Law 107: Credit Transactions

Interest

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Read the case of RCBC v. Alfa RTW Manufacturing Corp., et al., G.R. No. 133877, November 14, 2001, as an example of how the various types of interest are computed.

Insolvency: Liquidation

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A. General Concepts

Art. 2238 to 2240

R.A. No. 10142, Sec. 2, Sec. 4

B. Liquidation of Insolvent Individual Debtor

1. Voluntary Liquidation

R. A. No. 10142, Sec. 103, Sec. 104

2. Involuntary Liquidation

a. Acts of Insolvency

Sec. 105

b. Show Cause Order; Injunction; Default

Sec. 106, Sec. 107

c. Absent Individual Debtor

Sec. 108

d. Custody of Property; Sale of Property

Sec. 109, Sec. 110

C. Liquidation of Insolvent Juridical Debtors

Sec. 93

1. Voluntary Liquidation

Sec. 90

2. Involuntary Liquidation
D. Provisions Common to Liquidation of Individual and Juridical Debtors

Sec. 111

1. Liquidation Order

Sec. 112, Sec. 113

2. Liquidator

a. General Concepts

Sec. 115 to 118, Sec. 29

Sec. 120, Sec. 122

b. Powers, Duties and Responsibilities

Sec. 119, Sec. 113, Sec. 123, Sec. 126, Sec. 129, Sec. 131, Sec. 132, Sec. 121

3. Claims

Sec. 4(c)

a. Determination of Claims

Sec. 112, Sec. 123 to 126

b. Treatment of Claims

1) Secured Creditor Claims

Sec. 113, Sec. 114

Consuelo Metal Corporation, v. Planters Development Bank & Maningas, G.R. No. 152580, June 26, 2008, 555 SCRA 465.

2) Unsecured Creditor Claims

Sec. 123, Sec. 113

4. Treatment of Contracts

a. Termination or Breach of Contracts

Sec. 113

b. Avoidance Proceedings

Sec. 127, Sec. 58, Sec. 128

5. Liquidation Plan

Sec. 129 to 133

6. Termination of Proceedings

Sec. 121, Sec. 134, Sec. 135

E. Ancillary Proceedings

1. Securities Market Participant

Sec. 136

2. Banks and Other Financial Institutions Under Rehabilitation Receivership Pursuant to a State-funded or State-mandated Insurance System.

Sec. 137, Sec. 138

3. Cross-Border Insolvency Proceedings

Sec. 139 to 142

Insolvency: Rehabilitation

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A. General Concepts

R.A. No. 10142, Sec. 2

B. Court-Supervised Rehabilitation

1. Voluntary Proceedings

Sec. 12

2. Involuntary Proceedings

Sec. 13, Sec. 14

3. Provisions Common to Voluntary and Involuntary Rehabilitation Proceedings

a. Commencement Order

Sec. 15 to 17, Sec. 19, Sec. 21

b. Stay or Suspension Order

Sec. 16, Sec. 20

1) General Concepts

Rizal Commercial Banking Corporation v. Intermediate Appellate Court, G.R. No. 74851, December 9, 1999, 320 SCRA 279.

Sobrejuanite v. ASB Development Corporation, G.R. No. 165675, September 30, 2005, 471 SCRA 763.

2) Exceptions to Stay or Suspension Order

Sec. 18, Sec. 16

Metropolitan Waterworks & Sewerage System v. Daway and Maynilad Water Services, Inc., G.R. No. 160732, June 21, 2004, 432 SCRA 559.

Panlilio, et al. v. Regional Trial Court, Branch 51, City of Manila, G.R. No. 173846, February 2, 2011, 641 SCRA 438.

c. Subsequent Actions

Sec. 22, Sec. 24 to 27

d. Rehabilitation Receiver

1) General Concepts

Sec. 28 to 30, Sec. 32 to 35, Sec. 40

2) Powers, Duties and Responsibilities

Sec. 47, Sec. 24, Sec. 31, Sec. 39, Sec. 41

e. Creditors’ Committees

Sec. 42, Sec. 43, Sec. 8, Sec. 9

f. Management Committee

Sec. 47, Sec. 36 to 38

g. Claims

Sec. 4(c)

