CREDIT TRANSACTION

LOAN SUBJECT: Consumable (ex. Money) OWNERSHIP: - transferred to borrower - loan is for consumption

COMMODATUM SUBJECT: Not consummable OWNERSHIP: - retained by lender - temporary possession by borrower ceases to be a commodatum when there is compensation (becomes a LEASE) - bailor need not be the owner of the thing loaned. TYPE: - essentially gratuitous OBLIGATION: - borrower to return the same thing loaned - bailor may demand return of the thing loaned before expiration of the term. PRECARIUM - bailor may demand return of thing loaned at will ( in case of urgent needs) OBJECT: - personal property - real property LOSS: - suffered by the lender being the owner of the thing. CHARACTER OF CONTRACT - real contract (deli%ery re#uired) - &nilateral contract (obligation is upon the borrower) PERFECTION - upon deli%ery Persona !n "#ara"$er thus extinguished upon death of either bailor or bailee.

TYPE: a. Gratuitous b. nerous (when payment of interest is stipulated) OBLIGATION: !orrower only pays the same amount of the same "ind and #uality. $ender cannot demand return of thing loaned before expiration of the term.

OBJECT: - personal property LOSS: - borrower suffers the loss e%en if caused by fortuitous e%ent. CHARACTER OF CONTRACT - real contract (deli%ery re#uired) - &nilateral contract (obligation is upon the borrower) PERFECTION - upon deli%ery

DEPOSIT PRINCIPAL PURPOSE: - for safe"eeping - not a deposit if it is accessory to a principal obligation as in lease' agency or commodatum or when made for other purposes other than for safe"eeping. CHARACTER OF CONTRACT: - real contract (perfected upon deli%ery) - unilateral contract (when gratuitous) - bilateral contract (when compensation to the depositary is in%ol%ed)

ANTICHRESIS re#uires deli%ery of property co%ers only the fruits and the immo%able is excluded creditor in possession of property

OBLIGATION: - depositary to return the thing deposited to the depositor upon demand. OBJECT: - mo%ables or personal property 0 !ut may in%ol%e immo%able property in 1udicial deposit TYPE: - gratuitous - +xcept: 2 with a stipulation to the contrary 2 depositary is engaged in business of storing goods 2 property was sa%ed from destruction without the "nowledge of the owner of the thing. wner bound to pay 1ust compensation to the other party.

CHARACTER OF CONTRACT: - (ccessory contract (dependent on principal obligation) - )ormal contract (must be in writing) - Consensual contract perfected by mere consent - *here must be +,-.+// agreement that the creditor apply the fruits to the payment of interest if owing and thereafter apply it to the principal of the credit. - (mount of principal and interest must be specified in writing OBLIGATION: - creditor obliged to pay taxes and charges upon the estate and other costs for preser%ation of property OBJECT: - real property only

GUARANTY

SURETY

- cannot be presumed. - Must be expressed and in writing CHARACTER OF CONTRACT: - accessory (dependent upon a principal obligation - subsidiary and conditional (ta"es effect only when principal debtor fails in his obligation - unilateral (guarantor has duty only to the creditor). LIABILITY: - /econdary (becomes liable only when principal fails in his obligation and only after excussion (exhaustion) of the principal debtor3s property. - 4emand from creditor is re#uired after which the guarantor may set up against the creditor the %ene&!$ o& e'"(ss!on where guarantor points out to the creditor existing properties of the principal debtor. )ailure of creditor to act against the principal debtor3s property extinguishes the liability of the guarantor. - Guarantor cannot be sued 1ointly with the principal debtor CONTRACT OF INDEMNITY - contract between guarantor and principal debtor. - Guarantor may demand for reimbursement from the principal debtor. 0 Guarantor may subrogate the creditor

CHARACTER OF CONTRACT: - accessory but direct

LIABILITY: - /olidary' direct' immediately' absolute - +#ually bound as the original promisor when promisor fails to pay his obligations. - N * +N*5*$+4 * !+N+)5* ) +,C&//5 N - Not entitled to notice of demand from the creditor. - Not entitled to notice of principal3s default to pay obligation.

!oth are personal security

REAL MORTGAGE CHARACTER OF CONTRACT: 6. .eal Contract 7 perfected by deli%ery (%($ no$ ne"essar) !n *or$+a+e) 8. (ccessory contract 7 dependent upon a principal obligation 9. &nilateral contract 7 obligation is upon the creditor to return the thing to the debtor upon the fulfillment of obligation. :. /ubsidiary contract 7 obligation arises only upon failure to fulfill the obligation OWNERSHIP: - -ledgor;mortgagor must be the absolute owner of the thing - -ledgor;mortgagor must ha%e free disposal of the property - )uture property cannot be pledge or mortgaged - -ledgor or mortgagor may be a third person by %irtue of a""o**o,a$!on - e,+e or *or$+a+e. nly a %alid consent re#uired to the owner of property. DOCTRINE OF MORTGAGEE IN GOOD FAITH - -rotects an innocent purchaser for %alue relying on the *orrens *itle issued - 4oes not apply to ban"s 2 !oth are real surety or property surety 2 principal obligation is not extinguished by the loss of the property mortgaged or pledged. LOSS: - 4ebtor-owner bears the loss (RES PERIT DOMINO SUO) since ownership is retained by him. PROHIBITION AGAINST PACTUM COMMISSORIUM !oth the pledge and mortgagee cannot automatically appropriate the property for ownership upon failure of the debtor to perform his obligation. ((gainst public policy) /tipulation for automatic appropriation of the property upon the principal3s default is %oid.

PLEDGE

E/CEPTION: - -ledgee can appropriate the thing as his own if after the second public auction the thing is not sold. REMEDY WHEN PRINCIPAL DEBTOR IN DEFAULT: PLEDGEE MORTGAGEE - to sell the thing pledged in the public - foreclose the mortgage and if he wishes auction. 5f the thing is not sold until the to secure title o%er the property he can buy second auction pledgee can appropriate it in the foreclosure sale. the thing for himself (the exception of pactum commissorium). OBJECT: - Mo%ables - *o be deli%ered to the pledgee 0ALIDITY AS TO THIRD PERSON - description of the thing pledge and the date of the pledge must appear in a public instrument. OBJECT: - 5mmo%ables - (lienable real rights - deli%ery is not necessary 0ALIDITY AS TO THIRD PERSON - must be registered to be %alid against third person