UNIVERSITY

OF SAN JOSE RECOLETOS

School of Law
SY 2017-2018

COURSE SYLLABUS

Course Title: CREDIT TRANSACTIONS
No. of units: 3 units/3 hours per week session

Instructor:

Atty. Julius Christian Reyes

I. COURSE DESCRIPTION:

This course studies the different laws involving contracts of security. Particularly the laws
governing loans, deposits including mortgages, pledge, antichresis, guaranty, sureties and
other contract of security. It also includes other related laws, jurisprudence and legal
principles involving credit transactions. Part of the study is the law on Financial
Rehabilitation and Insolvency Act of 2010.

At the end of the course, the students are expected to learn the different provisions of law
relating to credit transactions, the rights and obligations of the parties. The students are
expected to interpret correctly the law and apply the said learning in answering bar
questions and legal problems. More importantly, the students are expected to give effect the
laws property and observe honesty and fair dealings in every business transactions.


II. COURSE OUTLINE

Week Topic Additional Reading Activity

Week 1 Class Policies Overview
Lecture
Grading System

Introduction to Credit • Acme Shoe Rubber &
Transactions Plastic Corp. vs. Court of
• Meaning and Scope of Appeals 260 SCRA 714
Credit Transactions • RA 3765, Sec. 3(2)
• Relevant Laws affecting • People vs. Conception, G.R.
credit transactions No. L-19190, November
29, 1922
Related Laws: • Central Bank of the
• RA No. 3765 Philippines vs. CA, 139
(Truth in Lending Act) SCRA 36, (1985)


LOAN LOAN
 • General Provisions • Garcia vs. Thio, G.R. No.
• Commodatum 154878, March 16, 2007
o Nature of • Saura Import and Export
Commodatum Co. Inc. vs. DBP, 44 SCRA
o Obligations of the 445
Bailee • BPI Investment
o Obligations of the Corporation vs. CA, G.R.
Bailor No. 133632, February 15,
(Articles 1933-1952) 2002
• Pantaloen vs. American
Express, Inc. August 25,
2010.

Commodatum

• Producers Bank of the
Philippines vs. Court of
Appeals, G.R. No. 115324,
February 19, 2003
• Pajuyo vs. Court of
Appeals, G.R. No. 146364,
June 3, 2004
• Republic vs. Bagtas, G.R.
No. L-17474, Oct. 25,
1962
Kinds:
• Quintos vs. Beck, Nov.
3, 1936
• Catholic Vicar vs. CA
165 SCRA 515

Week 2 Simple Loan or Mutuum General Concepts: Lecture
(Articles 1953-1961) • People vs. Puig and Graded
• General Concept Porras, G.R. No. 173654, Recitation
• Obligation to Pay August 28, 2008
• Interest • BPI Family Bank vs.
o Conventional Interest Franco, G.R. No. 123498,
o Interest on interest November 23, 2007
o Compensatory, Conventional Interest
Penalty or Indemnity • Eastern Shipping Lines
Interest (Articles NCC vs. CA, G.R. No. 97412,
1169, 1226, 2209, July 12, 1994, as modified
2213, 226, 2227) by: Nacar vs. Gallery
o Finance Charges, R.A Frames, Inc. August 13,
3765 Sec. 4, 6. 2013.
o BSP Circular No. 799, • PCI Leasing and Finance,
Series of 2013. Inc. vs. Trojan Metal
o Usury: General Industries Incorporated,
Concepts Dec. 15, 2010.
 • Siga-an vs. Villanueva,
G.R. No. 173227, January
20, 2009
• Ligutan vs. CA, G.R. No.
138677, February 12,
2002
• Pan Pacific Services
Contractors vs. Equitable
PCI Bank, March 18, 2010
• Prisma Construction &
Dev. Corp. vs. Menchavez,
March 19, 2010.
Finance Charge:
• United Coconut Planters
Bank vs. Samuel and
Beluso, G.R. No. 159912,
August 17, 2007.

