Escolar Documentos
Profissional Documentos
Cultura Documentos
I. GENERAL PROVISIONS
A. Definitions of Credit or Security Transactions.
Credit transactions include all transactions involving the purchase of l
oan of goods, services or money in the present with a promise to pay or deliver
in the future.
> Without a promise to pay or deliver in the future, there can be no security tr
ansaction.
B. Parties to a Bailment.
1. Bailor (Comodatario) the giver, the party who delivers the possession or
custody of the thing bailed.
2. Bailee (Comodante) the recipient; the party who receives the possession
or custody of the thing thus delivered.
D. Loan in General
D.1 Characteristics of the Contract
1. Real Contract because the delivery of the thing loaned is necessary for
the perfection of the contract (Article 1934; see also Article 1316); and
2. Unilateral Contract because once the subject matter has been deliver
ed, it creates obligations on the part of only one of the parties, i. e. the bor
rower
4. borrower need only pay the same amount of the same kind and quality
5. involves only personal property
7. no right to demand return before the lapse of the term agreed upon
8. borrower suffers the loss even if the loss is caused exclusively by a for
tuitous event
D.4 Distinction between Commodatum (Hiram) and Lease (Upa)
1. Commodatum is a real contract, whereas lease is a cosensual contract.
2. The object of commodatum is a non-consumable (nonfungible) thing, wherea
s the object of lease may even be work or service.
3. Commodatum is essentially gratuitous, whereas lease is not gratuitous.
II. COMMODATUM
A. Characteristics
1. Gratuitous, otherwise it is a lease (Article 1935)
2. Purpose is the temporary use of the thing loaned (Article 1935)
3. Bailee s right to use is limited to the thing loaned and not to its fruits
(Article 1935) unless there is stipulation to the contrary (Article 1940)
4. Subject matter is generally non-consumable things but may cover consumab
les if the purpose of the contract is for exhibition.
5. Bailor need not to be the owner; it is sufficient that he has possessory
interest over subject matter (Article 1938).
6. Commodatum is purely personal in character hence death of either bailor
or bailee extinguishes the contract (Article 1939)
7. General Rule: Bailee can neither lend nor lease the object of the contr
act to a third person.
Exception: Member of bailee s household
Exception to the exception:
a) contrary stipulation
b) nature of thing forbids such use
C. Obligations of Bailor
1. To allow the bailee the use of the thing loaned for the duration of peri
od stipulated or until the accomplishment of the purpose for which commodatum wa
s constituted.
Exceptions: a. urgent need during which time the
commodatum is suspended.
b. precarium
b.1 if duration of the contract has not been stipulated
b.2 if use or purpose of the thing has not been stipulated
b.3 if use of thing is merely tolerated by the bailor
2. To refund extraordinary expenses for the preservation of the thing loane
d provided bailor is notified before the expenses were incurred.
Exception: urgent need hence no notice is necessary.
3. To refund 50% of the extraordinary expenses arising from actual use of t
he thing loaned (i.e. caused by fortuitous event)
Exception: contrary stipulation
4. To pay damages to bailee for known hidden flaws in the thing loaned.
Note:
1. Bailor has the right to demand return of the thing if bailee commits any
act of ingratitude.
D. Recent Jurisprudence on Commodatum
Catholic Vicar Apostolic of the Mountain Province vs. Court of Appeals
(165 SCRA 515)
Private respondents were able to prove that their predecessors house was
borrowed by petitioner Vicar after the church and the convent were destroyed. T
hey never asked for the return of the house, but when they allowed its free use,
they became bailors in commodatum and the petitioner the bailee. The bailee s fa
ilure to return the subject matter of commodatum to the bailor did not mean adve
rse possession on the part of the borrower. The bailee held in trust the proper
ty subject matter of commodatum. The adverse claim of petitioner came only in
1951 when it declared the lots for taxation purposes. The action of petitioner
Vicar by such adverse claim could not ripen into title by way of ordinary acquis
itive prescription because of the absence of just title.
