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8/19/2019 Credit Trans PowerPoint in Doc (1)

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CREDIT TRANSACTIONS REVIEW

Introduction and Framework

Topical Outline

CREDIT TRANSACTIONS, IN GENERA

Concept• Include all tran!action! in"ol"in# t$e purc$a!e

or loan o% #ood!, !er"ice! or mone& in t$epre!ent wit$ a promi!e to pa& or deli"er in t$e%uture

'artie!

• (AIOR ) t$e one w$o lend! a t$in#* – Need not +e t$e owner +ut mu!t $a"e

po!!e!!or& intere!t in t$e S• e!!ee -./01, ./234• 5!u%ructuar& -2/64

The bailor is not required to be the owner but he musthave legal possession.

• (AIEE ) t$e one w$o +orrow! t$e t$in#

(AR 6337T$e partie! to a +ailment are8

A9 +ailor (9 +aileeC9 comodatarioD9 all o% t$e a+o"eE9 letter! a and (

An!wer8 E

'ART ONE8 Contract! o% oan

OAN

Concept ) .:11

(& t$e contract o% loan, one o% t$e partie! deli"er!

to anot$er, eit$er !omet$in# not con!uma+le !ot$at t$e latter ma& u!e t$e !ame %or a certain timeand return it, in w$ic$ ca!e t$e contract i! called acommodatum* or mone& or ot$er con!uma+let$in#, upon t$e condition t$at t$e !ame kind and;ualit& !$all +e paid, in w$ic$ ca!e t$e contract i!!impl& called a loan or mutuum9

Role o% deli"er&

.:10 ) deli"er& o% t$e !u+


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was however "lear to the parties to the transa"tion that themone would not be removed !rom Sterela+s savingsa""ount and would be returned to private respondent a!ter ; das.

COODAT5

Concept

Contract w$ere +ailor deli"er! to +ailee a non>

con!uma+le t$in# !o t$at +ailee ma& u!e it %or a certain time and return t$e identical t$in#

ea!e "9 Commodatum I% t$ere i! con!ideration in mone& %or t$e u!e o%

t$e S > contract i! NOT commodatum +ut i! acontract o% lea!e

ARTICE .:11 ) 0 the "ontra"t o! loan% one o! the partiesdelivers to another% either something not "onsumable so thatthe latter ma use the same !or a "ertain time and return it%in whi"h "ase the "ontra"t is "alled a commodatum= or mone or other "onsumable thing% upon the "ondtion thatthe same amount o! the same kind and qualit shall be paid%in whi"h "ase the "ontra"t is simpl "alled a loan or mutuum

ARTICE .:07 – The bailor ma demand the thing at will%and the "ontra"tual relation is "alled a pre"arium% in the

!ollowing "ases:'* 3! neither the duration o! the "ontra"t nor the use towhi"h the thing loaned should be devoted% has beenstipulated= or '-* 3! the use o! the thing is merel tolerated b the owner.

'artie!? O+li#ation!

(ailor (ailee

>rdinare?penses !oruse andpreservation

@4S

4?traordinare?penses notdue to his !aultwhile using

@4S B @4S B

4?traordinare?penses !orpreservation

@4S 3! with noti"e>6 even i! without i! noti"e will "ausedela

8ot ordinar%note?traordinare?penses

8> @4S

7oss due to!ortuitous event

94846A77@: @4S 94846A77@: 8>%unless e?"eptions

6espe"t theperiod

@4S. /nless 'a*urgent need= 'b* a"to! ingratitude underD= E pre"arium

4?traordinar e?penses – e?penses not e?pe"ted% e?pensesnot on a regular basis

o!! due to %ortuitou! e"ent E@CE'TIONS8'>W>D>

◦ '5R'OSE> u!e! %or purpo!e di%%erent %rom t$ea#reed one

◦ DEA > keep! it lon#er t$an t$e period !tipulatedor a%ter t$e accompli!$ment o% t$e purpo!e

◦ WITB A''RAISA > S wa! deli"ered wit$apprai!al o% it! "alue unle!! t$ere i! a !tipulatione=emptin# t$e +ailee %rom lo!! in ca!e o% %ortuitou! e"ent

ENDING TO 1RD 'ERSON> lend! or lea!e! t$e

S to a 1rd per!on not a mem+er o% $i! $ou!e$old

: 3n this "ase% is the house maid a member o! thehouseholdG

A: 8o% it does not e?tend to the house maid. 3t re!ers to!amil members based on the premise that a "ommodatumis based on trust

DOES NOT SAVE > +ein# a+le to !a"e t$e S

+orrowed or $i! own t$in#, $e !a"e! t$e latter

Ri#$t to 'o!!e!!ion o% S .:2. ) (ailee cannot retain t$e S unle!! +ailor

%ailed to warn $im o% $idden de%ect! and $e !u%%er!dama#e! a! a con!e;uence

0ailee has no right to retain e?"ept there are hiddende!e"ts known to the bailor and the bailor did not in!orm thebailee

