law3 credit transactions

7/27/2019 Law3 Credit Transactions

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COMMODATUM

I. DefinitionA contract, by which one of the parties binds himself to return to the other certain personal

chattels which the latter delivers to him, to be used by him, without reward; loan- for use.Vide loan for use.

II. Elementsa. Cause- essentially gratuitous (otherwise, if there is compensation, it might be lease).b. Purpose- loan for use or temporary possession but not its fruits unless stipulated or

incidental.

c. Subject matter- may involve real or personal property. Generally non-consumablegoods but if the consumable goods are not for consumption, such may be a subject.

III.

Obligationa. Debtor

i. To pay for the ordinary expenses for the use and preservation of the thingii. To pay for all other and extraordinary expensesiii. To take good care of the thing with the diligence of a good father to a familyiv. To be liable for the loss even in fortuitous events in the cases provided by Article

1942

v. The bailee has no right to retain the thing even as a security for any claimsagainst the bailor

b. Creditori. To allow the bailee to use the thing loaned for the period stipulated or until the

accomplishment of the purpose for which it was acquired

ii. To pay for known hidden flawsIV. Rights

a. Debtori. To use the thing loaned

ii. Does not answer for the deterioration of the thing loaned without fault.b. Creditor

i. To demand the thing at will if the contract is precariumii. To refund the ordinary expenses

V. Remedies for BreachVI. Extinguishment

MUTUUM


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I. DefinitionA contract whereby one of the parties delivers to another money or other fungible thing

with the understanding that the same amount of the same kind and quality shall be paid.

II. Elementsa. Cause- Gratuitous or onerous (with the stipulation to pay the interest)b. Purpose- Loan for consumptionc. Subject matter

i. Fungible goodsii. Money

III. Obligationa. Debtorb. Creditor

IV. Rightsa. Debtorb. Creditor


DEPOSIT

I. DefinitionA deposit is constituted from the moment a person receives a thing belong to another, with

the obligation of safely keeping it and of returning the same.

II. Elementsa. Cause-

i. By virtue of court orderii. By lawiii. Will of parties

b. Purpose- safekeeping of the thing delivered or mere custodyc. Subject matter

i. Movableii. Immovableiii. In extrajudicial deposit, only corporeal things may be the object.

III. Obligationa. Depositary

i. Safe keeping


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ii. Return the thing depositedb. Depositor

i. To pay expenses for the preservationii. To pay the losses incurred due to character of thing deposited

IV. Rightsa. Depositary

i. To retain the thing in pledge until full payment may be due by hinm because ofthe deposit

b. DepositorV. Remedies for BreachVI. Extinguishment

a. Death of either of the party if it is gratuitousb. Loss or deterioration of the thingc. Other provisions in the Civil Code (novation, merger, etc.)

GUARANTY

I. DefinitionBy guaranty, a person called guarantor, binds himself to the creditor, to fulfill the obligation

of the principal debtor in case the latter should fail to do so.

II. Elementsa. Cause- it is essentially gratuitous but if there is a stipulation on the contrary, may be

onerous.

b. Purposei. To secure the payment of the loan at maturity

ii. To secure payment if any debt to be subsequently incurrediii. To secure existing unliquidated debts

c. Subject matter-III. Obligation

a. Guarantori. Fulfill the conditions required or stipulated for making use of the benefit of

exhaustion

b. Debtori. The debtor becomes liable if the payment made by the guarantor was made:

1. With his consent2. Subsequently ratified by him

c. Creditori. Duty of the creditor to make prior demand for payment from guarantor


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IV. Rightsa. Guarantor

i. To proceed against the debtor even before paymentii. To reimburse after payment against the debtoriii. Guarantors liability cannot exceed principal obligationiv. To benefit excussion or exhaustion

b. Debtorc. Creditor

i. Creditor has every right to taka all possible measures to secure paymentii. Constitute the guaranty even against the will of the principal debtoriii. Demand for another guarantor if the later doesnt pass the qualifications

V. Remedies to which the guarantor entitleda. General Rule: The guarantor cannot demand reimbursement for indemnity because he

has not paid the obligation,

b. Exceptions:i. To obtain release from guaranty

ii. To demand security that shall protect him from:1. Any proceedings by the creditor2. Against insolvency of the debtor

VI. Extinguishmenta. Payment or performanceb. Loss of the thing duec. Condonationd. Confusione. Compensationf. Novationg. Other:

i. Annulmentii. Rescissioniii. Fulfillment of resolutory periodiv. Prescription

SURETYSHIP

I. DefinitionA relation which exists where the principal person has undertaken an obligation and the

surety is also under a direct obligation or other duty to the oblige, who is entitled to but one

performance, and as between the two who are bound, rather than the first should perform.