1) Determination of Claims

Sec. 16, Sec. 44 to 46

2) Treatment of Claims

a) Secured Creditor Claims

Sec. 60, Sec. 61

b) Employee Claims

Sec. 56, Sec. 16

c) Excluded Claims

Sec. 23

h. Treatment of Assets

Sec. 47

1) Unencumbered Assets

Sec. 48, Sec. 49, Sec. 52

2) Encumbered Assets

Sec. 17, Sec. 50, Sec. 51, Sec. 53

i. Treatment of Contracts

1) Confirmation or Termination of Contracts

Sec. 57, Sec. 16

2) Avoidance Proceedings

Sec. 58, Sec. 59

j. Rehabilitation Plan

1) General Concepts

Sec. 62, Sec. 54, Sec. 55

2) Cram Down Effect

Sec. 63 to 73

Bank of the Philippine Islands v. Securities & Exchange Commission, et al., G.R. No. 164641, December 20, 2007, 541 SCRA 294.

k. Termination of Proceedings

Sec. 74, Sec. 75

l. Conversion to Liquidation Proceedings

Sec. 92

C. Pre-negotiated Rehabilitation

Sec. 76 to 82, Sec. 92

D. Out-of-Court Rehabilitation

Sec. 83, Sec. 84.

1. General Concepts

2. Benefits of Out-of-Court Rehabilitation

Sec. 85 to 89

Insolvency: Suspension of Payments

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A. General Concepts

R.A. No. 10142, Sec. 2, Sec. 94. Sec. 95

1. Automatic Stay

Sec. 96

2. Suspension Order

Sec. 96

3. Injunction Against Debtor

Sec. 95

B. Commissioner

Sec. 95, Sec. 97

C. Creditors’ Meeting

Sec. 97, Sec. 99, Sec. 100

D. Proposed Agreement

Sec. 94, Sec. 101, Sec. 102

E. Treatment of Claims

Sec. 96, Sec. 98, Sec. 101

1. Secured Creditor Claims

2. Exempt Claims

3. Excluded Claims

Insolvency

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The Concept of Insolvency

Art. 2236, Art. 2237

R. A. No. 10142, Sec. 2, Sec. 4, Sec. 146 to Sec. 148

A. Nature of Insolvency Proceedings

R. A. No. 10142, Sec. 3, Sec. 7, Sec. 6

B. Civil and Criminal Liability in Insolvency Proceedings

R. A. No. 10142, Sec. 10. Sec. 145

Concurrence & Preference of Credits

A. General Concepts

R. A. No. 10142, Sec. 62, Sec. 133

B. Classification of Credits

1. Special Preferred Credits

Art. 2241, Art. 2242

R.A. No. 10142, Sec. 136

Art. 2243, Art. 2246 to 2250

De Barreto, et al. v. Villanueva, et al., G.R. No. L-14938, January 28, 1961, 1 SCRA 288, Resolution on Motion to Consider, December 29, 1962, 6 SCRA 929.

Development Bank of the Philippines v. Court of Appeals, G.R. No. 126200, August 16, 2001, 363 SCRA 307.

J.L. Bernardo Construction v. Court of Appeals, G.R. No. 105827, January 31, 2000, 324 SCRA 24.

2. Ordinary Preferred Credits

Art. 2244

P. D. No. 442, Art. 110

R. A. No. 10142, Sec. 133

Art. 2251

3. Common Credits

Art. 2245, Art. 2251

Cordova v. Reyes Daway Lim Bernardo Lindo Rosales Law Offices, et. al, G.R. No. 146555, July 3, 2007, 526 SCRA 300.

Security Transactions: Antichresis

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A. General Concepts

Art. 2132, Art. 2133, Art. 2135, Art. 2138, Art. 2139, Art. 2085, Art. 2089, Art. 2090,

Art. 2091

B. Form of Antichresis

Art. 2134

C. Right of Retention

Art. 2136

D. Foreclosure of Antichresis

Art. 2137

Diego v. Fernando, G.R. No. L-15128, August 25, 1960, 109 Phil 143.

Security Transactions: Real Estate Mortgage

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A. General Concepts

Art. 2085, 2087

B. Form of Real Estate Mortgage

Art. 2125, Art. 2131

C. Obligations Secured

Prudential Bank v. Alviar & Alviar, G.R. No. 150197, July 28, 2005, 464 SCRA 353.

