COR JESU COLLEGE

A Catholic School Administered by the

Brothers of the Sacred Heart that aims to fully
transform and draw out the best of a person
witnessing the compassionate love of God.
Course Outline
Credit Transactions
Part One
1. Loan (1933-1961)
a. Contract of Loan, concept, kinds 1933
i. Commodatum
ii. Mutuum
2. Loan vs. Credit: Loan vs. Discounting of Papers
a. People vs. Conception 44 Phil 126
3. Commodatum vs. Mutuum
a. Naguiat vs. CA October 3, 2003
4. Essentiality of Delivery
5. Commodatum
a. Producers vs. CA February 19, 2003
6. Obligations of the Bailee 1941-1945
a. Catholic Vicar vs. CA 165 SCRA 515
7. Obligations of the Bailor 1946-1951
8. Mutuum vs. Simple Loan 1953-1961
9. Act No. 2655, The Usury Law, as amended; Resolution No. 224 of the Central Bank
of the Philippines
a. In general
i. Verdejo vs. CA 157 SCRA 743
b. Establishing usury
i. Verzosa vs. Bucag, 97 Phil 996

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c. When usury law is inapplicable

i. Rental in a lease contract
1. Herrera vs. Petrophil 146 SCRA 385

ii. Bona fide sale

1. US vs. Constantino, Tan 39 Phil 552
iii. Increase in purchase price resulting from sale on credit
1. Sun Bros vs. Caluntad 16 SCRA 895
iv. Bona fide pacto de retro sale
10.Interest
a. Concept
i. Rono vs. Gomez 83 Phil 890
b. Kinds
i. Simple - 2209
ii. Compound 1959, 2212, Sec. 5 The Usury Law
1. Villaruel vs. Alvayda
iii. Legal
1. De Lima vs. Laguna 160 SCRA 70
2. PAL vs. CA 275 SCRA 621
3. Korean Airlines vs. CA 234 SCRA 717
4. Lawful Sec. 2 and 3, The Usury Law
5. Unlawful - Sec. 2 and 3, The Usury Law
6. Food Terminal vs. CA 262 SCRA 339
7. PNB vs. CA 263 SCRA 628
8. Villoria vs. CA 123 SCRA 259
9. Pilipinas Bank vs. CA 225 SCRA 268
10.Nakpil vs. CA 160 SCRA 334
11.Eastern vs. CA 332 SCRA 73
12.Sangrador vs. Villarama 168 SCRA 215
13.Medel vs. CA 299 SCRA 481
14.Escalation Clause Sec 7, The Usury Law
15.Florendo vs. CA 265 SCRA 67849
16.Mendoza vs. CA June 25, 2001
17.PNB vs. CA 258 SCRA 5

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11.Penalties
a. Insular Bank vs. Spouses Salazar 159 SCRA 133
b. GSIS vs. CA 145 SCRA 311
12.Attorneys Fees
a. Andreas vs. Green 48 Phil 463
b. Umali vs. Miclat 105 Phil 1109
13.Right to recover usurious interest Sec 6 , The Usury Law
a. Go Chiocou vs. Martinez 45 Phil. 256
b. Angel vs. Chelda 23 SCRA 119
c. Sanchez vs. Buenviaje 126 SCRA 208

