Credit Midterm Guide

7/27/2019 Credit Midterm Guide

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Primer on Credit TransactionsUP BarOps 2002

I. INTRODUCTION

A. MEANING AND SCOPE OF CREDIT TRANSACTIONS

credit: ability to borrow money or things by virtue of the trust reposed by a lender that theborrower may pay what he promised within a specified period

credit transactions: all transactions involving the purchase or loan of goods, services or moneyin the present with promise to pay or deliver in the future

types:

SECURE ! supported by a collateral or encumbrance of property "real # there is need

for delivery$

U%SECURE ! supported only by a personal commitment of another "personal, e&.

guaranty or suretyship$

'. SECURITY AND BAILMENT CONTRACTS

securit: something given, deposited or serving as a means to ensure the fulfillment orenforcement of a principal obligation

!ai"#ent: the delivery of property by one person to another in trust for a specific purpose, with acontract that the trust shall be faithfully e&ecuted and the property returned or duly accounted forwhen the special purpose is accomplished or (ept until the bailor reclaims it

parties:

'A)*+R ! the giver the party who delivers the possession or custody of the thing bailed

'A)*EE ! the recipient the party who receives the possession or custody of the thing

thus delivered (inds:

sole benefit of the bailor ! gratuitous deposit or mandatum

sole benefit of the bailee ! commodatum or mutuum "simple loan$

benefit of both parties ! deposit for compensation, pledge, bailment for hire

II. LOAN

contract o$ "oan "Art. %&''$: one of the parties delivers to another:

something not consumable so that the latter may use the same for a certain time and

return it "C+--+AU-$

money or other consumable thing, upon the condition that the same amount of the same

(ind and /uality shall be paid "S)-0*E *+A% +R -UUU-$

a REA* C+%RAC # not perfected until the delivery of the ob1ect of the contract

this is in view of the purpose of the contract which is to transfer either the use or the

ownership of the thing loaned

however, an accepted promise to deliver something by way of commodatum or simple

loan is a consensual contract, binding upon the parties "Art. %&'($

Saura I#)ort and E*)ort Co. +. DBP2here an application for a loan of money was approved by resolution of the defendant


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corporation and the corresponding mortgage was e&ecuted and registered, there arises aperfected consensual contract of loan.

Bonne+ie +. CA)n this case, the mortgage was e&ecuted for and on condition of the loan granted to the *o3anospouses. he fact that the latter did not collect from the respondent ban( the consideration of themortgage on the date it was e&ecuted is immaterial. he herein contract of loan was e&ecuted atthe same time the contract of mortgage was e&ecuted. he promissory not e&ecuted is only anevidence of indebtedness and does not indicate lac( of consideration of the mortgage at the timeof its e&ecution.

A. COMMODATUM

4. Nature o$ Co##odatu# "Art.%&',$4 bailee ac/uires the use of the thing loaned, but not its fruits

however, under Art. %&(-, a stipulation that the bailee may ma(e use of the fruits of

the thing loaned is valid

the en1oyment of the fruits must only be incidental to the use of the thing loaned if it

is the main cause, the contract may be one of usufruct5 ESSE%)A**6 7RAU)+US contract ceases to be a commodatum if any

compensation is to be paid by the bailee "in such a case, there arises a lease contract$8 purpose of the contract must be the temporary use of the thing loaned if the bailee is not

entitled to the use of the thing, the contract may be a deposit9 bailor need not be the owner of the thing loaned "Art. %&'$

since ownership does not pass to the borrower

however, the bailee may not lend nor lease the thing loaned to him to a 8 rdperson

"Art. %&'&/01$

0URE*6 0ERS+%A* in character "Art. %&'&$

4$ death of either the bailor or the bailee e&tinguishes the contract5$ bailee can neither lend not lease the ob1ect of the contract to a 8rd person but

members of the bailees household may ma(e use of the thing loaned, unless:

there is a stipulation to the contrary the nature of the thing forbids such use

Art. 4;8; constitutes an e&ception to the general rule that all rights ac/uired in virtueof an obligation are transmissible "Art. 44


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the contract would be one of lease.

