Credit Lectures Compilation

Assignment for 11/20 Until 1982 Medel v. CA 299 S 481 Eastern Shipping ines !n". v CA 2#4 S $8 % &'les on !
nterest( )hen d'e( rate *S+C! v. ,*+ 148$-# $/#0/01 % es"alation "la'se NOVEMBER 11, 2010 .ne of the "ommon transa"tions is the deliver/ of goods 0/ )a/ of p'r"hase or loan. 1hese transa"tions are "alled "redit transa"tions. 2efine. Credit transactions % in"l'de all transa"tions3 p'r"hase or loan of goods3 servi"es or mone/3 in the present3 )ith a promise to pa/ or deliver or ret'rn in the f't're. Examples: Commodat'm3 m't''m or loan. Sale on "redit 0't not on "ash. 1r'st re"eipt( 0ailment 4"ommon la) "on"ept or another "on"ept of "redit transa"tion5( "ontra"ts of se"'rit/ li6e mortgage3 pledge and anti"hresis( 'se of a "redit "ard3 'se /o'r "redit no)3 pa/ it later3 it is 0orro)ing from "redit "ard "ompan/( &1 stored val'e ti"6et( 2 kinds of contracts involvin credit transactions 1. Contra"ts of deliver/ of goods and mone/7 a.5 loan3 0.5 deposit 2. Contra"ts of Se"'rit/ % is something delivered3 deposited or serving as a means to ens're the f'lfillment or enfor"ement of the o0ligation for prote"ting some interest in the propert/. a. Se"'red % "ontra"ts of real se"'rit/
1hese are "ontra"ts s'pported 0/ "ollateral or se"'rit/ over propert/3 either real or personal propert/. E8amples7 Chattel Mortgage( &EM( Anti"hresis( ,ledge 0. Unse"'red % "ontra"ts of personal se"'rit/ 1here is no propert/ involved. 1his is not se"'red 0/ propert/ or en"'m0ran"e on the propert/ 0't it is 0ased on the personal "ommitment of a # rd person to f'lfill the o0ligation of the prin"ipal de0tor. E8ample. S'ret/ship and 9'arant/. ,'maso6 si :o;o ng late. &aha0ansa B!"#MEN$ % %o& is 'ailment esta'lis(ed) +/ "ontra"t and 0/ operation of la). Example of Bailment Contracts: Commodat'm or oan( 2eposit for "ompensation E8ample of +ailment 0/ operation of a) Art. 199<3 invol'ntar/ deposit or ne"essar/ deposit 4no meeting of the minds5 * +inds of Necessar, -eposit 1. =hen it is made in "omplian"e )ith a legal o0ligation( 2. =hen it ta6es pla"e on the o""asion of "alamit/. #. Art. 1998 .arties in a Bailment 1 % Credit 1ransa"tions7 :'dge Al0erto Serrano
1. +ailor % one )ho delivers the propert/. 2. +ailee % one )ho re"eived the propert/ and has one )ho "'stod/ or possession of the thing 0ailed. Classification of Bailment /!ccordin to Benefit0 1. Solel/ for the 0enefit of the 0ailor % grat'ito's deposit( no "onsideration 2. Solel/ for the 0enefit of the 0ailee % "ommodat'm or loan( no "onsideration #. >or the 0enefit of 0oth % deposit for "ompensation( mortgage or pledge. Ms1 231 #oan /4nder !rt1 15660 7 +/ the "ontra"t of loan3 one of the parties delivers to another3 either something not "ons'ma0le so that the latter ma/ 'se the same for a "ertain time and RE$4RN it3 in )hi"h "ase the "ontra"t is "alled a "ommodat'm( or mone/ or other "ons'ma0le thing3 'pon the "ondition that the same amo'nt of the same 6ind and ?'alit/ shall 0e .!"-3 in )hi"h "ase the "ontra"t is simpl/ "alled a loan or m't''m. Ms. Corrales 8(at is t(e p3rpose of contract of commodat3m) >or the temporar, 'se of the 0ailee. 8(at a'o3t simple loan) >or the cons3mption of the thing loaned. Under the 2nd3 #rd3 and 4th pars of 19## provide for the Chara"teristi"s of Commodat'm and Simple oan Commodat'm is essentiall, grat'ito's. 42nd ,ar.5
Simple oan ma/ 0e grat'ito's or )ith a stip'lation to pa/ interest 4"onsideration5. !n Commodat'm the 0ailor retains the o)nership of the thing loaned3 )hile in simple loan3 o)nership passes to the 0orro)er. 1a6e note7 !n m't''m there is no 0ailor or 0ailee for the/ refer onl/ in "ommodat'm 0't 0orro)er and lender or de0tor and "reditor. 8(at are t(e t&o common c(aracteristics of Commodat3m and M3t33m) 1he/ are unilateral "ontra"t3 )hi"h means after the deliver/3 onl/ one part/ is o0liged to perform or f'lfill 40ailee/0orro)er5. +ailee @ to ret3rn t(e same t(in 9 0orro)er % to pa/ the same amo'nt of the same 6ind and ?'alit/. 1he/ are real contracts. 1he perfe"tion of the "ontra"t is thro'gh the deliver/ of the thing or o0;e"t of "ommodat'm or m't''m. "f t(e t(in is not ,et delivered, is t(ere commodat3m or m3t33m) *o. +e"a'se deliver/ is essential to the perfe"tion of the "ontra"t as disting'ished from "onsens'al "ontra"t as to perfe"tion. %o& is consens3al contract perfected) +/ mere Consent of the parties. *o additional a"t re?'ired. Sin"e the/ are "ontra"ts3 )hat are the re?'isitesA 4C.C5 1. Consent 4"on"'rren"e of the offer and a""eptan"e5( 2. .0;e"t or s'0;e"t matter7 in "ommodat'm3 thing delivered )hi"h either 0e mova0le or immova0le propert/( in m't''m3 onl/ mova0le( #. Ca'se or "onsideration.
2 % Credit 1ransa"tions7 :'dge Al0erto Serrano
a. +orro)er % the a"?'isition of the thing. 0. ender % the right to demand its ret'rn.
<= per ann3m, so p3mila na ka,o1 %o& &o3ld t(e loan 'e paid) Example 3pon mat3rit,1 %o& m3c( is <= of .10+) <00 represents t(e interest1 Mr1 $orres 2is"o'nt % is )hen interest is ded'"ted in advan"e. 8(en is it made) At the perfe"tion of the "ontra"t. >rom the a0ove e8ample. !nstead of giving 106 as pro"eeds3 onl/ 93400 )ill 0e given. <00 is ded'"ted in advan"e. +'t the amo'nt )ill 0e paid is ,106. Do) to "omp'te dis"o'nt 4this is important to determine )hether the interest is 's'rio's7 the reason is that in dis"o'nt "harges a higher interest rate57 Co' divide the amo'nt of interest 0/ the a"t'al amo'nt re"eived 0/ the 0orro)er. "ll3stration: <00 E 9400 F <.#8E 4as "ompared to 's'al loan )hi"h is <E onl/5 -">$"NC$"ON> BE$8EEN COMMO-!$4M !N- M4$44M: 11 !s to t(e t(in loaned 21 !s to o&ners(ip of t(e t(in loaned 61 !s to t(e pa,ment of compensation
8(at is Credit) $(ere are t(ree concepts1 1. 1he a0ilit/ of a person to 0orro) mone/ 0ased on the tr'st and "onfiden"e 0/ the lender that the 0orro)er )ill pa/. 2. 4AMEB Case5 Credit Standing )hi"h is a propert/. A person iss'ed )ith "redit "ard has a "redit standing. #. Co' deposit mone/ in a 0an6 )hat happens to /o'r mone/. 4!t means /o' "annot 'se /o'r A1M Card.5 1he signifi"an"e of /o'r pass0oo63 it means that /o'r mone/ has /o'r "redited to /o'r a""o'nt. Credit is the s'm "redited in the 0oo6s of the "ompan/ in favor of the person )ho appears entitled to s'"h thin. 1his ma/ also refer to "redit against /o'r loan. #et 3s sa, ,o3 (ave .10k and ,o3 &ant to lend it to one of ,o3r favorite friends1 %o& &o3ld lend ,o3r mone,) B, ivin -eliver, of mone, to (im1 %o&) 8(at is 3s3al a reement) 8(at &o3ld 'e t(e accepta'le term and condition for lendin t(e mone,) $o pa, t(e principal &(ic( is t(e .10k1 pl3s interest1 Naninin il s,a n interest1 $(e principal o'li ation is t(e pa,ment of t(e principal1 Of co3rse if ,o3 do not c(ar e interest, it is rat3ito3s1 B3t if ,o3 do, t(at is onero3s1 8(at is ,o3r term) 1 ,ear1 8(at is ,o3r interest rate) :::'elo& le al interest1 /'a; Ma'ait0 12 percent is no& t(e le al in case of loan or for'earance of mone,1
# % Credit 1ransa"tions7 :'dge Al0erto Serrano
*1 :: /Mr1 -ionio0 !s to t(e o'li ation to ret3rn /&(at s(o3ld 'e ret3rned0 ?1 !s to t(e s3'@ect matter or o'@ect of t(e contract <1 !s to p3rpose of deliver, of t(e t(in , for temporar, 3se or cons3mption1 A1 !s to t(e ri (t to demand t(e ret3rn of t(e t(in a1 Ma, t(e 'ailor demand t(e ret3rn of t(e t(in t(e stip3lated period) i. Ces. !n "ase of 'rgent need. ii. !n m't''m. *o 'efore
1his a""epted promise to deliver something 0/ )a/ of loan3 is this "ontra"tA Ces. 8(at kind of contract) Consens'al. 8(at is consens3al contract) Are perfe"ted 0/ mere "onsent or meeting of the minds. !side from consens3al contract, &(at is !rt1 156*) !t is real. Commodat'm and m't''m are nominate "ontra"ts. 8(at do ,o3 call 3nder t(e first sentence Daccepted promise)E An innominate 4do 't das5 "ontra"t. 9overned 0/ the provisions on .0ligations and Contra"ts.
B1 !s to t(e effect of t(e loss, a1 Reason &(, 'ailor 'ears t(e risk of loss: o&ners(ip is retained 51 !s to t(e transmissi'ilit, of ri (ts /!R$1 15650, 8%!$ !RE $%E +"N-> OC COMMO-!$4M) a1 OR-"N!R2 /!R$1 15660 '1 .REC!R"4M /15*A MR1 #O :: MR1 CO .!#!; 4nder !rt1 156*, &(at is t(e contract) An a""epted promise to deliver something 0/ )a/ of "ommodat'm or simple loan 0inding 'pon the parties3 0't the "ommodat'm or simple loan itself shall not 0e perfe"ted 'ntil the deliver/ of the o0;e"t of the "ontra"t. Commodat'm or simple loan is not perfe"ted 'ntil the deliver/ of the thing.
8(at is t(e effect if t(e ot(er part, does not deliver):::: $(ere is 'reac( of contract 'eca3se it is 'indin and enforcea'le 3pon t(e parties1 $(3s, t(e one &(o fails to deliver ma, 'e compelled ', specific performance andFor dama es1 !rt1 156* !pplied in t(e Case: >a3ra export and "mport v1 -B. !n a 0an6 loan3 if /o' are a prospe"tive 0orro)er3 0efore /o' re"eive the pro"eeds of the loan3 /o' are re?'ired to sign a lot of agreement li6e loan agreement3 "redit agreement and sometimes a pre@signed real estate mortgage. So /o' in"'r alread/ e8penses. So on"e the agreement to lend is approved 0/ the 0oard of dire"tors3 there is alread/ a "ommitment to lend. 1hat is alread/ a "ontra"t( )hat is thatA an a""epted promise to deliver something 0/ )a/ of loan. So if the 0an6 does not "ompl/ )ith the o0ligation3 it the 0an6 lia0leA
Ces. >or 0rea"h of "ontra"t. +e"a'se the "ontra"t is "onsens'al "ontra"t( an innominate "ontra"t3 1he o0ligation to deliver. Sin"e it is 0rea"hed3 it is enfor"ea0le in the "o'rt of la). Central Bank v1 C! 1he loan approved )as ,806 0't )hat )as released is onl/ ,1$6. !n this "ase3 the 0an6 )as held lia0le. 2N- .!R$ OC !R$1 156*, 8%!$ -OE> $%"> ME!N) $(e need for t(e deliver, of t(e t(in 'eca3se t(e contract of loan is a RE!# CON$R!C$1 Ms. Cr'G N!$4RE OC COMMO-!$4M 8(at is it t(at t(e 'ailee acG3ires in commodat3m) /!rt1 156?0 1he 0ailee in "ommodat'm a"?'ires the 'se of the thing loaned 0't not its fr'its( if an/ "ompensation is to 0e paid 0/ him )ho a"?'ires the 'se3 the "ontra"t "eases to 0e a "ommodat'm. Under the 2nd senten"e3 if an/ "onsideration is paid3 it "eases to 0e a "ommodat'm. !n other )ords3 there is no "ommodat'm at all is "ompensation is paid. 8(at is t(e partic3lar c(aracteristic of commodat3m 3nder !rt1 156?) /descriptive &ord is important0 Essentiall, 9rat'ito's. !t means that it is !#8!2> grat'ito's. !n other )ords3 even if 1 "entavo is paid3 it is not "ommodat'm 0e"a'se the la) sa/s3 if Han,I "ompensation. Case 4manipis na dis"'ssion ng SC57 .a@3,o v1 C! /+as3nd3an0
9'evarra )as allo)ed to 'se the ho'se for free3 provided that he sho'ld maintain the "leanliness and orderliness of the ho'se3 and that he )o'ld va"ate the ho'se on"e the o)ner of the ho'se needed it. 1he o)ner of the ho'se3 after a n'm0er of /ears3 told 9'evarra to va"ate 0e"a'se the former needed it. 1he iss'e )as3 =.* their "ontra"t )as one of "ommodat'm or notA SC held3 *o 0e"a'se )hile 9'everra )as not re?'ired to pa/ rent3 it o0ligated him to maintain the propert/ in good "ondition. 1h's3 it is not "ommodat'm. ,ag tinanong to sa +ar7 isagot mo to. =hile 'nder Art. 19#-3 "ompensation is re?'ired 4i0ig sa0ihin pera7 pe"'niar/5. Dindi naman sina0i "onsideration lang. Rep3'lic v1 Ba tas /involvin t(e C(ica o B3lls0 +'rea' of Animal !nd'str/ lent 0'll for 0reeding p'rposes provided the 0orro)er )ill pa/ a 0reeding fee of 10E of the val'e of the 0'lls. +'t the 0orro)er retained possession of the 0'll even after the period stip'lated. Unfort'natel/3 the 0'll )as 6illed d'e to a DUJ raid. So )hat is the "a'se of the death of the 0'llA A fort'ito's event. 1he 0orro)er "ontended that the "ontra"t )as one of "ommodat'm. &ep'0li" "ontended that it )as one of lease. =hether or not the possessor sho'ld 0ear the loss of the 0'll d'e to fort'ito's event. DE 27 1he 0orro)er sho'ld 0ear the loss. 1he "ontra"t )as one of lease. Under the la)3 the lessee 4Art. 1<$15 is "onsidered a possessor in 0ad faith. 1herefore3 the loss of the thing d'e to fort'ito's event is at the ris6 of the lessee. !n an/ "ase3 if this )ere the "ontra"t of "ommodat'm3 the 0ailee is
- % Credit 1ransa"tions7 :'dge Al0erto Serrano
still lia0le 0e"a'se he retained the thing after the stip'lated period and the 0ailee is lia0le d'e to fort'ito's event 'nder Art. 194#. 8(, is commodat3m akin to donation) !n donation3 there is transfer of o)nership. 1he "a'se or "onsideration is the p're li0eralit/. !n "ommodat'm3 )hat is transferred onl/ temporar/ 'se and possession of the thing. 1he "a'se or "onsideration is also the p're li0eralit/. Ma, cons3ma'le oods 'e t(e s3'@ect of commodat3m) 2es1 Art. 19#< provides that "ons'ma0le goods ma/ the s'0;e"t of "ommodat'm if the p'rpose of the "ontra"t is not the "ons'mption of the o0;e"t3 as )hen it is merel/ for e8hi0ition Kor displa/L. 8(at are cons3ma'le oods) Are those )hi"h 0/ their nat're "annot 0e 'sed )itho't 0eing "ons'med. E8ample7 ri"e3 manti6a3 perf'me3 /osi. !ll'stration7 "f t(e 'ottle of perf3me is placed on top of t(e ta'le for displa,1 8(at is t(e contract) 1he "ontra"t is "ommodat'm. >3pposin contract) ,o3 allo& ,o3r friends to 3se t(e perf3me1 8(at is t(e
4nder !rt1 156B, &(o ma, constit3te commodat3m aside from t(e o&ner of t(e t(in ) 1he 0ailor in "ommodat'm need not 0e the o)ner of the thing loaned. Example of t(e person &(o is not t(e o&ner of t(e t(in enter into t(e contract of commodat3m1 &(o can
!n "ase of a lessee allo)ing another to temprar/ 'se the thing lease )itho't "ompensation. 4nder !rt1 1565, &(at is t(e c(aracteristic of commodat3m) !t is .4RE#2 .ER>ON!# . !t means that the right of the 0ailee "annot 0e transmitted to another person. 1he 0asis 4of allo)ing a person to lend5 of "ommodat'm is tr'st and "onfiden"e that the thing loaned )ill 0e ret'rned )ill 0e ret'rned to /o' as the 0ailor. 8(at are t(e effects of t(e principle t(at commodat3m is p3rel, personal 3nder !rt1 1565) a. 1he death of either the 0ailor or the 0ailee e8ting'ishes the "ontra"t( 0. 1he 0ailee "an neither lend nor lease the o0;e"t of the "ontra"t to a #rd person. E8"eption7 Do)ever3 the mem0ers of the 0aileeNs ho'sehold ma/ ma6e 'se of the thing loaned. E8"eption to e8"eption7 Unless there is a stip'lation to the "ontrar/3 or 'nless the nat're of the thing for0ids s'"h 'se.
Simple oan 0e"a'se /o' allo) grat'ito'sl/ /o'r friends to 'se it. Ma''0os /'nM 8(at is t(e s3'@ect matter of Commodat3m) Mova0le or immova0le propert/ 4Art. 19#$5 Mr. +ritania.
*at're or the thing for0ids s'"h 'se7 e8ample3 a dressM C'ng 0aga/ na ipapahiram mo na hindi p)ede gamitin ng i0a. $oot( 'r3s(, p&ede 'a ipa amit n i'a) CesM ,ang linis ng sapatos. +rea6.
< % Credit 1ransa"tions7 :'dge Al0erto Serrano
.!R$ "", NOV1 16, 2010

-">$"NC$"ON BE$8EEN M!$ER"!# !N- H4R"-"C!# .O>>E>>"ON Co' appl/ the prin"iple in "ommodat'm. "n commodat3m, 'efore t(e expiration of t(e period, &(o (as t(e ri (t to possess and en@o, t(e propert,) +ailee. Under the "ivl "ode also3 )hat is the o0ligation of the 0ailorA *ot to demand the ret'rn 0efore the e8piration of the period. .f "o'rse the e8"eption is 'rgent. +'t 0efore that he "annot ret'rn the "ase. 1hatNs the meaning of ;'ridi"al possession. 1he possessor 40ailee5 has the right to assert his right to possession even against the o)ner of the thing. So if he "an assert a right of possession even against the o)ner3 that possession isA :'ridi"al possession. >o &(at is t(e crime) Estafa. B3t if t(e possession is iven to t(e person '3t (e cannot assert possession a ainst t(e o&ner1 8(at is t(at possession) Material. E8ample a 0an6 teller. "f a 'ank teller receives mone, from t(e depositor, can (e take o3t t(e mone, t(en tell t(e 'ank, akin m3na to) *o. 0e"a'se his possession is merel/ material. >o &(at is t(e crime)
R"I%$ OC RE$EN$"ON !t refers to damages for hidden defe"t. 1his is the right of the 0ailee. Can t(e 'ailee ca3se t(e sale of t(e t(in 'eca3se of (is claim for dama es 3nder !rt1 15?1) Can (e ask a notar, p3'lic to sell it so t(at (e &o3ld 'e paid t(e dama es inc3rred or s3ffered) *o. 1he right is onl/ to possess it even 0e/ond the period stip'lated. 1his is different from the right of retention of the thing in pledge. :'st li6e right of retention provided in Art. 1994 for the "ontra"t of deposit. !n the "ontra"t of deposit3 if the depositor does not reim0'rse the depositar/ for the e8penses in"'rred 0/ the depositar/3 the latter ma/ retain the thing. +'t the retention is not onl/ possession 0't also pledge. So that is one "a'se or gro'nd for the esta0lishment for )hat is "alled legal pledge or pledge 0/ operation of la). !f there is a pledge3 pledge is "onsidered as se"'rit/ or "ollateral. 8(at is t(e nat3re of collateral) !t ma/ 0e sold at p'0li" a'"tion even )itho't going to "o'rt. +/ selling that at p'0li" a'"tion3 the pro"eeds )o'ld then 0e t'rned over to the pledge 4the "reditor5 to 0e applied to the o0ligation. !n this "ase the depositor. +'t that is not appli"a0le in "ase of "ommodat'm. 1hat is one of the distin"tions of the right of retention. 1here is no pledge 0/ operation of la) 'nder Art. 1944. .nl/ the right of possession or retention. 8(at is t(e remed, of t(e 'ailee) 1o file a "ase 4"ivil a"tion5 for damages. 1hen3 if he o0tains a final and e8e"'tor/ ;'dgment3 he "an as6 the sheriff to lev/ the thing in his possession. ev/ on e8e"'tion. So that the sheriff ma/ sell it at p'0li" a'"tion. 1his is not the same in pledge. !n legal pledge3 /o' "an ;'st as6 the notar/ p'0li" to immediatel/ sell. !n "ommodat'm3 /o' still have to file a "ase in "o'rt. And then3 let the sheriff lev/ on the propert/.
O'alified theft. So ta6ing 'n3 it is not ;'ridi"al possession. 1here is a0'se of "onfi"den"e3 6a/a nga ?'alified. $ % Credit 1ransa"tions7 :'dge Al0erto Serrano
"f t(ere are t&o or more 'ailees, &(at is t(e r3le) 1he/ are solidaril/ lia0le. 1his is an e8"eption to the r'le that if there are t)o or more de0tors3 the o0ligation is merel/ ;oint. 1his is an e8ample of solidar/ o0ligation 0/ operation of la) )hen there are or more 0ailees. 8(, is it &(en t(ere are t&o or more 'ailees t(eir lia'ilit, is solidar, &it( respect to t(e same t(in loaned 3nder t(e same contract of commodat3m) +e"a'se of tr'st and "onfiden"e. !n other )ords3 the 0ailor )o'ld not lend the thing to an/one if the 0ailor did not "onsider the integrit/ of all( that all of them )ill ret'rn the thing. So that the o0ligation is therefore3 solidar/ from the nat're of "ommodat'm as "ontra"t 0eing 0ased on tr'st and "onfiden"e. Mr. +olantePP Mr. Sarmiento OB#"I!$"ON> OC $%E B!"#OR 1. 1he 0ailor m'st respe"t the right of the 0ailee to 'se the thing. 1herefore3 the "annot demand the ret'rn 'ntil the e8piration of the period or the a""omplishment of the p'rpose for )hi"h the "ommodat'm is "onstit'ted. Do)ever3 if there is an 'rgent need3 he has t)o options 'nder Art. 194<3 first3 demand the ret'rn the thing( or se"ond3 temporar/ 'se lang. >o if t(e 'ailor demands t(e ret3rn of t(e t(in , &(at (appens to t(e contract of commodat3m) 1he "ontra"t is e8ting'ished )hen the 0ailor e8er"ises the right to ret'rn. +'t if merel/ temporar/ 'se3 the "ontra"t is merel/ s'spended. !n other )ords3 the 0ailor )o'ld still ret'rn it to the 0aile'PPP 4nag6amali si sir5 0ailee so that the latter ma/ "ontin'e to )ith the temporar/ 'se of the thing )ithin the period agreed 'pon. 2. +ailor is o0liged to reim0'rse the e8penses.
#. Art. 19-17 1o pa/ damages for hidden fla) or defe"t of the thing loan. 8(at is t(is precari3m) /!rt1 15*A0 1he 0ailor ma/ demand the ret'rn of the thing at )ill. 8(en) 1. =hen the d'ration and the 'se of the thing is not stip'lated. 2. =hen the 'se of the thing is merel/ tolerated 0/ the o)ner. !n these instan"es3 /o' have pre"ari'm3 a se"ond t/pe of "ommodat'm. Ma, a lessee &(o allo&s t(e 3se t(in leased constit3ted precari3m) 8(,) *o. Under 2nd par. .f 194$3 the 'se of the thing is merel/ tolerated 0/ the o&ner and the lessee is not the o)ner of the thing. =hile the la) sa/s that "ommodat'm ma/ 0e "onstit'ted 0/ person )ho is not the o)ner3 ho)ever for pre"ari'm 'nder Art. 194$425 the 'se of the thing m'st 0e tolerated 0/ the o)ner. C.U A,, C 1DE EB,&ESS 41DE 1E&M .> 1DE A=5 =E S1A&1 =!1D A&1. 1948 *EB1 MEE1!*9. 9&A2E SE9ME*1. >!*. ..J!*9
NOVEMBER 20, 2010 7 .!R$ "

