Professional Documents
Culture Documents
REGULATORY
FRAMEWORK ON
BUSINESS TRANSACTIONS
(PART 3)
based on lectures by
Atty. Dante de la Cruz, CPA (CPAR; 2016)
Q: IF THE TERMS OF THE of mutuum – the loan of money and
CONTRACT ARE VAGUE, HOW other fungible goods for their
CAN THE INTENTIONS OF THE consumption, such as food
PARTIES BE DISCERNED?
Food can be the subject matter of
A: As a general rule, the manifest commodatum as long as it is not
intentions and their subsequent acts consumed and it is returned to the
following the creation of the bailor, such as when it is merely for
contract must be referred to. If not display
apparent, refer to the written
provisions. If still vague, see the
printed ones. Particularly in
negotiable instruments, words must Q: IS AN ORALLY-CONSTITUTED
be referred first over figures PARTNERSHIP STILL VALID EVEN
IF REAL PROPERTY WAS
As to gratuitous contracts (those CONTRIBUTED?
involving no exchange such as
donations), misinterpretation of A: Generally, partnerships can be
contracts favor those transmitting made orally, the contract being
the least rights. Thus, if vague as to perfected on the consent of the
being a commodatum or donation, parties alone. If the parties
the contract will be treated as if contribute real property regardless
commodatum since commodatum of value, the partnership must be
transmits rights the least. turned into writing, otherwise void
Commodatum is merely the loan of
the use of the thing, while donation The partnership is void as to third
confers ownership over the thing persons, which means it cannot
validly make transactions with
As to onerous contracts (those them. But the partnership remains
involving an exchange such as sale valid between the partners
or loan), misinterpretation favor
contracts providing more benefit to
the parties involved. Thus, if the
contract is unclear as to the rate
and term of interest, the larger rate
and the longer term shall be
considered the terms of the
contract
Q: DIFFERENTIATE REAL ESTATE
MORTGAGE AND CHATTEL
MORTGAGE
Q: CAN FOOD BE THE SUBJECT
MATTER OF COMMODATUM? A: Both are credit transactions
involving real and personal
A: As mentioned, commodatum is property, respectively, as security
the loan of the use of something, to a loan. Also, both doesn’t require
where the debtor/bailee promises actual delivery of the subject matter
to return the thing with the same – otherwise, the transaction would
quality as it was given to him. become a pledge. Pactum de non
Normally, food is the subject matter aliendo is void in both mortgages
However, real estate mortgage is of kind, the partnership will always
merely consensual – it doesn’t be dissolved
require documents to be valid. To
bind third persons to the contract, If the contribution was lost after
the mortgage must be registered. delivery, only those contributed in
On the other hand, chattel usufruct will cause dissolution – i.e.
mortgages are formal contracts, those whose use is contributed in
requiring registration in the Registry the partnership, not ownership
and in an Affidavit of Good Faith