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credit transaction.docx

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ATENEO CENTRAL BAR OPERATIONS 2007 Civil Law SUMMER REVIEWER CREDIT TRANSACTIONS include all transactions involving the purchase or loan of goods, services or money in the present with a promise to pay or deliver in the future (contract of security) 2 TYPES OF CREDIT TRANSACTIONS: 1. Secured transactions – those supported by a collateral or an encumbrance of property 2. Unsecured transactions – those supported only by a promise to pay or the personal commitment of another such as a guarantor or
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  ATENEO CENTRAL   BAR OPERATIONS 2007  Civil Law SUMMER REVIEWER CREDIT TRANSACTIONS include all transactions involving the purchase or loan of goods, services or money in the present with a promise to pay or deliver in the future (contract of security) 2 TYPES OF CREDIT TRANSACTIONS: 1. Secured transactions  –  those supported by a collateral or an encumbrance of property 2.   Unsecured transactions  –  those supported only by a promise to pay or the personal commitment of another such as a guarantor or surety SECURITY is something given, deposited or serving as a means to ensure the fulfillment or enforcement of an obligation or of protecting some interest in the property 2 TYPES OF SECURITY: 1. personal  –  when an individual becomes a surety or a guarantor 2. real or property  –  when an encumbrance is made on property BAILMENT is the delivery of property of one person to another in trust for a specific purpose, with a contract, express or implied, that the trust shall be faithfully executed and the property returned or duly accounted for when a special purpose is accomplished or kept until the bailor reclaims it. PARTIES IN BAILMENT 1. bailor  –  the giver, the party who delivers possession/custody of the thing bailed 2 bailee  –  the recipient, the party who receives the possession/custody of the thing delivered KINDS OF CONTRACTUAL BAILMENT W/REFERENCE TO COMPENSATION  1. for the sole benefit of the bailor (gratuitous)e.g. gratuitous deposit, mandatum (do some act w/ respect to a thing) 2. for the sole benefit of the bailee (gratuitous)e.g. commodatum, gratuitous simple loan or mutuum 3. for the benefit of both parties e.g. deposit for compensation, involuntary deposit, pledge and bailments for hire:   a. hire of things  –  temporary use b. hire of service  –  for work or labor c. hire of carriage of goods  –  for carriage hire of custody  –  for storage LOAN CHARACTERISTICS 1. real contract  –  delivery is essential for perfection of the loan (BUT a promise to lend, being consensual, is binding upon the parties) 2. unilateral contract - only the borrower has the obligation KINDS  1. commodatum    –  where the bailor delivers to the bailee a non-consumable thing so that the latter may use it for a certain time and return the identical thing kinds of commodatum: a. ordinary commodatum  –  use by the bailee of the thing is for a certain period of time b. precarium  –  one whereby the bailor may demand the thing loaned at will; exists in cases where: i. neither the duration of the contract nor the use to which the thing loaned should be devoted has been stipulated ii. if the use of the thing is merely tolerated by the owner 2. mutuum or simple loan - where the lender delivers to the borrower money or other consumable thing upon the condition that the latter will pay the same amount of the same kind and quality (when it is consumed in a manner appropriate to its purpose) LOAN CREDIT  1. delivery by one party and the receipt by the other party of a given sum of money or other consumable thing upon an agreement, expressor implied 2. to repay the same amount of the same kind and quality, w/ or w/o interest. The ability of an individual to borrow money or things by virtue of the confidence or trust reposed by a lender the will pay what he may promise w/in a specified period  LOAN DISCOUNTING PAPER Interest is usually taken at the expiration of accredit Interest is deducted in advance. Always on single-name paper Double name paper More expensive for the borrower because interest is calculated on the amount loaned and not the amount actually received COMMODATUM MUTUUM(SIMPLE LOAN)  Object Ordinarily non-consumable Money or other consumable thing Ownership of the thing Ownership is retained by the lender Ownership is transferred to the borrower Cause Essentially gratuitous Gratuitous oronerous (w/ stipulation to pay interest)Thing to be re turned Borrower must return the same thing loaned Borrower need only pay the same amount of the same kind and quality Subject Matter May involve real or personal property Only personal property Purpose Loan for use or temporary possession Loan for consumption When to return Bailor may demand the return of the thing loaned before the expiration of the term in case of urgent need Lender may not demand its return before the lapse of the term agreed upon Who bears risk of loss Loss of the subject matter is suffered by the bailor since he is the owner Borrower suffers the loss (even if caused exclusively by a fortuitous event and he is not the refore discharged from his duty to pay) Nature Purely personal Not purely personal COMMODATUM(Articles 1935-1952)  1. cause:  essentially gratuitous (otherwise, if there Is compensation, it might be lease) 2 purpose : temporary use of the thing loaned but not its fruits, unless stipulated or is incidental (otherwise, if the bailee is not entitled to the use of the thing, it might be deposit) 3. subject matter  : generally non-consumable goods but if the consumable goods are not for consumption, such may be the subject of the commodatum, as when merely for exhibition (Art. 1936) 4. bailor need not be the owner of the thing loaned (Art 1938)ã  it is sufficient that he has a possessory interestã  a mere lessee or usufructuary may lend but the borrower or bailee himself may not lend not lease the thing loaned to himto a third person (Art. 1932[2]) 5. purely personal  a. death of either party terminates the contract UNLESS there is stipulation to the contrary b. generally, bailee can neither lend nor lease the object to a 3rdperson in the absence of some agreement to that effect  c. use of the thing loaned may extend to the bailee’s household (who are not considered  3 rd  persons) except: 1. when there is a contrary stipulation 2. nature of the thing forbids such use 6. enjoyment of fruits  –  a stipulation to make use of fruits is valid, but it is never presumed. The enjoyment of the fruits must only be incidental to the use of the thing itself, for if it is the main cause, the contract may be one of usufruct. OBLIGATIONS OF THE BAILEE (Arts 1941-1945)   (COOLRD2)  1. To pay for the ordinary expenses for the use and preservation of the thing loaned (Art.1941)  2. To pay for all other expenses other than those referred to in Art. 1941 and 1949 (refund of extra ordinary expenses either in full or in half) (Art. 1950)  REASON: Bailee makes use of the thing.Expenses for ostentation are to borne by the

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Jul 23, 2017
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