1.

a. For loans, there is no legal significance in view of validity and enforceability

whether it’s in a public or private instrument because under the law, contracts shall be
obligatory, in whatever form they may have been entered into, provided all the essential
requisites for their validity are present. However, when the law requires that a contract be
in some form in order that it may be valid or enforceable, or that a contract be proved in a
certain way, that requirement is absolute and indispensable. In such cases, the right of
the parties stated in the following article cannot be exercised. Further under the
law,commodatum is purely personal in character.

Hence, in a contract of loan or any kind of contract, as long as all the requisites for
validity is present unless the law requires that a contract to be in some form inorder for it
to be enforceable, shall be valid regardless whether its written in a public or private
document.

For, mortgages, there is a legal significance in view of validity and enforceability

whether its i a public or private instrument.

Under the law only the following property may be the object of a contract of mortgage:
Immovables; Alienable real rights in accordance with the laws, imposed upon immovables.
Nevertheless, movables may be the object of a chattel mortgage. Further, acts and contracts that
create, transmit, modify or extinguish real rights over immovable property should appear in
public document.

Hence, a mortgage in order to be valid and enforceable must be put in a public document.

b. Yes, Ferdie’s refusal is justified because the Supreme court held that a check of
any kind is not a legal tender and an offer of the same is not a valid legal tender of
payment and may be refused receipt by the obligee or creditor. Here, the refusal
of ferdie stems from the offer of lito to redeem said property by payment using a
managers check which is not a legal tender and justifies the former’s refusal
thereof.
2.
The action will not prosper.
The Supreme Court affirmed in a plethora of cases that stipulated interest rates of 3
percent per month and higher are excessive, iniquitous, unconscionable and exorbitant. Such
stipulations are void for being contrary to morals, if not against the law. While the Bangko
Sentral ng Pilipinas C.B. Circular No. 905-82 dated Jan. 1, 1983 effectively removed the ceiling
on interest rates for both secured and unsecured loans, regardless of maturity, nothing in the said
circular could possibly be read as granting carte blanche authority to lenders to raise interest
rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their
assets.

Here, the bank raised the same defense as the abovementioned ruling and the proviso of
raising the interest rate periodically until reaching the rate of 48% even when when Samuel
objected is clear carte blanch. Such stipulation are void being contrary to law and morals.

3.

a. It is a cession because the law provides for cession of lease rights the assignee
steps into the shoes of the lessee who is thereupon freed from his obligations under
the lease because from then on it is the assignee who is liable to the lessor
for rental payment.

Here, Ellen is the lessee who assigned her rights to the bank in order for her to obtain a
loan. The bank who stepped into the shoes of Ellen became the assignee. This cannot be a
mortgage because one of its requirement is for Ellen must be the owner of the said property in
order to be able to mortgage the public market stall. Thus in this case, she is not the owner but
only a lessee. Hence the assignment can only be a cession.

b. Yes, the provision of the bank constitutes pactum commissorium.

The law provides the requisites that constitutes pactum commissorium which are:
there should be a mortgage of property by way of security for the payment of the
principal obligation; that there is a stipulation for the automatic appropriation of
the property in favor of the creditor upon default of the debtor.

In the case at bar, ellen have a mortgage with the bank and the bank stipulated to
acquire ellen’s right to sell the property which is a right that belongs only for owners
and that is the right to dispose. This signifies an act of appropriation and thus
constitutes pactum commissorium.

4.
a. Antichresis is a contract whereby the creditor acquires the right to receive the fruits
of an immovable of the debtor, with the obligation to apply then to the payment of the
interest, if owing, and thereafter to the principal of the credit
The contract of antichresis must be specified in writing or in a specific form
otherwise, the contract of antichresis shall be void.

b. The contract between parties is a contract of antichresis.

Antichresis is a contract whereby the creditor acquires the right to receive the fruits of
an immovable of the debtor, with the obligation to apply then to the payment of the
interest, if owing, and thereafter to the principal of the credit. Here, B acquired the
rights to receive the fruit of an immovable of A. Even the latter part of the provision
was not expressed in the contract, such obligation to pay interest is notof the essence
 of the contract of antichresis; there being nothing in the Code to show that antichresis
is only applicable to securing the payment of interest-bearing loans.

c. The obligation of B are:

To pay taxes and charges on the estate, including necessary expenses. Creditor may
avoid said obligation by: a. compelling debtor to reacquire enjoyment of the property
b. by stipulation to the contrary.

To apply all the fruits, after receiving them, to the payment of interest, if owing, and
thereafter to the principal.

To render an account of the fruits to the debtor.

To bear the expenses necessary for its

preservation and repair.

c. No, A may not re-acquire the coconut land before her entire indebtedness shall have
been fully paid.

Under the law, the debtor cannot reacquire the enjoyment of the immovable without
first having totally paid what he owes the creditor.

