OBLIGATIONS – Juridical – Juridical necessity to give, to do, or not to do.
TIME Obligation to Deliver Arises:
With Suspensive Condition – from the time the condition is fulfilled.
ELEMENTS OF OBLIGATION:
Active Subject – Creditor/Obligee
Passive Subject – Debtor/Obligor
Prestation – Object/Subject Matter
Efficient Cause – Legal/Juridical Tie
With Period; with suspensive effect – when period arises.
Without period and condition – upon perfection of the contract (meeting of minds).
SOURCES: 1. 2.
shou ld be a law, can’t be Law – there should
DELIVERY:
presumed.
CONSTRUCTIVE:
Contracts –
Traditio Symbolica
Meeting of minds > Offer > Accepted
Traditio Longa Manu – mere consent or
Quasi-Contracts – no meeting of minds
3.
a.
Solutio Indebiti – undue payment.
b.
Negotiorum Gestio – unauthorized unauthorized
agreement.
management.
the hands of the debtor.
Delicts (Crimes) - acts or omissions
4.
punishable by law, if accused: a.
Traditio Brevi Manu – objects is already in
continues in possession.
Convicted – civil & criminal obligation.
Traditio Constitutum Posesorium – vendor
Quasi-Traditio – with documents.
b. Acquitted – civil civil obligation only.
5.
Did not commit act, no civil obligation.
Quasi-delicts – tort, culpa, negligence.
DAMAGES – harm done and the sum of money that can be recovered.
SOURCES:
Start
Result
Quasi-Contracts
Lawful
Benefit
a.
– voidable Causal Fraud (Causante) – voidable
Quasi-Delicts
Lawful
Injury/Damages
b.
– valid Incidental Fraud (Incidente) – valid
Delicts
Unlawful
Injury/Damages
1.
2.
NEGLIGENCE (CULPA) a.
– with existing contract. Contractual – with
Whether specific or generic, you can’t go to
b.
– without existing contract. Aquiliana – without
the court for specific performance in case of
c.
– with or without existing Criminal – with
TO GIVE: (POSITIVE, REAL)
FRAUD (DOLO)
contract.
refusal.
Specific – CAN’T be extinguished through other parties.
DILIGENCE:
Generic – CAN be extinguished through
As required by law
other parties.
As stipulated by parties
2 , diligence of a good father Absence of 1 & 2, of a family.
TO DO: (POSITIVE, PERSONAL)
in case of refusal, ONLY damages are allowed because of breach of contract.
NOT TO DO: (NEGATIVE, PERSONAL)
DEGREE OF DILIGENCE
Specific performance by court NOT allowed
Anything done shall be undone at the
Stipulated by parties
Increase
Valid
Decrease
Void
Common Carrier
Stipulated: GFF
Void
Required by Law: utmost care
Extraordinary
Agency
Req. by Law: extraordinary
Valid
Stipulated: GFF
Diligence GFF
Debtor’s expense.
GENERAL RULE: “No one is liable in
FRUITS:
Determinate thing: thing: right belongs to Creditor from the time the obligation to deliver arises.
fortuitous events.”
Except:
When law so provides
Page 1 of 21
When parties stipulate
Nature of the obligation requires
RIGHTS OF CREDITOR:
assumption of risks. (Example:
1.
Exact fulfillment/to demand payment =
Insurance)
court. 2.
Exhaust the properties of debtor. EXCEPT:
Res perit Domino
from the execution
The thing perishes with the owner” “ The
Writ attachment → Public Sale → Proceeds
3.
3.
(question/challenge) the acts of the debtor.
DELAY (MORA) a.
Solvendi (Debtor)
Ex re – real obligation, to give.
Ex persona – personal obligation, to
Designed to defraud creditor.
Creditor deprived right to enforce claim.
4.
do.
Accion Subrogatoria – to exercise rights of the Debtor.
b.
Accipiendi (Creditor)
c.
Compensatio Morae – both debtor and ACTS OF DEBTOR:
creditor.
d.
Accion Pauliana – to rescind. To impugn
Contravention of Tenor – violation of terms.