Ms. C' a0sent Ms. 2avid 8%EN M!2 $%E B!"#OR -EM!N- $%E "MME-"!$E RE$4RN OC $%E $%"NI 4N-ER !R$1 15*B) !n "ase of a"ts of ingratit'ted 'nder Art. $<-7
8(at are t(e t(ree acts covered 3nder !rt1 A<?) 8 % Credit 1ransa"tions7 :'dge Al0erto Serrano
1. .ffense against the person3 propert/ or honor of the 0ailor or his spo'se3 of "hildren 'nder his parental a'thorit/( 2. !mp'tation of an offense or a"ts involving moral t'rpit'de against the 0ailor3 his spo'se 'nder his parental a'thorit/( #. >ail're to give s'pport )hen the 0ailee is legall/ or morall/ 0o'nd to do so. =hat are the 'nderl/ing reasons )h/ the a"ts defined 'nder Art. $<- are made gro'nds to the immediate demand 0/ the 0ailorA +e"a'se the a"ts of ingratit'de ma6es him 'n)orth/ of the tr'st and "onfiden"e reposed in him 0/ the 0ailor. !n tagalong3 )alang 'tang loo0. ,inahiram mo na3 )inalang hi/a 6a pa. Under Art. 19493 )hat 6ind of e8pense is "overedA E8traordinar/ e8pense or 'n's'al e8pense. =h/ is it that e8traordinar/ e8pense 'n's'alA +e"a'se the 0ailee gives 'n's'al 0enefit to the 0ailor 0/ reason of the e8traordinar/ e8pense. Ms. Mala0anan E8ample of e8traordinar/ E8pense7 S'0;e"t matter of the "ommodat'm7 A ho'se( repla"ement of the entire roof in "ase of a t/phoon. !n order to repla"e it3 /o' )ill in"'r e8traordinar/ e8pense 0e"a'se of the val'e of repla"ement. 8(at is t(e r3le in case of extraordinar, expense so t(at t(e 'ailee can 'e reim'3rsed) =hen there is a need to ma6e the repairs3 0efore the 0ailee "o'ld ma6e repairs as e8traordinar/ e8pense3 he m'st notif, first the 0ailee.
!n the meantime3 the 0ailee m'st &ait for t(e repl, or the de"ision of the 0ailor )hether he )o'ld agree to the e8traordinar/ e8pense. Exception: =hen a)aiting the repl/ cannot 'e a&aited &it(o3t dan er. 4nder t(e 2nd par1 Of !rt1 15*5, &(at is t(e r3le) =hen the e8traordinar/ e8pense arise on the o""asion of the a"t'al 'se 0/ the 0ailee. !n )hi"h "ase3 the e8traordinar/ e8pense shall 0e 0orne eG3all, 0/ the parties3 'nless the 0ailor and 0ailee agree on the manner of sharing of e8penses or 'nless one of the part/ agrees to sho'lder the e8traordinar/ e8pense. Mr. +ele/. 8(at kind of expense is contemplated 3nder !rt1 15?0) 1hese are e8penses that are not ordinar/ 4ne"essar/5 or e8traordinar/ e8pense. E8penses not for the preservation of the thing. 1hese are 'sef'l e8penses or ornamental e8penses. E8ample of 'sef'l or ornamental e8penses7 Commodat'm on a Car( /o' repla"e a ne) mag@)heels. ,agandahin mo nalang 'ng 6otse. $(e @ack, &o3ld t(at em'ellis( t(e t(in ) *o. it is not 'sef'l or ornamental. 4nder !rt1 15?1, &(at is t(e r3le, in relation to !rt1 15**) 2amages s'ffered 0/ the 0ailee 0/ reason of hidden fla)s or defe"ts. 8(at are t(e reG3isites) 1. 1here m'st 0e fla) or defe"t
2. =hi"h m'st 0e hidden #. 1he 0ailor does not advise the 0ailee of the hidden defe"ts 4. 1he 0ailee s'ffers damage 0/ reason of hidden fla) or defe"ts. 8(, is it t(at t(e 'ailor is lia'le for dama es) +e"a'se 0/ not dis"losing the hidden fla) or defe"t 6no)n to the 0ailor3 the 0ailor a"ts in 0ad faith sin"e he is exposin t(e 'ailee to s3ffer dama es or dan er1 1hat is )h/ there is 0ad faith. Jahit na pinahihiram mo3 sa0ihin mo naman na p'mreno 6a naman pra di 6a ma0a0angga 6a. Under Art. 19-23 )hat is the r'leA 1he 0ailor "annot e8empt himself from damages 0/ a0andoning the thing loaned to the 0ailee. 8(,) +e"a'se the val'e of the thing loaned is less than the amo'nt of the e8penses of damages. +e"a'se it )o'ld 0e 'n;'st to the 0aliee. A6o. >"M.#E #O!N OR M4$44M !R$1 15?6, ot(er definition of simple loan or m3t33m1 8(at is t(e o'li ation of t(e 'ailor) 1o pa/ the same amo'nt of the same 6ind and ?'alit/ of the thing. "s t(ere a distinction 'et&een t(e definition 3nder !rt1 1566 and !rt1 15?6) *ot reall/. !t is ;'st a matter of perspe"tive. 1he definition 'nder Art. 19## )as made in relation to "ommodat'm )ith respe"t to the p'rpose of the loan 4C.*1&AC15. "n commodat3m, &(at is t(e p3rpose)
1emporar/ 'se. "n m3t33m) Cons'mption. 8(at are t(e t(in s 3nder !rt1 1566) Cons'ma0le and non@"ons'ma0le. !n Art. 19-# 4f'ngi0le5 and 19##3 the thing is mone/ or f'ngi0le v. "ons'ma0lesA 8(at is a f3n i'le) !n,t(in t(at 'elon s to a common en3s &(ic( incl3des of several species of t(e same kind permittin s3'stit3tion of one ', t(e ot(ers1 Examples .il. =hat 6ind of oilA Coo6ing oil. *ag'g'tom na da) a6o. =hat is non@f'ngi0leA 1hings that "annot 0e s'0stit'ted of the same amo'nt of the 6ind and ?'alit/ 'eca3se t(e, are alread, specificall, or partic3larl, determined or desi nated1 !1 is determinate. .0li"on C!sE: Rep3'lic v1 cri(aldo A person 0orro)ed mone/ se"'red 0/ a "ollateral on standing "rops. 1he "ontra"t is "hattel mortgage. 1he 0orro)er failed to pa/ the loan. !n the mean time 0efore the mat'rit/3 the standing "rops )ere destro/ed 0/ a t/phoon 4a fort'ito's event5. Sin"e the 0orro)er failed to pa/3 he "laims that the o0ligation )as e8ting'ished. A""ording to him the se"'rit/ has 0een lost d'e to a fort'ito's event.
!SSUE7 10 % Credit 1ransa"tions7 :'dge Al0erto Serrano
=.* the o0ligation has 0een e8ting'ishedA DE 27 1he o0ligation )as not e8ting'ished 0e"a'se the o0;e"t of the "ontra"t is generi" sin"e the o0ligation )as 1. .!2 mone,. So the destr'"tion of the standing "rop therefore has no 0earing. !t is not the s'0;e"t matter of the loan "ontra"t 0't of the "hattel mortgage 0e"a'se the o0ligation )as to pa/ mone/. =hat )as e8ting'ished )as the "hattel mortgage )hi"h )as onl/ an a""essor/ "ontra"t. Ien3s nonG3am perit; Mr. A0alos Ma, a 'orro&er &(o does /(3 das0 not pa, ma, 'e (eld criminall, lia'le) *o. So if /o' 0orro) mone/ from Mr. .landes"a3 ma/ /o' 0e held "riminall/ lia0leA *o. 8(, canJt ,o3 'e (eld criminall, lia'le if ,o3 do not pa, Mr1 Olandesca) +e"a'se3 'nder the definition of simple loan or m't''m3 there is a transfer of o)nership. >o if ,o3 are alread, t(e o&ner of t(e mone, t(at ,o3 'orro&ed, can ,o3 still misappropriate it) *o. 0e"a'se the mone/ is alred/ /o'rs. Can ,o3 convert it) .> "o'rse not 0e"a'se that is the p'rpose of m't''m )hi"h is "ons'mption. 8(at else is t(e reason)
Under the Constit'tion3 no person shall 0e imprisoned 0/ reason of de0t. Co' "an loan left and right3 /o' "annot 0e held "riminall/ lia0le. Co' )ill ;'st 0e "alled 0alas'0as. 4nder !rt1 15?*, &(at is t(e s3'@ect of t(e transaction) *on@f'ngi0les is transferred to another3 the other part/ is o0liged to deliver another non@f'ngi0le thing3 in )hi"h "ase the transa"tion is a 0arter. 1here is an e8"hange. E8ample7 +M= a/ 6a@peso ng A'di. ,ors"he a/ mas/adong mahal. 8(at are t(e distinctions of M3t33m and Barter) As to o0;e"t3 m't''m7f'ngi0le( 0arter7non@f'ngi0le As to "onsideration3 m't''m7generall/ grat'itio's( 0arter7al)a/s onero's 8(at are t(e distinctions 'et&een Commodat3m and Barter) !s to Consideratin, commodat3m:al&a,s/essentiall,0 'arter:al&a,s onero3s1 rat3ito3s9
As to o0ligation to ret'rn3 "ommodat'm7the same thing( 0arter7 different thing. Ms. .ani M!NNER OC .!2MEN$ OC #O!N 4N-ER !R$1 15??, %o& s(o3ld t(e o'li ation of t(e 'orro&er to pa, overned) Under Art. 1249 and 12-0 of the Civil Code. 1. C'rren"/ Stip'lated in )hi"h the pa/ment shall 0e effe"ted )hi"h "o'ld either 0e lo"al or foreign( m'st 0e paid in that "'rren"/ stip'lated.
S'pposing the 2ollar is not availa0le3 ho) sho'ld the 0orro)er pa/A !n the "'rren"/ )hi"h is the legal tender in the ,hilippines. Japag dinaan ng mga 6astila peso /'n. ,ag dinaan ng ameri6ano3 dollar /an. 2. 1he deliver/ of promissor/ notes pa/a0le to order or 0ills of e8"hange shall prod'"e the effe"t of pa/ment onl/ )hen "ashed 'nless d'e to the fa'lt of the "reditor the/ have 0een impaired. #. Art. 12-07 after the loan has 0een entered3 S'pervening event of e8traordinar/ inflation3 the 0orro)er shall pa/ the val'e at the time the o0ligation )as esta0lished3 'nless there is an agreement to the "ontrar/. =hat do /o' mean 0/ e8traordinar/ inflation 4inflation lang tinatanong dapat5/ Co' ;'st read the "ases in o0ligation7 e8traordinar/ inflation here sho'ld 0e similar to )hat happened d'ring the :apanese era. 8(at is t(e o'@ect of simple loan or m3t33m aside from mone,) >'ngi0le things. 8(at s(o3ld 'e paid ', t(e 'orro&er in case of f3n i'le t(in s) Another thing of the same 6ind and ?'antit/ and ?'alit/ even if it "hanges in val'e. And in "ase it is impossi0le to deliver the same thing3 the val'e of the thing at the time of the perfe"tion of the "ontra"t shall 0e paid 0/ the 0orro)er. S'pposing3 the 0orro)er 0orro)ed 100 sa"6s of 2in'rado &i"e. !f the o0ligation )as to deliver the same amo'nt of ri"e after < months3 )hat sho'ld 0e deliveredA 100 sa"6s of din'rado.
1o deliver the 100 sa"6s or ri"e pa rin. B3t if t(ere is not availa'le rice in t(e market, &(at is t(e o'li ation of t(e 'orro&er) 1o pa/ ,1206. 8(, not 100k onl,) +e"a'se the la) provides that the val'e of thing at the time of the esta0lishiment of the "ontra"t )hi"h is 1000pesos. Ms. 1'aGon.a0sent. Mr. Mala0anan. "n a contract of loan or m3t33m, if t(e s3'@ect matter is mone,, &(at s(o3ld 'e paid ', t(e 'orro&er) 1he 0orro)er m'st pa/ the prin"ipal of the loan. 2o3 'orro&ed 10k and ,o3 are reG3ired to pa, 12k1 &(at is t(e principal) 10k1 8(at is t(at 2k) $(at is t(e interest1 8(en is interest d3e and pa,a'le) .nl/ )hen it is e8pressl/ stip'lated in &ritin 4Art. 19-<5. 8(, is it not 'orro&er is not o'li ed to pa, interest 3nless it is a reed 3pon) Under Art. 19## 4#rd par53 simple loan is generall/ grat'ito's. 46apag ang "olonel a/ na@promote3 general sirM5 A ;o6e m'st 0e in"ongr'o's( i0a 'ng german.
S'pposing3 at the time of the "ontra"t3 the pri"e of din'rado ri"e is 1000pesos/sa"6. =hen the o0ligation 0e"ame d'e3 the val'e of the ri"e is 1200pesos/sa"6. =hat is the o0ligation of the 0orro)erA 12 % Credit 1ransa"tions7 :'dge Al0erto Serrano
8(at are t(e reG3isites t(at interest s(all 'e d3e and pa,a'le) 1. 1o pa/ interest m'st 0e E8pressl/ stip'lated( 2. !n )riting( #. !nterest m'st 0e la)f'l 4this pertains to the rate5. 8(at do ,o3 mean ', interest) /it is defined 3nder 3s3r, la&0 !t is the "ompensation allo)ed 0/ la) or fi8ed 0/ the parties for the 'se of mone/. 1he transa"tions are loan or for0earan"e3 of mone/3 goods or "redit. #etJs sa, t(at ,o3 lend 10k to one of ,o3r friends pa,a'le in one ,ear1 !t mat3rit, date, ,o3r friend ave ,o3 11k1 ma, (e recover t(e excess of 10k) 2es1 +e"a'se loan is generall/ grat'ito's. 1hen3 interest is not d'e and pa/a0le. 1h's3 in pa/ing 116 there )as a mista6e in pa/ment for 16. sin"e there )as a pa/ment 0/ mista6e3 sol'tio inde0iti m'st 0e applied. *o person m'st 0e 'n;'stl/ enri"h at the e8pense of the other. Ms. Casares >ame example, except t(at, ,o3 a ree orall, t(at s(e &ill pa, 10= to t(e principal1 "f (e pa,s ,o3 11k, can (e recover .1k) *o. +e"a'se 'nder the prin"iple laid do)n 'nder *at'ral .0ligation3 the o0ligation "annot 0e enfor"ed in the "o'rt of la) 0't he vol'ntar/ pa/s the same3 he "an no longer re"over. =hen the de0tor in a nat'ral o0ligation vol'ntaril/ f'lfills the o0ligation3 he "annot re"over )hat he paid or delivered. 4Art. 19<05 Art. 19<0 F Sol'tio !nde0iti or *at'ral .0ligation %o&ever, if t(e a reement to pa, interest in &ritin 1 $(e interest is d3e and enforcea'le or pa,a'le1
"n &(at instance ma, t(e de'tor, &it(o3t a reement to pa, interest in &ritin , 'e (eld lia'le to pa, interest) 1. !n "ase of dela, /0rea"h violation5 in o0ligation to pa/ mone/3 the de0tor is o0liged to pa/ damages in the form of interst( =hat if there is stip'lated rate of interestA 1hat rate of interest sho'ld follo)ed. "f t(ere is no stip3lated rate of interest) /na3'3san si sir n (an in0 Ms1 Collado "n t(e case of E!>$ERN >%".."NI #"NE> "NC, $E## 4> $%E R4#E> "N "N$ERE>$ 2. =hen the o0ligation is 0rea"hed3 4for loan and for0earan"e of mone/ goods or "redits35 !nterest d'e sho'ld 0e 0ased on the stip'lation of the part/. 1hen interest 0e"omes d'e and demanda0le as of the "onstit'tion of the o0ligation. +'t if there is no stip'lation to pa/ interest in "ase of loan or for0earan"e3 interest rate shall 0e imposed from dela/. !f there is a rate3 stip'lated. !f none3 12E 4legal interest5 per ann'm. !nterest in "ase of dela/ and no agreement to pa/ interest3 interest shall 0e 12E. #. !n "ase of other o0ligations other than loan or for0earan"e of mone/. !t is <E for in "ase of 0rea"h of o0ligation. !mposition7 )henA % in "ase of 0rea"h. =hat is the "onse?'en"e in "ase of 0rea"hA 2amages. !f the o0ligation is to pa/ mone/3 the "ompensator/ damages shall 0e in the form of interest.
1# % Credit 1ransa"tions7 :'dge Al0erto Serrano
=hat is the rateA !t depends on stip'lation. =hat a0o't monetar/ a)ards in ;'dgmentsA >rom the time of finalit/ 'p to satisfa"tion. 12E +e"a'se it is "onsidered for0earan"e of "redit. >3mmar, of Easter >(ippin #ines R3les ! @. =hen an o0ligation3 regardless of its so'r"e3 i.e.3 la)3 "ontra"ts3 ?'asi"ontra"ts3 deli"ts or ?'asi@deli"ts18 is 0rea"hed3 the "ontravenor "an 0e held lia0le for damages.19 1he provisions 'nder 1itle BQ!!! on R2amagesR of the Civil Code govern in determining the meas're of re"overa0le damages.20 !!.@ =ith regard parti"'larl/ to an a)ard of interest in the "on"ept of a"t'al and "ompensator/ damages3 the rate of interest3 as )ell as the a""r'al thereof3 is imposed3 as follo)s7 1. =hen the o0ligation is 0rea"hed3 and it "onsists in the pa/ment of a s'm of mone/3 i.e.3 a loan or for0earan"e of mone/3 the interest d'e sho'ld 0e that )hi"h ma/ have 0een stip'lated in )riting.21 >'rthermore3 the interest d'e shall itself earn legal interest from the time it is ;'di"iall/ demanded.22 !n the a0sen"e of stip'lation3 the rate of interest shall 0e 12E per ann'm to 0e "omp'ted from defa'lt3 i.e.3 from ;'di"ial or e8tra;'di"ial demand 'nder and s'0;e"t to the provisions of Arti"le 11<92# of the Civil Code.
0egin to r'n from the time the "laim is made ;'di"iall/ or e8tra;'di"iall/ 4Art. 11<93 Civil Code5 0't )hen s'"h "ertaint/ "annot 0e so reasona0l/ esta0lished at the time the demand is made3 the interest shall 0egin to r'n onl/ from the date the :'dgment of the "o'rt is made 4at )hi"h time the ?'antifi"ation of damages ma/0e deemed to have 0een reasona0l/ as"ertain. 15. 1he a"t'al 0ase for the "omp'tation of legal interest shall3 in an/ "ase3 0e on the amo'nt finall/ ad;'dged.
#E$ 4> >!2, ,o3 'o3 (t 'a s of cement evidenced ', a sales invoice or deliver, receipt1 Belo& t(e si nat3re line, t(ere are printed terms and conditions incl3din pa,ment of interest, late pa,ment c(ar e and attorne,Js fees1 $(e sacks of cement &as delivered to t(e &are(o3se '3t &as si ned ', t(e caretaker1 >3ppose ,o3 failed to pa,, are ,o3 o'li ed to t(e interest rate in t(e sales invoice) No1 1he 0'/er did not "onsent sin"e he did not sign the re"eipt. 1herefore3 he did not signif/ his "onsent. 4&o/al Shirt >a"tor/ v. Co5 Mr1 1olentino 8(at is t(e le al rate of interest) !t depends. !f for loan or for0earan"e of mone/3 goods or "redits3 12E 'nder C+ Cir"'lar 41<. 8(at a'o3t &it( re ard to ot(er o'li ation)
=hen an o0ligation3 no "onstit'ting loans or for0earan"e of mone/ !f for an/ other o0ligation3 <E 'nder the Civil Code. 1his is in "ase is 0rea"hed an interest on the amo'nt of damages a)arded ma/ of o0ligations other than loan or for0earan"e of mone/3 goods3 or he imposed at the dis"retion of the "o'rt24 at the rate of <E per a "redits. ann'm.2- *o interest3 ho)ever3 shall 0e ad;'dged on 'nli?'idated "laims or damages e8"ept )hen or 'ntil the demand "an 0e Example: esta0lished )ith reasona0le "ertain/.2< A""ordingl/3 )here the Sale on "redit. =hen there is a dela/ or 0rea"h of the "ontra"t of sale. demand is esta0lished )ith reasona0le "ertaint/3 the interest shah 14 % Credit 1ransa"tions7 :'dge Al0erto Serrano
!t is not a'tomati" for a de0tor to in"'r in dela/ 0e"a'se there is a need of demand3 ;'di"ial or e8tra@;'di"ial 411<95. ia0le to pa/ damages in "ase of dela/ 'nder Art. 11$0 in the form of interest for <E. <E 0e"a'se the transa"tion )as not loan or for0earan"e of mone/ 0't sale. Contra"t on ins'ran"e. !ns'rer is o0liged to pa/ for the damage "overed 0/ the ris6 ins'red against. >ire ins'ran"e. 1he +'ilding )as raGed 0/ fire. =hat is the o0ligation of the ins'rerA 1o indemnif/ the ins'red for the val'e of the propert/ a""ording to the poli"/. So if the ins'ran"e "ompan/ does not pa/ the pro"eeds3 )o'ld it 0e lia0le for damagesA After demand3 /es3 at the legal rate of <E per ann'm. !n "ase of Qehi"'lar a""ident. +asis of lia0ilit/7 ?'asi@deli"t 4negligen"e is the 0asis of lia0ilit/5. 1he part/ in;'red is entitled to "ompensation in the form of mone/. !f the negligent part/ does not pa/3 he is lia0le for damages in the form of interest at <E )hi"h is the legal rate of interest from demand. $%"> "> VER2 "M.OR$!N$ "N #EI!# .R!C$"CE: =hen /o' prepare "omplaints3 ma6e s're that /o' allege the interest and )hen the interest is d'e and )hat the rate of interest sho'ld 0e 0e"a'se if /o' donNt as6 that 40e"a'se /o' do not 6no)53 the "o'rt )ill not grant that. =hat /o' donNt 6no) )ill not 0e given to /o'. E 6'ng h'ndreds of million 'ng 6aso. Ms. +arona "s t(ere s3c( a t(in as interest on interest)
0/ stip'lations "apitaliGe the interest d'e and 'npaid3 )hi"h as added prin"ipal3 shall earn ne) interst. "f ,o3 lend mone, at 10= per ann3m pa,a'le after one ,ear1 !fter one ,ear &ill t(e 'orro&er pa,) ,1106. 106 is the interest. +'t if it is not /et paid3 it is "alled accr3ed interest. Sin"e it is alread/ d'e3 )o'ld the 10E earn interestA AS a r'le3 no. Unless3 there is a stip'lation. 8(at kind of a kind of an a reement) =hen the 'npaid interest is "apitaliGe and added to the prin"ipal. 1hen3 the prin"ipal and interest shall earn interest )hi"h m'st 0e in )riting. !t is "alled "ompo'nding of interest 0/ agreement. 8(at is t(e ot(er exception to t(e r3le t(at no interest in interest) !rt1 22121 "n case of H3dicial -emand1 1he a""r'ed interest shall earn interest after the "ase has 0een filed in "o'rt. N>BC" v1 .NB, ">>4E) =hether the es"alation "la'se )as validA 1he 0asis of the "omplaint of ,*+ is re?'ire *S+C! to pa/ the es"alated interest. *S+C! "ontended that the es"alation "la'se is void. ,*+ in"rease the rate 'nilaterall/ 0/ merel/ giving noti"e to the 0orro)er. Escalation cla3se 7 that "reditor ma/ in"rease the rate of interest rate on the original rate of interest. Ms. 9eronimoPPP didnNt read the "ase !SSUE7
Ces. Art. 19-9 )itho't pre;'di"e to the provisions of Art. 22123 interest d'e =hether or not the es"alation "la'se provided in the promissor/ note )as and 'npaid shall not earn interest. Do)ever3 the "ontra"ting parties ma/ valid 0/ mere noti"e to the 0orro)erA 1- % Credit 1ransa"tions7 :'dge Al0erto Serrano
>C %E#-: *o. !t violates the m't'alit/ of "ontra"ts. 1he giving of noti"e in"reasing the rate of interest is a 3nilateral determination and imposition of in"reased rate of interest. 1his is not valid sin"e there is no "onsent on the part of the 0orro)er. >o &(at if t(ere is no consent, t(ere is alread, a provision in t(e promissor, note stip3latin t(e increase9 is t(is not s3fficient) *o. +e"a'se of prin"iple of m't'alit/ of "ontra"ts 'nder Art. 1#08. .ne sided imposition do not have the for"e of la) 0et)een the "ontra"ting parties. Unilateral imposition does not appl/ the prin"iple of m't'alit/ 0e"a'se s'"h impositions are not 0ased on the partiesN essential e?'alit/ 4the "hara"teristi" of m't'alit/ of "ontra"ts5. ,*+ v. CA 19< SC&A 419915 Co' "an 'se this to dela/ the pro"eeding. +a6a ma6a6ahingi 6a pa ng 1&. for /o'r attorne/Ns fees. Jasi mahirap magtra0aho. #!8C4# "nterest: $(e last reG3isite 8(at a'o3t an a reement in t(e .N t(at provides t(at in case of defa3lt, t(e 'orro&er s(all pa, 1= interest per mont() !t is "alled the penalt/ "la'se. !n this "ase3 penalt/ rate. 8(at kind of o'li ation is t(at) .0ligation )ith a penal "la'se. -o3'le .3rpose of O'li ation of a .enal Cla3se: Cilinvest #and v1 C! IR 16B560 A penal "la'se is an a""essor/ 'nderta6ing( to ass'me greater lia0ilit/ in "ase of 0rea"h of the o0ligation. 1. !t provides for li?'idated damages in "ase of 0rea"h(
2. !t strengthens the "oer"ive for"e of the o0ligation 0/ the threat of greater responsi0ilit/ in the event of 0rea"h of o0ligation. 8(at ma, co3rt ma, do in case of penalt,) !n "ase the penalt/ is ini?'ito's or 'n"ons"iona0le3 the "o'rt ma/ red'"e the penalt/ or totall/ disregard the penalt/ "la'se. !n some "ases3 a penalt/ rate of #E per month is "onsidered 'n"ons"iona0le and 'nreasona0le. 4B." v1 MK0 $(e difference 'et&een interest and penalt, rate: !nterest is "ompensation for the 'se of mone/3 )hile penalt/ is imposed 0e"a'se of 0rea"h or violation of the "ontra"t. 1he latter "an onl/ 0e "olle"ted if there is a 0rea"h of "ontra"t. Mr. ,atriar"ha ME-E# V1 CO4R$ OC !..E!#> ::: C!VOR"$E C!>E N" H4-IE >AC1S7 eti"ia et al. o0tained the follo)ing loans7 ,-06 42 mos. At <E per month5 0't onl/ 4$6 advan"ed interest( 906 4<E per month5 846 )as released( #006 4-.-E5 2$-6 )as released. 1otal oan F 4406. additional loan <06. 1otal -006. ?1:00 "n ot(er &ords, t(ere &as a consolidation of t(e loan1 $(e, exec3ted a promissor, note to mat3re after 1 mont( &it( ?1?= interest12= service c(ar e and 1= penalt,1 2?= attorne,Js fees1 !fter mat3rit,, defa3lted1 %o& do ,o3 call t(is loan) -isco3ntin of interest % interest is ded'"ted in advan"e from the pro"eeds of the prin"ipal o0ligation. $(e creditor filed a case1 8(at &ere t(e defenses of Medels)
1< % Credit 1ransa"tions7 :'dge Al0erto Serrano
1. 1he interest violated the Us'r/ a) 4main line of defense5. 2. 1he interest rate of -.-E stip'lated in the ,* e8or0itant3 ini?'ito's3 'n"ons"iona0le3 e8"essive 42nd line of defense5. $rial Co3rt1 2etermination of the ,rin"ipal. 1he trial "o'rt ded'"ted the prin"ipal and instead appl/ 12E legal interest holding that -.-E is 'n"ons"iona0le. Appeal 0/ the "reditor. Co3rt of !ppeals1 !t 'pheld the stip'lation of the parties "iting C+ Cir"'lar 90-. 1he parties are given the freedom to stip'late the rate of interest. -.-E interest. Appeal 0/ the de0tors. >3preme Co3rt1 .n the first iss'e7 1here )as no violation of the Us'r/ la) 0e"a'se of C+ Cir"'lar *o. 90- p'rs'ant to ,2 11< )hi"h a'thoriGed the Central +an6 to determine/fi8 the rates of interest. egall/ ine8istent in ?'otation mar6s3 so do not 'se Hlegall/ ine8istent.I Under the 's'r/ la)3 if se"'re loan 12E. !f 'nse"'red3 14E. Sin"e there is no more pres"ri0ed rate of interest3 the 's'r/ la) is ineffe"tive 0e"a'se it )as s'spended. Ma, 3s3r, la& 'e revived) CesM !1 )as merel/ s'spended and C+ Cir"'lar 90- )hi"h is an administrative iss'an"e "annot amend or repeal a la). .n the se"ond iss'e3 the S'preme Co'rt r'led for the petitioners. =hile the interest rate is not 's'rio's3 nevertheless3 it )as ini?'ito's and 'n"ons"iona0le. 1herefore3 it is "ontrar/ to morals 4 CON$R! BON4> MORE>5 if not against the la). S'"h 0eing the "ase3 the "o'rt ma/ e?'ita0l/ red'"e the interest rate. "s t(e a reement on t(e rate of interest t(e same as t(e a reement to pa, interest)
No1 1he differen"e. 1he first spe"ifies the interest rate. 1he 2 nd3 the does not fi8 the rate 0't it em0odies the agreement to pa/ interest. 8(at &as imposed ', t(e >3preme Co3rt) 12= le al interest rate1 8(en do ,o3 appl, le al rate) !f there is an agreement to pa/ interest 0't there is no stip'lated rate. 1hat is )h/ it "alled the legal rate 0e"a'se it is s'pplied 0/ the la). Craftin a le al doc3ment: -ecision or Memorand3m: "f it is a memorand3m: facts, iss3es /fact3al andFor le al0, resol3tion /r3lin in case of a decision0, pra,er /dispositive portion in case of decision01 !R$1 15?B1 "n t(e determination of t(e interest, if it is pa,a'le in kind, its val3e s(all 'e appraised at t(e c3rrent price of t(e prod3cts or oods at t(e time and place of pa,ment1 1his is espe"iall/ tr'e )hile the 's'r/ la) )as still in effe"t. Co' "an appl/ this on sit'ations )here farmers o0tain loan )ith a promise to pa/ goods. !ssi nments for Next Meetin : 8(ole C(apter on -eposit and t(e Collo&in Cases: C! ! roL"nd3strial -evelopment Corporation v1 C! /15560 7 safet, deposit 'ox in %otels1 2%$ Realt, Corporation v1 C!, 12<AB0 fe'1 11, 200?
NOVEMBER 2A, 2010

