CREDIT

Question 1

Article 1933. By the contract of loan, one of the parties delivers to another, either something not

Answer 1

consumable so that the latter may use the same for a certain time and return it, in which case the contract is called a commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid, in which case the contract is simply called a loan or mutuum.

Question 2

Article 1933. Commodatum is essentially

Simple loan may be

In commodatum the bailor retains

Answer 2

1. gratuitous.
2. gratuitous or with a stipulation to pay interest.
3. the ownership of the thing loaned, while in simple loan, ownership passes to the borrower. (1740a)

Question 3

Article 1934. An accepted promise to deliver something by way of commodatum or simple loan is binding upon parties, but the commodatum or simple loan itself shall not be

Answer 3

perfected until the delivery of the object of the contract.

Question 4

Article 418. Movable property is either

Answer 4

consumable or nonconsumable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others.

Question 5

Article 1350. In onerous contracts the cause is understood to be, for each contracting party, the

Answer 5

prestation or promise of a thing or service by the other; in remuneratory ones, the service or benefit which is remunerated; and in contracts of pure beneficence, the mere liberality of the benefactor.

Question 6

Article 1935. The bailee in commodatum acquires the use of the thing loaned but not

Answer 6

its fruits; if any compensation is to be paid by him who acquires the use, the contract ceases to be a commodatum.

Question 6

Article 1233. A debt shall not be understood to have been paid unless the

Answer 6

thing or service in which the obligation consists has been completely delivered or rendered, as the case may be. (1157)

Question 7

Article 1232. Payment means not only the delivery of money but also

Answer 7

the performance, in any other manner, of an obligation.

Question 8

Article 1936. Consumable goods may be the subject of commodatum if the purpose of the contract is not the

Answer 8

consumption of the object, as when it is merely for exhibition.

Question 9

Article 1937. Movable or immovable property may be the

Answer 9

object of commodatum.

Question 10

Article 1938. The bailor in commodatum need not be the

Answer 10

owner of the thing loaned.

Question 11

Article 1939. Commodatum is purely personal in character. Consequently:

Answer 11

(1) The death of either the bailor or the bailee extinguishes the contract;

(2) The bailee can neither lend nor lease the object of the contract to a third person. However, the members of the bailee’s household may make use of the thing loaned, unless there is a stipulation to the contrary, or unless the nature of the thing forbids such use.

Question 12

Article 1940. A stipulation that the bailee may make use of the fruits of the thing loaned is

Answer 12

valid.

Question 13

Article 1941. The bailee is obliged to pay for the

Answer 13

ordinary expenses for the use and preservation of the thing loaned

Question 14

Article 1942. The bailee is liable for the loss of the thing, even if it should be through a fortuitous event:

Answer 14

(1) If he devotes the thing to any purpose different from that for which it has been loaned;

(2) If he keeps it longer than the period stipulated, or after the accomplishment of the use for which the commodatum has been constituted;

(3) If the thing loaned has been delivered with appraisal of its value, unless there is a stipulation exempting the bailee from responsibility in case of a fortuitous event;

(4) If he lends or leases the thing to a third person, who is not a member of his household;

(5) If, being able to save either the thing borrowed or his own thing, he chose to save the latter. (1744a and 1745)

Question 14

Article 1944. The bailee cannot retain the thing loaned on the ground that the

Answer 14

bailor owes him something, even though it may be by reason of expenses. However, the bailee has a right of retention for damages mentioned in article 1951.

Question 14

Article 1943. The bailee does not answer for the deterioration of the

Answer 14

thing loaned due only to the use thereof and without his fault.

Question 15

Article 1945. When there are two or more bailees to whom a thing is loaned in the same contract, they are liable

Answer 15

solidarily.

Question 16

ARTICLE 1946. The bailor cannot demand the return of the thing loaned till after the

Answer 16

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 urgent need of the thing, he may demand its return or temporary use.

In case of temporary use by the bailor, the contract of commodatum is suspended while the thing is in the possession of the bailor. (1749a)

Question 17

Article 1947. The bailor may demand the thing at will, and the contractual relation is called a precarium, in the following cases:

Answer 17

(1) If neither the duration of the contract nor the use to which the thing loaned should be devoted, has been stipulated; or

(2) If the use of the thing is merely tolerated by the owner.

Question 18

Article 1949. The bailor shall refund the extraordinary expenses during the contract for the

Answer 18

preservation of the thing loaned, provided the bailee brings the same to the knowledge of the bailor before incurring them, except when they are so urgent that the reply to the notification cannot be awaited without danger.

