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Precarium – Precarium is a kind of commodatum where the lender may demand the thing
at will. Precarium exists in the following cases:
a. If there is no stipulation as to the duration of the contract or to the use to which the
thing loaned should be devoted
b. If the use of the thing is merely tolerated by the lender
INTEREST
Requisites for Recovery of Interest:
1. The payment of interest must be expressly stipulated.
2. in writing
[3. And the interest must be lawful (but since there is no Usury Law anymore, then there is no
such thing as unlawful interest, so I don’t think this requisite is still included )]
Stipulation of interest
1. The interest rate stipulated by the parties, not the legal rate of interest, is applicable.
2. Default rule: If the parties do not stipulate an interest rate, the legal rate for loans and
forbearances of money is 12%.
For other sources of obligations, such as sale, and damages arising from injury to persons and
loss of property which do not involve a loan, the legal rate of interest is 6%.
3. Increases in interest must also be expressly stipulated.
4. It is only in contracts of loan, with or without security, that interest may be stipulated and
demanded.
5. Stipulation of interest must be mutually agreed upon by the parties and may not be
unilaterally increased by only one of the parties. This would violate consensuality and
mutuality of contract (PNB v. CA). But the parties can agree upon a formula for determining
the interest rate, over which neither party has control (ex: interest will be adjusted quarterly
at a rate of 3% plus the prevailing 91-day T-bill rate, etc.). But if the formula says “interest
will be based on T-bill rates and other interest-setting policies as the bank may determine,”
this is not valid.
Indemnity for damages – The debtor in delay is liable to pay legal interest as indemnity for
damages even without a stipulation for the payment of interest.
Where to base the rate of damages:
a. Rate in the penalty clause agreed upon by the parties
b. If there is no penalty clause, additional interest based on the regular interest rate of
the loan
c. If there is no regular interest, additional interest is equivalent to the legal interest rate
(12%)
GUARANTY AND SURETYSHIP
Characteristics of the Contract of Guaranty (A-SC-U-D)
1. Accessory: It is dependent for its existence upon the principal obligation guaranteed by it.
2. Subsidiary and Conditional: It takes effect only when the principal debtor fails in his
obligation.
3. Unilateral:
a. It gives rise to obligations on the part of the guarantor in relation to the creditor and
not vice-versa. (Although after its fulfillment, the principal debtor should indemnify
the guarantor, but this obligation is only incidental)
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b. It may be entered into even without the intervention of the principal debtor.
4. Distinct Person: It requires that the person of the guarantor must be distinct from the
person of the principal debtor (you cannot guaranty your own debt). However, in a real
guaranty, a person may guarantee his own obligation with his own properties
Classification of Guaranty
2. As to origin:
a. conventional: by agreement of the parties
b. legal: imposed by law
c. judicial: required by a court to guarantee the eventual right of one of the parties in a
Case
3. As to consideration:
a. gratuitous: the guarantor does not receive anything for acting as guarantor
b. onerous: the guarantor receives valuable consideration for acting as guarantor
1. Contractual and Accessory BUT Direct: The contractual obligation of the surety is merely
an accessory or collateral to the obligation contracted by the principal. BUT, his liability to the
creditor is direct, primary, and absolute.
2. Liability is limited by the terms of the contract : The extent of a surety’s liability is
determined only by the terms of the contract and cannot be extended by implication.
3. Liability arises only if principal debtor is held liable : If the principal debtor and the
surety are held liable, their liability to pay the creditor would be solidary. But, the surety does
not incur liability unless and until the principal debtor is held liable.
a. A surety is bound by a judgment against the principal even though the party was not a
party to the proceedings.
b. The creditor may sue, separately or together, the principal debtor and the surety
(since they are solidarily bound).
c. Generally, a demand or notice of default is not required to fix the surety’s liability.
d. An accommodation party (one who signs an instrument as maker, drawer, acceptor, or
indorser without consideration and only for the purpose of lending his name) is, in
effect, a surety. He is thus liable to pay the holder of the instrument, subject to
reimbursement from the accommodated party.
e. A surety bond is void where there is no principal debtor.
4. Surety is not entitled to exhaustion: A surety is not entitled to the exhaustion of the
properties of the principal debtor since the surety assumes a solidary liability for the
fulfillment of the principal obligation.
