Documentos de Académico
Documentos de Profesional
Documentos de Cultura
Note: the contract of loan is governed by the rules as to the requisites and
TITLE XI: LOAN validity of contracts in general
4 angel‘s notes
CREDIT TRANSACTIONS
Paras, de Leon, Assigned Cases, Class Discussion
Case: Equitable PCI Bank vs. Ng Sheung Ngor Case: Espiritu vs. Landrito
- If extraordinary inflation or deflation is present, the value of the - Stipulation for legal interest but higher rate is charged – VOID
currency at the time of the establishment of the obligation shall be - No interest shall be due unless it has been stipulated in writing
the basis of payment unless there is a stipulation to the contrary - The omission of the interest rate specified in the contract is
- Note the requisites to affect an obligation: considered as bad faith
o Declaration from banco central that there is - Wrong charge of interest led to the invalidity of the sale because it
extraordinary inflation or deflation led to the wrong computation of the principal
- 5% a month was unconscionable and it is not what is stipulated in
the contract (note: such ruling is only applicable to this case)
2. If what was loaned is a fungible thing other than money: debtor
owes another thing of the SAME kind, quantity and quality, even if Case: Jardenil vs. Solas
it should change in value. - Interest after maturity date can only be obtained if EXPRESSLY
STIPULATED (this case is a strict interpretation of the Law)
In case it is impossible to deliver the same kind, its value at the - It is only after an extrajudicial demand that mortgagee is allowed to
time of the PERFECTION OF THE LOAN shall be paid collect legal interest from the mortgagor
Note: payment of interest in kind – what is applicable is the value of the object Case: Sentinel Insurance Co. vs. CA
at the time of payment. - Damages due are not included in the computation of interest as the
two are of different categories and are distinct claims which may be
B. To Pay Interest demanded separately
Article 1956
- Interest shall be expressly stipulated in WRITING Note: if there is no written agreement on the interest but the borrower pays,
- Kinds of Interest: the presumption is that he did it VOLUNTARILY (moral or natural obligation).
o Compensation – for the use of the money (monetary Exception is SOLUTION INDEBITI (payment by mistake (this defense must be
interest) proven)
o Damages – compensatory interest
- This article speaks of the first kind of interest Remember: No compounding of Interest unless expressly stipulated
- When the stipulation to pay is verbal, the voluntary payment is
valid as a performance of a natural obligation. (But GR: Verbal – Article 1961
void; EXCP: voluntary payment) - Usurious contracts shall be governed by the Usury Law and other
- Requisites for recovery of interest special laws, so far as they are not inconsistent with this Code.
o Must be expressly stipulated
o Agreement must be in writing Bank Deposits
o Interest must be lawful - You are actually extending a loan to a bank
- Called an irregular deposit
Q: when does interest earns interest? - In time deposit: you can pre-terminate but you are not entitled to
A: interest due shall earn legal interest from the time it is JUDICIALLY the agreed interest
DEMANDED, although the obligation may be silent upon this point
Case: Gopoco Grocery vs. Pacific Coast Biscuit Co.
Note: if the exact rate of the interest is not mentioned, the legal rate of 12% - Saving deposits are converted into simple commercial loans
shall be payable (deals with (1) loans, (2) forbearance of any money, goods or - Bank: debtor (obtains ownership); Depositor: creditor
credits, (3) judgments involving such loans or forbearance) - In a simple loan, money deposited is only an ordinary credit as it
forms the asset of the bank
No increase in interest shall be due unless such increase has also been
expressly stipulated Case: Central Bank of the Phil. Vs. Morfe
- Deposits are considered simple loans and are not preferred credits
Article 1957 - Even if you acquired a favorable judgment from the court, you
- Usury law should not be circumvented don’t become a preferred credit. You still have to file a claim from
- Note however, Usury law no longer exists. Thus there is no more the liquidator or receiver
maximum rate of interest. The rate will just depend on the mutual
agreement of the parties Case: Serrano vs. Central Bank of the Phil
- Bank deposits are in the nature of irregular deposits. They are loans
Article 1958 because they earn interest and because the bank can use the same
- Determination of interest if in KIND: value should be at time and deposited money
place of PAYMENT
Case: Guingona vs. City Fiscal of Manila
Article 1959 - Failure to return savings deposit to depositor will not constitute
- Speaks of when accrued interest (due and unpaid) earns interest: Estafa through misappropriation but will only give rise to civil
o GR: it will not bear interest liability over which public respondent has no jurisdiction
o EXC: (a) if there is agreement to this effect; (b) if there is
judicial demand
- If it falls under the exception, such will bear interest at eh legal rate TITLE XII: DEPOSIT
5 angel‘s notes
CREDIT TRANSACTIONS
Paras, de Leon, Assigned Cases, Class Discussion
Note: the principal purpose should be the safekeeping of the thing. If When a deposit becomes a loan or commodatum:
otherwise, it is but some other contract like lease or commodatum If thing deposited is non-consumable, the contract loses the
character of a deposit and acquires that of a commodatum despite
Q: what is the degree of care needed in safekeeping? the fact that the parties may have denominated it as a deposit,
A: Same diligence as he would exercise over his property (good father) unless safekeeping is still the principal purpose.