IV. DEPOSIT
A. Definition
A deposit is constituted from the moment a person receives a thing belon
ging to another, with the obligation of safety keeping it and of returning the s
ame.
B. Characteristics
1. Real Contract because it is perfected by the delivery of the subject mat
ter.
2. If gratuitous, it is unilateral because only the depository has an oblig
ation. If onerous, it is bilateral.
3. Principal purpose of the contract of deposit is the safekeeping of the t
hing delivered.
4. Contract of deposit is generally gratuitous.
Exception: a) contrary stipulation
b) depository is in the business of storing
goods
c) property saved from destruction during calamity without owner s knowledge; jus
t compensation should be given the depository.
C. Distinctions between Deposit and Mutuum
1. Principal
Purpose
2. Return
3. Object
Deposit
Safekeeping or mere custody
1. Principal
Purpose
2. Nature
Deposit
Safekeeping
May be gratuitous
Commodatum
Transfer of use
Always gratuitous
E. Kinds of Deposit
1. Judicial
2. Extrajudicial
a. Voluntary
b. Necessary
3. Distinctions between Extrajudicial and Judicial Deposits
1. The first is constituted by will of the contracting parties, while the second
is constituted by virtue of a court order.
2. In the first, the object must be movable property, whereas in the second, the
object may be either movable or immovable property.
3. The purpose of the first is the safekeeping of the thing deposited, whereas t
he main purposes of the second is to secure or protect the owner s right.
4. The first is, as a general rule, gratuitous, whereas the second is always one
rous.
5. In the first, the depository is obliged to return the thing deposited upon de
mand made by the depositor, whereas the second, the thing shall be delivered onl
y upon order of the court.
F. Voluntary Deposit
1. Defined as one wherein the delivery is made by the will of the depositor
.
2. Although generally the owner, the depositor need not be the owner of the
thing deposited.
3. May be oral or in writing.
G. Obligations of the Depositary
1. Depositary is obliged to keep the thing safely and to return it when req
uired, even though a specified term may have been stipulated in the contract.
2. Depositary is liable if the loss occurs through his fault or negligence.
Loss of thing while in the depositary s possession raises a presumption of fault
. Required degree of care is greater if the deposit is for compensation than wh
en it is gratuitous.
3. Depositary is not allowed to deposit the thing with a third person.
Exception: contrary stipulation
4. Depositary is liable for the loss of the thing deposited if:
4.1 he transfers the deposit with a third person without authority although
there is no negligence on his part and the third person;
4.2 he deposits the thing with a third person who is manifestly careless or unfi
t although authorized, even in the absence of negligence; or
4.3 the thing is lost through the negligence of his employees whether the latter
are manifestly careless or not.
Note: Depositary is not responsible for loss of thing without negligence of th
e third person with whom he was allowed to deposit the thing if such third perso
n is not manifestly careless or unfit
5. Depositary is obliged to first notify the depositor and wait for the lat
ter s decision if he will change the way or manner of the deposit.
Exception: delay will cause danger
6. If thing deposited should earn interest, the depositary is under obligat
ion (1) to collect the interest as it becomes due and (2) to take such steps as
may be necessary to preserve its value and the rights corresponding to it. The
depositary is bound to collect not only the interest but also the capital itsel
f when due.
7. Depositary has the obligation not to commingle things deposited if so st
ipulated, even if they are of the same kind and quality (Article 1976).
8. Depositary is under obligation not to make use of the thing deposited (b
ecause deposit is for safekeeping of the subject matter and not for its use); ot
herwise he shall be liable for damages.
Exceptions: a) express permission of the depositor
b) preservation of the thing deposited required its use (article 1977)
Note:
1. If the thing deposited is non-consumable and the depositary has permissi
on to use the thing, the contract becomes one of commodatum.
2. If the thing deposited is money or other consumable thing, the contract
is converted into a simple loan or mutuum.
Exception: Where safekeeping is still the principal purpose of the contract
, the same shall be considered an irregular deposit.
3. Depositary is liable for loss through a fortuitous event even without hi
s fault.
