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

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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)

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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)

Commodatum refers to a gratuitous loan of a movable property which is to

Mutuum is a Latin term which means a loan or a borrowing for the purpose
of consumption by the borrower. The borrower can consume its use.
However, such loans are to be replaced in kind at the termination of the
bailment. A mutuum arises where one person transfers certain quantity of
res fungibles to another who becomes the owner, subject to obligation to
restore same amount of same quality as those received.

At common law, a "mutuum" was generally regarded as a sale for the reason
that the specific property delivered is not to be returned, subject to certain
exceptions under which transactions were regarded as bailments. [In re
Estate OF Ellis, 24 Del. Ch. 393 (Del. Ch. 1939)].