4?ample o! hidden de!e"t: a "ar with no brake

.:26> (ailor cannot e!cape e=pen!e! +& !impl&

a+andonin# t$e S to t$e +ailee

Simple abandonment will not e?"ulpate bailor !romdamages

(AR 6332 A le!t his adventure van to 0 be!ore he le!t to work

abroad. The parties agreed that 0 "an use the van !or ear. A did not tell 0 that the van+s brakes are !ault. 0 hadthe brakes repaired and the van tuned up% spending,%. 0 dis"overed that the van "onsumed too mu"h!uel. 1en"e% he leased the van to C. Two months later% Areturned and asked 0 to return the van. 1owever% the vanwas damaged while 0 was using it% without his !ault

'a* 5ho shall bear the ,% spent !or van repairG'b* 5ho shall bear the "ost o! the van+s !uelG'"* $oes A have the right to get the van be!ore the lapse

o! one earGANSWER-a4 (reak! -e=traordinar&4 ) A

Tuneup -ordinar&4 ) (-+4 Fuel -ordinar&4 ) (

-c4 A cannot demand return +e%ore t$e period unle!! $e$a! ur#ent need o% t$e "an

SI'E OAN

Concept

7ender delivers to borrower mone or other

"onsumable upon the "ondition that the latter shall pa thesame amount o! the same kind and qualit

T$e De+tor

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1as ownership o! mone re"eived or other !ungible

thing

&ust pa the "reditor an equal amount o! the same

kind and qualit

3s liable !or loss o! mone or thing

The debtor must pa an equal amount% unless there is a"ontrar stipulation.

3n "ommodautm% ownership is retained b the bailor and the loss is borne b the bailor.

INTEREST GENERA R5E8 .:2/ ) no interest shall be due

unless it has been e?pressl stipulated in writing and islaw!ul

As to being law!ul% su"h is not appli"able !or nowbe"ause the /sur 7aw has been legall suspended.

E=ception!

Indemnit& %or dama#e! – debtor in dela mustpa legal interest even i! there is no stipulation

Intere!t accruin# %rom unpaid intere!t – interest

due shall earn interest !rom the time it is con!uma+le one& or con!uma+le

NAT5RE E!!entiall&#ratuitou!

Gratuitou! or onerou!

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'5R'OSE 5!e or temporar&po!!e!!ion

For con!umption

IND OF'RO'ERTINVOVED

Real or per!onal 'er!onal propert&

RIS OF OSS ender or +ailor retain! owner!$ip

Tran!%er o% owner!$ip to+orrower

TIE OF'AENT

End o% periodunle!! ur#ent

need, act! o% in#ratitude or precarium

End o% period

CBARACTER OFTBE CONTRACT

'urel& per!onal Not per!onal

(AR 6330 Di!tin#ui!$ +rie%l& +ut clearl& +etween mutuum

and commodatum

'ART TWO8 5 N S E C 5 R E D O A N S

6 ind! o% 5n!ecured oan!.9

#uarant&69 !uret&!$ip

$i!!erentiate this !rom a se"ured loan – a se"ured loanis assured o! pament. 3! !ull pament is not "ertain% aparti"ular propert is se"ured in "ase nonLpament o! su"hloan.

G5ARANT (& #uarant&, a per!on called t$e #uarantor,

+ind! $im!el% to t$e creditor to %ul%ill t$eo+li#ation o% t$e principal de+tor in ca!e t$elatter !$ould %ail to do !o -63074

S5RETSBI'

Relation!$ip w$ere one per!on undertake! toen!ure t$e per%ormance o% an o+li#ation o% anot$er per!on

SIIARIT +etween #uarant& and !uret&!$ip (ot$ promi!e or undertake to an!wer %or a

de+t, de%ault or mi!carria#e o% anot$er per!on

0oth are a""essor "ontra"ts.

DIFFERENCE +etween #uarant& and !uret&!$ip

G5ARANTOR S5RET

ia+ilit& depend! on

independent a#reementto pa& t$e principal?!o+li#ation !$ould $e %ailto do !o

Be a!!ume! lia+ilit& a! a

re#ular part& to t$econtract

O+li#ation i! !econdar& O+li#ation i! primar&

5ndertakin# i! to pa& i%principal de+tor cannotpa&

5ndertakin# i! to pa& i%principal de+tor doe! notpa&

An in!urer o% t$e!ol"enc& o% t$e de+tor

In!urer o% a de+t

Entitled to e=cu!!ion No e=cu!!ion

&ain distin"tions o! guarant M suretship:4?tent o! liabilit M presen"e or absen"e o! e?"ussion

Take note that in a guarant% the prin"ipal debtor "annotpa. This means that the prin"ipal debtor is unable to pa!or he has no assets to pa his liabilit. 3n suret% there is noneed to establish that the prin"ipal debtor "annot pa hisdebt.

T$ere can +e a #uarant& o%8.9 A "oida+le contract69 An unen%orcea+le contract19 A natural o+li#ation09 Future de+t!29 Conditional o+li#ation!

