DE LA SALLE UNIVERSITY

College of Law

CREDIT TRANSACTIONS

Class: Attendance is mandatory and I expect you to be prepared to contribute to every class
discussion. Absence from 25% of classes or more will bar a student from taking the final
exam. Expect to be called at random.

Evaluation: 40% of the grade is based on a 2-hour final exam. 30% of the grade is based on
participation in class and the remaining 30% is based on quizzes/short writing
assignments.

Course Code : CRETRAN

Type of Course : Regular Course
Credit : 3 units
Total Hours : 48 hours
Term/Time/Room : First Semester 2019-2020

I. Course Description

Secured Transaction is a credit transaction in which the creditor is given an interest in property (personal
or real) to secure payment or performance of the obligation. There are two separate obligations in
secured transactions: (1) the underlying obligation to pay money back to the creditor and the (2) security
or collateral. The “secured” Part is the back-up. The primary obligation to re-pay the loan (promissory
note) on schedule. If all goes well, the Security Interest is never triggered (lender will exercise it if
something goes wrong).

A security interest arises when, in exchange for a loan, a borrower agrees in a security agreement that
the lender (the secured party) may take specified collateral owned by the borrower if he or she should
default on the loan. A security interest also provides the secured party with the assurance that if the
debtor bankrupts, he or she may be able to recover the value of the loan by taking possession of
specified collateral instead of receiving only a portion of the borrower's property after it is divided
among all creditor

This course seeks to examine the rationale, applicable laws, jurisprudence and actual case studies relative to credit
transactions. The principal laws covered in this course includes:

1. Civil Code, Book IV, Titles XI, XII, XV, XVI (Chapters [1], 3 and 4), XIX (except as repealed by RA 11057)
2. Republic Act No. 11057 (Personal Property Security Act)
3. Financial Rehabilitation and Insolvency Act (FRIA)
4. Truth in Lending Act (RA 3765)
5. Letters of Credit (Code of Commerce, Arts. 567, 568); Trust Receipts Law (PD 115)
6. Usury Law and related CB/BSP Circulars

INTRODUCTION

The Concept of Credit

A. Credit, Debt and Security

William Shakespeare, The Merchant of Venice-Book Report Assignment

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B. Credit and Credit Transactions Defined, Republic Act. No. 3765, Sec. 3. (2)
People v. Concepcion 44 Phil 126 (1922)

C. Commercial Credit Transactions, Code of Commerce, Art. 1 to 3

Loan

I. The Concept of Loan

A. General Concepts, Art1. 1933, Art. 1305

1. Obligation to Deliver, Art. 1934

Garcia v. Thio 518 SCRA 433 (2007).
2. Object of a Loan, Art. 1933, Art. 418
3. Consideration of a Loan, Art. 1933
4. Obligation to Return or Pay, Art. 1933, Art. 1232, Art. 1233

B. Contract to Loan, Art. 1934

Saura Import and Export Co. Inc. v. DBP, 44 SCRA 445 (1972).
BPI Inv. Corp. v. CA and ALS M & D Corp., 377 SCRA 117 (2002).
Pantaleon v. American Express, 629 SCRA 276 (2010)
Spouses Ong v. BPI Family Bank, GR No. 208638, Jan. 24, 2018

II. Commodatum

A. General Concepts, Art. 1933, Art. 1935, Art. 1939

1. Consideration in Commodatum
2. Object of Commodatum, Art. 1936
Producers Bank v. CA, 397 SCRA 651 (2003)

B. Parties to a Commodatum

1. Ownership by Bailor, Art. 1938, Art. 1933

2. Use by Bailee, Art. 1935, Art. 1940, Art.1939
3. Solidary Liability of Bailees, Art. 1945

C. Liability for Expresses and Damages

1. Ordinary Expenses, Art. 1933, Art. 1935, Art. 1941, Art. 1943
Pajuyo v. CA, 430 SCRA 492 (2004)
2. Extraordinary Expenses, Art. 1949
3. Other Expenses, Art. 1950
4. Abandonment by Bailor, Art. 1952
5. Right of Retention by Bailee, Art. 1944, Art. 1951

D. Liability for Loss, Art. 1933, Art. 1942

Republic v. Bagtas, 6 SCRA 262 (1962).

E. Obligation to Return, Art. 1933, Art. 1946 to 1948

Quintos v. Beck, 69 Phil. 108 (1939).