Question 19

Article 1948. The bailor may demand the immediate return of the thing if the

Answer 19

bailee commits any act of ingratitude specified in article 765.

Question 20

Article 1949. (2) If the extraordinary expenses arise on the occasion of the actual use of the thing by the bailee, even though he acted without fault, they shall be borne

Answer 20

equally by both the bailor and the bailee, unless there is a stipulation to the contrary. (1751a)

Question 21

Article 1951. The bailor who, knowing the flaws of the thing loaned, does not advise the bailee of the same, shall be

Answer 21

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

Question 22

Article 1952. The bailor cannot exempt himself from the

Answer 22

payment of expenses or damages by abandoning the thing to the bailee.

Question 23

Article 1953. A person who receives a loan of money or any other fungible thing acquires

Answer 23

the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality.

Question 24

Article 1954. A contract whereby one person transfers the ownership of non-fungible things to another with the obligation on the part of the latter to

Answer 24

give things of the same kind, quantity, and quality shall be considered a barter.

Question 25

Article 1955. The obligation of a person who borrows money shall be

Answer 25

governed by the provisions of articles 1249 and 1250 of this Code. If what was loaned is a fungible thing other than money, the debtor owes another thing of the same kind, quantity and quality, even if it should change in value. In case it is impossible to deliver the same kind, its value at the time of the perfection of the loan shall be paid.

Question 25

Article 1956. No interest shall be due unless it

Answer 25

has been expressly stipulated in writing.

Question 26

Article 1957. Contracts and stipulations, under any cloak or device whatever, intended to circumvent the laws against usury shall be

Answer 26

void. The borrower may recover in accordance with the laws on usury.

Question 27

Article 1958. In the determination of the interest, if it is payable in kind, its value shall be

Answer 27

appraised at the current price of the products or goods at the time and place of payment.

Question 28

Article 1959. Without prejudice to the provisions of article 2212, interest due and unpaid shall not

Answer 28

earn interest. However, the contracting parties may by stipulation capitalize the interest due and unpaid, which as added principal, shall earn new interest.

Question 29

Article 1960. If the borrower pays interest when there has been no stipulation therefor, the provisions of this Code concerning solutio indebiti, or natural obligations, shall be

Answer 29

applied, as the case may be.

Question 30

Article 1961. Usurious contracts shall be governed by the

Answer 30

Usury Law and other special laws, so far as they are not inconsistent with this Code.

Question 30

Article 1962. A deposit is constituted from the moment a person receives a

Answer 30

thing belonging to another, with the obligation of safely keeping it and of returning the same. If the safekeeping of the thing delivered is not the principal purpose of the contract, there is no deposit but some other contract.

Question 31

Article 1964. A deposit may be constituted

Answer 31

judicially or extrajudicially.

Question 31

Article 1967. An extrajudicial deposit is either

Answer 31

voluntary or necessary

Question 31

Article 1963. An agreement to constitute a deposit is

Answer 31

binding, but the deposit itself is not perfected until the delivery of the thing.

Question 32

Article 1965. A deposit is a

Answer 32

gratuitous contract, except when there is an agreement to the contrary, or unless the depositary is engaged in the business of storing goods.

Question 33

Article 1966. Only movable things may be

Answer 33

the object of a deposit.

Question 34

Article 1968. A voluntary deposit is that wherein the delivery is made by the will of the depositor. A deposit may also be made by

Answer 34

two or more persons each of whom believes himself entitled to the thing deposited with a third person, who shall deliver it in a proper case to the one to whom it belongs.

Question 35

Article 1969. A contract of deposit may be entered into

Answer 35

orally or in writing

Question 36

Article 1970. If a person having capacity to contract accepts a deposit made by one who is incapacitated, the former shall be subject to all the

Answer 36

obligations of a depositary, and may be compelled to return the thing by the guardian, or administrator, of the person who made the deposit, or by the latter himself if he should acquire capacity. (1764)

Question 37

Article 1971. If the deposit has been made by a capacitated person with another who is not, the depositor shall only have an action to recover the thing deposited while it is still in the

Answer 37

possession of the depositary, or to compel the latter to pay him the amount by which he may have enriched or benefited himself with the thing or its price. However, if a third person who acquired the thing acted in bad faith, the depositor may bring an action against him for its recovery.