d. Garcia vs. Matias 39 Phil 257

e. Vda. De Pamintuan vs. Tiglao 53 Phil 1
14.Criminal action for usury
a. People vs. Hodges 66 Phil 291
15.Related Special Laws
a. Truth in Lending Act (R.A. 3765, as amended)
b. Lending Company Regulation Act of 2007 (R.A. 9474)
c. Access Devices Regulation Act of 1998 (R.A. 8484)
PART TWO
16.Guaranty and Suretyship (2047 2084)
a. Concept 2047
b. Guaranty vs. Suretyship 2047, 2nd Paragraph
i. Agro vs. CA 348 SCRA 450
ii. Palmares vs. CA 288 SCRA 422
iii. People vs. Maniego 148 SCRA 30
iv. Towers vs. Ororama 80 SCRA 262
v. Machetti vs. Hospicio 43 Phil 297
c. Nature and Extent of Guaranty 2048-2057
i. RCBC vs. Cerro 115 SCRA 777
ii. Fortune vs. CA 267 SCRA 653
iii. Atok vs. CA 2222 SCRA 232
iv. BA Finance vs. CA 211 SCRA 112
v. PNB vs. CA 198 SCRA vs. 767
vi. Willex vs. CA 256 SCRA 478
vii. Security vs. Cuenca 341 SCRA 781
viii. RP vs. Palfox 43 SCRA 365
d. Effects of Guaranty 2076-2081
i. Between the guarantor and creditor
1. Wise vs. Tanglao 63 Phil 372
2. Southern vs. Barbosa 99 Phil 263
3. Prudential vs. IAC 216 SCRA 257
4. Imperial vs. Delos Angeles 111 SCRA 257
5. Saavedra vs. Price 68 Phil 699
6. Vda de Syquia vs. Jacinto 60 Phil 861
7. Malayan vs. Salas 90 SCRA 252
ii. Between debtor and guarantor - 2066-2072
1. Tuason vs. Machuca 46 Phil 561
iii. Between co-guarantors

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e. Extinguishment of guaranty
i. Mc Conn vs, Associated 4 SCRA 251

ii.
iii.
iv.
v.
vi.
vii.
viii.

Security Bank vs. Cuenca 341 SCRA 781

NASSCO vs. Torrento 20 SCRA 427
PNB vs. CA 147 SCRA 273
PNB vs. Macapanga 99 Phil 180
National Bank vs. Escueta 50 Phil 991
Radio Corp vs. Roa 62 Phil 112
Zobel vs. CA 290 SCRA 1

17.Legal and judicial bonds 2082 2084

PART THREE
18.Pledge (2085-2123)
a. Concept 2094-2095, 2098,2087,2103 1st Paragraph
b. Essential requisites of a contract of pledge -2085, 2093, 2096
i. Vda. De Bautista vs. Marcos 3 SCRA 434
ii. Cavite vs. Lim 324 SCRA 346
iii. General Insurance vs. Masakayan 54 SCRA 120
iv. PNB vs. Rocha 55 Phil 497
v. PNB vs. CA 98 SCRA 207
vi. Buiser vs. Cabrera 81 Phil. 669
vii. McMicking vs. Martinez 15 Phil 204
viii. Caltex vs. CA 212 SCRA 448
c. Nature of the contract of pledge 2087-2092
i. Guanzon vs. Argel 33 SCRA 374
ii. Francisco Realty vs. CA - 298 SCRA 349
iii. Uy Tong vs. CA 161 SCRA 383
iv. Agricultural vs. Tambunting 73 Phil 555
d. What may be pledged 2094, 2095
e. Rights and obligations of the creditor/pledge 2099, 2100, 2102-2104, 2106,
2108-2109
f. Rights and obligations of the creditor/pledge 2097, 2101, 2103, 2105, 2107
i. Cruz vs. Serrano 54 Phil 10
g. Extinguishment of Pledge 2110-2111
h. In case the pledgor fails to satisfy credit 2112
i. Sale of pledge 2113-2117, 2122
i. Manila vs. Velayo 21 SCRA 515

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j. Pawnshops 2123, Pawnshop Regulation Act

i. Definition of terms 3

ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.