Huali%ication! o% a #uarantor .9 'er!on w$o po!!e!!e! INTEGRIT69 Ba! t$e CA'ACIT TO (IND $im!el% 19 Ba! S5FFICIENT 'RO'ERT to an!wer %or t$e

o+li#ation $e #uarantee! -632/4

Ground! %or di!;uali%ication.9 In!ol"enc& OR69 Con"iction o% a crime in"ol"in# di!$one!t&

NOTE8 I% creditor did not c$oo!e t$e #uarantor, $e ma&demand a replacement #uarantor -632/4

3! debtor "hose the guarantor% the "reditor "an ask !or arepla"ement. The "reditor has a right to ask !or a repla"ementwhi"h he ma or ma not e?er"ise.

3! it was the "reditor who "hose the guarantor% he "annotask !or a repla"ement and must su!!er the "onsequen"esthereo!.

ARTICE 632/ >ne who is obliged to !urnish a guarantor shallpresent a person who possesses integrit% "apa"it to bindhimsel!% and su!!i"ient propert to answer !or the obligationwhi"h he guarantees. The guarantor shall be sub#uarantor!

.9 (etween Creditor and Guarantor8 (ENEFIT OFE@C5SSION

T$e #uarantor cannot +e compelled to pa& t$ecreditor unle!! t$e latter $a! e=$au!ted all t$e

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propert& o% t$e de+tor and $a! re!orted to allle#al remedie! a#ain!t t$e de+tor -6324

T$e #uarantor cannot +e compelled to pa& t$ecreditor unle!! t$e latter $a! e=$au!ted all t$epropert& o% t$e de+tor and $a! re!orted to allle#al remedie! a#ain!t t$e de+tor -6324

Illu!tration -63/04

ARTICE 63/0 The guarantor o! a guarantor shall en


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Concurrin# "!9 Su+>#uarant&

In!ol"ent co>#uarantor

G. pa&!G6 i! in!ol"entG. and G1 pa& '133,333 eac$

In!ol"ent #uarantor $a! a !u+>#uarantor

G. pa&!G6 i! in!ol"entG., SG6 and G1 pa& '633,333 eac$

Co>#uarantor i! relea!ed +& creditor I% WITB con!ent o% co>#uarantor!, t$e& will +ear

t$e !$are o% relea!ed #uarantor I% WITBO5T t$e con!ent o% co>#uarantor!, t$e&

will NOT +ear t$e !$are o% t$e relea!ed co>

#uarantor

3nsolven" is ther !orms o! de!ense – minorit% e?tinguished obligation.

3! the obligation is e?tinguished% it is a de!ense whi"h"an be "laimed b all "oLguarantors. 0ut minorit ispersonal in "hara"ter and "an onl be "laimed b the minor.

E@TING5ISBENT OF G5ARANTEE

Ground! 'a&ment o% principal o+li#ation

No"ation wit$out #uarantor?! con!ent w$ic$

materiall& a%%ect! t$e o+li#ation E=ten!ion o% period to pa& wit$out #uarantor?!

con!ent -637:4

Take note that it is possible that the guarant ise?tinguished be!ore the prin"ipal obligation is paid. 3t ispossible that the guarant is e?tinguished and et the prin"ipalobligation still stands.

4?ample o! novation: There was an in"rease in interest.This is a novation whi"h materiall a!!e"ts the obligation o! theguarantor. 1en"e% that ma "ause the e?tinguishment o! theguarantee.

3n other "ase% the interest rate was de"reased. There wasnovation be"ause there was a "hange.

5hen we talk about materiall a!!e"ts% it is to thedisadvantage o! the guarantor. Hust be"ause there is novation%it does not mean that the guarant is e?tinguished. 3t must beestablished that the novation is now to his disadvantage. 3! there is de"rease in interest rate% then% there is no problem.1e remains to be a guarantor.

4?tension o! period to pa without guarantor+s "onsent –ou must not think o! an other quali!i"ation. @ou do not have

to "onsider i! advantageous or disadvantageous to theguarantor. The longer the period to pa% the greater theprobabilit o! the debtor be"oming insolvent% whi"h then makesthe guarantor liable. 3! the period is e?tended% it isadvantageous to the debtor but disadvantageous to theguarantor. 5hen there is e?tension% the guarant ise?tinguished unless there is "onsent !rom the guarantor.

'ART TBREE8 Secured oan! > 'EDGE

CONCE'T It i! a contract +& "irtue o% w$ic$ t$e de+tor

deli"er! to t$e creditor or to a t$ird per!on a mo"a+leor document e"idencin# incorporeal ri#$t! %or t$epurpo!e o% !ecurin# t$e %ul%illment o% a principal

o+li#ation wit$ t$e under!tandin# t$at w$en t$eo+li#ation i! %ul%illed t$e t$in# !$all +e returned wit$all it! %ruit! and acce!!ion!9

3t is possible that the pledgor is not the debtor.

