WEEK 1 CREDIT TRANSACTIONS

WEEK 1

CREDIT TRANSACTIONS

Chriszel Ann I. Queñano

​Shena Fatima P. Dando

​LAW SCHOOL VERSION!

​MECHANICS: TIC-TAC-TOE LAW SCHOOL VERSION

1. ​The class will be divided into two. Each team will think of their team names.

2. ​The team will also set their buzzer sound everytime they will answer. (Ex. meow-meow)

3. ​Before each questions, the team will choose a player/representative who will answer.

4. ​The first who answers right will get a turn to draw in the tic tac toe board. If the player fails to answer, the other team get the chance to draw on the tic tac toe board.

5. ​The first team who will draw 3 straight X's or 3 O's (horizontal, vertical or diagonal) will be the winner and get one point.

6. ​The team who gathered the most number of points will be declared as winners and the losing team will do a DARE after the end of the report.

​TOPIC OUTLINE

​1. Credit and Debt distinguished

​2. Credit Transactions

​3. General Provisions on Loan

​4. Commodatum

​5. Simple Loan

CREDIT AND DEBT DISTINGUISHED​

Multiple Choice

What is the sum credited on the books of a company to a person who appears to be entitled to it;

• Loan

• Debt

• Credit

• Mutuum

Multiple Choice

money, goods or services which someone owes.

• Credit Card

• Debit Card

• Credit

• Debt

​GENERAL PROVISIONS ON LOAN

Articles 1156, 1305, 1306, 1933 and 1934, Civil Code​

​Art. 1156

An obligation is a juridical necessity to give, to do or not to do. (n)​

Multiple Choice

A ________ is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service

• obligation

• memorandum of agreement

• contract

• barter

​Art. 1305

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service

Multiple Choice

In a contract, who may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

• Obligor

• Obligee

• Creditor

• Contracting Parties

​Art. 1306

​The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. (1255a)

​

​Loan is governed by the rules as to the requisites and validity of contracts in general.

​ART. 1933

By the contract of loan, one of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time and return it, in which case the contract is called a commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid, in which case the contract is simply called a loan or mutuum.

​

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay interest.

In commodatum the bailor retains the ownership of the thing loaned, while in simple loan, ownership passes to the borrower. (1740a)

Multiple Select

CHARACTERISTICS OF THE CONTRACT OF LOAN

• Powerful

• Unilateral

• Real

• Consensual

​CHARACTERISTIC OF CONTRACT OF LOAN

​ 1. Real – delivery of the thing loaned is necessary for the perfection of the contract

​

2. 2. Unilateral – once the subject matter is delivered, it creates obligations on the part of only the borrower

Multiple Choice

I. As to the __________, the cause or consideration is the acquisition of the thing

II. As to the _________, the right to demand its return or its equivalent

• Seller; Buyer

• Borrower; Lender

• Lender; Borrower

• Obligee; obligor

​CAUSE OR CONSIDERATION

​1. As to the borrower, acquisition of the thing

​

2. As to the lender, the right to demand its return or its equivalent

​

​KINDS OF LOAN

• ​Commodatum - bailor delivers to the bailee a non-consumable thing so that the latter may use it for a certain time and return the identical thing

​

​

• ​Simple Loan / Mutuum - lender delivers to the borrower money or other consumable thing upon the condition that the latter shall pay the same amount of the same kind and quality

Multiple Choice

Those movables which cannot be used in a manner appropriate to their nature without their being consumed (Art. 418)

• Personal Property

• Consumable

• Non-consumable

• Things

​Consumable

​A thing is consumable when it is consumed when used in a manner appropriate to its purpose or nature.

