Assignment of Credit

Question 1

Assignment of Credit vs Donation

Answer 1

Assignment - for value

Question 2

Assignment on Credit Provision

Answer 2

NCC 1624

An assignment of credits and other incorporeal rights shall be perfected in accordance with the provisions of NCC 1475

Article 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. (1450a)

Question 3

Characteristics

Answer 3

Consensual
Bilateral
Generally Onerous
Commutative (or Aleatory)

Question 4

Are inchoate rights transferred?

Answer 4

No it can only transfer rights which the assignor has at the time of the assignment.

Question 5

What is transferred?

Answer 5

Principal Right

Accessory Rights and Remedies

Question 6

Does the debtor need to consent?

Answer 6

No.

Question 7

What is the importance of giving notice to the debtor?

Answer 7

Assignment takes effect from the time the debtor has knowledge thereof.

Question 8

Effect of Payment by debtor after assignment is made?

Answer 8

Effect of Payment

1. Before notice
   - Paying the assignor (orig creditor) is valid as against the assignee (debtor free)
2. Before notice BUT has knowledge
   - Bad Faith
   - Not valid against the Assignee
3. After notice
   - Not valid against Assignee

Question 9

Warranties of Assignor?

Answer 9

1. Existence of Credit at the time
2. Legality of the credit at the time of assignment
3. Solvency of debtor
   GR - Not warranted

Exception

(1) expressly stipulated or
(2) Debtor was already insolvent and this insolvency was of common knowledge

Question 10

Duration of warranty for solvency

Answer 10

1. Stipulated
2. No stipulation
   - 1 year from assignment (if period for payment expired)
   - 1 year from maturity (if period for payment not expired)

Question 11

Liability for breach of warrant (assignor)

Answer 11

Good Faith

1. Price
2. Expenses of Contract
3. Legitimate payments made by reason of assignment

Bad Faith
4. ++Damages

Question 12

Bad Faith (for Assignment)

Answer 12

Already had knowledge

1. Didn’t exist
2. Not legal
3. Insolvent (when he warranted solvent)

Question 13

Selling successional or hereditary rights?

Answer 13

Selling only the right to be an heir.

Question 14

Sale of WHOLE of certain rights, rents or products

Answer 14

Liable only for the legitimacy of the whole

Example : A sells all his rights as a partner to B. These rights include a car. However, the car is later recovered by C a creditor of the partnership.

A is not liable. He is only liable for the WHOLE not the specific parts.

Question 15

Fruits received (of an inheritance)

Answer 15

G : Assignor debtor liable for the fruits received. (Must give to assignee or reimburse)
E : Stipulation

Question 16

Debts and Charges on Estate paid by the seller

Answer 16

G : If the assignor pays the debts of the estate after assigning, the assignee must reimburse him.
E : Stipulation