(a) if it is so stipulated;
(b) is he uses the thing without the depositor s permission;
(c) if he delays its return;
(d) if he allows others to use it, even though he himself may have been authoriz
ed to use the same (article 1979)
4. Depositary has the obligation to:
(a) return the thing deposited when delivered closed and sealed, in the sam
e condition;
(b) pay for damages should the seal or lock be broken through his fault whic
h is presumed unless proven otherwise; and
(c) keep the secret of the deposit when the seal or lock is broken, with or
without his fault.
Note: Depositary is authorized to open the thing deposited which is cl
osed and sealed when there is:
(a) presumed authority (keys having been delivered to depositary), or
(b) in case of necessity.
5. Depositary has the obligation to return not only the thing but also all
its products, accessions and accessories which are a consequence of ownership.
Cause
Purpose
Subject Matter
Remuneration
Beneficiary
Judicial
by will or court
V. GUARANTY
A. Definition
Guaranty is a contract whereby a person binds himself to the creditor to
fulfill the obligation of the principal debtor in case the latter should fail t
o do so.
B. Characteristics
1. accessory
2. subsidiary and conditional
3. unilateral
4. requires that the guarantor must be a person
distinct from the debtor
3
Guaranty
Guarantor is secondarily
liable.
Guarantor is an insurer of
the debtor s solvency.
1
2
3
Suretyship
Surety is primarily liable and is therefore not entitled to the exhaustion of th
e properties of the principal debtor
4. Guaranty cannot be presumed. If there is any doubt on the terms and con
ditions of the guaranty or surety agreements, the doubt should be resolved in fa
vor of the guarantor or surety (Philippine National Bank vs. Court of Appeals, 1
98 SCRA 767). However, the rule of strictissimi juris commonly refers to an acc
ommodation surety and is not applied in case of compensated sureties.
3.
Movable property
Delivery of the object pledged to the pledgee or a third person
Pledge is not valid against third persons unless a description of the thing pled
ged and the date of the pledge appear in a public instrument.
1.
2.
3.
Immovable property
Delivery of the thing mortgaged is not necessary
Mortgage is not valid against third persons if not registered.
F. Provisions Applicable only to Pledge
1. The pledgor retains his ownership of the thing pledged. He may, therefo
re, sell the same provided the pledgee consents to the sale. As soon as the ple
dgee gives his consent, the ownership of the thing pledged is transferred to the
vendee subject to the rights of the pledgee, namely, that the thing sold may be
alienated to satisfy the obligation (Article 2112) and that the pledgee must co
ntinue in possession during the existence of the pledge. (Article 2093, 2098).
2. The possession of the pledgee constitutes his security. Hence, the debt
or cannot demand for its return until the debt secured by it is paid. (See Arti
cle 2105; Serrano vs. Court of Appeals, 196 SCRA 107 [1991]) But the right of r
etention is limited only to the fulfillment of the principal obligation for whic
h the pledge was created. (Article 2098).
3. Pledgee has the obligation to take care of the thing pledged with the di
ligence of a good father of the family. He is entitled to reimbursement of the
expenses incurred for its preservation and he is liable for loss or deterioratio
n by reason of fraud, negligence, delay or violation of the terms of the contrac
t. (Articles 1174, 1170).
4. Pledgee is not authorized to transfer possession of the thing pledged to
a third person.
Exception: stipulation authorizing pledgee to transfer possession. (Articl
e 2100)
5. The pledgee has no right to use the thing pledged or to appropriate the
fruits thereof without the authority of the owner (Article 2104; see Article 197
7). But the pledgee can apply the fruits, income, dividends, or interest, if ow
ing and thereafter to the principal of his credit. (see Article 2132).
Exception: contrary stipulation
6. The pledgor may ask that the thing pledged be deposited judicially or ex
trajudicially.
6.1 if the creditor uses the thing without authority;
6.2 if he misuses the thing in any other way (Article 2104);
6.3 if the thing is in danger of being lost or impaired because of the negligenc
e or willful act of the pledge.
7. Pledgor cannot ask for the return of the thing pledged until said obliga
tion is fully paid including interest due thereon and expenses incurred for its
preservation (Article 2099).