GENERAL RULE: “No demand. No delay”
To rescind: GF (√)
Donates (gratuitous)
Donee:
BF (√)
Sells (Onerous)
Buyer:
BF (√)
GF (×)
EXCEPT: If there are remedies.
Except:
When law so provides
Contract stipulates
Time is of the essence
– no period/condition Pure/Simple – no
Demand would be useless
Resolutory – with condition.
Reciprocal obligation
With Resolutory Effect – with
KINDS OF OBLIGATION: 1.
Demandable at once
period.
KINDS: (MENTAL)
2.
With a period
M – Moral
Benefit of both creditor & debtor.
E – Exemplar
Cannot be demanded before due
N – Nominal
T – Temperate
A – Actual/Compensatory
L – Liquidated
Liab./Responsibility
date, court can ONLY fix period. 3.
With Condition
4.
With Condition and period
“WILL IT HAPPEN?” Fulfillment of Obligation Demandable
Court-Reduce
Fraud
√
×
Negligence
√
√
DEBT:
MAYBE (not sure): condition Suspensive Resolutory
Before
After
No obligation
Obligation arises
Obligation
Obligation end
arises
(ext.)
YES (sure): Period
Oral Written
Principal (√) Principal (√)
Interest (×) (×) Interest (√)
VOID
Condition must not be impossible and not contrary to law, morals, public policy, public order, and good customs.
“No delay. No penalty.”
The creditor can’t be compelled to accept partial payment. EXCEPT: If there is a
FULFILLMENT OF CONDITION: 1.
stipulation.
Prima Facie – “Disputable/Assumption ”
Potestative – depends on sole will of one of the parties.
If Debtor:
Suspensive: VOID
Resolutory: VALID
If Creditor:
Suspensive: VALID
Resolutory: VALID
Page 2 of 21
2.
(valid) or third Casual – depends on chance (valid) or
2 OR MORE DEBTOR OR CREDITOR:
party (valid). 3.
Mixed – depends on:
1.
Will of one of the parties & third party (VALID).
JOINT – “to each his own”
2.
SOLIDARY – “all for one, one for all”
Will of one of the parties & chance
When the law so provides or stipulated.
(VALID).
If silent, presumed joint.
DEEMED FULFILLED PRINCIPLE: “When the
MODE OF EXTINGUISHMENT OF OBLIGATION:
debtor voluntarily prevented the fulfillment
1.
of the condition, the condition is deemed
PAYMENT OR PERFORMANCE
fulfilled.” fulfilled.”
By Whom:
Debtor, representative/agent, estate (executor/admin.)
Pending fulfillment; rights
Third Person (interested in
Principal
Fruits
Resolutory
CR
DR
fulfillment of obligation liable
Suspensive
DR
CR
if principal debtor can’t pay)
To Whom:
SUBJECT MATTER: (Before Fulfillment) LOST
estate (executor/admin.)
Fortuitous Event: EXTINGUISHED
Fault of DR: LIABLE (Value + Damages)
IMPAIRED
By Nature: CR BEARS IMPROVEMENT
Presumed Benefit: CR/DOUBT: burden of proof = DR
Efforts of DR: DR given right to usufruct
Except: Ratification, Subrogation, Estoppel
DEBTOR DEPRIVED OF PERIOD: (IGIVA)
I – Debtor INSOLVENT (total or partial).
G – Fails to GIVE (guaranty or security).
I – guaranty or security: IMPAIRED (fault DR) or lost (FE/fault lost (FE/fault of DR).
V – DR VIOLATES undertaking.
A – DR attempts to ABSCOND.
Alternative Alternative Obligation Obligation
Conjoint Obligation
Paid before maturity:
“Choice”
2 or more
DR. unless
1 (with
Debtor if
substitute)
stipulated
2 or more
Fulfillment:
(×) – waiver waiver of right to
DR “aware” of period
period
DR “not aware” of period
Prestation
When: Principal/ Recovery?
stipulated Facultative Obligation
Third Person (redounded to the benefit of the Creditor)
Fortuitous Event: CR BEARS LOSS Fault of DR: LIABLE (Spec.Per. + Damages)
IMPROVED
CR., representative/agent,
(×) Only Interest + fruits
On or After Maturity (not aware)
( √ √ ) + Interest + Fruits
Where:
To give specific thing:
ALL Obligation with a penal clause
With stipulation
Place as stipulated
Without stipulation
Where object is located @perfection of contract
To give generic thing or to pay money:
ALTERNATIVE ALTERNATIVE
Obligation Exting.?