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5. The undertaking is to the CREDITOR, not to the principal debtor : The debtor cannot
claim that the surety breached its obligation to pay for the principal obligation because there
is no obligation as between the surety and the debtor. If the surety does not pay, the
principal debtor is still not relieved of his obligation.
However, if the contract of guaranty is entered into without the knowledge or consent or
against the will of the principal debtor, the effect is like payment by a 3rd person:
1. The guarantor can only recover insofar as the payment has been beneficial to the debtor.
2. The guarantor cannot compel the creditor to subrogate him in the creditor’s rights such as
those arising from a mortgage, guaranty or penalty
BUT, a guraranty may be constituted to guarantee the following defective contracts and
natural obligations:
1. Voidable: because the contract is binding unless it is annulled
2. Unenforceable: because an unenforceable contract is not void.
3. Natural obligations: even if the principal obligation is not civilly enforceable, the creditor may
still go after the guarantor
1. Common example given by JPSP is the credit line – The bank allows you to borrow up to
a certain ceiling, but there is no release of funds yet. If you have an obligation with a third
person and you default, the third person just needs to inform the bank, and the bank will
release the money. The money released will be considered as a loan from the bank to you.
The bank will allow the release of the money so long as it doesn’t exceed the ceiling.
2. To secure payment of any debt to be subsequently incurred – If the contract states that
the guaranty is to secure advances made “from time to time,” “now in force or hereafter
made,” or uses the words “any debt,” “any indebtedness,” “any sum,” “any
transaction,” the guaranty is a continuing guaranty.
3. To secure existing unliquidated debts – Future debts may also mean debts that already
exist but whose amount is still unknown.
CONTINUING GUARANTEE:
Example: G guarantees the 10K loan that B owes L and any other indebtedness that B may
incur against L. This is a valid guaranty because there is already an existing obligation (the
10K loan).
G guarantees the loan that B and L will enter into tomorrow. This is not valid. Although it is
for a future debt, it is not valid under Article 2053 because there is no principal obligation yet.
There is nothing to guarantee.
GR: It is not necessary for the creditor to expressly accept the contract of guaranty since the contract is
unilateral; only the guarantor binds himself to do something.
EXCEPTION: If the guarantor merely offfers to become a guaranty, it does not become a binding obligation
unless the creditor accepts and notice of acceptance is given to the guarantor.
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When may the creditor demand another guarantor?
1. In case the guarantor is convicted in the first instance of a crime involving dishonesty (since
he loses integrity)
2. In case the guarantor becomes insolvent (since he loses sufficient property to answer for the
obligation which he guarantees) there is no need for a judicial declaration of insolvency
The liability of the guarantor is only accessory and subsidiary. Thus, in order for the creditor to
collect
from the guarantor, the ff. conditions must be fulfilled:
1. The creditor should have exhausted all the property of the debtor; and
2. The creditor has resorted to all legal remedies against the debtor (ex. Accion pauliana/
rescission of fraudulent alienations)
In order to demand that the creditor exhaust the properties of the principal debtor, the
guarantor must:
1. Set up the benefit of excussion against the creditor upon demand for payment by the creditor
from him; and
2. Point out to the creditor available property of the debtor within Philippine territory
sufficient to cover the amount of debt. (Therefore, property located abroad or which is not
easily available is not included among those that the guarantor can point out to the creditor.)
GR: A compromise binds only the parties thereto and not third persons. Thus, it cannot prejudice the
guarantor or debtor who was not a party to the compromise.
Exception: If the compromise has a benefit in the nature of a stipulation in favor of a third person,
the compromise may bind that third person.
The following conditions must concur in order that several guarantors may claim the benefit of
division:
1. There should be several guarantors
2. Of only one debtor
3. For the same debt
Art. 2066. The guarantor who pays the debtor must be indemnified by the latter.
The indemnity comprises:
(1) The total amount of the debt;
(2) The legal interests thereon from the time the payment was made known to the creditor, even
though it did not earn interest for the creditor;
(3) The expenses incurred by the guarantor after having notified the debtor that payment had been
demanded of him;
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(4) Damages, if they are due.
Art. 2071. The guarantor, even before having paid, may proceed against the principal debtor:
(1) When he is sued for payment;
(2) In case of insolvency of the principal debtor;
(3) When the debtor has bound himself to relieve him from the guaranty within a specified period,
and this period has expired;
(4) When the debt has become demandable, by reason of the expiration of the period for payment;
(5) After the lapse of 10 years, when the principal obligation has no fixed period for its maturity
unless it be of such nature that it cannot be extinguished except within a period longer than 10
years;
(6) If there are reasonable grounds to fear that the principal debtor intends to abscond;
(7) If the principal debtor is in imminent danger of becoming insolvent.