4>4R2 7
1$ % Credit 1ransa"tions7 :'dge Al0erto Serrano
!t is defined as "ontra"ting form of re"eiving something in e8"ess of the amo'nt allo)ed 0/ la) for the loan or for0earan"e of mone/3 goods or "hattels. Us'r/ is a stat'tor/ "reation. !t is a reg'lation )hi"h "ontains the prohi0ition to "harge and "olle"t 's'rio's interest. 8(en do ,o3 determine &(et(er t(e a reement to pa, interest is 3s3rio3s) =hen the ta6ing of the interest is a0ove the limit pres"ri0ed 0/ la). !n other )ords3 a0ove the ma8im'm rate of interst provided in the 's'r/ la). Under the Us'r/ a)3 for loans se"'red 0/ real estate mortgage3 the ma8im'm rate of interest is 12E )hile for loans *.1 se"'red 0/ real estate mortgage the ma8im'm rate of interest is 14E. +e/ond the ma8im'm the rate of interest3 the mere agreement 4and ta6ing of5 to "harge interest is "onsidered 's'rio's. E#EMEN$> of 4>4R2 1. 1here m'st 0e loan or for0earan"e( 2. An 'nderstanding 0et)een the parties that the loan shall or )ill 0e ret'rned( #. Unla)f'l intent to ta6e more than the legal rate for the 'se of mone/ or its e?'ivalent( 4. 1he ta6ing or agreeing to ta6e for the 'se of the loan of something in e8"ess of )hat is allo)ed 0/ la). !nterest % is the "ompensation for the 'se of mone/. >or0earan"e % to permit or allo) the 'se of mone/3 goods or "hattel. !f there is no loan or for0earan"e3 then there is no 's'r/ or 's'rio's transa"tion. .4R.O>E OC $%E 4>4R2 #!8
!1 is ena"ted for the prote"tion of 0orro)ers from the imposition of 'ns"r'p'lo's lenders )ho ta6e 'nd'e advantage of the ne"essities of others. -7< is illegal 4240E per ann'm5 'nder the medel r'ling and s'0se?'ent r'ling. 1he interest is ini?'ito's and 'n"ons"iona0le. Us'r/ pro"eeds on the theor/ that a 's'rio's loan is attri0'ta0le to s'"h ine?'alit/ in the relation of the lender and 0orro)er that the 0orro)erNs ne"essities deprive him of freedom in "ontra"ting and pla"e him at the mer"/ of the lender. 1he la) loo6s at the 0orro)er in the same position as an in"apa"itated person 0e"a'se of ne"essit/. 1h's3 )hatever is imposed 0/ the lender3 is a""epted 0/ the 0orro)er. 1o remove the disadvantage in the 0argaining position of the 0orro)er3 the 's'r/ la) )as ena"ted. 8%!$ "> $%E N!$4RE OC 4>4R2 #!8) !t is 0oth remedial and penal 'nder ,hilippine :'risdi"tion. >or provisions )hi"h are remedial in "hara"ter3 the/ sho'ld 0e interpreted li0erall/ in order to a""omplish the p'rpose or intention of the la). !f the provisions are penal3 then the interpretation sho'ld 0e stri"t ;'st li6e an/ other penal stat'te. =hen the "o'rt de"lares a transa"tion or agreement to 0e 's'rio's3 the effe"t of ta6ing and "harging 's'rio's interest rate is illegal( therefore3 n'll and void. 8(, donJt &e (ave 3s3rio3s interest rate no&) +e"a'se of C+ Cir". 90- iss'ed p'rs'ant to ,2 11<3 there is no "eiling in the rate of interest. ,rovided that the rate of interest m'st 0e la)( it m'st not 0e ini?'ito's or 'n"ons"iona0le. 8(at is declared void) !t is merel/ the agreement )ith respe"t to the 's'rio's interest. !f the ma8im'm rate of interest is 2E per month and the ma8im'm rate is 12E
or 14E. 1he entire agreement to pa/ 24E interest is void. !f that is paid3 the remed/ of the de0tor is to re"over )hat has 0een paid in e8"ess of the legal interest. !t a"t'all/ refers to the rate of interest( th's the entire interest paid ma/ 0e re"overed. 8(at a'o3t t(e a reement to pa, interest, is t(at covered) No1 1he agreement to pa/ interest is still valid. 1here is no ?'estion to pa/ prin"ipal is still valid. Sin"e there is an agreement to pa/ interest and onl/ the rate of interest is void3 )hat is the rateA 1he legal rate 0e"a'se it is as if the parties did not agree on an/ rate( there is no stip'lated 0e"a'se the agreed rate is n'll and void. !f there is no rate3 therefore3 it is the legal interest 412E for loan or for0earan"e of mone/3 goods and "redits or <E if it pertains to an/ other o0ligation5. Ms1 $orres -E.O>"$ !rt1 15<21 ! deposit is constit3ted from t(e moment a person receives a t(in 'elon in to anot(er, &it( t(e o'li ation of safel, keepin it and of ret3rnin t(e same1 "f t(e safekeepin of t(e t(in delivered is not t(e principal p3rpose of t(e contract, t(ere is no deposit '3t some ot(er contract1 $%E .R"NC".!# .4R.O>E OC -E.O>"$ Safe@6eeping. !> it is not3 then the prin"ipal p'rpose is another "ontra"t depending on the p'rpose. E8ample. !f the prin"ipal p'rpos is "ons'mption3 then it is m't''m. !f temporar/ 'se3 it is "ommodat'm. And if for management3 agen"/.
8(at are distinction 'et&een m3t3m and deposit) !> to p3rpose, deposit3 safe6eeping( m't''m3 "ons'mption. As to the o0ligation to ret'rn3 deposit3 ret'rn of the thing at )ill( m't''m3 pa/ment at the e8piration of the period. As to o0;e"t3 deposit3 mova0le or immova0le( m't''m3 mone/ or other f'ngi0les. 8(at re t(e distinction 'et&een deposit and commodat3m) As to prin"ipal p'rpose3 deposit3 safe6eeping( "ommodat'm3 transfer of the 'se. As to o0;e"t 4e8tra;'di"ial5 deposit3 onl/ mova0le( "ommodat'm3 0oth mova0le and immova0le. As to "ompensation3 deposit ma/ 0e grat'ito's )hile "ommodat'm is essentiall/ and al)a/s grat'ito's. M>1 Man3el -oes !rt1 15<6 pertain to a contract of deposit) *o. it is merel/ an agreement 1. C.*S1!1U1E A 2E,.S!1. An agreement that a person )o'ld deliver the thing. 8(en is t(e contracted of deposit perfected) !t is perfe"ted after deliver/ of the thing 0e"a'se a deposit is a real "ontra"t. "s t(ere alread, a contract 3nder !rt1 15<6) Ces. A "onsens'al "ontra"t )hi"h is perfe"ted 0/ mere "onsent. Consent 1. C.*S1!1U1E A 2E,.S!1. Dindi pa 0'ntis3 maaring ma0'ntis pa lang.
8(at do ,o3 mean t(at Dan a reement to constit3te of deposit is 'indin )E !t is enfor"ea0le in a "o'rt of la) so that the person )ho promise to deliver does not perform3 he is lia0le for 0rea"h of "ontra"t to deposit 4similar to Art. 19#45. 1his is also an innominate "ontra"t sin"e there is no name designated for it. %o& ma, a deposit ma, 'e constit3ted /kinds of deposit0) Art. 19<4 provides that a deposit ma/ 0e "onstit'ted ;'di"iall/ or e8tra@ ;'di"iall/. 8(en is t(ere @3dicial deposit) Constit'ted thro'gh a "o'rt order s'"h as atta"hment or replevin. 8(at are t(e kinds of extra@3dicial deposit) Qol'ntar/ and *e"essar/. Vol3ntar, % or one )herein the deliver/ is M!-E B2 $%E 8"## OC $%E -E.O>"$OR or 0/ t)o or more persons ea"h of )hom 0elieves himself to 0e entitled to the thing deposited. 8(at are t(e instances &(en necessar, deposit ma, 'e constit3ted /apat ,an0) 1. =hen it ta6es pla"e on the o""asion of an/ "alamit/( 2. =hen it ta6es pla"e in "omplian"e )ith an o0ligation imposed 0/ la)( #. 2eposit made 0/ g'ests and travelers in hotels and inns( 4. 2eposit made 0/ travelers or passengers )ith "ommon "arriers.
9enerall/3 a deposit is a grat'ito's "ontra"t3 e8"ept )hen there is a stip'lation to "ompensate the depositar/ or the depositar/ is engaged in the 0'siness of storing goods 4Art. 19<-5. "n necessar, deposit, &(ere propert, is saved from destr3ction &it(o3t kno&led e of t(e o&ner, t(e latter is 'o3nd to pa, t(e savior @3st compensation1 8(at is t(e reason &(, Donl, mova'le t(in s ma, 'e t(e o'@ect /s3'@ect matter0 of deposit /!rt1 15<<0)E 8(, not immova'le) +e"a'se the possi0ilit/ that the thing ma/ disappear or ma/ 0e lost or stolen is not present in real propert/. Moreover the p'rpose of deposit is for safe6eeping. Soil ma/ 0e stolen 0't not the land. Mr. 2agalangit. Ms. C' Ma, incorporeal ri (ts 'e t(e s3'@ect of extra@3dicial deposit) No1 +e"a'se 0/ reason of its in"orporealit/3 it is not s's"epti0le of "'stod/. A right "annot 0e safe 6ept sin"e a right "annot 0e lost or stolen. !n"orporeal propert/ has no ph/si"al or tangi0le e8isten"e. Do)ever3 )hat ma/ 0e the s'0;e"t of depositA Onl, evidence or doc3ments evidencin t(e /incorporeal propert,0 ri (ts of a person1 E8ample7 "ertifi"ate of Sto"6( a negotia0le promissor/ note or 0ill of e8"hange. Vol3ntar, deposit 8(at are t(e c(aracteristics of a contract of deposit) !n relation to Art. 19<#3 it is a RE!# CON$R!C$ 0e"a'se it "annot e8ist )itho't the thing 0eing delivered to the depositar/.
!s re ards compensation or ca3se or consideration, a deposit ma, eit(er 'eM) 20 % Credit 1ransa"tions7 :'dge Al0erto Serrano
!t ma/ either 0e 4N"#!$ER!# or B"#!$ER!#1 4nilateral if grat'ito's sin"e the o0ligation arises onl/ on the part of the depositar/ to safe6eep and ret'rn( and +ilateral is for "ompensation sin"e the o0ligations pertain to 0oth of the parties. Ira 7 t3&i 7 toos 4nder t(e 2nd sentence of !rt1 15<B, &(o ma, make t(e deposit) =hen t)o or more persons ea"h of )hom 0elieves himself entitled to the deposited )ith a third person3 the depositar/ shall deliver/ it to the person to )hom it 0elongs. 1here is a "onfli"t 0et)een t)o persons )ho "laim to 0e entitled in the same thing in his o)n right. "C ,o3 are t(e depositar,, &(at is ,o3r remed,) !nterpleader % a pro"ed're or an a"tion in "o'rt filed 0/ the depositar/ against the "laimants in order to "ompel the parties to litigate so that the "o'rt ma/ determine )ho is entitled to the thing. 1he depositar/ m'st follo) the order of the "ase. After the "ase has 0een filed3 the depositar/ is merel/ a spe"tator the "ase. MR1 -ionio "s it reG3ired t(at t(e act3al o&ner 'e t(e depositor) *o. for e8ample3 a "arrier3 agent3 or lessee )ho ma/ deposit the goods temporaril/ in his possession "onsidering that the "ontra"t does not involve the transfer of o)nership. Moreover3 Art. 1984 provides that the Hdepositar/ "annot demand that the depositor prove his o)nership of the thing deposited.I 8(at is t(e form of t(e contract of deposit) Art. 19<9 provides that Ha "ontra"t of deposit ma/ 0e entered into orall/ or in )riting.I
8(, is t(ere no &ritten form is reG3ired) +e"a'se the "ontra"t is real and 0eing real3 the deliver/ itself "onstit'tes performan"e )hi"h )ill eviden"e the perfe"tion of the "ontra"t. !rt1 15A0, &(at is t(e scenario and t(e r3le) 1he depositar/ is "apa"itated and the depositor is incapacitated to "ontra"t. 1he r'le is that3 the depositar/ shall 0e s'0;e"t to all the o0ligations of the depositar/( and ma/ 0e "ompelled to ret'rn the thing 0/ the g'ardian or administrator or 0/ the depositor himself sho'ld he a"?'ire "apa"it/. 8(at a'o3t !rt1 15A1) 1he depositar/ is in"apa"itated )hile the depositor has "apa"it/ to "ontra"t. 1he r'le is that the depositor ma/ re"over the thing itself or the val'e of the thing to the e8tent that the depositar/ ma/ have 0een enri"hed or 0enefited. 8it( re ard to 6rd part, '3,er) !t depends if he a"ted in 0ad faith or in good faith. !f in good faith3 the depositor "annot 0ring a"tion against him. !f in 0ad faith3 the depositor ma/ 0ring an a"tion against the third person for its re"over/. 8(en is a 6rd person considered to (ave acted in 'ad fait() !f he has a"t'al 6no)ledge of the in"apa"it/ of the depositar/ and more importantl/ he has 6no)ledge that the thing is s'0;e"t of the "ontra"t of deposit. Ms1 Cr3N 4nder !rt1 15A2, &(at are t(e t&o principal o'li ations of t(e depositar,) 1. 1o safel/ 6eep the thing 4ta6e "ared PPP 'ng tinet8t mo sa 0f mo5
2. 1o ret'rn it to the depositor or his heirs and s'""essors or to the person )ho ma/ have 0een designated in the "ontra"t. 8(at is t(e r3le t(at overn t(e responsi'ilit, of t(e depositar, &it( re ard to t(e safekeepin and t(e loss of t(e t(in ) +/ 1itle ! of +oo6 !Q of the Civil Code. 1he r'le on .0ligations and Contra"t. 8(at is t(e o'li ation of t(e person &(o is o'li ed to deliver t(in ) 1o ta6e "are of the thing )ith the diligen"e of a good father of the famil/ 'nless the la)3 or the nat're of the thing or stip'lation3 another standard of "are is re?'ired. 8(at is t(e dili ence of a deposit) ood fat(er of a famil, &it( re ard to
=as the ta6ing of the mone/ 0/ the militar/ a'thor "onsidered a fort'ito's eventA DE 27 Ces. 1he "onfis"ation 4a""ording to the SC5 is a fort'ito's event 0e"a'se as li6ened to the ta6ing of mone/ for"i0l/ from the ho'se of the tr'stee( irresisti0le for"e( a state of )ar. 1herefore3 the tr'stee is a0solved from responsi0ilit/. OB#"I!$"ON> OC $%E -E.O>"$!R2 Arts. 19$#3 19$4 and 19$83 )e have the negative o0ligations or d'ties of the depositar/. *egative 0e"a'se the depositar/ is prohi0ited from doing something. !rt1 15A6: $(e depositar, cannot deposit t(e same t(in person1 Except: =hen allo)ed 0/ the depositor( hen"e3 he )ill not 0e lia0le for the loss of the thing in the hands of the third part/ depositar/. 8(en &o3ld 'e t(e first depositar, 'e (eld lia'le even if t(e t(in is in t(e (ands of t(e t(ird part, depositar,, even &it(o3t t(e fa3lt of t(e 1st depositar,) !> the third person is manifestl/ "areless or 'nfit 0e"a'se the 1 st depositar/ is "onsidered negligent in "hoosing the #rd part/ depositar/. 4C'lpa A?'iliana5 8(at a'o3t loss t(ro3 ( t(e fa3lt of t(e emplo,ees of t(e depositar,) 1he depositar/ is lia0le for the loss 'nder the prin"iple of &ES,.*2EA1 SU,E&!.&. 1he a"ts of the emplo/ee is imp'ta0le to the emplo/er. 1he latter is responsi0le for the negligen"e of his emplo/ees. to a t(ird
.rdinaril/ 2iligen"e 4+on's ,ater >amilias5 % the diligen"e that a person )o'ld e8er"ise )ith his o)n propert/ as his o)n propert/. Ma, t(e parties a ree to a lo&er de ree of dili ence to 'e exercised t(an pater familias) No1 +e"a'se this is the minim'm standard pres"ri0ed 0/ la) 0e"a'se it )o'ld 0e "ontrar/ to la) and p'0li" poli"/. 1here is no diligen"e of a good "hild of a famil/. 1he poli"/ of the la) is to 0e diligent or "aref'l )ith their affairs. Case: Roman Cat(olic Bis(op v1 -e la .ena 1he +ishop gave a person 4a priest5 f'nds in tr'st. 1he latter "ommingled the mone/ )ith his 0an6 a""o'nt together )ith his mone/. Unfort'natel/3 the mone/ )as se?'estered or "onfis"ated 0/ the militar/ a'thorit/. So the +ishop s'ed the tr'stee. 1he defense )as fort'ito's event. !ss'e7
!rt1 15A*: $(e -epositar, is o'li ed not to c(an e t(e &a, of deposit 22 % Credit 1ransa"tions7 :'dge Al0erto Serrano
M!NNER OR 8!2 OC -E.O>"$ $(e t(in is delivered to ,o3, (o& s(o3ld ,o3 take care of it) $(e eneral is t(at, to take deposit accordin t(in 1 Example: -iamond Rin , (o& s(o3ld ,o3 keep it) .3t it in a safe or a place not accessi'le to an,one1 $(is is t(e 3s3al1 Can t(is 'e c(an ed) 2es1 "f 3nder t(e circ3mstances, t(e depositar, ma, reasona'le pres3me t(at t(e depositor &o3ld consent to t(e c(an e of t(e &a, of t(e deposit1 "n ot(er &ords, t(e depositor kne& t(e facts of t(e sit3ation1 %o&ever, &(at is t(e reG3irement 'efore t(e depositar, ma, c(an e t(e &a, of t(e deposit) DE m'st first notif/ the depositor A*2 he sho'ld )ait for the de"ision of the depositor3 U* ESS the dela/ 4in the de"ision or repl/5 )o'ld "a'se danger. Ms1 IrantoNa "C t(e o'@ect of t(e deposit consist in t(e certificates, 'onds, sec3rities or instr3ments, &(at is t(e r3le) !f the/ earn interest3 the depositar/ is 0o'nd to "olle"t the certificates, 'onds, sec3rities or instr3ments )hen it 0e"omes d'e3 A*2 to ta6e s'"h steps as ma/ 0e ne"essar/ in order that the se"'rities ma/ preserve their val'e and the rights "orresponding to them a""ording to la). Example: to t(e nat3re of t(e
8(at is delivered to t(e depositar, is a ne otia'le promissor, note &it( interest1 1he depositar/ is 0o'nd to "olle"t not onl/ the prin"ipal 0't also the prin"ipal. B3t s3ppose t(e .N (as 'een dis(onored ', nonLpa,ment1 1he depositar/ m'st give noti"e of dishonor to the indorsers so that the latter )ill not 0e dis"harged from lia0ilit/. Case: C! ! roL"nd3strial Corporation v1 C! 215 >CR! *2< /155<0 Ms1 C3ervo CA Agro entered into a "ontra"t to p'r"hase t)o par"els of land of the Sps. ,'gao. !t )as agreed that title )ill pass 'pon f'll pa/ment of the pri"e. !t )as also agreed that the "ertifi"ate of title )o'ld 0e deposited in a safet/ deposit 0o8 )ith an/ 0an6. 1he/ agreed that the deposit 0o8 )ill not 0e opened )itho't the signat're of 0oth parties. CA Agro and Sps. ,'gao deposited the "ertifi"ates of title )ith Se"'rit/ +an6. &enter 6e/s )ere given to the spo'ses ,'gao and CA Agro3 the g'ard 6e/ in the "'stod/ of the 0an6. 1he 0an6 stip'lated that H1#. 1he 0an6 is not a depositar/ of the "ontents of the safe and has neither the possession nor "ontrol of the same. 14. 1he 0an6 has no interest )hatsoever in said "ontents3 e8"ept herin e8pressl/ provided3 and it ass'mes a0sol'tel/ no lia0ilit/ in "onne"tion there)ith. ater3 Margarita &amos approa"hed CA Agro to p'r"hase the lots higher than the pri"e 0et)een CA Agro and Spo'ses ,'gao. CA Agro agreed and it promptl/ notified Spo'ses ,'gao. =hen the/ tried to retrieve the "ertifi"ates3 in the presen"e of CA Agro3 Spo'ses ,'gao and the +an63 the "ertifi"ate are no longer there. +e"a'se of the dela/ in the re"onstit'tion of title3 Margarita &amos )ithdre) her earlier offer to p'r"hase the p'r"hase the lots.
2# % Credit 1ransa"tions7 :'dge Al0erto Serrano
CA Agro@filed an a"tion against Se"'rit/ +an6 alleging that it s'stained damages 0e"a'se of the )ithdra)al of Margarita &amos d'e to the fa'lt of the 0an6 having the titles lost. 1he +an6 "ontended that it is not lia0le 0e"a'se of the stip'lation. Moreover3 it averred that the "ontra"t )as merel/ one of lease 0e"a'se as s'"h3 it is not lia0le for the loss 4provided it has no fa'lt5. CA Agro "ontroverted that the "ontra"t )as n'll and void for 0eing "ontrar/ to p'0li" poli"/. Moreover3 it "ontented that the "ontra"t )as one of deposit. !SSUES7 1. ease or deposit
Condition 14 is void for 0eing "ontrar/ to p'0li" poli"/ 'nder Art. 1#0<. !t is a provision e8empting the 0an6 from lia0ilit/( hen"e it violates the la) and p'0li" poli"/. Art. 11$0 provides that Hever/ person o0liged to deliver something is g'ilt/ of fra'd3 negligen"e3 dela/ and in an/ manner "ontravene the tenor of the o0ligation3 is lia0le for damages.I 1h's a person e8empting the de0tor d'e to fra'd or negligen"e is void. Condition 14 is pre"isel/ that. Ms. Mala0anan 1he 0an6 ho)ever is not lia0le for damages. !t )as not a)are of the greement 0et)een the ;oint renters. 1here )as not "ompetent proof )as presented to sho) that the 0an6 "a'sed the loss of the "ertifi"ates d'e to its fra'd or negligen"e. Attorne/Ns fees "annot 0e imposed against CA Agro 0e"a'se it did not a"t in 0ad faith. Ma, t(e depositar, commin le kind and t(e same G3alit,) rain or ot(er articles of t(e same
2. Qoid Stip'lation #. DE 27 !t )as not a "ontra"t of lease 0e"a'se ( neither )as it a "ontra"t of deposit. 1he "ontra"t )as a spe"ial 6ind of deposit. Do)ever3 the relationship of CA Agro and the +an6 )as one of 'ailor and 'ailee 3nder a 'ailment contract for (ire and m3t3al 'enefit1 !t )as one of 0ailment 0e"a'se Se". $2 of 9eneral +an6ing A"t )hi"h )as ta6en from Ameri"an a)s. 1he ;'rispr'den"e interpreting Ameri"an la)s sho'ld 0e applied. 1he "onsens's of a'thorit/ the relationship is one of 0ailor and 0ailee 'nder 0ailment 'nder a 0ailment "ontra"t for hire and m't'al 0enefit. M&. +olante. Conditions 1# and 14 are void. Condition 1# does not find s'pport to the fa"ts of the "ase 0e"a'se the tr'th is the safet/ deposit 0o8 is lo"ated )ithin the premises of the 0an6. 1herefore3 it has possession and "ontrol over the safet/ deposit 0o8. ,ossession and Control is also manifested 0/ the g'ard 6e/. 1he 0o8 "annot 0e opened )itho't the g'ard 6e/. ia0ilit/
Ces. E8"ept )hen there is a stip'lation to the "ontrar/ 4Art. 19$<5 8(at is t(e Effect) 1here is "o@o)nership among the depositors. 8(at s(o3ld 'e delivered ', t(e depositar,) .nl/ their proportionate interest in the mass 0e"a'se of the "ommingling. +rea6. Mr. +ele/ Mr. A0alos Ms. .ani $(e ot(er ne ative o'li ation of t(e depositar, 3nder !rt1 15AA:
1he depositor/ "annot ma6e 'se of the thing deposited )itho't the express permission of the depositor. =hat is the effe"t if he 'ses )itho't the e8press a'thorit/A De is lia0le for damages. 8(en ma, t(e depositar, make 3se of t(e t(in 'ein lia'le for dama es) deposited &it(o3t
2. 1he de0tor 4depositar/5 is not lia0le for the loss. Mr1 #eal -E.O>"$OR !N- $%E B!N+ 4N-ER !R$1 15B0, 8(at kinds of acco3nts are covered) >i8ed3 Savings3 or "'rrent deposited in 0an6s and similar instit'tions. Cixed !cco3nts 7 time deposit9 c3rrent 7 demand deposit or c(eckin acco3nt ', dra&in a c(eck for pa,ment coverin ,o3r deposit1 =hat is the r'le that governs this 6ind of depositA 1he r'le on simple loan. 8(at is t(e relations(ip 'et&een t(e depositor and t(e Bank1 Creditor and de0tor. Creditor 0eing the depositor and the de0tor is the 0an6. >3pposin , t(e 'ank fails to pa, t(e &it(dra&al of t(e deposit, ma, t(e officers of t(e 'ank 'e (eld lia'le for estafa)
1hen there is a permission to 'se the thing deposited3 provided the 'se is merel/ in"idental to the prin"ipal p'rpose )hi"h is safe6eeping 4Art. 19$85. .& =hen the preservation of the thing deposited re?'ires its 'se3 provided it m'st 0e 'sed onl/ for that p'rpose 4preservation5 4Art3 19$$5. .ermission to 3se m3st 'e proved1 "t cannot 'e pres3med1 8(at do ,o3 call t(e deposit &(ere t(e depositar, is allo&ed or permitted to 3se t(e t(in deposited) !rreg'lar deposit. PPP disting'ish from m't''m and "ommodat'm. 8(en is t(e depositar, lia'le for t(e loss of t(e t(in fort3ito3s event) Art. 19$9 provides that7 1. !f it is so stip'lated( 2. !f he 'ses the thing )itho't the depositorNs permission( #. !f he dela/s the ret'rn( 4. !f he allo)s others to 'se it3 even tho'gh he himself ma/ have 0een a'thoriGed to 'se the same. $(e eneral r3le is t(at, if t(e t(in is lost d3e to fort3ito3s event1 1. 1he o0ligation is e8ting'ished. d3e to
No1 +e"a'se there is transfer of o)nership over the mone/ )hi"h is the s'0;e"t of the deposit. Sin"e the 0an6 is alread/ the o)ner3 it "annot misappropriate or "onvert it. 1here is no estafa thro'gh a0'se of "onfiden"e. 1he relationship 0eing that of "reditor and de0tor. >ince t(e 'ank is en a ed in t(e 'ankin '3siness, t(e depositor (as a deposit &it( t(e 'ank and t(e same time it (as a loan &it( t(e 'ank, &(at ma, t(e 'ank do) 1he 0an6 ma/ offset 4"ompensation5 )hi"h is one of the modes of e8ting'ishment of an o0ligation 4See. Art. 12$9 for the re?'isites5. 1he 0an6 has a'thorit/ to offset the loan. !n that )a/3 there is a total or partial e8ting'ishment of the o0ligation. 8(, are 'anks impressed &it( p3'lic interest)
2- % Credit 1ransa"tions7 :'dge Al0erto Serrano
Sin"e the 0an6 o0tains its f'nds from the p'0li"3 it is so impressed )ith p'0li" interest. 1hat is )h/ 0an6ing is a highl/ reg'lated 0'siness. %o& s(o3ld t(e t(in sealed) deposited 'e ret3rned if it is closed and
9enerall/3 /o' are not allo)ed to open the 0o8 4Art. 19825. E8"ept7 1. =hen it is ne"essar/ to do so( 2. =hen the order of the depositor "annot 0e e8e"'ted )itho't opening the 0o8 or depositor. 8(en ma, t(e depositar, a3t(oriNed to open t(e 'ox) =hen there is deliver/ of the 6e/ to the lo"6ed 0o8 or re"epta"le. 8(at s(o3ld 'e ret3rned ', t(e depositar,) Art. 198#. 1he thing deposited3 all its prod'"ts3 a""essories and a""essions. 8(at is t(e r3le if t(e o'@ect is mone,) 1he provisions relative to agents 'nder Art. 189< shall 0e applied. 8(at is t(e o'li ation of t(e depositar, &(o 3ses t(e mone, delivered to (im for deposit) De shall 0e lia0le for the interest as indemnit/ from the da/ on )hi"h he 'sed the mone/. !rt1 15B*1 $(e depositar, cannot demand t(at t(e depositor prove (is o&ners(ip of t(e t(in deposited1 Nevert(eless, s(o3ld (e discover t(at t(e t(in (as 'een stolen and &(o its tr3e o&ner is, (e m3st advise t(e latter of t(e deposit1 Elements7 1. 1he thing deposited m'st have 0een stolen9 2. 1he depositar/ 6no)s )ho its tr'e o)ner is 4Art. --95.
!t m'st 0e ret'rned 0/ the depositar/ in the same "ondition 4Art. 19815. 8(at is t(e effect is t(e seal or lock is 'roken) 1he depositar/ is lia0le for damages for 0rea"h of "ontra"t 4Art. 19815. Ms. +arona 8(at is t(e pres3mption if t(e seal is 'roken) 1he depositar/ is pres'med at fa'lt3 'nless there is proof to the "ontrar/. "f t(e t(in closed and sealed deposited is forci'l, open and it is imp3ta'le to t(e depositar,, &(at is t(e r3le &it( re ard t(e val3e of t(e t(in ) 1he statement of the depositor as to the val'e shall 0e a""epted. 1he "o'rt )ill a""ept that as the tr'e val'e. 8(at &ill t(e co3rt do &it( t(e testimon,) Do)ever3 the Co'rt ma/ pass 'pon the "redi0ilit/ of the depositor )ith respe"t to the val'e "laimed 0/ him. 8(at is t(e responsi'ilit, of t(e depositar, &(en t(e seal or lock is 'roken &it( or &it(o3t t(e depositar,Js fa3ld) 1o 6eep the se"ret of the deposit. +a)al maging tsimosa. !rt1 15B2, t(e t(in s3'@ect of t(e deposit is placed in &(at) o"6ed 0o8 or re"epta"le. 8(at is t(e r3le)
"C s3c( &as t(e case, t(e depositar, m3st inform t(e tr3e o&ner1 8(at s(o3ld t(e tr3e o&ner do after t(e receipt of t(e information t(at (is propert, &(ic( &as stolen is s3'@ect of deposit) 1he tr'e o)ner ma/ "laim the thing from the depositar/ )ithin one month from the date of the notifi"ation. >3pposin t(e tr3e o&ner does not claim from t(e depositar, &it(in one mont( or t(e one mont( period (as alread, expired1 8(at s(o3ld (e do to 'e relieved from lia'ilit,) De "an ret'rn the thing to the depositor. HB# Re,es1 8(at a'o3t t(e sit3ation &(ere, after 10 da,s from notification to t(e tr3e o&ner, t(e depositor demands t(e ret3rn of t(e t(in 1 "f ,o3 are t(e depositar,, &o3ld ,o3 take (eed of t(e demand of t(e depositor) 8o3ld ,o3 'e @3stified to ref3se deliver,) 2es1 1his sho'ld 0e interpreted that )a/. 1he reasona0le interpretation of this provision is that H)ithin the period of one month3 the depositar/ has the legal ;'stifi"ation not to ret'rn the thing to the depositor( onl/ after #0 da/s and no "laim 0/ the tr'e o)ner3 then the depositar/ "an ret'rn.I "C t(e depositar, (as reasona'le ro3nds to 'elieve t(at t(e t(in (as not 'een la&f3ll, acG3ired, &(at ma, t(e depositar, do after (e (as accepted it) 1o ret'rn the same to the depositor 4Art. 19845. Ms. 9eronimo 8(at is t(e r3le if t(ere are t&o or more depositors) !f the/ are not solidar/ and the thing admits division 4divisi0le53 ea"h one "annot demand more than his share. 1his is a ;oint o0ligation. 1he thing m'st also 0e divisi0le.