If thing deposited consists of money/consumable things, the
contract is converted into a simple loan or mutuum unless
Characteristics of the Contract of Deposit safekeeping is still the principal purpose in which case it is called an
1. Real – perfected by delivery irregular deposit.
2. Naturally gratuitous – it can either be gratuitous or onerous; note Example: bank deposits are irregular deposits in nature but governed by law
that there is no presumption of payment or compensation unless on loans
stipulated
3. Principal purpose is the safekeeping of the thing delivered Case: Compania Agricola de Ultamar vs. Nepomoceno
IRREGULAR DEPOSIT SIMPLE LOAN
Case: US vs. Igpuara The only benefit is that which accrues The essential cause for the
- If an agent receives money from another agent of his principal to the depositor transaction is the necessity of the
which is the balance of a commission, such transaction becomes a buyer
deposit, thus he can be liable for Estafa if misappropriated The depositor can ask for the return A lender is bound by the provisions of
- Agent does not become owner nor does it imply a permission to of the article at anytime the contract and cannot seek
sue the thing deposited restitution until the time for payment
Depositor in irregular deposit has Common creditors enjoy no
Case: BPI vs. IAC preference over other creditors with preference in the distribution of the
- Based on Central Bank Circular No. 20, when foreign currency is respect to the thing deposited debtor’s property
deposited, it should be sold to central bank. Doing otherwise makes
one liable for the violation of said circular Deposit vs. Sale and Barter
DEPOSIT SALE AND BARTER
Case: CA Agro-Industrial Devt. Corp vs. CA
Ownership is not transferred Ownership is transferred upon
- Rental of safety deposit box is in the form of SPECIAL DEPOSIT.
delivered
- It is not a lease because the full and absolute possession and
Real contract Consensual
control of the safety deposit box was not given to the joint renters.
Generally gratuitous Always Onerous
- It is not a deposit because bank has no control over the content
6 angel‘s notes
CREDIT TRANSACTIONS
Paras, de Leon, Assigned Cases, Class Discussion
Article 1967 Note: if you allow the use – it should not be the primary purpose
- Extrajudicial deposit is either:
o Voluntary – there is mutual consent; made by the will of the Article 1972 (a – to preserve the thing or safekeeping)
depositor - If the degree of diligence is not specified, one should observe the
o Necessary – made in compliance with a legal obligation, on diligence of a good father of a family
the occasion of calamity (depositum miserable), made by - Note however that more care is required if the deposit is for a
travelers in hotels or inns, made by travelers with common compensation than if it is gratuitous
carriers
Note: in case of non-fault on the part of the depositary, the depositor-owner
bears the loss because of the maxim “res perit domino”.
Principal Obligation of the depositary Note: permission shall not be presumed, and its existence must be proved.