PLEDGE AND MORTGAGE
What are the kinds of pledge?
Pledge may be either:
1. Voluntary or conventional (created by agreement of the parties);
2. Legal (by operation of law).
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WHAT ARE THE EXCEPTIONS TO INDIVISIBILITY:
1. Where each one of several thing guarantees a determinate portion of credit.
Ex: If you have 100 mortgages securing corresponding portion of the loan, then when the
corresponding portion is paid, the corresponding pledge/mortgage is extinguished. All 100 mortgages may
be in the same document. Or, if the parties agree to allow partial discharge of the pledge/mortgage. How?
Cancel pledge/mortgage and constitute a new pledge/mortgage.The downside is that you must again pay
doc. stamps and reg. fees, unlike in the document with 100 mortgages, where the fees are only paid once.
2. If there was only partial release of the loan. CB v. CA. The bank only released a portion of the loan;
the court ordered a corresponding portion of the REM to be released.
3. Where there was failure of consideration. Creditor took over management but the business failed.
HOW DO YOU GUARD AGAINST THE SITUATION OF NOT BEING ABLE TO RECOVER THE
DEFICIENCY IF YOU ARE THE PLEDGEE?
1) Set a minimum bid (if this is actually allowed; JPSP says yes, book says no)
2) Instead of selling the thing, just sue for the entire obligation.
3) Stipulate that if the value of the pledge goes under a certain amount, then the debtor shall be obliged to
pledge additional securities.
The foregoing articles govern the following pledges by operation of law; BUT after sale, the
excess, if any, is returned to the pledgor:
• Possessor in good faith may retain the thing on which he spent for necessary expenses until
he is reimbursed.
• He who works on a movable may retain the same until paid for the work.
• Depositary may retain thing until paid for the deposit.
• Agent may retain objects of agency until reimbursed by principal.
• Laborer’s wages are considered a lien on goods manufactured or work done.
If the first four requisites are present, there is already a valid mortgage between the parties –
mortgagor and mortgagee.
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But to affect third persons, there is a need to comply with the fifth requisite: The document of mortgage
must be recorded in the Registry of Property. This is because recording the document in the Registry of
Property serves as notice to 3rd persons. This is similar to the requirement in pledge that the pledge be in a
public document.
This article 2073 applies only if there are two or more guarantors of the same debtor for the
same debt and one of them has paid:
1. by virtue of a judicial demand; or
2. when the principal debtor is insolvent.
General Rule: A debtor is liable with ALL his property, present and future, for the fulfillment of his
obligations.
PROCESS:
After the confirmation of the sale, the purchaser shall be entitled to the possession of the
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property, and all the rights of the mortgagor with respect to the property are severed or
terminated. The equity of redemption period actually extends until the sale is confirmed. Even after the
lapse of the 90 to 120 day period, the mortgagor can still redeem the property, so long as there
has been no confirmation of the sale yet. Therefore, the equity of redemption can be
considered as the right of the mortgagor to redeem the property
BEFORE the confirmation of the sale.
IMPORTANT: After the confirmation of the sale, the mortgagor does not have a
right to redeem the property anymore. This is the general rule in judicial foreclosures – there is no
right of redemption after the sale is confirmed.
The exception to this rule is when the judicial foreclosure is done by a BANK. In
such a case, there is still a right of redemption within one year from the
registration of the sale.
STEP 6: The proceeds of the sale of the property will be disposed as follows:
1. First, the costs of the sale will be deducted from the price at which the
property was sold
2. The amount of the principal obligation and interest will be deducted
3. The junior encumbrances will be satisfied
4. If there is still an excess, the excess will go back to the mortgagor. In mortgage,
the mortgagee DOES NOT get the excess (unlike in pledge).
This need not be done within a span of 21 days. For example, you can publish on
August 30, which is a Friday, then on September 2, which is a Monday, and then on
September 9, which is also a Monday. In this case, publication for three consecutive
weeks is completed within 11 days.