!f there is solidarit/ and the thing is not divisi0le3 ea"h one of the solidar/ depositors ma/ do )hatever ma/ 0e 'sef'l to the others 0't not an/thing )hi"h ma/ 0e pre;'di"ial to the others( and the depositar/ ma/ ret'rn to an/ one of the solidar/ depositors 'nless a demand3 ;'di"ial or e8tra;'di"ial3 for its ret'rn has 0een made 0/ one of them in )hi"h "ase the deliver/ sho'ld 0e made to him. >'rther3 if the "ontra"t designates the person to )hom the thing sho'ld 0e ret'rned. 8(at is t(e r3le if t(ere is a s3'seG3ent incapacit, of t(e depositor) 1he thing m'st 0e ret'rned onl/ to the persons )ho ma/ have the administration of his propert/ and rights( to the depositor himself3 to his heirs and s'""essors3 or to the person )ho ma/ have 0een designated in the "ontra"t 4Art. 198<5. 8(ere s(o3ld t(e t(in 'e ret3rned) !1 depends. !f there is a pla"e designated in the "ontra"t3 the thing m'st 0e ret'rned to that pla"e. !f none3 it m'st 0e ret'rned to the pla"e )here it ma/ 0e3 even if it sho'ld not 0e the same pla"e )here the deposit )as made3 provided that there is no mali"e on the part of the depositar/ 4Art. 198$5. 8(o s(all 'ear t(e expenses of transportation) 1he depositor. 2o not loo6 an/moreM *a0a0a)asan lalo ang grade mo n/an. ,U1AAAADDDS 4sina0i ni sir Tto5 tingin 6a ng tingin. &eading nalang /an. >3pposin t(e a reement em'odies t(at t(e deliver, to 'e made in Batan as alt(o3 ( t(e deposit is made in Manila, &(o s(all 'ear t(e expenses for transportation) Art. 198$ provides that it shall 0e 0orne 0/ the depositor. Ms1 Corrales
8(en s(o3ld t(e t(in 'e ret3rned ', t(e depositar,) Upon demand 0/ the depositor. 8(at is t(e exception) 8(en ma, t(e depositar, 'e @3stified in not ret3rnin t(e t(in to t(e depositor) !n "ase of ;'di"ial atta"hement 4;'di"ial deposit5( in "ase there is a noti"e of opposition of a third person for the ret'rn. 8(at is t(e o'li ation of t(e depositor, if t(ere is an opposition or attac(ment) /!rt1 15BB0 1o retain and to inform the depositor "on"erning the atta"hment or opposition 0/ a #rd person. .pposition is "riti"iGed 0e"a'se it is prone to a0'se and mis"hief. !t )o'ld permit the depositar/ to ref'se. 8(en ma, t(e depositar, ret3rn t(e t(in even prior to t(e expiration of t(e period) !n "ase of grat'ito's deposit3 the depositar/ ma/ ret'rn it for ;'stifia0le reason 4Art. 19895. %o& a'o3t if t(e deposit is for compensation) 1he depositar/ is o0liged to hold the same for safe6eeping 'ntil the e8piration of the term. 1he reason is that there is m't'al 0enefit to the "ontra"ting parties sin"e the o0ligation that had arisen is re"ipro"al and onero's. MR1 -e Mesa1 8(at is t(e le al effect s(o3ld t(e depositor ref3se to accept deliver,) 8(at s(o3ld t(e depositar, do) De m'st file a "omplaint for "onsignation of the thing. 1he o0ligation is e8ting'ished 0e"a'se "onsignation is e?'ivalent to pa/ment or performan"e of the o0ligation.
8(at is t(e effect if t(e t(in overnment order)
is lost t(ro3 ( force ma@e3re or
1he depositar/ is o0liged to deliver the s'm or other thing re"eived to the depositor. Example: 6A:?0 #et 3s sa, t(at a paintin of H3an #3na is fo3nd in ,o3r possession1 $(e overnment ma, expropriate t(at ', pa,in @3st compensation1 $(erefore, in effect, t(ere is a c(an e in t(e o'@ect of t(e deposit from t(e paintin to mone,1 $(3s, t(e depositar, is o'li ed to ret3rn1 8(at is t(e R3le 4nder !rt1 1551, in case t(e depositar,Js (eir takes t(e t(in deposited) /$(ere is a misprint Ddepositar,E dapat0 !t depends on )hether the depositar/Ns heir is in good faith or 0ad faith. 65:00 De re"eives a thing from his prede"essor in interest )hi"h )as deposited 0/ another. >or e8ample 0/ his father )ho died alread/. 1he heir then sold the thing deposited to a #rd person. 8(at is t(e R3le) $(e (eir is 'o3nd to ret3rn t(e price (e ma, (ave received or assi n (is ri (t of action a ainst t(e '3,er in case t(e price (as not 'een paid1 8(at is t(e r3le if it is still in t(e (ands of t(e (eir) De sho'ld ret'rn it to the depositor. 8(at is t(e r3le if t(e depositar,Js (eir is in 'ad fait() De is lia0le for damages and ma/ also 0e held "riminall/ lia0le for estafa. %o& a'o3t t(e '3,er from t(e depositar,Js (eir)
!t depends if the p'r"haser is in good faith or in 0ad faith. !f in good faith3 he "an no longer re"over. Do)ever3 if the 0'/er is in 0ad faith3 then he "an re"over in 0ad faith )hi"h means that the 0'/er has 6no)ledge that the thing is s'0;e"t of the "ontra"t of deposit.
8(at kind of c(aracter) Norio3s1 2angero's "hara"ter. 8(at are t(e exceptions to t(e o'li ation to reim'3rse or t(e depositor is not o'li ed to reim'3rse) 1. At the time of the "onstit'tion of the deposit the depositor )as not a)are of the dangero's "hara"ter of the thing( 2. At the time of the "onstit'tion of the deposit the depositor )as not e8pe"ted to 6no) the dangero's "hara"ter of the thing( #. At the time of the "onstit'tion of the deposit the depositor notified the depositar/ of the dangero's "hara"ter of the thing deposited( 4. At the time of the "onstit'tion of the deposit the depositor/ )as a)are of the dangero's "hara"ter of the thing even )itho't the advi"e from the depositor. "f t(e depositor does not pa, t(e o'li ation provided 3nder !rts1 1552 and 1556, &(at are t(e ri (ts of t(e depositar, over t(e t(in deposited) Under Art. 19943 the depositar/ ma/ retain the thing in pledge 'ntil the f'll pa/ment of )hat ma/ d'e him 0/ reason of deposit. "s t(is t(e same as !rt1 15**) $(ere is also t(e ri (t of retention in case of commodat3m1 8(at is t(e difference) 2es1 !n the right of retention 'nder 1944 is onl/ limited to the possession of the thng3 )hile 'nder Art. 1994 the right to retain in pled e 'ntil f'll pa/ment of )hat ma/ 0e d'e. Mr1 Co 4nder !rt1 155*, &(at is it t(at t(e depositar, ma, do &it( respect to t(e t(in deposited t(at (e retains in pled e for nonLpa,ment of t(e expenses ', t(e depositor) R"I%$ $O RE$!"N "N .#E-IE1 $%"> ">
-istin 3is( 2%$ Realt, Corporation and C! !IRO !ltes 8(at are t(e o'li ations of t(e depositor) 4nder !rt1 1552, Dif t(e deposit is rat3ito3s, t(e depositor is o'li ed to reim'3rse t(e depositar, for t(e expenses (e ma, (ave inc3rred for t(e preservation of t(e t(in deposited1 8(at kind of deposit) Irat3ito3s deposit1 8(, is it t(at t(e depositor is o'li ed to reim'3rse t(e depositar, in case of rat3ito3s deposit) +e"a'se if the thing )ere not 0e deposited3 he )o'ld have in"'rred s'"h e8penses. 8(at is t(e conseG3ence if (e does not) De )ill 0e 'n;'stl/ enri"hed at the e8pense of the depositar/. 8(at a'o3t a deposit for compensation or onero3s deposit) 8(, is t(ere no o'li ation to reim'3rse on t(e part of t(e depositor) +e"a'se the ne"essar/ e8pense is in"l'ded in the "ompensation. !t sho'ld 0e part of the "ompensation and the "harges. 8(at a'o3t t(e o'li ation 3nder !rt1 1556)
1o reim0'rse for an/ loss arising from the "hara"ter of the thing deposited. 1o reim0'rse is the o0ligation to the depositar/. 29 % Credit 1ransa"tions7 :'dge Al0erto Serrano
ONE OC "N>$!NCE> OC .#E-IE B2 O.ER!$"ON OC #!8 OR #EI!# .#E-IE1 1he depositar/ ma/ "a'se the sale of the thing pledge. .nl/ DC!4>EE 0e"a'se it is not the pledge )ho )o'ld sell 0't a notar/ p'0li". 1he pro"eeds )o'ld 0e applied to the o0ligation of the depositor. 8(at are t(e ca3ses for t(e extin 3is(ment of deposit 3nder !rt1 155?) 1. Upon the loss or destr'"tion of the thing deposited( 2. !n "ase of grat'ito's deposit3 'pon the death of either the depositor or the depositar/. !re t(e ca3ses specified excl3sive) No1 >ince t(ere are ot(er means ', &(ic( t(e o'li ation is extin 3is(ed as specified 3nder !rt1 12611 8(at are t(e ca3ses 3nder !rt1 1261) *ovation( "ompensation( merger( remission( pa/ment( loss( pres"ription( res"ission( f'lfillment of a resol'tor/ "ondition( ann'lment. *.@C.@ME&@&E@,A@ .@,&E@&ES@>U @A* ', @3stice Vit3 tin3ro kina H3d e1 Nait3ro 'as a in,o sa criminal la&, 3n cases &(ic( cannot 'e prosec3ted de oficio) "t means t(at t(e private complainant m3st initiate t(e complaint) C@A@S@A@&@A@, Con"'0inage( ad'lter/( sed'"tion( a0d'"tion( rape 4tanggalin na 6asi p'0li" "rime na Tto5( a"ts of las"ivio'sness( private li0el. >irst /ear pa ni ;'dge nat't'nan Tto( ta/o 2nd /ear na. * sta es of dr3nkenness:
11 Hok3s 7 3n Masa,a9 na 'i'ir3an9 21 #acr,mose 7 3mii,ak9 la(at n mal3n kot na stor,a n '3(a, 61 Bellicose 7 na (a(anap n a&a,9 la(at n tao sa m3ndo kaa&a, n,a9 nakakita ln n konti nakipa Ls3nt3kanna1 *1 Comatose 7 'elieve me, naLexperience ko na ,an1 Ba&al na da& 3minom1 NECE>>!R2 -E.O>"$ 8(at are t(e instances &(en necessar, deposit is constit3ted) Under Art. 199<I 1. =hen it is made in "omplian"e )ith the legal o0ligation( 2. =hen it ta6es pla"e o the o""asion of "alamit/3 s'"h as fire3 sotrm3 flood3 pillage3 ship)re"63 or other similar events. Under Art. 19983 #. 1he deposit of effe"ts made 0/ travelers in hotels or inns( Under Art. 1$#43 4. 1he deposit made 0/ passenger of his 0aggage to the "ommon "arrier )hi"h is not in his 4passenger5 personal "'stod/ or in that of his emplo/ees. Mr1 $orres 8(at are t(e distinctions 'et&een necessar, and vol3ntar, deposit) !n vol'ntar/ deposit3 there is freedom of "hoi"e )hile in ne"essar/ deposit it is the )ill of the "o'rtPPPP NO$E Iive me examples of necessar, deposit made in compliance &it( t(e le al o'li ation1 /.rovided ', provision of la&0
#0 % Credit 1ransa"tions7 :'dge Al0erto Serrano
Art. -#8( Art. -8<( Art. 2104(PPPPP .ar1 1 of 155A, &(at overns necessar, deposit) +/ the provisions of the la) esta0lishing it and in "ase of its defi"ien"/3 0/ the r'les on vol'ntar/ deposit. $(e 2nd t,pe of necessar, deposit are t(ose t(at take place &(en) Examples1 .n the o""asion of "alamit/ s'"h as fire3 storm3 flood3 pillage3 ship)re"6 or other similar events. .&ede 'a eart(G3ake) Ces. 8(at overns necessar, deposit t(at takes place on t(e occasion of a calamit,) +/ the r'les on ne"essar/ deposit and Art. 21<8 H=hen d'ring a fire3 flood3 storm3 or other "alamit/3 the propert/ is >!VE- CROM -E>$R4C$"ON B2 !NO$%ER .ER>ON &it(o3t t(e kno&led e of t(e o&ner, the latter is 0o'nd to pa/ the former @3st compensation1 Ms1 >antos #etJs o to t(e t(ird kind of necessar, deposit1 8(at is it) 2eposits made 0/ travelers in hotels or inns 4Art. 19985. -efinition of $erms: 8(at do ,o3 mean ', (otel) /(a'a n an >3l3 %otel one floor lan )0 description sa li'ro e1 Bakit
!t f'rnishes food and lodging to the p'0li" for pa/. !t is also "alled a tavern. Mas maliit 6a/sa sa hotel3 's'all/ at the "o'ntr/ side. 8(at a'o3t motel) !t "omes from t)o )ords "ontra"ted. Motorist and hotel. Ameri"an origin. +e"a'se if /o' travel from one state to another state3 it )o'ld ta6e /o' da/s thro'gh interstate high)a/s. "t is defined as roadside (otel or a roadside cotta es for people travellin ', car1 Of co3rse sa atin i'a an i'i sa'i(in n,an: Bi lan #ik31 $(e 'ook of de leon (as a 'etter description of a motel .(ilippine >t,le1 8(at is traveler or 3est) 8(o is contemplated 3nder !rt1 155B) !t refers to transient. 8(o is a transient) 8(at a'o3t a 'oarder) 8(at is t(e difference 'et&een a traveler and 'oarder1 1he traveler is a transient 0e"a'se he onl/ visits the pla"e for a short period of time. "f ,o3 o to Boraca, for 1 &eek, &(at are ,o3) ! transient or a 'oarder) $ransient1 A 0oarder is a person )ho reg'larl/ gets meal and lodging at a fi8ed rate. Monthl/ or other terms. Co' are not a transient. 8(at a'o3t a lessee) De is also "alled a tenant.
!t is an esta0lishment that f'rnishes lodging and food to the p'0li" for pa/ 4=e0sterNs 2efinition5.
#et me ive ,o3 a pro'lem1 #et 3s sa, t(at ,o3 are invited ', ,o3r 8(at a'o3t an "nn) /8estern term: pana(on ni Ro'in(ood0 friend in (er &eddin in >(an riL#a sa Makati1 2o3 &ent t(ere &it( ,o3r cal t(en t(e valet in t(e 'asement and t(en ,o3 attended t(e #1 % Credit 1ransa"tions7 :'dge Al0erto Serrano
&eddin 1 >omet(in (appened to t(e car, it &as destro,ed1 "s t(e (otel keeper lia'le 3nder !rt1 155B in relation to !rt1 2000) NOOOOO1 Beca3se t(e car is not considered s3'@ect of a necessar, deposit 'eca3se 2O4 !RE NO$ ! I4E>$ OC $%E %O$E#1 8(, are ,o3 not a 3est) +e"a'se /o' did not pa/ for lodging. Co' are merel/ invited 0/ the g'est of the hotel 0't a g'est of /o'r friend. Co' did not "he"6 in. Unless /o' "he"6 in the hotel as a g'est of the hotel3 there is no ne"essar/ deposit "onstit'ted on the "ar that /o' 0ro'ght to the hotel. Co' do not appl/ Art. 19983 1999 in relation to 2000. ! 'oarder is not incl3ded neit(er is a lessee in t(e term traveler1 Cor &(at propert, &o3ld t(e (otel keeper or inn keeper 'e responsi'le for) Effe"ts or 0aggage or l'ggage 4personal propert/5 8(at a'o3t 3nder !rt1 1555) Qehi"les3 arti"les and animals )hi"h have 0een introd'"ed or pla"ed in the anne8es of the hotel. 8(o are responsi'le for t(e losses for t(e dama e of t(e personal propert, or effects of t(e 3est) Jeepers of the hotels or inns. %o& are keepers of (otels or inns responsi'le) As depositaries( provided that notice &as iven to t(em, or to t(eir emplo,ees, of t(e effects 'ro3 (t ', t(e 3ests and t(at, on t(e part of t(e 3est, take preca3tions &(ic( (otel keepers or t(eir s3'stit3tes advised relative to t(e care and vi ilance of t(eir effects1
8(at is t(e responsi'ilit, /o'li ations0 of t(e (otel keepers &it( respect to t(e effects 'ro3 (t in t(e (otel) .0ligations of a depositar/ in a vol'ntar/ deposit. 8(at do t(e responsi'ilities of (otel keepers incl3ded 3nder !rt1 2000) $(eir responsi'ilit, incl3de t(e loss of, or in@3r, to t(e personal poropert, of t(e 3est ca3sed ', t(e servants or emplo,ees of t(e keepers of (otless or inss as &ell as ', stran ers1 EOCE.$: $(ose t(at ma, proceed from an, force ma@e3re1 1he fa"t that travelers are "onstrained to rel/ on the vigilan"e of the 6eepers of the hotel or inn shall 0e "onsidered in determining the de ree of care reG3ired of (im /in takin care of t(e oods 'ro3 (t in t(e (otel01 "$ CO##O8> $%E .R"NC".#E $%!$ $%E -EB$OR "> NO$ RE>.ON>"B#E -4E $O !N2 EVEN$ 8%"C% CO4#- NO$ BE CORE>EEN OR $%!$ 8%"C% CO4#- BE CORE>EEN, 8!> "NEV"$!B#E1 COR$4"$O4> EVEN$ >!B" N" H4-IE, COR$4"$O4> EVEN$ !N- CORCE M!HE4RE %!VE NO -">$"NC$"ON1 >4..O>"NI, t(e emplo,ee of t(e (otel 3sed a 3n and poked it and (eld 3p one of t(e 3est1 "s t(e (otel keeper 'e lia'le for t(e loss of t(e personal propert, of t(e 3est) 2E>1 +e"a'se 'nder the prin"iple of respondeat s'perior3 the a"ts of the emplo/ees are imp'ta0le to the emplo/er 'nder Art. 2180 4dinis"'ss Tto sa CD15. Art. 2180 44th and -th pars.57 H1he o)ners and managers of an esta0lishment or enterprise are li6e)ise responsi0le for damages "a'sed 0/ their emplo/ees in the servi"e of the 0ran"hes in )hi"h the latter are emplo/ed of on o""asion of their f'n"tions.
Emplo/ers shall 0e lia0le for the damages "a'sed 0/ their emplo/ees and ho'sehold helpers a"ting )ithin the s"ope of their assigned tas6s3 even tho'gh the former are not engaged in an/ 0'siness or ind'str/.I
11 8(en t(e loss or is ca3sed ', force ma@e3re9 21 8(en t(e loss or in@3r, is ca3sed ', ro''er, committed ', stran ers &it( t(e 3se of arms or irresisti'le force9 61 8(en t(e loss or in@3r, is d3e to t(e acts of t(e famil,, servants or visitors, or /!rt1 20020 3est, (is
Ms1 -avid >3ppose t(e t(ief or ro''er is a stran er to t(e (otel, is t(e (otel keeper 'e lia'le for loss of t(e effects of t(e 3ests) CesM As a general r'le. >or 'nder Art. 20013 1he a"t of a thief or ro00er3 )ho has entered the hotel is not deemed for"e ma;e're3 'nless it is done )ith the 'se of arms thro'gh an irresisti0le for"e. Exception is &(en ro''er, is done &it( t(e 3se of arms or t(ro3 ( an irresisti'le force1 8(at do ,o3 mean ', Darms)E !t refers to )eapon. 8(at kind of ro''er, is contemplated 3nder !rt1 2001) &o00er/ thro'gh violen"e or intimidation. 1here are t)o 6inds or ro00er/. 1he first is )ith the 'se of for"e 'pon things and the se"ond is ro00er/ thro'gh violen"e or intimidation. C'ng a6/at 0aha/ is ro00er/ thro'gh for"e 'pon things7 )hen a person 'ses a pi"6lo"6 or destro/s a )indo) or tinanggal 'ng roof to gain entr/ into the ho'se. &o00er/ thro'gh violen"e or intimidation is )hen the "'lprit 'ses )eapon. !"e pi"6 p)ede na. Mr1 >armiento #etJs o no& to some instances &(ere t(e (otel keepers is not lia'le1
*1 "f t(e loss arises from t(e dan ero3s c(aracter of t(e t(in s 'ro3 (t into t(e (otel1 /!rt1 20020 4nder !rt1 2006, &(at is t(e r3le concernin t(e responsi'ilit, of t(e (otel keepers) 1he hotel 6eeper "annot free himself from responsi0ilit/ 0/ positing noti"es to the effe"t that he is not lia0le for the arti"les 0ro'ght 0/ the g'est. A*2 an/ stip'lation that s'ppresses or diminishes the responsi0ilit/ of the hotel 6eepers 'nder Art. 1998 % 2001 is void. $ell 3s t(e stor, of Mr1 Mclo3 (lin C!>E: 2%$ V1 CO4R$ OC !..E!#> Mr. Do) is this 0o8 operatedA Can onl/ 0e opened 0/ the g'est and representative or the hotel. =h/ is the hotel representative re?'ired in openingA +e"a'se he holds the 6e/ sin"e the t)o 6e/s m'st 0e 'sed in order to open the safet/ deposit 0o8. Envelops 4dala)a5 01:00:00
## % Credit 1ransa"tions7 :'dge Al0erto Serrano
,rivate respondent M" o'ghlin is an A'stralian 0'siness@man philanthropist. De sta/ed at the Sheraton Dotel d'ring his trips to the ,hilippines. De met Ms. 1an )ho 0efriended him3 and "onvin"ed him to transfer from Sheraton to 1ropi"ana )here aineG3 ,a/am and opeG )ere emplo/ed. opeG served as the manager of the hotel )hile aineG and ,a/am had "'stod/ of the 6e/s of the safet/ deposit 0o8es of 1ropi"ana. 1an too6 "are of M" o'ghlinUs 0oo6ing at the 1ropi"ana. !t is M"lo'ghlinUs pra"ti"e to rent a safet/ deposit 0o8 ever/ time he registered at 1ropi"ana. 1he safet/ deposit 0o8 "o'ld onl/ 0e opened thro'gh the 'se of t)o 6e/s3 one is given to the registered g'est3 and the other remaining in the "'stod/ of the management of the hotel. =hen a registered g'est )ished to open his safet/ deposit 0o83 he alone "o'ld personall/ re?'est the management )ho )o'ld then assign one of its emplo/ees to a""ompan/ the g'est and assist him in opening the safet/ deposit 0o8 )ith the t)o 6e/s. Sometime on 2e"em0er of 198$3 )hen he too6 a trip to Dong Jong )hile still a g'est at 1ropi"ana he dis"overed )hen he got there that the envelopes "ontaining monies he deposited in the safet/ deposit 0o8 are )anting USV26. After ret'rning to Manila he left for A'stralia3 and it is there that he dis"overed that the mone/ in the envelopes )as short of USV-6 and the diamond 0ra"elet )hi"h he 0o'ght in DJ is also lost. =hen he "ame 0a"6 to the ,hilippines on April of 19883 he as6ed aineG if some mone/ and/or ;e)elr/ )hi"h he had lost )ere fo'nd and ret'rned to her or to the management. Do)ever3 aineG told him that no one in the hotel fo'nd s'"h things and none )ere t'rned over to the management. De again registered at 1ropi"ana and rented a safet/ deposit 0o8. De against lost several tho'sand of dollars USV26 and A'sV4.-6. =hen he dis"overed the loss3 he immediatel/ "onfrontedn ,a/am and aineG )ho admitted that 1an opened the safet/ deposit 0o8. M"lo'ghlin also "onfronted 1an )ho admitted that she had stolen M"lo'ghlinUs 6e/
and )as a0le to open the 0o8 )ith the assistan"e of opeG3 ,a/am and aineG. opeG told M"lo'ghlin that 1an stole the 6e/ assigned to M"lo'ghlin )hile the latter )as asleep. ater3 opeG )rote on a pie"e of paper a promissor/ note )hi"h is signed 0/ 1an promising to pa/ M"lo'ghlin the amo'nts of A'sV46 and USV26 or its e?'ivalent in ,hilippine "'rren"/. 2espite the e8e"'tion of promissor/ note 0/ 1an3 M" o'ghlin insisted that it m'st 0e the hotel )ho m'st ass'me responsi0ilit/ for the loss he s'ffered. Do)ever3 opeG ref'sed to a""ept the responsi0ilit/ rel/ing on the "onditions for renting the safet/ deposit 0o8 entitled HUnderta6ing >or the Use .f Safet/ 2eposit +o8.I 1he said 'nderta6ing stip'lates that the g'est holds 1ropi"ana harmless for the loss of the effe"ts of the g'est "ontained in the safet/ deposit 0o8. =hen M"lo'ghlin ret'rned to A'stralia3 he "ons'lted his la)/ers as to the validit/ of the stip'lation. 1he/ opined that the stip'lations are void for 0eing violative of 'niversal hotel pra"ti"es and "'stoms. S'0se?'entl/3 after "ons'lting ,hilippine la)/ers3 a "omplaint for damages )as filed against CD1 &ealt/3 1an3 opeG3 ,a/am and aineG. After trial3 the "o'rt held them lia0le ;ointl/ and severall/. 1he trial "o'rt relied on the vera"it/ of the M"lo'ghlinNs testimonies. Moreover3 the trial "o'rt fo'nd that the stip'lation in the HUnderta6ingI is void for 0eing "ontrar/ to la) 4Art. 200#5 and p'0li" poli"/. 1he Co'rt of Appeals agreed )ith the lo)er "o'rt 0't red'"ed the amo'nt of damages. Unpert'r0ed3 hen"e3 this appeal on "ertiorari. !SSUES7 1. )hether the appellate "o'rtNs "on"l'sion on the alleged prior e8isten"e and s'0se?'ent loss of the s'0;e"t mone/ and ;e)elr/ is s'pported 0/ the eviden"e on re"ord(
2. )hether the finding of gross negligen"e on the part of petitioners in the performan"e of their d'ties as inn6eepers is s'pported 0/ the eviden"e on re"ord( #. )hether the HUnderta6ing >or 1he Use of Safet/ 2eposit +o8I admittedl/ e8e"'ted 0/ private respondent is n'll and void( 4. )hether the damages a)arded to private respondent3 as )ell as the amo'nts thereof3 are proper 'nder the "ir"'mstan"es. %E#-: 1he petition is devoid of merit. =e adhere to the findings of the trial "o'rt as affirmed 0/ the appellate "o'rt that the fa"t of loss )as esta0lished 0/ the "redi0le testimon/ in open "o'rt 0/ M" o'ghlin. S'"h findings are fa"t'al and therefore 0e/ond the am0it of the present petition. 1. 1he trial "o'rt had the o""asion to o0serve the demeanor of M" o'ghlin )hile testif/ing )hi"h refle"ted the vera"it/ of the fa"ts testified to 0/ him. .n this s"ore3 )e give f'll "reden"e to the appre"iation of testimonial eviden"e 0/ the trial "o'rt espe"iall/ if )hat is at iss'e is the "redi0ilit/ of the )itness. 1he oft@repeated prin"iple is that )here the "redi0ilit/ of a )itness is an iss'e3 the esta0lished r'le is that great respe"t is a""orded to the eval'ation of the "redi0ilit/ of )itnesses 0/ the trial "o'rt. 2. 1he eviden"e reveals that t)o 6e/s are re?'ired to open the safet/ deposit 0o8es of 1ropi"ana. .ne 6e/ is assigned to the g'est )hile the other remains in the possession of the management. !f the g'est desires to open his safet/ deposit 0o83 he m'st re?'est the management for the other 6e/ to open the same. !n other )ords3 the g'est alone "annot open the safet/ deposit 0o8 )itho't the assistan"e of the management or its emplo/ees. =ith more reason that a""ess to the safet/ deposit 0o8 sho'ld 0e denied if the one re?'esting for the opening of the safet/ deposit 0o8 is a stranger. 1h's3 in "ase of loss of an/ item deposited in the safet/ deposit 0o83 it is inevita0le to "on"l'de that the management had at least a hand in the "ons'mmation of the ta6ing3 'nless the
reason for the loss is force majeure. *ote)orth/ is the fa"t that ,a/am and aineG3 )ho )ere emplo/ees of 1ropi"ana3 had "'stod/ of the master 6e/ of the management )hen the loss too6 pla"e. !n fa"t3 the/ even admitted that the/ assisted 1an on three separate o""asions in opening M" o'ghlinNs safet/ deposit 0o8. 1his onl/ proves that 1ropi"ana had prior 6no)ledge that a person aside from the registered g'est had a""ess to the safet/ deposit 0o8. Cet the management failed to notif/ M" o'ghlin of the in"ident and )aited for him to dis"over the ta6ing 0efore it dis"losed the matter to him. 1herefore3 1ropi"ana sho'ld 0e held responsi0le for the damage s'ffered 0/ M" o'ghlin 0/ reason of the negligen"e of its emplo/ees. Under Arti"le 11$0 of the *e) Civil Code3 those )ho3 in the performan"e of their o0ligations3 are g'ilt/ of negligen"e3 are lia0le for damages. As to )ho shall 0ear the 0'rden of pa/ing damages3 Arti"le 21803 paragraph 445 of the same Code provides that the owners and managers of an esta0lishment or enterprise are li6e)ise responsi0le for damages "a'sed 0/ their emplo/ees in the servi"e of the 0ran"hes in )hi"h the latter are emplo/ed or on the o""asion of their f'n"tions. Also3 this Co'rt has r'led that if an emplo/ee is fo'nd negligent3 it is pres'med that the emplo/er )as negligent in sele"ting and/or s'pervising him for it is hard for the vi"tim to prove the negligen"e of s'"h emplo/er. 1h's3 given the fa"t that the loss of M" o'ghlinNs mone/ )as "ons'mmated thro'gh the negligen"e of 1ropi"anaNs emplo/ees in allo)ing 1an to open the safet/ deposit 0o8 )itho't the g'estNs "onsent3 0oth the assisting emplo/ees and CD1 &ealt/ Corporation itself3 as o)ner and operator of 1ropi"ana3 sho'ld 0e held solidaril/ lia0le p'rs'ant to Arti"le 219#. #. Art. 200#. H1he hotel@6eeper "annot free himself from responsi0ilit/ 0/ posting noti"es to the effe"t that he is not lia0le for the arti"les 0ro'ght 0/ the g'est. An/ stip'lation 0et)een the hotel@6eeper and the g'est )here0/ the responsi0ilit/ of the former as set forth in Arti"les 1998 to 2001 is s'ppressed or diminished shall 0e void.I Arti"le 200# )as in"orporated in the *e) Civil Code as an e8pression of p'0li" poli"/ pre"isel/ to appl/ to sit'ations s'"h as that presented in this "ase. 1he hotel 0'siness li6e the "ommon
#- % Credit 1ransa"tions7 :'dge Al0erto Serrano
"arrierNs 0'siness is im0'ed )ith p'0li" interest. Catering to the p'0li"3 hotel6eepers are 0o'nd to provide not onl/ lodging for hotel g'ests and se"'rit/ to their persons and 0elongings. 1he t)in d't/ "onstit'tes the essen"e of the 0'siness. 1he la) in t'rn does not allo) s'"h d't/ to the p'0li" to 0e negated or dil'ted 0/ an/ "ontrar/ stip'lation in so@"alled H'nderta6ingsI that ordinaril/ appear in prepared forms imposed 0/ hotel 6eepers on g'ests for their signat're. 1he *e) Civil Code is e8pli"it that the responsi0ilit/ of the hotel@ 6eeper shall e8tend to loss of3 or in;'r/ to3 the personal propert/ of the g'ests even if "a'sed 0/ servants or emplo/ees of the 6eepers of hotels or inns as )ell as 0/ strangers3 e8"ept as it ma/ pro"eed from an/ force majeure. !t is the loss thro'gh force majeure that ma/ spare the hotel@6eeper from lia0ilit/. !n the "ase at 0ar3 there is no sho)ing that the a"t of the thief or ro00er )as done )ith the 'se of arms or thro'gh an irresisti0le for"e to ?'alif/ the same as force majeure. 4. As to damages a)arded to M" o'ghlin3 )e see no reason to modif/ the amo'nts a)arded 0/ the appellate "o'rt for the same )ere 0ased on fa"ts and la). Note: Altho'gh there is a "ontra"t'al relation 0et)een the hotel and the g'est3 there is nothing anomalo's in the r'ling of the lo)er "o'rt 0e"a'se the lo)er "o'rt prono'n"ed a ;'rispr'dential r'le that tort lia0ilit/ "an e8ist even if there are pre@e8isting "ontra"t'al relation. 1he a"t that 0rea6s the "ontra"t ma/ also 0e a tort 4C'lpa A?'iliana5. Air >ran"e v. Caras"oso7 A 0rea"hed of "ontra"t "an also 0e pri"ed from a tort'o's a"t. Jahit mag6ahalo /an p)ede. A tort'o's a"t at the same time a 0rea"h of "ontra"t. 8(at is t(e difference no& 'et&een t(e safet, deposit 'ox in a (otel and t(at from a 'ank)
!s to contract3al relation, in a 0an6 it is a "ontra"t of 0ailment for hire and for m't'al 0enefit3 )hile in a hotel3 it is a ne"essar/ deposit. !s to relations(ip, in a 0an63 0ailor and 0ailee )hile in a hotel3 depositor and depositar/. Break1 -i ka,o na Laral, nakakapa odK
-EC1 *, 2010 7 .!R$ ""