Liable: Damages?
FE:
(×)
(×)
Fault-DR
(×)
(×)
FE:
( √ √ )
(×)
Fault-DR
(×)
( √ √ )
With stipulation
Place as stipulated
Without stipulation
Where debtor resides
VS. FACULTATIVE
How:
To pay (money):
With stipulation
Currency as stipulated
Without stipulation
Legal Tender
Page 3 of 21
(TRAIT)
To give:
Specific
As stipulated, no substitute
Generic
As stipulated, neither
o
T – 2 or more persons claiming right.
inferior/superior
o
R – CR refuses to issue RECEIPT w/o just cause.
As stipulated
To do:
If poorly done: undo @the
expense of the debtor.
o
A – Creditor ABSENT
o
I – CR becomes INCAPACITATED to
receive payment.
SPECIAL FORMS OF PAYMENT: A.
o
Application of payment
Gives DR privilege (right to
choose)
2 or more obligation is due
If silent: apply proportionately (
B.
Dation en payment
benefitted or money was kept. 2.
Payment in kind, ONLY 1 CR,
LOSS OF THE THING DUE
Applicable if: determinable/specific
Not applicable: generic (genus nunguam perit)
Payment by Cession
DR insolvent, 2 or more CR,
(existence unknown/ cannot
extinguished.
be recovered).
D. Tender of payment and Consignation CR refuses, money is deposited in court with notice
3.
CONDONATION/REMISSION
to the CR. If approved,
Consignation allowed w/o prior
Essential
- Multiple obligation s are ALL due and demandable. - Payment not enough.
Payment by Cession
Requirements:
Capacity of Donor (CR) & Donee (DR) Donative Intent
T.O.P.:
A.o.P
Essentially gratuitous, nature:
donation.
obligation extinguished.
LOST – perishes, goes out of commerce, disappears
obligation partially
DR pays: incapacitated:
obligation extinguished. If CR
DR solvent.
C.
T – TITLE is lost.
Acceptance (DR)
Dation in Payment
T.O.P. & Consignation T.O.P.
Debtor is
Debtor
insolvent
need not
– Act – Act of the DR of
be
offering to his CR
Formal
Personal Property: P5000 up (writing) Real Property: Public Instrument
4.
COMPENSATION
2 persons, CR & DR of each other. a.
Conventional - by
insolvent
what is due to him.
All
Does not
CONSIGNATION – CONSIGNATION –
properties
affect all
CR refuses to
are given
the
accept payment,
up to
debtor’s
deposit thing due
satisfy the
properties
to the judicial
Principally bound DRs & CRs.
needs of
. Plurality
authority.
Both debts: debts: payable in money,
agreement b.
Legal – by operation of law
Requirements:
in kind/quality or both.
creditors
of the
(2 or more)
creditors
Both obligation: due
is not
Both obligation: liquidated
required. No transfer
Transfer
of
of
ownership
property
Partial
Extinguish
extinguish-
& demandable
NO: controversy or retention by third person. c.
Facultative – one party can claim compensation,
ment of debt
the other cannot. d.
Judicial – decree by court, in case where there is counterclaim.
Page 4 of 21
CONTRACTS
Compensation NOT allowed: when one of the obligation arose from:
CHARACTERISTICS: (MACRO)
Deposit
Bailee in Commodatum
parties. Validity: can’t can ’t be left with
Obligation to give gratuitous
will of one of them.
support (present/future)
M – Mutuality: bind both contracting
A – Autonomy: liberty/freedom to
Obligation arising from
stipulate.
commission on penal offenses:
C – Consensuality: perfected by mere
civil liability.
Consent.
5.
CONFUSION/ MERGER
6.
R – Relativity of contracts: take effect to parties.
CR & DR, one person.
O - Obligatoriness & compliance in good faith.
NOVATION
Changing the object (real) or condition (real)
KINDS:
SUBSTITUTION – Debtor
Delegacion – personal novation. Original DR must be discharged.
