Frank Lloyd C. Cadorna JD - Ii Credit Transactions First Quiz 1
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Frank Lloyd CadornaFrank Lloyd C. Cadorna JD - Ii Credit Transactions First Quiz 1
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Frank Lloyd CadornaFRANK LLOYD C.
CADORNA
JD – II
CREDIT TRANSACTIONS
FIRST QUIZ
1.
A precarium is a contract of loan wherein the bailor has the right to demand the return of the
thing loan at will provided that neither the duration of the contract nor the purpose as to why the thing
is loaned is stipulated in the contract or if the use of the thing by the bailee is merely tolerated by the
bailor.
To illustrate, Lender B loaned his car to Borrower A, without any stipulation as to date when A
should return it or for what purpose the car should be utilized. Another example would be if the car is
already in the possession and usage of Borrower A, with the knowledge of Lender B, and the latter did
not object to it. In both cases illustrated above, Lender B may demand the return of his car anytime as it
is a contract of precarium.
2.
No, Lender Z has no obligation to reimburse the expenses incurred by Borrower X.
Under the New Civil Code, the bailee has the obligation to pay for the ordinary expenses
incurred for the use and preservation of the thing borrowed. Furthermore, the New Civil Code provides
that with respect the extraordinary expenses should be borne by the bailor only if he was informed by
the bailee of such expenses prior to incurring it, unless the situation is urgent that to wait for the bailor’s
reply will cause damage to the thing loaned.
With respect to the gasoline, washing, and greasing expenses, these are considered as ordinary
expenses necessary for the use and preservation of the car. Hence, Lender Z has no obligation to
reimburse these. As to the expense incurred to repair the loose wirings, this is considered as an
extraordinary expense, which needs to be communicated to Lender Z for him to be liable to reimburse it
to Borrower X. Since Borrower X did not inform Lender Z of such, and there is no showing that the repair
is urgent that failure to do so would cause damage to the car, then Lender Z is not liable to reimburse
Borrower X of such expense.
3.
a. Yes, A may recover the watch from C as the latter is a purchaser in bad faith.
The New Civil Code provides that, if a capacitated depositor deposits a thing to an incapacitated
depositary, and the latter subsequently sells it to a purchaser in bad faith, the capacitated depositor may
recover the thing deposited from the purchaser in bad faith.
In this case, A, the capacitated depositor deposited the watch to B, an incapacitated depositary
due to his minority. If C purchases the watch from B in bad faith, applying the New Civil Code, A may
recover it from C.
b. If C acted in good faith in buying the watch, A can’t recover it from him anymore. What A can
do, under the New Civil Code, is to compel B to give him the amount by which B benefited or enriched
himself from the sale of the watch.
4.
The contract entered by the parties is a contract of loan and not deposit.
In a contract of deposit, the primary purpose for the delivery of the thing is the safekeeping of
such, and not its use. On the other hand, in a contract of mutuum or simple loan, the money or
consumable thing delivered is utilized by the borrowers, with or without stipulation for interest.
In this case, since the contract has the stipulation “without interest”, it can be said that C
permits A and B to use the money loaned, without compensation in the form of interest. Such
permission can also be inferred when C allows for the extension of the payment of the amount loaned
to A and B, now with interest. Therefore, since the borrower is permitted to use the thing loaned, then
the contract is considered as a contract of loan, and not a contract of deposit.
5.
No, ABC Hotel is not freed from his liability for the loss of the thing deposited by A, as both
defenses are untenable.
According to the New Civil Code, a hotel is not liable for the loss of its guest’s things provided
that the loss was due to a force majeure or if the loss or damage is caused by the guest himself, or his
companions or servants. The New Civil Code further provides that the act of a thief or a robber is not
considered as force majeure unless done with the use of arms or irresistible force. And lastly, the hotel
can’t free himself from responsibility by posting notices that it is not liable for the things brought by the
guest.
In this case, the theft was not done with the use of arms or irresistible force as it was done
through the sleight of hand. Hence, the defense of the hotel that the theft is force majeure is not
tenable. Furthermore, the notices posted by ABC Hotel has not freed it from its liability. Therefore, both
defenses are not tenable and ABC Hotel is still liable for the stolen electronics owned by A, its guest.