MR1 O#!N-E>C! 4nder !rt1 200*, &(at is t(e remed, or t(e ri (ts of (otel keeper for 3npaid 'ills) De ma/ retain the effe"ts in pledge. 1his is similar to Art. 1994. .f "o'rse3 there is also a right of retention 'nder Art. 1944. &ight of retention 4lahat /an ma/ T4N5. 8(at is t(e ri (t of t(e (otel keeper in case of nonLpa,ment) 1o "a'se the sale of the pledged propert/ in an a'"tion sale or a p'0li" sale. 1he pro"eeds )ill 0e applied to the o0ligation of the g'est for the 'npaid 0ail. 8(at is t(e criminal lia'ilit, of a 3est for not pa,in t(e (otel 'ills) Estafa. So do not "he"6 in and r'n a)a/ and not pa/ the hotel. #etJs o no& to @3dicial deposit1 H3dicial deposit or) >eG3estration1 8(en is @3dicial deposit or seG3estration constit3ted)
!t ta6es pla"e )hen an atta"hment or seiG're of propert/ in litigation is ordered 4Art. 200-5. So there is a pending "ase. 1he propert/ is either atta"hed or seiGed 4not ne"essaril/ s'0;e"t of litigation5. #< % Credit 1ransa"tions7 :'dge Al0erto Serrano
8(at are t(e ro3nds for attac(ement) 1. Civil >ra'd 2. >ra'd in "ontra"ting the o0ligation #. A0s"onding 4. 2efendant is not a resident of the ,hilippines. 8(at are t(e effects of attac(ment in case of re istered propert,) 1. !t "reates a lien or en"'m0ran"e on a propert/ 'pon registration of the atta"hment or lev/ on atta"hment. 2. !t provides for se"'rit/ for satisfa"tion of the ;'dgment that ma/ 0e rendered 0/ the "o'rt. $(ere are t(ree partic3lar r3les in ROC &(ic( cover @3dicial seG3estration: R3le ?A, R3le ?5 and R3le <01 R3le ?A L attac(ment9 R3le ?5 7 Receivers(ip9 R3le <0 7 Replevin /recover, or seiN3re of personal propert,0 "N $%E>E $%REE "N>$!NCE>, $%ERE "> H4-"C"!# -E.O>"$ OR >EP4E>$R!$"ON1 8(en a propert, in liti ation, in order to preserve it d3rin t(e pendenc, of t(e action, ma, 'e s3'@ect of a receivers(ip t(ro3 ( an appointment of a receiver1 8(at are t(e s3'@ect of @3dicial deposit or seG3estration) Either immova0le or mova0le 4Art. 200-5. H3dicial -eposit is !4O"##"!R2 or a .ROV">"ON!# REME-2 /R4#E> ?<L<001 $(at a part, ma, file d3rin t(e pendenc, of a case1 8(o is t(e depositar, in @3dicial deposit) 1he one appointed 0/ "o'rt.
Ms1 Man3el 8(at is t(e responsi'ilit, or d3t, or o'li ation of t(e depositar, /s(eriff or t(e receiver0) $(e s(eriff process t(e attac(ment1 Cor t(e receiver: 1o safe@6eep the thing )hile it is in his "'stod/. 8(at is t(e extent of t(e responsi'ilit, of t(e depositar, in a @3dicial deposit) Under Art. 200$3 the depositar/ "annot 0e relieved of his responsi0ilit/ 'ntil the "ontrovers/ has ended or 0/ virt'e of a "o'rt order. 42 9ro'nds ang5 Controvers, comes to an end means) &endition of a ;'dgment that has 0e"ome final and e8e"'tor. 8(at are t(e distinctions 'et&een a @3dicial and extra@3dicial deposit) !s to Ca3se or Ori in, ;'di"ial 0/ the )ill of the "o'rt( e8tra;'di"ial 0/ the )ill of the parties. !s to p3rpose, ;'di"ial3 as se"'rit/ and to se"'re the rights of a part/ to re"over/ in "ase of a favora0le ;'dgment( e8tra;'di"ial3 "'stod/ and safe6eeping of the thing( !s to >3'@ect Matter, ;'di"ial3 either mova0le or immova0le propert/( e8tra;'di"ial3 onl/ mova0le propert/( !s to Rem3neration /compensation0, ;'di"ial is A =ACS rem'nerated 4rem'neration to the offi"er appointed5( e8tra;'di"ial3 generall/ grat'it'o's !s to &(ose 'e(alf it is (eld /.erson 'enefitted0, ;'di"ial3 in 0ehalf of the person )ho3 0/ the ;'dgment 0/ the ;'dgment3 has a right 4or a part/ litigant5( e8tra;'di"ial3 in 0ehalf of the depositor or third persons designated.
#$ % Credit 1ransa"tions7 :'dge Al0erto Serrano
!rt1 20051 !s to matters not provided for in t(is Code, @3dicial seG3estration s(all 'e overned ', t(e R4#E> of CO4R$1
!t ma/ also 0e iss'ed 0/ person )ho is d'l/ a'thoriGed 0/ the )areho'seman 4Se". 15. 42'l/ a'thoriGed agent5 8(at is t(e definition of a &are(o3se receipt) $(ere are t&o senses: 1. !t is defined as a )ritten a"6no)ledgment 0/ a )areho'seman that he has re"eived and holds "ertain goods therein des"ri0ed in store for the person to )hom it is iss'ed. 2. !t is a >"M.#E CON$R!C$ 0et)een the =DM and the o)ner of the goods so that the o)ner ma/ pa/ the "ompensation for storage of the goods. MR1 -a alan it "s it necessar, t(at t(e &are(o3se receipt compl, &it( a partic3lar form prescri'ed ', la&) 8(,) No1 +e"a'se Se". 2 provides that )areho'se re"eipts need not 0e in an/ parti"'lar form. 8(at s(o3ld 'e &ritten on t(e receipt 3nder >ec1 2) 8(at are t(eir si nificance) 1. o"ation of )areho'se % to ena0le the holders of the re"eipt to determine )here the goods are deposited3 espe"iall/ )hen the )areho'seman has several )areho'ses lo"ated in different pla"es.
8!RE%O4>E RECE".$> #!8 /!C$ 216A, !> !ME-E-0