(Initiative: Original DR )
Expromission – personal
NOMINATE Vs. INNOMINATE
Do ut des
I give that you may give.
Do ut facias
I give that you may do.
Facio ut des
I do that you may give.
Facio ut facias
I do that you may do.
(Initiative: New DR or third person )
SUBROGATION – CR. (Personal) a.
Conventional - by agreement
b.
Legal – by operation of law
PRINCIPAL Vs. ACCESSESORY
CONSENSUAL Vs. REAL Vs. FORMAL (COC Vs. COC + DEL. Vs. COC + DOC.)
When a CR pays another CR who is preferred even without consent of DR.
When a third person who is interested in the fulfillment of the obligation pays even without the consent of
GRATUITOUS Vs. ONEROUS: Liberality
UNILATERAL Vs. BILATERAL
COMMUTATIVE: Exchange of values
ALEATORY: based on chance
AUTOMATIC
ADHESION
the DR.
“First in time, First in right”
If new DR fails to pay, can CR
ELEMENTS:
collect original DR?
contract- Cause, Object, Consent (COC)
Delegacion: YES
Time of delegacion;
NO
After of delegacion
NO
Time of expromission
New DR insolvent
YES
Time of expromission
Orig.DR aware & didn’t object to expromission
Time of expromission
Orig.DR’s insolvency is known to the public.
NO
After of expromission
NATURAL – deemed included except if stipulated not to include.
New DR insolvent
Expromission:
YES
ESSENTIAL – without them, there is no
– included if stipulated. ACCIDENTAL – included
An offer becomes INEFFECTIVE “BEFORE” acceptance: (DICI)
D - Death
I - Insolvency
C – Civil Interdiction
I – Insanity
Mixed Novation:
Must be REAL + PERSONAL
Page 5 of 21
PERIOD TO DECIDE
Can offer or sell?
Liable (damages)
Without consideration (option money) Without consideration
√
√
√
×
√
√
With earnest pay (down payment)
future (×).
CAUSE OF CONTRACTS:
Lawful
If inadequate (lesion)
Fictitious/Simulated
Unemancipated Minors – incapacitated to
give consent (below 18 y/o).
(√); Intransmissible Right – Transmissible (√); (×).
INCAPACITATED: (CHIPUD)
Inheritance – only present inheritance (√);
Absolute (void)
Relative (effect True Agreement)
False : (VOID)
Insane/Demented Person – except: lucid
interval.
Motive – not an essential element (with or without: VALID)
Deaf-Mute
Civil Interdiction – as if dead. Mortis Causa
(√)
Inter-vivos
FORMS OF CONTRACT – any form (oral, written, P.I.) (×)
EXCEPT:
Hospitalized Lepers
For validity – validity – failure: VOID
Prodigals/Spend Thrills
For enforceability – enforceability – Statute Statute of fraud.
For convenience
VICES OF CONSENT: (VIMFU)
V – Violence (physical pain) Serious/ irresistible force
INTERPRETATION: to give effect – “true intention”
I – Intimidation (mental pain)
Words – clear & unambiguous: literal meaning.
Well-grounded fear, imminent
danger, must be unlawful.
printed.
M – Mistake (Error)
If serious: Annulment
F – Fraud Insidious words, machination
U – Undue Influence
Amount: words prevail over figures.
If NOT: Reformation
Provision: written prevail over
2 or more: “I” – solidary; “We” – joint.
Acts – contemporaneous, subsequent.
Customs and usages
Professional Relationship
(Ex. Lawyer-client)
– Fraud / A – Accident – Accident / M – Mistake – Mistake / I – Inequitable – Inequitable Conduct F – Fraud
Consanguinity/Affinity
(Ex. Aunt, uncle) Religious Affiliation
(Ex. Priest, Parishioners)
NO FRAUD:
Before meeting of minds:
Remedy: Annulment
After meeting of minds:
Reformation
OPTION:
– failure to disclose acts Concealment – failure
without duty to disclose .
Reformation or specific performance
Except: with duty to disclose (fraud).