Se"uritO&ortgage is a good eviden"e o! e?isten"e o! aprin"ipal obligation

ESSENTIA REH5ISITES, 632 con!tituted to !ecure t$e %ul%illment o% a

principal o+li#ation

pled#or i! t$e a+!olute owner o% t$e t$in#

-Cavite v. Lim4

The pledgor must be the absolute owner o! the thing. 3! heis not the owner o! the thing at the time the thing was pledgedbut he eventuall be"ame the owner thereo!% still% it is not avalid pledge.

pled#or $a! t$e %ree di!po!al o% t$eir

propert& or are le#all& aut$oried to do !o

ARTICE 632. The !ollowing requisites are essential to the"ontra"ts o! pledge and mortgage:'* That the be "onstituted to se"ure the !ul!illment o! aprin"ipal obligation='-* That the pledgor or mortgagor be the absolute owner o! the thing pledged or mortgaged=';* That the persons "onstituting the pledge or mortgage havethe !ree disposal o! their propert% and in the absen"e thereo!%that the be legall authori#ed !or the purpose.

Third persons who are not parties to the prin"ipalobligation ma se"ure the latter b pledging or mortgaging their own propert.

ESSENTIA REH5ISITES t$e propert& mu!t +e placed in t$e

po!!e!!ion o% t$e creditor -63:14

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3n pledge% the deliver o! the movable is essential. 3n"hattel mortgage% what is essential is the registration in theChattel &ortgage 6egistr.

t$e de!cription o% t$e t$in# and t$e

date o% t$e pled#e mu!t +e in a pu+lic in!trument to+ind 1rd per!on! -63:/4

No Dou+le 'led#e A propert& alread& pled#ed cannot +e pled#ed

a#ain w$ile t$e %ir!t pled#e i! !till !u+!i!tin#-Mission de San Vicente v. Reyes, 19 Phil 5244

There "an be no double pledge be"ause ou "annotdeliver to - separate individuals one obowner ma& pled#e $i! portion o% t$e t$in#

-P() v. C#, 9& SCR# 2$'%

NAT5RE -63:4

GENERA R5E8 indi"i!i+le

De+tor w$o pa&! part o% t$e de+t cannot a!k %or

proportionate e=tin#ui!$ment o% t$e pled#e

E@CE'TION8 w$ere !e"eral t$in#! are #i"en in

pled#e and eac$ t$in# #uarantee! onl& adeterminate portion o% t$e credit

'EDGEE

O+li#ation!

To appropriate %ruit!, income, di"idend! or

intere!t o% t$in# wit$ t$o!e w$ic$ are owin# $im,and i% none, to appl& it to t$e principal -6.364

Take care o% t$e t$in# wit$ t$e dili#ence o% a #ood

%at$er o% a %amil&, !u+


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4?tinguishment o! the pledge does not ne"essarilmean that the prin"ipal obligation is !ul!illed

W$en t$e de+tor de%ault! O+li#ation i! due and unpaid

Sale o% t$in# at a pu+lic auction

Notice to t$e pled#or and owner !tatin# t$e

amount %or w$ic$ t$e !ale i! to +e $eld Sale mu!t +e conducted +& a notar& pu+lic

A%ter t$e !ale, pled#ee mu!t ad"i!e t$e pled#or o% t$e re!ult!

'u+lic Auction 'led#or > ma& +id and i% $e o%%er! t$e !ame

term! a! $i#$e!t +idder, $e i! pre%erred -6..14

'led#ee > ma& +id +ut not i% $e i! t$e onl&

+idder -6..1, 6nd par94

9eneral 6ule: ,ledgee "an parti"ipate in the publi"au"tion but not i! he is the loan bidder

all +id! !$all o%%er to pa& t$e purc$a!e price at

once -6..04

De%icienc& > pled#ee cannot collect t$e +alance

-6..24

E=ce!! > de+tor i! not entitled to t$e e=ce!!

unle!! t$e contrar& i! pro"ided -6..24

3t is di!!erent in Chattel &ortgage. The "reditor "an getthe balan"e and the debtor "an get the e?"ess.

Can t$e creditor appropriate t$e t$in# to $im!el% in ca!e

o% non>pa&ment

NO9 Creditor cannot appropriate t$e t$in#

pled#ed to $im!el% or di!po!e o% t$em9 An&!tipulation to t$e contrar& i! VOID -6349

Suc$ !tipulation i! called *actm

commisso!im

,a"tum "ommissorium is prohibited

Element! o% 'actum T$ere !$ould +e a pled#e, mort#a#e, or

antic$re!i! o% propert& +& wa& o% !ecurit& %or

t$e pa&ment o% t$e principal o+li#ation*

T$ere !$ould +e !tipulation %or an automatic

appropriation +& t$e creditor o% t$e propert& int$e e"ent o% non>pa&ment o% t$e o+li#ation

