Short answer. Yes. In a free loan of a thing, the lender does not have to be the owner. He only needs a right to use it, so a tenant, a usufructuary or a possessor can validly lend. What he cannot do is give you a better right than he himself holds.
What the law says
The bailor in commodatum need not be the owner of the thing loaned.
Civil Code, Article 1938 — Bailor Need Not Own the Thing. Read the full provision →
Why ownership is beside the point
A free loan of a thing — the Code calls it commodatum — transfers only the use of an item, for a time, at no charge. Nothing about ownership changes hands, so there is no reason to demand that the lender own anything. What he must have is a right to use the thing and to let you use it: a lessee under a lease that does not forbid it, a usufructuary, a person holding under some other title that carries the use with it. This is a genuinely practical rule. Equipment, vehicles and tools circulate among families and small businesses on exactly this footing every day.
What the lender cannot pass on
The other side of the rule is the one that catches people out. A lender can only hand over the use he actually has. If his own right is due to expire next month, your loan cannot outlast it. If he is holding the thing on terms that forbid letting anyone else use it, lending it to you breaches his own arrangement, and the person he answers to may simply take the item back. And a borrower is not free to lend the thing on again: a free loan is personal to the borrower, so passing it to a third person is not permitted, even though members of the borrower's own household may ordinarily use it.
The true owner is not bound by your loan
Your agreement binds the two of you. It does not bind an owner who was never part of it. If it turns out the item belongs to someone else who never consented, that owner can demand it back from whoever is holding it, and you have no defence built out of a contract he did not sign. This is another of those rules that allocates a loss between two people who both behaved decently — you borrowed in good faith, the owner never gave the thing up — and the Code resolves it by returning the property to its owner and leaving you with a claim against the person who lent it.
Ask the awkward question first
Before taking custody of anything of value, ask who owns it and on what footing the lender holds it. For a vehicle, look at the registration; for equipment, at the purchase or lease papers. Put the loan in writing even between friends, naming the item, the purpose, the period and who is expected to pay for what. Holding property that turns out to be stolen or subject to a claim is an unpleasant position to be in, and a short written record of who handed it to you, and when, is the difference between an explainable situation and an accusation you cannot answer.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Rex Sorongon vs. People of the Philippines, G.R. No. 230669, June 16, 2021 — read the decision on LawPhil →