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Published by: Vev'z Dangpason Balawan on Jun 06, 2013
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182
2005
C
ENTRALIZED
B
 AR 
O
PERATIONS
CREDIT TRANSACTIONS
All transactions involving thepurchase or loan of goods, services,or money in the present with apromise to pay or deliver in thefuture
Contracts of securityTypes:
1.
Secured transactions or contracts of real security 
- supported by acollateral or an encumbrance of property2.
Unsecured transactions or contractsof personal security 
- supported onlyby a promise or personalcommitment of another such as aguarantor or surety
Security
Something given, deposited, orserving as a means to ensurefulfilment or enforcement of anobligation or of protecting someinterest in property
Types of Security
a.
 personal
when an individualbecomes surety or guarantorb.
real or property 
when amortgage, pledge, antichresis,charge or lien or other deviceused to have property held, outof which the person to be madesecure can be compensated forloss
Bailment
The delivery of property of oneperson to another in trust for aspecific purpose, with a contract,express or implied, that the trustshall be faithfully executed and theproperty returned or duly accountedfor when the special purpose isaccomplished or kept until the bailorclaims it.
Parties:
1.bailor - the giver; one who deliversproperty2.bailee- the recipient; one whoreceives the custody or possession of the thing thus delivered
LOAN (Articles 1933 – 1961) 
A contract wherein one of theparties delivers to another, eithersomething not consumable so thatthe latter may use the same for acertain time and return it or moneyor other consumable thing, upon thecondition that the same amount of the same kind and quality shall bepaid. (Art 1933)
Characteristics:
1.
Real Contract
– delivery of the thingloaned is necessary for theperfection of the contract
NOTE:
An accepted promise to makea future loan is a consensualcontract, and therefore binding uponthe parties but it is only afterdelivery, will the real contract of loan arise. (Art 1934)2.
Unilateral Contract
- once thesubject matter has been delivered,it creates obligations on the part of only one of the parties (i.e.borrower).
Kinds:
1.
Commodatum
when the bailor(lender) delivers to the bailee(borrower) a non-consumable thingso that the latter may use it for acertain time and return the identicalthing.
Kinds of commodatum:
a.
Ordinary Commodatum
– use bythe borrower of the thing is for acertain period of timeb.
Precarium
- one whereby thebailor may demand the thingloaned at will and it exists in thefollowing cases:i.neither the duration norpurpose of the contract isstipulated
2005 C
ENTRALIZED
B
AR
O
PERATIONS
E
XECUTIVE
C
OMMITTEE
 
AND
S
UBJECT
 
 
C
HAIRPERSONS
 
Maricel Abarentos
(Over-all Chairperson),
Ronald Jalmanzar
(Over-all Vice Chair),
 YolandaTolentino
(VC-Acads), J
ennifer Ang
(VC- Secretariat),
 Joy Inductivo
(VC-Finance),
Elaine Masukat
(VC-EDP),
Anna Margarita Eres
(VC-Logistics).
 JonathanMangundayao
(Political Law),
Francis Benedict Reotutar
(Labor Law),
Romuald Padilla
(Civil Law),
Charmaine Torres
(Taxation Law),
Mark David Martinez
(Criminal Law),
Garny Luisa Alegre
(CommercialLaw),
 Jinky Ann Uy
(Remedial Law),
 Jackie Lou Bautista
(Legal Ethics)
CREDIT TRANSACTIONS
 
183
2005
C
ENTRALIZED
B
 AR 
O
PERATIONS
ii.the use of the thing ismerely tolerated by theowner2.
Simple loan or mutuum
– where thelender delivers to the borrowermoney or other consumable thingupon the condition that the lattershall pay the same amount of thesame kind and quality.
CommodatumMutuumKey: COPS-LOTR 
1. Object
Non-consumableConsumable
2. Cause
GratuitousMay or may not begratuitous
3. Purpose
Use or temporarypossessionConsumption
4. Subject Matter 
Real or personalpropertyOnly personalproperty
5. Ownership of the thing
Retained by thebailorPasses to the debtor
6. Thing to be returned 
Exact thing loanedEqual amount of thesame kind andquality
7. Who bears risk of loss
BailorDebtor
8. When to return
In case of urgentneed, even beforethe expiration of thetermOnly after theexpiration of theterm
LoanCredit
Delivery by one partyand the receipt of other party of agiven sum of moneyor other consumablething upon anagreement, expressor implied, to repaythe same.Ability of a person toborrow money orthings by virtue of the trust orconfidence reposedby the lender that hewill pay what hepromised.
LoanCredit
1. Interest taken atthe expiration of thecreditInterest is taken inadvance2. Always on adouble name paper(two signaturesappear with bothparties held liablefor payment)Always on a singlename paper (i.e.promissory note withno indorse-mentother than themaker)
COMMODATUM (Articles 1935 – 1952)
Nature:
1.
PURPOSE:
Bailee in commodatumacquires the
temporary use
of thething but not its fruits (unlessstipulated as an
incidental
part of the contract).(Art 1935)
Use must be temporary,otherwise the contract may be adeposit.2.
CAUSE:
Essentially gratuitous; itceases to be a commodatum if anycompensation is to be paid by theborrower who acquires the use, insuch case there arises a leasecontract.
Similar to a donation in that itconfers a benefit to therecipient. The presumption isthat the bailor has loaned thething for having no needtherefor.3.
SUBJECT MATTER:
Generally non-consumable whether real or personalbut if the consumable goods are notfor consumption as when they aremerely for exhibition, consumablegoods may be the subject of thecommodatum. (Art 1936)4.Bailor need not be the owner of thething owned (Art. 1938) since by theloan, ownership does not pass to theborrower.
A mere lessee or usufructuarymay lend but the borrower orbailee himself may not lend norlease the thing loaned to him toa third person (Art 1932[2])
5.Purely Personal (Art 1939):
Death of either party terminatesthe contract unless bystipulation, the commodatum istransmitted to the heirs of eitheror both parties.
2005 C
ENTRALIZED
B
AR
O
PERATIONS
E
XECUTIVE
C
OMMITTEE
 