There is no need for personal notice to the mortgagor, unlike in a guaranty. This is because the
mortgagor, having defaulted in the principal obligation, should expect that a foreclosure is forthcoming. This
is because the mortgagor, having defaulted in the principal obligation, should expect that a foreclosure is
forthcoming. If you’re the mortgagee, you would want to surprise the mortgagor so the he cannot employ
dilatory tactics such as getting an injunction in order to delay the foreclosure. If you’re nasty, you should
publish it in Abante, which is a newspaper of general circulation, but which nobody consults for the purpose
of checking if their mortgaged property is about to be foreclosed.
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justice or auxiliary justice of the peace of the municipality, or of a notary public of the municipality, who
shall be compensated with FIVE PESOS for each day of actual work performed (wow $$$).
Who may bid: Anyone may bid at the sale, unless there are exceptions stipulated in the
mortgage deed. Even the mortgagee/creditor may bid. And unlike in pledge, even if the
mortgagee/creditor is the sole bidder, the sale is still valid. This is because there is a right to
redeem in extra-judicial foreclosure. Therefore, the lower the price at which it is sold, the better the chances
of the mortgagor/debtor to redeem the property.
No, because the property must be sold to the highest bidder. Parties cannot, by agreement, contravene the
law. However, this rule may not apply where the purchaser happens to be the creditor or mortgagee
himself. The mortgagor can argue that the stipulation should be binding on the mortgagee on the principle
of estoppel.
What is the effect of inadequacy of the price at which the property is sold at auction?
If there is a right to redeem, inadequacy of price is not material because the debtor may
reacquire the property. It will even make it easier for him to redeem it if it is sold at a low price.
Mere inadequacy of price will not be sufficient to set aside the sale unless the price is so
inadequate as to shock the conscience.
Exception to this rule: If the party foreclosing is a BANK, Sec 47 of the General Banking
Law provides that the purchaser shall immediately have the right to take possession of the property
upon confirmation of the sale.
STEP 5: Redemption
The debtor has the right to redeem the property sold within one year from the date of the sale,
reckoned from date of execution of the certificate of sale since it is only from that date that the sale
takes effect as a conveyance.
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CHATTEL MORTGAGE
If the first four requisites are present, there is already a valid mortgage between the parties –
mortgagor and mortgagee.
But to affect third persons, there is a need to comply with the fifth requisite: The document of mortgage
must be recorded in the Chattel Mortgage Registry. This is because recording the document in the
Chattel Mortgage Registry serves as notice to 3rd persons. This is similar to the requirement in pledge that
the pledge be in a public document and the requirement in Real Estate Mortgage that it must be recorded in
the Registry of Property.
In case of default, the following persons may redeem the property before it
is sold, by paying the amount of the obligation plus costs and expenses
incurred from the breach:
a. the mortgagor
b. a subsequent mortgagee
c. a subsequent attaching creditor
3. Foreclosure
The parties can stipulate for a private sale upon default.
If there is no stipulation, the applicable rule is Section 14 of the Chattel
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Mortgage Law.
ANTICHRESIS
What are the obligations of the creditor under the contract of antichresis?
When can the debtor get back the property subject of the antichresis?
GR: The debtor can get it back only when he has totally paid the principal obligation. This is because the
property stands as a security for the payment of the principal obligation.
EXCEPTION: if the creditor does not want to pay the taxes and charges
upon the estate. In such a case, the creditor may compel the debtor to get the property back,
The creditor in antichresis since he has no ownership over the property here are the remedies
in case of deafault:
Can the parties stipulate on an extra-judicial foreclosure? Yes, in the same manner that
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they are allowed in pledge and mortgage.
CONCURRENCE OF PREFERENCE
2. Does not create an interest in property – Preference simply creates a right to be paid first from the
proceeds of the sale of property of the debtor. It does not create a lien on the property itself, but merely a
preference in the application of the proceeds of the
property after it is sold.
The creditor does not have the right to TAKE the property or SELL it as against
another creditor – Preference is not a question as to who may take and sell property
belonging to the debtor. Preference applies after a sale, and it is a question of
application of the proceeds of the sale to satisfy the debt.
4. It must be asserted – If the right claimed is not asserted and maintained, it is lost. If
property has not been seized, it is open to seizure by another.
5. It must be maintained – Where a creditor released his levy, leaving the property in
possession of the debtor, thereby indicating that he did not intend to press his claim
further as to that specific property, he is deemed to have abandoned his claim of
Preference.
There must be a proceeding such as an insolvency proceeding wherein the creditors can file their claims.
The right becomes significant only after the properties of the debtor have been inventoried and liquidated.