D. Object of Real Estate Mortgage

Art. 2124, 415

1. After Acquired Properties

People’s Bank & Trust Company & Atlantic Gulf and Pacific Co. of Manila v. Dahican Lumber Company, et al., G.R. No. L-17500, May 16, 1967, 20 SCRA 84.

2. Effect and Extent

Art. 2126, Art. 2127, Art. 2129

E. Right to Alienate Real Estate Mortgage Credit

Art. 2128, Art. 1625, Art. 1627

F. Right to Alienate Collateral

Art. 2085, Art. 2130

G. Foreclosure of Real Estate Mortgage

1. Judicial Foreclosure

a. Complaint for Foreclosure

Rules of Court, Rule 68, Sec. 1

b. Judgment on Foreclosure

Rules of Court, Rule 68, Sec. 2

Korea Exchange Bank v. Filkor Business Integrated, Inc., et al., G.R. No. 138292, April 10, 2002, 380 SCRA 381.

c. Equity of Redemption

Rules of Court, Rule 68, Sec. 2

d. Foreclosure Sale

Rules of Court, Rule 68, Sec. 3 to 5, Sec. 7, Sec. 8

Rules of Court, Rule 39, Sec. 31, Sec. 32, Sec. 34

e. Right of Redemption

Huerta Alba Resort, Inc. v. Court of Appeals, G.R. No. 128567, September 1, 2000, 339 SCRA 534

f. Right to Surplus or Deficiency

Rules of Court, Rule 68, Sec. 4, Sec. 6

Rules of Court, Rule 86, Sec. 7

2. Extrajudicial Foreclosure

a. Special Powers

Act No. 3135, Sec. 1

b. Foreclosure Sale

Act No. 3135, Sec. 2

A.M. No. 99-10-05-0, as amended

1) Requirement of Notice

Grand Farms, Inc. & Philippine Shares Corporation v. Court of Appeals, et al., G.R. No. 91779, February 7, 1991, 193 SCRA 748.

2) Conduct of Sale

Act No. 3135, Sec. 4, Sec. 5
A.M. No. 99-10-05-0

c. Right of Redemption

Act No. 3135, Sec. 6

A.M. No. 99-10-05-0

1) Who may Redeem

Act No. 3135, Sec. 6

Rules of Court, Rule 39, Sec. 27

Medida, et al. v. Court of Appeals, et al., G.R. No. 98334, May 8, 1992, 208 SCRA 887

2) How to Redeem

Rules of Court, Rule 39, Sec. 28, Sec. 29, Sec. 30, Sec. 33

d. Right to Deficiency

Rules of Court, Rule 86, Sec. 7

e. Right to Surplus

Suico v. Philippine National Bank, G.R. No. 170215, August 28, 2007, 531 SCRA 514.

f. Right to Possession

1) During Redemption Period

Act No. 3135, Sec. 7 to 9

2) After Consolidation of Ownership

Rules of Court, Rule 39, Sec. 33

3) When Held by a Third Party

Rules of Court, Rule 39, Sec. 33, Sec. 16

BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc., G.R. No. 176019, January 12, 2011, 639 SCRA 405.

Security Transactions: Chattel Mortgage

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A. General Concepts

Art. 2085, Art. 2087, Art. 2140, Art. 2141

PCI Leasing & Finance, Inc. v. Trojan Metal Industries Inc., et al., G.R. No. 176381, December 15, 2010, 638 SCRA 615.

B. Form of Chattel Mortgage

Act No. 1508, Sec. 4 to 6

C. Obligations Secured

Act No. 1508, Sec. 5

ACME Shoe, Rubber & Plastic Corporation v. Court of Appeals, G.R. No. 103576, August 22, 1996, 260 SCRA 714.

D. Object of Chattel Mortgage

Art. 2124, Art. 416, Art. 417

Act No. 1508, Sec. 2

Makati Leasing & Finance Corporation v. Wearever Textile Mills, Inc. & Court of Appeals, G.R. No. L-58469, May 16, 1983, 122 SCRA 296.

1. Reasonable Description Rule

Act No. 1508, Sec. 7

2. After Acquired Properties

Act No. 1508, Sec. 7

E. Ownership of Collateral

Dy v. Court of Appeals, G.R. No. 92989, July 8, 1991, 198 SCRA 826.