Exception: Pledgor is allowed to substitute the thing pledged which is in d
anger of destruction or impairment with another thing of the same kind and quali
ty (Article 2107).
8. The possession of the thing pledged by the debtor or owner subsequent to
the perfection of the pledge gives rise to a prima facie presumption that the t
hing has been returned and, therefore, that the pledge has been extinguished.
9. When the thing pledged is later found in the hands of the pledgor or the
owner, only the accessory obligation of pledge is presumed remitted, not the pr
incipal obligation itself (Article 1274).
10. The sale of the thing pledged extinguishes the principal obligation whet
her the price of the sale is more or less than the amount due.
a. If the price of the sale is more than the amount due the creditor, the debtor
is not entitled to the excess unless the contrary is provided;
b. In the same way, if the price of the sale is less, neither is the creditor en
titled to recover the deficiency. A contrary stipulation is void (Article 2115)
.
G. Foreclosure of Mortgages
1. Judicial foreclosure governed by Rule 68 of the Rules of Court.
2. Extrajudicial Foreclosure governed by Act. No. 3135 as amended, if and w
hen the mortgagee is given a specific power or express authority to do so.
a. Public auction must be conducted in the province where the property is situat
ed.
b. Posting of notice of sale in at least 3 public places therein
c. Publication in a newspaper of general circulation
d. Personal notice to mortgagor is not required (Bonnevie vs. Court of Appeals,
125 SCRA 122 [1983]; GSIS vs. Court of Appeals, 170 SCRA 533 [1989]).
e. Debtor has the right to redeem the property sold within the term of one year
from and after the date of the sale (Section 6). The reckoning date in case of
registered land is from the registration of the certificate of sale since it is
only from such date that the sale takes effect as a conveyance. (Jose vs. Blue,
42 SCRA 351, [1971]; Gorospe vs. Santos, 69 SCRA 191 [1976]; General vs. Barra
meda, 60 SCRA 162 [1976]. Every conveyance of lands acquired under the free pate
nt or homestead provisions, when proper, shall be subject to repurchase by the a
pplicant, his widow or legal heirs, within a period of five years from the date
of the conveyance. (Section 119, C.A. No. 141 [Public Land Law], as amended) or
foreclosure sale (Tupas vs. Damasco, 132 SCRA 593 [1984]).
Note: Cerna vs. CA (220 SCRA 517): The filing of a collection suit bars the fo
reclosure of mortgage.
K. Right of Redemption
1. In all cases of extrajudicial sale, the mortgagor may redeem the propert
y at any time within the term of one year from and after the date of registratio
n of the sale (see Section 6, Act No. 3135; Reyes vs. Tolentino 42 SCRA 365 [19
71]).
2. In judicial foreclosure of real estate mortgage, there is a right of red
emption which he can exercise at any time after service of judgment of foreclosu
re and within the 90-day period and even thereafter provided he does so before t
he foreclosure sale is confirmed by the court. (Anderson vs. Reyes, 54 Phil 944
). Confirmation of the sale of mortgaged real property cuts off all the rights
or interests of the mortgagor and of the mortgage and persons holding under him,
and with them the equity of redemption in the property and vests them in the pu
rchaser. Confirmation retroacts to the date of the sale. It is a final order,
not interlocutory. (Ocampo vs. Domalanta, 20 SRCA 1136 [1967]; Binalbagan Estat
e, Inc. vs. Gatuslao, 76 Phil. 128 [1946]; Villar vs. Javier, 97 Phil 604 [1955
]; Lonzome vs. Amores, 134 SCRA 380 [1985].
Exception: However, if the property has been mortgaged in favor of the DBP
(CA 459) Philippine National Bank (RA 1300), banks, banking and credit instituti
ons (RA 337, or the General Banking Act) or rural banks (RA 2670), redemption is
allowed within one year from the registration of the sale. (Conzales vs. Phil.
