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    Credit Transactions

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    Kersy Mere Fajardo
    Credit transactions are agreements based on trust between parties where one provides money, goods, or services to another. There are two main types of credit transactions: commodatum and mutuum. Commodatum is a loan of non-consumable goods, where the borrower is obligated to return the identical goods. The borrower is responsible for ordinary expenses to preserve the goods but not deterioration from normal use. Mutuum is a loan of consumable goods like money, where ownership transfers to the borrower who must return an equivalent amount. Interest may be charged if stipulated in writing.

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    Credit Transactions

    Uploaded by

    Kersy Mere Fajardo
    30 views5 pages
    Credit transactions are agreements based on trust between parties where one provides money, goods, or services to another. There are two main types of credit transactions: commodatum and mutuum. Commodatum is a loan of non-consumable goods, where the borrower is obligated to return the identical goods. The borrower is responsible for ordinary expenses to preserve the goods but not deterioration from normal use. Mutuum is a loan of consumable goods like money, where ownership transfers to the borrower who must return an equivalent amount. Interest may be charged if stipulated in writing.

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    Credit transactions are agreements based on trust between parties where one provides money, goods, or services to another. There are two main types of credit transactions: commodatum and mutuum. Commodatum is a loan of non-consumable goods, where the borrower is obligated to return the identical goods. The borrower is responsible for ordinary expenses to preserve the goods but not deterioration from normal use. Mutuum is a loan of consumable goods like money, where ownership transfers to the borrower who must return an equivalent amount. Interest may be charged if stipulated in writing.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    30 views5 pages

    Credit Transactions

    Uploaded by

    Kersy Mere Fajardo
    Credit transactions are agreements based on trust between parties where one provides money, goods, or services to another. There are two main types of credit transactions: commodatum and mutuum. Commodatum is a loan of non-consumable goods, where the borrower is obligated to return the identical goods. The borrower is responsible for ordinary expenses to preserve the goods but not deterioration from normal use. Mutuum is a loan of consumable goods like money, where ownership transfers to the borrower who must return an equivalent amount. Interest may be charged if stipulated in writing.

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    of 5

    CREDIT TRANSACTIONS

     Credit Transactions – agreements based on trust or belief of


    someone on the ability of another person to comply with his
    obligations.
    o Includes all transactions involving loans of money,
    goods or services extended to another either
    gratuitously or onerously.
     Security – something promised or delivered to ensure the
    fulfillment of an obligation.

    1. LOAN
    A. Contract of Commodatum- where one of the parties (bailor)
    delivers to another (bailee) something not consumable so that
    the latter may use the same for a certain time and there after
    returns it.

    KINDS OF COMMODATUM
    1. Precarium- where the bailor may demand the thing loaned at
    will under the conditions set forth in Article 1947. The use
    of the thing by the bailee depends on the pleasure of the
    bailor.

    2. Ordinary Commodatum-where the bailor cannot just demand the


    return of the things at will because there is a period
    agreed upon which must be respected.

    CHARACTERISTICS OF COMMODATUM:
     It is essentially gratuitous.
     Its purpose is to transfer the temporary use of the thing
    loaned to the bailee.
     The use of the thing is for a “certain time”.
     It is a real contract because:
    o it requires delivery of the object
     It is a principal contract because:
    o it does not depend upon another contract
     It is a unilateral contract because:
    o after the object had been delivered by the
    bailor(lender), it creates obligations to be performed
    by the bailee alone(borrower).
     It is purely personal because:
    o of the trust and belief reposed on the bailee

    GENERAL RULE: The bailor does not enjoy the fruits.


    EXCEPTION: When there is a stipulation in the contract allowing
    the bailee to enjoy the fruits of the thing loaned.