Question 38

Article 1972. The depositary is obliged to keep the thing safely and to return it, when required, to the

Answer 38

depositor, or to his heirs and successors, or to the person who may have been designated in the contract. His responsibility, with regard to the safekeeping and the loss of the thing, shall be governed by the provisions of Title I of this Book.

Question 39

Article 1972. If the deposit is gratuitous, this fact shall be taken into account in determining

Answer 39

the degree of care that the depositary must observe

Question 39

Article 1973. Unless there is a stipulation to the contrary, the depositary cannot deposit the thing with

Answer 39

a third person. If deposit with a third person is allowed, the depositary is liable for the loss if he deposited the thing with a person who is manifestly careless or unfit. The depositary is responsible for the negligence of his employees.

Question 40

Article 1974. The depositary may change the way of the deposit if under the circumstances he may reasonably presume that the depositor would consent to the change if he knew of the facts of the situation. However, before the depositary may make such change, he shall notify the

Answer 40

depositor thereof and wait for his decision, unless delay would cause danger.

Question 41

Article 1975. The depositary holding certificates, bonds, securities or instruments which earn interest shall be bound to collect the

Answer 41

latter when it becomes due, and to take such steps as may be necessary in order that the securities may preserve their value and the rights corresponding to them according to law. The above provision shall not apply to contracts for the rent of safety deposit boxes. (n)

Question 42

Article 1976. Unless there is a stipulation to the contrary, the depositary may commingle

Answer 42

grain or other articles of the same kind and quality, in which case the various depositors shall own or have a proportionate interest in the mass.

Question 43

Article 1977. The depositary cannot make use of the thing deposited without the express

Answer 43

permission of the depositor. Otherwise, he shall be liable for damages. However, when the preservation of the thing deposited requires its use, it must be used but only for that purpose.

Question 44

Article 1978. When the depositary has permission to use the thing deposited, the contract loses the concept of a

Answer 44

deposit and becomes a loan or commodatum, except where safekeeping is still the principal purpose of the contract. The permission shall not be presumed, and its existence must be proved.

Question 45

Article 1979. The depositary is liable for the loss of the thing through a fortuitous event:

Answer 45

(1) If it is so stipulated; (2) If he uses the thing without the depositor's permission; (3) If he delays its return; (4) If he allows others to use it, even though he himself may have been authorized to use the same.

Question 45

Article 1980. Fixed, savings, and current deposits of money in banks and similar institutions shall be

Answer 45

governed by the provisions concerning simple loan.

Question 46

Article 1981. When the thing deposited is delivered closed and sealed, the depositary must return it in the same condition, and he shall be liable for

Answer 46

damages should the seal or lock be broken through his fault.

Question 47

Article 1981. 2 Fault on the part of the depositary is

Answer 47

presumed, unless there is proof to the contrary. As regards the value of the thing deposited, the statement of the depositor shall be accepted, when the forcible opening is imputable to the depositary, should there be no proof to the contrary. However, the courts may pass upon the credibility of the depositor with respect to the value claimed by him.

Question 48

Article 1982. When it becomes necessary to open a locked box or receptacle, the depositary is presumed

Answer 48

authorized to do so, if the key has been delivered to him; or when the instructions of the depositor as regards the deposit cannot be executed without opening the box or receptacle.

Question 48

Article 1981. When the seal or lock is broken, with or without the depositary's fault, he shall

Answer 48

keep the secret of the deposit.

Question 49

Article 1985. When there are two or more depositors, if they are not solidary, and the thing admits of division, each one cannot demand

Answer 49

more than his share. When there is solidarity or the thing does not admit of division, the provisions of articles 1212 and 1214 shall govern. However, if there is a stipulation that the thing should be returned to one of the depositors, the depositary shall return it only to the person designated.

Question 49

Article 1983. The thing deposited shall be returned with all its

Answer 49

products, accessories and accessions. Should the deposit consist of money, the provisions relative to agents in article 1896 shall be applied to the depositary.

Question 50

Article 1984. The depositary cannot demand that the depositor prove

Answer 50

his ownership of the thing deposited. Nevertheless, should he discover that the thing has been stolen and who its true owner is, he must advise the latter of the deposit. If the owner, in spite of such information, does not claim it within the period of one month, the depositary shall be relieved of all responsibility by returning the thing deposited to the depositor. If the depositary has reasonable grounds to believe that the thing has not been lawfully acquired by the depositor, the former may return the same.