National Bank, 48 Phil. 824 [1926]). The redemption must be made within one ye
ar after the sale if the mortgagee is a bank, banking or credit institution (Sec
tion 78, R. A. No. 337; Piano vs. Cayanog, supra). Under the Revised charter of
the PNB, the period is one year from the registration of the foreclosure sale.
VII. ANTICHRESIS
1. Definition
Antichresis is a contract whereby the creditor acquires the right to rec
eive the fruits of an immovable of his debtor, with the obligation to apply them
to the payment of the interest, if owing and thereafter to the principal of his
credit.
B. Characteristics
1. It is an accessory contract because it secures the performance of a prin
cipal obligation.
2. It is a formal contract because the amount of the principal and of the i
nterest must both be in writing, otherwise the contract of antichresis is void.
Note:
1. Delivery of the property to the creditor is required only in order that
the creditor may receive the fruits and not for the validity of the contract.
2. It is not essential that the loan should earn interest in order that it
can be guaranteed with a contract of antichresis. Antichresis is susceptible of
guaranteeing all kinds of obligations, pure or conditional. (Javier vs. Vallis
er, (CA) N. 2648-R, April 29, 1950; Sta. Rosa vs. Noble, 35 O.G. 27241).
3. The fruits of the immovable which is the object of the antichresis must
be appraised at their actual market value at the time of the application. (see
Article 2138)
4. The property delivered stands as a security for the payment of the oblig
ation of the debtor in antichresis. Hence, the debtor cannot demand its return
until the debt is totally paid.
5. A stipulation authorizing the antichretic creditor to appropriate the pr
operty upon the non-payment of the debt within the period agreed upon is void.
(see Article 2038).
C. Distinctions between Antichresis and Pledge
1.
2.
3.
Antichresis
Refers to real property
Perfected by mere consent
Consensual contract
1.
2.
3.
Pledge
Refers to personal property
Perfected by delivery
Real contract
D. Distinctions between Antichresis and Real Mortgage
1.
2.
3.
4.
Antichresis
Property is delivered to the creditor
Creditor requires only the right to receive the fruits of the property; hence it
does not produce a real right
Creditor, unless there is stipulation to the contrary, is obliged to pay the tax
es and charges upon the estate (Article 2135)
Creditor given possession of the property shall supply the fruits thereof to the
payment of interest, if owing, and thereafter to the principal of the credit
1.
2.
3.
Real Mortgage
4.
Debtor usually retains the possession of the property
Creditor does not have any right to receive the fruits, but mortgage creates a r
eal right over the property which is enforceable against the whole world
Creditor has no such obligation
Mortgagee has no such obligation
E. Obligations of Antichretic Creditor
1. The creditor is obliged, unless there is a stipulation to the contrary,
to pay the taxes and charges upon the estate. If he does not pay the taxes, he
is, by law (Article 1170), required to pay indemnity for damages to the debtor.
(Pando vs. Gimenez, 54 Phil. 459 [1930]).
2. Another obligation of the creditor is to apply the fruits, after receivi
ng them to the interest, if owing, and thereafter to the principal (Article 2132
) in accordance with the provisions of Article 2133 or 2138. Hence, the duty of
the creditor to render an account of said fruits to the debtor and the correspo
nding right of the latter that the said fruits be applied to the debt. (Barrett
o vs. Barretto, 37 Phil. 234 [1917]; Diaz and Rubillos vs. De Mendezona, 48 Phil
. 666 [1926]; Macapilac vs. Gutierrez Recipe 43 Phil. 770 [1922]).
F. Remedy of Creditor in Case of Default
1. To bring an action for specific performance
2. To petition for the sale of the real property as in a foreclosure of mor
tgages under Rule 68 of the Rules of Court. The parties, however, may agree on
an extrajudicial foreclosure in the same manner as they are allowed in contracts
of mortgage and pledge (see Article 1307; Tavera vs. El Hogar Filipino, Inc. 68
Phil. 712 [1939]).