– ads Mere exaggerations in trade – ads
Specific Performance to Reformation
(×)
Dealer’s talk: Caveat Emptor –
Rescission to specific performance
Specific Performance to Rescission (√)
“buyer beware” beware”
Mere expression of Opinion – Except: Opinion of an Expert.
OBJECTS OF CONTRACTS:
Wills – except by the testator
Simple donation Inter-vivo – if no condition
Things – existing/future Should come to existence. Retroactive (emtio rae speratae)
REFORMATION NOT ALLOWED:
imposed.
Real Obligation
Hope – with hope (√); vain hope (×)
Page 6 of 21
-
DEFECTIVE CONTRACTS: 1.
RESCISSIBLE – least defective.
Do not comply with statute of fraud.
(SALSAR)
Defect: lesion (damage) (GACTS)
S – SPECIAL PROMISE – to answer
debt, default, miscarriage of
G – made by GUARDIAN
Lesion: more than ¼ value.
Rescind: within 4 years from
another.
A – AGREEMENT not to be
the time incapacity ceases.
performed within 1 year from the making thereof.
A – made by representative of ABSENTEES = property
L – LEASING: period longer than 1
Lesion: more than ¼ value.
year. Sale of real property or any
Rescind: within 4 years from
interest therein.
the time his (absentee).
S – SALE of goods, chattels or
Whereabouts are known,
things in action @least P500.
EXCEPT: within 2 years, if:
A – AGREEMENT made in
o
Boarded airplane
consideration of mortgage other
o
Boarded Vessel
than mutual promise to marry,
o
Sent to war
enforceable even if oral if oral ONLY.
C – made to defraud CREDITORS.
R – REPRESENTATION as to the
(Accion Pauliana)
credit of a third person.
T – THINGS in litigation made without consent of litigant or
Sale of Real Property
Enforceable?
court.
S – SPECIFICALLY declared by law to be rescissible.
NO
DOWNPAYMENT DELIVERY
ORAL
WITH 2.
VOIDABLE – valid until annulled. Defect: consent.
-
Person
(×)
(×) (×)
(√)
DOWNPAYMENT DELIVERY
DOWNPAYMENT DELIVERY
WRITING
(√)
(×)
(√)
(√)
W/ NO
PUBLIC INST.
DOWNPAYMENT DELIVERY
W/ 4.
Vitiated by VIMFU
One of the contracting parties
RATIFICATION – retroacts on the day the
ratified/period to question. ( ICAD)
O – OBJECT/CP: contrary to law, morals…
O – OBJECT: outside the commerce of men.
O – OBJECT: did not exist at the time of transaction.
I – INTENTION of the parties relative to the principal object: cannot be ascertained.
UNENFORCEABLE – validable. Defect: without effect unless ratified.
VOID/INEXISTENT – most defective. Defect: without effect cannot be
Except: marriage- 5 years
contract was made. Cleans defect.
3.
Buyer
To annul within 4 years’ time MF-discovery
incapacitated. -
Consent – Consent – vitiated vitiated (VIMFU)
/ VIU – cease. cease. -
Third
NO
One of the contracting parties – incapacitated.
Seller &
C – CONTEMPLATE an impossible service.
-
Both contracting parties are incapacitated.
A – ABSOLUTELY simulated or fictitious .
-
Made without authority.
D – DECLARED void by law.
Page 7 of 21
SALES VENDOR’S LIABILITY IN CASE OF EVICTION: (VICED)
SALES VS. BARTER:
V – Value of the thing
1. Manifestation: (Ex. B sells B sells his car to C)
I – Income or fruits
Cash:
P1M (Sale)
C – Cost of suit which cause the eviction
Trade-in:
Cash-600 / TI-400 (sale)
E – Expenses of the contract
Cash-400 / TI-600 (sale)
D – Damages and Interest
2. Absence of Manifestation: (Ex. B transfers his car to C) Cash: P1M (Sale)
Kind:
Cash-600 / Kind-400 (Sale)
Cash-400 / Kind-600 (Barter)
Cash-500 / Kind-500 (Sale)
If vendor acted in good faith
IF VENDOR ACTED IN GOOD FAITH:
P1M (Barter)
1. Value of the thing sold only *waiver consciente (without knowledge of eviction)
SALES VS. CPW (Contract for a Piece of Work): MASSACHUSETTS: Object:
Same with New York Rule
Available/Regular Stock (Sale)
Specially/Manufactured (CPW)
2. No liability *waiver intencionada (with knowledge of eviction)
TYPES OF WAIVER
English Rule: Materials > Labor = Sale
1. Waiver Intentionada – seller not liable.
Labor > Materials = CPW
– seller liable up to 2. Waiver Consiente – seller
FMV @ the time of eviction. OBLIGATIONS OF THE VENDOR (SELLER):
ANIMALS:
1.
