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Credit Transactions Reviewer PDF
Credit Transactions Reviewer PDF
Case Doctrines Art. 1938. The bailor in commodatum need not be the owner of the
Producers Bank v. CA thing loaned.
• Facts: X approached Y, claiming he needed help to get his
business incorporated. X needed Y to put some money in the Bailor Need Not be Owner
bank under his & Y’s account, so that X would be able to show It is sufficient that the bailor has such possessory interest in the subject
authorities that he had money in the bank enough to matter or right to its use which he may assert against the bailee & third
incorporate. Y agreed, using a check to make the deposit. persons although not against the rightful owner
However, when Y checked the account again, X had already • A lessee of a thing or a usufructuary may lend the thing
withdrawn all the money. • A lessee may sublet the thing leased, where there is no express
• Held: The contract was one of commodatum though it involved prohibition in the lease contract
a consumable thing, because the money was meant only for • BUT the bailee or borrower himself MAY NOT lend or lease the
exhibition, as per the agreement of X & Y. Y thus had no right to thing loaned to him to a third person
use the money & must now pay X.
Class Scenario
Lerma’s Lecture: In this case, X lent P200,000 via check. Was Y tasked Q1: X lent Y an iPad on commodatum. It turns out that X is not the
to return the exact same check? No. So is the case correct? NO, owner, but Z is. Is the relationship between X & Y still a commodatum?
because what was asked to be returned was not actually the original A: YES.
money given.
WHEN YOU INCORPORTE, one of the incorporators, X, will be asked to be Q2: What if X stole the iPad from Z, who should Y return the iPad to &
a treasurer-in-trust. Said incorporator X will deposit money for the why?
account on his name and also on the name of the corporation. That A: Z, because X never obtained possessory interest.
amount deposited cannot be touched until the SEC will look into the
account and verify WON the amount is there. If the amount is there, SEC
will approve the incorporation. That was the initial purpose of lending Art. 1939. Commodatum is purely personal in character. Consequently:
the money. (1) The death of either the bailor or the bailee extinguishes the
contract;
Art. 1937. Movable or immovable property may be the object
of commodatum.
1 Art. 1643. In the lease of things, one of the parties binds himself to give another r the
enjoyment or use of a thing for a price certain, & for a period which may be definite or
Subject Matter of the Contract indefinite. However, no lease for more than 99 years shall be valid.
Right of the Bailee to Lend the Thing Loaned to Third Persons SECTION 2. - Obligations of the Bailee
General Rule: The bailee can neither lend nor lease the object of the
contract to a third person, unless: Art. 1941. The bailee is obliged to pay for the ordinary expenses for the
(1) There is stipulation to the contrary; or use & preservation of the thing loaned.
(2) The use of the thing loaned is extended to just members of the
household (who are not considered third persons), EXCEPT— Liability for Ordinary Expenses
a. If there is stipulation to the contrary; or The borrower must take good care of the thing with the diligence of a
b. Of the nature of the thing forbids such use (e.g. dress) good father of a family.
• Ex. If B borrows the car of L, B must pay for the gas, motor oil,
Class Discussion washing, etc. B cannot demand reimbursement for such
Practical perspective: Why is commodatum purely personal in expenses.
character? Because the bailor takes personal characteristics of the
bailee into consideration before he entrusts the thing & because it’s for Class Scenario
free. Q1: X lent Y his iPhone to Y. What does Y have to pay for?
Members of the household pertain to your actual family members; yet A: The “load” that Y will use or whatever billings.
this is actually an arguable idea.
Q2: What if Y decides to bejewel the iPhone, must X pay?
Class Scenarios A: NO. This is not an expense for use or preservation.
Q1: X lends Y an antique sword. Y’s son starts playing with said antique
sword. Did Y violate the commodatum? Art. 1942. The bailee is liable for the loss of the thing, even if it should
A: YES, because the nature of the thing would forbid Y from allowing the be through a fortuitous event: (DKALS)
son to use it. (1) If he Devotes the thing to any purpose different from that for
which it has been loaned;
Q2: X is a dentist. Y, also a dentist, lends X a dentist chair to be used in (2) If he Keeps it longer than the period stipulated, or after the
X’s home clinic. Can members of the family use the dentist chair? accomplishment of the use for which the commodatum has
been constituted;
Fungible Things Art. 1954. A contract whereby one person transfers the ownership of
Things which are usually dealt with by number, weight or measure such non-fungible things to another with the obligation on the part of the
as rice, oil, sugar, etc. so that any given unit or portion is treated as the latter to give things of the same kind, quantity, & quality shall be
equivalent of any other unit or portion considered a barter.
Depositor Need Not Be Owner of Thing Q: X gives W, a kid, his iPhone for safekeeping. W sold X’s phone for
• Generally, depositor is owner of the thing P100. The kid then spent P90 and then kept the P10.