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Unless otherwise indicated, “Art.” Refers to the Articles of the Civil Code
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III. Simple Loan

A. General Concepts, Art. 1933, Art. 1954, Art. 1980, Act. No. 2137, Sec. 58 “Fungible goods”
BPI Family Bank v. Franco, 538 SCRA 184 (2007).
People v. Puig and Porras, 563 SCRA 564 (2008).

B. Obligation to Pay, Art. 1955, Art. 1249, Art. 1250

C. Interest

1. Conventional Interest, Art. 1933, Art. 1956, Art. 1253, Art. 1958, art. 1960, Art. 2154, Art. 1423, Act. No.
2655, Sec. 1, Central Bank Circular No. 416, series of 1974, Act. No. 2655, Sec. 7, Sec. 7-a (as inserted by
P.D. No. 1684).
Concepcion v. Court of Appeals, et. al., 274 SCRA 614 (1997)
Frias v. San Diego-Sison, 520 SCRA 244 (2007).
Ignacio F. Juico v. China Banking Corp., 695 SCRA 520 (2013) (Include Concurring Opinion)

2. Interest on Interest, Art. 1959, Art. 2212.

3. Compensatory, Penalty or Indemnity Interest, Art. 1169, Art. 1226, Art. 2209, Art. 2213, Art. 2226, Art.
2227.
GSIS v. CA 145 SCRA 311 (1996)
Eastern Shipping Lines, Inc. v. CA, 234 SCRA 78 (1994) (Ratio Decidendi only)
Ligutan v. CA, 376 SCRA 560 (2002)
Siga-an v. Villanueva, 576 SCRA 696 (2009)
Estores v. Spouses Supangan, 670 SCRA 95 (2012)
Nacar v. Gallery Frames and/or Bradley, 703 SCRA 439 (2013)

4. Finance Charges, R.A. No. 3765, Sec. 4. Sec. 6

UCPB v. Samuel and Beluso, 530 SCRA 567 (2007).

5. Usury
A. General Concepts, Art. 1175, Art. 1957, Art. 1961, Act. No. 2655, Sec. 1-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,
688 SCRA 530 (2013)

B. Usurious Acts, Act. No. 2655, Sec. 2 to 4

C. Remedies, Art. 1413, Act. No. 2655, Sec. 6 to 10

1) Remedy of Debtor
2) Remedy of Creditor
Carpo v. Chua & Dy Ng 471 SCRA 471 (2005)

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
BPI v. IAC and Zshornack, 164 SCRA 630 (1988)

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 Chan vs. Maceda, 402 SCRA 352 (2003)
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
The Roman Catholic Bishop of Jaro v. De La Pena, 26 Phil 144 (1913).
CA Agro-Industrial Development Corp. v. CA and Security Bank, 219 SCRA 426 (1993).

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

Durban Apartments Corp. v Pioneer Insurance and Surety Corp.,

639 SCRA 441 (2011)

B. Examples of Necessary Deposit

1. Compliance with a Legal Obligation, Art. 1996, Art. 1997

2. On the Occasion of a Calamity, Art. 1996, Art. 1997, Art. 2168
3. Passenger Baggage with Common Carriers, Art. 1754
4. Hotel or Inns, Art. 1998 to 2004
YHT Realty Corporation v. CA, 451 SCRA 638 (2005)

IV. Judicial Deposit

Art. 1964, Art. 2005 to 2009

V. Warehouse Receipts

A. General Concepts, Act. No. 2137, Sec. 1 to 7

B. Obligations and Rights of a Warehouseman

1. Obligation to Deliver, Act. No. 2137, Sec. 8 to 19, Sec. 36, Sec. 58
2. Liability for Goods, Sec. 20 to 26
3. Warehouseman’s Lien, Sec. 31 to 36

C. Negotiation and Transfer, Sec. 37 to Sec. 49

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 D. Criminal Liability, Sec. 50 to Sec, 55

E. General Bonded Warehouses, Act No. 3893, as amended

PNB v. Se, et. al., 256 SCRA 380 (1996)

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) (II (kk) (jj) (qq) (pp) (t)

II. Letters of Credit

A. General Concepts, Code of Commerce, Art. 567, Art. 568, Art. 2

Bank of America vs. Court of Appeals, 228 SCRA 357 (1993)
Transfield Philippines, Inc. v. Luzon Hydro Corporation Australia, et. al., 443 SCRA 307 (2004).