F. Foreclosure of Chattel Mortgage

Act No. 1508, Sec. 8, Sec. 14

A.M. No. 99-10-05-0

1. Equity of Redemption

Act No. 1508, Sec. 13, Sec. 14

2. Right of Redemption

Rizal Commercial Banking Corporation v. Royal Cargo Corporation, G.R. No. 179756, October 2, 2009, 602 SCRA 545.

3. Right to Possession

Servicewide Specialists, Inc. v. Court of Appeals, G.R. No. 110048, November 19, 1999, 318 SCRA 493.

4. Right to Surplus or Deficiency

Act No. 1508, Sec. 14

PAMECA Wood Treatment Plant, Inc. v. Court of Appeals, G.R. No. 106435, July 14, 1999, 310 SCRA 281.

Security Transactions: Pledge

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A. General Concepts

Art. 2085, Art. 2087, Art. 2123

B. Form of Pledge

Art. 2096

C. Obligations Secured

D. Object of Pledge

Art. 2094, Art. 2095, Art. 416, Art. 417

E. Ownership of Collateral

Art. 2103, Art. 2102, Art. 2101, Art. 1951, Art. 2108, Art. 2112, Art. 2097

Estate of Litton v. Mendoza & Court of Appeals, G.R. No. L-49120, June 30, 1988, 163 SCRA 246.

F. Rights of Third Party Pledgor

Art. 2120, Art. 2117, Art. 2066 to 2070, Art. 2079 to 2081

G. Right to Possession

Art. 2093, Art. 2110

1. Right of Retention

Art. 2098, Art. 2109, Art. 2099, Art. 2100, Art. 2104, Art. 2106

2. Right to Payment

Art. 2102, Art. 2118

Manila Banking Corporation v. Teodoro, Jr. and Teodoro, G.R. No. 53955, January 13, 1989, 169 SCRA 95.

Citibank, N.A. & Investors Finance Corporation v. Sabeniano, G.R. No. 156132, October 12, 2006, 504 SCRA 378.

H. Return of Collateral

Art. 2105, Art. 2107, Art. 2108, Art. 2110, Art. 2111

I. Foreclosure of Pledge

Art. 2112, Art. 2119

1. Who May Bid

Art. 2113, Art. 2114

2. Effect of Notarial Sale

a. Extinction of Principal Obligation

Art. 2115, Art. 2116

b. Right of Redemption

Paray & Espeleta v. Rodriguez, et al., G.R. No. 132287, January 24, 2006, 479 SCRA 571.

c. Right to Surplus or Deficiency

Art. 2115

J. Legal Pledges

Art. 2121

1. Examples of Legal Pledges

Art. 1944, Art. 1951, Art. 1994, Art. 2004, Art. 546, Art. 1731

2. Foreclosure of Legal Pledge

Art. 2122, Art. 2121

Security Transactions: Pledge and Mortgage

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A. General Concepts

Art. 2085, Art. 2087

B. Obligations Secured

Art. 2086, Art. 2052, Art. 209

C. Contract to Pledge or to Mortgage

Art. 2092

D. Remedies of Pledgee and Mortgagee

E. Indivisibility of a Pledge or Mortgage

Art. 2089, Art. 2090

F. Pactum Commissorium

Art. 2087, Art. 2088

1. Elements

2. Effect on Pledge or Mortgage

Development Bank of the Philippines v. Court of Appeals, G.R. No.118342, January 5, 1998, 284 SCRA 14.

Bustamante v. Rosel, G. R. No. 126800, November 29, 1999, 319 SCRA 413.

Ong v. Roban Lending Corporation, G.R. No. 172592, July 9, 2008, 557 SCRA 516.

G. Equitable Mortgage

Art. 1602 to 1605

Security Transactions: Surety

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A. General Concepts

Art. 2047, Art. 1211, Art. 1216,Art. 2082 to 2084

B. Form of Surety

Art. 1403

C. Obligations Secured

Art. 2053

Security Bank & Trust Company v. Cuenca, G.R. No. 138544. October 3, 2000, 341 SCRA 781.

D. Distinguished from Standby Letter of Credit

E. Distinguished from Guaranty

Art. 2047

Palmares v. Court of Appeals & M.B. Lending Corporation, G.R. No. 126490, March 31, 1998, 288 SCRA 422.