Question 51

Article 1986. If the depositor should lose his capacity to contract after having made the deposit, the thing cannot be

Answer 51

returned except to the persons who may have the administration of his property and rights.

Question 52

Article 1987. If at the time the deposit was made a place was designated for the return of the thing, the depositary must take

Answer 52

the thing deposited to such place; but the expenses for transportation shall be borne by the depositor. If no place has been designated for the return, it shall be made where the thing deposited may be, even if it should not be the same place where the deposit was made, provided that there was no malice on the part of the depositary. (1774)

Question 52

Article 1988. The thing deposited must be returned to the depositor upon

Answer 52

demand, even though a specified period or time for such return may have been fixed. This provision shall not apply when the thing is judicially attached while in the depositary's possession, or should he have been notified of the opposition of a third person to the return or the removal of the thing deposited. In these cases, the depositary must immediately inform the depositor of the attachment or opposition.

Question 53

Article 1989. Unless the deposit is for a valuable consideration, the depositary who may have justifiable reasons for not keeping the thing deposited may, even before the time designated,

Answer 53

return it to the depositor; and if the latter should refuse to receive it, the depositary may secure its consignation from the court.

Question 54

Article 1990. If the depositary by force majeure or government order loses the thing and receives money or another thing in its place, he shall deliver

Answer 54

the sum or other thing to the depositor.

Question 55

Article 1991. The depositor's heir who in good faith may have sold the thing which he did not know was deposited, shall only be bound to

Answer 55

return the price he may have received or to assign his right of action against the buyer in case the price has not been paid him.

Question 56

Article 1993. The depositor shall reimburse the depositary for any loss arising from the character of the thing deposited, unless at the time of the constitution of the deposit the former was

Answer 56

not aware of, or was not expected to know the dangerous character of the thing, or unless he notified the depositary of the same, or the latter was aware of it without advice from the depositor.

Question 56

Article 1992. If the deposit is gratuitous, the depositor is obliged to

Answer 56

reimburse the depositary for the expenses he may have incurred for the preservation of the thing deposited

Question 57

Article 1994. The depositary may retain the thing in pledge until the

Answer 57

full payment of what may be due him by reason of the deposit.

Question 58

Article 1995. A deposit its extinguished:

Answer 58

(1) Upon the loss or destruction of the thing deposited; (2) In case of a gratuitous deposit, upon the death of either the depositor or the depositary. (n)

Question 59

Article 1997. The deposit referred to in No. 1 of the preceding article shall be governed by

Answer 59

the provisions of the law establishing it, and in case of its deficiency, by the rules on voluntary deposit. The deposit mentioned in No. 2 of the preceding article shall be regulated by the provisions concerning voluntary deposit and by article 2168.

Question 59

Article 1996. A deposit is necessary:

Answer 59

(1) When it is made in compliance with a legal obligation; (2) When it takes place on the occasion of any calamity, such as fire, storm, flood, pillage, shipwreck, or other similar events.

Question 60

Article 1998. The deposit of effects made by travellers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that

Answer 60

notice was given to them, or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects.

Question 61

Article 1999. The hotel-keeper is liable for

Answer 61

the vehicles, animals and articles which have been introduced or placed in the annexes of the hotel.

Question 62

Article 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the

Answer 62

personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him.

Question 63

Article 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of

Answer 63

arms or through an irresistible force.

Question 64

Article 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in articles 1998 to 2001 is

Answer 64

suppressed or diminished shall be void.

Question 64

Article 2002. The hotel-keeper is not liable for compensation if the loss is due to the

Answer 64

acts of the guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel.

Question 65

Article 2004. The hotel-keeper has a right to

Answer 65

retain the things brought into the hotel by the guest, as a security for credits on account of lodging, and supplies usually furnished to hotel guests.

Question 66

Article 2005. A judicial deposit or sequestration takes place when

Answer 66

an attachment or seizure of property in litigation is ordered.

Question 67

Article 2006. Movable as well as immovable property may be

Answer 67

the object of sequestration.

Question 68

Article 2007. The depositary of property or objects sequestrated cannot be

Answer 68

relieved of his responsibility until the controversy which gave rise thereto has come to an end, unless the court so orders.

Question 69

Article 2008. The depositary of property sequestrated is bound to

Answer 69

comply, with respect to the same, with all the obligations of a good father of a family.

Question 70

Article 2009. As to matters not provided for in this Code, judicial sequestration shall be

Answer 70

governed by the Rules of Court.