Here, in order for A to reacquire the coconut land, A must fully pay the loan of 500.00
to B.

5. The bank is incorrect.

Under the law, the depositary cannot make use of the thing deposited without the
express permission of the depositor. Otherwise, he shall be liable for damages.
Here, Sarah did not expressly permit the bank to deduct the amount of 1M from her
5M deposit. The bank’s act of deducting without permission makes him liable for
damages incurred to Sarah.

6.
The bonding company as a guarantor is held liable for the bond if D fails to pay
the obligation.
Under the law, a guaranty is a contract whereby a person, called the guarantor,
binds himself to the creditor to fulfill the obligation of the principal debtor in case the
latter should fail to do so.
Here, D failed to fulfill his obligation and as such, the guarantor is responsible to
pay such obligation in D’s stead.
 b.
The answer would be the same because while a surety undertakes to pay if the
principal does not pay, the guarantor only binds himself to pay if the principal cannot
pay as in this cases D is unable to pay.
7. a.
The contention of the pledgor is untenable.
Under the law, The sale of the thing pledged shall extinguish the principal
obligation, whether or not the proceeds of the sale are equal to the amount of the
principal obligation, interest and expenses in a proper case. If the price of the sale is
more than said amount, the debtor shall not be entitled to the excess, unless it is
otherwise agreed.
In the case at bar, there was no stipulation in their contract that proves the
pledgor’s contention that he is entitled to the excess of the purchase price. Lacking
such stipulation the pledgor is not entitled to the excess of the purchase price.
b.
In the case of the offspring of the cow not mentioned in the pledge, his contention
is untenable.
Under the law, in a pledge of animals, their offspring shall pertain to the pledgor or
owner of animals pledged, but shall be subject to the pledge, if there is no stipulation
to the contrary.
Here, there was no stipulation that the cow offspring shall not be subjected to the
pledge and as such it became part of the pledge.
8.
a.
Pedro shall bear the 15,000 spent for the repair of the van.
Under the law, The bailor who, knowing the flaws of the thing loaned, does not
advise the bailee of the same, shall be liable to the latter for the damages which he may
suffer by reason thereof.

Here, Pedro did not inform Tito of the faulty brakes and in turn Tito spent 15,000 for
the damage incurred by reason thereto.

b.

Tito shall bear the ordinary expenses.

Under the law, the bailee is obliged to pay for the ordinary expenses for the use and
preservation of the thing loaned.
 Here, the cost for the van’s fuel, oil and other materials shall be paid by Tito as it is
necessary for using and preserving the van while under his care and usage.

c.
As a general rule, Pedro cannot demand the return of the van loaned till after the
expiration of the period stipulated, or after the accomplishment of the use for which the
commodatum has been constituted. However, if in the meantime, he should have urgent
need of the van, he may demand its return or temporary use which in turn shall suspend
the contract of commodatum while the van is in his the possession.

d.

Tito shall bear the loss.

The bailee is liable for the loss of the thing, even if it should be through a fortuitous event
If he lends or leases the thing to a third person, who is not a member of his household.

Here, the act of Tito leasing the van to Annabelle makes Tito liable to Pedro if the van
lent incurs damage even if accidental.

9.
XYZ’s contention is bereft of merits.
The law provides two requisites of pactum commissorium: that there is a pledge
or mortgage; and the existence of a stipulation for an automatic appropriation by the
creditor of the property in the event of nonpayment by the debtor.
In the case at bar, XYZ mortgaged their deposit certificate to the bank however
there was no provision in their contract that stipulates an automatic appropriation of
the property by the creditor in case of non-payment. Hence the bank is correct in
disagreeing the existence of a pactum commissorium as the requisites of such were
not conformed.
10.
The order of the court is incorrect and must be reversed.
The Supreme Court held that in the absence of insolvency proceedings (or other
equivalent general liquidation of the debtor's estate), the conflict between the parties
now before us must be decided pursuant to the well established principle concerning
registered lands; that a purchaser in good faith and for value takes registered property
free from liens and encumbrances other than statutory liens and those recorded in the
certificate of title.
There being no insolvency or liquidation, the claim of the C, as unpaid vendor,
did not acquire the character and rank of a statutory lien co-equal to the B’s recorded
encumbrance, and must remain subordinate to the latter and cannot be simultaneously
prorated from the proceeds of the foreclosure sale.

11. a.
AAA’s claim will prosper.
Property held by the insolvent debtor as a trustee of an express or implied trust, shall
be excluded from the insolvency proceedings.
Here the insolvent bank holds the property of AAA and shall be excluded from its
insolvency proceeding.

12.
13. The Supreme Court held that there is no period of prescription as to the issuance
of a writ of possession, and inasmuch as the final decree has already been entered, it
follows that a writ of possession should be issued in favor of the registered owner.