Credit Transactions
I. II.
III.
IV. V. VI.
I. II.
The 2a*a0a$s "e'&-e*e" %$ 0e se" !$% 0e&! *e%*!e" 0( %he "e+e!"a!% .$! .$! "ea!" "ea!"// %he*e %he*e &s !$ "$0% %ha% she &s !"e* !"e* $0'&a $0'&a%&$ %&$! ! %$ &!"e!&+( %he $#!e* %he*e$+ 0( .a(&! h& %he&* -a'e A'%h$h &% &s %*e %ha% &! a 2$!%*a2% $+ 2$$"a% %he 0a&'$* *e%a&!s %he $#!e*sh&. $+ %he %h&! '$a!e"/ a!" a% %he e.&*a%&$! $+ %he .e*&$"/ $* a+%e* %he se +$* #h&2h &% #as '$a!e" has 0ee! a22$.'&she", & s
CONCEPT OF CREDIT TRANSACTIONS LOAN a. CONCEPT b. COMMODATUM c. MUTU MUTUUM UM & USUR USURY Y LAW LAW DEPOSIT a. DEPOS DEPOSIT IT IN GENE GENERAL RAL AND AND ITS DIFFER DIFFERENT ENT KINDS b. EXT EXTRAJ RAJUDIC UDICIIAL i. VOLU VOLUNT NTA ARY DEPO DEPOSI SIT T ii. ii. NECE NECESS SSAR ARY Y DEPO DEPOSI SIT T c. JUDICI JUDICIAL AL DEPOS DEPOSIT IT OR OR SEQUES SEQUESTRA TRATI TION ON WAREHOUSE RE RECEIPTS LA LAW TRUST RECEIPTS LAW LETTERS OF CREDIT
&'e )pe%a&4e -(&# $! &'e ba"ee &$ %e&(%+ &'e &'+ &se"! &$ &s $/+e%, $% &$ pa# ') -a)aes ! &'%$(' &'e !a("& $! &'e ba"ee &'e &'+ s'$("- 'a4e bee+ "$s& $% +5(%e-
5) RP VS 8AGT 8AGTA AS I''%( As %he "ea%h $+ %he 0'' #as "e %$ )"*c% ma+%*% / &s 8
*e'&e-e" +*$ %he "%( $+ .a(&! &%s -a'e $%# N$ A 2$!%*a2% $+ 2$$"a% &s esse!%&a''( *a%&%$s I+ %he
0*ee"&! +ee 0e 2$!s&"e*e" 2$.e!sa%&$!/ %he! %he 2$!%*a2% #$'" 0e a 'ease $+ %he 0'' U!"e* A*%&2'e 1:1 $+ %he C&-&' C$"e/ %he 'essee #$'" 0e s0e2% %$ %he *es.$!s&0&'&%&es $+ a .$ssess$* &! 0a" +a&%h 0e2ase she ha" 2$!%&!e" .$ssess&$! $+ %he 0'' a+%e* %he e.&*a%&$! $+ %he 2$!%*a2% A!" e-e! &+ %he 2$!%*a2% 0e 2$$"a%/ s%&'' 8 &s '&a0'e !"e* A*%&2'e 19B77/ 3) Reca"": PDALI (+-e% 6789
CONC CONCEP EPT T OF OF CRE CREDI DIT T TRA TRANS NSAC ACTI TION ONS S LOAN a. CONCEPT b. COMMODATUM
:) CATH CATHOL OLIC IC VIC VICAR AR VS CA CA T'e ba"ees !a"(%e &$ %e&(%+ &'e s(b5ec& )a&&e% $! c$))$-a&() &$ &'e ba"$% -- +$& )ea+ a-4e%se p$ssess$+ $+ &'e pa%& $! &'e 0a&'ee he'" he'" &! %*s% %*s% %he .*$.e*%( .*$.e*%( s0e2% s0e2% a%%e* a%%e* $+ b$%%$/e% The 0a&'ee
1) PAJUYO JUYO VS CA 1935 USE OF THE THING LOANED; ESSENTIALLY GRATUITOUS The Kas!"a! Kas!"a! #as !$% esse!%&a''( esse!%&a''( *a%&%$s *a%&%$s +$* #h&'e &% "&" !$% *e,&*e Ge-a**a %$ .a( *e!%/ &% $0'&a%e" h& %$ a&!%a&! %he .*$.e*%( &! $$" 2$!"&%&$! The &.$s&%&$! $+ %h&s $0'&a%&$! a4es &% a 2$!%*a2% "&++e*e!% +*$ a 2$$"a% The e++e2%s $+ %he Kas!"a! a*e a's$ "&++e* "&++e*e!% e!% +*$ +*$ %ha% %ha% $+ a 2$$" 2$$"a% a% Case Case 'a# $! ee2% ee2%e!% e!% has %*ea%e %*ea%e" " *e'a%& *e'a%&$!s $!sh&. h&. 0ase" $! %$'e*a %$'e*a!2e !2e as $!e %ha% &s a4&! a4&! %$ a 'a!"'$*"6%e!a!% *e'a%&$!sh&. #he*e %he #&%h"*a#a' $+ .e*&ss&$! #$'" *es'% &! %he %e*&!a%&$! $+ %he 'ease The %e!a!%s #&%hh$'"&! $+ %he .*$.e*%( #$'" %he! 0e !'a#+'
2$$"a% The a"-e*se 2'a& $+ .e%&%&$!e* 2ae $!'( &! 1951 #he! &% "e2'a*e" %he '$%s +$* %aa%&$! .*.$ses The a2%&$! $+ .e%&%&$!e* V&2a* 0( s2h a"-e*se 2'a& 2$'" !$% *&.e! &!%$ %&%'e 0( #a( $+ $*"&!a*( a2,&s&%&-e .*es2*&.%&$! 0e2ase $+ %he a0se!2e $+ s% %&%'e
) UIN UINTO TOS S VS VS 8EC 8ECK K G*a%&%$s se $+ +*!&%*e +*!&%*e #as s0e2% %$ %he 2$!"&%&$! 2$!"&%&$! %ha% $%# G*a%&%$s 'essee 'essee #$'" *e%*! *e%*! %he %he (p$+ "ess$%;s -e)a+- 0p%eca%()3 0% !$%#&%hs%a!"&! s2h "ea!"/ +$*e* 2$!%&!e" %$ se +*!&%*e !%&' e.&*a%&$! $+ 'ease
7) PROD PRODUC UCER ERS S 8ANK 8ANK VS CA
W,%- !,%*% i' *%ca*im
N$ s%&.'a%&$! as %$ .e*&$" Use $+ %he %h&! &s e*e'( %$'e*a%e" 0( %he $#!e*
SUBJECT MATTER IS MONEY, BUT MERELY FOR EXHIBITION s0e2% $+ %he 2$!%*a2% 2$!%*a2% &s a 2$!sa0'e 2$!sa0'e %h&!/ s2h as GR &+ %he s0e2% $!e(/ %he 2$!%*a2% #$'" 0e a m!m XPN: 193: •
W,%- !,%*% i' "*#i-a*/ c"mm"#a!m
C$!sa0'e $$"s a( 0e %he s0e2% $+ 2$$"a% &+ %he .*.$se $+ %he 2$!%*a2% &s !$% %he 2$!s.%&$! $+ %he $0e2%/ as #he! &% &s e*e'( +$* eh&0&%&$!
In this case / e-&"e!2e sh$#s %ha% PR a*ee" %$ "e.$s&% h&s $!e( &! %he sa-&!s sa-&!s a22$! a22$!%% $+ S%e*e'a S%e*e'a spec! spec!ca ca""# ""# !$% &'e p(%p$s p(%p$se e $! )a*+ & appea% &'a& sa- !%) 'a- s(!!ce+& cap&a"a&$+ !$% +c$%p$%a&$+, /&' &'e p%$)se &'a& &'e a)$(+& s'a"" be %e&(%+e/&'+ &'%&# 0123 -a#s <%=he 0a&'ee &! c"mm"#a!m a2,&*es %he se $+ %he %h&! '$a!e" 0% NOT &%s +*&%s He!2e/ &% #as $!'( .*$.e* +$* D$*$!&''a %$ *e&%
• •
c. MUTU MUTUUM UM < USU USURY RY LA= LA=
1) YONG YONG CHAN CHAN KI? VS PEOPLE PEOPLE s&.'( ea!s ea!s %he se%%'&! se%%'&! $+ a! &!"e0% &!"e0%e"! e"!ess ess A! L>(-a&$+ s&.'( e.'$(ee/ s2h as he*e&! .e%&%&$!e*/ #h$ '&,&"a%es a 2ash a"-a!2e &s &! +a2 +a2% pa#+ pa#+ bac* 's -eb& + &'e !$%) $! a "$a+ "$a+ $! )$+e# a"-a a"-a!2 !2e" e" %$ h& h& 0( h&s h&s e.' e.'$( $(e* e*// as %* #i%m' a!" a!" a''$#a!2es a''$#a!2es S&&'a*'(/ &+ %he a$!% $+ %he 2ash a"-a!2e he *e2e&-e" &s 'ess %ha! %he a$!% he s.e!% +$* a2%a' %*a-e' he has %he *&h% %$ "ea!" *e&0*see!% +*$ h&s e.'$(e* %he a$!% he s.e!% 2$&! +*$ h&s .e*s$!a' .e*s$!a' +!"s 17 I! $%he* #$*"s/ %he $!e( a"-a!2e" 0( e&%he* .a*%( &s a2%a''( a '$a! %$ %he $%he* He!2e, pe&&$+e% /as (+-e% +$
•
%$ PR %he &!%e*es% a22*&! %$ %he 'a%%e*>s $!e( "e.$s&%e" #&%h .e%&%&$!e*
3) ?INA ?INA VS PA PASCUA SCUAL L $%# A! ea.'e $+ 2$$"a% &!-$'-&! *ea' .*$.e*%( &s #he! a
"ea" $b"a&$+ &$ %e&(%+ &'e sa)e cas' $% )$+e#, i.e., i.e., &'e b""s $% c$+s, /'c' 'e %ece4e- !%$) &'e p%4a&e %esp$+-e+&. 13
.e*s$! a''$#e" a!$%he* %$ 0&'" a #a*eh$se $! %he +$*e*>s 'a!" s$ %ha% %he 'a%%e* a( se %he .*$.e*%( +$* a 2e*%a&! .e*&$" #&%h$% a!( .a(e!% $+ *e!%a's I+ !$ %&e +$* se $+ %he 'a!" &s s.e2&+&e"/ %he 2$!%*a 2$!%*a2% 2% #$'" #$'" 0e %ha% %ha% s.e2&e s.e2&e $+ 2$$" 2$$"a% a% #h&2h &s 2a''e" 2a''e" @.*e2a*& !"e* 19B I+ *e!%a' &s .a&"/ %he 2$!%*a2% #$'" 0e $!e $+ 'ease
The *'&! $+ %he %*&a' "e %ha% $#!e*sh&. $+ %he 2ash a"-a!2e" %$ %he .e%&%&$!e* 0( .*&-a%e *es.$!"e!% #as !$% %*a!s+e**e" %$ %he 'a%%e* &s e**$ e**$!e !e$ $s s O/+e O/+e%s %s' 'p p $! &'e &'e )$+e )$+e# # /as /as &%a+ &%a+s! s!e% e%%e %e- &$ &'e &'e S&!2e $#!e*s $#!e*sh&. h&. $+ %he $!e( 2ash a"-a!2e) a"-a!2e) #as pe&&$+e%. S&!2e %*a!s+e**e" %$ .e%&%&$!e*/ !$ +&"2&a*( *e'a%&$!sh&. #as 2*ea%e" A0se!% %h&s +&"2&a*( *e'a%&$!sh& *e'a%&$!sh&. . 0e%#ee! 0e%#ee! .e%&%&$!e* .e%&%&$!e* a!" PR/ #h&2h &s a! esse!% esse!%&a' &a' e'ee! e'ee!%% $+ %he 2*&e 2*&e $+ es%a+a es%a+a 0( &sa.. &sa..*$. *$.*&a *&a%&$ %&$! ! $* 2$!-e*s&$!/ .e%&%&$!e* 2$'" !$% ha-e 2$&%%e" es%a+a
B) DELO DELOS S SANT SANTOS OS VS JAR JARRA RA OBLI BLIGAT GATION TO COMMODATUM
RETU RETUR RN
THE THE
THIN THING G
SUBJECT JECT
S%&.'a%&$! as %$ .e*&$" A22$.'&she!% $+ %he se
OF
7) 8PI VS CA 1
Credit Transactions
LOAN IS A REAL CONTRACT PERFECTED BY DELI?ERY.
%he '$a! 2$!%*a2% 0e%#ee! 8PI/ $! %he $!e ha!"/ a!" ALS a!" L&%$!a/ $! %he $%he*/ #as pe%!ec&e- $+"# $+ Sep&e)be% 61, 67@9 / %he "a%e $+ %he se2$!" *e'ease $+ %he '$a! F$''$#&! %he &!%e!%&$!s $+ %he .a*%&es $! %he 2$e!2ee!% $+ %he $!%h'( a$*%&a%&$!/ PR>s $0'&a%&$! %$ .a( 2$e!2e" $!'( $! O2%$0e* 13/ 197/ a $!%h a+%e* %he .e*+e2%&$! $+ %he 2$!%*a2% The .*$&se $+ 8PIIC %$ e%e!" a!" "e'&-e* %he '$a! &s .$! %he 2$!s&"e*a%&$! %ha% ALS a!" L&%$!a sha'' .a( %he $!%h'( a$*%&a%&$! 2$e!2&! $! ?a( 1/ 191/ $!e $!%h a+%e* %he s..$se" *e'ease $+ %he '$a! I% &s a 0as&2 .*&!2&.'e &! %ecp%$ca" $b"a&$+s %ha% !e&%he* .a*%( &!2*s &! "e'a(/ &+ %he $%he* "$es !$% 2$.'( $* &s !$% *ea"( %$ 2$.'( &! a .*$.e* a!!e* #&%h #ha% &s &!20e!% .$! h&
P*&-a%e *es.$!"e!% a&!%a&!s %ha% %he %#e'-e .e*2e!% 17) &!%e*es% sh$'" 0e &.$se"/ 0e2ase %he $0'&a%&$! a*$se +*$ a +$*0ea*a!2e $+ $!e(<77= Th&s &s e**$!e$s I! Eas%e*! Sh&..&!/<73= %he C$*% $0se*-e" %ha% a FORBEARANCE + &'e c$+&e& $! &'e (s(%# "a/ s a c$+&%ac&(a" $b"a&$+ $! "e+-e% $% c%e-&$% &$ %e!%a+, -(%+ a 4e+ pe%$- $! &)e, !%$) %e>(%+ &'e b$%%$/e% $% -eb&$% &$ %epa# a "$a+ $% -eb& &'e+ -(e a+- pa#ab"e. Us+ &'s s&a+-a%-, &'e $b"a&$+ + &'s case /as $b4$(s"# +$& a !$%bea%a+ce $! )$+e#, $$-s $% c%e-&.
5) PN8 VS I8ARROLA T'e case a& be+c' -$es +$& +4$"4e a "$a+ F$%bea%a+ce $! )$+e# $% 5(-)e+& +4$"4+ a "$a+ $% !$%bea%a+ce $! )$+e# as & a%$se !%$) a c$+&%ac& $! sa"e /'e%eb# Iba%%$"a -- +$& %ece4e !("" pa#)e+& !$% 'e% )e%c'a+-se. he! a! $0'&a%&$! a*&ses +*$ a
3) EASTERN SHIPPING LINES VS CA RULES OF THUMB FOR FUTURE GUIDANCE he! a! $0'&a%&$!/ *ea*"'ess $+ &%s s$*2e/ &e/ 'a#/ 2$!%*a2%s/ I.
2$!%*a2% $+ .*2hase a!" sa'e a!" !$% +*$ a 2$!%*a2% $+ '$a! $* %/ %he a..'&2a0'e *a%e &s : .e* a!! as .*$-&"e" &! A*%&2'e 779 $+ %he NCC a!" !$% %he *a%e $+ 17 .e* a!! as .*$-&"e" &! C8) C&* N$ B1:
,as&62$!%*a2%s/ "e'&2%s $* ,as&6"e'&2%s 1 &s 0*ea2he"/ %he 2$!%*a-e!$* 2a! 0e he'" '&a0'e +$* "aaes II.
1
7
3
&%h *ea*" .a*%&2'a*'( %$ a! a#a*" $+ &!%e*es% &! %he 2$!2e.% $+ a2%a' a!" 2$.e!sa%$*( "aaes/ %he *a%e $+ &!%e*es%/ as #e'' as %he a22*a' %he*e$+/ &s &.$se"/ as +$''$#s
:) ?EDEL VS CA s%&.'a%e" *a%e $+ &!%e*es% a% 55 .e* $!%h $! %he P5/ '$a! &s e2ess&-e/ &!&,&%$s/ !2$!s2&$!a0'e a!" e$*0&%a!% H$#e-e*/ #e 2a! !$% 2$!s&"e* %he *a%e s*&$s 0e2ase %h&s C$*% has 2$!s&s%e!%'( he'" %ha% C&*2'a* N$ 95 $+ %he Ce!%*a' 8a!4/ a"$.%e" $! De2e0e* 77/ 197/ has e.*ess'( *e$-e" %he &!%e*es% 2e&'&!s .*es2*&0e" 0( %he Us*( La# a!" %ha% %he Us*( La# &s !$# 'ea''( &!e&s%e!%
he! % he $ 0'&a%&$! & s 0*ea2he"/ a !" & % 2$!s&s% s &! % he .a(e!% $+ a s() $! )$+e#/ &e/ a '$a! $* +$*0ea*a!2e $+ $!e(/ %he &!%e*es% "e sh$'" 0e %ha% #h&2h a( ha-e 0ee! s&p("a&e- + /%&+ 71 F*%he*$*e/ %he &!%e*es% "e sha'' &%se'+ ea*! 'ea' &!%e*es% +*$ %he %&e &% &s "&2&a''( "ea!"e" 77 I! %he a0se!2e $+ s%&.'a%&$!/ %he *a%e $+ &!%e*es% sha'' 0e 69 pe% a++() %$ 0e 2$.%e" +*$ "e+a'%/ &e/ +*$ "&2&a' $* e%*a"&2&a' "ea!" !"e* a!" s0e2% %$ %he .*$-&s&$!s $+ A*%&2'e 11:9 73 $+ %he C&-&' C$"e he! a! $0'&a%&$!/ +$& c$+s&&(&+ a "$a+ $* +$*0ea*a!2e $+ $!e(/ &s 0*ea2he"/ a! &!%e*es% $! %he a$!% $+ "aaes a#a*"e" a( 0e &.$se" a% %he "&s2*e%&$! $+ %he 2$*% a% %he *a%e $+ pe% a++() N$ &!%e*es%/ h$#e-e*/ sha'' 0e a""e" $! !'&,&"a%e" 2'a&s $* "aaes e2e.% #he! $* !%&' %he "ea!" 2a! 0e es%a0'&she" #&%h *eas$!a0'e 2e*%a&!%( A22$*"&!'(/ #he*e %he "ea!" &s es%a0'&she" #&%h *eas$!a0'e 2e*%a&!%(/ %he &!%e*es% sha'' 0e&! %$ *! +*$ %he %&e %he 2'a& &s a"e "&2&a''( $* e%*a"&2&a''( A*% 11:9/ C&-&' C$"e) 0% #he! s2h 2e*%a&!%( 2a!!$% 0e s$ *eas$!a0'( es%a0'&she" a% %he %&e %he "ea!" &s a"e/ %he &!%e*es% sha'' 0e&! %$ *! $!'( +*$ %he "a%e %he "e!% $+ %he 2$*% &s a"e a% #h&2h %&e %he ,a!%&+&2a%&$! $+ "aaes a( 0e "eee" %$ ha-e 0ee! *eas$!a0'( as2e*%a&!e") The a2%a' 0ase +$* %he 2$.%a%&$! $+ 'ea' &!%e*es% sha''/ &! a!( 2ase/ 0e $! %he a$!% +&!a''( a""e" he! %he "e!% $+ % he 2$*% a #a*"&! a s $+ $!e( 0e2$es +&!a' a!" ee2%$*(/ %he *a%e $+ 'ea' &!%e*es%/ #he%he* %he 2ase +a''s !"e* .a*a*a.h 1 $* .a*a*a.h 7/ a0$-e/ sha'' 0e 69 pe% a++() +*$ s2h +&!a'&%( !%&' &%s sa%&s+a2%&$!/ %h&s &!%e*& .e*&$" 0e&! "eee" %$ 0e 0( %he! a! e,&-a'e!% %$ a +$*0ea*a!2e $+ 2*e"&%
SC .*e-&$s'( he'" %ha% %he 2&*2'a* "&" !$% *e.ea' !$* &! a!( #a( ae!" %he Us*( La# 0% s&.'( ss.e!"e" %he 'a%%e*>s e++e2%&-&%( Us*( has 0ee! 'ea''( !$!6e&s%e!% &! $* *&s"&2%&$! I!%e*es% 2a! !$# 0e 2ha*e" as 'e!"e* a!" 0$**$#e* a( a*ee .$!