a. Preserve the thing
b. Return the Thing
7 angel‘s notes
CREDIT TRANSACTIONS
Paras, de Leon, Assigned Cases, Class Discussion
Q: Can the right to demand the return of the thing deposited prescribe? Article 1985 (b – Form or manner of return)
A: No. In deposit, there is no transfer of ownership. What is transferred is - Speaks of an instance when there is two or more depositors
simply the custody of the thing. In order to ripen into prescription possession - Joint depositor and the thing is capable of division: each one
must be in the concept of an owner, public, peaceful and uninterrupted. cannot demand more than his share
- Solidary depositor and the thing is incapable of division: return to
Article 1979 any of the depositor (exception: if there is a stipulation that the
- GR: depositary is not liable for loss due to fortuitous event thing should be returned to one of the depositors, depositary shall
- This article provides for the EXCEPTIONS: return it only to the person designated)
1. If it is so stipulated
2. If he uses the thing without the depositor’s permission Article 1986 (b – to whom)
3. If he delays its return - Even if the depositor had the capacity at the time of making the
4. If he allows others to use it, even though he himself may deposit but he subsequently loses his capacity during the deposit,
have been authorized to use the same the thing must be returned to his legal representative
Article 1980
- Fixed, savings, and current deposits of money in banks and similar Article 1987 (b – place of return)
institutions shall be governed by the provisions concerning simple - GR: At the place agreed upon by the parties, transportation
loans expenses shall be borne by the depositor.
- Exception: In the absence of stipulation, at the place where the
Note: a bank can COMPENSATE a debtor’s debt with a debtor’s deposit thing deposited might be even if it should not be the same place
because insofar as the deposit is concerned, the relationship between them is where the original deposit was made, provided that there was no
that of debtor and creditor. malice on the part of the depositary
8 angel‘s notes
CREDIT TRANSACTIONS
Paras, de Leon, Assigned Cases, Class Discussion
Q: when is legal compensation possible (requisites)? Security of the Depositary
A:
a. Both are creditors and debtors of each other Article 1994
b. Sum of money or delivery of consumable goods - The depositary may retain the thing in pledge until the full payment
c. Must be due of what may be due him by reason of the deposit (including
d. Must be liquidated and demandable remuneration stipulated)
e. No controversy
Note however: obligations arising from deposit are not extinguished by
Case: Gullas vs. PNB compensation
- GR: set-off can be done because bank and client have a
creditor-debtor relationship Q: if the depositary has returned the thing to the depositor even if the latter
- EXC: With regards to an indorser, notice should be given to has not yet fully paid him, can he still bring an action to recover fees,
him before set-off to protect his interest compensation or expenses?
A: Yes. The depositary only lost the right of retention but he did not lose the
Case: Associated Bank (Westmont Bank) vs. Tan right to recover what may be due him.
- Bank generally has a right to set-off over the deposits therein for
payment of any withdrawals on the part of a depositor. However, Termination of the Contract
the bank should exercise extraordinary diligence, thus notification
is required before set-off may happen Article 1995
- A deposit is extinguished:
Bank’s Failure to Return Amount 1. Upon the loss or destruction of the thing deposited
- Claims for recovery of time deposits plus interest from an insolvent 2. In case of gratuitous deposit, upon the death of either the
bank shall be filed before the liquidation proceedings in the proper depositor or the depositary
court. Failure of bank to honor the time deposit is not a breach of - Other causes provided for by law (1995 is not an exclusive):
trust arising from a depositary’s failure to return the subject matter 1. By claim of the deposit by the depositor at any time
but a mere failure to pay its obligation as a debtor. 2. Expiration of the term
3. Termination of the purpose of the deposit or fulfillment of
Case: Guingona vs. City Fiscal of Manila a resolutory condition
- Failure to Return bank deposit will NOT constitute Estafa, but will 4. By renunciation of the depositary unless deposit is for
only give rise to civil liability consideration (you can only renounce if you have
reasonable grounds or you have a reasonable assumption
When Bank Officials may be guilty of Estafa that the thing was not lawfully acquired by the depositor)
- GR: Failure of bank to return the amount deposited will not 5. Mutual withdrawal from the contract
constitute estafa through misappropriation.
- Exception:
Chapter 3
Case: Guingona vs. City Fiscal of Manila Necessary Deposit
- If the bank entered in its record or books a different amount form
that of the real amount deposited, officials of the bank may be Kinds
guilty of estafa
Article 1996 (1 and 2)
Earnest Money - Deposit is necessary:
- If a sale did not materialize, the earnest money is considered to be 1. When it is made in compliance with a legal obligation
a deposit 2. When it takes place on the occasion of any calamity,
such as fire, storm, flood, pillage, shipwreck, or other
Case: Compania Maritima vs. CA similar events
- if sale did not materialize, then the money should be returned
Article 1997
- Speaks of Governing Rules
Section 3: Obligations of the Depositor
a. Those made in compliance with a legal Obligation
Obligations of the Depositor 1. First, the law creating said deposits
2. Suppletorily, the rule on voluntary deposit
Article 1992
- Gratuitous Deposit: depositor is obliged to reimburse the Example: A borrowed P100,000. 00 from B, and as security thereof,
depositary for the expenses he may have incurred for the pledged his diamond ring. If B uses the ring without the authority of
preservation of the thing deposited A, A may ask that the ring be judicially or extrajudicially deposited.