5. O!"i4ations o$ t5e Bai"ee

a. o 0A6 for the +R)%AR6 E0E%SES for the USE and 0RESERBA)+% of the thingloaned "Art. %&(%$

b. *)A'*E for the *+SS of the thing, though loss is through a fortuitous event, if:4$ he devotes the thing to any purpose different from that for which it has been loaned5$ he (eeps it longer than the period stipulated, or after the accomplishment of the use

for which the commodatum has been constituted8$ the thing loaned has been delivered with appraisal of its value, unless there is a

stipulation e&empting the bailee from responsibility in case of a fortuitous event9$ he lends or leases the thing to a 8rdperson, who is not a member of his household>$ he chose to save his own thing, instead of saving the thing borrowed "Art. %&(0$

7E%. RU*E: bailee is %+ *)A'*E for loss or damage due to a fortuitous eventsince the bailor retains ownership of the thing loaned

Art. 4;95 specifies the instances when the general rule will not apply

De Los Santos +. 6arra)n a contract of commodatum whereby one of the parties delivers to the other a thing that is notperishable, to be used for a certain time and afterwards returned, it is the imperative duty of thebailee, if he should be unable to return the thing to the owner, to pay damages to the latter, ifthrough the fault of the bailee the thing loaned was lost or destroyed.

c. %+ *)A'*E for the EER)+RA)+% of the thing loaned, if deterioration is:4 due only to the use thereof5 without the bailees fault "Art. %&('$

d. CA%%+ REA)% the thing loaned on the ground that the bailor owes him something,even though it may be by reason of e&penses "Art. %&(($

bailee has right of retention for A-A7ES suffered under Art. %&,%, when the bailor

does not advise the bailee of the flaws of the thing loaned, such flaws being (nown tothe bailor

Cat5o"ic 7icar A)osto"ic +. CAhe Catholic Bicar Apostolic of the -t. 0rovince was in possession as borrower in commodatumwhen it repudiated the trust by declaring the properties in its name for ta&ation purposes. he SCheld that the bailee in this case did not meet the re/uirement of possession for ac/uisitiveprescription since its failure to return the thing loaned did not mean adverse possession.

e. S+*)AR6 *)A')*)6 when there are 5 or more bailees in the same contract "Art. %&(,$

an e&ception to the general rule that the concurrence of 5 or more parties in the same

obligation gives rise only to a 1oint obligation

'. O!"i4ations o$ t5e Bai"or

a. CA%%+ E-A% REUR% of the thing loaned until after:

e&piration of the period stipulated

accomplishment of the use for which the commodatum has been constituted

"Art. %&(2$

owever, the bailor may demand return of the thing if:

he should have urgent need of the thing "in this case, the contract of


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commodatum is suspended while the bailor is in possession of the thing$ " Art.%&(2$

the contractual relation is a )recariu#, in which case bailor may demand the

thing at will"Art. %&(3$

where neither the duration of the contract nor the use of the thing loaned isstipulated

where the use of the thing is merely tolerated by the owner the bailee commits any act of ingratitude under Art. "Art. %&($

this is because the contract of commodatum, li(e a donation, is essentiallygratuitous

c. RE@U% ERA+R)%AR6 e&penses for the 0RESERBA)+% of the thing providedthe bailee brings the same to the (nowledge of the bailor before incurring them e&ceptwhen they are so urgent that reply to the notification cannot be awaited without danger"Art. %&(&$

if the e&traordinary e&penses "caused by fortuitous event$ arise on the occasion of

the actual use of the thing, they shall be borne EUA**6 by the bailor and bailee:

even though the bailee acted without fault

unless there is a stipulation to the contrary

'ailee not entitled to reimbursement for e&penses other than those referred to in Arts.4;94 and 4;9;, for the purpose of ma(ing use of the thing "Art. %&,-$.