E. Zobel, Inc. v. Court of Appeals, G.R. No. 113931, May 6, 1998, 290 SCRA 1.

International Finance Corporation v. Imperial Textile Mills, Inc., G.R. No. 160324, November 15, 2005, 475 SCRA 149.

Philippine Blooming Mills, Inc. & Ching, v. Court of Appeals, G.R. No. 142381, October 15, 2003, 413 SCRA 445.

F. Distinguished from Joint and Solidary Obligations

Art. 2047, Art. 2066, Art. 2067, Art. 1217

Escano & Silos v. Ortigas, Jr., G. R. No. 151953, June 29, 2007, 526 SCRA 26.

Security Transactions: Guaranty

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A. General Concepts

Art. 2047, Art. 2048, Art. 2051

B. Form of Guaranty

Art. 2055, Art. 1403

C. Obligations Secured

Art. 2052 to 2054

D. Parties to a Guaranty

Art. 2056. Art. 2057, Art. 2049, Art. 2064, Art. 2065

E. Benefit of Excussion

Art. 2058 to 2064, Art. 2081

Tupaz IV & Tupaz v. Court of Appeals & Bank of the Philippine Islands, G.R. No. 145578, November 18, 2005, 475 SCRA 398.

F. Right to Protection

Art. 2071

G. Right to Indemnification

Art. 2066, Art. 2050, Art. 1236, Art. 2069, Art. 2070, Art. 2072

H. Right to Subrogation

Art. 2067, Art. 2050, Art. 1237, Art. 2068, Art. 2080

I. Rights of Co-Guarantors

1. Benefit of Division

Art. 2065, Art. 2078

2. Right to Reimbursement
Art. 2073 to 2075.

J. Extinguishment and Right of Release

Art. 2076, Art. 2077, Art. 2079, Art. 2080

Security Transactions

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The Concept of Security

A. General Concepts

1. Distinguished from Securities

R. A. No. 8799, Sec. 3.1

2. Distinguished from Securitization
B. Events of Default

C. Kinds of Security Transactions

1. Personal Security Transactions

2. Real Security Transactions

3. In the Context of Insolvency

R.A. No. 10142, Sec. 4 (p) (ll) (kk) (jj) (qq) (pp) (t)

Letters of Credit

A. General Concepts

Code of Commerce, Art. 567, Art. 568, Art. 2

Transfield Philippines, Inc. v. Luzon Hydro Corporation Australia, et al., G.R. No. 146717, November 22, 2004, 443 SCRA 307.

B. Kinds of Letters of Credit

1. Commercial Letters of Credit

2. Standby Letters of Credit

C. Rule of Strict Compliance

D. Independence Principle

Trust Receipts

A. General Concepts

P.D. No. 115, Sec. 3, Sec. 4

B. Form of Trust Receipts

Sec. 5, Sec. 6

C. Rights of Entruster

Sec. 7, Sec. 8.

D. Obligations of Entrustee

Sec. 9 to 13

E. Rights of Purchaser

Sec. 11

Colinares & Veloso v. Court of Appeals, G.R. No. 90828, September 5, 2000, 339 SCRA 609.

Deposit

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The Concept of Deposit

Art. 1962, Art. 1964, Art. 1967

Voluntary Deposit

A. General Concepts

Art. 1963, Art. 1968, Art. 1969, Art. 1965, Art. 1966, Art. 1995

Bank of the Philippine Islands v. The Intermediate Appellate Court and Zshornack, G.R. No. L-66826 August 19, 1988, 164 SCRA 630.

Triple-V Food Services, Inc. v. Filipino Merchants Insurance Company, Inc., G.R. No. 160544, February 21, 2005.

B. Obligation to Safekeep

1. Way of the Deposit

Art. 1974 to 1978, Art. 1981, Art. 1982

CA Agro-Industrial Development Corporation v. Court of Appeals and Security Bank and Trust Company, G.R. No. 90027, March 3, 1993, 219 SCRA 426.

The Roman Catholic Bishop of Jaro v. De La Pena, G.R. No. L-6913, November 21, 1913, 26 Phil 144.