T$ere i! pactum Stipulation t$at t$e t$in# !$all +e con!idered in

%ull pa&ment o% t$e de+t wit$out %urt$er action-(o!the!n Moto!s v. +e!!e!a4

Stipulation in a pacto de retro !ale t$at

owner!$ip o"er t$e t$in# will automaticall&pa!! to t$e "endee in ca!e t$ere i! no

redemption -Lana v. -e Leon4

Case: 3t is not pa"tum "ommissorium i! ordered b the"ourt

E=ception to 'actum

A%ter 6 auction !ale! and t$ere are no +idder!,

pled#ee ma& appropriate t$e t$in# to $im!el% (5T $e mu!t #i"e an ac;uittance o% t$e entireclaim -6..64

(AR 6330 A(C loaned to NO '03,333 %or w$ic$ t$e latter

pled#ed 033 !$are! o% !tock! in @K Corp9 T$e partie!a#reed t$at i% pled#or %ailed to pa& t$e loan wit$ .3&earl& intere!t wit$in %our &ear!, t$e pled#ee i!aut$oried to %oreclo!e on t$e !$are!9 NO deli"eredpo!!e!!ion o% !$are! to A(C wit$ under!tandin# t$att$e !$are! will +e returned to NO upon pa&ment o% loan9 Bowe"er, t$e loan wa! not paid on time9

A mont$ a%ter 0 &ear!, ma& t$e !$are! +e deemed

owned +& A(C

ANSWER NO9 T$e !$are! o% !tock! cannot +e deemed

owned +& A(C9 T$e pled#e $a! to +e %oreclo!ed95nder t$e law, t$e creditor cannot appropriate t$et$in#! #i"en +& wa& o% pled#e9 E"en i% t$e partie!a#reed t$at A(C will automaticall& own t$e !$are!upon NO?! de%ault, t$at con!titute! *actmcommisso!im, w$ic$ i! a "oid a#reement9

(AR 633. To !ecure a loan %rom a rural +ank, A a!!i#ned $er

lea!e$old ri#$t! o"er a pu+lic market !tall in %a"or o%

t$e +ank9 T$e deed o% a!!i#nment pro"ide! t$at inca!e o% de%ault in t$e loan pa&ment, t$e +ank !$all$a"e t$e ri#$t to !ell 'urita?! ri#$t! o"er t$e !tall a!$er attorne& in %act and to appl& t$e proceed! to t$epa&ment o% t$e loan9

Wa! t$e a!!i#nment o% ri#$t! a mort#a#e or

ce!!ion A!!umin# it i! a mort#a#e, doe! t$epro"i!ion #i"in# t$e +ank t$e power to !ell t$e !tallcon!titute pactum commi!!orium

ANSWER T$e a!!i#nment wa! a mort#a#e not a ce!!ion o%

t$e lea!e$old ri#$t!9 A ce!!ion would $a"etran!%erred owner!$ip to t$e +ank9 Bowe"er, t$e #ranto% aut$orit& to t$e +ank to !ell t$e !tall i! proo% t$at no

!uc$ owner!$ip wa! tran!%erred and t$at a mereencum+rance wa! con!tituted9 T$ere would $a"e+een no need %or t$e aut$orit& i% t$ere wa! ce!!ion9

No9 T$e clau!e doe! not con!titute pactum

commi!!orium9 It i! pactum w$en non>pa&ment o% loan automaticall& "e!t! to t$e +ank owner!$ip o% t$eencum+ered propert&9 In t$i! ca!e, t$e +ank merel&$a! t$e ri#$t to !ell t$e ri#$t! to t$e !tall and to appl&t$e proceed! to t$e loan9

(AR .::: @ +orrowed mone& %rom and #a"e a piece o%

land a! !ecurit& +& wa& o% mort#a#e9 It wa! e=pre!!l&a#reed in t$e mort#a#e contract t$at upon non>

pa&ment o% t$e loan, t$e land will alread& +elon# to 9I% @ de%aulted in t$e pa&ment o% loan, will now ownt$e land W$&

ANSWER No9 would not +ecome t$e owner o% t$e land9

T$e !tipulation i! in t$e nature o% *actmcommisso!im, w$ic$ i! pro$i+ited +& law9 T$epropert& !$ould +e !old at a pu+lic auction and t$eproceed! t$ereo% paid to 9

(AR .::: Suppo!e in t$e preceedin# ;ue!tion, t$e

a#reement i! t$at i% @ %ailed to pa& t$e loan, t$e de+t!$all +e paid wit$ t$e land mort#a#ed +& @ to 9 Would&our an!wer +e t$e !ame E=plain9

ANSWER No, m& an!wer would not +e t$e !ame9 T$i! i! a

"alid !tipulation and doe! not con!titute *actmcommisso!im. In *actm, t$e ac;ui!ition i!automatic wit$out need o% %urt$er action9 In t$e!econd !ituation, anot$er act i! re;uired to +eper%ormed, namel&, t$e con"e&ance o% propert& a!pa&ment dacion en *a/o%9