c. *)A')*)6 to 0A6 A-A7ES for (nown hidden flaws "Art. %&,%$

in case the bailor does not advise the bailee of the (nown hidden flaw

bailee must suffer damages by reason of said flaw or defect

8 he bailor cannot e&empt himself from the payment of e&penses or damages byabandoning the thing to the bailee "Art. %&,0$.

this is because the value of e&penses or damages may e&ceed the value of the thing

loaned

B. SIMPLE LOAN OR MUTUUM

4. Nature o$ Si#)"e Loan or Mutuu# "Art. %&,'$

borrower ac/uires ownership of money or other fungible thing loaned

8 $un4i!"e: things which are usually dealt with by number, weight or measure so thatany given unit or portion is treated as the e/uivalent of any other unit or portion

borrower is bound to pay to the creditor an e/ual amount of the same (ind and /uality

2here by the contract one person transfers ownership of %+%!@U%7)'*E things to anotherand the latter is obliged to give things of the same (ind, /uantity and /uality, the contract shallbe considered a 'ARER "Art. %&,($

#utuu# !arter

sub1ect matter ismoney or any otherfungible thing

sub1ect matter is non!fungible thing

may be gratuitous an onerous contract amutual sale


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To"entino +. Gon8a"e8)n this case, the Court distinguished between a contract of loan and a contract of lease. A loan isan advancement of money, goods, or credits upon a contract of stipulation to repay, not to return,the thing loaned on some future day in accordance with the terms and conditions of the contract.he moment the contract of loan is completed, the thing sub1ect of the contract ceases to be theproperty of the former owner and becomes the property of another to be used according to hisown will, unless the contract e&pressly provides for its specific use.+n the other hand, in a contract of lease, the owner of the property does not lose his ownership.e simply uses control over the property rented during the contract period.

Gro)o Grocer +. Paci$ic Coast Biscuit Co.he so!called current account and savings deposit lost their character as deposits, and areconverted into simple commercial loans because, in cases of such deposits, the ban( has madeuse thereof in the ordinary course of its transaction as an institution engaged in the ban(ingbusiness, not because it so wishes, but precisely because of the authority deemed to have beengranted to it by the depositors to enable them to collect the interest which they had been and theyare now collecting, and by virtue further of the authority granted to it by the Corporation *aw and'an(ing *aw. he ban( ac/uired ownership of the money deposited. -oreover, payment ofinterest only ta(es place in case of loans.

5. For# o$ Pa#ent "Art. %&,,$

a. -+%E6

payment must be made in the currency which is legal tender in the 0hilippines "Art.

459;$

in case of e&traordinary inflation or deflation, the basis of payment shall be the value

of the currency at the time of the creation of the obligation "Art. 45>F$

b. @U%7)'*E )%7

borrower is under obligation to pay the lender another thing of the same (ind, /uality

and /uantity

in case this is impossible to do, the borrower shall pay its value at the time of the

perfection of the loan

'. Interest

7E%. RU*E: %o interest shall be due. "Art. %&,2$

ECE0)+%S:

if agreement to pay interest is e&pressly stipulated and is in writing "Art. %&,2$

the interest must be lawful, i.e. it is not usurious "Art. %&,3$ however, laws onusury have been suspended

indemnity for damages # the debtor in delay is liable to pay legal interest even in

absence of stipulation "Art. 55F;$

interest due shall earn legal interest from the time it is 1udicially demanded although

the obligation may be silent upon this point "Art. 5545$

San4rador +. 7a"derra#a2here no interest was e&pressly stipulated, although a hidden interest was incorporated in theprincipal amount, the court ordered the payment of 45G interest per annum.

Eastern S5i))in4 Lines +. CA2ith regard particularly to an award of interest in the concept of actual and compensatorydamages, the rate of interest would be imposed as follows: "a$ obligation breached, payment ofsum of money "forbearance of money or loan$, that stipulated, in the absence of which 45Gcomputed from default "b$ the obligation not constituting loan or forbearance of money, interestimposed at the discretion of the court at the rate of DG per annum "c$ when 1udgment awarding


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sum of money becomes final and e&ecutory, rate is 45G per annum, interim period deemede/uivalent to a forbearance or credit.

