CREDIT | ASG Galandines | 2017-2018

LOAN
1. What is mutuum?
2. Who gives consent? Who are the parties? What may be its object?
3. When you say fungible, is it necessarily consumable? Give an example of a consumable which is not
fungible.
4. Can a non-consumable property be an object of mutuum?
5. What is the cause?
6. In the case where A deposits in his savings account in Bank B a sum of money, who is the owner of the
money deposited?
A: See BPI case (?)
7. If this is a checking account, would it be the same?
8. Pedro Santos opens a checking account in BDO for ₱100,000. He draws a check payable to Juan dela Cruz
for ₱50,000. Juan dela Cruz presents the check at BDO. Who are the parties? What are their relations?
9. Is there mutuum between Pedro and Juan? Is there mutuum between Pedro and BDO? Is BDO a party in the
mutuum or just a collecting bank?
10. Can the bank use the money deposited by Pedro Santos for his checking account?
11. If BDO issues a credit card to Juan, is this transaction commodatum or mutuum?
12. Is a credit card consumable?
13. A is a holder of a credit card issued by Metrobank. A then used the credit card to purchase a bag at Rustan.
How should A, Metrobank, and Rustan be respectively addressed in this transaction?
14. B lent his credit card issued by Metrobank to A. A bought merchandise from Rustan’s using the such credit
card. What is the transaction between A and Rustan’s? Between A & Metrobank? Between A & B?
A: Kaso raw to [sic]
15. Who would pay the interest?
16. In mutuum, can interest be charged?
17. Pedro and Juan entered into a contract of loan without providing that it shall earn interest. When the
obligation became due and demandable, can A, the creditor, demand the payment of interest? Why?
A: See Eastern Shipping Lines, Inc. v. CA and Naver v. Gallery Frames & BSP-MB Circular No. 799 s. 2013
18. What is the difference between the interest in mutuum and the interest awarded by the court?
19. Suppose there is no agreement that interest shall be paid, but the debtor pays. What law shall govern the
relationship between the parties?
20. What are the kinds of interest?
21. State the rule on imposition of interest in case of money judgments.

GUARANTY & SURETYSHIP

1. What is guaranty?
2. How many contracts are involved? Is it possible for there to be a contract of guaranty alone, without a
principal contract?
3. Why is it called a security transaction? What does it secure?
4. What is a principal obligation? Is a contract of loan the only possible principal contract of a contract of
guaranty? Examples of valid obligations aside from a contract of loan.
A: As per ASG, commodatum, mutuum, and deposit fall under loan
5. A applied for a 300K loan with DE Bank, with a contract of guaranty having F as guarantor. Between whom
is the contract of guaranty entered into?
6. Who should give consent? Should the Bank be a party to the guaranty? Should the debtor be a party to the
guaranty?
7. Active contract?
8. F asks you if he could pay the obligation before it is due and demandable
9. What is the effect if F did not inform B of such payment?
10. How is notification done? What if it is through text message?
11. Velasquez v. Solid Bank
12. If F pays in advance, would that not fall under the concept that F binds himself solidarily with B?
13. Requirements of the form of guaranty
 A: Art. 2055
14. Can F guaranty the payment of 100K? 350K? 300K? Why?
15. On the day the obligation became due and demandable, A defaulted in paying the loan to the bank. Can the
bank compel F to pay?
16. After exhausting the properties of A, can the guarantor answer for 300K when he only guaranteed 100K?
17. If there is no amount stipulated between A and F, how much can the bank recover?
18. May the creditor go against the guarantor directly? What is the general rule? What are the exceptions?
19. Who exercises the right of excussion?
20. What is the effect of a compromise agreement?

PROVISIONS COMMON TO PLEDGE & MORTGAGE

1. What are the characteristics common to pledge and mortgage? Difference?
2. What is pledge?
3. What is Art. 2085?
4. What does it mean when we say actual owner?
5. What is absolute ownership?
6. Owner without a certificate or original certificate of original registration?
7. Your client got a brand-new car thru a bank, on amortization for 10 months. The OCR is in his name but the
same is still with the bank. His father then entered into a contract of loan with A. Can your client’s father
pledge the car to secure his loan from A?
8. Even if your client’s father is not the absolute owner?
9. Car: pledge or mortgage?
10. Your client was awarded a house and lot through a government program, to be paid for 25 years through
GSIS. His father obtained a loan from a bank. Can your client validly mortgage the house and lot?
11. What if there is a third-party claim?
12. Is amortization possible to mortgage or pledge? The title of the car is still with the bank.
13. In case of land, is there absolute ownership when it is to be paid on an installment basis?
14. What is the difference between installment in amortization and installment in sale of land?
15. Does Art. 2052 apply as well to pledge and mortgage?
16. Principal obligation involves what?
17. Is a contract which is voidable valid?
18. If the principal obligation is unenforceable, is the pledge or mortgage necessarily unenforceable? If the
principal obligation is valid? If it is voidable? If it is a natural obligation?
19. Example of a voidable contract. Example of an unenforceable contract. Example of a natural obligation.
20. Aside from Art. 2085, what other provisions or requisites are common to both pledge and mortgage?
21. Is registration required for both pledge and mortgage?
22. Why is registration needed in mortgage and not in pledge?
23. What is the benefit of registration?
24. If RD in mortgage is security to mortgagee, then how about security of pledgee in pledge?
25. Where do you register?
26. Example of things that could be subject of real mortgage. Example of things that could be subject of pledge.
27. Who are the parties in a mortgage or pledge?
28. Is the debtor always the pledgor? Is the creditor always the pledgee?
29. What is foreclosure?
30. Who forecloses the mortgage?
31. What is needed before foreclosure of mortgage? Do you need to go to court?
32. How about those in pawnshop?
33. Why is possession in pledge required?
34. A, in order to get a loan from Cebuana, pledged his Rolex watch worth ₱350K to get the loan worth ₱250K.
if A fails to pay, what would be the process to foreclose the Rolex watch?
35. What is specific performance?
36. How is it different from foreclosure?
37. DBP v. CA and Cuba
38. Bustamante v. Sps. Rosel
39. “The value of the thing pledged or mortgaged is equal to the loan.” Is this statement accurate?
40. What is pactum commissorium?
41. Your client extended a ₱5000 loan to Mr. X. Mr. A, in turn, pledged his ring, which was appraised at ₱15000.
Your client asks you to include this stipulation in the contract: “In case of failure of Mr. A to pay ₱5000, the
₱15000 ring shall answer for the loan obligation.” Does the stipulation fall under pactum commissorium?
A: Yes.
42. Your client asks you to include this stipulation in the contract: “In case of failure of Mr. A to pay ₱5000, he
shall execute a deed of absolute sale where he would sell the ₱15000 ring to me.” Does the stipulation fall
under pactum commissorium?
A: No.
43. Your client asks you to include this stipulation in the contract: “In case of failure of Mr. A to pay ₱5000, it
would give me the right to sell the ₱15000 ring at a public auction.” Does the stipulation fall under pactum
commissorium?
A: No.
44. The loan was worth ₱1M, while the thing mortgaged was sold at the public auction for ₱3M. Who is entitled
to the difference amounting to ₱2M?
45. If there is an express stipulation?