1. Pawner
2. Pawnee
3. Pawn
4. Pawn Ticket
Property
Registration and licensing - 5
Capitalization - 7
Citizenship requirement - 8
Amount of loan - 9
Redemption - 13
Disposition of pawn in case of default -14
Public Auction 15

PART FOUR
19.Chattel Mortgage
a. (2140 2141, The Chattel Mortgage Law, Act 1508)
b. Concept 2140, Sec. 3 Act 1508 (repealed)
c. Requisites - 2140, Sec. 4 Act 1508 (repealed), 2085, 2088-2089
i. Northern vs. Coquia 68 SCRA 374
ii. Allied vs. Salas 168 SCRA 414
iii. Cebu vs. CA 268 SCRA 178
d. Chattel mortgage vs. Pledge
i. Ablaza vs. Ignacio 103 Phil 1151
e. Subject matter of chattel mortgage 2140, Sec. 7 paragraph 4 Act 1508
i. Monserrat vs. Ceron 58 Phil 469
ii. Davao vs. Castillo 44 Phil 933
iii. PRC vs. Jarque 61 Phil 229
iv. Montoya vs. Ignacio 94 Phil 182
v. Luna vs. Encarnacion 91 Phil 531
vi. Piansay vs. David 12 SCRA 227
vii. Makati vs. Weaver 122 SCRA 296
viii. Tolentino vs. Baltazar 1 SCRA 822
ix. Peoples vs. Dahican 26 SCRA 84
x. Saldana vs. Phil 106 Phil 919
f. Procedure in case of breach of condition
g. Redemption Sec 13, Act 1508

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h. Right of mortgage to possession

i. Bataan vs. Dy Pac 43 SCRA 450
ii. Agustin vs. CA 271 SCRA 457
iii. BA vs. CA 258 SCRA 102

i. Sale of subject matter

i. Public Sale Sec. 14 Act 1508
1. Esguerra vs. CA 173 SCRA 1
2. PAMECA vs. CA 310 SCRA 281
ii. Private Sale
1. PNB vs. Manila 34 SCRA 462
j. Right to mortgagee to recover deficiency
i. In general
1. Bicol vs. Guinhawa 188 SCRA 642
2. DBP vs. Tolentino 101 SCRA 1
k. When chattel mortgage secures purchase of personal property in instalments
1484
l. Criminal offenses involving chattel mortgage Art. 319 of RPC
i. Peole vs. Chupeco 10 SCRA 640
ii. US vs. Kilayko 32 Phil 61
PART FIVE
20.Real Mortgage (2134-2131)
a. Concept
b. Requisites 2085-2092, 2125
i. Gaotian vs. Gaffud 24 SCRA 706
ii. Hechanova vs. Adil 114 SCRA 450
iii. Samanilla vs. Cajucom 107 Phil 791
iv. Agricultural vs. Yusay 107 Phil 791
v. State Investment vs. CA 254 SCRA 398
vi. Bonnevie vs. CA 125 SCRA 122
vii. Cebu vs. CA 268 SCRA 178
viii. DBP vs. CA 331 SCRA 267
c. Subject matter 2124, 2127
i. Nartales vs. GSIS 156 SCRA 205
ii. Castro vs. CA 250 SCRA 661
iii. Cu Unjiengs vs. Mabalacat 58 Phil 439
iv. Cea vs. Villanueva 18 Phil 538
v. Phil Sugar vs. Campos 36 Phil 85
vi. Mendoza vs. CA June 25, 2001
vii. Quintinilla vs. CA 279 SCRA 397

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d. Effects of Real Mortgage 2126, 2128-2131

i. Santiago vs. Dionisio 92 Phil 495
ii. Isaguirre vs, de Lara 332 SCRA 803
iii. Medida vs. CA 208 SCRA 887

iv.
v.
vi.
vii.
viii.

Oronce vs. CA 298 SCRA 594

Casabuena vs. CA 286 SCRA 594
Delos Santos vs. CA 279 SCRA 118
Ramos vs. CA 157 SCRA 100
Litonjua vs. L & R 320 SCRA 405