6a+ier +. De Gu8#an2hile the Usury *aw is now legally ine&istent, when the interest charged is e&orbitant andunconscionable, the courts may provide relief to the borrower.

4 if interest is payable in (ind, its value shall be appraised at the current price of theproducts or goods at the time and place of payment "Art. %&,$

4 )f the borrower pays interest when there has been no stipulation therefore, the provisionsconcerning solutio indebiti or natural obligations shall be applied "Art. %&2-$.

where unstipulated interest is paid by mista(e, the debtor may recover "Art. 54>9$

where unstipulated interest is paid voluntarily because the debtor feels morally

obliged to do so, there can be no recovery "Art. 495>$co#)ounded interest: interest due and unpaid shall be added to the principal obligation and theresulting total amount shall earn interest

7E%. RU*E: accrued interest shall not earn interest

ECE0)+%S:

when 1udicially demanded "Art. 5545$ when there is an e&press stipulation made by the parties "Art. %&,&$

Cu Un9ien4 +. Ma!a"acat Su4ar Co.A stipulation to the effect that interest shall be at the rate of 45G per annum payable at eachmonth upon the unpaid capital of the loan, does not authori3e the compounding of interestpayment at intervals of one month. 2here interest charged is usurious, the mere voluntarypayment of it to the creditor by the debtor is not binding.)n the absence of e&press stipulation for the accumulation of compound interest, no interest canbe collected upon interest until the debt is 1udicially claimed.

co##odatu# #utuu#

sub1ect matter isordinarily somethingnot consumable

sub1ect matter ismoney or otherconsumable thing

ownership of thingloaned is retained bythe lender

ownership istransferred to theborrower

essentially gratuitous may be gratuitous oronerous "wH stipulationto pay interest$

borrower must returnthe same thing loaned

borrower need onlypay the same amountof the same (ind and/uality

may involve real orpersonal property refers only to personalproperty

loan for use loan for consumption

bailor may demandreturn of the thingloaned before thee&piration of the termin case of urgent need

the lender may notdemand its returnbefore the lapse of theterm agreed upon

loss is generally borneby the bailor since he

borrower suffers theloss


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is the owner

III. DEPOSIT

A. DEPOSIT IN GENERAL

de)osit "Art. %&20$: constituted from the moment a person receives a thing belonging to anotherwith the obligation of:4 safely (eeping it, and5 returning the same

)f safe(eeping of the thing delivered is not the principal purpose of the contract, there is notdeposit but some other contract "Art. %&20$.

a REA* C+%RAC # deposit is not perfected until the delivery of the thing

but an agreement to constitute a deposit is binding "Art. %&2'$

may be constituted 1udicially or e&tra1udicially "Art. %&2($

it is a 1udicial deposit or se/uestration when an attachment or sei3ure of property in

litigation is ordered

e&tra1udicial deposit is either voluntary or necessary "Art. %&23$

a generally 7RAU)+US C+%RAC , unless:

there is an agreement to the contrary the depositary is engaged in the business of storing goods

"Art. %&2,$

sub1ect matter covers only movable things "Art. %&22$

however, 1udicial deposit may cover movable as well as immovable property its purpose

being to protect the things of parties to a suit "Art. 0--2$

de)osit #utuu#

principal purpose is safe(eeping principal purpose is consumption

depositor can demand the return ofthe sub1ect matter at will

the lender must wait until thee&piration of the period granted

both movable and immovableproperty "in case of 1udicial deposit$may be the ob1ect

only money and other fungible thingsmay be the ob1ect

de)osit co##odatu#

principal purpose is safe(eeping principal purpose is the transfer ofthe use

may be gratuitous essentially and always gratuitous

'. 7OLUNTARY DEPOSIT%. Genera" Pro+isions

+o"untar de)osit "Art. %&2$:

delivery is made by the will of the depositor

delivery made by 5 or more persons each of whom believes himself entitled to the thingdeposited with a 8rdperson