​

​Example:

1. ​Rice

2. ​Gasoline

3. ​Money

4. ​Fruit

COMMODATUM AND MUTUUM DISTINGUISHED​

​

Multiple Choice

True or False:

I. Commodatum ordinarily involves something NOT consumable

II. Mutuum, the subject matter is money or other consumable things

• TRUE

• FALSE

• TRUE Statement I

  FALSE Statement II

• FALSE Statement I

  TRUE Statement II

​SUBJECT MATTER

​1. Commodatum - real property/ ordinarily not consumable

​

​

​2. Mutuuum/Simple Loan - money or consumable thing

Multiple Choice

TRUE OR FALSE:

I. Simple loan/Mutuum, the ownership of the thing loaned is retained by the lender

II. Simple Loan/ Mutuum the ownership is transferred to the borrower

• TRUE

• FALSE

• TRUE Statement I

  FALSE Statement II

• FALSE Statement I

  TRUE Statement II

​FALSE: STATEMENT I

​Wrong:

​ SIMPLE LOAN/MUTUUM - ownership of the thing remained to the lender

​

​

​Correct:

​COMMODATUM - ownership of the thing remained to the lender

Multiple Choice

This is essentially gratuitious

• Commodatum

• Mutuum

COMMODATUM IS ESSENTIALLY GRATUITOUS​

​

Multiple Choice

TRUE OR FALSE:

I. Mutuum is a loan for temporary possession

II. Commodatum is a loan for consumption

• TRUE

• FALSE

• TRUE Statement I

  FALSE Statement II

• FALSE Statement I

  TRUE Statement II

​

Multiple Select

Kinds of Commodatum

• Secured loan

• Ordinary Commodatum

• Precarium

• Principal Transactions

​KINDS OF COMMODATUM

​1. Ordinary commodatum - Art. 1933

​

​

2. Precarium – Art. 1947

-where the bailor may demand the thing loaned at will

​Art. 1953

A person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality.

Multiple Choice

In Simple loan or mutuum, what is the Obligation of the debtor?

• To pay

• To do

• To return

• To give

Multiple Choice

True or false:

In Simple Loan or Mutuum, the person who refuses to pay his debt or denies its existence is criminally liable for estafa?

• TRUE

• FALSE

Multiple Choice

Things which are usuall dealt with by number, weight or measure such asrice, oil, sugar, etc., so that any given unit or portion is treated as the equivalent of an other unit or portion

• Consumable

• Non Consumable

• Fungible

• Non Fungible

​MEANING OF FUNGIBLE THINGS

​Fungible things are those which are usually dealt with by number, weight, or measure so that any given unit or portion is treated an equivalent to any other unit or portion.

​

​EXAMPLE:

​ Three cavans of "wagwag" rice

Multiple Choice

True or False:

Fungible things and consumable things are the same

• TRUE

• FALSE

​Distinction between consumability and fungibility

• ​Consumability depends on the nature of the thing

​

• Fungibility depends upon the intention of the parties.

​​Art. 1954.

A contract whereby one person transfers the ownership of non-fungible things to another with the obligation on the part of the latter to give things of the same kind, quantity, and quality shall be considered a barter.

Commodatum vs Mutuum vs Barter​

​

Multiple Choice

TRUE OR FALSE:

I. Mutuum and Commodatum - the subject matter is money or other fungible things

II. Barter - non fungible/non consumable things

• TRUE

• FALSE

• TRUE Statement I

  FALSE Statement II

• FALSE Statement I

  TRUE Statement II

Multiple Choice

TRUE OR FALSE:

I. In Commodatum, bailee is bound to return the equivalent things borrowed

II. In barter, the person has to give the things of the same kind,quantity and quality

• TRUE

• FALSE

• TRUE Statement I

  FALSE Statement II

• FALSE Statement I

  TRUE Statement II

Multiple Choice

TRUE OR FALSE:

I. Mutuum may be gratuitous

II. Commodatum is essentially gratuitous

III. Barter is onerous

• TRUE

• FALSE

• ONLY STATEMENT I is FALSE

• ONLY STATEMENT III is TRUE

​​Art. 1955

The obligation of a person who borrows money shall be governed by the provisions of Articles 1249 and 1250 of this Code.

If what was loaned is a fungible thing other than money, the debtor owes another thing of the same kind, quantity and quality, even if it should change in value. In case it is impossible to deliver the same kind, its value at the time of the perfection of the loan shall be paid. (1754a)

Multiple Choice

What provision should govern the relation between bank and depositor?

• Commodatum

• Mutuum/Simple Loan

• Agency

• Sales

​Art. 1980

Fixed, savings, and current deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loan. (n)