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 or Entrustee, Sec. 9 to 13
E. Rights of Purchaser, Sec. 11
Colinares & Veloso v. CA, 339 SCRA 609 (2000)
Hur Tin Yang vs. People of the Philippines, 703 SCRA 606 (2013)
Sps. Dela Cruz vs. Planters Products, Inc., 691 SCRA 28 (2013)

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

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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. CA & BPI, 475 SCRA 398 (2005)

F. Right to Protection, Art. 2071

G. Right to Indemnification, Art. 2066, Art. 2050, Art. 1236, Art. 2069, Art. 2070, Art. 2072

H. Right to Subrogation, Art. 2067, Art. 2050, Art. 1237, Art. 2068, Art. 2080

I. Rights of Co-Guarantors

1. Benefit of Division, Art. 2065, Art. 2078

2. Right to Reimbursement, Art. 2073 to 2075

J. Extinguishment and Right of Release, Art. 2076, Art. 2077, Art. 2079, Art. 2080

V. Surety

A. General Concepts, Art. 2047, Art. 1211, Art. 1216, Art. 2082 to 2084

B. Form of Surety, Art. 1403

C. Obligations Secured, Art. 2053

Security Bank v. Cuenca, 341 SCRA 781 (2000)

D. Distinguished from Standby Letter of Credit

E. Distinguished from Guaranty, Art. 2047

Palmares v. CA & M. B. Lending Corporation, 288 SCRA 422 (1998)
E. Zobel, Inc. v. CA, 290 SCRA 1 (1998)
Philippine Blooming Mills, Inc. & Ching v. CA, 413 SCRA 445 (2003)
IFC v. Imperial Textile Mills, Inc., 475 SCRA 445 (2005).
Lim vs. Security Bank Corporation, 718 SCRA 709 (2014)
Trade and Investment Development Corporation of the Philippines (Formerly Philippine Export and
Foreign Loan Guarantee Corporation) vs. Asia Paces Corporation, 716 SCRA 67 (2014)

F. Distinguished from Joint and Solidary Obligations, Art. 2047, Art. 2066, Art. 2067, Art. 1217
Escano & Silos v. Ortigas, Jr., 526 SCRA 26 (2007).

VI. Pledge and Mortgage

A. General Concepts, Art. 2058, Art. 2087

B. Obligations Secured, Art. 2086, Art. 2052, Art. 209

C. Contract to Pledge or to Mortgage, Art. 2092

D. Remedies of Pledgee and Mortgagee

E. Indivisibility of a Pledge or Mortgage, Art. 2089, Art. 2090

F. Pactum Commissorium, Art. 2087, Art. 2088

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 1. Elements
2. Effects on Pledge or Mortgage
DBP v. CA, 284 SCRA 14 (1998).
Bustamante v. Rosel, 319 SCRA 413 (1999)
Ong. v. Roban Lending Corporation, 557 SCRA 516 (2008)

G. Equitable Mortgage, Art. 1602 to 1605

VII. Security Over Personal Property (Republic Act 11057)

A. General Concepts, Art. 2085, Art. 2087, Art. 2123

B. Form of Pledge, Art. 2096

C. Obligations Secured

D. Object of Pledge, Art. 2094, Art. 2095, Art. 416, Art. 417

E. Ownership of Collateral, Art. 2103, Art. 2102, Art. 2101, Art. 1951, Art. 2108, Art. 2112, Art. 2097
Estate of Litton v. Mendoza & CA, 163 SCRA 246 (1988)

F. Rights of Third Party Pledgor, Art.2120, Art. 2117, Art. 2066 to 2070, Art. 2079 to 2081

G. Rights 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, 169 SCRA 95 (1989). (include concurring
opinion)
Chu v. Court of Appeals et al., G.R. No. L-78519, September 26, 1989
Citibank, N.A. & Investor Finance Corporation v. Sabeniano, 504 SCRA 378 (2006)

H. Return of Collateral, Art. 2105, Art. 2107, Art. 2108, Art. 2110, Art. 2111

I. Foreclosure of Pledge, Art. 2112, Art. 2119.

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., 479 SCRA 571 (2006).
c. Right to Surplus of 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., 638 SCRA 615 (2010)

B. Form of Chattel Mortgage, Act No. 1508, Sec. 4 to 6

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 C. Obligations Secured, Act. No. 1508, Sec. 5
ACME Shoe, Rubber & Plastic Corporation v. CA, 260 SCRA 714 (1996)

D. Object of Chattel Mortgage, Art. 2124, Art. 417, Act. No. 1508, Sec. 2
Makati Leasing & Finance Corporation v. Wearever Textile Mills, Inc. & CA, 122 SCRA 296 (1983).

