Credit Transactions Atty. Luis Alfonso Llaguno 1. 2. 3. 4. 5. 6. 7. 8. 9.

Commodatum Mutuum Deposits Guaranty Surety Mortgage Chattel and Real Pledge Concurrence and Preference of Credit - Someone got insolvent - Liabilities more than his assets - Rules (Law provides order in payment) 10. Insolvency Law There are special laws governing other topics Ex: Chattel Mortgage Law Property Registration Decree. Homework: Law on Commodatum (1933-1952) Obligation and Contracts Obligation : to give(Real) to do or not do. ( Personal) Sources of Obligations To Give: Something To Do: Personal (Not subject to specific performance.) Determinate Indeterminate In case of loss (importance) Unilateral Obligation (( Donation) To accept or not.) Reciprocal (One Legal Source) // Non reciprocal ( Different Source) Bilateral Obligation They have obligation to each other. DELAY: DEMAND + LAPSE OF TIME - Time if someone has breached his contract.

Exceptions

Sources of Damages Fraud ( INCIDENTAL / CAUSAL) Negligence ( It can be waived) Delay Contravention of the Tenor of the Obligation (Obligor did not perform the obligation needed) - He did something else. - He violated the contract Force Majeure Types Pure Conditional ( Future and Uncertain & Past and Unknown) - Retroacts from the moment the obligation is constituted. - Resolutory Condition and Suspensive Consdition - Sole will of one of the parties (Potestative ) VOID - Eg. Death by Malaria Period - Happening of the event at some determinate time - It will definitely happen - Resolutory Condition and Suspensive Consdition - E. g. Death of a Person - For the benefit of both the D and C Joint and Solidary - Extent of Liability 2/more creditors or debtors - Solidary : Commodatum (Tort/ Employers) Obligation of Penal Clause Modes of Extinguishment 1. Payment (Complete) Ds excuse: Substantial Compliance in good faith : the C will reduce his obligation 3rd Party Payment Not Know: Delagacion : Up to the extent he is benefited (Beneficial Reimbursement)

Know: will assume the rights of the creditor. (Expromission) Legal Tender : Excludes Promissory notes and Checks ( Unless encashed) Special Forms of Payment 1. Dation in Payment : Initial : load with security delivery of the object 2. Application of Payments: Indebted by D to C (Not Consolidated) - Most onerous debts - All equal (Proportionally) 3. Payment by Cession (No longer used now a days because of Law of Insolvency) 4. Tender and Consignation 5. Loss: Change in the nature of the obligation to be delivered. - Cannot be invoked as a ground especially if its Generic. - Illegal, goes out of commerce, rebus sic instantibus 6. Condonation/ Remission 7. Confusion / Merger of Rights H&W (separation of property regime ) -> died Promissory Note Scenario D-> PN ->C->E->D (Grocery Items) 8. Compensation 9. Novation : Intent by the parties to extinguish the old obligation and change to a new one. Mortgage (Accessory Contract) x-D -> Z | y-C Mortgagor Contracts Meeting of the minds Offer: ( Complete and Certain) + Acceptance : Absolute = Performance of a Contracts Types of Contracts

1. Consensual Contract ( No need for Document ( Meeting of the Minds) Eg. Sales 2. Real Contracts: add something up ( Another element is added because of the Nature ( Delivery) Eg. Loan, Mutuum, Deposit, Commodatum, Pledge Meeting of the Minds + Delivery 3. Formal / Solemn contracts : Form for public policy. Consent = fraud Eg. Partnership of Real property, Donation + Acceptance, Chattel Mortgage (Must be registered) Five Principles of Contracts 1. Consensuality 2. Uninanimity 1306 (Can stipulate on anything) 3. Relativity (1311) : Contracts are binding upon the parties only. - Binding to the assigns, successors and heirs. - Exception: Commodatum 4. Obligatoriness: (1159) Contracts are the law of force between the parties. 5. Mutuality (Interest) 1308: The validity or enforceability cannot be left to the will of the parties. Types of Contracts Valid Voidable (within 4 Years) may be ratified Rescissible Contracts 1380 (Economic Prejudice) -> Resolution vs. 1191 - Creditor is not a party of the contract can sue for the rescission of the contract. - 4 Years - Can be ratified Unenforceable - 2 or more persons are incapacitated. - Agent goes beyond his authority - Statute of Frauds ( Procedural-> Substantive Laws)

o Defense can be waived o Failure to object; the court will still try the case. o Partial execution. Void An element is missing Element is illegeal Impossible Laws declare it void. Sale of animal with contagious disease. (Does not Prescribe) 3rd parties can assail Reformation : 10 Years from Cause of Action