) TOLEDO VS HYDEN T,% 01 !" 21 i-!%*%'! %* m"-!, ai# b/ J"c%/- i' -"! %3c%''i4% -#%* !,% ci*cm'!a-c%' ") !,i' ca'%.
&! M%#% 4. C"*! ") A%a' /<1:= #e a!!''e" a s%&.'a%e" 55 .e* $!%h $* :: .e* a!! &!%e*es% #&%h a""&%&$!a' se*-&2e 2ha*e $+ 7 .e* a!! a!" .e!a'%( 2ha*e $+ 1 .e* $!%h $! a P5/ '$a! +$* 0e&! e2ess&-e/ &!&,&%$s/ !2$!s2&$!a0'e a!" e$*0&%a!% I! %h&s 2ase/ h$#e-e*/ #e 2a!!$% 2$!s&"e* %he "&s.%e" : %$ $!%h'( &!%e*es% *a%e %$ 0e &!&,&%$s $* !2$!s2&$!a0'e 4i'554i' %he .*&!2&.'e 'a&" "$#! &! M%#%. N$%e#$*%h( &s %he +a2% %ha% &! M%#% / %he "e+e!"a!%6s.$ses #e*e !e-e* a0'e %$ .a( %he&* &!"e0%e"!ess +*$ %he -e*( 0e&!!&! a!" #he! %he&* $0'&a%&$!s 0a''$$!e" &!%$ a s%ae*&! s/ %he 2*e"&%$*s +&'e" a 2$''e2%&$! 2ase aa&!s% %he I! %h&s 2ase/ I% #as 2'ea*'( sh$#! %ha% 0e+$*e J$2e'(! a-a&'e" $+ sa&" '$a!s/ she 4!e# +''( #e'' %ha% %he sae 2a**&e" #&%h &% a! &!%e*es% *a%e $+ : %$ .e* $!%h/ (e% she "&" !$% 2$.'a&! I! +a2%/ #he! she a-a&'e" $+ sa&" '$a!s/ a! a"-a!2e &!%e*es% $+ : %$ #as a'*ea"( "e"2%e" +*$ %he '$a! a$!%/ (e% she !e-e* %%e*e" a #$*" $+ .*$%es%
) ESTORES VS SPS SUPANGAN The 2$!%*a2% &!-$'-e" &! %h&s 2ase &s a"&%%e"'( !$% a '$a! 0% a C$!"&%&$!a' Dee" $+ Sa'e H$#e-e*/ %he 2$!%*a2% .*$-&"es %ha% %he se''e* .e%&%&$!e*) s% *e%*! %he .a(e!% a"e 0( %he 0(e* *es.$!"e!%6s.$ses) &+ %he 2$!"&%&$!s a*e !$% +'+&''e" N$%#&%hs%a!"&! "ea!"s/ %he se''e* .e%&%&$!e*) has +a&'e" %$ *e%*! %he $!e( a!" sh$'" 0e 2$!s&"e*e" &! "e+a'% +*$ %he %&e %ha% "ea!" #as a"e $! Se.%e0e* 7/ 7 Th&s s&p("a&$+ $4e%++ &'e
He*e/ %he &!%e*es% *a%e a..'&2a0'e &s : .a s&!2e %he 2$!%*a2% &s sa'e a!" %*a!s.$*%a%&$! $+ $$"s
B) CRIS?INA GAR?ENTS VS CA Beca(se &'e a)$(+& -(e + &'s case a%$se !%$) a c$+&%ac& !$% a pece $! /$%*, +$& !%$) a "$a+ $% !$%bea%a+ce $! )$+e#, &'e "ea" +&e%es& $! s pe%ce+& 03 pe% a++() s'$("- be app"e-
%e&(%+ $! &'e )$+e# s c$+s-e%e- as a !$%bea%a+ce $! )$+e# /'c' %e>(%e- pa#)e+& $! +&e%es& a& &'e %a&e $! 69
F*%he*$*e/ s&!2e %he a$!% $+ %he "ea!" 2$'" 0e es%a0'&she" #&%h 2e*%a&!%( #he! %he C$.'a&!% #as +&'e"/ %he s& .e*2e!% :) &!%e*es% sh$'" 0e 2$.%e" +*$ %he +&'&! $+ %he sa&" C$.'a&!% 8% a+%e* %he "e!% 0e2$es +&!a' a!" ee2%$*( !%&' %he $0'&a%&$! &s sa%&s+&e"/ %he &!%e*es% sh$'" 0e *e24$!e" a% %#e'-e .e*2e!% 17) .e* (ea*
I! C%s)+a Ga%)e+&s, I+c. 4. C$(%& $! Appea"s/ FORBEARANCE #as "e+&!e" as a 2$!%*a2%a' $0'&a%&$! $+ 'e!"e* $* 2*e"&%$* %$ *e+*a&! "*&! a &-e! .e*&$" $+ %&e/ +*$ •
2
Credit Transactions
*e,&*&! %he 0$**$#e* $* "e0%$* %$ *e.a( a '$a! $* "e0% %he! "e a!" .a(a0'e Th&s "e+&!&%&$! "es2*&0es a '$a! #he*e a "e0%$* &s &-e! a .e*&$" #&%h&! #h&2h %$ .a( a '$a! $* "e0% I! s2h 2ase/ +$*0ea*a!2e $+ $!e(/ $$"s $* 2*e"&%s #&'' ha-e !$ "&s%&!2% "e+&!&%&$! +*$ a '$a! e 0e'&e-e h$#e-e*/ %ha% %h&s &s ea!% %$ ha-e a se.a*a%e ea!&! +*$ a '$a!/ $%he*#&se %he*e #$'" ha-e 0ee! !$ !ee" %$ a"" %ha% .h*ase as a '$a! &s a'*ea"( s++&2&e!%'( "e+&!e" &! %he C&-&' C$"e<3B= F$*0ea*a!2e $+ $!e(/ $$"s $* 2*e"&%s sh$'" %he*e+$*e *e+e* !"
%he '$#e* 2$*%s 0e2ase &% "&" !$% e.*ess %he *ea' &!%e!%&$! $+ %he .a*%&es/ &s s0s%a!%&a' .*$$+ %ha% %he 0a!4 'e!"&! *a%e a% %he %&e $+ "e+a'% #as 1 .e* a!! A0se!% a!( e-&"e!2e $+ +*a"/ !"e &!+'e!2e $* a!( -&2e $+ 2$!se!% ee*2&se" 0( .e%&%&$!e*s aa&!s% %he *es.$!"e!%/ %he &!%e*es% *a%e a*ee" .$! &s 0&!"&! $! %he
1)
•
PRIS?A VS ?ENCHAVEM
A*%&2'e 195: $+ %he C&-&' C$"e s.e2&+&2a''( a!"a%es %ha% !$ &!%e*es% sha'' 0e "e !'ess &% has 0ee! e.*ess'( s%&.'a%e" &! #*&%&! U!"e* %h&s .*$-&s&$!/ %he .a(e!% $+ &!%e*es% &! '$a!s $* +$*0ea*a!2e $+ $!e( &s a''$#e" $!'( &+ 1) %he*e #as a! e.*ess s%&.'a%&$! +$* %he .a(e!% $+ &!%e*es%; a!" 7) %he a*eee!% +$* %he .a(e!% $+ &!%e*es% #as *e"2e" &! #*&%&! The 2$!2**e!2e $+ %he %#$ 2$!"&%&$!s &s *e,&*e" +$* %he .a(e!% $+ &!%e*es% a% a s%&.'a%e" *a%e
a**a-6%m%-!' "!,%* !,a- "a- a6*%%m%-!'7 8,%*% a %*'"ac9i%'c%' !" !,% !%m"*a*/ '% ") ,i' m"-%/7 6""#' "* c*%#i!' %-#i-6 ,a%-i-6 ") c%*!ai- %4%-!' "* ))im%-! ") c%*!aic"-#i!i"-' I- !,i' ca'%7 %he *es.$!"e!%6s.$ses .a*%e" #&%h %he&* $!e( e-e!
0e+$*e %he 2$!"&%&$!s #e*e +'+&''e" The( ha-e %he*e+$*e a''$#e" $* *a!%e" +$*0ea*a!2e %$ %he se''e* .e%&%&$!e*) %$ se %he&* $!e( .e!"&! +'+&''e!% $+ %he 2$!"&%&$!s The( #e*e "e.*&-e" $+ %he se $+ %he&* $!e( +$* %he .e*&$" .e!"&! +'+&''e!% $+ %he 2$!"&%&$!s a!" #he! %h$se 2$!"&%&$!s #e*e 0*ea2he"/ %he( a*e e!%&%'e" !$% $!'( %$ %he *e%*! $+ %he .*&!2&.a' a$!% .a&"/ 0% a's$ %$ 2$.e!sa%&$! +$* %he se $+ %he&* $!e( A!" %he 2$.e!sa%&$! +$* %he se $+ %he&* $!e(/ a0se!% a!( s%&.'a%&$!/ sh$'" 0e %he sae *a%e $+ 'ea' &!%e*es% a..'&2a0'e %$ a '$a! s&!2e %he se $* "e.*&-a%&$! $+ +!"s &s s&&'a* %$ a '$a! Pe%&%&$!e*s !#a**a!%e" #&%hh$'"&! $+ %he $!e( #h&2h *&h%+''( .e*%a&!s %$ *es.$!"e!%6s.$ses a$!%s %$ +$*0ea*a!2e $+ $!e( #h&2h 2a! 0e 2$!s&"e*e" as a! &!-$'!%a*( '$a! Ths/ %he a..'&2a0'e *a%e $+ &!%e*es% &s 17 .e* a!!
A..'(&! %h&s .*$-&s&$!/ #e +&!" %ha% %he &!%e*es% $+ PB/ .e* $!%h 2$**es.$!"s $!'( %$ %he s& :)6$!%h .e*&$" $+ %he '$a!/ $* +*$ Ja!a*( / 199B %$ J!e / 199B/ as a*ee" .$! 0( %he .a*%&es &! %he .*$&ss$*( !$%e The*ea+%e*/ %he &!%e*es% $! %he '$a! sh$'" 0e a% %he 'ea' &!%e*es% *a%e $+ 17 .e* a!!/ 2$!s&s%e!% #&%h $* *'&! &! Eas%e*! Sh&..&! L&!es !$ &sse $! %he e2ess&-e!ess $+ %he s%&.'a%e" a$!% $+ PB/ .e* $!%h #as e-e* .% &! &sse 0( %he .e%&%&$!e*s;
9) PAN PACIFIC VS EUITA8LE CA #e!% 0e($!" %he &!%e!% $+ %he .a*%&es 0( *e,&*&! *es.$!"e!% %$ &-e &%s 2$!se!% %$ %he &.$s&%&$! $+ &!%e*es% 0e+$*e .e%&%&$!e*s 2a! h$'" *es.$!"e!% '&a0'e +$* &!%e*es% a% %he 2**e!% 0a!4 'e!"&! *a%e Th&s &s e**$!e$s A *e-&e# $+ Se2%&$! 7: $+ %he A*eee!% a!" Se2%&$! :1 $+ %he Ge!e*a' C$!"&%&$!s sh$#s %ha% %he 2$!se!% $+ %he *es.$!"e!% &s !$% !ee"e" +$* %he &.$s&%&$! $+ &!%e*es% a% %he 2**e!% 0a!4 'e!"&! *a%e/ #h&2h $22*s .$! a!( "e'a( &! .a(e!%
11)
PILIPINAS 8ANK VS CA
A%&c"e 67 $+ %he C&-&' C$"e/ #h&2h *e+e*s %$ $!e%a*( &!%e*es%/ RULING: N$&e %ha% C%c("a% N$. 86, +&&! %he *a%e $+ &!%e*es% a% 17 .e*
s.e2&+&2a''( a!"a%es %ha% !$ &!%e*es% sha'' 0e "e !'ess &% has 0ee! e.*ess'( s%&.'a%e" &! #*&%&! The*e+$*e/ .a(e!% $+ $!e%a*( &!%e*es% &s a''$#e" $!'( &+ 1) %he*e #as a! e.*ess s%&.'a%&$! +$* %he .a(e!% $+ &!%e*es%; a!" 7) %he a*eee!% +$* %he .a(e!% $+ &!%e*es% #as *e"2e" &! #*&%&! The 2$!2**e!2e $+ %he %#$ 2$!"&%&$!s &s *e,&*e" +$* %he .a(e!% $+ $!e%a*( &!%e*es%<33= I! 2ase $+ "e+a'%/ %he 2$!se!% $+ %he *es.$!"e!% &s !$% !ee"e" &! $*"e* %$ &.$se &!%e*es% a% %he 2**e!% 0a!4 'e!"&! *a%e
a!!/ "ea's #&%h 1) '$a!s; 7) +$*0ea*a!2e $+ a!( $!e(/ $$"s $* 2*e"&%; a!" 3) J"e!%s SC .*e-&$s'( he'" %ha% "e!%s s.$4e! $+ a!" *e+e**e" %$ &! C&*2'a* N$ B1: a*e "e!%s &! '&%&a%&$! &!-$'-&! '$a!s $* +$*0ea*a!2e $+ a!( $!e(/ $$"s $* 2*e"&%s A!( $%he* 4&!" $+ $!e%a*( "e!% #h&2h has !$%h&! %$ "$ #&%h !$* &!-$'-&! '$a!s $* +$*0ea*a!2e $+ a!( $!e(/ $$"s $* 2*e"&%s "$es !$% +a'' #&%h&! %he 2$-e*ae $+ %he sa&" 'a# +$* &% &s !$%/ #&%h&! %he a0&% $+ %he a%h$*&%( *a!%e" %$ %he Ce!%*a' 8a!4
Applicable Interest Rate
U!"e* A*%&2'e 779 $+ %he C&-&' C$"e/ %he a..*$.*&a%e eas*e +$* "aaes &! 2ase $+ "e'a( &! "&s2ha*&! a! $0'&a%&$! 2$!s&s%&! $+ %he .a(e!% $+ a s $+ $!e( &s %he .a(e!% $+ .e!a'%( &!%e*es% a% %he *a%e a*ee" .$! &! %he 2$!%*a2% $+ %he .a*%&es I! %he a0se!2e $+ a s%&.'a%&$! $+ a .a*%&2'a* *a%e $+ .e!a'%( &!%e*es%/ .a(e!% $+ a""&%&$!a' &!%e*es% a% a *a%e e,a' %$ %he *e'a* $!e%a*( &!%e*es% 0e2$es "e a!" .a(a0'e F&!a''(/ &+ !$ *e'a* &!%e*es% ha" 0ee! a*ee" .$! 0( %he 2$!%*a2%&! .a*%&es/ %he! %he "aaes .a(a0'e #&'' 2$!s&s% $+ .a(e!% $+ 'ea' &!%e*es% #h&2h &s :/ $* &! %he 2ase $+ '$a!s $* +$*0ea*a!2es $+ $!e(/ 17 .e* a!!<3B=I% &s $!'( #he! %he .a*%&es %$ a 2$!%*a2% ha-e +a&'e" %$ +& %he *a%e $+ &!%e*es% $* #he! s2h a$!% &s !#a**a!%e" %ha% %he C$*% #&'' a..'( %he 17 &!%e*es% .e* a!! $! a '$a! $* +$*0ea*a!2e $+ $!e(<35=
C%c("a% N$. 86 "$es !$% a..'( %$ "e!%s &!-$'-&! "aaes a!"
2$.e!sa%&$! &! e.*$.*&a%&$! .*$2ee"&!s; a's$ .a(e!% $+ !'&,&"a%e" 2ash a"-a!2es %$ a! e.'$(ee 0( h&s e.'$(e*/ a!" %he *e%*! $+ $!e( .a&" 0( a 0(e* $+ a 'easeh$'" *&h% 0% #h&2h 2$!%*a2% #as -$&"e" "e %$ %he +a'% $+ %he se''e* W,a! !,%- i' !,% -a!*% ") !,% +#6m%-! "*#%*i-6 P: !" a/ Ec,a' !,% am"-! ") ;.
The sa&" a$!% #as a .$*%&$! $+ %he P/:/335:9 #h&2h .e%&%&$!e* #as $0'&a%e" %$ .a( G*ea%'a!" as 2$!s&"e*a%&$! +$* %he sa'e $+ se-e*a' .a*2e's $+ 'a!" 0( G*ea%'a!" %$ .e%&%&$!e* The a$!% $+ P7/3/ #as ass&!e" 0( G*ea%'a!" &! +a-$* $+ .*&-a%e *es.$!"e!% The sa&" $0'&a%&$! %he*e+$*e a*$se +*$ a 2$!%*a2% $+ .*2hase a!" sa'e a!" !$% +*$ a 2$!%*a2% $+ '$a! $* % He!2e/ #ha% &s a..'&2a0'e &s %he *a%e $+ : .e* a!! as .*$-&"e" &! A*%&2'e 779 $+ %he C&-&' C$"e $+ %he Ph&'&..&!es a!" !$% %he *a%e $+ 17 .e* a!! as .*$-&"e" &! C&*2'a* N$ B1:
The #*&%%e! a*eee!% &! %he PN e!%e*e" &!%$ 0e%#ee! .e%&%&$!e*s a!" *es.$!"e!% .*$-&"es +$* a! &!%e*es% a% %he 2**e!% 0a!4 'e!"&! *a%e &! 2ase $+ "e'a( &! .a(e!% a!" %he .*$&ss$*( !$%e 2ha*e" a! &!%e*es% $+ 1 T$ .*$-e .e%&%&$!e*s e!%&%'ee!% %$ %he 1 0a!4 'e!"&! *a%e $+ &!%e*es%/ .e%&%&$!e*s .*ese!%e" %he .*$&ss$*( !$%e<3:=.*e.a*e" 0( *es.$!"e!% 0a!4 &%se'+ Th&s .*$&ss$*( !$%e/ a'%h$h "e2'a*e" -$&" 0(
8% 17 as %$ %he e2ess a$!% $*"e*e" %$ *e+!"e" 0( .*&-a%e *es.$!"e!% s&!2e C&*2'a* N$ B1: a..'&es %$ cases /'e%e )$+e# s
3
Credit Transactions
The e-&"e!2e sh$#s %ha% &% #as &!"ee" %he *es.$!"e!%s #h$ .*$.$se" %he 5 &!%e*es% *a%e .e* $!%h +$* %#$ 7) $!%hs Ha-&! a*ee" %$ sa&" *a%e/ %he .a*%&es a*e !$# es%$..e" +*$ 2'a&&! $%he*#&se F$* %he s22ee"&! .e*&$" a+%e* %he %#$ $!%hs/ h$#e-e*/ %he C$*% $+ A..ea's 2$**e2%'( *e"2e" %he &!%e*es% *a%e %$ 17 .e* a!! a!" %he .e!a'%( *a%e %$ 1 .e* $!%h/ &! a22$*"a!2e #&%h A*%&2'e 777<1= $+ %he C&-&' C$"e
&%a+s!e%%e- !%$) $+e pe%s$+ &$ a+$&'e% a+- &'e $b"a&$+ &$ %e&(%+ &'e sa)e $% a p$%&$+ &'e%e$! s s(bse>(e+&"# a-5(-e-.