II. Elementsa. Cause


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b. Purposec. Subject matter

III. Obligationa. Surety

i. Answer for the liability if the principal debtor fails to do sob. Debtor

i. Fulfill his obligation to relieve the surety of the obligationc. Creditor

IV. Rightsa. Surety

i. Protected against unjust pecuniary impoverishment by imposing on theprincipal, duties akin to those fiduciary

b. Debtorc. Creditor

i. May sue separately or together, the principal debtor and the suretyV. Remedies for BreachVI. Extinguishment

PLEDGE

I. DefinitionA contract by virtue of which the debtor delivers to the creditor or to a third person a

movable or a document evidencing incorporeal rights for the purpose of securing the

fulfillment of a principal obligation with the understanding that when the obligation is

fulfilled, the thing delivered shall be returned with all its fruits and accessions.

II. Elementsa. Cause-b. Purpose- to secure paymentc. Subject matter- constituted on movable, personal property

III. Obligationa. Pledgor

i. Has responsibility for the flaws of the thing pledgedii. Cannot ask for the return of the thing pledged against the will of the creditor

b. Creditori. Notice the pledgor on the sale of the thing pledge and comply with the

formalities of the law.

ii. Not to dispose the thing same as owneriii. Not to appropriate for himself the thing held as pledged

IV. Rightsa. Pledgor


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i. The right to be noticed of the sale of the thing in the event that the debtorcannot pay the obligation due.

ii. Is allowed to substitute the thing with another of the same kind and qualityb. Creditor

i. If the debtor fails to pay, the creditor has the right to sell the thing pledged withformalities of the law

ii. To hold as a security the proceeds of the pledge for the principal obligationV. Remedies for BreachVI. Extinguishment

a. If the thing pledged is returned by the pledgeeb. A statement in writing by the pledgee states that he abandons the thing pledgedc. If subsequent to the perfection of the pledge, the possession of the thing is in the

owner.

d. If after the constitution of the pledge, the possession of the thing pledge is on a 3rdperson.

e. Payment of the debtf. Sale of the thing pledged at a public auction

USURY

I. DefinitionII. Elements

a. Causeb. Purposec. Subject matter

III. Obligationa. Baileeb. Bailor

IV. Rightsa. Baileeb. Bailor


REAL MORTGAGE

I. DefinitionIt is a contract whereby the debtor secures to the creditor the fulfillment of a principal

obligation, specially subjecting to such security immovable property in case the principal

obligation is not complied with the time stipulated.

II. Elements


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a. Causeb. Purposec. Subject matter

i. Immovableii. Alienable real rights in accordance with the law

III. Obligationa. Mortgageeb. Mortgagor

IV. Rightsa. Mortgageeb. Mortgagor


ANTICHRESIS

I. DefinitionA 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.

II. Elementsa. Causeb. Purposec. Subject matter- fruits of real property

III. Obligationa. Debtorb. Creditor

i. To pay taxes and charges on the state, including necessary expensesii. To apply all the fruits, after receiving them, to the payment of interest and

principal

iii. To render an account of the fruits to the debtoriv. To bear the expenses necessary for its reservation and repair

IV. Rightsa. Debtorb. Creditor


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V. Remedies for Creditor in case of non-paymenta. Action for specific performanceb. Petition for the sale of real property as in a foreclosure mortgages under Rule 68 of the

rules of court.

VI. ExtinguishmentCHATTEL MORTGAGE

I. DefinitionIt is a contract by virtue of which a personal property is recorded in the chattel Mortgage

Register as security for the performance of an obligation.

II. Elementsa. Causeb. Purposec. Subject matter

III. Obligationa. Mortgageeb. Mortgagor

IV. Rightsa. Mortgageeb. Mortgagor


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