2. Liability for Loss and Damage

Art. 1972, Art. 1973, Art. 1977, Art. 1978, Art. 1981, Art. 1979, Art. 1990, Art. 1993

a. Liability of Depositary

b. Liability of Depositor

3. Liability for Expenses

Art. 1992

C. Obligation to Return

1. By Whom and To Whom

Art. 1972, Art. 1970, Art. 1971, Art. 1984, Art. 1985, Art. 1212, Art. 1214, Art. 1986, Art. 1991

2. What to Return

Art. 1983, Art. 1896

3. Where to Return

Art. 1987

4. When to Return

Art. 1988, Art. 1989

5. Right of Retention

Art. 1994

Necessary Deposit

A. General Concepts

Art. 1964, Art. 1967, Art. 1996, Art. 1966

B. Examples of Necessary Deposit

1. Compliance with a Legal Obligation

Art. 1996, Art. 1997

2. On the Occasion of a Calamity

Art. 1996, Art. 1997, Art. 2168

3. Passenger Baggage with Common Carriers

Art. 1754

4. Hotels or Inns

Art. 1998 to 2004

YHT Realty Corporation v. Court of Appeals, G.R. No. 126780, February 17, 2005, 451 SCRA 638.

Judicial Deposit

Art. 1964, Art. 2005 to 2009

Warehouse Receipts

A. General Concepts

Act No. 2137, Sec. 1 to 7

B. Obligations and Rights of a Warehouseman

1. Obligation to Deliver

Act No. 2137, Sec. 8 to 19, Sec. 36, Sec. 58

2. Liability for Goods

Sec. 20 to 26

3. Warehouseman’s Lien

Sec. 31 to 36

C. Negotiation and Transfer

Sec. 37 to Sec. 49

D. Criminal Liability

Sec. 50 to Sec. 55

E. General Bonded Warehouses

Act No. 3893, as amended

Philippine National Bank v. Se et al., G.R. No. 119231. April 18, 1996, 256 SCRA 380.

Loan: Simple Loan

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A. General Concepts

Art. 1933, Art. 1953, Art. 1954, Art. 1980

Act No. 2137, Sec. 58 "Fungible goods"

People v. Puig and Porras, G.R. No. 173654-765, August 28, 2008, 563 SCRA 564.

BPI Family Bank v. Franco, G.R. No. 123498, November 23, 2007, 538 SCRA 184.

B. Obligation to Pay

Art. 1955, Art. 1249, Art. 1250

C. Interest

1. Conventional Interest

Art. 1933, Art. 1956, Art. 1253, Art. 1958, Art. 1960, Art. 2154, Art. 1423

Act No. 2655, Sec. 1

Central Bank Circular No. 416, series of 1974

Act No. 2655, Sec. 7, Sec. 7-a

Frias v. San Diego-Sison, G.R. No. 155223, April 3, 2007, 520 SCRA 244.

Concepcion v. Court of Appeals, et al., G.R. No. 122079, June 27, 1997, 274 SCRA 614.

2. Interest on Interest

Art. 1959, Art. 2212

3. Compensatory, Penalty or Indemnity Interest

Art. 1169, Art. 1226, Art. 2209, Art. 2213, Art. 2226, Art. 2227

Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78

Siga-an v. Villanueva, G.R. No. 173227, January 20, 2009, 576 SCRA 696.

Ligutan v. Court of Appeals, G.R. No. 138677, February 12, 2002, 376 SCRA 560.

4. Finance Charges

R. A. No. 3765, Sec. 4, Sec. 6

United Coconut Planters Bank v. Samuel and Beluso, G.R. No. 159912, August 17, 2007, 530 SCRA 567.

5. Usury

a. General Concepts

Art. 1175, Art. 1957, Art. 1961

Act No. 2655, Sec. 1, Sec. 1-a, Sec. 4-a, Sec. 4-b, Sec. 5, Sec. 9-a

Central Bank Circular No. 905, Series of 1982, Sec. 1

b. Usurious Acts

Act No. 2655, Sec. 2 to 4

c. Remedies
Art. 1413

Act No. 2655, Sec. 6 to 10

1) Remedy of Debtor

2) Remedy of Creditor

Carpo v. Chua & Dy Ng, G.R. Nos. 150773, September 30, 2005, 471 SCRA 471.

Loan: Commodatum

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A. General Concepts

Art. 1933, Art. 1935, Art. 1939

1. Consideration in Commodatum

2. Object of Commodatum

Art. 1937, Art. 1936

Producers Bank of the Philippines v. Court of Appeals, G.R. No. 115324, February 19, 2003, 397 SCRA 651.