17)
SOLID8ANK VS PER?ANENT HO?ES
A"&'$(' +&e%es& %a&es a%e +$ "$+e% s(b5ec& &$ a ce"+, &'e "e+-e% s&"" -$es +$& 'a4e a+ (+b%-"e- "ce+se &$ )p$se +c%ease- +&e%es& %a&es The 'e!"e* a!" %he 0$**$#e* sh$'" a*ee
$! %he &.$se" *a%e/ a!" s2h &.$se" *a%e sh$'" 0e &! #*&%&! a3 b3 c3
The s%&.'a%&$!s $! &!%e*es% *a%e *e.*&2&! a*e -a'&" 0e2ase %he .a*%&es %a''( a*ee" $! sa&" s%&.'a%&$!s *e.*&2&! %a4es e++e2% $!'( .$! S$'&"0a!4s #*&%%e! !$%&2e %$ Pe*a!e!% $+ %he !e# &!%e*es% *a%e; a!" Pe*a!e!% has %he $.%&$! %$ .*e.a( &%s '$a! &+ Pe*a!e!% a!" S$'&"0a!4 "$ !$% a*ee $! %he !e# &!%e*es% *a%e
15)
The .h*ases &**e-$2a0'( a%h$*&e/ a% a!( %&e a!" a"s%e!% $+ %he &!%e*es% *a%e sha'' 0e e++e2%&-e +*$ %he "a%e &!"&2a%e" &! %he #*&%%e! !$%&2e se!% %$ s 0( %he 0a!4/ $* &+ !$ "a%e &s &!"&2a%e"/ +*$ %he %&e %he !$%&2e #as se!%/ e.has&e %ha% Pe%)a+e+& s'$("- %ece4e a
Se2%&$! 1 The *a%e $+ &!%e*es% +$* %he '$a! $* +$*0ea*a!2e $+ a!( $!e(/ $$"s $* 2*e"&%s a!" %he *a%e a''$#e" &! "e!%s/ &! %he a0se!2e $+ a! e.*ess 2$!%*a2% as %$ s2h *a%e $+ &!%e*es%/ sha'' 0e s& .e*2e!% :) .e* a!!
/%&&e+ +$&ce !%$) S$"-ba+* as a c$+-&$+ !$% &'e a-5(s&)e+& $! &'e +&e%es& %a&es e *'e %ha% S$'&"0a!4s 2$.%a%&$! $+ %he &!%e*es%
I% sh$'" 0e !$%e"/ !$!e%he'ess/ %ha% %he !e# *a%e 2$'" $!'( 0e a..'&e" .*$s.e2%&-e'( a!" !$% *e%*$a2%&-e'( C$!se,e!%'(/ %he %#e'-e .e*2e!% 17) .e* a!! 'ea' &!%e*es% sha'' a..'( $!'( !%&' J!e 3/ 713 C$e J'( 1/ 713 %he !e# *a%e $+ s& .e*2e!% :) .e* a!! sha'' 0e %he .*e-a&'&! *a%e $+ &!%e*es% #he! a..'&2a0'e
"e +*$ Pe*a!e!% sh$'" 0e a"s%e" %$ %a4e e++e2% $!'( .$! Pe*a!e!%s *e2e&.% $+ %he #*&%%e! !$%&2e +*$ S$'&"0a!4
13)
CHUA VS TI?AN
Pe%&%&$!e*s a-e* %ha% %he s%&.'a%e" &!%e*es% $+ 5 $!%h'( a!" h&he* 2a!!$% 0e 2$!s&"e*e" !2$!s2&$!a0'e 0e2ase %hese *a%es a*e !$% s*&$s 0( -&*%e $+ Ce!%*a' 8a!4 C8) C&*2'a* N$ 9567: #h&2h ha" e.*ess'( *e$-e" %he &!%e*es% 2e&'&!s .*es2*&0e" 0( %he Us*( La# Pe%&%&$!e*s a"" %ha% *es.$!"e!%s #e*e &! .a*& "e'&2%$ s&!2e %he( a*ee" $! %he s%&.'a%e" &!%e*es% *a%es $+ a!" 5 .e* $!%h The( +*%he* a-e* %he( h$!es%'( 0e'&e-e" %ha% %he &!%e*es% *a%es %he( &.$se" $! *es.$!"e!%s> '$a!s #e*e !$% s*&$s
T$ *e2a.&%'a%e a!" +$* +%*e &"a!2e/ %he &"e'&!es 'a&" "$#! &! %he 2ase $+ Eas%e*! Sh&..&! L&!esB7 a*e a22$*"&!'( $"&+&e" %$ e0$"( 8SP6?8 C&*2'a* N$ 99/ as +$''$#s I he! a! $ 0'& a%& $!/ * ea*"'ess $ + &%s s$*2e/ & e/ 'a#/ 2$!%*a2%s/ ,as&62$!%*a2%s/ "e'&2%s $* ,as&6 "e'&2%s &s 0*ea2he"/ %he 2$!%*a-e!$* 2a! 0e he'" '&a0'e +$* "aaes The .*$-&s&$!s !"e* T&%'e VIII $! Daaes $+ %he C&-&' C$"e $-e*! &! "e%e*&!&! %he eas*e $+ *e2$-e*a0'e "aaes>?8,i> II &%h *ea*" .a*%&2'a*'( %$ a! a#a*" $+ &!%e*es% &! %he 2$!2e.% $+ a2%a' a!" 2$.e!sa%$*( "aaes/ %he *a%e $+ &!%e*es%/ as #e'' as %he a22*a' %he*e$+/ &s &.$se"/ as +$''$#s
Res.$!"e!%s/ &!-$4&! ?e"e' - C$*% $+ A..ea's/ 2$!%e* %ha% %he s%&.'a%e" &!%e*es% *a%es $+ a!" 5 .e* $!%h a*e &!&,&%$s/ !2$!s2&$!a0'e a!" e$*0&%a!%/ %hs/ %he( a*e e!%&%'e" %$ %he *e%*! $+ %he e2ess&-e &!%e*es% .a&" RULING: The s%&.'a%e" &!%e*es% *a%es $+ a!" 5 .e* $!%h
&.$se" $! *es.$!"e!%s> '$a!s s% 0e e,&%a0'( *e"2e" %$ 1 .e* $!%h $* 17 .e* a!! s&p("a&e- +&e%es& %a&es $! 17 pe% )$+&'
='e+ &'e $b"a&$+ s b%eac'e-, a+- & c$+ss&s + &'e pa#)e+& $! a s() $! )$+e#, .e., a "$a+ $% !$%bea%a+ce $! )$+e#, &'e +&e%es& -(e s'$("- be &'a& /'c' )a# 'a4e bee+ s&p("a&e- + /%&+
62
a+- ''e% a%e ecess4e, +>(&$(s, (+c$+sc$+ab"e a+e$%b&a+&
F*%he*$*e/ %he &!%e*es% "e sha'' &%se'+ ea*! 'ea' &!%e*es% +*$ %he %&e &% &s "&2&a''( "ea!"e" I! %he a0se!2e $+ s%&.'a%&$!/ %he *a%e $+ &!%e*es% sha'' 0e : .e* a!! %$ 0e 2$.%e" +*$ "e+a'%/ &e/ +*$ "&2&a' $* e%*a"&2&a' "ea!" !"e* a!" s0e2% %$ %he .*$-&s&$!s $+ A*%&2'e 11:9 $+ %he C&-&' C$"e
h&'e C8 C&*2'a* N$ 9567/ #h&2h %$$4 e++e2% $! Ja!a*( 1/ 193/ e++e2%&-e'( *e$-e" %he 2e&'&! $! &!%e*es% *a%es +$* 0$%h se2*e" a!" !se2*e" '$a!s/ *ea*"'ess $+ a%*&%(/ !$%h&! &! %he sa&" 2&*2'a* 2$'" .$ss&0'( 0e *ea" as *a!%&! 2a*%e 0'a!2he a%h$*&%( %$ 'e!"e*s %$ *a&se &!%e*es% *a%es %$ 'e-e's #h&2h #$'" e&%he* e!s'a-e %he&* 0$**$#e*s $* 'ea" %$ a he$**ha&! $+ %he&* asse%s
1B)
NACAR VS GALLERY FRA?ES
See Ea'!%*- S,ii-6 Gi#%i-% Re2e!%'(/ h$#e-e*/ %he 8SP ?$!e%a*( 8$a*" 8SP6?8)/ &! &%s Res$'%&$! N$ 9:/ a..*$-e" %he ae!"e!% $+ Se2%&$! 73B $+ C&*2'a* N$ 95/ Se*&es $+ 197 a!"/ a22$*"&!'(/ &sse" C%c("a% N$. 77/ Se*&es $+ 713/ e++e2%&-e J("# 6, 9261 / %he .e*%&!e!% .$*%&$! $+ #h&2h *ea"s
='e+ a+ $b"a&$+, +$& c$+s&&(&+ a "$a+ $% !$%bea%a+ce $! )$+e#, s b%eac'e-, a+ +&e%es& $+ &'e a)$(+& $! -a)aes a/a%-e- )a# be )p$se- a& &'e -sc%e&$+ $! &'e c$(%& a& &'e %a&e $! pe% a++() N$ &!%e*es%/ h$#e-e*/ sha'' 0e a""e" $!
DIO VS SPS JAPOR
!'&,&"a%e" 2'a&s $* "aaes/ e2e.% #he! $* !%&' %he "ea!" 2a! 0e es%a0'&she" #&%h *eas$!a0'e 2e*%a&!%( A22$*"&!'(/ #he*e %he "ea!" &s es%a0'&she" #&%h *eas$!a0'e 2e*%a&!%(/ %he &!%e*es% sha'' 0e&! %$ *! +*$ %he %&e %he 2'a& &s a"e "&2&a''( $* e%*a"&2&a''( A*% 11:9/ C&-&' C$"e)/ 0% #he! s2h 2e*%a&!%( 2a!!$% 0e s$ *eas$!a0'( es%a0'&she" a% %he %&e %he "ea!" &s a"e/ %he &!%e*es% sha'' 0e&! %$ *! $!'( +*$ %he "a%e %he "e!% $+ %he 2$*% &s a"e a% #h&2h %&e %he ,a!%&+&2a%&$! $+ "aaes a( 0e "eee" %$ ha-e 0ee! *eas$!a0'( as2e*%a&!e") The a2%a' 0ase +$* %he 2$.%a%&$! $+ 'ea' &!%e*es% sha''/ &! a!( 2ase/ 0e $! %he a$!% +&!a''( a""e"
Ce+&%a" Ba+* C%c("a% N$. 72 / #h&2h %$$4 e++e2% $! Ja+(a%# 6, 67@1, e++e2%&-e'( *e$-e" %he 2e&'&! $! &!%e*es% *a%es +$* b$&' sec(%e- a+(+sec(%e- "$a+s, %ea%-"ess $! )a&(%&#. H$/e4e%, +$&'+ + saC%c("a% %a+&s "e+-e%s ca%&e b"a+c'e a(&'$%&# &$ )p$se +&e%es& %a&es /'c' /$("- %es("& + &'e e+s"a4e)e+& $! &'e% b$%%$/e%s $% &$ &'e 'e)$%%'a+ $! &'e% asse&s. ha% &s &!&,&%$s/
!2$!s2&$!a0'e/ a!" e$*0&%a!% sha'' "e.e!" .$! %he +a2%a' 2&*2s%a!2es $+ ea2h 2ase I! %he &!s%a!% 2ase/ %he CA +$!" %ha% %he 5 &!%e*es% *a%e .e* $!%h a!" 5 .e!a'%( *a%e .e* $!%h +$* e-e*( $!%h $+ "e+a'% $* "e'a( &s &! *ea'&%( &!%e*es% *a%e a% 17 .e* a!! Th&s C$*% has he'" %ha% a s%&.'a%e" &!%e*es% *a%e $+ 55 .e* $!%h $* :: .e* a!! &s -$&" +$* 0e&! &!&,&%$s $* !2$!s2&$!a0'e L&4e#&se/ *a%e $+ : .e* $!%h $* 7 .e* a!! &s $%*ae$s a!" &!$*"&!a%e C$!+$*a0'( %$ %hese .*e2e"e!% 2ases/ a 2$0&!e" &!%e*es% a!" .e!a'%( *a%e a% 1 .e* $!%h $* 17 .e* a!!/ sh$'" 0e "eee" &!&,&%$s/ !2$!s2&$!a0'e/ a!" &!$*"&!a%e
he! %he "e!% $+ %he 2$*% a#a*"&! a s $+ $!e( 0e2$es +&!a' a!" ee2%$*(/ %he *a%e $+ 'ea' &!%e*es%/ #he%he* %he 2ase +a''s !"e* .a*a*a.h 1 $* .a*a*a.h 7/ a0$-e/ sha'' 0e : .e* a!! +*$ s2h +&!a'&%( !%&' &%s sa%&s+a2%&$!/ %h&s &!%e*& .e*&$" 0e&! "eee" %$ 0e 0( %he! a! e,&-a'e!% %$ a +$ *0ea*a!2e $+ 2*e"&% A!"/ &! a""&%&$! %$ %he a0$-e/ "e!%s %ha% ha-e 0e2$e +&!a' a!" ee2%$*( .*&$* %$ J'( 1/ 713/ sha'' !$% 0e "&s%*0e" a!" sha'' 2$!%&!e %$ 0e &.'ee!%e" a..'(&! %he *a%e $+ &!%e*es% +&e" %he*e&!
What then sh!l" the interest an" penalt# rates be$
4
Credit Transactions
1:)
&!%e*es% *a%e %$ 0e ea*!e" 0% a's$ %he a!!e* $+ ea*!&! %he sae/ &+ &% &s %$ 0e 2$.$!"e" Fa&'*e %$ s.e2&+( %he a!!e* $+ ea*!&! &!%e*es%/ h$#e-e*/ sha'' !$% a%$a%&2a''( *e!"e* %he s%&.'a%&$! &.$s&! %he &!%e*es% *a%e -$&" s&!2e &% &s *ea"&'( a..a*e!% +*$ %he 2$!%*a2% &%se'+ %ha% %he .a*%&es he*e&! a*ee" +$* %he '$a! %$ 0ea* &!%e*es% I!s%ea"/ &! "e+a'% $+ a!( s%&.'a%&$! $! %he a!!e* $+ ea*!&! &!%e*es%/ s)p"e +&e%es& sha'' a22*e
ECE REALTY VS HERNANDEM 71B)
CONDOMINIUM UNIT CASE.
A*%&2'e 779 $+ %he Ne# C&-&' C$"e .*$-&"es %ha% I+ %he $0'&a%&$! 2$!s&s%s &! %he .a(e!% $+ a s $+ $!e(/ a!" %he "e0%$* &!2*s &! "e'a(/ %he &!"e!&%( +$* "aaes/ %he*e 0e&! !$ s%&.'a%&$! %$ %he 2$!%*a*(/ sha'' 0e %he .a(e!% $+ %he &!%e*es% a*ee" .$!/ a!" &! %he a0se!2e $+ s%&.'a%&$!/ %he 'ea' &!%e*es%/ #h&2h &s s& .e* 2e!% .e* a!! The*e &s !$ "$0% %ha% ECE &!2**e" &! "e'a( &! "e'&-e*&! %he s0e2% 2$!"$&!& !&% The*e 0e&! !$ s%&.'a%&$! as %$ &!%e*es%/ !"e* A*%&2'e 779 %he &.$sa0'e *a%e &s s& .e*2e!% :) 0( #a( $+ "aaes 8% s&!2e J'( 1/ 713/ %he *a%e $+ %#e'-e .e*2e!% 17) .e* a!! +*$ +&!a'&%( $+ %he "e!% !%&' sa%&s+a2%&$! has 0ee! 0*$h% 0a24 %$ s& .e*2e!% :) Se2%&$! 1 $+ Res$'%&$! N$ 9: $+ %he ?$!e%a*( 8$a*" $+ %he 8a!4$ Se!%*a' ! P&'&.&!as "a%e" ?a( 1:/ 713 .*$-&"es The *a%e $+ &!%e*es% +$* %he '$a! $* +$*0ea*a!2e $+ a!( $!e(/ $$"s $* 2*e"&%s a!" %he *a%e a''$#e" &! "e!%s/ &! %he a0se!2e $+ a! e.*ess 2$!%*a2% as %$ s2h *a%e $+ &!%e*es%/ sha'' 0e s& .e*2e!% :) .e* a!! Ths/ %he *a%e $+ &!%e*es% %$ 0e &.$se" +*$ +&!a'&%( $+ "e!%s &s !$# 0a24 a% s& .e*2e!% :)/ %he *a%e .*$-&"e" &! A*%&2'e 779 $+ %he C&-&' C$"e HEREFORE/ %he "e2&s&$! $+ %he C$*% $+ A..ea's &! CA6GR SP N$ 173 &s AFFIR?ED #&%h ?ODIFICATION Pe%&%&$!e* ECE Rea'%( a!" De-e'$.e!%/ I!2 &s he*e0( $*"e*e" %$ .a( *es.$!"e!% Ha("(! He*!a!"e %he a$!% $+ PB57/551:5 *e.*ese!%&! %he %$%a' a$!% he .a&" %$ .e%&%&$!e* ECE Rea'%( a!" De-e'$.e!% I!2$*.$*a%e"/ .'s s& .e*2e!% :) &!%e*es% .e* a!! +*$ Se.%e0e* / 7: !%&' +&!a'&%( he*e$+ 0( #a( $+ a2%a' a!" 2$.e!sa%$*( "aaes F*$ +&!a'&%( !%&' +'' sa%&s+a2%&$!/ %he %$%a' a$!% "e !$# 2$.$!"e" #&%h &!%e*es% "e +*$ Se.%e0e* / 7: . %$ +&!a'&%(/ sha'' '&4e#&se ea*! &!%e*es% a% s& .e*2e!% :) .e* a!! !%&' +''( .a&"
1)
*es.$!"e!% s.$ses he*e&! &.$se" a 5 $!%h'( &!%e*es% &! %he '$a! 2$!%*a2%e" 0( .e%&%&$!e*s F$''$#&! %he "&2&a' .*$!$!2ee!%s/ %he &!%e*es% *a%e s$ &.$se" he*e&! &s !''&+&e" +$* 0e&! !2$!s2&$!a0'e I! '&e %he*e$+/ a s)p"e +&e%es& $! 69 pe% a++() sh$'" 0e &.$se"
19)
The .e!a'%( 2ha*e $+ %#$ .e*2e!% 7) .e* $!%h &! %he 2ase a% 0a* 0ea! %$ a22*e +*$ %he %&e $+ "e+a'% 0( %he .e%&%&$!e* The*e &s !$ "$0% %ha% %he .e%&%&$!e* &s '&a0'e +$* 0$%h %he s&p("a&e- )$+e&a%# +&e%es& a!" %he s%&.'a%e" .e!a'%( 2ha*e a4a .e!a'%( $* c$)pe+sa&$%# +&e%es&3.