AND
S
UBJECT
 
 
C
HAIRPERSONS
 
Maricel Abarentos
(Over-all Chairperson),
Ronald Jalmanzar
(Over-all Vice Chair),
 YolandaTolentino
(VC-Acads), J
ennifer Ang
(VC- Secretariat),
 Joy Inductivo
(VC-Finance),
Elaine Masukat
(VC-EDP),
Anna Margarita Eres
(VC-Logistics).
 JonathanMangundayao
(Political Law),
Francis Benedict Reotutar
(Labor Law),
Romuald Padilla
(Civil Law),
Charmaine Torres
(Taxation Law),
Mark David Martinez
(Criminal Law),
Garny Luisa Alegre
(CommercialLaw),
 Jinky Ann Uy
(Remedial Law),
 Jackie Lou Bautista
(Legal Ethics)
 
San Beda College of Law
184
M
EMORY 
A
ID
 
IN
C
IVIL
L
AW
 
Bailee can neither lend nor leasethe object of the contract to athird person.
NOTE:
Use of the thing loanedmay extend to members of thebailee’s household except:a.contrary stipulation;b.nature of the thingforbids such use
Obligations of the Bailee: (Arts 1941 –1945)
1.To pay for the ordinary expenses forthe use and preservation of the thingloaned. (Art 1941)2.To be liable for the loss of the thingeven if it should be through afortuitous event in the followingcases: (
KLAS D)
a.when he
k
eeps it longer than theperiod stipulated, or after theaccomplishment of its useb.when he
l
ends or leases it tothird persons who are notmembers of his householdc.when the thing loaned has beendelivered with
a
ppraisal of itsvalued.when, being able to
s
ave eitherof the thing borrowed or his ownthings, he chose to save thelatter; ore.when the bailee
d
evoted thething for any purpose differentfrom that for which it has beenloaned (Art 1942)3.To be liable for the deterioration of thing loaned (a) if expresslystipulated; (b) if guilty of fault ornegligence; or (c) if he devotes thething to any purpose different fromthat for which it has been loaned4.To pay for extraordinary expensesarising from the actual use of thething by the bailee, which shall beborne equally by both the bailor andthe bailee, even though the baileeacted without fault, unless there is astipulation to the contrary (Art 1949par 2)5.To return the thing loaned
The bailee has no right to retainthe thing loaned as security forclaims he has against the bailoreven for extraordinary expensesexcept for a claim for damagessuffered because of the flaws of the thing loaned.
NOTES
:
However, the bailee’s rightextends no further thanretention of the thing loaneduntil he is reimbursed for thedamages suffered by him.
He cannot lawfully sell thething to satisfy such damageswithout court’s approval.
In case there are two ormore bailees, theirobligation shall be solidary.
Obligations of the bailor (Art 1946 – Art1952):
1.To respect the duration of the loan
 
GENERAL RULE:
Allow the baileethe use of the thing loaned for theduration of the period stipulated oruntil the accomplishment of thepurpose for which the commodatumwas instituted.
 
EXCEPTIONS:
 
a.In case of urgent nee
inwhich case bailee may demandits return or temporary use;
b.
The bailor may demandimmediate return of the thing
if the bailee commits any act of ingratitude specified in Art. 765
.2.To refund to the baileeextraordinary expenses for thepreservation of the thing loaned,provided the bailee brings the sameto the knowledge of the bailorbefore incurring them, except whenthey are so urgent that the reply tothe notification cannot be awaitedwithout danger.3.To be liable to the bailee fordamages for known hidden flaws.
Requisites:
 
C
IVIL
L
AW
C
OMMITTEE
 
 
C
HAIRPERSON
:Romuald Padilla
 
A
SST
.C
HAIRPERSON
: Vida Bocar, Joyce Vidad
 
EDP : Alnaiza Hassiman, Dorothy Gayon
 
S
UBJECT
H
EADS
:Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.RhodoraFerrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John StephenQuiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), AnthonyPurganan(LTD),Ma. Ricasion Tugadi (Conflicts of Law)

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