The title on Concurrence and Preference of Credits refers only to credits which are already due.
If one of the spouses is insolvent, the assets of the CPG or AC do not pass to the assignee in insolvency
elected by the creditors or appointed by the court. The reason for this is that the CPG or AC is distinct
from the individual spouses. The exemption applies provided that:
1. The CPG or AC subsists; and
2. The obligations of the insolvent spouse have not redounded to the benefit of the
Family.
The insolvency of the husband does not dissolve the CPG or AC.
The Civil Code classifies credits against a particular insolvent into three general categories:
GR: With respect to the same specific movable or immovable, creditors merely concur. There is no
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preference among them.
EXCEPTION: except that the State always gets paid the taxes imposed on the property first.
To be a preferred credit:
If it’s a pledge, it must be in a public instrument.
If it’s a chattel mortgage, it must be registered in the chattel mortgage registry.
(5) Mortgage
The mortgage must be registered in the Registry of Property in order for the credit to be a
preferred claim against the immovable.
(7) Credits annotated in the Registry of Property in virtue of judicial order, attachment, or
execution
The credits must also be registered in order to be preferred.
Unlike the other special preferred credits, these credits do not share
proportionately in the property upon which they are imposed. To determine the order of
priority among several credits of this kind, their dates should be the basis. The first one to be
registered will be prioritized over the others.
Important Items
(2) Labor Claims
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Art. 110 of the Labor Code has modified 2244 by moving labor claims to number (1), ahead of funeral
expenses. Labor claims are still not in the level of special preferred claims under 2241 and 2242. The Labor
Code merely moved it up to the top of the list of ordinary preferred claims. Also, Art. 110 of the Labor Code
has removed the one-year limitation.
Under 2244, on the other hand, taxes of other kinds are only ordinary preferred credits and are only 9th,
10th, and 11th priorities with respect to the free portion of the property of the debtor.
Examplesare income tax, license fees, and capital gains tax. These are not imposed on specific property of
the debtor, so they are ordinary preferred claims, which can be collected against the debtor’s free property.
Taxes owing the national government should be satisfied first, followed by the provincial government, then
the city or municipal government.
This does not include those registered credits which fall under 2241 and 2242, such as those arising from a
pledge or mortgage, or an attachment of specific real property.
Those without special preferred claims will constitute the debtor’s Free Property. Remember to take out
property held by the debtor only in the capacity of trustee. He may have legal
title to it, but the beneficial title and ownership actually belong to another person. Since the property does
not belong to the debtor, they should not be included in the proceedings. The same goes for property of the
AC of CPG, property held as lessee or usufructuary, etc
For the special preferred claims, look out for the following because they are the most common:
1. For movables:
a. import duties/other taxes imposed directly on the movable
b. an obligation secured by a pledge (in a public instrument) or a chattel mortgage
(registered)
c. claim of unpaid seller for the price of the movable
2. For immovables:
a. real estate taxes
b. an obligation secured by a real estate mortgage (registered)
c. claim of unpaid seller for the price of the immovable
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d. credits annotated in the Registry of Property by attachment or execution upon the
Immovable. Put the ordinary preferred claims under 2244 together. List them down according to the order
under 2244, since 2244 already gives the order of preference. Remember, though, that labor claims are on
top.
What if you have more than one preferred creditor over the same property?
Ex: The claims against a car are: import duties, chattel mortgage, and unpaid seller.
In this case, pay the taxes first. Since the mortgage creditor and the unpaid seller are both
special preferred creditors, they will share the balance proportionately. There will only be
proportionate sharing in case the value of the thing after payment of taxes is not enough to satisfy all of the
special preferred claims against it. If the value of the thing is sufficient, then
all the special preferred claims must be paid in full.
Fourth: If, after paying the taxes and other special preferred claims, there is an excess, take the value of
the excess and add it to the debtor’s Free Property.
Fifth: If the value of the specific property is not enough to satisfy the taxes and other special preferred
claims, and there is a deficiency, follows these rules:
a. If the deficiency is in a credit arising from a pledge, real mortgage, or chattel mortgage,
put the deficiency in the ordinary preferred credits group. Why do we know right away
that it is an ordinary preferred credit? It is a credit in a public instrument, so it is an
ordinary preferred credit under (14) of 2244. You know it’s in a public instrument because
it was treated at first as a special preferred credit, and the requirement under 2241 and
2242 is that these transactions be registered (for real and chattel mortgage) or be in a
public document (for pledge).
b. If the deficiency is in a credit arising from a transaction that is not in a public document or
is not contained in a final judgment (ex: unrecorded sale), put the deficiency in the
common credits group.