!e% &sse %$ 0e *es$'-e" &s #he%he* &!%e*es% a( a22*e $! %he .e!a'%( $* 2$.e!sa%$*( &!%e*es% #&%h$% -&$'a%&! %he .*$-&s&$!s $+ A*%&2'e 1959 YES &%h$% .*e"&2e %$ %he .*$-&s&$!s $+ A*%&2'e 7717/ &!%e*es% "e a!" !.a&" sha'' !$% ea*! &!%e*es% H$#e-e*/ %he 2$!%*a2%&! .a*%&es a( 0( s%&.'a%&$! 2a.&%a'&e %he &!%e*es% "e a!" !.a&"/ #h&2h as a""e" .*&!2&.a'/ sha'' ea*! !e# &!%e*es%
7)
I! %he .*ese!% 2ase/ .e%&%&$!e*>s $0'&a%&$! a*$se +*$ a ,as&62$!%*a2% $+ s$'%&$ &!"e0&%& a!" !$% +*$ a '$a! $* +$*0ea*a!2e $+ $!e( Ths/ a! &!%e*es% $+ : .e* a!! sh$'" 0e &.$se" $! %he a$!% %$ 0e *e+!"e" as #e'' as $! %he "aaes a#a*"e" a!" $! %he a%%$*!e(>s +ees/ %$ 0e 2$.%e" +*$ %he %&e $+ %he e%*a6"&2&a' "ea!" $! 3 ?a*2h 199/B: . %$ %he +&!a'&%( $+ %h&s De2&s&$! I! a""&%&$!/ %he &!%e*es% sha'' 0e2$e 17 .e* a!! +*$ %he +&!a'&%( $+ %h&s De2&s&$! . %$ &%s sa%&s+a2%&$!
DE LA PAM VS LJ DEVELOP?ENT
H$#e-e*/ .*sa!% %$ Ce!%*a' 8a!4 C&*2'a* N$ 99 s 713 #h&2h %$$4 e++e2% $! J'( 1/ 713/3: %he &!%e*es% &.$se" 0( %he CA s% 0e a22$*"&!'( $"&+&e" The P77:/ #h&2h R$'a!"$ &s $*"e*e" %$ .a( LJ sha'' ea*! a! &!%e*es% $+ : .e* a!!+*$ %he +&!a'&%( $+ %h&s De2&s&$!
III. DEPOSIT 067992273 a. DEPOSIT IN GENERAL AND ITS DIFFERENT INDS
SPS AL8OS VS E?8ISAN
The 2$.$!"&! $+ &!%e*es% sh$'" 0e &! #*&%&!
8PI VS IAC 19)
M$+e&a%# +&e%es& •
SIGA6AN VS VILLANUEVA
O0'&a%&$! a*$se +*$ S$'%&$ I!"e0&%& NOT +$*0ea*a!2e &! $!e( : &!%e*es% sh$'" 0e &.$se"
As ehas%&0'( "&s2sse"/!$ $!e%a*( &!%e*es% &s"e R$'a!"$ .*sa!% %$ A*%&2'e 195:1#.h&1 The CA %hs 2$**e2%'( a""e" %ha% %he e2ess &!%e*es% .a(e!%s a"e 0( LJ sh$'" 0e a..'&e" %$ &%s .*&!2&.a' '$a! As 2$.%e" 0( %he CA/ R$'a!"$ &s 0$!" %$ *e%*! %he e2ess .a(e!% $+ P77:/ %$ LJ +$''$#&! %he .*&!2&.'e $+ s$'%&$ &!"e0&%&35
1)
TAN VS CA
A*%&2'e 195:N$ &!%e*es% sha'' 0e "e !'ess &% has 0ee! e.*ess'( s%&.'a%e" &! #*&%&!
ISSUE: &s %he*e a 2$!%*a2% $+ "e.$s&% YES; Ca! Msh$*!a24 *e2$-e*
"aaes NO
As a!"a%e" 0( %he +$*e$&! .*$-&s&$!/ .a(e!% $+ $!e%a*( &!%e*es% sha'' 0e "e $!'( &+ 1) %he*e #as a! e.*ess s%&.'a%&$! +$* %he .a(e!% $+ &!%e*es%; a!" 7) %he a*eee!% +$* s2h .a(e!% #as *e"2e" &! #*&%&!
HELD: CONTRACT OF DEPOSIT A*!. >@0;. A #%"'i! i' c"-'!i!!%# )*"m !,% m"m%-! a %*'"*%c%i4%' a !,i-6 b%"-6i-6 !" a-"!,%*7 8i!, !,% "bi6a!i"- ") 'a)%/ %%i-6 i! a-# ") *%!*-i-6 !,% 'am%. I) !,% 'a)%%%i-6 ") !,% !,i-6 #%i4%*%# i' -"! !,% *i-cia *"'% ") !,% c"-!*ac!7 !,%*% i' -" #%"'i! b! '"m% "!,%* c"-!*ac!. •
I- !,% ca'% a! ba* / &% &s !"&s.%e" %ha% %he .a*%&es ha-e a*ee" +$* %he
'$a! %$ ea*! 5 $!%h'( &!%e*es%/ %he s%&.'a%&$! %$ %ha% e++e2% .% &! #*&%&! he! %he .e%&%&$!e*s "e+a'%e"/ %he .e*&$" +$* .a(e!% #as e%e!"e"/ 2a**(&! $-e* %he %e*s $+ %he $*&&!a' '$a! a*eee!%/ &!2'"&! %he 5 s&.'e &!%e*es% H$#e-e*/ 0( %he %h&*" e%e!s&$! $+ %he '$a!/ *es.$!"e!% s.$ses "e2&"e" %$ a'%e* %he a*eee!% 0( 2ha!&! %he a!!e* $+ ea*!&! &!%e*es% *a%e/ 2$.$!"&! &% 0e&!!&! J!e 19: Th&s &s a..a*e!% +*$ %he S%a%ee!% $+ A22$!% .*e.a*e" 0( %he s.$ses E0&sa! %hese'-es
H$#e-e*/ S&!2e %he e*e sa+e4ee.&! $+ %he *ee!0a24s/ #&%h$% se''&! %he %$ %he Ce!%*a' 8a!4 #&%h&! $!e 0s&!ess "a( +*$ *e2e&.%/ &s a %*a!sa2%&$! #h&2h &s !$% a%h$*&e" 0( C8 C&*2'a* N$ 7/ &% s% 0e 2$!s&"e*e" as $!e #h&2h +a''s !"e* %he e!e*a' 2'ass $+ .*$h&0&%e" %*a!sa2%&$!s he! %he !''&%( .*$2ee"s +*$ %he &''ea'&%( $+ %he 2ase $* $0e2% $+ %he 2$!%*a2%/ a!" %he a2% 2$!s%&%%es a 2*&&!a' $++e!se/ 0$%h .a*%&es 0e&! &! .a*& "e'&2%$/ %he( sha'' ha-e !$ 2ase $+ a2%&$! aa&!s% ea2h $%he*
G&-e! %he 2&*2s%a!2es/ e *'e %ha% %he +&*s% *e,&*ee!%QQ%ha% %he*e 0e a! e.*ess s%&.'a%&$! +$* %he .a(e!% $+ &!%e*es%QQ&s !$% s++&2&e!%'( 2$.'&e" #&%h/ +$* .*.$ses $+ &.$s&! 2$.$!"e" &!%e*es% $! %he '$a! The *e,&*ee!% "$es !$% $!'( e!%a&' *e"2&! &! #*&%&! %he
5
Credit Transactions
BAN IS NOT LIABLE I- !,% i-'!a-! ca'% / %he*e &s !$ 2$.e%e!%
b. ?OLUNTARY DEPOSIT 63 CHAN ?S MACEDA
.*$$+ .*ese!%e" %$ sh$# %ha% *es.$!"e!% 8a!4 #as a#a*e $+ %he a*eee!% 0e%#ee! %he .e%&%&$!e* a!" %he Pa$s %$ %he e++e2% %ha% %he 2e*%&+&2a%es $+ %&%'e #e*e #&%h"*a#a0'e +*$ %he sa+e%( "e.$s&% 0$ $!'( .$! 0$%h .a*%&es $&!% s&!a%*es/ a!" %ha% !$ e-&"e!2e #as s0&%%e" %$ *e-ea' %ha% %he '$ss $+ %he 2e*%&+&2a%es $+ %&%'e #as "e %$ %he +*a" $* !e'&e!2e $+ %he *es.$!"e!% 8a!4 Th&s &! %*! +'$#s +*$ %h&s C$*%s "e%e*&!a%&$! %ha% %he 2$!%*a2% &!-$'-e" #as $!e $+ "e.$s&% S&!2e 0$%h %he .e%&%&$!e* a!" %he Pa$s a*ee" %ha% ea2h sh$'" ha-e $!e 1) *e!%e*s 4e(/ &% #as $0-&$s %ha% e&%he* $+ %he 2$'" as4 %he 8a!4 +$* a22ess %$ %he sa+e%( "e.$s&% 0$ a!"/ #&%h %he se $+ s2h 4e( a!" %he 8a!4s $#! a*" 4e(/ 2$'" $.e! %he sa&" 0$/ #&%h$% %he $%he* *e!%e* 0e&! .*ese!%
NO PRI?ITY OF CONTRACT BET=EEN SPS CHAN AND MACEDA.
U!"e* A*%&2'e 1311 $+ %he C&-&' C$"e/ 2$!%*a2%s a*e 0&!"&! .$! %he .a*%&es a!" %he&* ass&!s a!" he&*s) #h$ ee2%e %he he! %he*e &s !$ .*&-&%( $+ 2$!%*a2%/ %he*e &s '&4e#&se !$ $0'&a%&$! $* '&a0&'&%( %$ s.ea4 a0$% a!" %hs !$ 2ase $+ a2%&$! a*&ses S.e2&+&2a''(/ + a+ ac&$+ aa+s& &'e -ep$s&a%#, &'e b(%-e+ s $+ &'e p"a+&!! &$ p%$4e &'e ba")e+& $% -ep$s& a+- &'e pe%!$%)a+ce $! c$+-&$+s p%ece-e+& &$ &'e %'& $! ac&$+. 39 A "e.$s&%a*( &s $0'&e" %$ *e%*! %he %h&! %$
%he "e.$s&%$*/ $* %$ h&s he&*s $* s22ess$*s/ $* %$ %he .e*s$! #h$ a( ha-e 0ee! "es&!a%e" &! %he 2$!%*a2%B I- !,% *%'%-! ca'% / %he *e2$*" &s 0e*e+% $+ a!( 2$!%*a2% $+ "e.$s&%/ $*a'
13 SIA ?S CA
$* #*&%%e!/ 0e%#ee! .e%&%&$!e*s a!" *es.$!"e!% I+ a% a''/ &% #as $!'( 0e%#ee! .e%&%&$!e*s a!" ?$*ea! A!" *a!%&! a*e!"$ %ha% %he*e #as &!"ee" a 2$!%*a2% $+ "e.$s&% 0e%#ee! .e%&%&$!e*s a!" ?$*ea!/ &% &s s%&'' &!20e!% .$! *es.$!"e!% %$ .*$-e &%s e&s%e!2e a!" %ha% &% #as ee2%e" &! h&s +a-$* H$#e-e*/ *es.$!"e!% &se*a0'( +a&'e" %$ "$ s$ The $!'( .&e2es $+ e-&"e!2e *es.$!"e!% .*ese!%e" %$ .*$-e %he 2$!%*a2% $+ "e.$s&% #e*e %he #%i4%*/ *%c%i!'B1 S&!&+&2a!%'(/ %he( a*e -'i6-%# a-# -"! #/ *%c%i4%# "* a!,%-!ica!%# b/ %i!,%*
C$+&%ac& !$% &'e (se $! sa!e&# -ep$s& b$ s a speca" *+- $! -ep$s& a+- &'e %e"a&$+s'p be&/ee+ &'e pa%&es &'e%e&$, /&' %espec& &$ &'e c$+&e+&s $! &'e b$, s &'a& $! a ba"$% a+- ba"ee, &'e ba")e+& be+ !$% '%e a+- )(&(a" be+e!& A"&'$(' !"$$-+ c$("- be c$+s-e%e- a !$%&(&$(s e4e+&, !a"(%e $! &'e ba+* &$ 4e +$&ce &$ &'e %e+&e% $! s(c' !ac& )a*es & "ab"e !$% -a)aes, &s +e"e+ce ca(se- &$ a%a4a&e +5(%# $% -a)ae &$ &'e %e+&e% ; S8TC>s !e'&e!2e a*a-a%e" %he &!*( $* "aae %$
M"*%ma-7 %!i!i"-%*' "* *%'"-#%-! "* a-/ ") !,%i* a!,"*iB%# *%*%'%-!a!i4%' He!2e/ %h$se "e'&-e*( *e2e&.%s ha-e !$ .*$0a%&-e -a'e a% a''; e-e*( 2ase $+ a2%&$! %35c"-!*ac! s% 0e +$!"e" .$!
%he .e%&%&$!e* #h&2h *es'%e" +*$ %he '$ss $* "es%*2%&$! $+ %he s%a. 2$''e2%&$! S8TC #as a#a*e $+ %he +'$$"s $+ 195 a!" 19:; &% a's$ 4!e# %ha% %he +'$$"#a%e*s &!!"a%e" %he *$$ #he*e Sa+e De.$s&% 8$ N$ 5B #as '$2a%e" I! -&e# %he*e$+/ &% sh$'" ha-e '$s% !$ %&e &! !$%&+(&! %he .e%&%&$!e* &! $*"e* %ha% %he 0$ 2$'" ha-e 0ee! $.e!e" %$ *e%*&e-e %he s%a.s/ %hs sa-&! %he sae +*$ +*%he* "e%e*&$*a%&$! a!" '$ss The "es%*2%&$! $* '$ss $+ %he s%a. 2$''e2%&$! #h&2h #as/ &! %he 'a!ae $+ %he %*&a' 2$*%/ %he @.*$"2% $+ 7 (ea*s $+ .a%&e!2e a!" "&'&e!2e 2ase" %he .e%&%&$!e* .e2!&a*( '$ss; he!2e/ he s% 0e 2$.e!sa%e" %he*e+$*
a 2$!%*a2%/ $*a' $* #*&%%e!/ e.*ess $* &.'&e"
93 CA AGRO INDUSTRIAL ?S CA The 2$!%*a2% +$* %he *e!% $+ %he sa+e%( "e.$s&% 0$ &s !$% a! $*"&!a*( 2$!%*a2% $+ 'ease as "e+&!e" &! a*%&2'e 1:B3 $+ %he 2&-&' 2$"e H$#e-e*/ e "$ !$% +''( s0s2*&0e %$ &%s -&e# %ha% %he sae &s a 2$!%*a2% $+ "e.$s&% %ha% &s %$ 0e s%*&2%'( $-e*!e" 0( %he .*$-&s&$!s &! %he C&-&' C$"e $! "e.$s&%; 19%he 2$!%*a2% &! %he 2ase a% 0a* &s a speca" *+- $! -ep$s& NOT LEASE UNDER 681 0e2ase %he +'' a!" a0s$'%e .$ssess&$! a!" 2$!%*$' $+ %he sa+e%( "e.$s&% 0$ #as !$% &-e! %$ %he $&!% *e!%e*s %he .e%&%&$!e* a!" %he Pa$s The a*" 4e( $+ %he 0$ *ea&!e" #&%h %he *es.$!"e!% 8a!4; #&%h$% %h&s 4e(/ !e&%he* $+ %he *e!%e*s 2$'" $.e! %he 0$ O! %he $%he* ha!"/ %he *es.$!"e!% 8a!4 2$'" !$% '&4e#&se $.e! %he 0$ #&%h$% %he *e!%e*s 4e( I! %h&s 2ase/ %he sa&" 4e( ha" a ".'&2a%e #h&2h #as a"e s$ %ha% 0$%h *e!%e*s 2$'" ha-e a22ess %$ %he 0$
N$ "ab"&# p%$4s$+s a%e ?OID. 2$!"&%&$!s N$ 9 a!" N$ 13 $+ %he
Lease A*eee!% 2$-e*&! %he sa+e%( "e.$s&% 0$ &! ,es%&$! Eh&0&%s A a!" 1) s% 0e s%*&24e! "$#! +$* 0e&! 2$!%*a*( %$ 'a# a!" .0'&2 .$'&2( as %he( a*e ea!% %$ ee.% S8TC +*$ a!( '&a0&'&%( +$* "aae/ '$ss $* "es%*2%&$! $+ %he 2$!%e!%s $+ %he sa+e%( "e.$s&% 0$ #h&2h a( a*&se +*$ &%s $#! $* &%s ae!%s +*a"/ !e'&e!2e $* "e'a( A22$*"&!'(/ S8TC 2a!!$% %a4e *e+e !"e* %he sa&" 2$!"&%&$!s
83 BARON ?S DA?ID U!"e* a*%&2'e 1: $+ %he C&-&' C$"e, /'e+ &'e -ep$s&$%# 'as
He!2e/ %he a%h$*&%&es 2&%e" 0( %he *es.$!"e!% C$*% 92 $! %h&s .$&!% "$ !$% a..'( Ne&%he* 2$'" A*%&2'e 195/ a's$ *e'&e" .$! 0( %he *es.$!"e!% C$*%/ 0e &!-$4e" as a! a*e!% aa&!s% %he "e.$s&% %he$*( O0-&$s'(/ %he +&*s% .a*a*a.h $+ s2h .*$-&s&$! 2a!!$% a..'( %$ a "e.$s&%a*( $+ 2e*%&+&2a%es/ 0$!"s/ se2*&%&es $* &!s%*e!%s #h&2h ea*! &!%e*es% &+ s2h "$2e!%s a*e 4e.% &! a *e!%e" sa+e%( "e.$s&% 0$ I% &s 2'ea* %ha% %he "e.$s&%a*( 2a!!$% $.e! %he 0$ #&%h$% %he *e!%e* 0e&! .*ese!%
pe%)ss$+ &$ )a*e (se $! &'e &'+ -ep$s&e-, &'e c$+&%ac& "$ses &'e c'a%ac&e% $! )e%e -ep$s& a+- bec$)es a "$a+ $% a c$))$-a&() a!" $+ 2$*se b# app%$p%a&+ &'e &'+, &'e ba"ee bec$)es %esp$+sb"e !$% &s 4a"(e I! %h&s 2$!!e2%&$! #e #h$''(
*ee2% %he "e+e!"a!%s .*e%e!se %ha% %he .a'a( "e'&-e*e" 0( %he .'a&!%&++s $* a!( .a*% $+ &% #as a2%a''( 2$!se" &! %he +&*e $+ Ja!a*(/ 1971 N$* &s %he '&a0&'&%( $+ %he "e+e!"a!% &! a!( #&se a++e2%e" 0( %he 2&*2s%a!2e %ha%/ 0( a 2s%$ .*e-a&'&! a$! *&2e &''e*s &! %h&s 2$!%*(/ .e*s$!s .'a2&! .a'a( #&%h %he #&%h$% s.e2&a' a*eee!% as %$ .*&2e a*e a% '&0e*%( %$ #&%h"*a# &% 'a%e*/ .*$.e* a''$#a!2e 0e&! a"e +$* s%$*ae a!" sh*&!4ae/ a %h&! %ha% &s s$e%&es "$!e/ %h$h *a*e'(
BAILMENT FOR HIRE AND MUTUAL BENEFIT. The *e'a%&$! 0e%#ee!