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, 198 SCRA 826 (1991).

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
RCBC v. Royal Cargo Corporation, 602 SCRA 545 (2009)
3. Right to Possession
Servicewide Specialists, Inc. v. CA, 320 SCRA 478 (1999).
4. Right to Surplus or Deficiency, Act. No 1508, Sec. 14
PAMECA Wood Treatment Plant, Inc. v. CA, 310 SCRA 281 (1999).

IX. Security Over Real Property

A. General Concepts, Art. 2085, 2087

B. Form of Real Estate Mortgage, Art. 2125, Art. 2131

C. Obligation Secured

Prudential Bank v. Alviar & Alviar, 464 SCRA 353 (2005)

D. Object of Real Estate Mortgage, Art. 2124, 415

1. After Acquired Properties

People’s Bank & Trust Company & Atlantic Gulf and Pacific Co. of Manila v. Dahican Lumber
Company, et al., 20 SCRA 84 (1967)

2. Effect and Extent, Art. 2126, Art. 2127, Art. 2129

Star Two (SPV-AMC), Inc. v. Paper City Corp. of the Phil., 692 SCRA 438 (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, 675 SCRA 80 (2012)

G. Foreclosure of Real Estate Mortgage

1. Judicial Foreclosure

a. Complaint for Foreclosure, Rule 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., 380 SCRA 381 (2002).
c. Equity of Redemption, Rules of Court, Rule 68, Sec. 2

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 d. Foreclosure Sale, Rules of Court, Rule 68, Sec. 3 to 5, Sec. 7, Sec. 8, Rule 39, Sec. 31, Sec. 32
Sec. 34
e. Right of Redemption
Huerta Alba Resort, Inc. v. Court of Appeals, 339 SCRA 534 (2000)
f. Right to Surplus or Deficiency, Rules of Court, Rule 68, Sec. 4, Sec. 6, Rule 86, Sec 7

2. Extrajudicial Foreclosure

a. Special Powers, Act. No. 3135, Sec. 1

b. Foreclosure Sale, Act. No. 3135, Sec. 2, AM No. 99-10-05-0 as amended

1. Requirement of Notice
Grand Farms, Inc. v. CA, 193 SCRA 748 (1991)

2. Conduct of Sale, Act. No. 3135, Sec. 4, Sec. 5, A.M. No. 99-10-05-0
Spouses Rabat v. PNB, 673 SCRA 383 (2012)

c. Right of Redemption, Act No 3135, Sec. 6 A.M. No. 99-10-05-0

Goldenway Merchandising Corporation v. Equitable PCIBank, 693 SCRA 439 (2013).

1. Who may Redeem,

Act No. 3135, Sec. 6, Rules of Court, Rule 9, Sec. 27
Medida, et. al v. Court of Appeals, 208 SCRA 887 (1992)
2. How to Redeem,
Rules of Court, Rule 39, Sec. 28, Sec. 29, Sec. 30, Sec. 33
Spouses Francisco & Whelma Yap v. Spouses Zosimo & Natividad Dy, et al.,
654 SCRA 593 (2011)

d. Right to Deficiency, Rules of Court, Rule 86, Sec. 7.

Heirs of the Late Spouses Maglasang v. Manila Banking Corp., 706 SCRA 235 (2013)

e. Right to Surplus
Suico v. PNB, 531SCRA 514 (2007)

f. Right to Possesion

1. During Redemption Period, Act No. 3135, Sec. 7 to 9

2. After Consolidation of Ownership, Rules of Court, Rule 39, Sec. 33
Chu, et al., v. Lacqui & PBComm., G.R. No. 169190 February 11, 2010
3. When Held by a Third Party, Rules of Court, Rule 39, Sec. 33, Sec. 16
BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc.
639 SCRA 405 (2011)
Nagtalon v. United Coconut Planters Bank, G.R. No. 172504, July 31, 2013.
Homeowners Savings and Loan Bank v Felonia , 717 SCRA 358 (2014)
Cameron Granville 3 Asset Management, Inc. v Chua and Filiden Realty and
Development Corp. (GR No. 191170, Sept. 14, 2016); White Marketing Development
Corp. v Granwood Furniture & Woodwork, Inc. (G.R. No. 222407, Nov. 23, 2016)
PNB v Heirs of Alonday (GR No. 171865, 12 Oct. 2016)
Spouses Teves v. Integrated Credit and Corporate Services
(GR No. 216714, Apr. 4, 2018)
Roldan v Spouses Barrios (GR No. 214803, Apr. 23, 2018)

