Professional Documents
Culture Documents
Course Outline
Second Semester, 2013-2014
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II.
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Unless otherwise indicated, Art. refers to the Articles of the Civil Code
Stephanie V. Gomez-Somera
Credit Transactions
Course Outline
Second Semester, 2013-2014
2.
3.
4.
5.
a.
b.
c.
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.
Spouses Juico v. China Banking Corporation, G.R. No. 187678, April 10, 2013. (Include
Concurring Opinion)
Interest on Interest, Art. 1959, Art. 2212
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 (Ratio Decidendi only)
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.
Estores v. Spouses Supangan, G.R. No. 175139, April 18, 2012.
Nacar v. Gallery Frames and/or Bordey, G.R. No. 189871, August 13, 2013.
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.
Usury
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
Advocates for Truth in Lending, Inc. and Olaguer v. Bangko Sentral Monetary Board,
G.R. No. 192986, January 15, 2013.
Usurious Acts, Act No. 2655, Sec. 2 to 4
Remedies, Art. 1413, Act No. 2655, Sec. 6 to 10
1) Remedy of Debtor
2) Remedy of Creditor
Deposit
I.
The Concept of Deposit
Art. 1962, Art. 1964, Art. 1967
II.
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
III.
Necessary Deposit
A.
General Concepts, Art. 1964, Art. 1967, Art. 1996, Art. 1966
B.
Examples of Necessary Deposit
Stephanie V. Gomez-Somera
Credit Transactions
Course Outline
Second Semester, 2013-2014
IV.
V.
A.
B.
C.
D.
E.
Security Transactions
I.
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)
II.
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
III.
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.
IV.
Guaranty
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
Stephanie V. Gomez-Somera
Credit Transactions
Course Outline
Second Semester, 2013-2014
H.
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V.
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F.
VI.
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G.
VII.
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B.
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G.
H.
I.
Right to Subrogation, Art. 2067, Art. 2050, Art. 1237, Art. 2068, Art. 2080
Rights of Co-Guarantors
1. Benefit of Division, Art. 2065, Art. 2078
2. Right to Reimbursement, Art. 2073 to 2075
Extinguishment and Right of Release, Art. 2076, Art. 2077, Art. 2079, Art. 2080
Surety
General Concepts, Art. 2047, Art. 1211, Art. 1216,Art. 2082 to 2084
Form of Surety, Art. 1403
Obligations Secured, Art. 2053
Security Bank & Trust Company v. Cuenca, G.R. No. 138544. October 3, 2000, 341 SCRA
781.
Distinguished from Standby Letter of Credit
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.
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.
Pledge and Mortgage
General Concepts, Art. 2085, Art. 2087
Obligations Secured, Art. 2086, Art. 2052, Art. 209
Contract to Pledge or to Mortgage, Art. 2092
Remedies of Pledgee and Mortgagee
Indivisibility of a Pledge or Mortgage, Art. 2089, Art. 2090
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.
Equitable Mortgage, Art. 1602 to 1605
Pledge
General Concepts, Art. 2085, Art. 2087, Art. 2123
Form of Pledge, Art. 2096
Obligations Secured
Object of Pledge, Art. 2094, Art. 2095, Art. 416, Art. 417
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.
Rights of Third Party Pledgor, Art. 2120, Art. 2117, Art. 2066 to 2070, Art. 2079 to 2081
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. (Include Concurring Opinion)
Chu v. Court of Appeals et al. G.R. No. L-78519, September 26, 1989.
Citibank, N.A. & Investors Finance Corporation v. Sabeniano, G.R. No. 156132, October 12,
2006, 504 SCRA 378.
Return of Collateral, Art. 2105, Art. 2107, Art. 2108, Art. 2110, Art. 2111
Foreclosure of Pledge, Art. 2112, Art. 2119
Stephanie V. Gomez-Somera
Credit Transactions
Course Outline
Second Semester, 2013-2014
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
VIII. Chattel Mortgage
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.
IX. Real Estate Mortgage
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
Peoples 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
Star Two (SPV-AMC), Inc. v. Paper City Corp. of the Phil. , G.R. No. 169211, March 06,
2013.
E.
Right to Alienate Real Estate Mortgage Credit, Art. 2128, Art. 1625, Art. 1627
F.
Right to Alienate Collateral, Art. 2085, Art. 2130
Garcia v. Villar, G.R. No. 158891, June 27, 2012.
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.
Stephanie V. Gomez-Somera
Credit Transactions
Course Outline
Second Semester, 2013-2014
X.
A.
B.
C.
D.
Insolvency
I.
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
II.
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.
Stephanie V. Gomez-Somera
Credit Transactions
Course Outline
Second Semester, 2013-2014
III.
A.
B.
C.
D.
E.
IV.
A.
B.
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.
Suspension of Payments
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
Commissioner, Sec. 95, Sec. 97
Creditors Meeting, Sec. 97, Sec. 99, Sec. 100
Proposed Agreement, Sec. 94, Sec. 101, Sec. 102
Treatment of Claims, Sec. 96, Sec. 98, Sec. 101
1. Secured Creditor Claims
2. Exempt Claims
3. Excluded Claims
Rehabilitation
General Concepts, R.A. No. 10142, Sec. 2
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.
Town and Country Enterprises, Inc. v. Quisumbing et al., G.R. No. 173610, October
01, 2012.
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
Stephanie V. Gomez-Somera
Credit Transactions
Course Outline
Second Semester, 2013-2014
C.
D.
V.
A.
B.
C.
D.
E.
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.
Bank of the Philippine Islands v. Sarabia Manor Hotel Corp., G.R. No. 175844,
July 29, 2013
k. Termination of Proceedings, Sec. 74, Sec. 75
l. Conversion to Liquidation Proceedings, Sec. 92
Pre-negotiated Rehabilitation, Sec. 76 to 82, Sec. 92
Out-of-Court Rehabilitation, Sec. 83, Sec. 84.
1. General Concepts
2. Benefits of Out-of-Court Rehabilitation, Sec. 85 to 89
Liquidation
General Concepts, Art. 2238 to 2240, R.A. No. 10142, Sec. 2, Sec. 4
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
Liquidation of Insolvent Juridical Debtors, Sec. 93
1. Voluntary Liquidation, Sec. 90
2. Involuntary Liquidation
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.
Yngson v. Philippine National Bank, G.R. No. 171132, August 15, 2012
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
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
Stephanie V. Gomez-Somera