Mr1 $olentino 8(en do ,o3 appl, t(e provisions of 8are(o3se Receipt #a&) 1here m'st 0e a )areho'se re"eipt iss'ed 0/ a person 6no)n as the )areho'seman. *ote7 A person ma/ o)n a )areho'se and ma/ iss'e a re"eipt 0't if he is not a )areho'seman3 then this is not "overed 0/ the =areho'se &e"eipts a). So =hat la) appliesA 1he provisions of the Civil Code on Qol'ntar/ 2eposit. 8(o is a &are(o3seman) De is person )ho is engaged in 0'siness of storing goods for profit. De m'st have a )areho'se. 8(at is a &are(o3se) !t means a 0'ilding of pla"e )here goods are deposited and stored for profit. >t3d, t(e definitions 3nder >ec1 ?B1 Onl, a &are(o3seman ma, iss3e a &are(o3se receipt 3nder >ec1 11 B3t &(o ma, si n aside from a &are(o3seman) /Baka ma'ok,a ka, t(e depositor cannot iss3e a &are(o3se receipt0 "s it t(e &are(o3seman &(o is t(e onl, one reG3ired to iss3e receipt1
2. 2ate of !ss'e of &e"eipt % for it serves as an indi"ation )hen the "ontra"t of deposit is perfe"ted and the storage "harges shall 0egin to r'n. #. Conse"'tive n'm0er of re"eipt % to identif/ ea"h re"eipt )ith the goods for )hi"h it )as iss'ed. *ote7 the "onse"'tive n'm0ering ma/ 0egin at an/ n'm0er. 4. ,erson to )hom the goods are delivera0le % either to the depositor or his order( or a spe"ified person or his order( to the 0earer(
-. &ate of Storage Charges % this states the "onsideration for the "ontra"t from the vie)point of the )areho'seman. !n the a0sen"e of e8press agreement3 the la) pres'mes that the depositor shall pa/ the "'stomar/ or reasona0le "ompensation( <. 2es"ription of goods or pa"6ages % this is important for identifi"ation so that the identi"al propert/ delivered to the )areho'seman ma/ 0e delivered 0a"6 0/ him 'pon the ret'rn of the )areho'se re"eipt( $. Signat're of the )areho'seman % his signat're f'rnishes the 0est eviden"e of the fa"t that the )areho'seman has received the goods re"eived the goods des"ri0ed in the re"eipt and has agreed to 0o'nd himself )ith the depositor( 8. =areho'semanNs o)nership of or interest in goods % in order to prevent a0'ses )hi"h in the past had arisen from )areho'seman iss'ing re"eipts on their goods( 9. Statement of advan"es made and lia0ilities in"'rred % in order to preserve the lien of the )areho'seman 4=areho'semanNs lien5 over the goods stored or the pro"eeds thereof in his hand. !f he does not state W93 then the advan"es and lia0ilities )ill not 0e "overed 0/ the )areho'semanNs lien. !n order to preserve the )areho'semanNs lien. !tNs in the nat're of a pledge. 1he goods stored are s'0;e"t to )areho'semanNs lien. >3pposin some of t(e terms provided in >ec1 2 are omitted, &(at is t(e effect) 1he )areho'seman shall 0e lia0le for the damages to those in;'red 0/ his omission. Do)ever3 the validit/ of the )areho'se re"eipt is not affe"ted. 8(at kind of &are(o3se receipt)
$(e form in sec1 2 is merel, director, '3t not mandator,1 P3iN next &eek1 >ec1 1 to t(e end of 8are(o3se Receipts #a&1 CORM OC RECE".$> Ma, t(e &are(o3seman insert ot(er terms and conditions in t(e receipt t(at (e iss3ed) />ec1 60 2es1 .rovided t(at t(e terms and conditions are not: 11 Contrar, to t(e provision of t(is !ct9 21 "n an, &ise impair (is o'li ation to exercise t(at de ree of care in safekeepin of t(e oods1 8(at de ree of care) 1hat "are )hi"h a reasona0l/ "aref'l man )o'ld e8er"ise in regard to similar goods of his o)n. !n other )ords3 ordinar/ diligen"e or pater familias. Example of Contrar, stip3lation to 8are(o3se Receipt1 E8ample in "ase of the sale of goods3 the depositor is not entitled to noti"e( this stip'lation is "ontrar/ to the provision of this A"t 4Se"s. ## and #45. And therefore void. >ec1 * and ? covers t(e definition of a ne otia'le and nonLne otia'le &are(o3se receipt1 NonLNe otia'le % is one )here the goods are to 0e delivered to a spe"ified person. 2eliver 1000 sa"6s of ri"e to :'an 2e a Cr'G. Ne otia'le 7 is one )here the goods are to 0e delivered to the 0earer3 or to the order of a spe"ified person or to a spe"ified person or 0earer.
8(at is t(e effect of insertion of t(e term DnonLne otia'eE in a .nl/ negotia0le re"eipt. Se". 2 last par. HA )areho'seman shall 0e lia0le NEIO$"!B#E Receipt) to an/ person in;'red there0/ for all damages "a'ses 0/ the omission from a ne otia'le receipt of an/ of the terms herein re?'ired.I !1 is "onsidered as not )ritten for that is void 'nder par. 2 of Se". -. #9 % Credit 1ransa"tions7 :'dge Al0erto Serrano
%o& man, copies of &are(o3se receipt ma, 'e iss3ed) As man/ as the )areho'seman iss'es. 8(at do ,o3 call in t(e first cop,) Ori inal1 $(e >econd) -3plicate1 $(e t(ird) 1ripli"ate. 8(at is t(e reG3irement 3nder >ec1 < if t(ere is a d3plicate) 1he d'pli"ate m'st 0e stamped or mar6ed )ith Hd'pli"ate.I 1he legal effe"t is damages against the )areho'seman 0/ an inno"ent p'r"haser for val'e s'pposing the d'pli"ate to 0e original. Rationale: 1he p'rpose of a )areho'se re"eipt is to fa"ilitate 0'siness transa"tions. !nstead of selling and delivering the goods to the 0'/er3 )hat is transferred is merel/ the )areho'se re"eipt. So it is easier to transa"t 0'siness. Co' do not have to hire tr'"6s ever/ time /o' sell. 1he p'rpose of a )areho'se re"eipt is to ma6e it circ3late it1 =hile it is in "ir"'lation3 the )areho'se re"eipt is O4$>$!N-"NI1 1o prevent t)o or more persons having a "laim or interest in the same goods "overed 0/ different )areho'se re"eipts3 the la) sa/s H A9CA* M. *9 2U, !CA1E.I .1DE&=!SE3the )areho'seman is lia0le for damages to a p'r"haser for val'e in good faith s'pposing that the re"eipt )as iss'ed as the original of the re"eipt3 even if the goods had 0een delivered 0/ the )areho'seman to the holder of the original )areho'se re"eipt. 4Se". <5
8(at are t(e &arranties of a &are(o3seman &it( respect to a d3plicate &are(o3se receipt) /Correlate t(is &it( >ec1 1?0 11 $(at t(e d3plicate is t(e acc3rate cop, of t(e ori inal receipt9 21 $(at t(e ori inal receipt &as properl, iss3ed and 3ncancelled at t(e date of t(e iss3e of t(e d3plicate1 "f t(ose are t(e onl, &arranties of t(e &are(o3seman, &(at is t(e si nificance of t(e &arranties) Under Se". 143 in "ase of loss or destr'"tion of the original re"eipt3 the d'pli"ate )ill prove the e8isten"e of the goods. 4nder >ec1 A, if t(e &are(o3se receipt is not ne otia'le, t(e p(rase Dnot ne otia'leE m3st 'e placed on t(e face of t(e receipt1 8(at is t(e effect in case of fail3re to do so) A holder of the re"eipt )ho p'r"hased it for val'e s'pposing it to 0e negotia0le3 ma/3 at his option3 treat s'"h re"eipt as negotia0le re"eipt. #-7#2A,A1 MEM.&!XE *C. CU*9 2!S1!*C1!.*S +E1=EE* 1DE *E9.1!A+ E A*2 *.*@*E9.1!A+ E &ECE!,1S SEC 41 A*2 SEC 49( &EA2 1DE CASE .> +,! Q. DE&&!29E3 =DE&E 1DE SC ,&.Q!2E2 &U ES !* !*1E&,&E1!*9 1DE 1E&MS !* A =A&ED.USE &ECE!,1
>EC1 *5 7 t(e ri (ts of an 3npaid seller is s3'ordinate to a (older of ne otia'le &are(o3se receipt1 P3iN Covera e: >ecs1 1 7 *5 of !C$ 216A
-ECEMBER 11, 2010 8!RE%O4>E RECE".$> #!8 /!C$ 216A0
P4"Q /10 mins1: $(is s(o3ld not 'e strictl, taken9 H3d e >errano ave t(e ot(er sections a different set of G3estions0: 11 $o &(om is t(e &are(o3seman @3stified in deliverin oods covered ', s3c( receipt) t(e
a. Se". 8. 1he =DM has the o0ligation to deliver goods 'pon the demand of the holder of the re"eipt of the goods or the depositor( the demand m'st 0e a""ompanied 0/7 i. .ffer to satisf/ the =DMNs lien % 1. 1his is re?'ired 0e"a'se if the =DM delivers the goods )itho't 0eing paid to satisf/ the =DMNs lien3 he loses over the goods 'nder Se". 29. 2. De "annot sell the goods p'rs'ant to Se". ## ii. .ffer to s'rrender the re"eipt3 if negotia0le3 )ith s'"h indorsements as )o'ld 0e ne"essar/ for the negotiation of the re"eipt( 1. +e"a'se of Se". 11( in fa"t3 the =DM ma/ 0e held "riminall/ if he does not re?'ire the s'rrender of the re"eipt( 2. 1his also prevents the negotia0le re"eipt from 0eing "ir"'lated from one person to another( this prevents third person from a"?'iring rights over the re"eipts sin"e the goods have alread/ 0een delivered. iii. &eadiness and )illingness to sign an a"6no)ledgement that the goods have 0een delivered3 if s'"h signat're is re?'ested 0/ the =DM. 1. 1he re?'irement that the re"eipt 0e f'll/ 0e negotiated 'pon deliver/ )ill ena0le the =DM to a"?'ire rights of a holder of a negotia0le )areho'se re"eipt 'nder Se". 41.
21 "s t(e ne otiation of a ne otia'le &are(o3se receipt ', a t(ief of s3c( receipt to an innocent p3rc(aser for val3e and in ood fait( valid) No1 !: Under the )areho'se re"eipts la)3 the indorsee of a negotia0le )areho'se re"eipt a"?'ires7 >3c( title to t(e oods as t(e person ne otiatin it (ad or (ad t(e a'ilit, to conve, to an innocent p3rc(aser for val3e1 >ince t(e t(ief (as no title to t(e oods and (e does not (ave t(e a'ilit, to conve,, t(en t(e indorsee acG3ired not(in 1 Moreover, for a ne otiation to prod3ce le al effect, t(e receipt m3st 'e d3l, ne otiated ', t(e person entitled to s3c( receipt1 >ince t(e ne otiation &as made ', a t(ief, t(en it did not prod3ce an, effect &(atsoever, re ardless of &(et(er t(e receipt &as a ne otia'le 'earer or order receipt1 /$(is is one of t(e distinctions 'et&een a &are(o3se receipt and a doc3ment of title 3nder t(e civil code01 1#700
O'li ations and Ri (ts of a 8are(o3seman 7 C(apter 2 O'li ations 7 similar to a depositar,
1. 1o ta6e "are of the goods deposited )ith him )ith the diligen"e of a good father of a famil/ 2. 1o deliver the goods to the holder of the re"eipt or to the depositor in a""ordan"e )ith Se"s. 8 and 9
0. 1a6e note that the =DM is not o0liged to deliver if there is a la&f3l exc3se( in "ase the =DM ref'ses or fails to 41 % Credit 1ransa"tions7 :'dge Al0erto Serrano
deliver e8"'se the 0'rden is on the =DM to esta0lish the e8isten"e of a la)f'l e8"'se( ". Under Se". 23 there is no re?'irement of the term )ithin )hi"h the =DM shall 6eep the goods stored( parti"'larl/ )ith regard to negotia0le re"eipts 'eca3se the latter is in "ir"'lation )hi"h is the intended to fa"ilitate "ommer"ial transa"tion( the re"eipt is intended to 0e "ir"'lated to pass from one person to another 0/ negotiation or transfer. d. So )hen does the d't/ to deliver ariseA % Upon demand 0/ the holder of the re"eipt or the depositor. +'t it depends )hether the goods are "overed 0/ a negotia0le or non@ negotia0le re"eipt. #!8C4# EOC4>E> /4nder >ec1 B0 11 >ec1 10, a person la&f3ll, entitled to a ri (t of possession or propert, of t(e oods reG3ests t(e 8%M not to deliver 21 ! person makin t(e demand is not la&f3ll, entitled to t(e possession of t(e oods9 61 >ec1 1B, $(e 8%M (as information of adverse claim of anot(er person, (e need not deliver t(e oods 3ntil (e (as reasona'le time to determine t(e validit, of t(e adverse claim *1 >ec1 21, in case of loss of t(e oods d3e to fort3ito3s event ?1 >ec1 61, 3nless t(e 8%MJs lien is d3l, satisfied <1 >ec1 6<, in case of sale of oods d3e t( 8%MJs lien or d3e to t(e peris(a'le or (aNardo3s nat3re of t(e oods1 H4>$"C"C!$"ON OC $%E 8!RE%O4>EM!N "N -E#"VER"NI $%E IOO-> /P4"Q0 11 $O 8%OM $%E 8%M "> H4>$"C"E- "N -E#"VER"NI $%E IOO->) 7 >ec1 5
a1 .erson la&f3ll, entitled to t(e possession of t(e oods or (is a ents9 t(is implies t(at t(e person is not a (older of a &are(o3se receipt i1 .3rs3ant to >ec1 1*, t(e person to &(om a competent co3rt ordered t(e deliver, of t(e oods in case of loss or destr3ction of a ne otia'le &are(o3se receipt9 ii1 ! person declared ', @3d ment of t(e co3rt in an action for interpleader to t(e person la&f3ll, entitled to t(e oods9 iii1 ! creditor &(o attac(es t(e receipt 3nder >ec1 2<9 not t(e oods '3t t(e receipt itself iv1 B3,er in case of sale of t(e oods to satisf, t(e 8%MJs lien9 >ec1 66 in relation to >ec1 6< v1 B3,er in case of sale of t(e oods d3e to t(e peris(a'le or t(e (aNardo3s nat3re of t(e oods9 '1 Ioods covered ', a nonLne otia'le receipt9 i1 $(e depositor (imself or to t(e person specified in t(e receipt or (is a ent &it( &ritten a3t(orit, eit(er endorsed in t(e receipt or in anot(er doc3ment9 $(is is different from para rap( c &(ere t(e person covered &o3ld 'e t(e (older of a ne otia'le receipt t(at is validl, ne otiated to (im p3rs3ant to >ec1 6A, 6B, *0 and *19
ii1 #ia'ilit, of t(e 8%M for coversion 3nder >ec1 10 if (e delivers t(e oods to t(e person not la&f3ll, entitled9 42 % Credit 1ransa"tions7 :'dge Al0erto Serrano
c1 ! person in possession of a ne otia'le receipt ', t(e terms of &(ic( t(e oods are delivera'le to (im or order, or to 'earer, or &(ic( (as 'een indorsed to (im or in 'lank ', t(e person to &(om deliver, &as promised ', t(e terms of t(e receipt or ', (is mediate or immediate indorser
lia'le ', a p3rc(aser of t(e receipt &(o acG3ired t(e receipt from a t(ief of t(e receipt1 Ma, t(e t(ief validl, ne otiate to a p3rc(aser in ood fait() No1 'eca3se of 3nder >ec1 *11 $(e t(ief (as no a3t(orit, to ne otiate t(e receipt1 $(is is different from provisions 3nder t(e Civil Code on -oc3ments of title1 $%E RECE".$ M4>$ BE -4#2 NEIO$"!$E- !N- $%E .ER>ON NEIO$"!$"NI "$ M4>$ %!VE $"$#E OVER $%E IOO->1 >EC1 121 ##700
$%E 8%M "> H4>$"C"E- "N NO$ -E#"VER"NI $%E IOO-> 3nder >ec1 10 i. 1he person la)f'll/ entitled to the goods re?'ests the =DM not to deliver( ii. =DM had information that the holder of the re"eipt is not la)f'll/ entitled to the goods( Under these instan"es3 the =DM is ;'stified in not delivering the goods. 4nder >ec1 11, &(at kind of receipt is covered) *egotia0le )areho'se re"eipt. >ec1 6<, &it( respect to sale of oods to satisf, 8%MJs lien Ieneral r3le: 8%M is o'li ed to take 3p and cancel t(e ne otia'le receipt1 Ot(er&ise, (e s(all 'e lia'le to t(e p3rc(aser for val3e1 .!$ !$$EN$"ON $O $%E .%R!>E: D$%E NEIO$"!$"ON OC 8%"C% 8O4#- $R!N>CER R"I%$ $O $%E .O>>E>>"ON OC $%E IOO-E 3nder >ec1 11 G3alif,in t(e &ords D&(ere a &are(o3seman delivers t(e oods for &(ic( (e (ad iss3ed a ne otia'le receiptE c(aracteriNin t(e acG3isition of t(e receipt ME!N"NI:
I4!R!N$2 !N- >4RE$2>%". 7 H!N1 0B, 2011