a 0a!4 *e!%&! $% sa+e6"e.$s&% 0$es a!" &%s 2s%$e* #&%h *es.e2% %$ %he 2$!%e!%s $+ %he 0$ &s %ha% $+ a 0a&' $* a!" 0a&'ee/ %he 0a&'e!% 0e&! +$* h&*e a!" %a' 0e!e+&% I! %he 2$!%e% $+ $* 'a#s #h&2h a%h$*&e 0a!4&! &!s%&%%&$!s %$ *e!% $% sa+e%( "e.$s&% 0$es/ &% &s 2'ea* %ha% &! %h&s *&s"&2%&$!/ %he .*e-a&'&! *'e &! %he U!&%e" S%a%es has 0ee! a"$.%e" Se2%&$! 7 $+ %he Ge!e*a' 8a!4&! A2% 91 .e*%&!e!%'( .*$-&"es Se2 7 I! a""&%&$! %$ %he $.e*a%&$!s s.e2&+&2a''( a%h$*&e" e'se#he*e &! %h&s A2%/ 0a!4&! &!s%&%%&$!s $%he* %ha! 0&'"&! a!" '$a! ass$2&a%&$!s a( .e*+$* %he +$''$#&! se*-&2es a) Re2e&-e &! 2s%$"( +!"s/ "$2e!%s/ a!" -a'a0'e $0e2%s/ a!" *e!% sa+e%( "e.$s&% 0$es +$* %he sa+ea*"&! $+ s2h e++e2%s The 0a!4s sha'' .e*+$* %he se*-&2es .e*&%%e" !"e* s0se2%&$!s a)/ 0) a!" 2) $+ %h&s se2%&$! as #%"'i!"*i%' $* as ae!%s
DEPOSIT USE OF THING DEPOSITED LIABILITY OF DEPOSITARYThe $#!e* $+ a *&2e &'' #h$/ &! 2$!+$*&%( #&%h
2s%$ .*e-a&'&! &! %he %*a"e/ *e2e&-es .a'a( a!" 2$!-e*%s &% &!%$ *&2e/ se''&! %he .*$"2% +$* h&s $#! 0e!e+&%/ s% a22$!% +$* %he .a'a( %$ %he $#!e* a% %he .*&2e .*e-a&'&! a% %he %&e "ea!" &s a"eThe "es%*2%&$! $+ a *&2e &''/ #&%h &%s 2$!%e!%s/ 0( +&*e a+%e* .a'a( %hs "e.$s&%e" has 0ee! &''e" a!" a*4e%e" "$es !$% a++e2% %he '&a0&'&%( $+ %he &''e*
3 JA?ELLANA ?S LIM
6
Credit Transactions
CONTRACT BAILMENT OR DEPOSIT LOAN. he*e $!e(/
.*$-&s&$!s $+ %he 2$!%*a2% a!" 2a!!$% see4 *es%&%%&$! !%&' %he %&e +$* .a(e!%/ as .*$-&"e" &! %he 2$!%*a2%/ has a*&se! I% &s a..a*e!% +*$ %he %e*s $+ %h&s "$2e!% %ha% %he .'a&!%&++ 2$'" !$% "ea!" h&s $!e( a% a!( %&e He #as 0$!" %$ &-e !$%&2e $+ h&s "es&*e +$* &%s *e%*! a!" %he! %$ #a&% +$* s& $!%hs 0e+$*e he 2$'" &!s&s% .$! .a(e!%
2$!s&s%&! $+ 2$&!s $+ 'ea' %e!"e*/ &s "e.$s&%e" #&%h a .e*s$! a!" %he 'a%%e* &s a%h$*&e" 0( %he "e.$s&%$* %$ se a!" "&s.$se $+ %he sae/ %he a*eee!% %hs e!%e*e" &!%$ 0e%#ee! %he "e.$s&%$* a!" %he "e.$s&%a*( &s !$% a 2$!%*a2% $+ "e.$s&%/ 0% a '$a! A%&c"e 6 $+ %he C&-&' C$"e .*$-&"es %ha%
The "e.$s&%$*( 2a!!$% a4e se $+ %he %h&! "e.$s&%e" #&%h$% %he e.*ess .e*&ss&$! $+ %he "e.$s&%$* O%he*#&se he sha'' 0e '&a0'e +$* '$sses a!" "aaes
Dh see +'' %e% "&s2ss&$!
3 CO?PANIA AGRICOLA VS NEPO?UCENO I! %he .*ese!% 2ase %he %*a!sa2%&$! &! ,es%&$! #as 2'ea*'( !$% +$* %he s$'e 0e!e+&% $+ %he C$.a!&a A*&2$'a "e U'%*aa*; &% #as e-&"e!%'( +$* %he 0e!e+&% $+ 0$%h .a*%&es Ne&%he* 2$'" %he a''ee" "e.$s&%$* "ea!" .a(e!% !%&' %he e.&*a%&$! $+ %he %e* $+ %h*ee $!%hs
A%&c"e 6@ a's$ .*$-&"es %ha%
he! %he "e.$s&%$*( has .e*&ss&$! %$ a4e se $+ %he %h&! "e.$s&%e"/ %he 2$!%*a2% '$ses %he 2ha*a2%e* $+ a "e.$s&% a!" 0e2$es a '$a! $* 0a&'e!% The . e*&ss&$! sha'' !$% 0e .*ese"/ a!" &%s e&s%e!2e s% 0e .*$-e!
@3 8PI VS CA 199B
3 ROGERS VS S?ITH
0a!4 "e.$s&%s a*e &! %he !a%*e $+ &**e'a* "e.$s&%s; %he( a*e *ea''( '$a!s 0e2ase %he( ea*! &!%e*es% The *e'a%&$!sh&. %he! 0e%#ee! a "e.$s&%$* a!" a 0a!4 &s $!e $+ c%e-&$% a+- -eb&$% The "e.$s&% !"e* %he ,es%&$!e" a22$!% #as a! $*"&!a*( 0a!4 "e.$s&%; he!2e/ &% #as .a(a0'e $! "ea!" $+ %he "e.$s&%$* 8e2ase %he $#!e*sh&. $+ %he "e.$s&% *ea&!e" !"e%e*&!e"/ 8PI/ as %he "e0%$*/ ha" !$ *&h% %$ .a( %$ .e*s$!s $%he* %ha! %h$se &! #h$se +a-$* %he $0'&a%&$! #as 2$!s%&%%e" $* #h$se *&h% $* a%h$*&%( %$ *e2e&-e .a(e!% &s &!"&s.%a0'e Pa(e!% a"e 0( %he "e0%$* %$ %he #*$! .a*%( "$es !$% e%&!&sh %he $0'&a%&$! as %$ %he 2*e"&%$* #h$ &s #&%h$% +a'% $* !e'&e!2e/ e-e! &+ %he "e0%$* a2%e" &! %$s% $$" +a&%h a!" 0( &s%a4e as %$ %he .e*s$! $+ %he 2*e"&%$*/ $* %h*$h e**$* &!"2e" 0( +*a" $+ a %h&*" .e*s$! The .a(e!% %he! 0( 8PI %$ %he he&*s $+ Ve'as2$/ e-e! &+ "$!e &! $$" +a&%h/ "&" !$% e%&!&sh &%s $0'&a%&$! %$ %he %*e "e.$s&%$*/ Eas%e*!
#he%he* $* !$% %h&s "$2e!% &s e-&"e!2e $+ a! $*"&!a*( '$a! #h&2h 2*ea%e" 0e%#ee! %he .'a&!%&++ a!" %he "e+e!"a!%s %he s&.'e *e'a%&$! $+ "e0%$* a!" 2*e"&%$* The a..e''a!% &! h&s 0*&e+ *e.ea%e"'( 2a''s &% a "e.$s&%/ 0% #e "$ !$% !"e*s%a!" %ha% he 2'a&s %ha% &% &s $ * e-e* #as a "e.$s&% &! %he %e2h!&2a' se!se $+ %he %e*; %ha% &s/ %ha% he $#!e*sh&. $+ %he .a*%&2'a* 2$&! #h&2h #as "e'&-e*e" 0( h& %$ S&%h/ 8e'' C$ "&" !$% .ass %$ S&%h/ 8e'' C$ 0% *ea&!e" &! h& a!" %ha% S&%h/ 8e'' C$ #as 0$!" %$ *e%*! %$ h& %he &"e!%&2a' 2$&! #h&2h %he( ha" *e2e&-e" I% &s a..a*e!% %ha% !$ s2h 2'a& 2$'" 0e a&!%a&!e" &! -&e# $+ %ha% .a*% $+ %he &!s%*e!% #h&2h .*$-&"es +$* %he .a(e!% $+ &!%e*es% I% &s 2'a&e"/ h$#e-e*/ 0( %he a..e''a!%/ %ha% #h&'e !$% a "e.$s&% &! %he s%*&2% se!se $+ %he #$*"/ %he "$2e!% e-&"e!2es #ha% &s 4!$#! as a! %%e("a% -ep$s& The .a*%&es a*ee %ha% %he 2ase s% 0e "e2&"e" &! %h&s *es.e2% &! -&e# $+ %he 'e&s'a%&$! &! +$*2e .*&$* %$ %he a"$.%&$! $+ %he C&-&' C$"e/ a!" %he a..e''a!% sa(s %ha% %he "e+&!&%&$! $+ a! &**e'a* "e.$s&% &s +$!" &! La# II/ T&%'e III $+ %he F&+%h Pa*%&"a ?a!*esa/ &! h&s C$e!%a*&es $! %he C&-&' C$"e -$' 11/ . ::B)/ s%a%es %ha% %he*e a*e %h*ee .$&!%s $+ "&++e*e!2e 0e%#ee! a '$a! a!" a! &**e'a* "e.$s&% IRREGULAR DEPOSIT
LOAN
A' !" b%-%)i!' acc*%#
%ha% #h&2h a22*es %$ %he "e.$s&%$*
A' !" D%ma-#abii! /
"e.$s&%$* 2a! "ea!" %he *e%*! $+ %he a*%&2'e a% a!( %&e
A' !" P*%)%*%-c% ") C*%#i!
"e.$s&%$* has a .*e+e*e!2e $-e* $%he* 2*e"&%$*s
%he esse!%&a' 2ase +$* %he %*a!sa2%&$! &s %he !e2ess&%( $+ %he 0$**$#e* Le!"e* 2a!!$% see4 *es%&%%&$! !%&' %he %&e +$* .a(e!%/ as .*$-&"e" &! %he 2$!%*a2% N$ .*e+e*e!2e
73 ?ETRO8ANK VS 8A FINANCE %he $0'&a%&$! &! %h&s 2ase "&" !$% a*&se $% $+ a '$a! $* +$*0ea*a!2e $+ $!e(/ $$"s/ $* 2*e"&%s The( "&" !$% ha-e a 0a!4 "e.$s&% &! %h&s a22$!%/ !$ 2*e"&%$* a!" "e0%$* *e'a%&$!sh&. A*%&2'e 19 &s !$% a..'&2a0'e s&!2e %he !a%*e $+ %he *e'a%&$!sh&. 0e%#ee! 8A F&!a!2e a!" .e%&%&$!e* &s $!e $+ ae!2( he*e0( .e%&%&$!e*/ as 2$''e2%&! 0a!4/ #as %$ 2$''e2% +$* 8A F&!a!2e %he 2$**es.$!"&! .*$2ee"s $+ %he 2he24 N$% 0e&! a '$a! $* +$*0ea*a!2e $+ $!e(/ &!%e*es% &s : .e* a!! +*$ %he "a( $+ e%*a"&2&a' "ea!" !%&' +&!a'&%( $+ "e!% a!" 17 +*$ +&!a'&%( !%&' .a(e!%
623 REYES VS CA The "e*ee $+ "&'&e!2e *e,&*e" $+ 0a!4s &s $*e %ha! %ha% $+ a $$" +a%he* $+ a +a&'( #he*e %he +&"2&a*( !a%*e $+ %he&* *e'a%&$!sh&. #&%h %he&* "e.$s&%$*s &s 2$!2e*!e" I! $%he* #$*"s 0a!4s a*e "%( 0$!" %$ %*ea% %he "e.$s&% a22$!%s $+ %he&* "e.$s&%$*s #&%h %he h&hes% "e*ee $+ 2a*e 8% %he sa&" *'&! a..'&es $!'( %$ 2ases #he*e 0a!4s a2% !"e* %he&* +&"2&a*( 2a.a2&%(/ %ha% &s/ as "e.$s&%a*( $+ %he "e.$s&%s $+ %he&* "e.$s&%$*s 8% %he sae h&he* "e*ee $+ "&'&e!2e &s !$% e.e2%e" %$ 0e ee*%e" 0( 0a!4s &! 2$e*2&a' %*a!sa2%&$!s %ha% "$ !$% &!-$'-e %he&* +&"2&a*( *e'a%&$!sh&. #&%h %he&* "e.$s&%$*s The 2ase a% 0a* "$es !$% &!-$'-e %he ha!"'&! $+ .e%&%&$!e*s "e.$s&% I!s%ea"/ %he *e'a%&$!sh&. &!-$'-e" #as %ha% $+ a 0 (e* a!" se''e*/ %ha% &s/ 0e%#ee! %he *es.$!"e!% 0a!4 as %he se''e* $+ %he s0e2% +$*e&! e2ha!e "ea!" "*a+% He!2e/ *es.$!"e!% 0a!4 #as !$% *e,&*e" %$ ee*% $*e %ha! %he "&'&e!2e $+ a $$" +a%he* $+ a +a&'( &! *ea*" %$ %he sa'e a!" &ssa!2e $+ %he s0e2% FDD
The 2$!%*a2% &! ,es%&$! "$es !$% +'+&'' %h&s *e,&*ee!% $+ a! &**e'a* "e.$s&% I% &s -e*( a..a*e!% %ha% &s #as !$% +$* %he s$'e 0e!e+&% $+ R$e*s I%/ '&4e a!( $%he* '$a! $+ $!e(/ #as +$* %he 0e!e+&% $+ 0$%h .a*%&es The 0e!e+&% #h&2h S&%h/ 8e'' C$ *e2e&-e" #as %he se $+ %he $!e(; %he 0e!e+&% #h&2h R$e*s *e2e&-e" #as %he &!%e*es% $+ h&s $!e( I! %he 'e%%e* #h&2h S&%h/ 8e'' C$ $! %he 3%h $+ J!e/ 1/ !$%&+&e" %he .'a&!%&++ $+ %he *e"2%&$! $+ %he &!%e*es%/ %he( sa&" e 2a'' ($* a%%e!%&$! %$ %h&s a%%e* &! $*"e* %ha% ($ a( &+ ($ %h&!4 0es% e.'$( ($* $!e( &! s$e $%he* .'a2e
663 GUINGONA VS CITY FISCAL PROVINCE OF
The se2$!" "&++e*e!2e #h&2h e&s%s/ a22$*"&! %$ ?a!*esa/ 0e%#ee! a! &**e'a* "e.$s&% a!" a '$a! '&es &! %he +a2% %ha% &! a! &**e'a* "e.$s&% %he "e.$s&%$* has a .*e+e*e!2e $-e* $%he* 2*e"&%$*s &! %he "&s%*&0%&$! $+ %he "e0%$*s .*$.e*%(
8ATAAN VS VILLAFUERTE #he! .*&-a%e *es.$!"e!% Da-&" &!-es%e" h&s $!e( #&%h NSLA/ %he 2$!%*a2% %ha% #as .e*+e2%e" #as a 2$!%*a2% $+ s&.'e '$a! $* % a!" !$% a 2$!%*a2% $+ "e.$s&% Ths/ A*%&2'e 19 $+ %he Ne# C&-&' C$"e .*$-&"es %ha% @+&e"/ sa-&!s/ a!" 2**e!% "e.$s&%s $+6$!e( &! 0a!4s a!" s&&'a* &!s%&%%&$!s sha'' 0e $-e*!e" 0( %he .*$-&s&$!s 2$!2e*!&!