5Chattel Mortgage
Delivery of personal property to the mortgagee is not necessary
Registration in the Chattel Mortgage Register is necessary for its validity
Procedure for sale of the mortgaged property is found in Section 14 of RA 1508,
as amended
If property is foreclosed, the excess over the amount due goes to the debtor
2
3
5
Pledge
Delivery is necessary
Note:
1. In contrast with Articles 2241 and 2242, Article 2244 creates no liens o
n determinate property which follow such property. What Article 2244 creates ar
e simply rights in favor or certain creditors to have the cash and other assets
of the insolvent applied in a certain sequence or order of priority (Republic vs
. Peralta, 150 SCRA 37 [1987]).
2. Article 2244 relates to the property of the insolvent that is not burden
ed with the liens or encumbrances created or recognized by Article 2241 and 2242
.
3. Recent Jurisprudence on Concurrence
and Preference of Credits
a) A foreclosing bank creditor cannot be held liable for unpaid wages and t
he like of the employees of the mortgagor. The employees should file their clai
ms in a proceeding in bankruptcy on their employer. (Development Bank of the Ph
ilippines vs. National Labor Relations Commissions, 186 SCRA 841 [1990]).
b) From the provisions of Article 110 of the Labor Code and Section 10, Rul
e VIII, Book III of the Revised Rules and Regulations Implementing the Labor Cod
e, a declaration of bankruptcy or a judicial liquidation must be present before
the worker s preference may enforced. (Development Bank of the Philippines vs. Sa
ntos, 171 SCRA 138 [1989]).
DBP vs. NLRC
(236 SCRA 117)
1. To the extent that claims for unpaid wages fall outside the scope of Art
icles 2241(6) and 2242(3), they would come within the ambit of the category of o
rdinary preferred credits under Article 2242.
3. The right of first preference as regards unpaid wages recognized by Article 1
10 of the Labor Code does not constitute a lien on the property of the insolvent
debtor in favor or workers. It is a right to a first preference in the dischar
ge of the funds of the judgment debtor.
BPI vs. Court of Appeals
(229 SCRA 223)
Whenever a distressed corporation asks SEC for rehabilitation and suspen
sion of payments, preferred creditor may no longer assert such preference, but s
hall stand on equal footing with other creditors. This rule will enable the reh
abilitation receiver to effectively exercise his powers free from judicial and e
xtrajudicial interference that might unduly hinder rescue of the company.
DBP vs. NLRC
(229 SCRA 350)
1. Article 110 of the Labor Code as amended must be viewed and read in conjuncti
on with the provisions of the Civil Code on concurrence and preference of credit
s.
2. The Civil Code and Labor Code provisions require judicial proceedings in rem
in adjudication of creditor s claims against the debtor s assets to become operative
.
3. RA 6715 expanded worker preference to cover not only unpaid wages but also othe
r monetary claims of laborers, to which even claims of the Government must be de
emed subordinate.
4. Amendatory provisions of RA 5715 which became effective on 21 March 1989 shou
ld only be given prospective application.
F. Order of Preference of Credits
1. Those credits which enjoy preference with respect to specific movable, e
xcluded all others to the extent of the value of the personal property to which
the preference refers (Article 2246).
2. If there are two or more credits with respect to the same specific mova
ble property, they shall be satisfied pro-rata, after the payment of duties, tax
es, and fees due the State or any subdivision thereof (Article 2247).
3. Those credits which enjoy preference in relation to specific real proper
ty or real rights, exclude all others to the extent of the value of the immovabl
e or real right to which the preference refers (Article 8).
4. If there are two or more credits with respect to the same specific real
property or real rights, they shall be satisfied pro rata, after the payment of
the taxes and assessments upon the immovable property or real right (Article 224
9).
5. The excess, if any, after the payment of the credits which enjoy prefere
nce with respect to specific property, real or personal, shall be added to the f
ree property which the debtor may have, for the payment of the other credits (Ar
ticle 2250).
6. Those credits which do not enjoy any preference with respect to specific
property and those which enjoy preference, as to the amount not paid, shall be
satisfied according to the following rules:
a. In the order established in Article 2244;
b. Common credits referred to in Article 2245 shall enjoy no preference and shal
l be paid pro rata regardless of dated (Article 2251).
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