     Subject of Commodatum
    o Must be NON-CONSUMABLE
    o Not to consume them

     Object of Commodatum
    o Both movable and immovable property

    OBLIGATIONS OF THE BAILEE


    The Bailee is obliged to:
    1. Pay for the ordinary expenses for the use and preservation
    of the thing loaned
    REASON:
    o The bailee is under the obligation to return the
    identical thing to the bailor
    o Consequently, it is understood that he should take good
    care of the thing with the diligence of a good father of
    a family
     This applies only:
    o To ORDINARY EXPENSES
     If the expenses incurred by the bailee are EXTRAORDINARY:
    o The bailor must reimburse the bailee provided that
    before incurring them, he first informs the bailee about
    it
     If the EXTRAORDINARY expenses are incurred during the actual
    use of the thing:
    o The bailee and the bailor shall equally bear the
    expenses UNLESS there is a stipulation to the contrary
    2. GENERAL RULE: No person shall be responsible for those
    events which could not be foreseen, or which, though
    foreseen, were inevitable.
    EXCEPTION: The bailee is liable for the loss of the things
    if it should be through a fortuitous event:
    o If he devotes the thing to any purpose different from
    that for which it has been loaned.
    o If he keeps it longer than the period stipulated or
    after the accomplishment of the use for which the
    commodatum has been constituted.
    o If the thing loaned has been delivered with appraisal of
    its value, unless there is stipulation exempting the
    bailee from responsibility in case of a fortuitous event
    o If he lends or leases he thing to a third peson who is
    not a member of his household.
    o If, being able to save either the thing borrowed or his
    own thing, he chose to save the latter.
    o Committed an act tantamount to ingratitude
    3. GENERAL RULE: Bailee does not answer for the deterioration
    of the thing loaned due only:
    a. To the use thereof (wear and tear)
    b. Without his fault
    EXCEPTION: If the deterioration is caused by the fault or
    negligence of the bailee.
    4. GENERAL RULE : Bailee has no right to retain the thing
    loaned on the ground that:
    a. The bailor owes him something including claims for
    extraordinary expenses by him(bailee)
    REASON: Bailment implied trust that as soon as the time has
    expired, or the purpose accomplished, the bailed property must be
    restored by the bailor
    EXCEPTION: Bailee can retain the thing loaned when claims
    for damages which the bailee suffered by reason of:
    a. Hidden defects or flaws of the thing loaned
    b. He was not warned or advised by the bailor
    He has no right to sell the thing to satisfy his claims for
    damages

    5. Solidary Obligation – each one of the debtors is obliged to


    pay the entire obligation, and where each one of the
    creditors has the right to demand from any of the debtors,
    the payment or fulfillment of the entire obligation

    OBLIGATIONS OF THE BAILOR


    1. The bailor cannot demand the return of the thing loaned
    till:
    a. After the expiration of the period stipulated; or
    b. After the accomplishment of the use for which the
    commodatum has been constituted.
    EXCEPTION: When the bailor in the meantime, has urgent need
    of the thing loaned, he may demand its:
    a. Return, or;
    b. Its temporary use
     in case of temporary use
    o the commodatum is not extinguished
    o it is merely suspended
     However, if the period had already expired the bailor can no
    longer demand the return of the thing
     Damages are not recoverable by the bailee in the absence of
    bad faith on the part of the bailor
     If the loan is executed for illegal or immoral purpose or
    use, the contract is VOID.
    Precarium - the bailee (borrower) is bound to return the thing
    upon the demand of the bailor (lender) in any of the following
    circumstances:

    a. If the duration of the contract had not been stipulated;


    b. If the use to which the thing loaned should be devoted had
    not been also stipulated; and
    c. If the use of the thing is merely by tolerance of the owner
    B. Contracts of Mutuum- where money or other consumable thing is
    delivered by the lender to the borrower subject to the
    condition that the same amount of the same kind and quality
    shall be paid.
     The cause in a contract of loan
    o As to the borrower: the acquisition of the thing
    o As to the lender: the right to demand the return of the
    thing loaned or its equivalent
     Ownership of the thing is transferred:
    o Borrower becomes the owner of the thing or property
    delivered to him
    FORM OF PAYMENT
    1. If the object is money: Payment must be made in the currency
    stipulated;
     otherwise it is payable in the currency which is legal
    tender in the Philippines.
    2. If the object is a fungible thing other than money: Borrower
    must pay lender another thing of the same kind, quality, and
    quantity.
    o In case it is impossible to do so, the borrower shall
    pay its value at the time of the perfection of the
    loan.
    This Applies to: INTEREST FOR USE OF MONEY.

    REQUISITES FOR RECOVERY OF INTEREST:


    1. The payment of interest must be expressly stipulated.
    2. in writing

    STIPULATION OF INTEREST
    1. The interest rate stipulated by the parties, not the legal
    rate of interest, is applicable.
    2. Default rule: If the parties do not stipulate an interest
    rate, the legal rate for loans and forbearances of money is
    6%.
    3. Increases in interest must also be expressly stipulated.
    4. It is only in contracts of loan, with or without security,
    that interest may be stipulated and demanded.
    5. Stipulation of interest must be mutually agreed upon by the
    parties and may not be unilaterally increased by only one of
    the parties.

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