B. Parties to a Commodatum

1. Ownership by Bailor

Art. 1938, Art. 1933

2. Use by Bailee

Art. 1935, Art. 1940, Art. 1939

3. Solidary Liability of Bailees

Art. 1945

C. Liability for Expenses and Damages

1. Ordinary Expenses

Art. 1933, Art. 1935, Art. 1941, Art. 1943

Pajuyo v. Court of Appeals, G.R. No. 146364, June 3, 2004, 430 SCRA 492.

2. Extraordinary Expenses

Art. 1949

3. Other Expenses

Art. 1950

4. Abandonment by Bailor

Art. 1952

5. Right of Retention by Bailee

Art. 1944, Art. 1951

D. Liability for Loss

Art. 1933, Art. 1942

Republic v. Bagtas, G.R. No. L-17474, October 25, 1962, 6 SCRA 262.

E. Obligation to Return

Art. 1933, Art. 1946 to 1948

Quintos v. Beck, G.R. No. L-46240, November 3, 1939, 69 Phil 108.

Loan

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The Concept of Loan

A. General Concepts

Art. 1933, Art. 1305

1. Obligation to Deliver

Art. 1934

Garcia v. Thio, G.R. No. 154878, March 16, 2007, 518 SCRA 433.

2. Object of a Loan

Art. 1933, Art. 418

3. Consideration of a Loan

Art. 1933

4. Obligation to Return or Pay

Art. 1933, Art. 1232, Art. 1233

B. Contract To Loan

Art. 1934

Saura Import and Export Co. Inc. v. Development Bank of the Philippines, G.R. No. L-24968, April 27, 1972, 44 SCRA 445.

BPI Investment Corporation v. Court of Appeals and ALS Management & Development Corporation, G.R. No. 133632, February 15, 2002, 377 SCRA 117.

Pantaleon v. American Express International, Inc., G.R. No. 174269, August 25, 2010, 629 SCRA 276.

The Concept of Credit

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A. Credit, Debt and Security

B. Credit and Credit Transactions Defined

Republic Act No. 3765, Sec. 3. (2)

People v. Concepcion, G.R. No. L-19190, November 29, 1922, 44 Phil 126.

C. Commercial Credit Transactions

Code of Commerce, Art. 1 to 3

Group Project

2009-11-02T23:50:00.002+08:00

The Group Project is a written report simulating a contract review, on behalf of a fictional client, of all documents required for (a) a loan with real estate mortgage and (b) a loan with chattel mortgage. The documents to be reviewed must be actual documents used in such transactions. At the minimum the contracts that must be reviewed for each transaction is a loan contract and a mortgage contract. The complexity of the transactions and the number of contracts reviewed will be considered for purposes of grading each Group.

The written report must identify to the fictional client the mandatory or essential provisions of law that appear in the documents, stipulations that vary the provisions of law, stipulations that may be in violation of the law, citations of relevant Supreme Court cases, and an analysis of the rights and obligations of the fictional client.

The groups shall be organized on the first day of class.

Special Project

2009-11-01T20:00:00.004+08:00

The Special Project is an oral report (accompanied by a written handout) consisting of an hour-long lecture on one of the topics listed. Purely voluntary, the intention is to assist students who are running for honors or who are working for a specific grade point average. The report must include a discussion of the salient provisions of the law and at least 2 illustrative Supreme Court cases (aside from the case assigned in the outline). Provided the report is well researched and presented, a credit of at most .25 shall be deducted from the final grade of the student. The credit shall not help a student who has a failing or incomplete grade in the Course.

The topics are some of the Special Commercial laws included in the Course:
1. The Code of Commerce/Letters of Credit/The Trust Receipts Law
2. The Truth in Lending Act/Usury Law, and
3. The Warehouse Receipts Law/ The General Bonded Warehouse Act.

Volunteers shall be chosen on a first-to-claim-basis on the first day of class.

Conduct of Recitation/ Case Digests

2009-11-01T11:40:00.001+08:00

Recitation shall be conducted primarily on a non-voluntary basis, and shall include questions on relevant provisions of the law, matters and cases discussed in the reference textbook, and assigned cases.

Case Digests need not include matters relating to procedure unless otherwise indicated, but shall include substantive arguments raised by each party, aside from the facts and substantive rulings of the Supreme Court.