N$* "$es %he 2$!%*a2% &! ,es%&$! +'+&'' %he %h&*" *e,&s&%e &!"&2a%e" 0( ?a!*esa/ #h&2h &s/ &! a! &**e'a* "e.$s&%/ %he "e.$s&%$* 2a! "ea!" %he *e%*! $+ %he a*%&2'e a% a!( %&e/ #h&'e a 'e!"e* &s 0$!" 0( %he
7
Credit Transactions
s&.'e '$a! 8a!4 "e.$s&%s a*e &! %he !a%*e $+ &**e'a* "e.$s&%s The( a*e *ea''( '$a!s 0e2ase %he( ea*! &!%e*es% A'' 4&!"s $+ 0a!4 "e.$s&%s/ #he%he* +&e"/ sa-&!s/ $* 2**e!% a*e %$ 0e %*ea%e" as '$a!s a!" a*e %$ 0e 2$-e*e" 0( %he 'a# $! '$a!s C**e!% a!" sa-&! "e.$s&%s/ a*e '$a!s %$ a 0a!4 0e2ase &% 2a! se %he sae He!2e/ %he *e'a%&$!sh&. 0e%#ee! %he .*&-a%e *es.$!"e!% a!" %he Na%&$! Sa-&!s a!" L$a! Ass$2&a%&$! &s %ha% $+ 2*e"&%$* a!" "e0%$*; 2$!se,e!%'(/ %he $#!e*sh&. $+ %he a$!% "e.$s&%e" #as %*a!s&%%e" %$ %he 8a!4 .$! %he .e*+e2%&$! $+ %he 2$!%*a2% a!" &% 2a! a4e se $+ %he a$!% "e.$s&%e" +$* &%s 0a!4&! $.e*a%&$!s/ s2h as %$ .a( &!%e*es%s $! "e.$s&%s a!" %$ .a( #&%h"*a#a's
%h*$h %he !e'&e!2e $+ T*$.&2a!a>s e.'$(ees 0$%h %he e.'$(ees a!" YHT/ as $#!e* $+ T*$.&2a!a/ sh$'" 0e he'" s$'&"a*&'( '&a0'e .*sa!% %$ A*% 7193 %he "e+e!se %ha% A*% 77 ee.%s %he h$%e'64ee.e* +*$ '&a0&'&%( &+ %he '$ss &s "e %$ %he a2%s $+ %he es%/ +a&'( $* -&s&%$*s +a&'s 0e2ase %he h$%e' &s &'%( $+ !e'&e!2e as #e'' Th&s .*$-&s&$! .*es..$ses %ha% %he h$%e'64ee.e* &s !$% &'%( $+ 2$!2**e!% !e'&e!2e
-. SEUESTRATION OR JUDICIAL DEPOSIT
h&'e %he 8a!4 has %he $0'&a%&$! %$ *e%*! %he a$!% "e.$s&%e"/ &% has/ h$#e-e*/ !$ $0'&a%&$! %$ *e%*! $* "e'&-e* %he sae $!e( %ha% #as "e.$s&%e" A!" %he +a&'*e $+ %he 8a!4 %$ *e%*! %he a$!% "e.$s&%e" #&'' !$% 2$!s%&%%e es%a+a %h*$h &sa..*$.*&a%&$! .!&sha0'e !"e* A*%&2'e 315/ .a* '0) $+ %he Re-&se" Pe!a' C$"e/ 0% &% #&'' $!'( &-e *&se %$ 2&-&' '&a0&'&%(
63 LOS 8ANOS VS AFRICA A !$%&2e $+ '&s .e!"e!s se*-es as a! a!!$!2ee!% %$ %he #h$'e #$*'" %ha% a .a*%&2'a* *ea' .*$.e*%( &s &! '&%&a%&$! a!" as a #a*!&! %ha% %h$se #h$ a2,&*e a! &!%e*es% &! %he .*$.e*%( "$ s$ a% %he&* $#! *&s4 66 %he( a0'e $! %he *es'% $+ %he '&%&a%&$! $-e* &% H$#e-e*/ %he !$%&2e $+ '&s .e!"e!s "$es !$% s++&2e %$ .*$%e2% he*e&! *es.$!"e!%s *&h%s $-e* %he .*$.e*%( I% "$es !$% .*$-&"e 2$.'e%e a!" a.'e .*$%e2%&$! A !$%&2e $+ '&s .e!"e!s &s !$% e,&-a'e!% %$ a "&2&a' "e.$s&% I% e*e'( se*-es as a! a!!$!2ee!% %$ %he #h$'e #$*'" %ha% %he .*$.e*%( &! ,es%&$! &s s0e2% %$ '&%&a%&$!/ a!" as a #a*!&! %ha% %h$se #h$ ha-e a! &!%e*es% &! %he .*$.e*%( "$ s$ a% %he&* $#! *&s4
693 PROVINCE OF 8ATAAN VS VILLAFUERTE A! esc%$/ &s a #*&%%e! &!s%*e!% #h&2h 0( &%s %e*s &.$*%s a 'ea' $0'&a%&$! a!" #h&2h &s "e.$s&%e" 0( %he *a!%$*/ .*$&s$*/ $* $0'&$*/ $* h&s ae!% #&%h a s%*a!e* $* %h&*" .a*%(/ %$ 0e 4e.% 0( %he "e.$s&%a*( !%&' %he .e*+$*a!2e $+ a 2$!"&%&$! $* %he ha..e!&! $+ a 2e*%a&! e-e!%/ a!" %he! %$ 0e "e'&-e*e" $-e* %$ %he *a!%ee/ .*$&see/ $* $0'&ee &% &s !$ '$!e* $.e! %$ ,es%&$! %ha% $!e( a( 0e "e'&-e*e" &! es2*$# The '$#e* 2$*%/ &! %he 2$*se $+ a""&2a%&! a!" *es$'-&! %he &sses .*ese!%e" &! %he a&! s&%/ &s 2'ea*'( e.$#e*e" %$ 2$!%*$' %he .*$2ee"&!s %he*e&! %h*$h %he a"$.%&$!/ +$*'a%&$! a!" &ssa!2e $+ $*"e*s a!" $%he* a!2&''a*( #*&%s/ &!2'"&! %he a%h$*&%( %$ .'a2e %he .*$.e*%&es &! 2s%$"&a 'e&s/ +$* %he .*.$se $+ e++e2%a%&! &%s "e!% $* "e2*ee a!" .*$%e2%&! +*%he* %he &!%e*es%s $+ %he *&h%+' 2'a&a!%s $+ %he s0e2% .*$.e*%(
The .*.$se $+ a 5(-ca" -ep$s& &s %$ a&!%a&! %he s%a%s ,$ a!%e "*&! %he '&%&a%&$! $* %$ e!s*e %he *&h%s $+ %he .a*%&es %$ %he .*$.e*%( &! 2ase %he*e &s a +a-$*a0'e "e!% I% &s e*e'( a&'&a*( %$ a 2ase .e!"&! &! 2$*% The "e.$s&%a*( $+ %he se,es%*a%e" .*$.e*%( $* %he .*$.e*%( s0e2% $+ "&2&a' "e.$s&% &s %he .e*s$! a..$&!%e" 0( %he 2$*%/ a!" !"e* A*%&2'e 7/ has %he $0'&a%&$! %$ %a4e 2a*e $+ %he .*$.e*%( #&%h %he "&'&e!2e $+ a $$" +a%he* $+ %he +a&'( a!" a( !$% 0e *e'&e-e" $+ %h&s *es.$!s&0&'&%( !%&' %he '&%&a%&$! &s e!"e" $* %he 2$*% s$ $*"e*s
c. NECESSARY DEPOSIT
I?. =AREHOUSE RECEIPTS LA= ?. TRUST RECEIPTS LA=
63 DUR8AN APART?ENTS VS PIONEER A "e.$s&% &s 2$!s%&%%e" +*$ %he $e!% a .e*s$! *e2e&-es a %h&! 0e'$!&! %$ a!$%he*/ #&%h %he $0'&a%&$! $+ sa+e'( 4ee.&! &% a!" *e%*!&! %he sae I+ %he sa+e4ee.&! $+ %he %h&! "e'&-e*e" &s !$% %he .*&!2&.a' .*.$se $+ %he 2$!%*a2%/ %he*e &s !$ "e.$s&% 0% s$e $%he* 2$!%*a2% A*% 199 The "e.$s&% $+ e++e2%s a"e 0( %*a-e'e*s &! h$%e's $* &!!s sha'' a's$ 0e *ea*"e" as !e2essa*( The 4ee.e*s $+ h$%e's $* &!!s sha'' 0e *es.$!s&0'e +$* %he as "e.$s&%a*&es/ .*$-&"e" %ha% !$%&2e #as &-e! %$ %he/ $* %$ %he&* e.'$(ees/ $+ %he e++e2%s 0*$h% 0( %he es%s a!" %ha%/ $! %he .a*% $+ %he 'a%%e*/ %he( %a4e %he .*e2a%&$!s #h&2h sa&" h$%e'64ee.e*s $* %he&* s0s%&%%es a"-&se" *e'a%&-e %$ %he 2a*e a!" -&&'a!2e $+ %he&* e++e2%s The &!s*e" "e.$s&%e" %he -eh&2'e +$* sa+e4ee.&! #&%h %he h$%e'/ %h*$h &%s e.'$(ee Th&s e.'$(ee &sse" a 2'a& s%0 %$ %he &!s*e" The 2$!%*a2% $+ "e.$s&% #as .e*+e2%e" +*$ %he "e'&-e*( $+ %he -eh&2'e/ #he! %he 4e(s #e*e ha!"e" $-e* %$ %he h$%e'>s e.'$(ee/ a!" #h&2h he @*e2e&-e" #&%h %he $0'&a%&$! $+ sa+e'( 4ee.&! a!" *e%*!&! &% Th&s 2$'" 2$!2e&-a0'( 0e se" as 0as&s +$* se*s $+ a'' a!" $%he* .0'&2 .a*4&! '$%s %$ 2'a& &!"e!&%( +$* '$ss $* "aae %$ %he&* -eh&2'es I% #$'" 0e &!%e*es%&! %$ see &+ %he .*a2%&2e $+ .'a2&! "&s2'a&e*s $+ '&a0&'&%( &! %he .a*4&! s%0/ as #e'' as &! s&!aes/ #$'" 0e .he'" 0( %he 2$*%s as 0&!"&! $! %he se*s I% "$es s%a!" %$ *eas$! %ha% #he! ($ a*e a"e %$ .a*4 a!" .a(/ .a*4&! '$% .*$-&"e*s $#e a "e*ee $+ 2a*e %$ &!s*e ($* -eh&2'e &s 4e.% sa+e a!" s$!" A!" &+ %he( +a&' %$ a"he*e %$ %h&s s%a!"a*"/ %he! %he( sh$'" 0e s$**( %he( "&"!>%/ as &! %h&s 2ase
63
ROSARIO TEXTILE ?S HOME BANERS a.
#! .e%&%&$!e*s a*e !$% *e'&e-e" $+ %he&* $0'&a%&$! %$ .a( %he&* '$a! a+%e* %he( %*&e" %$ %e!"e* %he $$"s %$ %he 0a!4 #h&2h *e+se" %$ a22e.% %he sae/ a!" #h&2h $$"s #e*e s0se,e!%'( '$s% &! a +&*e;
I% &s %hs 2'ea* %ha% %he .*&!2&.a' %*a!sa2%&$! 0e%#ee! .e%&%&$!e* RT?C a!" %he 0a!4 &s a c$+&%ac& $! "$a+ RT?C se" %he .*$2ee"s $+ %h&s '$a! %$ .*2hase *a# a%e*&a's +*$ a s..'&e* a0*$a" I! $*"e* %$ se2*e %he .a(e!% $+ %he '$a!/ RT?C "e'&-e*e" %he *a# a%e*&a's %$ %he 0a!4 as 2$''a%e*a' T*s% *e2e&.%s #e*e ee2%e" 0( %he .a*%&es %$ e-&"e!2e %h&s se2*&%( a**a!ee!% S&.'( s%a%e"/ %he %*s% *e2e&.%s #e*e e*e se2*&%&es I! Sa$ -s Pe$.'e/<5= #e "es2*&0e" a %*s% *e2e&.% as a se2*&%( %*a!sa2%&$! &!%e!"e" %$ a&" &! +&!a!2&! &.$*%e*s a!" *e%a&' "ea'e*s #h$ "$ !$% ha-e s++&2&e!% +!"s $* *es$*2es %$ +&!a!2e %he &.$*%a%&$! $* .*2hase $+ e*2ha!"&se/ a!" #h$ a( !$% 0e a0'e %$ a2,&*e 2*e"&% e2e.% %h*$h %&'&a%&$!/ as 2$''a%e*a'/ $+ %he e*2ha!"&se &.$*%e" $* .*2hase"<:= I! V&!%$'a -s I!s'a* 8a!4 $+ As&a a!" Ae*&2a/<= #e e'2&"a%e" +*%he* %ha% a %*s% *e2e&.%/ %he*e+$*e/ &s a se2*&%( a*eee!%/ .*sa!% %$ #h&2h a 0a!4 a2,&*es a se2*&%( &!%e*es% &! %he $$"s I% se2*es a! &!"e0%e"!ess a!" %he*e 2a! 0e !$ s2h %h&! as se2*&%( &!%e*es% %ha% se2*es !$ $0'&a%&$!<= Se2%&$! 3 h) $+ %he T*s% Re2e&.%s La# PD N$ 115) "e+&!es a se2*&%( &!%e*es% as +$''$#s
93 YHT REALTY VS CA A*% 71/ .a* B) $+ %he sae C$"e .*$-&"es %ha% %he $#!e*s a!" a!ae*s $+ a! es%a0'&she!% $* e!%e*.*&se a*e '&4e#&se *es.$!s&0'e +$* "aaes 2ase" 0( %he&* e.'$(ees &! %he se*-&2e $+ %he 0*a!2hes &! #h&2h %he 'a%%e* a*e e.'$(e" $* $! %he $22as&$! $+ %he&* +!2%&$!s G&-e! %he +a2% %ha% %he '$ss $+ ?2L$h'&!>s $!e( #as 2$!sa%e"
h) Se2*&%( I!%e*es% ea!s a .*$.e*%( &!%e*es% &! $$"s/ "$2e!%s/ $* &!s%*e!%s %$ se2*e .e*+$*a!2e $+ s$e $0'&a%&$! $+ %he e!%*s%ee $* $+ s$e %h&*" .e*s$!s %$ %he e!%*s%e* a!" &!2'"es %&%'e/ #he%he* $*
8
Credit Transactions
!$% e.*esse" %$ 0e a0s$'%e/ #he!e-e* s2h %&%'e &s &! s0s%a!2e %a4e! $* *e%a&!e" +$* se2*&%( $!'(
I! a'' %*s% *e2e&.% %*a!sa2%&$!s/ 0$%h $0'&a%&$!s $! %he .a*% $+ %he %*s%ee e&s% &! %he a'%e*!a%&-e %he *e%*! $+ %he .*$2ee"s $+ %he sa'e $* %he *e%*! $* *e2$-e*( $+ %he $$"s/ #he%he* *a# $* .*$2esse"<7B= he! 0$%h .a*%&es e!%e* &!%$ a! a*eee!% 4!$#&! %ha% %he *e%*! $+ %he $$"s s0e2% $+ %he %*s% *e2e&.% &s !$% .$ss&0'e e-e! #&%h$% a!( +a'% $! %he .a*% $+ %he %*s%ee/ &% &s !$% a %*s% *e2e&.% %*a!sa2%&$! .e!a'&e" !"e* Se2%&$! 13 $+ PD 115; %he $!'( $0'&a%&$! a2%a''( a*ee" .$! 0( %he .a*%&es #$'" 0e %he *e%*! $+ %he .*$2ee"s $+ %he sa'e %*a!sa2%&$! Th&s %*a!sa2%&$! 0e2$es a e*e '$a!/<75= #he*e %he 0$**$#e* &s $0'&a%e" %$ .a( %he 0a!4 %he a$!% s.e!% +$* %he .*2hase $+ %he $$"s
Pe%&%&$!e*s &!s&s%e!2e %ha% %he $#!e*sh&. $+ %he *a# a%e*&a's *ea&!e" #&%h %he 0a!4 &s !%e!a0'e I! S&a -s Pe$.'e/<9= A0a" -s C$*% $+ A..ea's/<1= a!" PN8 -s P&!e"a/<11= #e he'" %ha% I+ !"e* %he %*s% *e2e&.%/ %he 0a!4 &s a"e %$ a..ea* as %he $#!e*/ &% #as 0% a! a*%&+&2&a' e.e"&e!%/ $*e $+ 'ea' +&2%&$! %ha! +a2%/ +$* &+ &% #e*e *ea''( s$/ &% 2$'" "&s.$se $+ %he $$"s &! a!( a!!e* &% #a!%s/ #h&2h &% 2a!!$% "$/ s% %$ &-e 2$!s&s%e!2( #&%h .*.$se $+ %he %*s% *e2e&.% $+ &-&! a s%*$!e* se2*&%( +$* %he '$a! $0%a&!e" 0( %he &.$*%e* T$ 2$!s&"e* %he 0a!4 as %he %*e $#!e* +*$ %he &!2e.%&$! $+ %he %*a!sa2%&$! #$'" 0e %$ "&s*ea*" %he '$a! +ea%*e % he*e$+<17=
e !$%e &! %h&s *ea*" %ha% a% %he $!se% $+ %hese %*a!sa2%&$!s/ L8P 4!e# a!" %he( #e*e a#a*e $+ %he +a2% %ha% %he*e #as !$ #a( %he( 2$'" *e2$-e* %he 0&'"&!s $* 2$!s%*2%&$!s +$* #h&2h %h e a%e*&a's s0e2% $+ %he a''ee" %*s% *e2e&.%s ha" 0ee! se" N$%a0'(/ "es.&%e %he a''ea%&$!s &! %he a++&"a-&%62$.'a&!% #he*e&! L8P s$h% %he *e%*! $+ %he 2$!s%*2%&$! a%e*&a's/<7= &%s "ea!" 'e%%e* "a%e" ?a( B/ 1999 s$h% %he .a(e!% $+ %he 0a'a!2e 0% +a&'e" %$ as4/ as a! a'%e*!a%&-e/ +$* %he *e%*! $+ %he 2$!s%*2%&$! a%e*&a's $* %he 0&'"&!s #he*e %hese a%e*&a's ha" 0ee! se"<79=
Ths/ .e%&%&$!e*s 2a!!$% 0e *e'&e-e" $+ %he&* $0'&a%&$! %$ .a( %he&* '$a! &! +a-$* $+ %he 0a!4 %he 2$!%*a2% 0e%#ee! %he .a*%&es &s a '$a! ha% *es.$!"e!% 0a!4 s$h% %$ 2$''e2% as 2*e"&%$* #as %he '$a! &% *a!%e" %$ .e%&%&$!e*s Pe%&%&$!e*s *e2$*se &s %$ se %he&* s..'&e*/ &+ &!"ee" %he a%e*&a's #e*e "e+e2%&-e
93
13
LANDBAN ?S PEREK
The "&s.%e" %*a!sa2%&$!s a*e !$% %*s% *e2e&.%s Se2%&$! B $+ PD 115 "e+&!es a %*s% *e2e&.% %*a!sa2%&$! &! %h&s a!!e*
T$ e.has&e/ %he T*s% Re2e&.%s La# #as 2*ea%e" %$ %$ a&" &! +&!a!2&! &.$*%e*s a!" *e%a&' "ea'e*s #h$ "$ !$% ha-e s++&2&e!% +!"s $* *es$*2es %$ +&!a!2e %he &.$*%a%&$! $* .*2hase $+ e*2ha!"&se/ a!" #h$ a( !$% 0e a0'e %$ a2,&*e 2*e"&% e2e.% %h*$h %&'&a%&$!/ as 2$''a%e*a'/ $+ %he e*2ha!"&se &.$*%e" $* .*2hase" S&!2e As&a%*s% 4!e# %ha% .e%&%&$!e* #as !e&%he* a! &.$*%e* !$* *e%a&' "ea'e*/ &% sh$'" ha-e 4!$#! %ha% %he sa&" a*eee!% 2$'" !$% .$ss&0'( a..'( %$ .e%&%&$!e*
Se2%&$! B ha% 2$!s%&%%es a %*s% *e2e&.% %*a!sa2%&$! A %*s% *e2e&.% %*a!sa2%&$!/ #&%h&! %he ea!&! $+ %h&s De2*ee/ &s a!( %*a!sa2%&$! 0( a!" 0e%#ee! a .e*s$! *e+e**e" %$ &! %h&s De2*ee as %he e!%*s%e*/ a!" a!$%he* .e*s$! *e+e**e" %$ &! %h&s De2*ee as e!%*s%ee/ #he*e0( %he e!%*s%e*/ #h$ $#!s $* h$'"s a0s$'%e %&%'e $* se2*&%( &!%e*es%s $-e* 2e*%a&! s.e2&+&e" $$"s/ "$2e!%s $* &!s%*e!%s/ *e'eases %he sae %$ %he .$ssess&$! $+ %he e!%*s%ee .$! %he 'a%%e*s ee2%&$! a!" "e'&-e*( %$ %he e!%*s%e* $+ a s&!e" "$2e!% 2a''e" a %*s% *e2e&.% #he*e&! %he e!%*s%ee 0&!"s h&se'+ %$ h$'" %he "es&!a%e" $$"s/ "$2e!%s $* &!s%*e!%s &! %*s% +$* %he e!%*s%e* a!" %$ se'' $* $%he*#&se "&s.$se $+ %he $$"s/ "$2e!%s $* &!s%*e!%s #&%h %he $0'&a%&$! %$ %*! $-e* %$ %he e!%*s%e* %he .*$2ee"s %he*e$+ %$ %he e%e!% $+ %he a$!% $#&! %$ %he e!%*s%e* $* as a..ea*s &! %he %*s% *e2e&.% $* %he $$"s/ "$2e!%s $* &!s%*e!%s %hese'-es &+ %he( a*e !s$'" $* !$% $%he*#&se "&s.$se" $+/ &! a22$*"a!2e #&%h %he %e*s a!" 2$!"&%&$!s s.e2&+&e" &! %he %*s% *e2e&.%/ $* +$* $%he* .*.$ses s0s%a!%&a''( e,&-a'e!% %$ a!( $+ %he +$''$#&!