,a"tum "ommissorium – at the time o! that the obligationwas se"ured% it was alread stipulated

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$a"ion en pago – (a!ter the !a"t)

e#al 'led#e! 'ro"i!ion! on po!!e!!ion, care and !ale o% t$e

t$in# pled#ed co"er le#al pled#e! -6.6.4

Art9 20/ ) ri#$t o% po!!e!!or in #ood %ait$ to

re%und o% nece!!ar& e=pen!e! +e%ore $e return! t$et$in#

Art9 .737 ) lien on #ood! manu%actured or work

done +& la+orer until $i! wa#e! are paid

Art9 .71. ) ri#$t to retain +& a worker w$o

e=ecuted work on a mo"a+le

Art9 .:.0 ) ri#$t o% an a#ent to retain t$e t$in#

until $e i! reim+ur!ed ad"ance! and dama#e!

Art9 .::0 ) ri#$t o% retention o% a depo!itar&

until $e i! paid $i! %ee!

Art9 6330 ) ri#$t o% a $otelkeeper to retain

propertie! o% t$e #ue!t until $i! +ill! are paid

'awn!$op Re#ulation Act

Capitaliation ) '.33,333

Citien!$ip ) 73 Filipino

Amount o% loan ) not le!! t$an 13 o% t$e

propert&?! "alue unle!! pawner mani%e!t! in writin#de!ire to loan a !maller amount

Redemption ) wit$in :3 da&! %rom maturit& o%

o+li#ation Noti%& owner o% !ale on or +e%ore end o% :3>da&

period

'u+lic auction in place o% +u!ine!! or pu+lic

place wit$in territorial limit! w$ere t$e pawn!$opoperate!

5nder control o% licen!ed auctioneer

Notice once in at lea!t two dail& new!paper! in

t$e cit& o% operation

'ART FO5R8 Secured oan! ) CBATTE ORTGAGE

Concept 6.03 ) +& a c$attel mort#a#e, per!onal propert&

i! recorded in t$e C$attel ort#a#e Re#i!ter a!a !ecurit& %or t$e per%ormance o% an o+li#ation9

I% t$e mo"a+le, in!tead o% +ein# recorded i!

deli"ered to t$e creditor or a t$ird per!on, t$econtract i! a pled#e, not a c$attel mort#a#e9

E!!ential Re;ui!ite!

Art9 632 con!tituted to !ecure t$e %ul%illment o% a

principal o+li#ation pled#or i! t$e a+!olute owner o% t$e t$in#

per!on! con!titutin# t$e pled#e $a"e

t$e %ree di!po!al o% t$eir propert& or are le#all&aut$oried to do !o

per!onal propert& mu!t +e recorded in

t$e c$attel mort#a#e re#i!tr& -6.034

4ssential requisites in Chattel &ortgage: Arti"le -I P registrationOre"ording o! the Chattel&ortgage in the Chattel &ortgage 6egistr

(AR 6331 @ con!tructed a $ou!e on ?! land9 @ e=ecuted a

C o"er t$e $ou!e in %a"or o% 9 @ purc$a!ed t$e lot%rom 9 @ t$en e=ecuted a real mort#a#e o"er t$epropert& in %a"or o% A +ank9 W$en A wa! a+le to%oreclo!e t$e mort#a#e, demanded t$at A !ati!%& t$ede+t o% @ and to $onor t$e C +etween @ and 9 I! t$i!demand a#ain!t A "alid and !u!taina+le W$&

ANSWER ?! demand i! not "alid9 T$e C i! "oid +ecau!e it

wa! not re#i!tered wit$ t$e C Re#i!tr&9 Bence, A(ank doe! not $a"e an& o+li#ation to 9

E%%ect o% Re#i!tration Re#i!tration i! +indin# notice to ot$er creditor! o%

it! e=i!tence and create! a real ri#$t or a lienw$ic$ %ollow! t$e c$attel w$ene"er it #oe!

T$e lien o% a c$attel mort#a#ee o"er t$e propert&

i! !uperior to t$e le"& made +& an a!!i#nee o% t$e

un!ecured


10/20

T$e 13>da& period i! t$e minimum period wit$

at lea!t .3 da&!? notice to t$e mort#a#or andpo!tin# o% pu+lic notice o% time, place and purpo!eo% t$e !ale -Ca!al v. 6van/elista, 2& SCR# 1$$$%

E=tra Creditor A ) $e can %oreclo!e t$e

c$attel mort#a#e in ca!e o% de%ault

6nd ort#a#ee ) Creditor ( ) $e can redeem t$e

propert& +& pa&in# A t$e mort#a#e de+t9 Be can nowappropriate t$e propert& to $im!el%

This is not pa"tum "ommissorium be"ause this is not anautomati" appropriation.