Week 3 DEPOSIT Voluntary Deposit Lecture
• BPI vs. IAC, G.R. No. L- Graded
Deposit in General and 66826, August 19, 1988 Recitation
Different Kinds • Triple V Food Services vs.
(Articles 1962-1967) Filipino Merchant
Insurance Com. G.R. No.
160544, February 21,
2005
VOLUNTARY DEPOSIT • CA Agro-Industrial Dev.
(Articles 1968- 2009) Corp. vs. CA, G.R. No.
90027, March 3, 1993.
• General Provisions • Associated Bank vs. Tan,
o Obligations of the Dec. 14, 2004
Depositary
o Obligations of the Necessary Deposit
Depositor • YHT Realty Corp. vs. CA
• Necessary Deposit G.R. No. 126780,
• Sequestration or Judicial February 17, 2005.
Deposit
Bank Deposit
• Serrano vs. Central
Bank, Feb. 14, 1980
• Guingona vs. City Fiscal
of Manila, April 4, 1984
• People vs. Puig, August
28, 2008.
Week 4 SECURITY TRANSACTIONS Guaranty Lecture
• Tupaz IV & Tupaz vs. CA Graded
Guaranty and Surety and BPI, G.R. No. 145578, recitation
• Nature and Extent of November 18, 2005
Guaranty (Articles 2047- • Fortune Motors vs. E.L.
 2057) Rodriguez, G.R. No.
• Effects of Guaranty: 112191, Feb. 7, 1997
Between the Guarantor • Atok Fianance Corp. vs.
and the Creditor (Art. CA, G.R. No. 80078, May
2058-2065) 18, 1993
• Continuing Guaranty or • Texas Co. (Phil.) vs.
Suretyship Alonzo, 73 Phil. 90
• Bank of Commerce vs.
Flores, December 8, 2010
• Baylon vs. CA, August 17,
1999.
Continuing
Guaranty/Suretyship:
• Lim vs. Security Bank
Corp. March 12, 2014 G.R.
No. 188539
• Willex Plastic Industries
Corp. vs. CA, April 25,
1996
Surety
• Pacific Building Copr. vs.
IAC, 203 SCRA 495
• Security Bank and Trust
Company vs. Cuenca, G.R.
No. 138544, October 3,
2000
• Philippine Blooming
Mills, Inc. vs. Ching & CA,
G.R. No. 142381, October
15, 2003.
• Escano & Silos vs. Ortigas,
Jr. G.R. No. 151953, June
29, 2007
• Philippine Export and
Foreign Loan Guarantee
Corp. vs. V.P. Eusebio
Construction Corp. , July
13, 2004.
• Stronghold Insurance Co.
Inc. vs. Tokyu
Construction Com. Ltd. ,
June 5, 2009
Week 5-6 • Effects of Guaranty: Exhaustion: Quiz
Between the Debtor and • JN Devt. Corp. vs.
Guarantor: (Art. 2066- Philippine Export and
2072) Foreign Loan Guarantee
• Extinguishment of Corp., August 31, 2005.
Guaranty (Articles 2076- • Tupaz, vs. CA November
2081) 18, 2005
 • Legal and Judicial Bonds • Prudential Guarantee
and Assurance Corp. vs.
Anscor Land, Inc.,
September 8, 2010.
Extinction:
• E. Zobel Inc. vs. CA, May
6, 1998
• Stronghold Insurance
Com. vs. Republic Asahi
Glass Corp. June 22,
2006.
Prelim Submission of
Case Digest
Week 7 Pledge and Mortgage Pactum Commissorium Lecture
• DBP vs. CA, G.R. No. Graded
General Concept 118342, January 5, 1998 Recitation
• Obligations Secured • Bustamante vs. Rosel,
• Remedies G.R. No. 126800,
• Indivisibility of Pledge November 29, 1999
• Pactum Commissorium • Ong vs. Roban Lending
Corporation, G.R. No.
171592, July 9, 2008
Pledge (Provisions • Garcia vs. Villar, June 27,
Applicable to Pledge, Articles 2012
2093-2123)
Pledge
• Manila Banking
Corporation vs. Teodoro,
Jr. G.R. No. 53955,
January 13, 1989
• Citibank N.A. & Investors
Corp. vs. Sabeniano, G.R.
No. 156132, October 12,
2006
Week 8-9 Real Estate Mortgage (REM) Real Estate Mortgage (REM)
(Articles 2124-2131) Obligations Secured
• General Concept: • Prudential Bank vs.
• Form of REM Alviar, G.R. No. 150197,
• Obligations secured July 28, 2005
• Object of REM Object
• People’s Bank & Trust Co.
Foreclosure of REM. Rule 68 vs. Dahican Lumber Com.
Rules of Court Et.al G.R. No. L-17500,
• Judicial Foreclosure May 16, 1967
• Extrajudicial
Foreclosure (Act. 3135,
Sec. 1)
• Sec. 47 General Banking Extrajudicial Foreclosure
Law of REM
 Requirement of Notice
• Grand Farms, Inc. & Phil.
Shares Corp. vs. CA G.R.
No. 91779, February 7,
1991
Conduct of Sale
• Act No. 3135, Sec. 4 and 5
• AM No. 99-10-05-0