X. Antichresis

A. General Concepts, Art. 2132. Art. 2133, Art. 2138. Art. 2139, Art. 2085, Art. 2089, Art. 2090, Art. 2091
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 B. Form of Antichresis, Art. 2134
C. Right of Retention, Art. 2136
D. Foreclosure of Antichresis, Art. 2137
Diego v. Fernando, 109 Phil 143 (1960).

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., 1 SCRA 288 (1961)
Resolution on Motion to Consider, 6 SCRA 929 (1962).
DBP v. CA, 363 SCRA 307 (2001)
J.L. Bernardo Construction v. CA, 324 SCRA 24 (2000)

2. Ordinary Preferred Credits, Art. 2244, P.D. No. 442, Art. 1110, 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., 526 SCRA 300 (2007)
Philippine Deposit Insurance Corporation vs. Bureau of Internal Revenue, 698 SCRA 311 (2013)

III. Suspension of Payments

A. 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

B. Commissioner, Sec. 95, Sec. 97

C. Creditors’ Meeting, Sec. 97, Sec. 99, Sec. 100

D. Proposed Agreement, Sec. 94, Sec. 101, Sec. 102

E. Treatment of Claims, Sec. 96, Sec. 98, Sec. 101

1. Secured Creditor Claims

2. Exempt Claims
3. Excluded Claims

IV. Rehabilitation

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A. General Concepts, R.A. No. 10142, Sec. 2

B. Court-Supervised Rehabilitation

1. Voluntary Proceedings, Sec. 12

2. Involuntary Proceedings, Sec. 13, Sec. 14
3. Provisions Common to Voluntary and Involuntary Rehabilitation Proceedings
4.
a. Commencement Order, Sec. 16, Sec. 20
b . Stay or Suspension Order, Sec. 16, Sec. 20

1. General Concepts
RCBC v. IAC, 320 SCRA 279 (1999)
Subrejuanite v. ASB Development Corporation, 471 SCRA 763 (2005)
Town and Country Enterprises, Inc. v. Quisumbing et. al.. 173610, October 1,
2012
Situs Development Corp. v. Asiatrust 688 SCRA 621 (2013)

Exceptions to Stay or Suspension Order, Sec. 18, Sec. 16

MWSS v. Daway and Maynilad Water Services, Inc., 432 SCRA 559 (2004)
Panlilio et al., v. Regional Trial Court, 641 SCRA 438 (2011)

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. 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

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
BPI v. SEC, 541 SCRA 294 (2007).
BPI v. Sarabia Manor Hotel Corp., 702 SCRA 432 (2013)
Victorio-Aquino vs. Pacific Plans, Inc., 744 SCRAS 480 (2014)
BIR Asst. Commissioner vs. Lepanto Ceramics, Inc. (GR No. 224764, Apr. 24, 2017)
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 Puerto Azul Land, Inc. vs. Export Industry Bank (GR No. 213020, March 20, 2017)

C. Pre-negotiated Rehabilitation, Sec. 76 to 82, Sec 92

D. Out-of-Court Rehabilitation, Sec. 83, Sec. 84

1. General Concepts
2. Benefits of Out-of-Court Rehabilitation, Sec. 85 to 89

V. Liquidation

A. General Concepts, Art. 2238 to 2240, R.A. No. 10142, Sec. 2, Sec. 4

B. 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

C. Liquidation of Insolvent Juridical Debtors, Sec. 93

1. Voluntary Liquidation, Sec. 90

2. Involuntary Liquidation

D. 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, 555 SCRA 465 (2008)
Yngson v. PNB, G.R. NO.678 SCRA 447 (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

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 6. Termination of Proceedings, Sec. 121, Sec. 134, Sec. 135

E. 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

Final Exams

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