Attac$in# Creditor ) Creditor C $e can redeem t$e

propert& +& pa&in# A t$e mort#a#e de+t9 Be ac;uire!t$e ri#$t to %oreclo!e and not t$e ri#$t to own t$epropert&

De+tor can al!o redeem t$e propert& +& pa&in#

t$e mort#a#e de+t and #et t$e propert& +ack

Ri#$t to De%icienc& ort#a#ee can reco"er de%icienc&

E=ception8 w$en t$e c$attel mort#a#e wa!

in!tituted to !ecure t$e purc$a!e o% a propert& onin!tallment -Recto aw4

3n Chattel &ortgage% the debtor has a right to get thebalan"e e?"ept i! the 6e"to law 'pur"hase o! personal properton installment* is appli"able. The "ounterpart o! the 6e"to lawin real propert is the &a"eda law.

Ri#$t to E=ce!! Since t$ere i! no e=pre!! pro$i+ition under t$e

law, t$e c$attel mort#a#or i! pre!umed to $a"et$e ri#$t to t$e e=ce!! o% t$e purc$a!e price o"er t$e de+t

Criminal Ca!e! in C$attel ort#a#e Article 1.: o% t$e R'C

knowin#l& remo"in# an& per!onal

propert& mort#a#e under t$e C$attelort#a#e aw to an& pro"ince or cit& ot$er t$an t$e one w$ere it wa! located at t$e timeo% e=ecution o% mort#a#e wit$out t$eWRITTEN con!ent o% t$e mort#a#ee

!ellin# or pled#in# per!onal propert&

alread& mort#a#ed wit$out t$e con!ent o% t$emort#a#ee written at t$e +ack o% t$emort#a#e and dul& recorded wit$ t$e C$attelort#a#e Re#i!tr&

C 'led#e

Re#i!tration i! re;uired%or "alidit&

Re#i!tration i! not re;uired %or "alidit&

Deli"er& i! not e!!ential%or "alidit&

Deli"er& i! e!!ential %or "alidit&

Act No9 .23 rule! t$e!ale

Article 6..6 #o"ern! t$e !ale

Creditor can !ue %or +alance, e=cept i% !aleon in!tallment -Rectoaw4

Creditor cannot !ue %or +alance

CM infavor ofA dated June 1,

2000

CM infavor ofB dated July 1,

2000Attachment by

judgment creditor C on July 15, 2000

1


11/20

De+tor #et! e=ce!! De+tor doe! not #et e=ce!!unle!! t$ere i! a !tipulation tot$e contrar&

(AR .::: Di!tin#ui!$ a c$attel mort#a#e %rom a contract

o% pled#e

'ART FIVE8 Secured oan! ) REA ORTGAGE

CONCE'T

A contract w$ere+& t$e de+tor !ecure! to t$ecreditor t$e %ul%illment o% a principal o+li#ation,!peciall& !u+ until di!c$ar#ed, it %ollow!

t$e propert& w$ere"er it #oe! and !u+!i!t!notwit$!tandin# c$an#e o% owner!$ip9 I% t$emort#a#or !ell! t$e propert& , t$e S remain!!u+


12/20

E%%ect! o% ort#a#e Create! merel& an encum+rance ) it doe!

in"ol"e t$e tran!%er, ce!!ion or con"e&ance o% propert& +ut onl& con!titute! a lien9 W$at i!lo!t i! t$e %ree di!po!al and !ale o% t$e S-Medida v. C#, 2$& SCR# &&' 4

3t merel "reates an en"umbran"e. The owner still hasthe right to !reel dispose the propert !or su"h right is not"urtailed.

6.6 ) t$e mort#a#e credit ma& +e alienated or

a!!i#ned to a 1rd per!on in w$ole or in part'right is trans!erable*

6.13 ) a !tipulation %or+iddin# t$e owner %rom

alienatin# t$e S !$all +e VOID

E%%ect! o% an In"alid ort#a#e T$e principal o+li#ation !u+!i!t!

W$at i! lo!t i! merel& t$e ri#$t to %oreclo!e

T$e mort#a#e deed remain! a! e"idence o%

per!onal o+li#ation o% t$e de+tor --)P v. C#, 249SCR# 14

W$en t$e principal o+li#ation i! not %ul%illed ort#a#ee c$oo!e! +etween %ilin# a collection

ca!e or %oreclo!in# t$e mort#a#e

Foreclo!ure ma& eit$er +e e=trar Ri#$t o% Redemption

I% redemption period e=pire!, Clerk arc$i"e! record!

Redemption in E=tra


13/20

u!t +e made wit$in t$e period

'a&ment o% purc$a!e price plu! . intere!t per

mont$ wit$ ta=e! t$ereon %rom date o% re#i!trationo% !ale until date o% redemption9 'a&ment i! toredemptioner or !ale o%%icer

Written notice o% redemption mu!t +e !er"ed on

o%%icer w$o made t$e !ale and a duplicate wit$Re#i!ter o% Deed! -Rosales v. ;oa, 12$ SCR# &9%

udicial Foreclo!ure

File an action wit$ RTC w$ic$ $a! &r title !$all now +eri#$t o% redemption !tart! con!olidated inwinnin#+idder?! name

: 5hat is hearing !or "on!irmation o! saleG A: This is a hearing where the parties will appear and themortgagor will tr his best to assail the validit o! the au"tionthe sale. 1e will question the legalit o! the sale.

