Difference: commodatum & mutuum

According to De Leon and De Leon, Jr. (2010), the difference between commodatum or mutuum becomes relatively simple to see if one bears in mind eight principal points of distinction as discussed below. But first, Article 1933 of the New Civil Code provides:

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.
[1] Commodatum ordinarily involves something not consumable (see Art. 1936.), while in mutuum, the subject matter is money or other consumable thing. It must be noted that only personal (movable) property can be classified into consumable or not;

[2] In commodatum, ownership of the thing loaned is retained by the lender (Art. 1933.), while in mutuum, the ownership is transferred to the borrower. The purpose of mutuum is for the borrower to own the thing loaned and use and consume it;

[3] Commodatum is essentially gratuitous, while mutuum may be gratuitous or it may be onerous, that is, with stipulation to pay interest. If any compensation is paid by the bailee, the contract is no longer within the concept of commodatum;

[4] In commodatum, the borrower must return the same thing loaned, while in mutuum, the borrower need only pay the same amount of the same kind and quality. Money, for example, when it used, parts the owner and, therefore, it is almost impossible for a bailee in mutuum to return the same cash with the same series numbers;

[5] Commodatum may involve real or personal property (Art. 1937.), while mutuum refers only to personal property. If personal property (whether or not consumable) is borrowed not for the purpose of consumption but for exhibition or display, the contract is commodatum, not mutuum;

[6] Commodatum is a loan for use or temporary possession (Art. 1935.), while mutuum is a loan for consumption. Use or temporary possession of the thing may or may not include its fruits. In commodatum, the parties may stipulate that the bailee has the right to make use of the fruits of the thing bailed BUT the fruits are not the main purpose of the contract. Otherwise (i.e. the main purpose of the contract being the enjoyment by the bailee of the fruits of the thing), the contract may be classified as one of usufruct.

[7] In commodatum, the bailor may demand the return of the thing loaned before the expiration of the term in case of urgent need (Art. 1946), while in mutuum, the lender may not demand its return before the lapse of the term agreed upon. Note that this does not mean that the bailor may demand the return of the thing anytime; there must be an urgent need.

On the other hand, even if there is urgent need or emergency (e.g. hospitalization of a child, etc.), the bailor in mutuum cannot demand the return of the thing before the lapse of the period agreed upon. In fact, he cannot go to court for this purpose.

[8] In commodatum, the loss of the subject matter is suffered by the bailor since he is the owner (Art. 1942 and Art. 1174.), while in mutuum, the borrower suffers the loss even if caused exclusively by a fortuitous event and he is not, therefore, discharged from his duty to pay. It may also be said that while commodatum is purely personal in character (see Art. 1939.), mutuum is not so.

The discussion above is based on an outline by De Leon and De Leon, Jr. (2010). Their books are available in fine bookstores nationwide. SOURCE: De Leon and De Leon, Jr. (2010). Comments and Cases on CREDIT TRANSACTIONS. 11th edition. ISBN 978-971-23-5535-6. Rex Books Store. https://www.rexestore.com/civil-law-books/1187-comments-cases-on-credit-transactions-.html


It can be readily noted from [Article 1933] that in simple loan (mutuum), as contrasted to commodatum, the borrower acquires ownership of the money, goods or personal property borrowed. Being the owner, the borrower can dispose of the thing borrowed (Article 248, Civil Code) and his act will not be considered misappropriation thereof. (G.R. No. L-50550-52. October 31, 1979)


In commodatum, the bailor retains the ownership of the thing loaned, while in simple loan, ownership passes to the borrower.

The foregoing provision seems to imply that if the subject of the contract is a consumable thing, such as money, the contract would be a mutuum. However, there are some instances where a commodatum may have for its object a consumable thing. Article 1936 of the Civil Code provides:

Consumable goods may be the subject of commodatum if the purpose of the contract is not the consumption of the object, as when it is merely for exhibition.

Thus, if consumable goods are loaned only for purposes of exhibition, or when the intention of the parties is to lend consumable goods and to have the very same goods returned at the end of the period agreed upon, the loan is a commodatum and not a mutuum.

The rule is that the intention of the parties thereto shall be accorded primordial consideration in determining the actual character of a contract. In case of doubt, the contemporaneous and subsequent acts of the parties shall be considered in such determination. (G.R. No. 115324. February 19, 2003)