Cases:
• Medida, et.al vs. CA, G.R.
No. 98334, May 8, 1992
• Suico vs. PNB, G.R. No.
170215, August 28, 2007
• BPI Family Savings Bank
Inc. vs. Golden Power
Diesel Sales, G.R. No.
176019, January 12, 2011
• 680 Home Appliances,
Inc. vs. CA, Sept. 29, 2014
• Rural Bank of Sta.
Barbara, Inc. vs. Centeno,
March 11, 2013
Redemption by Juridical
Person:
• Golden Merchandising vs.
Equitable PCI Bank,
March 13, 2013
Week 10 Antichresis Case: Quiz
(Articles 2132-2139) • Diego vs. Fernando, G.R.
No. L-15128
• De La Vega vs. Ballilos, 34
Phil. 683
Midterm Submission of
Examination Case Digest
Week 11 Chattel Mortgage Cases:
(Articles 2140-2141) • Acme Shoe, Rubber and
Plastic Corp. vs. CA,
• Concept August 22, 1996
• Nature and • Makati Leasing and
characteristics Finance Corp. vs. Weaver
• Elements Textlite Mills, Inc. May
• Form 16, 1983
• Effect of Mortgage • Cebu International
• Redemption and Finance Corp. vs. CA,
Foreclosure February 13, 1997.
• Judicial • Pameca Wood Treatment
• Extra-judicial (A.M. Plant, Inc. vs. CA, July 14,
99-10-05-0, August 7, 1999.
 2001. • Paray vs. Rodriguez,
January 24, 2006.

Week 12 Concurrence and Preference Cases:
of Credits • Republic vs. Peralta, G.R.
No. L-56568 May 20,
• Concept 1987
• Classifications of Credits • De Barreto vs. Villanueva,
• Order of Preference G.R. No. L-14938
• DBP vs. CA, G.R. No.
126200
• J.L. Bernardo
Construction vs. CA, G.R.
No. 105827
Week 12-13 Comprehensive Study on RA. Cases: Quiz
10142 otherwise Known as
the Financial Rehabilitation • RCBC vs. IAC, G.R. No.
and Insolvency (FRIA) Act of 74851, December 9, 1999
2010. • Sobrejuanite vs. ASB
Development Corp. G.R.
AM No. 12-12-11-SC. No. 165675, September
30, 2005
• Nature of the • MWSS vs. Daway, G.R. No.
Proceedings 160732, June 21, 2004
• Kinds of • Panlilio vs. RTC, G.R. No.
Rehabilitation 173846, February 2,
• Stay Order 2011
• Suspended Claims • San Jose Timber Corp. vs.
• Exceptions SEC, Feb. 27, 2012
• Siochi Fishery
Enterprises vs. BPI,
October 19, 2011
• BPI vs. SEC, G.R. No.
164641, December 20,
2007
• Consuelo Metal Corp. vs.
Planters Development
Bank and Maningas, G.R.
No. 152580, June 26,
2008.
Week 14 Other Relevant Laws
Affecting Credit Transactions

• Estafa Law
• BP. 22


Week 15 Review and Quiz Submission of
Case Digest
Finals

III. REFERENCES AND MATERIALS

• Civil Code of the Philippines
• De Leon, Hector and De Leon, Jr., Hector. Comments and Cases on CREDIT
TRANSACTIONS. Manila, Philippines Rex Bookstore, latest ed.
• Aquino, Timoteo B. Essentials of Credit Transactions and Banking Laws.
Manila, Philippines Rex Bookstore, 2015 ed.
• Apolo, Jose T. Credit and Business Transactions: relevant laws, commentaries
and jurisprudence. Mandaluyong City, Philippines, National Bookstore, 2005.
• Please note that the professor reserves the right to amend and provide
additional cases and other reading materials.


IV. GRADING SYSTEM

Students will be assessed through series of examinations and class activities, which
are divided into two (2) aspects, to wit: Major Examinations and Class Standing
Activities. Major Examinations include Prelim, Midterm and Final Examinations.
Class standing activities include the following: quizzes, graded recitation,
attendance and case digest. Final Grade is computed as follows:

Major Examination (70%)

Activity Row Score (sample only) Equivalent Grade
Prelim 100/100 1.0
Midterm 100/100 1.0
Finals 100/100 1.0
Average

Class Standing (30%)

Activity Score (Example Equivalent Remarks
Only)
Quizzes 50 Quizzes are
divided into
Prelim, Midterm
and Finals
Graded Oral 20
Examination
Case Digest 30 10 points per term
Total 100/100 1.0


Computation of the Final Grade:

Final Grade: = Average Equivalent Grade for Major Exam * 70% (A)
= Equivalent Grade for Class Standing * 30% (B)

Final Grade = A + B;

Temporary Midterm Grade is based on the average equivalent grade for Prelim and
Midterm Major Examinations only.