8(at is 3arant,) Under Art. 204$ H0/ g'arant/ a person3 "alled the g'arantor3 0inds himself to the "reditor to f'lfill the o0ligation of the prin"ipal de0tor in "ase the latter sho'ld fails to do so. !f a person 0inds himself solidaril/ )ith the prin"ipal de0tor3 the provisions of Se". 43 Chap. #3 1itle ! of this +oo6 shall 0e o0served. !n s'"h "ase3 the "ontra"t is "alled a s'ret/ship.I 8(at 'ook) +oo6 !Q of the Civil Code that refers to o0ligations and Contra"t I3arant, is a contract of sec3rit, and in a 'road sense, incl3des &(at) ,ledge and mortgage.
8(at kind of sec3rit, is t(at) >ec1 111 *1 p3rs3ant to >Ecs1 6A, 6B, *0 and *11 B3t if t(e 8%M delivers t(e oods to real o&ner &it(o3t reG3irin latter to s3rrender t(e ne otia'le receipt for cancellation, t(e 8%M &o3ld not 'e (eld 4# % Credit 1ransa"tions7 :'dge Al0erto Serrano
&eal3 )hen propert/ is involved )ith the a'thorit/ on the part of the "reditor to "olle"t the de0t from the pro"eeds of the sale of s'"h propert/. C(aracteristics of I3arant, 1. !t is an a""essor/ "ontra"t 4Art. 20-25. HA g'arant/ "annot e8ist )itho't a valid Kprin"ipalL o0ligation. 1his is ver/ important 0e"a'se it applies not onl/ to g'arant/ 0't to pledge3 mortgage3 "hattel mortgage3 anti"hresis. 2. !t is s'0sidiar/ and "onditional 0e"a'se it ta6es effe"t onl/ )hen the prin"ipal de0tor fails in his o0ligation. 4see 204$ definition5 #. !t is 'nilateral. !t gives rise onl/ to a d't/ on the part of the g'arantor in relation to the creditor and not vi"e versa. 4. !t is a personal "ontra"t )hi"h re?'ires that the g'arantor m'st 0e a person distin"t from the de0tor 0e"a'se a person "annot 0e the personal g'arantor of himself. 8(at are t(e C#!>>E> OC I4!R!N$2) IN a broad sense 1. ,ersonal % onl/ personal "redit 4no "ollateral5 2. &eal % )here the g'arant/ is propert/3 mova0le or immova0le As to origin (Art. 2051) 1. Conventional % "onstit'ted 0/ agreement of the parties( 2. egal % one imposed 0/ virt'e of a la)(
2. .nero's % g'arantor re"eives val'a0le "onsideration for his g'arant/. As to the person guaranteed (Art. 2051 par. 2) 1. Single % one "onstit'ted to g'arant/ or se"'re performan"e 0/ the de0tor of the prin"ipal o0ligation( 2. 2o'0le or s'0@g'arant/ % one "onstit'ted to se"'re the f'lfillment 0/ the g'arantor of a prior g'arant/. As to its scope or e!tent (2055) 1. 2efinite % or one )hi"h is limited to the prin"ipal o0ligation3 or to a spe"ifi" portion thereof( 2. !ndefinite 7 one )here the g'arant/ in"l'des not onl/ the prin"ipal o0ligation 0't also all its a""essories3 li6e interests in"l'ding ;'di"ial "ost. #. Spe"ifi" % )hen it "overs a parti"'lar or spe"ifi" o0ligation 4. Contin'ing % )hen it se"'res the f'lfillment of f't're de0ts3 even the amo'nt is not /et 6no)n. Contin'ing i0ig sa0ihin t'lo/@t'lo/. !t "overs not onl/ a parti"'lar o0ligation '3t s'0se?'ent or additional o0ligations. !t "o'ld "over past3 present and f't're o0ligations. $(is even incl3des extension1 8(at r3les overn s3ret,s(ip) &'les governing solidar, de'tors 'nder o0ligations and "ontra"ts. 8(at do ,o3 call t(e person &(o 'inds (imself solidaril, &it( t(e principal de'tor) S'ret/. 8(at is t(e 3ndertakin of a solidar, de'tor in relation to t(e o'li ation) %o& is (e lia'le)
#. :'di"ial % one re?'ired 0/ a "o'rt to g'arantee the event'al right of one of the parties3 li6e an attac(ment 'ond. As to consideration (Art. 2048)
1. 9rat'ito's % no "ompensation to the person 'nderta6ing as a g'arantor 44 % Credit 1ransa"tions7 :'dge Al0erto Serrano
De is prin"ipall/ or primaril/ lia0le for the f'lfillment or performan"e of the prin"ipal o0ligation. 8(at is t(e 3ndertakin of a 3arantor) De is s'0sidiar/ or se"ondaril/ lia0le for the f'lfillment or performan"e of the prin"ipal o0ligation. Nat3re of t(e 3ndertakin of t(e >3ret, 1. Contra"t'al and A""essor/ % it "annot e8ist )itho't a valid prin"ipal o0ligation. 2. 2ire"t and primar/ 4solidar/ lia0ilit/5 % he is e?'all/ 0o'nd )ith the prin"ipal as original promisor( in other )ords3 the "reditor ma/ r'n after the s'ret/ in "ase of defa'lt of the prin"ipal de0tor. a1 8(at ma, creditor do ) &'n after the s'ret/. "s it reG3ired t(at t(e principal de'tor 'e s3ed also 'efore t(e s3ret, is s3ed) NO1 appl/ the prin"iple on solidar/ de0tors 4either ;oint or solidar/5 B3t if it is solidar,, (o& &o3ld ,o3 enforce t(e o'li ation) Against !N2 one, >OME OR !## the solidar/ de0tor the EN$"RE OB#"I!$"ON. 1he "reditor "an go dire"tl/ to the s'ret/ )itho't s'ing the prin"ipal de0tor or 0/ s'ing the prin"ipal de0tor and the s'ret/. "s demand or notice of defa3lt reG3ired to t(e s3ret,) As a r'le3 *.. Exception:
Unless it is stip'lated. Unless it is provided in the s'ret/ agreement or s'ret/ 0ond3 that the s'ret/ 0e notified of defa'lt3 there is no need for demand or noti"e of defa'lt to fi8 the lia0ilit/ of the s'ret/. 61 %o& do ,o3 determine &(et(er a person is solidaril, 'o3nd or not) 8(at is ,o3r 'asis) >rom the terms and "onditions of the "ontra"t 0e"a'se the relationship is "ontra"t'al and that t(e lia'ilit, is limited ', t(e terms of t(e contract. *1 ! s3ret, 'ond or s3ret, a reement is an accessor, contract1 $(3s, t(ere m3st 'e a valid principal o'li ation and a principal de'tor1 1he reason is that the g'arant/ "annot e8ist )itho't a valid o0ligation 4Art. 20-25 sin"e it is an a""essor/ "ontra"t. ?1 "s t(e s3ret, entitled to t(e 'enefit of exc3ssion) No1 Under Art. 20-93 there "an 0e no e8"'ssion )hen the g'arantor 0inds himself solidaril/. $(e Benefit of Exc3ssion means that the "reditor "annot "ompel the g'arantor to f'lfill the o0ligation 'nless the "reditor has e8ha'sted all the properties of the prin"ipal de0tor and has resorted to all the legal remedies against the de0tor. <1 "n &(ose favor t(e 3ndertakin of t(e s3ret,) !n favor of the "reditor. Under Art. 204$3 the g'arantor 0inds himself Hto the "reditor.I 8(o ma, enforce t(e lia'ilit, or 3ndertakin of t(e s3ret,) 1he "reditor. 8(at a'o3t t(e principal de'tor) >ince t(ere is a s3ret, 'ond, can t(e principal de'tor compel t(e s3ret, to f3lfill t(e o'li ation and iss3e t(e s3ret, 'ond)
4- % Credit 1ransa"tions7 :'dge Al0erto Serrano
*o. +e"a'se 'nder the definition of a g'arant/3 the g'arantor 0inds himself Hto the "reditor.I Ja/a nga in favor ng "reditor. >imilarities of 3arant, and s3ret,s(ip +oth are promises to ans)er for the de0t3 defa'lt or mis"arriage of another. -istinctions 'et&een 3arant, and s3ret,s(ip As to nat're of lia0ilit/3 s'ret/ is prin"ipall/ or primaril/ lia0le( )hile the g'arantor is s'0sidiaril/ lia0le. As to nat're of 'nderta6ing3 a s'ret/ ass'mes lia0ilit/ as a reg'lar part/ ;'st li6e a "o@ma6er in a promissor/ note )ho does not re"eive an/thing 0/ signing in the promissor/. Under the *! 3 )hen a person signs a promissor/ not as a "o@ma6er3 he is lia0le as a solidar, de'tor or solidar/ )ith the 0orro)er( )hile in g'arantee the 'nderta6ing is "ollateral )hi"h means se"ondaril/ or s'0sidiaril/ As to the 0enefit of e8"'ssion and the 0enefit of division3 this is not given to the s'ret/. 1he s'ret/ is an ins'rer of the de0t itself( )hile a g'arantor merel/ )arrants the solven"/ of the prin"ipal de0tor. As to the essen"e of the o0ligation3 s'ret/ is to pa/ )itho't ?'alifi"ation if prin"ipal de0tor does not pa,( )hile the g'arantor is re?'ired to pa/ if the prin"ipal de0tor cannot pa,1 8(ic( o'li ation is more onero3s) S'ret/ 0e"a'se the performan"e of the entire o'li ation ma/ 0e e8a"ted from the s'ret/. 8(en t(ere are several 3arantors of t(e same o'li ation in favor of t(e same creditor, &(at (appens) 1he g'arantors are 0o'nd onl/ to their proportionate share.
"s t(e ver'al 3arant, enforcea'le) Under the Art. 140# 4S.>53 a spe"ial promise to ans)er for the de0t3 defa'lt or mis"arriage of another m'st 0e in )riting or there is a memorand'm to that effe"t. -istinctions of "ndorsement and I3arant, !n indorsement3 there is transfer of rights and propert/( )hile in g'arant/3 it is to se"'re merel/ 'nderta6e to f'lfill the o0ligation of the prin"ipal de0tor in "ase he "annot pa/. 1he 'nderta6ing of the g'arantor is more onero's 0e"a'se the *! 3 the indorserNs lia0ilit/ is se"ondaril/ lia0le. 1he indorsers ma/ 0e dis"harged from lia0ilit/ if the holder of the negotia0le instr'ment fails to give a noti"e of dishonor )ithin a reasona0le time. 1he g'arantor )arrants the solven"/ of the de0tor3 )hile the indorser does not. 1he g'arantor "annot 0e s'ed as promisor3 0't an indorser ma/ 0e s'ed. -istinctions 'et&een I4!R!N$2 !N- 8!RR!N$2 A g'arant/ is to f'lfill the o0ligation of another in "ase he "annot f'lfill( )hile )arrant/ is a representation as to the title3 ?'alit/ or "ondition of the s'0;e"t matter( li6e )arrant/ against evi"tion and )arrant/ against hidden defe"ts.
Mr1 !'alos /na 3lat da&0 Classification of I3arant, as to Compensation 11 Onero3s 21 Irat3ito3s 8(at is t(e r3le on 3arant, as to compensation)
!1 is generall/ grat'ito's3 'nless there is a stip'lation to the "ontrar/ 4Art. 20485. i6e simple loan and deposit3 g'arant/ is generall/ grat'ito's. 1he a0sen"e of 0enefit3 dire"t or indire"t3 or interest3 is not re?'ired for the validit/ and enfor"ea0ilit/ of the agreement. Do)ever3 there m'st 0e a "a'se or "onsideration. 8(at is t(e ca3se or consideration t(en in a rat3ito3s 3arant, /for if t(ere is no ca3se or consideration, it is not a contract0) *ot onl/ the a"t of li0eralit/ 0't also the same "a'se or "onsideration that s'pports the prin"ipal o0ligation. 8(at a'o3t a married &oman, ma, s(e 3arantee an o'li ation) Ces. Under 20493 a married )oman ma/ g'arantee an o0ligation even )itho't the "onsent of the h's0and3 0't shall not 0ind the a0sol'te "omm'nit/ or "on;'gal partnership3 e8"ept in "ases provided 0/ la). 8(en t(en is t(e a'sol3te comm3nit, or con@3 al partners(ip lia'le for 3arant, of t(e married &oman &it(o3t t(e consent of t(e (3s'and) !f the prin"ipal o0ligation g'aranteed redo'nded to the 0enefit of the a0sol'te "omm'nit/ of propert/ or "on;'gal partnership. Ma, a married &oman 3arantee of (er (3s'and) 2es1 ,)ede nga sa third person3 e sa asa)a pa 6a/a. !n this "ase 4g'aranteeing the o0ligation of the h's0and53 the a0sol'te "omm'nit/ or "on;'gal partnership is a0sol'tel/ 0o'nd to satisf/ the o0ligation. 8(at is t(e effect of 3arant, &it(o3t t(e kno&led e or consent or a ainst t(e &ill of t(e principle de'tor) Art. 12#< and 12#$ shall appl/. +oo6 !Q on .0ligations( r'les on pa/ment 0/ third person )itho't the 6no)ledge3 "onsent or against the )ill of the de0tor.
Art. 12#<. 1he third person 4the g'arantor5 "an re"over insofar as the pa/ment has 0een 0enefi"ial to the de0tor. Art. 12#$. De "annot "ompel the "reditor to s'0rogate him in his 4"reditorNs5 rights3 s'"h as those arising from a mortgage3 g'arant/ or penalt/. #et 3s sa, t(e o'li ation is .1M1 t(ere (as 'een a partial pa,ment of .600k1 $(e 3arantor paid .1M1 %o& m3c( can (e recover from t(e de'tor) ,$006 0e"a'se the pa/ment )as made )itho't the 6no)ledge3 "onsent or even against the )ill of the de0tor3 therefore3 the g'arantor ma/ onl/ re"over from the de0tor insofar as it )as 0enefi"ial to the latter. 4nder !rt1 126A, t(e provision is for t(e 'enefit of t(e de'tor1 "f some'od, pa,s (is o'li ation, &it(o3t (is kno&led e, consent or even a ainst (is &ill, t(e creditor cannot 'e compelled to s3'ro ate t(e pa,or in (is ri (ts1 8(at kind of s3'ro ation is contemplated 3nder !rt1 126A) egal S'0rogation. !f the g'arant/ is )itho't the 6no)ledge3 "onsent or against the )ill of the prin"ipal de0tor3 and the g'arantor pa/s his o0ligation3 there is no legal s'0rogation3 not 0/ operation of la) from the fa"t of pa/ment. 8(at is t(e remed, so t(at t(e 3arantor ma, exercise t(e ri (t of t(e creditor after pa,ment) 8(at kind of s3'ro ation is reG3ired) Conventional s'0rogation. 1he "reditor ma/ assign in favor of g'arantor his rights as against the prin"ipal de0tor in "ase the g'arantor pa/s the o0ligation. +'t )itho't the 6no)ledge3 "onsent or against the )ill of the o0ligation3 there is no legal o0ligation. +'t )ith 6no)ledge or "onsent3 there is legal s'0rogation 'pon pa/ment. 4nder !rt112?1, &(at are t(e classes of 3arant,)
Conventional or ;'di"ial3 onero's or grat'ito's. 4nder 2nd par1 of 12?1, &(at are t(e kinds of 3arant,) Single or 2o'0le. >in le % )hen the 'nderta6ing refers to the prin"ipal de0tor. -o3'le or s3'L 3arant, % )hen the 'nderta6ing refers to g'arantee of a prior g'arantor. 4nder !rt1 20?2 2nd par1, nevert(eless, a 3arant, ma, 'e constit3ted to 3arantee t(e performance of a voida'le or an 3nenforcea'le contract1 "t ma, also 3arantee a national o'li ation1 4nder !rt1 20?6, t(ere is also a 3arantee for conditional o'li ations1 ! 3arantee cannot exist &it(o3t a valid o'li ation 'eca3se, it is &(at kind of a contract) !t is an a""essor/ "ontra"t. #et 3s sa, t(at a person pla,ed ton Lits &it( (is friends and (e lost for .100k '3t (e did not (ave mone,1 %e si ned a .N for .100k pa,a'le after 2 mont(s of t(e note1 Can ,o3 constit3te a valid 3arantee on o'li ation on t(e .N) No 'eca3se t(e principal contract is void1 8(, is it void, &(at is lackin in t(e contract) 1he o0;e"t 0e"a'se it is not la)f'l. Valid O'li ation, al&a,s remem'er ,3n movie na D"ndecent .roposalE ', -emi Moore and Ro'ert Redford1 4>R1M for a one ni (t stand1 Ma, t(at 'e sec3red ', 3arantee ', t(ird person t(e o'li ation of Ro'ert Redford) *o. +e"a'se there is no la)f'l or valid o0;e"t of the "ontra"t. !n other )ords3 the term Hvalid prin"ipal o0ligationI sho'ld 0e disting'ished against void. 1his m'st 0e "orrelated )ith 2 nd paragraph of Art. 20-2 'nder )hi"h
the la) allo)s the g'arantee to 0e made in voida0le or 'nenfor"ea0le "ontra"ts. 8(at a'o3t rescissi'le contracts) !re t(ese covered) 8(, is it voida'le or 3nenforcea'le contracts ma, 'e sec3red ', 3arantee) +e"a'se it is valid 'ntil ann'lled or valid 'nless the other part/ o0;e"ts thereto. 8(at is a nat3ral o'li ation) !t is 'nenfor"ea0le in a "o'rt of la) 0't if the de0tor pa/s the nat'ral o0ligation3 he "an no longer re"over )hat he has paid. E8ample7 an o0ligation that has alread/ pres"ri0ed. =hile it is no longer a "ivil o0ligation3 it is still a nat'ral o0ligation. 1he de0tor is morall/ 0o'nd to pa/ 0/ virt'e of e?'it/. 8(at &o3ld 'e t(e nat3re of lia'ilit, of t(e 3arantor &(o 3arantees t(e o'li ation 3nder a nat3ral o'li ation) Ma, t(e creditor compel t(e 3arantor to f3lfill t(e o'li ation of t(e principal de'tor in a nat3ral o'li ation) *o. +e"a'se 'nder Art. 20-43 Ha g'arantor ma/ 0ind himself for less3 0't not for more than the prin"ipal de0tor3 0oth as regards the amo'nt and the onero's nat're of the "onditions. Sho'ld he have 0o'nd himself for more3 his o0ligations shall 0e red'"ed to the limits of that of the de0tor.I Can (is o'li ation of t(e de'tor) No1 3nder !rt1 20?*1 >ince if t(e principal de'tor cannot 'e compelled to pa,, ma, t(e 3arantor 'e compelled to pa,) No1 3arantor 'e reater t(an t(e principal
B3t if t(e 3arantor pa,s, can (e recover from t(e principal de'tor) *o. other)ise3 /o' )ill 0e "hanging the nat're of the nat'ral o0ligation. !f )hat )as se"'red )as a nat'ral o0ligation3 it )ill remain that )a/. 8(at m3st t(e 3arantor do) De m'st )ait for the prin"ipal de0tor to f'lfill the o0ligation to reim0'rse him. Correlate t(e lia'ilit, of t(e 3arantor in a nat3ral o'li ation 3nder !rt1 20?2 to !rt1 20?*1 $(at &(ile t(e 3arant, ma, 'e made on a nat3ral o'li ation, t(e o'li ation of t(e 3arantor, (o&ever, cannot 'e more t(an t(at of t(e principal de'tor1 M3n1 of Iasan v1 Marasi an <6 .(il1 ?10 .laridel >3ret, and "ns3rance Co1 v1 !rtex -evJt Compan, 120 >CR! B2A S15B6T .!R$ "" H!N 0B, 2011 M, classes da& on Han1 22, 2011 4nder 20?6, &(at kind of de'ts ma, 'e sec3red) >'t're de0ts. "f t(e amo3nt of t(e o'li ation is not ,et kno&n, t(at is called) Unli?'idated de0t. 8(at is t(e G3alification as re ards 3nliG3idated de'ts) 1here "an 0e no "laim against the g'arantor 'ntil the de0t is li?'idated. 8(at do ,o3 mean ', liG3idated) !t means that the amo'nt of the o0ligation is fi8ed3 determina0le or demanda0le.
8(at kind of o'li ation ma, sec3red 3nder t(e last sentence of !rt1 20?6) Conditional o0ligations )hi"h ma/ either 0e s'spensive or resol'tor/. 8(at is t(e effect on t(e s3spensive) 3arantorJs o'li ation if t(e o'li ation is
!t )ill not atta"h 'ntil the happening of the s'spensive "ondition. 8(at a'o3t &it( re ard resol3tor, condition) +/ the happening of the resol'tor/ "ondition3 the g'arantorNs lia0ilit/ is also e8ting'ished 0/ the e8ting'ishment of the prin"ipal o0ligation. 8(at kind of 3arant, is contemplated 3nder !rt1 20?6 /or t(at sec3rin f3t3re de'ts0) Contin'ing g'arant/ or s'ret/ship. =hen a person 'nderta6es to f'lfill the o0ligation of another ma/ "onsider not onl/ the present 0't the o0ligation "onstit'ted on the of e8e"'tion of g'arant/ 0't onl/ to that e8tent. 1he g'arantor ma/ f'lfill the o0ligation of f't're de0ts3 additional de0ts or s'0se?'ent to the e8e"'tion to the g'arant/. Ienerall, t(e 3arant, is prospective '3t t(e parties ma, a ree to sec3re prior, present and f3t3re de'ts1 >or f't're de0ts3 the parties ma/ agree to "over series of transa"tions for an indefinite period of time. !n example in t(e s3ret, 'ond cla3se of contin3in 3arant,, RCBC v1 Cerro1 D$(e s3ret, 'inds (imself to 3arantee p3nct3al pa,ment of a loan at mat3rit, !N-FOR all ot(er o'li ations or inde'tedness &(ic( ma, 'ecome d3e or o&in to t(e principal1E $(at cla3se is called a contin3in 3arant, cla3se1 2o3 ma, also 3se t(e follo&in terms: Df3t3re o'li ations covered are additional, s3'seG3ent or extensions t(ereof, or rene&al t(ereofE t(e o'li ation of 3arant, is contin3in 1
"n ot(er &ords, t(e 3arantor contin3es to 'e 'o3nd for t(e o'li ation inc3rred ', t(e principal de'tor1 %o&ever, if t(e 3arant, or t(e s3ret,s(ip o'li ation (as 'een f3ll, paid at a partic3lar date, &(at (appens) 1he prin"ipal o0ligation is e8ting'ished as )ell as the s'ret/ship or g'arant/ "ontra"t 0e"a'se there is no more o0ligation to se"'re. >3ppose, t(e principal de'tor 'orro&s a ain mone, from t(e same creditor1 Can t(e creditor 3se t(e 3arant, as provided 3nder !rt1 20?6) *o more. +e"a'se the g'arant/ has alread/ 0een disting'ished. 8(at s(o3ld 'e done) A ne) "ontra"t m'st 0e e8e"'ted for )itho't that no g'arant/ is "reated and the prior g'arant/ "annot 0e revived. 1he "ontra"t of g'arant/ has alread/ 0een e8ting'ished. Tpag 6a p'maso6 6a/o sa 0ang6o3 lagi 6o sinasa0i /a3 /o' 0etter ta6e a loo6 at the "ontra"t. Sa0ihin ng i0a ;an7 attorne/3 o6a/ na 0a tong s'ret/ agreement3 "ontin'ing /anA +'t if /o' loo6 at the 0oo6 of the 0an63 at that point in time there is no o0ligation an/more. Can /o' 'se thatA *o. 1anggal 6a sa tra0aho moM +e"a'se the g'arant/ is no longer in e8isten"e. 1herefore3 /o' re?'ire another s'ret/ or g'arant/ agreement to 0e e8e"'ted 0/ the 0orro)er. !f not3 the o0ligation )ill 0e "onsidered 'nse"'red. &emem0er that haM $(e accessor, c(aracter of t(e 3arant, s(o3ld 'e 'orne in mind1 CRE-"$ #"NE !IREEMEN$ /! 4>4!# B!N+"NI $R!N>!C$"ON0
from t(e 'ank1 %is prod3ction is s3c( t(at &ill reG3ire (im to 'orro& mone, ever, 6 mont(s to prod3ce 1000 per G3arter or *000 3nits per ,ear1 Cor convenience, (e does not (ave to 'orro& all t(e cas( reG3ired to prod3ce *000 'eca3se (is capacit, is onl, 1000 per G3arter1 $(e ve(icle 3sed ', t(e 'ank in servicin t(is kind of a client is to make a credit line availa'le to t(e man3fact3rer 'orro&er1 $(3s, a credit line a reement is exec3ted1 $(is is also called a revolvin line a reement1 Cor a specific period, t(e 'orro&er ma, avail of loans on a periodic 'asis a ainst t(e credit line /t(ere is a maxim3m amo3nt and a period9 ex1 1 ,ear0 and t(e amo3nt of t(e credit is .10M1 #etJs sa, t(at ever, 6 mont(s t(e man3fact3rer 'orro&s mone, .21?M1 $(e &it(dra&al is called -R!8 -O8N &(ic( is evidenced ', a promissor, note &(ic( is s(ort period1 $(e pa,ment is also dependent on t(e collection9 i1e1 pa pasok n #C mo1 %o& man, .NJs &ill 'e exec3ted &it(in one ,ear period, considerin t(ere are fo3r G3arters) $(ere are *, t(e mat3rit, date of eac( .N &o3ld 'e different1 "f t(e collateral for t(e sec3rit, of t(e credit line a reement is a contin3in s3ret,s(ip or 3arant,, &(at is sec3red &ill 'e t(e entire credit line for one /10 ,ear1 >o for all o'li ations inc3rred d3rin t(e effectivit, of t(e credit line a reement, t(at is sec3red ', t(e contin3in 3arant, or s3ret,s(ip contained in a CON$"N4"NI I4!R!N$EE C#!4>E1 #et 3s sa, t(at all t(e loans (ave 'een paid 3nder credit line a reement1 ! ne& credit line a reement &as exec3ted1 $(e 'orro&er 'orro&ed mone, a ain1 Can ,o3 3se t(e first contin3in s3ret,s(ip or 3arant, a reement 3nder t(e 2nd credit line a reement) *o. +e"a'se all the o0ligations 'nder the first "redit line has 0een e8ting'ished. 1here is no more prin"ipal o0ligation. So the g'arant/ is also e8ting'ished.
"f t(e 'orro&er is a man3fact3rer of oods for export1 $(e capacit, of (is factor, is onl, 1000 3nits of oods for a 6 mont( period or *000 3nits per ,ear1 %e needs mone, from 'ank9 t(3s (e 'orro&ed mone, -0 % Credit 1ransa"tions7 :'dge Al0erto Serrano
%o&ever, in t(e contin3in 3arant, t(ere is no ap, &(ic( means t(ere is a remainin 'alance or overlappin of loans1 Can ,o3 3se t(e contin3in 3arant, or s3ret,s(ip a reement in t(e first credit line to cover t(e 2nd credit line) Ces. +e"a'se there is "ontin'it/ of o0ligation. 1here is no period )here the o0ligation has 0een "ompletel/ paid. $(is principle /!rt1 20?2 and 20?60 also applies to mort a es, pled e or antic(resis1 BE C!REC4# 8%EN 2O4 EOEC4$E -OC4MEN$> .!I-!$"NI >! ">>4E ON CON$R!C$>9 -E$ERM"NE C"R>$ "C $%ERE "> !N O4$>$!N-"NI OB#"I!$"ON /2E>09 +4NI 8!#! N!, B!IO N!; U8!I +!NI .!-!-!#! >! MI! D.REV"O4> O 2E H!N1 B#!N+E$ MOR$I!IE OR -R!INE$ C#!4>E !RE RECOIN"QEV!#"- B2 >C1 8%EN $%ERE "> NO MORE .R"NC"N.!# OB#"I!$"ON, $!.O> N! -"N 24NI >4RE$2>%". OR I4!R!N$2 !IREEMEN$1 Mr1 -ionio 4nder !rt1 20??, a 3arant, is) !t is not pres'med. 1o 0e valid3 it must be e!press and cannot e!tend to more than "hat is stipu#ated therein. "f it is simple or indefinite, it s(all comprise not onl, t(e principal o'li ation, '3t also t(e accessories, incl3din t(e @3dicial costs, provided &it( respect to t(e latter, t(at t(e 3arantor s(all onl, 'e lia'le for t(ose costs inc3rred after (e (as 'een @3diciall, reG3ired to pa,1
!n other )ords3 there is a ;'dgment alread/ 0/ the "o'rt re?'iring him to pa/ the ;'di"ial "ost 4"ost of s'it5 0e"a'se there )as a "ase filed against the g'arantor. 8(at do ,o3 mean t(at t(e 3arant, m3st 'e express) !t "annot 0e pres'med that a "ontra"t of g'arant/ has 0een "onstit'ted. 1here is no s'"h thing as implied g'arant/. =e do not appl/ pres'mption. !t m'st 0e e8pressl/ provided. >3ppose, a >.! exec3ted ', a principal to t(e a ent1 !mon t(e po&ers, t(e a ent is empo&ered to 'orro& mone,1 Can t(e a ent 3se t(e .O! in makin t(e principal 3arantor for t(e loans of t(e a ent) *o. there are t)o reasons7 1. 1he po)er to 0orro) mone/ does not in"l'de the po)er to 0ind the prin"ipal as s'ret/ or g'arant/ 0e"a'se it )o'ld 0e impl/ing the po)er to 0ind the prin"ipal. &emem0er that g'arant/ m'st 0e e8press. 2. 1he ,.A is for the 0enefit of the prin"ipal )ho e8e"'ted the ,.A. 2O4 C!NNO$ .RE>4ME CROM $%E .O8ER $O BORRO8 MONE2 $%!$ $%E !IEN$ "> !4$%OR"QE- $O B"N- $%E .R"NC".!# !> I4!R!N$OR OR >4RE$2 COR %"> O8N #O!N1 8%!$ "> $%E REME-2 >O $%!$ $%E !IEN$ C!N B"N- $%E .R"NC".!# "N ! I4!R!N$2) !t m'st 0e !*C U2E2 EB,&ESS C3 QE&C C EA& C in the ,o)er of Attorne/. =itho't that3 the prin"ipal is not 0o'nd. U,an m a pro'lema sa m a 'an ko or lendin companies1 $(ereJs a po&er to 'orro&, (e can alread, exec3te a mort a e or 3arant,1 $(atJs alread, alri (t attorne,; " 3arantee ,o3 t(at1 Ion L on ; 4nless t(e >.! provides t(e po&er expressl, to mort a e or to 'ind t(e principal as 3arantor or s3ret,1 $(at is not
-1 % Credit 1ransa"tions7 :'dge Al0erto Serrano
s3fficient1 Not onl, t(at, if it is t(e a ent &(o is 'orro&in , alt(o3 ( t(ere is s3c( cla3se or provision in t(e >.!, if it is not provided t(at t(e mort a e ma, 'e exec3ted to sec3re t(e o'li ation of t(e a ent, .!$!2 -"N 2!N; ! mort a e exec3ted ', t(e a ent &it(o3t a3t(orit, is VO"-, NO$ ON#2 4NENCORCE!B#E1 "f ,o3 are t(e la&,er preparin t(e doc3ment, 'e caref3l1 2o3 read t(e .o!1 U&a kan papirma n papirma1 "f t(e .O! does not incl3de t(e po&er expressl,, t(e po&er to mort a e, t(e po&er to 'ind t(e principal as 3arantor s3ret,, it cannot 'e t(e 'asis of 3arant, or s3ret,, &orse mort a e or pled e1 Beca3se t(e person m3st (ave a3t(orit, 3nder !rt1 20B?1 "t is an essential reG3isite of pled e and mort a e1 I3arant, or s3ret, is em'odied in a doc3ment 'eca3se) 1he/ are "ontra"ts )hi"h are "overed 0/ stat'te of >ra'ds.. %o& s(o3ld t(e terms and conditions or provisions in s3ret, 'ond, s3ret, a reement or 3arant, a reement 'e interpreted in case of do3't or am'i 3it,) !t depends on )hether the g'arant/ or s'ret/ is 9&A1U!1.US .& .*E&.US 4=!1D C.M,E*SA1!.*5. !n "ase of do'0t of a grat'ito's g'arant/ or s'ret/3 it m'st 0e resolved against the "reditor and in favor of the g'arantor or s'ret/. 8(at is t(e application of 3arant,) %o& do ,o3 appl, t(e effective application of 3arant,) $o &(at o'li ations t(erefor is covered ', 3arant, or s3ret,s(ip) >or o0ligations that are in"'rred at the time of the e8e"'tion of the g'arant/ or s'ret/ship agreement or immediatel/ thereafter. .f "o'rse3 if it is single onl/ to a parti"'lar g'arant/ as disting'ished from a "ontin'ing. I3arant, (as &(at kind of effective) ,rospe"tive. E8"ept )hen there is stip'lation to the "ontrar/.
"f t(e contract provides t(at t(e lia'ilit, of t(e s3ret, &ill expire 12 mont(s from t(e mat3rit, date of t(e o'li ation1 "s t(at valid) !t is valid. +ECAUSE7 it is not "ontrar/ to la)3 morals3 good "'stoms3 p'0li" order and p'0li" poli"/. 8(at a'o3t t(e provision in a s3ret, 'ond or a reement &(ic( provides t(at: t(e lia'ilit, of t(e s3ret, s(all expire on t(e mat3rit, date of t(e o'li ation) NO1 +ECAUSE it is 'nfair and 'nreasona0le for it pra"ti"all/ n'llifies the nat're of the 'nderta6ing of the s'ret/. =hat is logi"al is to hold that the lia0ilit/ of the s'ret/ atta"hes as soon as the prin"ipal de0tor defa'lts. !f the e8piration is on the mat'rit/ date3 there )ill 0e no o""asion )hen the s'ret/ )ill 0e lia0le. *ag@e8pire na. 6elan pa mag6a6a@defa'ltA 4.ngsia6o v. =orld =ide !ns'ran"e and S'ret/ Co.5 Ms1Cr3N1 Ma1 #3isa1 Cor rat3ito3s 3arant, or s3ret,, if t(ere is do3't) !t shall 0e interpreted stri"tl/ and in favor of the g'arantor or s'ret/ and against the "reditor. Stri"tissimi ;'ris. 8(at a'o3t &it( respect to s3ret,s(ip entered into ', s3ret,s(ip compan, for compensation) S1&!C1!SS!M! :U&!S CA**.1 A,, C +ECAUSE 4# &EAS.*S5 1. S'ret/ "ompanies are 0'siness entities and the/ deal )ith the "lients on an impersonal 0asis and thro'gh standardiGed )ritten "ontra"t'al forms 4fine print5 prepared 0/ their la)/ers or representatives. 1o prote"t the interest of the s'ret/. Contra"t of adhesion. !f there is an/ do'0t of a s'ret/ 0ond as prepared 0/ the s'ret/ "ompan/3 it sho'ld 0e interpreted against the s'ret/ "ompan/ 0e"a'se it is responsi0le for the am0ig'it/ of the "ontra"t
2. S'ret/ "ompanies are sec3red from all possi'le loss 0/ ade?'eate "o'nter0onds or indemnit/ agreements. =ise /ang mga /an. E8ample 'ng 0ail 0ond3 that is a s'ret/ 0ond. Ang premi'm n/an mataas for an a""'sed )hi"h is #0 E. E8ample the "ase is illegal possession of sha0'. 1he 0ail is 2006. the premi'm is #0E or <06 a /ear. Ja/a marami ang na6a6a)ala. E /earl/ 0asis /an. !f /o' do not pa/ on a /earl/ 0asis3 ma6a6a@"an"el /an. D'lihin 6a 'li. #. Altho'gh "alling themselves as s'reties3 s'"h "orporations are3 in fa"t3 "N>4RER> A*2 !* 2E1E&M!*!*9 1DE!& &!9D1S A*2 !A+! !1!ES3 1DE r'les pe"'liar to s'ret/ship do not appl/. Mga ins'rers )ise pa /an. *ag@re@reins're pa mga /anM Danggang sa lo/dNs of ondon. Tto 'ng pina6amala6ing 0'siness ng llo/dNs. )hen the ins'ran"e "ompan/ ins'res its o)n ris63 that is reins'ran"e. "s t(e acceptance ', t(e creditor of t(e 3arant, reG3ired) Ces. +ECAUSE a g'arant/ or s'ret/ship is a "ontra"t. 1herefore3 there m'st 0e "onsent )hi"h is manifested 0/ the "on"'rren"e of the offer and a""eptan"e. ,arang liga)an7 Con"'rren"e of the proposal and the a""eptan"e 0/ the other part/. 1here is meeting of the mind. !f there is meeting of the mind3 there is QA !2 C.*SE*1 4hindi pa "ontra"t /anM5. 8(at is t(e form of acceptance) "t is reG3ired t(at t(e creditor s(o3ld accept1 As a general r'le3 A""eptan"e ma/ 0e implied. !t is re?'ired to 0e e8press )hen the g'arant/ is merel/ an offer to g'arant/ the o0ligation. !f it is merel/ an offer3 there m'st 0e e8press a""eptan"e. .ther)ise3 there )o'ld 0e meeting of the minds3 no "onsent3 no "on"'rren"e of proposal and a""eptan"e. .& !> 1DE 9UA&A*1C !S "onditional. Express 3arant, reG3ired:
11 "f it is an offer to 3arant,9 21 Conditional 3arant,1 61 ReG3ired ,3n express acceptance1 Example of implied 3arant,1 !f the "reditor merel/ retains the do"'ment. 1he g'arantor signs the g'arant/ agreement and s'0mits it to the "reditor. =itho't doing an/thing3 the "reditor lends mone/ to the prin"ipal de0tor. "s t(e 3arant, accepted) 2es1 8(at kind of acceptance) "mplied1 !n that "ase3 there is no need for the "reditor to inform the g'arantor or s'ret/ has 0een a""epted 0/ him. !n another "ase3 the letter or 0ond provides3 it shall 0e in the form and amo'nt that sho'ld 0e satisfa"tor/ to the "reditor. !s the e8press a""eptan"e re?'iredA CES. !f it is provided that the "reditor sho'ld report violations of the "ontra"t )ithin five da/s. 1hat g'arant/ is also a "onditional g'arant/. And therefore the "reditor m'st "ompl/ )ith the "ondition. 1here m'st 0e noti"e to the g'arantor or s'ret/. .ther)ise3 it )ill not 0e 0inding 'pon the g'arantor or s'ret/. &(at are t(e G3alifications of a 3arantor) Under Art. 20-<3 the person m'st possess7 1. !ntegrit/ 4Chara"ter5 2. Capa"it/ to 0ind himself #. S'ffi"ient propert/ to ans)er for the o0ligation. ? CJs of credit /sa m a commerce 3nder rad0 1he most important is the first C and that refers to CDA&AC1E&. :'dge learned it sa seminar sa 0ang6o. =ill /o' lend a person )ho is 0alas'0asA
-# % Credit 1ransa"tions7 :'dge Al0erto Serrano
.f "o'rse not. Jasi he la"6s integrit/. Ms1 C3erdo 8innie !nn1 8(, is a 3arantor reG3ired to (ave s3fficient propert,) +e"a'se the g'arantor3 )itho't s'ffi"ient propert/3 he )o'ld not 0e a0le to f'lfill his o0ligation. 4nder !rt1 20?A, 8(at is t(e remed, of t(e creditor &(en t(e 3arantor (as 'een convicted of a crime involvin dis(onest, or s(o3ld 'ecome insolvent) 1he "reditor3 ma/ demand s'0stit'tion of another g'arantor )ho hass all the ?'alifi"ations re?'ired in Art. 20-<. Except1 8(en t(e creditor reG3ired and stip3lated t(at a >.EC"C"E.ER>ON >%O4#- BE I4!R!N$OR1 =ala nang s'0stit'te. +ECAUSE he is 0o'nd 0/ his sele"tion. Sin"e he is the one )ho sele"ted3 he alread/ "onsidered the ?'alifi"ations of the g'arantor or s'ret/. 8(at is t(e effect of t(e deat( of t(e 3arantor to (is o'li ation) 1he o0ligation is *.1 EB1!*9U!SDE2. +ECAUSE his lia0ilit/ is 1&A*SM!SS!+ E. ia0ilit/ of a g'arantor is transmissi0le to the heirs. 1he rights and o0ligations of a person are enerall, transmissi0le. Except &(en t(e o'li ation is p3rel, .ER>ON!#1 "f t(e o'li ation is p3rel, personal, t(en it is not transmissi'le1 B3t t(e lia'ilit, of t(e (eirs is limited to t(e val3e of t(e estate of t(e deceased1
!rt1 20?B1 $(e 3arantor cannot 'e compelled to pa, t(e creditor 3nless t(e latter (as ex(a3sted all t(e propert, of t(e de'tor, and (as resorted to all le al remedies a ainst t(e de'tor1 1here are t)o re?'irements for E8"'ssion7 1. 1he 0enefit of e8"'ssion or e8ha'stion % it is the pro"ess or pro"ed're 0/ )hi"h the "reditor ma/ 0e prevented from immediatel/ pro"eeding against the g'arantor. 2. 1he "reditor has resorted to all legal remedies against the de0tor. 8(at do ,o3 mean ', t(e p(rase D(as resorted to all le al remedies)E Correlate this )ith Art. 20<2. E8ample res"issi0le "ontra"t. 1hose ta6en in fra'd of the "reditors. !n this "ase3 the "reditor m'st first file the appropriate a"tion to res"ind the "ontra"t. !t is a "ondition pre"edent 0efore the "reditor ma/ pro"eed against the g'arantor. !f he has not done that3 (e (as not resorted to all le al remedies1 1herefore3 he ma/ not pro"eed against the g'arantor. ! 3arantor ma, 'e impleaded as coLdefendant in a case &it(o3t &aitin for t(e co3rt to render @3d ment a ainst t(e principal de'tor1 8(en t(e @3d ment 'ecomes final and exec3tor,, it ma, 'e exec3ted1 -3rin t(e exec3tion sta e of t(e @3d ment, t(at is t(e time &(en t(e 3arantor ma, set 3p t(e 'enefit of exc3ssion1 %o&) 4nder !rt1 20<01 "t m3st 'e set 3p a ainst t(e creditor 3pon t(e latterJs demand for pa,ment from (im1 8(en is t(at) !fter t(e exec3tion of t(e @3d ment1 Meanin , after t(e s(eriff (as made a report t(at t(e @3d ment (as not 'een satisfied1 $(e 2nd d3t, of t(e 3arantor is to point o3t all t(e levia'le propert, of t(e principal de'tor1 R!$"ON!#E OC "M.#E!-"NI $%E I4!R!N$OR: -4 % Credit 1ransa"tions7 :'dge Al0erto Serrano
ECCEC$> OC I4!R!N$2 >EC1 1 7 ECCEC$> OC I4!R!N$2 BE$8EEN $%E I4!R!N$OR !N- $%E CRE-"$OR
1his avoids m'ltipli"it/ of s'its and for the "onvenien"e of the parties. At the e8e"'tion stage3 if /o' are the "o'nsel for the g'arantor. 8(en do ,o3 set it 3p) 2'ring the e8e"'tion stage3 not d'ring trial. Jasi mala/ mo 0a/aran 6a na 6aagad ng prin"ipal de0tor 6a/a 6elangan mo mag@anta/ ng e8e"'tion at i6a) /'ng ha0'lin 0ago mag@e8"'ssion. $(is also facilitates t(e settlement of o'li ation1 8(,) +e"a'se the g'arantor need not loo6 for the properties after pa/ing e 0a0a/aran din n/a e if he does not point o't. .r if he pa/s the "reditor3 the g'arantor has to loo6 for the properties of the prin"ipal de0tor. Ja/a maganda ga)in3 the g'arantor point o't alread/ the propert/ of the "reditor. EOCE.$"ON>: 8%EN EOC4>>"ON >%!## NO$ $!+E .#!CE) !rt1 20?5 provides t(at 11 "f t(e 3arantor (as reno3nced it9 21 "f t(e (e (as 'o3nd (imself solidaril, &it( t(e de'tor9 61 "n case of insolvenc, of t(e de'tor9 *1 8(en (e (as a'sconded or cannot 'e s3ed &it(in t(e .(ilippines 3nless (e (as left a mana er or representative9 ?1 "f it ma, 'e pres3med t(at an exec3tion on t(e propert, of t(e principal de'tor &o3ld not res3lt in t(e satisfaction of t(e o'li ation1 8(at is t(e effect of t(e ne li ence of t(e creditor after t(e 3arantor (as pointed t(e propert, of t(e de'tor) "n ot(er &ords, (e did not attac( t(e propert, immediatel,)
1DE 9UA&A*1.& =.U 2 +E &E EASE2 AS MUCD AS 1DE QA UE .> 1DE ,&.,E&1C ,.!*1E2 .U1 1. 1DE C&E2!1.&. Remem'er sa #$-, (o& do ,o3 enforce ,o3r ri (t in a @3d ment) B, eit(er lev, or d3rin t(e pendenc, of t(e case, attac(ment1 "n t(is case, lev, on attac(ment na since exec3tion sta e na1 >3ppose, t(e creditor &ent a'road after t(e 3arantor pointed, t(en anot(er creditor of t(e de'tor attac(es or levies on exec3tion t(e propert,1 8(at (appens) *ap'nta sa pangala)ang "reditor. 1he first "reditor lost the propert/. Appl/ing the r'le on ,&!MUS 1EM,.&E ,.1!.& :U&E. !n this "ase3 the g'arantor )ill 0e released to the e8tent of the val'e of the propert/. >tart from !rt1 20<21 Covera e of midLterm1 4ntil !rt1 20B*1 MCP and E>>!21 Ms1 #eal ! ainst &(om t(e action 'e filed 3nder !rt1 20<2) Against the prin"ipal de0tor alone. 8(at is t(e reG3irement as far as t(e 3arantor is concerned) De m'st 0e notified of s'"h a"tion 0/ the "o'rt. 8(at m3st t(e 3arantor do in case (e appears in t(e case) "n ot(er &ords, t(e creditor files action a ainst not onl, t(e principal de'tor '3t also a ainst t(e 3arantor) De ma/ set 'p s'"h defense as are granted him 0/ la). 8(at a'o3t t(e 'enefit of exc3sssion)
-- % Credit 1ransa"tions7 :'dge Al0erto Serrano
!f the g'arantor is s'ed together )ith the prin"ipal de0tor3 he "an ma6e 'se of the 0enefit of e8"'ssion at the e8e"'tion stage. 1he 0enefit of e8"'ssion shall al)a/s remain 'nimpaired. 8(, is it d3rin t(e exec3tion sta e) =itho't the ;'dgment the propert/ of the prin"ipal de0tor "annot 0e levied )ith. !rt1 20<6, 8(at is t(e effect of compromise 'et&een creditor and t(e principal de'tor) !t depends on )hether the "ompromise is either 0enefi"ial or pre;'di"ial to the g'arantor. #et 3s sa, t(at in t(e compromise t(e creditor and t(e principal de'tor t(at t(e interest rate &ill 'e increased from 10= to 20=1 8ill t(e 3arantor 'e lia'le for t(e increase 'ec3ase of t(e compromise) NO1 0e"a'se it is pre;'di"ia B3t s3ppose from 20= L 10=) Ces. 1he g'arantor )ill 0e lia0le for 10E 0e"a'se it is 0enefi"ial to the g'arantor. #et 3s sa, t(e compromise 'et&een t(e 3arantor and creditor1 8(at is t(e effect on t(e principal de'tor) 1he same r'le as a0ove. ,re;'di"ial7 *o. +enefi"ial7 Ces. 8(at is it t(at t(e s3' 3arantor ma, make 3se of 3nder !rt1 20<*) 1he s'0@g'arantor ma/ ma6e 'se of the 0enefit of e8"'ssion against the g'arantor and against the prin"ipal de0tor. "f t(e creditor &ere to enforce t(e @3d ment o'tained in t(e case, (o& &o3ld t(e creditor proceed in exec3tin t(e @3d ment)
>irst3 the "reditor m'st pro"eed agains the propert/ of the prin"ipal de0tor. 1hen3 against the g'arantor. 1hen against the s'0g'arantor 4third level de0tor. 1he "reditor m'st go thro'gh the level step 0/ step. 8(en is t(ere 'enefit of division 3nder !rt1 20<?) 1. there are several g'arnators( 2. for the same de0t #. of the same de0tor &(at is t(e lia'ilit, of t(e coL 3arantors 3nder 20<?) 1heir lia0ilit/ shall 0e HO"N$ in their level as "o@g'arantor. 8(at is t(eir s(are) %o& &o3ld t(e creditor enforce f3lfillment of t(e principal o'li ation, ass3min t(e creditor can alread, proceed a ainst t(e 3arantors) 1he g'arantors are lia0le in a""ordan"e )ith their proportionate s(are in the o0ligation3 'nless solidarit/ is e8pressl/ stip'lated. "n addition to solidarit,, &(at are t(e ot(er exceptions to t(e 'enefit of division) Co' also appl/ Art. 20-9. +e"a'se 'nder Art. 20<-3 the 0enefit of division against the "o@g'arantor "eases in the same "ases and for the same reasons as the 0enfit of e8"'ssion against the prin"ipal de0tor. E8. !nsolven"/( a0s"onds3 et". >EC1 2 7 ECCEC$> OC I4!R!N$2 BE$8EEN $%E -EB$OR !N$%E I4!R!N$OR Remem'er t(e 3arant, is exec3ted is for t(e 'enefit for t(e creditor1 "f t(e 3arantor pa,s t(e principal o'li ation, t(e creditor is alread, removed from t(e pict3re 'eca3se t(e principal o'li ation is alread, extin 3is(ed insofar as t(e creditor is concerned1
-< % Credit 1ransa"tions7 :'dge Al0erto Serrano
8%!$ !RE $%E R"I%$> OC ! I4!R!N$OR !> ! CON>EP4ENCE OC .!2MEN$ B2 $%E I4!R!N$OR) "n ot(er &ords &(at are t(e ri (ts of t(e 3arantor after pa,ment of t(e principal o'li ation /!rts1 20<< and 20<A0 Under Art 20<<3 the right to indemnit/. Under 20<$3 the right to s'0rogation. 4nder !rt1 20<<, t(e 3arant, 'ecomes a contract of indemnit, 3pon pa,ment ', t(e 3arantor of t(e principal o'li ation1 >ince t(e principal de'tor is 3ltimatel, t(e person lia'le to pa, t(e o'li ation, if t(e 3arantor is compelled to pa,, t(e de'tor m3st reim'3rse t(e 3arantor1 8(at does indemnit, comprise) !rt1 20<< 1. 1he total amo'nt of the de0t( 2. 1he legal interest from the time the pa/ment )as made 6no)n to the de0tor 40efore notifi"ation of the pa/ment 0/ the g'arantor3 the total amo'nt of the o0ligation is not /et earning interest. 1here m'st 0e noti"e of the pa/ment to the prin"ipal de0tor 0/ the g'arantor !t is at that time that the prin"ipal de0tor in"'rs in dela/3 after the time of pa/ment 0/ the g'arantor. After pa/ment of o0ligation3 the g'arantor in effe"t is a"t'all/ allo)ing the de0tor to ma6e 'se of his mone/( for0earan"e( 12E #. 1he e8penses in"'rred 0/ the g'arantor after having notified the de0tor that the pa/ment had 0een demanded of him( 4. 2amages3 if the/ are d'e. 4nder !rt1 20<A, ', virt3e of t(e pa,ment t(e 3arantor is s3'ro ated to all ri (ts &(ic( t(e creditor (ad a ainst t(e de'tor1 "f t(e 3arantor compromised &it( t(e creditor, (e cannot demand of
t(e de'tor more t(an &(at (e (as real, paid1 $(is m3st 'e correclated to !rt1 20?01 8(at is s3'ro ation) !t is the s'0stit'tion of a person in pla"e of another )ith referen"e to a la)f'l "laim3 demand or right. 1he g'arantor )ho pa/s the prin"ipal o0ligation a"?'ires the "redit )ith all the rights pertaining thereto as against the prin"ipal de0tor. !n other )ords3 all rights of the "reditor goes to the g'arantor )ho pa/s the o0ligation. De steps into the shoes of the "reditor. 8(at kind of s3'ro ation is covered 3nder !rt1 20?A) egal or 0/ operation of la). 1hat 'pon pa/ment of the prin"ipal o0ligation3 there is s'0rogation. t(e ri (t accr3es in favor of t(e 3arantor &it( respect to t(e ri (t of t(e creditor B4$ NO$ t(e ri (ts of t(e principal de'tor1 8(at kind of pa,ment is contemplated 3nder !rt1 20?A) ,a/ment )ith the 6no)ledge and "onsent of the prin"ipal de0tor. 8(at a'o3t &it(o3t kno&led e and consent 8(at article do ,o3 appl,) Art. 20-0 in relation to Arts. 12#< and 12#$. 1he person pa/ing "an onl/ re"over from the de0tor to the e8tent as it )as 0enefi"ial to the latter 4Art. 12#<5. And the person pa/ing "annot 2EMA*2 from the "reditor that he 0e s'0rogated to the rights to the rights of the "reditor. -oes t(at mean t(at 3nder !rt1 20?0 t(at t(e s3'ro ated a'sol3tel,) 3arantor cannot 'e
*o. +/ )a/ of C.*QE*1!.*A SU+&.9A1!.*. 1he "reditor ma/ still assign the "redit e8pressl/ to the g'arantor )ho pa/s the o0ligation.
$(e ri (t does not pertain to t(e principal de'tor1 #et 3s sa, t(at in a case filed a ainst t(e principal de'tor and t(e 3arantor1 $(e -$ % Credit 1ransa"tions7 :'dge Al0erto Serrano
propert, of t(e principal de'tor &as levied 3pon on exec3tion '3t t(e p3rc(ase price d3rin t(e exec3tion sale did not completel, did not extin 3is( t(e o'li ation1 8(at (appens) 1he "reditor "an alread/ pro"eed against the g'arantor. "n t(e same case, can t(e 3arantor &(o pa, t(e o'li ation exercise t(e ri (t of redemption of t(e @3d ment de'tor) *.. 0e"a'se the s'0rogation merel/ pertains to the rights of the "reditor and not of the prin"ipal de0tor. !rt1 20<B1 $(is is pa,ment &it(o3t notif,in t(e de'tor1 $(e de'tor co3ld set 3p all t(e defenses a ainst t(e 3arantor &(o pa,s &(ic( (e co3ld set 3p a ainst t(e creditor at t(e time pa,ment &as made1 NOCOMERE.!#O.RERE>C4#!N1 -ECEN>E !I!"N>$ $%E I4!R!N$OR1 "f t(e de't is &it( a period and t(e 3arantor pa,s it 'efore it 'ecomes d3e, t(e 3arantor cannot demand reim'3rsement of t(e de'tor 3ntil t(e expiration of t(e period 3nless t(e pa,ment (as 'een ratified ', t(e de'tor /!R$1 20<50 !rt1 20A01 "t refers to repetition of pa,ment ', t(e de'tor1 $(e eneral r3le is t(at t(e 3arantor (as no remed, a ainst t(e creditor1 Exception: in case of rat3ito3s 3arant,1 ReG3isites: 1. 1he "reditor 0e"omes insolvent( 2. 1he g'arantor )as prevented 0/ fort'ito's event from advising the de0tor of the pa/ment( #. 1he g'arant/ is grat'ito's. !f all these "on"'r3 the g'arantor ma/ still see6 reim0'rsement from the de0tor.
!rt1 20A11 .ertains to t(e remedies of t(e 3arantor 'efore pa,in t(e principal o'li ation, namel, 3nder A instances: 1. &elease from the g'arant/( or 2. 1o demand a se"'rit/ that shall prote"t him from an/ pro"eedings 0/ the "reditor and from the danger of insolven"/ of the de0tor. 1he g'arantor m'st file a "ase against the prin"ipal de0tor 0efore pa/ment and then pra/ to the "o'rt either he is to 0e released( or demand se"'rit/ from the prin"ipal de0tor. 1hese are alternative remedies. 8(at are t(e p3rposes of t(e alternative remedies) 1. 1o prote"t him from an/ pro"eedings 0/ the "reditor and 2. 1o prote"t him from the danger of insolven"/ of the de0tor. !f the de0tor is alread/ insolvent then the g'arantor )o'ld 0e re?'ired to pa/( )ala na re"over/ for the g'arantor. 8(at are t(e distinctions 'et1 20<< and 20A1) 1he t)o arti"les "over t)o different stages of transa"tions. !rt1 20<< &(ere t(e 3arantor (as alread, paid1 $(e ri (t to indemnified to indemnification is 'ased on s3'stantive ri (t1 20A1 covers a sit3ation &(ere t(ere is ,et no pa,ment1 $(is is alread, preliminar, sec3rit,1 "f t(e 3arantor is a'le to et a sec3rit,, t(en (e &o3ld 'e ass3red of reim'3rsement1 %e can foreclosed t(at1 !nd if (e is released, t(en (e no lon er (ave t(e o'li ation to pa, t(e de't1 8%!$ "> $%"> "N-EMN"$2 !IREEMEN$) !n "ase there is a s'ret/ship or g'arant/3 /o' have t)o "ontra"ts 4transa"tions5. 1he first is the so'r"e of the prin"ipal o0ligation. 1he parties therein are the "reditor and the de0tor.
1he se"ond is the g'arant/ or s'ret/ship agreement. !t is "onstit'ted in favor the "reditor 0/ the g'arantor or s'ret/. 1he parties therein are the g'arantor/s'ret/ and the "reditor. 1here is another level of transa"tion )hi"h "overs the lia0ilit/ or the e8pos're of the s'ret/ to either loss or lia0ilit/ "alled the !*2EM*!1C A9&EEME*1. 1his is the third level of "ontra"ts. 1his is e8e"'ted 's'all/ 0/ third persons in favor of the s'ret/ and not for the 0enefit of the "reditor. +ECAUSE the persons )ho e8e"'ted the indemnit/ agreement 0ind themselves to indemnif/ the s'ret/ in "ase he is made lia0le 0/ virt'e of the f'lfillment of the prin"ipal o0ligation. 1he parties herein are s'ret//g'arantor and the indemnitors. &(at a'o3t t(e creditor and t(e indemnitor) Can t(e creditor s3e t(e indmenitor) NO1 'eca3se t(ere is not privit, of contract1 $(e parties in t(e indemnit, a reements is 'et&een t(e s3ret, and t(e indemnitor1 +inds of indemnit, a reements 1. !ndemnit/ against loss % is a "ontra"t )here the indemnitor is not lia0le /et 'ntil the person to 0e indemnified ma6es pa/ment or s'stains loss. !n other )ords3 the s'ret/ m'st first pa/ 0efore pro"eeding against the indemnitor. 2. !ndemnit/ against lia0ilit/ % as soon as the lia0ilit/ of the s'ret/ arises3 the indemnitor "an alread/ 0e s'ed 0/ the s'ret/ even )itho't a"t'al pa/ment or a"t'al loss s'ffered 0/ the s'ret/. !rt1 20A2 a "ase )here a person vol'nteers another to pa/ the o0ligation. 2. *.1 2. 1D!S 0e"a'se /o' )ill also 0e lia0le to the g'arantor. >EC1 6 7 effects of 3arant, as 'et&een coL 3arntors $(e same de't for t(e same de'tor ', t(e different 3arantors1 !nd t(at one of t(e coL 3arantors (as paid t(e o'li ation1
!rt1 20A6 L R"I%$ $O CON$R"B4$"ON from ot(er 3arantors in t(e same proportion1