8rdperson shall deliver it in a proper case to the one to whom it belongs

contract may be entered into orally or in writing "Art. %&2&$

E@@EC +@ )%CA0AC)6a. of the E0+S)+R "Art. %&3-$


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depositary shall be sub1ect to all the obligations of a depositary

depositary may be compelled to return the thing by the guardian or administrator of the

depositor or by the depositor himself if he should ac/uire capacityb. of the E0+S)AR6 "Art. %&3%$

depositary does not incur the obligations of a depositary

depositary is liable to return the thing deposited while still in his possession

depositary may be compelled to pay the depositor the amount by which he may havebenefited himself with the thing or its price sub1ect to the right of any 8 rd person whoac/uired the thing in good faith

depositor may bring an action against a 8rdperson who ac/uires the thing in bad faith

5. O!"i4ations o$ t5e De)ositar

a. to IEE0 the thing SA@E and REUR% it when re/uired, to the depositor, his heirs andsuccessors, or any person who may have been designated in the contract "Art. %&30$

responsibility of depositary with regard to the safe(eeping and loss of the thing is

governed by Arts. 45D5 to 45D;4 he is liable if the loss occurs through his fault or negligence5 defenses available: diligence of a good father of a family, fortuitous event

degree of care is greater is the deposit is for compensation than when it is gratuitous if the depositor should lose his capacity to contract after having made the deposit, the

thing cannot be returned e&cept to the persons who may have the administration ofhis property and rights "Art. %&2$

b. %+ to E0+S) the thing with a 8R0ERS+%, unless there is a stipulation to thecontrary "Art. %&3'$

if deposit with a 8rdperson is allowed, the depositary is liable for the loss if he

deposited the thing with a person who is manifestly careless or unfit

depositary is responsible for the negligence of his employees

c. may CA%7E E 2A6 of the E0+S) under circumstances he may reasonablypresume that the depositor would consent to the change if he (new of the facts of thesituation "Art. %&3($

depositary must first notify the depositor and wait for the latters decision before

effecting the change4 re/uirement of prior notice may be dispensed with if the delay would cause

danger

d. to C+**EC )%ERES on C+SES )% AC)+% deposited "Art. %&3,$

where the depositary is holding certificates, bonds, securities, or instruments which

earn interest

depositary is also bound to ta(e such steps necessary in order that the securities

may preserve their value and rights corresponding to them

provision does not apply to contracts for the rent of safety deposit bo&es "bailment for

hire, a special (ind of deposit$

e. may C+--)%7*E 7RA)% or articles of the SA-E I)% A% UA*)6 "Art. %&32$

unless there is a stipulation to the contrary

the various depositors shall own or have a proportionate interest in the mass

f. %+ to -AIE USE of the )%7 E0+S)E "Art. %&33$

unless:

5 there is e&press permission of the debtor


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8 the preservation of the thing deposited re/uires its use, but it may only be usedfor that purpose

breach of this obligation shall render the depositary liable for damages

irre4u"ar de)osit: when the depositary has permission to use the consumable thing

or money deposited but safe(eeping is still the principal purpose9 if the thing deposited is non!consumable and the depositary has permission to

use the thing, the contract is converted to one of commodatum "Art. %&3$> if the thing deposited is money or other consumable thing, the permission given

and the consumption converts the contract into a simple loan "Art. %&3$D permission to use is not presumed but must be proven "Art. %&3$

Co#)ania A4rico"a de U"tra#ar +. Ne)o#ucenohere are points of difference between a loan and an irregular deposit. )n an irregular deposit,the only benefit is that which accrues to the depositor, while in a loan the essential cause for thetransaction is the necessity of the borrower. Also, in an irregular deposit, the depositor candemand the return of the article at any time, while a lender is bound by the provisions of thecontract and cannot see( restitution until the time for payment has arisen.