After you have satisfied all of the special preferred claims, update the following:
You may have to add to the Free Property Group if, after satisfying the special preferred
claims, you have an excess. Make sure that you add the excess to the Free Property Group.
Add up the entire value of the Free Property Group because this is what you will use to settle
the ordinary preferred claims and the common claims.
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If there was a deficiency in satisfying the special preferred claims, the deficiency will be an ordinary
preferred credit if it is notarized or is contained in a final judgment.
If there was a deficiency in satisfying the special preferred claims, the credit will be a common
credit if it is not notarized or contained in a final judgment.
DEPOSIT
Bilateral if the deposit is for compensation – gives rise to obligations on the part of both
the depositary and the depositor.
Kinds of Deposit
1. Judicial – takes place when an attachment or seizure of property in litigation is ordered
2. Extra-judicial
(a) Voluntary – delivery is made by the will of the depositor or by two or more
persons each of whom believes himself entitled to the thing deposited; or
(b) Necessary – made in compliance with a legal obligation, or on the occasion
of any calamity, or by travelers in hotels and inns, or by travelers with common
Carriers.
This is the rule that applies if you deposit with a minor or other incapacitated person.
If the depositary is incapacitated, while the depositor is capacitated, the incapacitated does not incur the
obligations of a depositary.
What happens if the depositary deposits the thing with a third person, and it is lost?
1. If there is no stipulation allowing him to deposit with a third person, he is liable
for the loss, whether it was through his or the third person’s fault or through
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fortuitous event.
2. Generally, if the thing is deposited with a third person with permission of the
depositor, and the thing is lost through fortuitous event, the depositary is
not liable for the loss.
3. If the thing is lost through the negligence of the depositary’s employees, the depositary is
liable for the loss (The employee is the agent of the depositary;
principal bears the loss resulting from the negligence of his agent) . Here, it
is not necessary that the employees be manifestly careless or unfit, but it is
necessary that the loss be through negligence.
What are the obligations of the depositary if the thing earns interest?
1. Collect the interest, as well as the capital, as it becomes due; and
2. Take such steps as may be necessary to preserve its value and the rights
corresponding to it.
GENERAL RULE: The depositary may commingle grain or other articles of the same kind and quality.
EXCEPTION: If there is a contrary stipulation
De Leon example:
A, depositary, received the following:
from B: 30 cavans of rice
from C: 20 cavans of rice
from D: 10 cavans of rice
The rice was of the same kind and quality.
Can A put all of the rice together?
Yes, since there is no stipulation forbidding it. B will own 30/60 or ½ of the whole pile; C will
own 20/60 or 1/3; and D will own 10/60 or 1/6.
But if the articles deposited by different depositors are not of the same kind and quality, or if
there is a stipulation forbidding it, the depositary must keep them separate or at least
identifiable, since he must return to each depositor the very same thing deposited.
The depositary can only open the box without incurring liability:
1. When there is presumed authority – authority is presumed if the key has been
delivered to him; or
2. When there is necessity for opening the box in order to execute the
instructions of the depositor as regards the deposit
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ART. 1995 Causes for extinguishment of deposit:
1. loss or destruction of the thing deposited
2. In case of gratuitous deposit, upon the death of either the depositor or the
Depositary
When is the hotel liable for the loss of the effects of its guests?
So as a general rule, if armed men enter the hotel and steal your things, the
hotel is excused from liability because it is considered a fortuitous event.
However, if the hotel failed to take reasonable precautions (ex: secluded
island with only one security guard stationed near the shore and lots of
foreigners checked in), it will still be liable for its negligence.
2. When the loss is due to the acts of the guest (who is the owner of the thing),
his family, servants, or visitors; and
3. When the loss arises from the character of the things brought into the hotel
Example of thing where the loss arises from the character of the thing: If
you bring a Dalmatian, or a snake, or Cyrus’ pet hamster into the hotel, by
the very nature of these pets, they could easily get lost in the premises.
Examples:
1. attachment of properties by sheriff upon the filing of a complaint
2. garnishment of money
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3. receiver may be appointed by the court to administer and preserve the
property in litigation
4. personal property may be seized by the sheriff in suits of replevin
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