- Onerous Deposit: to pay the compensation (Article 2104, Civil Code – “the creditor cannot use the thing
pledged, without the authority of the owner, and if he should do
Q: why is this article not applicable to Onerous Deposit? so, or should misuse the thing in any other way, the owner may ask
A: Because expenses for preservation are deemed included in the that it be judicially or extrajudicially deposited." When the
compensation preservation of the thing pledged requires its use, it must be used
by the creditor but only for that purpose.
Note: in this article, the law talks merely of necessary expenses and not the
useful ones or those for mere luxury or pleasure b. Deposits made because of a Calamity
1. First, the rules on Voluntary Deposits
Article 1993 2. Also, Article 2168 of the Civil Code “when during fire, flood, storm,
- GR: if the depositary suffers because of the character of the thing or other calamity, property is saved from destruction by another
deposited, the depositor should be responsible for the loss person without the knowledge of the owner; the latter is bound
sustained by the depositary to pay the former just compensation.” – NEGOTIORUM
- EXC: GESTIUM (quasi-contract)
1. Depositor was not aware of , or was not expected to
know the dangerous character of the thing Article 1998 (3)
2. Depositor knew of the danger but he notified the - The deposit of effects made by travelers in hotels or inns shall also
depositary of the same (depositary have assumed the be regarded as necessary
risk) - Requisites before the hotel or inn can be held liable:
3. Depositary was aware of the danger, even though he 1. Notice was given to the hotel or inns about the objects
had not been notified by the depositor (also an 2. That the depositor took the precautions (may be given
assumption of risk) orally or in written form) which said hotel-keepers or
their substitutes advised relative to the care and
vigilance of their effects
9 angel‘s notes
CREDIT TRANSACTIONS
Paras, de Leon, Assigned Cases, Class Discussion
Note: travelers refer to TRANSIENT and do not include ordinary or regular Article 2006
boarders in any apartment, house, inn or hotel. Guest is synonymous to - movable as well as immovable property may be the object of
travelers. Non-transient are governed by the rules on lease sequestration
- The liability or responsibility by the hotel or inn keeper commences Article 2007
as soon there is an evident intention on the part of the travelers to - The depositary of property or objects sequestrated cannot be
avail himself of the accommodations of the hotel or inn. It does not relieved of his responsibility until the controversy which gave rise
matter whether compensation has already been paid or not, or thereto has come to an end, unless the court so orders
whether the guest has already partaken of food and drink or not.
Article 2002
- Speaks of an instance when hotel-keeper is not liable
- The hotel-keeper is not liable for compensation if the loss is due to
o the acts of the guest, his family, servants or
visitors,
o or if the loss arises from the character of the things
brought into the hotel.
Note: the law does NOT distinguish what kind of acts are referred to. Acts
therefore may either be the result of voluntary malicious act or simply of
negligence.
Article 2003
- The hotel-keeper cannot free himself from responsibility by posting
notices to the effect that he is not liable for the articles brought by
the guest. Any stipulation between the hotel-keeper and the guest
whereby the responsibility of the former as set forth in articles
1998 to 2001 is suppressed or diminished shall be void.
Article 2004
- The hotel-keeper has a right to retain the things brought into the
hotel by the guest, as a security for credits on account of lodging,
and supplies usually furnished to hotel guests.
Note however that the lien or the right of retention does not exist when the
debtor is not a guest of the hotel.
Chapter 4
Sequestration or Judicial Deposit
Article 2005
- A Judicial deposit or sequestration takes place when an attachment
or seizure of property in litigation is ordered by a court
- Garnishment of property is to satisfy a writ of executions
- The property is brought into CUSTODIA LEGIS, under the sole
control of the court
Note: the purpose of a judicial deposit is to maintain the status quo during the
pendency of the litigation or to insure the right of the parties to the property
in case of a favorable judgment
10 angel‘s notes
CREDIT TRANSACTIONS
Paras, de Leon, Assigned Cases, Class Discussion