g. *)A'*E for the *+SS of the thing through @+RU)+US EBE% if:

it is stipulated he uses the thing without the depositors permission

he delays its return

he allows others to use it, even though he himself may have been authori3ed to use

the same"Art. %&3&$

h. in case the thing deposited is delivered C*+SE and SEA*E "Art. %&%$4 the depositary must return it in the same condition5 depositary is liable for damages should the seal or loc( be bro(en through his fault

fault of the depositary is presumed unless there is proof to the contrary

statement of the depositor as to the value of the thing deposited shall beaccepted however, the courts may pass upon the credibility of the depositor with

respect to the value claimed by him8 depositary is liable to (eep the secret of the deposit when the seal or loc( is bro(en

with or without his fault9 depositary is authori3ed to open the thing deposited which is closed and sealed

when:

he is presumed to have authority "as where the (ey has been delivered to him$

such is necessary to carry out the instructions of the depositor"Art. %&0$

i. to REUR% the thing deposited with all its 0R+UCS, ACCESS+R)ES andACCESS)+%S "Art. %&'$4 if the depositary be in delay or has used the money without permission, he shall be

liable for interest "Art. 4=;D$

1. CA%%+ E-A% that the depositor 0R+BE +2%ERS)0 of the thing deposited "Art.%&($5 if the depositary discovers that the thing has been stolen and he (nows who the true

owner is, he must advise the latter of the deposit

if the owner does not claim the thing within 4 month from notice, the depositaryshall be relieved of all responsibility by returning the thing deposited to thedepositor

8 if the depositary has reasonable grounds to believe that the thing has not beenlawfully ac/uired by the depositor, he may return the same


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(. to REUR% the thing at the 0*ACE ES)7%AE "Art. %&3$4 e&penses for transportation shall be borne by the depositor5 if no place is designated, it shall be made where the thing deposited may be, even if

it should not be the same place where the deposit was made

provided that there was no malice on the part of the depositary

l. to REUR% the thing to the depositor U0+% E-A%, even though a specified periodor time for such return may have been fi&ed "Art. %&$

does not apply:

when the thing is 1udicially attached while in the depositarys possession

should the depositary have been notified of the opposition of a 8 rdperson to thereturn or removal of the thing deposited

in these 5 cases, the depositary must inform the depositor of the attachment oropposition

m. to REUR% the thing even 'E@+RE the )-E ES)7%AE, if he should have1ustifiable reasons to do so "Art. %&&$

unless the deposit is for a valuable consideration

if the depositor refuses to receive the thing, the depositary may secure itsconsignation from the court

n. to REUR% what he received by reason of loss through @+RCE -A?EURE or7+BER%-E% +RER "Art. %&&-$

4 in case the depositarys heir, in good faith, sells the thing deposited, he shall be bound:

to return the price received

to assign his right of action against the buyer in case the price has not been paid

"Art. %&&%$

5 in case of fi&ed, savings and current deposits of money in ban(s and similar institutions, theprovisions concerning S)-0*E *+A% shall govern "Art. %&-$

relation between depositor and ban( is that of creditor and debtor gen. rule is that a ban( can compensate or set!off the deposit in its hands for the

payment of any indebtedness to it on the part of the depositor " Gu""as +. PNB$ in atrue deposit, compensation is not allowed

Serrano +. CBA ban(s failure to honor a deposit is failure to pay its obligation as debtor and not a breach oftrust arising from a depositarys failure to return the thing deposited.

R)7 +@ 2+ +R -+RE E0+S)+RS + E-A% E)R RES0EC)BE SARES " Art.%&,$:4 if the thing deposited is divisible and there are 5 or more depositors who are not solidary,

each one can demand only his proportionate share

5 if there is solidarity or the thing does not admit of division: the provisions of Arts. 4545 "do anything useful, not pre1udicial$ and 4549 "return the

thing to any solidary depositor e&cept if there has already been demand$

however, if there is a stipulation that the thing should be returned to one of the

depositors, the depositary shall return it only to the person designated

8. O!"i4ations o$ t5e De)ositor

a. to RE)-'URSE the depositary for E0E%SES he may have incurred for the


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0RESERBA)+% of the thing deposited, if deposit is 7RAU)+US "Art. %&&0$

b. to 0A6 for *+SSES arising from the CARACER of the thing, unless:4 the depositor was unaware of, or was not e&pected to (now, the dangerous character

of the thing, at the time of the constitution of the deposit5 the depositor notified the depositary of the dangerous character of the thing8 the depositary was aware of the dangerous character of the thing without advice from

the depositor"Art. %&&'$

he depositary may REA)% the thing in 0*E7E until the @U** 0A6-E% of what may bedue him by reason of the deposit "Art. %&&($.

