LOAN
GENERAL PROVISIONS
Art. 1933. By the contract of loan, one of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time and return it, in which case the contract is called a commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid, in which case the contract is simply called a loan or mutuum.
Commodatum is
essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum the bailor retains the ownership of the
thing loaned, while in simple loan, ownership passes to the borrower. (1740a)
Art. 1934. An accepted promise to deliver something by way of commodatum or
simple loan is binding upon parties, but the commodatum or
simple loan itself shall not be perfected until the delivery of the object of
the contract. (n)
SIMPLE LOAN OR MUTUUM
Art. 1953. A person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality. (1753a)
Art. 1954. A contract whereby one person transfers the ownership of
non-fungible things to another with the obligation on the part of the latter to
give things of the same kind, quantity, and quality shall be considered a
barter. (n)
Art. 1955. The obligation of a person who borrows money shall be governed
by the provisions of Articles 1249 and 1250 of this Code.
If what was loaned is a fungible thing other than money, the debtor owes
another thing of the same kind, quantity and quality, even if it should change
in value. In case it is impossible to deliver the same kind, its value at the
time of the perfection of the loan shall be paid. (1754a)
Art. 1956. No interest shall be due unless it has been expressly
stipulated in writing. (1755a)
Art. 1957. Contracts and stipulations, under any cloak or device
whatever, intended to circumvent the laws against usury shall be void. The
borrower may recover in accordance with the laws on usury. (n)
Art. 1958. In the determination of the interest, if it is payable in
kind, its value shall be appraised at the current price of the products or
goods at the time and place of payment. (n)
Art. 1959. Without prejudice to the provisions of Article 2212, interest
due and unpaid shall not earn interest. However, the contracting parties may by
stipulation capitalize the interest due and unpaid, which as added principal,
shall earn new interest. (n)
Art. 1960. If the borrower pays interest when there has been no
stipulation therefor, the provisions of this Code concerning solutio
indebiti, or natural obligations, shall be applied, as the case may be. (n)
Art. 1961. Usurious contracts shall be governed by the Usury Law and other
special laws, so far as they are not inconsistent with this Code. (n)