Ths/ &! 2$!2'"&! %ha% %he %*a!sa2%&$! #as a '$a! a!" !$% a %*s% *e2e&.%/ #e !$%e" &! C$'&!a*es %ha% %he &!"s%*( $* '&!e $+ #$*4 %ha% %he 0$**$#e*s #e*e e!ae" &! #as 2$!s%*2%&$! e .$&!%e" $% %ha% %he 0$**$#e*s #e*e !$% &.$*%e*s a2,&*&! $$"s +$* *esa'e I!"ee"/ $$"s s$'" &! *e%a&' a*e $+%e! #&%h&! %he 2s%$"( $* 2$!%*$' $+ %he %*s%ee !%&' %he( a*e .*2hase" I! %he 2ase $+ a%e*&a's se" &! %he a!+a2%*e $+ +&!&she" .*$"2%s/ %hese +&!&she" .*$"2%s Q &+ !$% %he *a# a%e*&a's $* %he&* 2$.$!e!%s Q s&&'a*'( *ea&! &! %he .$ssess&$! $+ %he %*s%ee !%&' %he( a*e s$'" 8% %he $$"s a!" %he a%e*&a's %ha% a*e se" +$* a 2$!s%*2%&$! .*$e2% a*e $+%e! .'a2e" !"e* %he 2$!%*$' a!" 2s%$"( $+ %he 2'&e!%s e.'$(&! %he 2$!%*a2%$*/ #h$ 2a! $!'( 0e 2$.e''e" %$ *e%*! %he a%e*&a's &+ %he( +a&' %$ .a( %he 2$!%*a2%$* a!" $+%e! $!'( a+%e* %he *e,&s&%e 'ea' .*$2ee"&!s The 2$!%*a2%$*>s "&++&2'%( a!" !2e*%a&!%( &! 2'a&&! %hese a%e*&a's $* %he 0&'"&!s a!" s%*2%*es #h&2h %he( 0e2$e .a*% $+)/ as s$$! as %he 0a!4 "ea!"s %he/ "&s,a'&+( %he +*$ 0e&! 2$-e*e" 0( %*s% *e2e&.% a*eee!%s19
1 I! %he 2ase $+ $$"s $* "$2e!%s/ a) %$ se'' %he $$"s $* .*$2*e %he&* sa'e; $* 0) %$ a!+a2%*e $* .*$2ess %he $$"s #&%h %he .*.$se $+ '%&a%e sa'e P*$-&"e"/ Tha%/ &! %he 2ase $+ $$"s "e'&-e*e" !"e* %*s% *e2e&.% +$* %he .*.$se $+ a!+a2%*&! $* .*$2ess&! 0e+$*e &%s '%&a%e sa'e/ %he e!%*s%e* sha'' *e%a&! &%s %&%'e $-e* %he $$"s #he%he* &! &%s $*&&!a' $* .*$2esse" +$* !%&' %he e!%*s%ee has 2$.'&e" +''( #&%h h&s $0'&a%&$! !"e* %he %*s% *e2e&.%; $* 2) %$ '$a"/ !'$a"/ sh&. $* %*a!sh&. $* $%he*#&se "ea' #&%h %he &! a a!!e* .*e'&&!a*( $* !e2essa*( %$ %he&* sa'e<=
?I. LETTERS OF CREDIT 0a3 PRUDENTIAL BAN ?S IAC The %*a!sa2%&$! &! %he 2ase a% 0a* s%ee" +*$ Ph&'&..&!e Ra($!s a..'&2a%&$! +$* a 2$e*2&a' 'e%%e* $+ 2*e"&% #&%h %he .e%&%&$!e* &! %he a$!% $+ 17/5B %$ 2$-e* %he +$*e*s 2$!%*a2% %$ .*2hase a!" &.$*% '$$ a!" %e%&'e a2h&!e*( +*$ N&ssh$ C$.a!(/ L%" $+ Ja.a! !"e* a +&-e6(ea* "e+e**e" .a(e!% .'a! Pe%&%&$!e* a..*$-e" %he a..'&2a%&$! As 2$**e2%'( *'e" 0( %he %*&a' 2$*% &! &%s O*"e* $+ : ?a*2h 195 9
T'e%e a%e &/$ $b"a&$+s + a &%(s& %ecep& &%a+sac&$+. 63 2$-e*e" 0( %he .*$-&s&$! %ha% *e+e*s %$ $!e( !"e* %he $0'&a%&$! 93
HUR TIN YANG ?S PEOPLE
C$!s&"e*&! %ha% %he $$"s &! %h&s 2ase #e*e !e-e* &!%e!"e" +$* sa'e 0% +$* se &! %he +a0*&2a%&$! $+ s%ee' 2$!&2a%&$! %$#e*s/ %he %*&a' 2$*% e**e" &! *'&! %ha% %he a*eee!% &s a %*s% *e2e&.% %*a!sa2%&$!
%$ "e'&-e* &% e!%*ea*'a) %$ %he $#!e* $+ %he e*2ha!"&se s$'" 2$-e*e" 0( %he .*$-&s&$! *e+e**&! %$ e*2ha!"&se *e2e&-e" !"e* %he $0'&a%&$! %$ *e%*! &% "e-$'-e*a) %$ %he $#!e*
Ths/ !"e* TRL/ +&e+& &$ -e!%a(- s p%es()e- #he! 1) %he e!%*s%ee +a&'s %$ %*! $-e* %he .*$2ee"s $+ %he sa'e $+ $$"s 2$-e*e" 0( %he %*s% *e2e&.% %$ %he e!%*s%e*; $* 7) #he! %he e!%*s%ee +a&'s %$ *e%*! %he $$"s !"e* %*s%/ &+ %he( a*e !$% "&s.$se" $+ &! a22$*"a!2e #&%h %he %e*s $+ %he %*s% *e2e&.%s<73=
8( -&*%e $+ sa&" A..'&2a%&$! a!" A*eee!% +$* C$e*2&a' Le%%e* $+ C*e"&%/ .'a&!%&++ 0a!4 1 #as !"e* $0'&a%&$! %$ .a( %h*$h &%s 2$**es.$!"e!% 0a!4 &! Ja.a! %he "*a+%s %ha% N&ss$ s&2) C$.a!(/ L%"/ .e*&$"&2a''( "*e# aa&!s% sa&" 'e%%e* $+ 2*e"&% +*$ 19:3 %$ 19:/ .*sa!% %$ .'a&!%&++s 2$!%*a2% #&%h %he "e+e!"a!% Ph&'&..&!e Ra($! ?&''s/ I!2 I! %*!/ "e+e!"a!% Ph&'&..&!e Ra($! ?&''s/ I!2/ #as $0'&a%e"
9
Credit Transactions
%$ .a( .'a&!%&++ 0a!4 %he a$!%s $+ %he "*a+%s "*a#! 0( N&ss$ s&2) C$.a!(/ L%" aa&!s% sa&" .'a&!%&++ 0a!4 %$e%he* #&%h a!( a22*&! 2$e*2&a' 2ha*es/ &!%e*es%/ e%2 .*sa!% %$ %he %e*s a!" 2$!"&%&$!s s%&.'a%e" &! %he A..'&2a%&$! a!" A*eee!% $+ C$e*2&a' Le%%e* $+ C*e"&% A!!e A
0$%%$ a se2*&%( %&%'e/ as &% has s$e%&es 0ee! 2a''e"/ a!" %he 0a!4e* &s a'#a(s !"e* %he $0'&a%&$! %$ *e2$!-e(; 0% $!'( a+%e* h&s a"-a!2es ha-e 0ee! +''( *e.a&" a!" a+%e* %he &.$*%e* has +'+&''e" %he $%he* %e*s $+ %he 2$!%*a2% As +*%he* s%a%e" &! Na%&$!a' 8a!4 -s V&"a e H&$s "e A!e' J$se/ 77 %*s% *e2e&.%s
A 'e%%e* $+ 2*e"&% &s "e+&!e" as a! e!aee!% 0( a 0a!4 $* $%he* .e*s$! a"e a% %he *e,es% $+ a 2s%$e* %ha% %he &sse* #&'' h$!$* "*a+%s $* $%he* "ea!"s +$* .a(e!% .$! 2$.'&a!2e #&%h %he 2$!"&%&$!s s.e2&+&e" &! %he 2*e"&% Th*$h a 'e%%e* $+ 2*e"&%/ %he 0a!4 e*e'( s0s%&%%es &%s $#! .*$&se %$ .a( +$* $!e $+ &%s 2s%$e*s #h$ &! *e%*! .*$&ses %$ .a( %he 0a!4 %he a$!% $+ +!"s e!%&$!e" &! %he 'e%%e* $+ 2*e"&% .'s 2*e"&% $* 2$&%e!% +ees %a''( a*ee" .$! I! %he &!s%a!% 2ase %he!/ %he "*a#ee #as !e2essa*&'( %he he*e&! .e%&%&$!e* I% #as %$ %he 'a%%e* %ha% %he "*a+%s #e*e .*ese!%e" +$* .a(e!% I! +a2%/ %he*e #as !$ !ee" +$* a22e.%a!2e as %he &sse" "*a+%s a*e s&h% "*a+%s P*ese!%e!% +$* a22e.%a!2e &s !e2essa*( $!'( &! %he 2ases e.*ess'( .*$-&"e" +$* &! Se2%&$! 1B3 $+ %he Ne$%&a0'e I!s%*e!%s La# NIL)
I! %he &!s%a!% 2ase %he "*a+%s 0e&! a% s&h%/ %he( a*e s..$se" %$ 0e .a(a0'e .$! a22e.%a!2e !'ess .'a&!%&++ 0a!4 has &-e! %he Ph&'&..&!e Ra($! ?&''s I!2 %&e #&%h&! #h&2h %$ .a( %he sae The +&*s% %#$ "*a+%s A!!ees C D/ Eh 61) #e*e "'( a22e.%e" as &!"&2a%e" $! %he&* +a2e s&2)/ a!" .$! s2h a22e.%a!2e sh$'" ha-e 0ee! .a&" +$*%h#&%h These %#$ "*a+%s #e*e !$% .a&" a!" a'%h$h Ph&'&..&!e Ra($! ?&''s $h% %$ ha-e .a&" %he sae/ %he +a2% *ea&!s %ha% !%&' !$# %he( a*e s%&'' !.a&" 1: C$e*2&a' 'e%%e*s $+ 2*e"&% ha-e 2$e &!%$ e!e*a' se &! &!%e*!a%&$!a' sa'es %*a!sa2%&$!s #he*e 2h %&e !e2essa*&'( e'a.ses 0e%#ee! %he sa'e a!" %he *e2e&.% 0( a .*2hase* $+ %he e*2ha!"&se/ "*&! #h&2h &!%e*-a' *ea% .*&2e 2ha!es a( $22* 8(e*s a!" se''e*s s%*'e +$* %he a"-a!%ae $+ .$s&%&$! The se''e* &s "es&*$s $+ 0e&! .a&" as s*e'( a!" as s$$! as .$ss&0'e/ *ea'&&! %ha% %he -e!"ee a% a "&s%a!% .$&!% has &% &! h&s .$#e* %$ *ee2% $! %*&-&a' *$!"s e*2ha!"&se $! a**&-a'/ a!" 2ase 2$!s&"e*a0'e ha*"sh&. %$ %he sh&..e* Le%%e*s $+ 2*e"&% ee% %h&s 2$!"&%&$! 0( a++$*"&! 2e'e*&%( a!" 2e*%a&!%( $+ .a(e!% The&* .*.$se &s %$ &!s*e %$ a se''e* .a(e!% $+ a "e+&!&%e a$!% .$! .*ese!%a%&$! $+ "$2e!%s The 0a!4 "ea's $!'( #&%h "$2e!%s I% has !$%h&! %$ "$ #&%h %he ,a'&%( $+ %he e*2ha!"&se D&s.%es as %$ %he e*2ha!"&se sh&..e" a( a*&se a!" 0e '&%&a%e" 'a%e* 0e%#ee! -e!"$* a!" -e!"ee/ 0% %he( a( !$% &.e"e a22e.%a!2e $+ "*a+%s a!" .a(e!% 0( %he &ss&! 0a!4 #he! %he .*$.e* "$2e!%s a*e .*ese!%e"
I% &s a''ee" &! %he 2$.'a&!% %ha% .*&-a%e *es.$!"e!%s !$% $!'( ha-e .*esa0'( .% sa&" a2h&!e*( %$ $$" se a!" ha-e .*$+&%e" 0( &%s $.e*a%&$! a!"$* "&s.$s&%&$! 0% -e*( *e2e!% &!+$*a%&$! %ha% s&2) *ea2he" .'a&!%&++ 0a!4 %ha% "e+e!"a!%s a'*ea"( s$'" %he a2h&!e*( 2$-e*e" 0( %he %*s% *e2e&.% %$ Y.a!2$ C$%%$! ?&''s/ a!" %ha% as %*s%ees $+ %he .*$.e*%( 2$-e*e" 0( %he %*s% *e2e&.%/ a!" %he*e+$*e a2%&! &! +&"2&a*( s&2) 2a.a2&%(/ "e+e!"a!%s ha-e #&''+''( -&$'a%e" %he&* "%( %$ a22$!% +$* %he #he*ea0$%s $+ %he a2h&!e*( 2$-e*e" 0( %he %*s% *e2e&.% $* +$* %he .*$2ee"s $+ a!( 'ease/ sa'e $* $%he* "&s.$s&%&$! $+ %he sae %ha% %he( a( ha-e a"e/ !$%#&%hs%a!"&! "ea!"s %he*e+$*; "e+e!"a!%s ha-e +*a"'e!%'( &sa..'&e" $* 2$!-e*%e" %$ %he&* $#! se a!( $!e( *ea'&e" +*$ %he 'ease/ sa'e/ a!" $%he* "&s.$s&%&$! $+ sa&" a2h&!e*( 73 h&'e %he*e &s !$ s.e2&+&2 .*a(e* +$* %he "e'&-e*( %$ %he .e%&%&$!e* 0( Ph&'&..&!e Ra($! $+ %he .*$2ee"s $+ %he sa'e $+ %he a2h&!e*( 2$-e*e" 0( %he %*s% *e2e&.%/ s2h *e'&e+ &s 2$-e*e" 0( %he e!e*a' .*a(e* +$* s2h +*%he* a!" $%he* *e'&e+ as a( 0e s% a!" e,&%a0'e $! %he .*e&ses 7B A!" a'%h$h &% &s %*e %ha% %he .e%&%&$!e* 2$e!2e" a 2*&&!a' a2%&$! +$* %he -&$'a%&$! $+ %he T*s% Re2e&.%s La#/ !$ 'ea' $0s%a2'e .*e-e!%e" &% +*$ e!+$*2&! %he 2&-&' '&a0&'&%( a*&s&! $% $+ %he %*s%/ *e2e&.% &! a se.a*a%e 2&-&' a2%&$! U!"e* Se2%&$! 13 $+ %he T*s% Re2e&.%s La#/ %he +a&'*e $+ a! e!%*s%ee %$ %*! $-e* %he .*$2ee"s $+ %he sa'e $+ $$"s/ "$2e!%s $* &!s%*e!%s 2$-e*e" 0( a %*s% *e2e&.% %$ %he e%e!% $+ %he a$!% $#&! %$ %he e!%*s%e* $* as a..ea* &! %he %*s% *e2e&.% $* %$ *e%*! sa&" $$"s/ "$2e!%s $* &!s%*e!%s &+ %he( #e*e !$% s$'" $* "&s.$se" $+ &! a22$*"a!2e #&%h %he %e*s $+ %he %*s% *e2e&.% sha'' 2$!s%&%%e %he 2*&e $+ es%a+a/ .!&sha0'e !"e* %he .*$-&s&$!s $+ A*%&2'e 315/ .a*a*a.h 10) $+ %he Re-&se" Pe!a' C$"e 75 U!"e* A*%&2'e 33 $+ %he C&-&' C$"e/ a 2&-&' a2%&$! +$* "aaes/ e!%&*e'( se.a*a%e a!" "&s%&!2% +*$ %he 2*&&!a' a2%&$!/ a( 0e 0*$h% 0( %he &!*e" .a*%( &! 2ases $+ "e+aa%&$!/ +*a" a!" .h(s&2a' &!*&es Es%a+a +a''s !"e* +*a"
The %*&a' 2$*% a!" %he .0'&2 *es.$!"e!% '&4e#&se e**e" &! "&s*ea*"&! %he %*s% *e2e&.% a!" &! !$% h$'"&! %ha% Ph&'&..&!e Ra($! #as '&a0'e %he*e$! I! Pe$.'e -s Y Cha& H$/ 7 %h&s C$*% e.'a&!s %he !a%*e $+ a %*s% *e2e&.% 0( ,$%&! I! *e D!'a. Ca*.e% C$/ 71 %hs 8( %h&s a**a!ee!% a 0a!4e* a"-a!2es $!e( %$ a! &!%e!"&! &.$*%e*/ a!" %he*e0( 'e!"s %he a&" $+ 2a.&%a'/ $+ 2*e"&%/ $* $+ 0s&!ess +a2&'&%&es a!" ae!2&es a0*$a"/ %$ %he e!%e*.*&se $+ +$*e&! 2$e*2e ?2h $+ %h&s %*a"e 2$'" ha*"'( 0e 2a**&e" $! 0( a!( $%he* ea!s/ a!" %he*e+$*e &% &s $+ %he +&*s% &.$*%a!2e %ha% %he +!"ae!%a' +a2%$* &! %he %*a!sa2%&$!/ %he 0a!4e*s a"-a!2e $+ $!e( a!" 2*e"&%/ sh$'" *e2e&-e %he a.'es% .*$%e2%&$! A22$*"&!'(/ &! $*"e* %$ se2*e %ha% %he 0a!4e* sha'' 0e *e.a&" a% %he 2*&%&2a' .$&!% %ha% &s/ #he! %he &.$*%e" $$"s +&!a''( *ea2h %he ha!"s $+ %he &!%e!"e" -e!"ee %he 0a!4e* %a4es %he +'' %&%'e %$ %he $$"s a% %he -e*( 0e&!!&!; he %a4es &% as s$$! as %he $$"s a*e 0$h% a!" se%%'e" +$* 0( h&s .a(e!%s $* a22e.%a!2es &! %he +$*e&! 2$!%*(/ a!" he 2$!%&!es %$ h$'" %ha% %&%'e as h&s &!"&s.e!sa0'e se2*&%( !%&' %he $$"s a*e s$'" &! %he U!&%e" S%a%es a!" %he -e!"ee &s 2a''e" .$! %$ .a( +$* %he Th&s se2*&%( &s !$% a! $*"&!a*( .'e"e 0( %he &.$*%e* %$ %he 0a!4e*/ +$* %he &.$*%e* has !e-e* $#!e" %he $$"s/ a!" $*e$-e* he &s !$% a0'e %$ "e'&-e* %he .$ssess&$!; 0% %he se2*&%( &s %he 2$.'e%e %&%'e -es%e" $*&&!a''( &! %he 0a!4e*s/ a!" %h&s 2ha*a2%e*&s%&2 $+ %he %*a!sa2%&$! has aa&! a!" aa&! 0ee! *e2$!&e" a!" .*$%e2%e" 0( %he 2$*%s O+ 2$*se/ %he %&%'e &s a%
e a's$ 2$!2'"e/ +$* %he *eas$! he*e&!a+%e* "&s2sse"/ a!" !$% +$* %ha% a""2e" 0( %he .0'&2 *es.$!"e!%/ %ha% .*&-a%e *es.$!"e!% Ch&s s&!a%*e &! %he "$*sa' .$*%&$! $+ %he %*s% *e2e&.% "&" !$% 0&!" h& s$'&"a*&'( #&%h Ph&'&..&!e Ra($!
