8/13/2019 1st part Credit Transactions

1/2

U S J R C r e d i t T r a n s c a t i o s - P A N O T S K I E Page 1

CREDIT TRANSACTIONS

includes all transactions involving the purchases or loans of goods

services or money in the present with the promise to pay or

deliver in the future

CHAPTER 1

Kinds of Loans

Commodatum Mutuum (simple loan)

Commodatum Mutuum

-Not consumable

-delivers another a thing to use

the same for a certain time and

return it

-essentially gratuitous

-

-consumable

-delivers another a money

or thing with the condition

that the same amount be

of the same kind and

quality shall be paid

-may be gratuitous or with

a stipulation

Kinds of Commodatum

Ordinary commodatum Precarium

ACCEPTED PROMISEto deliver something by way of

commodatum or simple loan is BINDINGupon the parties

Commodatum or simple loan ITSELF SHALL NOT BE PERFECTED

until DELIVERY of the OBJECT of the contract.

Commodatum and Mutuum are real contracts.

BAILORgiver/ the one who delivers the object to the bailee

BAILEEborrower/ recipient

BAILEE acquires the use of the thing loaned BUT NOT ITS FRUITS.

If any compensation is to be paid by the BAILEE thecontract CEASES to be a COMMODATUM.

COMMODATUM is essentially gratuitous Transient possession of a person (not in the conept of

an owner) by an owners land partakes of the

character of a commodatum IT DOES NOT MILITATE

AGAINST THE TITLE OF THE OWNER.

Fruits and its use shall go to the owner.However a STIPULATIONthat the bailee may make

useof the fruits of the thing loaned is VALID.

Consumable goods may be a subject of COMMODATUM if the

PURPOSE is NOT the CONSUMPTION of the object.

Movable and Immovable Property may be the Object of

COMMODATUM

COMMODATUM of:

Personal Property Real Property

-granting the use of a certain

personal property ex.

furniture

reserving the ownership for

herself thereof

-granting the use of a lot

which allows another to erect

a house w/out any

consideration or price

BAILOR in commodatum need not be the owner of the thing

loaned.

COMMODATUM is purely personal in character

Death of either Bailor or Bailee extinguishes thecontract

Bailee can netiher lend nor lease the object of thecontract to a third person.However the members of

the BAILEEs household may use the thing loaned,

UNLESS there is a stipulation to the contrary or UNLESS

the nature of the thing forbid such use.

The BAILEE is obliged to pay for the ORDINARY EXPENSES for the

USE and PRESERVATION of the thing loaned

(Art.1941)

The BAILEE is liable for the LOSS OF THE THING even if it should

be through FORTUITOUS EVENT.

he devotes the thing to any purpose different fromthat of which it has been intended

if he keeps it longer than what is stipulated thing loaned has been delivered with appraisal value,

unless there is a stipulation exempting the bailee from

responsibility in cases of fortuitous event.

if he lends or leases the thing not a member of hishousehold

if being able to save either the thing borrowed or hisown thing, he chose to save the LATTER.

If the thing loaned (Carabao) is not returned upon the demand of

the BAILOR the BAILEE is liable to indemnify the owner thereof by

PAYING HIM THE VALUE.

BAILEE does not answer for the deterioration of the thing loaned

due only to the usethereof and without his fault.

The Bailee has NO RIGHT OF RETENTION to the thing loaned on

the ground that the BAILOR OWES HIM SOMETHING even though

arising from expenses.

However THERE IS A RIGHT OF RETENTION for damages incurred

by the Bailee for the Bailors failure to inform him of the thing

loaned.

The failure of the BAILEE to return the thing loaned DID NOT

MEAN ADVERSE POSSESSION

He held in trust for the owner UNTIL REPUDIATED the TRUST

by declaring the property in his name for taxation purposes.

Catholic Vicar Apostolic of the Mt. Province vs. Court ofAppeals

If there are two or more BAILEES of the thing loaned in the same

contract, they are SOLIDARILY LIABLE.

The BAILOR cannot demand the return of th thing loaned till

AFTER THE EXPIRATION of the period stipulated or AFTER THE

ACCOMPLISHMENT of the use for which the commodatum has

been constituted.

However, if in the meantime he should have urgentneed of the thing he MAY DEMAND temporary use by

the bailor.

-the contract of commodatum is SUSPENDED while the

thing is in possession of the BAILOR.

8/13/2019 1st part Credit Transactions

2/2

U S J R C r e d i t T r a n s c a t i o s - P A N O T S K I E Page 2

PRECARIUM

the bailor may demand the thing at will in 2 instances:

If there is no stipulation as to the duration of the use ofthe thing

If the use of the thing is merely tolerated by the ownerThe BAILOR may demand the immediate return of the thing if theBAILEEcommits any act of ingratitude.

Refer to Art.765 of the CIVIL CODE

BAILEE (DONEE) commits offense against the person,honor, or the property of the BAILOR (DONOR) or his

wife or children under parental authority.

BAILEE (DONEE) imputes to the BAILOR(DONOR) anycriminal offense, or any act involving moral turpitude

even though he should prove it, unless the crime or the

act has been committed against the BAILEE(DONEE)

himself, his wife or children under his authority.

The Bailor shall REFUND EXTRAORDINARY EXPENSES for the

preservation of the thing loaned

Provided the Bailee brings the same to the knowledgeof the Bailor

Before incurring them EXCEPT the when it is so urgent

that reply to the notification cannot be awaited

without danger. (Art.1949)

If the extraordinary expenses arise on the actual use of the thing

by the bailee even though he acted without fault, they shall be

BORNE EQUALLY by both BAILOR and BAILEE

unless there is a stipulation to the contrary.

(Art.1949)

If for the purpose of making use of the thing, the BAILEE INCURS

EXPENSES OTHER THAN those referred in articles Art.1941 and

Art.1949, he is not entitled to reimbursement.

The BAILOR who, KNOWING THE FLAWS of the thing loaned,

DOES NOT ADVISE THE BAILEE OF THE SAME, shall be liable to

the latter for the damages which he may suffer by reason thereof.

The BAILOR cannot exempt himself from the payment of

expenses or damages by ABANDONING THE THING TO THE

BAILEE.