Case: 4quit o! redemption in


14/20

Innocent mort#a#ee! %or "alue, like innocent

purc$a!er! %or "alue are protected +& law

ort#a#e +& u!in# a %or#ed !pecial power o%

att& i! VOID

ort#a#e +& an impo!tor i! VOID

: Can a 6eal 4state &ortgage and Anti"hresis "over sub


15/20

'led#e C$attel ort#a#e Real ort#a#e Antic$re!i!

Su+ a recei"er ma& +eappointed +& t$e court to admini!ter andpre!er"e t$e propert& in liti#ation

• Rule /3 -Reple"in4 > per!onal propert& ma& +e!eied +& !$eri%%! in !uit! o% reple"in or manual deli"er& o% per!onal propert&

• Rule .67 ) attac$ment in criminal ca!e!

udicial Depo!it• 633 ) depo!itar& mu!t compl& wit$ t$e

o+li#ation! o% a #ood %at$er o% %amil&

• 6337> o+li#ation o% depo!itar& !u+!i!t! untilt$e end o% contro"er!& w$ic$ #a"e ri!e to t$e!e;ue!tration, unle!! t$e court order!9

E@TRA5DICIA DE'OSIT

VO5NTAR DE'OSIT

Concept• .:/ > One w$erein t$e deli"er& i! made +& t$e

will o% t$e depo!itor or +& two or more per!on!eac$ o% w$om +elie"e! $im!el% entitled to t$e t$in#depo!ited

3n this "ase% ou "an "hoose who will be the depositar

• AIN DISTINCTION WITB NECESSARDE'OSIT8 Depo!itor $a! complete %reedom inc$oo!in# t$e depo!itar&9

O+li#ation! o% t$e Depo!itar&

• To keep t$e t$in# !a%el& and to return it, w$enre;uired, to t$e depo!itor or to $i! $eir! or !ucce!!or! or to t$e per!on w$o ma& $a"e +eende!i#nated in t$e contract -.:764 'sa!ekeeping*

15


16/20

• De#ree o% care re;uired ) de#ree o% care onewould e=erci!e o"er $i! own propert&

• u!t return t$e S to#et$er wit$ all acce!!ion!,acce!!orie! and product!9 -.:14

• Cannot depo!it t$e S wit$ a 1rd per!on 9• I% depo!it wit$ 1rd per!on i! allowed, depo!itar&

i! lia+le %or lo!! i% depo!ited wit$ 1rd per!on w$o i!mani%e!tl& carele!! or un%it9 -.:714

• a& c$an#e t$e wa& o% t$e depo!it i%8

– under t$e circum!tance! $e ma& rea!ona+l&pre!ume t$at t$e depo!itor would con!ent to t$ec$an#e i% $e knew t$e %act! o% t$e !ituation9

– (e%ore c$an#e $e mu!t noti%& t$e depo!itor andwait %or $i! deci!ion, unle!! dela& would cau!edan#er9-.:704

• Depo!itar& $oldin# certi%icate!, +ond!, !ecuritie!or in!trument! w$ic$ earn intere!t8

– mu!t collect intere!t w$en t$e& +ecome due – take !tep! !o t$at "alue o% !ecuritie! i! pre!er"ed

-.:724

• I% S deli"ered clo!ed and !ealed8

– mu!t return it in t$e !ame condition – lia+le %or dama#e! !$ould t$e !eal +e +roken

t$rou#$ $i! %ault9 – %ault on t$e part o% t$e depo!itar& i! pre!umed

unle!! t$ere i! proo% to t$e contrar& -.:.4

O+li#ation! o% t$e Depo!itar&8 o!! +& Fortuitou! E"ent-.:7:4• GENERA R5E8 Not lia+le• E@CE'TIONS8

– Stipulated – 5!e! wit$out owner?! permi!!ion – Dela&! in return – Allow! ot$er! to u!e it e"en t$ou#$ $e $im!el% i!

aut$oried

O+li#ation! o% t$e Depo!itar&8 o!! +& Force a


17/20

• W$en durin# a %ire, %lood, !torm, or ot$er calamit&a propert& i! !a"ed %rom de!truction +& anot$er per!on wit$out t$e knowled#e o% t$e owner, t$elatter i! +ound to pa& t$e %ormer


18/20

• T$e!e !pecial pre%erred credit! or o+li#ation!$a"e to +e !ati!%ied u!in# t$e proceed! %rom t$e!ale o% !aid propert&

Illu!tration• A own! a "e$icle9 T$e price o% t$e "e$icle i! not

&et paid9 T$e "e$icle i! al!o t$e !u+


19/20

• O+


20/20

A lon# li%e ma& not +e enou#$,+ut a #ood li%e i! #ood enou#$

credit trans powerpoint in doc (1)

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