9. E*tin4uis5#ent o$ De)osit "Art. %&&,$

upon the loss or destruction of the thing deposited

in case of gratuitous deposit, upon the death of either the depositor or depositary

4 in case of onerous deposit, the rights and obligations are transmitted to the heirshowever, the heirs of either party have a right to terminate the deposit even beforethe e&piration of the term

he causes in Art. 4;;> are not e&clusive other causes can be found in Art. 4584 of theCivil Code "e&. novation, merger, etc.$.

C. NECESSARY DEPOSIT

2E% C+%S)UE:4$ when it is made in compliance with a legal obligation "Art. %&&2$

governed by the provisions of the law establishing it in case of its deficiency, by the rules

of voluntary deposit "Art. %&&3$

e&amples:

1udicial deposit of a thing the possession of which is being disputed in litigation by 5

or more persons "Art. >8=$ deposit of a thing pledged when the creditor uses the same without the authority of

the owner or misuses it in any other way "Art. 0%-($

those constituted to guarantee contracts with the government

5$ when it ta(es place on the occasion of any calamity, such as fire, storm, flood, pillage,shipwrec(, or other similar events "Art. %&&2$

regulated by the rules on voluntary deposit and by Art. 54D= "establishes a UAS)!

C+%RAC # owner is bound to pay another for saving his property from destruction$

8$ deposit of effects made by travelers in hotels or inns "Art. %&&$

to hold (eepers of hotels or inns responsible as depositaries, the following must concur:

notice be given to them or their employees, of the effects brought

guests ta(e the precautions which hotel(eepers or their substitutes advised relativeto the care and vigilance of their effects

liability e&tends to effects lost or damaged in the anne&es of the hotel "Art. %&&&$

responsibility of hotel(eepers shall include loss of, or in1ury to the personal property of

guests caused by employees as well as strangers "Art. 0---$

hotel(eepers are not liable when:

the loss or in1ury is caused by force ma1eure "Art. 0---$

the act of a thief or robber, who has entered the hotel, is not deemed forcema1eure unless it is done with the use of arms or through irresistible force " Art.


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0--%$

the loss is due to the acts of guests, his family, servants or visitors "Art. 0--0$

the loss arises from the character of the things brought into the hotel "Art. 0--0$

4 hotel(eeper has a right to retain the things brought into the hotel as a security for creditson account of lodging and supplies "Art. 0--($

he hotel(eeper cannot suppress or diminish liability by posting notices to the effect thathe is not liable for the articles brought by the guest. Any stipulation to the contrary shallbe void "Art. 0--'$.

. SE:UESTRATION OR 6UDICIAL DEPOSIT

ta(es place when an attachment or sei3ure of property in litigation is ordered "Art. 0--,$

4 purpose is to maintain the status /uo during the pendency of litigation5 Rule >< "Rules of Court$: properties may be attached by the sheriff upon the filing of

a complaint8 Rule >; "R+C$: appointment of a receiver for the preservation of property in litigation9 Rule DF "R+C$: personal property is sei3ed in suits of replevin

ob1ect may be movable or immovable property "Art. 0--2$

+%ER+US # always remunerated

+'*)7A)+% +@ E E0+S)AR6:

to ta(e care of the property with the diligence of a good father of a family "Art. 0--$

may not be relieved of his responsibility until the litigation is ended or the court so orders "Art.0--3$

As to matters not provided for in the Civil Code, 1udicial se/uestration shall be governed bythe Rules of Court "Art. 0--&$.

Documents

Credit Midterm Guide