10
Credit Transactions
•
0b3 BAN OF AMERICA ?S CA T'e !$""$/+ ss(es a%e %ase- b# Ba+* $! A)e%ca:
•
a) #he%he* &% has #a**a!%e" %he e!&!e!ess a!" a%he!%&2&%( $+ %he 'e%%e* $+ 2*e"&% a!"/ 2$*$''a*&'(/ #he%he* &% has a2%e" e*e'( as a! a"-&s&! 0a!4 $* as a 2$!+&*&! 0a!4; 0) #he%he* I!%e*6Res&! has a2%a''( sh&..e" %he *$.es s.e2&+&e" 0( %he 'e%%e* $+ 2*e"&%; a!" 2) +$''$#&! %he "&sh$!$* $+ %he 'e%%e* $+ 2*e"&% 0( 8a!4 $+ A("h(a/ #he%he* 8a!4 $+ Ae*&2a a( *e2$-e* aa&!s% I!%e*6Res&! !"e* %he "*a+% ee2%e" &! &%s .a*%&a' a-a&'e!% $+ %he 'e%%e* $+ 2*e"&%
pa#+ ba+*/ #h&2h !"e*%a4es %$ e!2ash %he "*a+%s "*a#!
0( %he e.$*%e* F*%he*/ &!s%ea" $+ $&! %$ %he .'a2e $+ %he &ss&! 0a!4 %$ 2'a& .a(e!%/ %he 0(e* a( a..*$a2h a!$%he* 0a!4 #2 &s %he +e$&a&+ ba+*/ %$ ha-e %he "*a+% "&s2$!%e"
/'e&'e% (+-e% &'e "e&&e% $! c%e-&, Ba+* $! A)e%ca 'as +c(%%e- a+# "ab"&# &$ &'e be+e!ca%# &'e%e$! / a! &sse %ha%
'a*e'( &s "e.e!"e!% $! %he 0a!4s .a*%&2&.a%&$! &! %ha% %*a!sa2%&$!; as a e*e a"-&s&! $* !$%&+(&! 0a!4/ &% #$'" !$% 0e '&a0'e/ 0% as a 2$!+&*&! 0a!4/ ha" %h&s 0ee! %he 2ase/ &% 2$'" 0e 2$!s&"e*e" as ha-&! &!2**e" %ha% '&a0&'&%( 77
RE h$#/ &! &%s $"e*! se/ a 'e%%e* $+ 2*e"&% &s e.'$(e" &! %*a"e %*a!sa2%&$!s
BAN OF AMERICA IS ONLY AN AD?ISING BAN !$% 2$!+&*&!/
0a!4/ a!" %h&s 2h &s 2'ea*'( e-&"e!%/ a$! $%he* %h&!s/ 0( %he .*$-&s&$!s $+ %he 'e%%e* $+ 2*e"&% &%se'+/ %he .e%&%&$!e* 0a!4s 'e%%e* $+ a"-&2e/ &%s *e,es% +$* .a(e!% $+ a"-&s&! +ee/ a!" %he a"&ss&$! $+ I!%e*6Res&! %ha% &% has .a&" %he sae Tha% 8a!4 $+ Ae*&2a has as4e" I!%e*6Res&! %$ s0&% "$2e!%s *e,&*e" 0( %he 'e%%e* $+ 2*e"&% a!" e-e!%a''( has .a&" %he .*$2ee"s %he*e$+/ "&" !$% $0-&$s'( a4e &% a 2$!+&*&! 0a!4 The +a2%/ %$$/ %ha% %he "*a+% *e,&*e" 0( %he 'e%%e* $+ 2*e"&% &s %$ 0e "*a#! !"e* %he a22$!% $+ Ge!e*a' Che&2a's 0(e*) $!'( ea!s %he sae ha" %$ 0e .*ese!%e" %$ Ba+* $! A#(-'#a &ss&! 0a!4) +$* .a(e!% I% a( 0e s&!&+&2a!% %$ *e2a'' %ha% %he 'e%%e* $+ 2*e"&% &s a! e!aee!% $+ %he &ss&! 0a!4/ !$% %he a"-&s&! 0a!4/ %$ .a( %he "*a+%
A 'e%%e* $+ 2*e"&% &s a +&!a!2&a' "e-&2e "e-e'$.e" 0( e*2ha!%s as a 2$!-e!&e!% a!" *e'a%&-e'( sa+e $"e $+ "ea'&! #&%h sa'es $+ $$"s %$ sa%&s+( %he see&!'( &**e2$!2&'a0'e &!%e*es%s $+ a se''e*/ #h$ *e+ses %$ .a*% #&%h h&s $$"s 0e+$*e he &s .a&"/ a!" a 0(e*/ #h$ #a!%s %$ ha-e 2$!%*$' $+ %he $$"s 0e+$*e .a(&! 9 T$ 0*ea4 %he &.asse/ %he 0(e* a( 0e *e,&*e" %$ 2$!%*a2% a 0a!4 %$ &sse a 'e%%e* $+ 2*e"&% &! +a-$* $+ %he se''e* s$ %ha%/ 0( -&*%e $+ %he 'a%%e* $+ 2*e"&%/ %he &ss&! 0a!4 2a! a%h$*&e %he se''e* %$ "*a# "*a+%s a!" e!ae %$ .a( %he .$! %he&* .*ese!%e!% s&'%a!e$s'( #&%h %he %e!"e* $+ "$2e!%s *e,&*e" 0( %he 'e%%e* $+ 2*e"&% 1 The 0(e* a!" %he se''e* a*ee $! #ha% "$2e!%s a*e %$ 0e .*ese!%e" +$* .a(e!%/ 0% $*"&!a*&'( %he( a*e "$2e!%s $+ %&%'e e-&"e!2&! $* a%%es%&! %$ %he sh&.e!% $+ %he $$"s %$ %he 0(e*
N$ 'ess &.$*%a!% &s % ha% 8a!4 $+ Ae*&2as 'e%%e* $+ 11 ?a*2h 191 has e.*ess'( s%a%e" %ha% <%=he e!2'$s*e &s s$'e'( a! a"-&se $+ 2*e"&% $.e!e" 0( %he a0$-ee!%&$!e" 2$**es.$!"e!% a!" 2$!-e(s !$ e!aee!% 0( s 7B Th&s #*&%%e! *ese*-a%&$! 0( 8a!4 $+ Ae*&2a &! '&&%&! &%s $0'&a%&$! $!'( %$ 0e&! a! a"-&s&! 0a!4 &s &! 2$!s$!a!2e #&%h %he .*$-&s&$!s $+ UCP
O!2e %he 2*e"&% &s es%a0'&she"/ %he se''e* sh&.s %he $$"s %$ %he 0(e* a!" &! %he .*$2ess se2*es %he *e,&*e" sh&..&! "$2e!%s $* "$2e!%s $+ %&%'e T$ e% .a&"/ %he se''e* ee2%es a "*a+% a!" .*ese!%s &% %$e%he* #&%h %he *e,&*e" "$2e!%s %$ %he &ss&! 0a!4 The &ss&! 0a!4 *e"ees %he "*a+% a!" .a(s 2ash %$ %he se''e* &+ &% +&!"s %ha% %he "$2e!%s s0&%%e" 0( %he se''e* 2$!+$* #&%h #ha% %he 'e%%e* $+ 2*e"&% *e,&*es The 0a!4 %he! $0%a&!s .$ssess&$! $+ %he "$2e!%s .$! .a(&! %he se''e* The %*a!sa2%&$! &s 2$.'e%e" #he! %he 0(e* *e&0*ses %he &ss&! 0a!4 a!" a2,&*es %he "$2e!%s e!%&%'&! h& %$ %he $$"s U!"e* %h&s a**a!ee!%/ %he se''e* e%s .a&" $!'( &+ he "e'&-e*s %he "$2e!%s $+ %&%'e $-e* %he $$"s/ #h&'e %he 0(e* a2,&*es sa&" "$2e!%s a!" 2$!%*$' $-e* %he $$"s $!'( a+%e* *e&0*s&! %he 0a!4
As a+ a-4s+ $% +$&!#+ ba+*, Ba+* $! A)e%ca -- +$& +c(% a+# $b"a&$+ )$%e &'a+ 5(s& +$&!#+ I+&e%Res+ $! &'e "e&&e% $! c%e-& ss(e- + &s !a4$% / 'e% a'$!e %$ 2$!+&* %he 'e%%e* $+ 2*e"&% 75
The 0a*e s%a%ee!% $+ %he 0a!4 e.'$(ees/ a+$*ee!%&$!e"/ &! *es.$!"&! %$ %he &!,&*( a"e 0( A%%( Ta!a(/ I!%e*6Res&!s *e.*ese!%a%&-e/ $! %he a%he!%&2&%( $+ %he 'e%%e* $+ 2*e"&% 2e*%a&!'( "&" !$% ha-e %he e++e2% $+ !$-a%&! %he 'e%%e* $+ 2*e"&% a!" 8a!4 $+ Ae*&2as 'e%%e* $+ a"-&se/ 7: !$* 2a! &% s%&+( %he 2$!2's&$! %ha% %he 0a!4 s% !$# asse %$%a' '&a0&'&%( $! %he 'e%%e* $+ 2*e"&% I!"ee"/ I!%e*6Res&! &%se'+ 2a!!$% 2'a& %$ ha-e 0ee! a'' %ha% +*ee +*$ +a'% As %he se''e*/ %he &ssa!2e $+ %he 'e%%e* $+ 2*e"&% sh$'" ha-e $0-&$s'( 0ee! a *ea% 2$!2e*! %$ &% 7 I% #$'" ha-e/ &! +a2%/ 0ee! s%*a!e &+ &% "&" !$%/ .*&$* %$ %he 'e%%e* $+ 2*e"&%/ e!%e* &!%$ a 2$!%*a2%/ $* !e$%&a%e" a% %he e-e*( 'eas%/ #&%h Ge!e*a' Che&2a's 7 I! %he $*"&!a*( 2$*se $+ 0s&!ess/ %he .e*+e2%&$! $+ 2$!%*a2% .*e2e"es %he &ssa!2e $+ a 'e%%e* $+ 2*e"&%
ha% 2ha*a2%e*&es 'e%%e*s $+ 2*e"&%/ as "&s%&!&she" +*$ $%he* a22ess$*( 2$!%*a2%s/ &s %he e!aee!% $+ %he &ss&! 0a!4 %$ .a( %he se''e* $+ %he "*a+% a!" %he *e,&*e" sh&..&! "$2e!%s a*e .*ese!%e" %$ &% I! %*!/ %h&s a**a!ee!% ass*es %he se''e* $+ .*$.% .a(e!%/ &!"e.e!"e!% $+ a!( 0*ea2h $+ %he a&! sa'es 2$!%*a2% 8( %h&s s$62a''e" +-epe+-e+ce p%+cp"e, %he 0a!4 "e%e*&!es 2$.'&a!2e #&%h %he 'e%%e* $+ 2*e"&% $!'( 0( ea&!&! %he sh&..&! "$2e!%s .*ese!%e"; &% &s .*e2'"e" +*$ "e%e*&!&! #he%he* %he a&! 2$!%*a2% &s a2%a''( a22$.'&she" $* !$% 11
B%++ &'e "e&&e% $! c%e-& &$ &'e a&&e+&$+ $! &'e se""e% s &'e p%)$%-a" $b"a&$+ $! a+ a-4s+ ba+*. The -&e# %ha% 8a!4 $+
Ae*&2a sh$'" ha-e +&*s% 2he24e" %he a%he!%&2&%( $+ %he 'e%%e* $+ 2*e"&% #&%h 0a!4 $+ A("h(a/ 0( s&! a"-a!2e" $"e $+ 0s&!ess 2$!&2a%&$!s/ 0e+$*e "&s.a%2h&! %he sae %$ I!%e*6Res&! +&!"s !$ *ea' s..$*% &! UCP A*%&2'e 1 $+ %he UCP s%a%es %ha% 8a!4s asse !$ '&a0&'&%( $* *es.$!s&0&'&%( +$* %he 2$!se,e!2es a*&s&! $% $+ %he "e'a( a!"$* '$ss &! %*a!s&% $+ a!( essaes/ 'e%%e*s $* "$2e!%s/ $* +$* "e'a(/ %&'a%&$! $* $%he* e**$*s a*&s&! &! %he %*a!s&ss&$! $+ a!( %e'e2$!&2a%&$! As a-4s+ ba+*, Ba+* $! A)e%ca s
The*e #$'" a% 'eas% 0e %h*ee 3) .a*%&es 0a3 b(#e%/ #h$ .*$2*es %he 'e%%e* $+ 2*e"&% a!" $0'&es h&se'+ %$ *e&0*se %he &ss&! 0a!4 .$! *e2e&.%s $+ %he "$2e!%s $+ %&%'e; 0b3 ba+* ss(+ &'e "e&&e% $! c%e-&/ 13 #h&2h !"e*%a4es %$ .a( %he se''e* .$! *e2e&.% $+ %he "*a+% a!" .*$.e* "$2e!% $+ %&%'es a!" %$ s**e!"e* %he "$2e!%s %$ %he 0(e* .$! *e&0*see!%; a!"/ 0c3 se""e%/ #h$ &! 2$.'&a!2e #&%h %he 2$!%*a2% $+ sa'e sh&.s %he $$"s %$ %he 0(e* a!" "e'&-e*s %he "$2e!%s $+ %&%'e a!" "*a+% %$ %he &ss&! 0a!4 %$ *e2$-e* .a(e!%
b$(+- $+"# &$ c'ec* &'e appa%e+& a(&'e+&c&# $! &'e "e&&e% $! c%e-&, /'c' & --. Ma# Ba+* $! A)e%ca &'e+ %ec$4e% /'a& & 'as pa- (+-e% &'e "e&&e% $! c%e-& /'e+ &'e c$%%esp$+-+ -%a!& !$% pa%&a" a4a")e+& &'e%e(+-e% a+- &'e %e>(%e- -$c()e+&s /e%e "a&e% +e$&a&e- /&' & b# I+&e%Res+ The a!s#e* &s (es Th&s 4&!" $+ %*a!sa2%&$! &s #ha% &s 2$$!'( *e+e**e" %$ as a DISCOUNTING ARRANGEMENT Th&s
The !0e* $+ %he .a*%&es/ !$% &!+*e,e!%'( a!" a'$s% &!-a*&a0'( &! &!%e*!a%&$!a' %*a"e .*a2%&2e/ a( 0e &!2*ease" Ths/ %he se*-&2es $+ a! a-4s+ 0+$&!#+3 ba+* a( 0e %&'&e" %$ 2$!-e( %$ %he se''e* %he e&s%e!2e $+ %he 2*e"&%; $*/ $+ a c$+!%)+ ba+* #h&2h #&'' 'e!" 2*e"e!2e %$ %he 'e%%e* $+ 2*e"&% &sse" 0( a 'esse* 4!$#! &ss&! 0a!4; $*/ $+ a
%&e/ 8a!4 $+ Ae*&2a has a2%e" &!"e.e!"e!%'( as a !e$%&a%&! 0a!4/ %hs sa-&! I!%e*6Res&! +*$ %he ha*"sh&. $+ .*ese!%&! %he "$2e!%s "&*e2%'( %$ 8a!4 $+ A("h(a %$ *e2$-e* .a(e!% I!%e*6Res&!/ $+ 2$*se/ 2$'" ha-e 2h$se! $%he* 0a!4s #&%h #h&2h %$ !e$%&a%e %he
•
•
11
Credit Transactions
"*a+% a!" %he "$2e!%s) As a !e$%&a%&! 0a!4/ 8a!4 $+ Ae*&2a has a *&h% %$ *e2$*se aa&!s% %he &sse* 0a!4 a!" !%&' *e&0*see!% &s $0%a&!e"/ I!%e*6Res&!/ as %he "*a#e* $+ %he "*a+%/ 2$!%&!es %$ asse a 2$!%&!e!% '&a0&'&%( %he*e$! 31
"*a+%s "*a#! &! .*sa!2e $+ %he 2*e"&% a*e &!"&2a%e" %$ 0e #&%h$% *e2$*se %he*e+$*e/ %he !e$%&a%&! 0a!4 has %he $*"&!a*( *&h% $+ *e2$*se aa&!s% %he se''e* &! %he e-e!% $+ "&sh$!$* 0( %he &ss&! 0a!4 The +a2% %ha% %he 2$**es.$!"e!% a!" %he !e$%&a%&! 0a!4 a( 0e $!e a!" %he sae "$es !$% a++e2% &%s *&h%s a!" $0'&a%&$!s &! e&%he* 2a.a2&%(/ a'%h$h a s.e2&a' a*eee!% &s a'#a(s a .$ss&0&'&%( 33
h&'e 0a!4 $+ Ae*&2a has &!"ee" +a&'e" %$ a''ee a%e*&a' +a2%s &! &%s 2$.'a&!% %ha% &h% ha-e '&4e#&se #a**a!%e" %he a..'&2a%&$! $+ %he Ne$%&a0'e I!s%*e!%s La# a!" .$ss&0'e %he! a''$#e" &% %$ e-e! $ a+%e* %he &!"$*se*s $+ %he "*a+%/ %h&s +a&'*e/ 37 !$!e%he'ess/ "$es !$% .*e2'"e .e%&%&$!e* 0a!4s *&h% as !e$%&a%&! 0a!4) $+ *e2$-e*( +*$ I!%e*6Res&! &%se'+ I!%e*6Res&! a"&%s ha-&! *e2e&-e" P1/719/937 +*$ 0a!4 $+ Ae*&2a $! %he 'e%%e* $+ 2*e"&% a!" &! ha-&! ee2%e" %he 2$**es.$!"&! "*a+% The .a(e!% %$ I!%e*6Res&! has &-e!/ as a+$*esa&"/ 8a!4 $+ Ae*&2a %he *&h% $+ *e&0*see!% +*$ %he &ss&! 0a!4/ 8a!4 $+ A("h(a #h&2h/ &! %*!/ #$'" %he! see4 &!"e!&+&2a%&$! +*$ %he 0(e* %he Ge!e*a' Che&2a's $+ Tha&'a!") S&!2e 8a!4 $+ A("h(a "&s$#!e" %he 'e%%e* $ + 2*e"&%/ h$#e-e*/ 8a!4 $+ Ae*&2a a( !$# %*! %$ I!%e*6Res&! +$* *es%&%%&$!
The a""&%&$!a' *$!" *a&se" 0( %he .e%&%& $!e*/ &e/ %ha% I!%e*6Res&! se!% #as%e &!s%ea" $+ &%s .*$"2%s/ &s *ea''( $+ !$ 2$!se,e!2e I! %he $.e*a%&$! $+ a 'e%%e* $+ 2*e"&%/ %he &!-$'-e" 0a!4s "ea' $!'( #&%h "$2e!%s a!" !$% $! $$"s "es2*&0e" &! %h$se "$2e!%s 3B C$+c"(s$+s •
•
8e%#ee! %he se''e* a!" %he !e$%&a%&! 0a!4 %he*e &s %he sa' *e'a%&$!sh&. e&s%&! 0e%#ee! a "*a#e* a!" .*2hase* $+ "*a+%s U!'ess
12
8a!4 $+ Ae*&2a has a2%e" e*e'( as a !$%&+(&! 0a!4 a!" "&" !$% asse %he *es.$!s&0&'&%( $+ a 2$!+&*&! 0a!4; a!" .e%&%&$!e* 0a!4/ as a !e$%&a%&! 0a!4/ &s e!%&%'e" %$ *e2$-e* $! I!%e*6Res&!s .a*%&a' a-a&'e!% as 0e!e+&2&a*( $+ %he 'e%%e* $+ 2*e"&% #h&2h has 0ee! "&s$#!e" 0( %he a''ee" &sse* 0a!4