e. Recovery of deficiency 1144

i. DBP vs. Mirang 66 SCRA 141
ii. Tarnate vs. CA 241 SCRA 254
f. Redemption
i. Concept
ii. Kinds
1. Equity of redemption Sec 3, Rule 68 Rules of Court
a. Top Rate vs. IAC 142 SCRA 467
b. Huerta vs. CA 339 SCRA 534
g. Right of redemption Sec. 6 3135
i. Sta. Ignacia vs. CA 230 SCRA 513
ii. State vs. CA 215 SCRA 734
iii. Bernardez vs. Reyes 201 SCRA 648
h. Requisites for a valid redemption Sec. 28, Rule 39 of the Rules of Court, Sec.
6, 3135
i. Rosales vs. Yboa 120 SCRA 869
ii. Reyes vs. Delos Santos 50 SCRA 431
iii. Bodiongan vs. CA 248 SCRA 496
iv. PNB vs. CA 140 SCRA 360
v. Flores vs. Lim 50 Phil 738
i. Persons entitled to redeem Sec. 29, Rule 39 Rules of Court
i. De Castro vs. IAC 165 SCRA 654
ii. Sy vs. CA 172 SCRA 125
iii. Villanueva vs. Malaya 330 SCRA 278
iv. Tibajia vs. CA 193 SCRA 581
PART SIX
21.Antichresis (2132-2139)
a. Concept 2132, 2138
i. Dizon vs. Gaborro 83 SCRA 680
b. Form 2134
c. Obligations of the creditor 2135-2137
i. Rosales vs. Tanseco 90 Phil 496
ii. Macapinlac vs. Gutierrez 43 Phil 770

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PART SEVEN

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22.Deposit ( 1962-2009)
a. Concept 1962
i. BPI vs. IAC 164 SCRA 630
b. Nature 1965, 1967
c. Subject Matter 1966
d. Form 1969
e. Kinds
i. Judicial 2005-2008
ii. Extrajudicial 1967
iii. Voluntary 1968-1995
iv. Necessary 1996-2004
f. The Warehouse Receipts Law, Act No. 2137, as amended
i. Who may issue receipts 1
ii. Form of receipts, essential terms 2
iii. Non-negotiable vs. Negotiable receipt 4,5
iv. Obligation to deliver 8
v. Liability for misdelivery 10
vi. In case of adverse claimants 17
PART EIGHT
23.Concurrence and Preference of Credits (2236-2251)
a. Concurrence vs. Preference of Credits
i. Molina vs. Somes 31 Phil 76
ii. DBP vs. NLRC 183 SCRA 328
b. Liability of debtors property 2236-2239
c. Exempt properties 2238, 2240, 152-155 Family Code, Sec 13, Rule 139; Sec
118 The Public Land Act
i. Vda de Tan Toco vs. Municipal Council of Iloilo 49 Phil 52
d. Classification of credits
e. Special preferred credits 2241-2243; 2246-2249
i. Uy vs. Zamora 13 SCRA 508
ii. Carried Lumber vs ACCFA 63 SCRA 411
iii. J.L. Bernardo vs. CA 324 SCRA 476
iv. PS Bank vs. Lantin - 124 SCRA 476
f. Ordinary preferred credits 2244, 2250-2251
i. DBP vs. NLRC 222 SCRA 264
ii. DBP vs. NLRC 242 SCRA 59
iii. Commissioner vs. NLRC 238 SCRA 42
g. Common credits 2245
i. Central Bank vs. CA 163 SCRA 482
ii. Ong vs. CA 253 SCRA 105
h. Financial Rehabilitation and Insolvency Act (FRIA) of 2010
i. Salient Features
ii. The Insolvency Law, Act No. 1956, as amended
iii. Suspension of Payments 2-13
1. RCBC vs. IAC 320 SCRA 279
2. Rubberworld vs. NLRC 305 SCRA 722

iv. Voluntary Insolvency 14-19

1. Phil Trust vs. National Bank 42 Phil 413
2. In re estate of Mindanao Motor 57 SCRA 99
v. Involuntary Insolvency 20-28
1. State vs. Citibank 203 SCRA 9
2. De Coya vs. Tan - 53 Phil 153

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PART NINE
24.Miscellaneous Topics
a. Letters of Credit
b. Equitable Mortgage