• BUT it may belong to a carrier, commission agent, lessee, etc. A: X can collect the whole P100 from the minor, because that is the total
who deposits them temporarily in a depositor’s possession, amount he sold it for & was benefited by.
since the contract does not involve the transfer of ownership Q2: What if W exchanged the thing for a lottery ticket and won P50M?
• A depositary cannot dispute the title of the depositor to the Can X claim the P50M?
thing deposited as the former is in estoppel A: Yes, because that’s the amount by which the child was enriched.
Case Doctrines Art. 1979. The depositary is liable for the loss of the thing through a
Gavieres v. Taverra fortuitous event:
• Facts: The contract reads: "Received of X, P3,000, as a deposit (1) If it is so stipulated;
payable on two months' notice in advance, with 6% int. p.a. with (2) If he uses the thing without the depositor's permission;
an hypothecation of the goods now owned by me or which may (3) If he delays its return;
be owned hereafter, as security of the payment. "In witness (4) If he allows others to use it, even though he himself may have
whereof I sign in Binondo, January 31, 1859.” been authorized to use the same.
• Held: This is a contract of loan, as it stipulates an interest.
Furthermore, the fact that it was collective after 2 months’ General Rule
notice showed that X intended to give the other party the • The depositary is not liable for loss through a fortuitous event
opportunity to ensure availability of funds. without his fault; exceptions are provided above
Proof of Ownership Not Necessary Thing Divisible & Depositors Not Solidary
To constitute a deposit, it is not essential that the depositor is the owner Each depositor can demand only his share proportionate to the deposit.
of the thing deposited. • Ex. If A & B deposited 150 & 300 cavans of rice, respectively, A
can only demand 150 cavans
For Paragraph 2 to Apply
(1) The thing deposited must have been stolen; & Obligation is Solidary or Thing Deposited is Not Divisible
(2) The depositary must know who the true owner is • Art. 1212 – Each of the solidary depositors may do whatever
may be useful to the others but not anything which may be
Effect of Failure to Claim within 1 Month prejudicial to the latter
• The 1 month period is meant to protect the depositary • Art. 1214 – The depositary may return the thing to any of the
o Depositary could unjustly be made liable for refusing to solidary depositors unless a demand, judicial or extrajudicial, is
return to the depositor made by one of them, in which case delivery should be made to
o The law, however, does not provide an answer for a him
situation where the depositor demands the thing
before the expiry of 1 month but the depositary has CLASS SCENARIO
already discovered that the depositor is not the owner
CLASS SCENARIO Art. 1997. The deposit referred to in No. 1 of the preceding article shall
Q: X owes Y P1,000 2 weeks ago. Last week, Y deposited his iPad with X. be governed by the provisions of the law establishing it, & in case of its
Today is the due date of the return of Y’s iPad. When Y made the deficiency, by the rules on voluntary deposit.
demand for P1,000, X refused to return the iPad of Y because Y still The deposit mentioned in No. 2 of the preceding article shall be
owed X P1,000. If X & Y go to court, who would win? regulated by the provisions concerning voluntary deposit and by Art.
A: Y would win, because the right of retention has to be by virtue of the 2168.
deposit (i.e., the retention should be because of expenses for the
preservation of the iPad), and has nothing to do with other obligations Four Kinds of Necessary Deposit (LOCTP)
due from the depositor to the depositary even if said obligation still As opposed to a voluntary deposit, a necessary deposit does not involve
exists at the time the deposit is demanded by the depositor. freedom of choice.
(1) When it is made in compliance with a Legal Obligation
Art. 1995. A deposit is extinguished: • Judicial deposit of a thing which is being disputed in a
(1) Upon the loss or destruction of the thing deposited; litigation by 2 or more persons
(2) In case of a gratuitous deposit, upon the death of either the • Deposit of a thing pledged when the creditor uses the
depositor or the depositary. same without authority of the owner or misuses it in
any other way
Causes of Extinguishment of Deposit
Art. 1998. The deposit of effects made by the travellers in hotels or inns Extent of Liability of Keepers of Hotels & Inns
shall also be regarded as necessary. The keepers of hotels or inns shall • Liability is not limited to baggage or articles of clothing, but
be responsible for them as depositaries, provided that notice was given include those lost or damaged in hotel annexes, such as
to them, or to their employees, of the effects brought by the guests and vehicles in the hotel’s garage.
that, on the part of the latter, they take the precautions which said hotel- o Contract of deposit is perfected when the hotel guest
keepers or their substitutes advised relative to the care and vigilance of hands over his keys to his vehicle, & the latter received
their effects. the obligation to safely keep & return it
• Hotel-keepers cannot waive this because they are tasked with
Case Doctrines taking extraordinary care with the safety & well-being of their
Tan Khey v. De los Santos guests & their guests’ things
• Facts: X stayed at a hotel owned by Y. X left his stuff with the • Responsibility extends to all those who offer lodging for
staff of Y in the afternoon, consisting of his bag & revolver, & compensation, whatever may be their character.
then came back in the evening & retired to his room. When X • Innkeepers are also subsidiarily liable for restitution of goods
taken by theft or robbery within their houses from guests