Credit Lectures Compilation

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Credit Lectures Compilation

Uploaded by

Copyright:

Available Formats

Assignment for 11/20 Until 1982 Medel v. CA 299 S 481 Eastern Shipping ines !n". v CA 2#4 S $8 % &'les on !

2 % Credit 1ransa"tions7 :'dge Al0erto Serrano

# % Credit 1ransa"tions7 :'dge Al0erto Serrano

4 % Credit 1ransa"tions7 :'dge Al0erto Serrano

- % Credit 1ransa"tions7 :'dge Al0erto Serrano

< % Credit 1ransa"tions7 :'dge Al0erto Serrano

.!R$ "", NOV1 16, 2010

NOVEMBER 20, 2010 7 .!R$ "

9 % Credit 1ransa"tions7 :'dge Al0erto Serrano

!SSUE7 10 % Credit 1ransa"tions7 :'dge Al0erto Serrano

11 % Credit 1ransa"tions7 :'dge Al0erto Serrano

1# % Credit 1ransa"tions7 :'dge Al0erto Serrano

1< % Credit 1ransa"tions7 :'dge Al0erto Serrano

NOVEMBER 2A, 2010

1$ % Credit 1ransa"tions7 :'dge Al0erto Serrano

18 % Credit 1ransa"tions7 :'dge Al0erto Serrano

19 % Credit 1ransa"tions7 :'dge Al0erto Serrano

21 % Credit 1ransa"tions7 :'dge Al0erto Serrano

2# % Credit 1ransa"tions7 :'dge Al0erto Serrano

24 % Credit 1ransa"tions7 :'dge Al0erto Serrano

2- % Credit 1ransa"tions7 :'dge Al0erto Serrano

2< % Credit 1ransa"tions7 :'dge Al0erto Serrano

2$ % Credit 1ransa"tions7 :'dge Al0erto Serrano

8(at is t(e effect if t(e t(in overnment order)

is lost t(ro3 ( force ma@e3re or

28 % Credit 1ransa"tions7 :'dge Al0erto Serrano

#0 % Credit 1ransa"tions7 :'dge Al0erto Serrano

#2 % Credit 1ransa"tions7 :'dge Al0erto Serrano

## % Credit 1ransa"tions7 :'dge Al0erto Serrano

#4 % Credit 1ransa"tions7 :'dge Al0erto Serrano

#- % Credit 1ransa"tions7 :'dge Al0erto Serrano

-EC1 *, 2010 7 .!R$ ""

#$ % Credit 1ransa"tions7 :'dge Al0erto Serrano

8!RE%O4>E RECE".$> #!8 /!C$ 216A, !> !ME-E-0

#8 % Credit 1ransa"tions7 :'dge Al0erto Serrano

-ECEMBER 11, 2010 8!RE%O4>E RECE".$> #!8 /!C$ 216A0

40 % Credit 1ransa"tions7 :'dge Al0erto Serrano

I4!R!N$2 !N- >4RE$2>%". 7 H!N1 0B, 2011

4- % Credit 1ransa"tions7 :'dge Al0erto Serrano

4< % Credit 1ransa"tions7 :'dge Al0erto Serrano

4$ % Credit 1ransa"tions7 :'dge Al0erto Serrano

48 % Credit 1ransa"tions7 :'dge Al0erto Serrano

49 % Credit 1ransa"tions7 :'dge Al0erto Serrano

-1 % Credit 1ransa"tions7 :'dge Al0erto Serrano

-2 % Credit 1ransa"tions7 :'dge Al0erto Serrano

-# % Credit 1ransa"tions7 :'dge Al0erto Serrano

-- % Credit 1ransa"tions7 :'dge Al0erto Serrano

-< % Credit 1ransa"tions7 :'dge Al0erto Serrano

-8 % Credit 1ransa"tions7 :'dge Al0erto Serrano

-9 % Credit 1ransa"tions7 :'dge Al0erto Serrano

You might also like