To effect DELIVERY
2.
To TRANSFER OWNERSHIP (TITLE) to buyer
1. Disease:
VOIDABLE: Can annul if third party is in bad faith.
3.
Contagious – Contagious – VOID
NOT Contagious – Contagious – VALID, VOID IF dies within 3 Days from the date of
VOID: Stolen
purchase and existed at that time.
To WARRANT
EXPRESS: As stipulated
IMPLIED: o
2. Defects: if hidden: BUYERS’ option: within 40 days.
Against Eviction: Except if waived.
– to annul, Accion Redhibitoria – to
Buyer deprived of object:
because object is unfit for the use
Right: existing @ the time sale
Seller: given opportunity to
intended. – to reduce Accion Quanti Minoris – to
defend title. o
price
Against Hidden Defects:
NO WARRANTY: Caveat Emptor
Defects NOT Hidden – caveat
emptor (buyer beware)
Fairs, public auction, livestock sold as
– caveat Defects Hidden – caveat
condemned.
venditor (seller beware) o
Seller:
Defect
“If waived”
Aware
(√)
VOID
Not Aware
(√)
VALID
Defects: If Seller: Good Faith –
Merchantability: within the commerce of man.
o
Fit for the purpose: Seller Liable General:
(√)
Specific, if stipulated:
(√)
NOT liable for damages.
Page 8 of 21
RIGHTS OF THE UNPAID VENDOR (SELLER): 1.
Stoppage in transit
2.
Possessory lien
3.
Resale
4.
Cancel
interest can sell his undivided interest.
OBLIGATIONS OF THE VENDEE (BUYER): 1. 2. TERMS:
A. On TRIAL or Satisfaction On SALE or Return
Ownership AFTER delivery
Risk of loss on FE
Seller
Seller (RPD)
Buyer
Buyer (RPD)
B. LUMPSUM – no increase or decrease in price. Discrepancy (Estimate < Actual): Should not exceed ¼. If seller insists delivery of excess between actual and estimate: Buyer’s Option: Rescind/Cancel contract + Damages Agree – Specific performance C. INSTALLMENT PERSONAL PROPERTY – RECTO LAW DR default installment: 1 or more – Seller – to exact fulfillment. 2 or more – Altern. Remedies Remedies I. Exact fulfillment – S demands payment; Seller – Ordinary CR – NO right to foreclose Public Sale: proceeds: Higher than debt: excess belong to buyer. Lower than debt: deficiency – Buyer pays. II. Cancel Sale: B returns object/ Seller returns payment. III. Foreclose the Chattel Mortgage - deficiency: no recovery, stip. – VOID - excess: belongs to seller, stip. (B) – VALID REAL PROPERTY (Realty Installment Buyer Protection Act) RIBPA (MACEDA LAW) NOT applicable to: Sale or Financing – Industrial Lots Sale or financing – Commercial Buildings Sale to tenants – Land Reform Code Applicable to: Residential Lots DR default installment : Without additional interest/penalty. Grace Period : Payment: <2 years (60 days) ⪰ 2 years (1 mo. /yr.) Available once every every 5 years Condominium: Residential, Commercial, Industrial: SELLER: cancels – refund: 50% amount paid + 5% per year after 5 yrs. D. REDEMPTION CONVENTIONAL – based on stipulation Repossession Period: With Stipulation – max. of 10 yrs. Without Stipulation – 4 years Pacto de retro sale (death of seller), can heir repurchase? – NO. The owner of the undivided
Y & Z repurchase what
(√)
W & X sold? Y rep. what W & X sold?
(√)
(√) Adjacent/Ad Adjacent/Ad joint Landowners Landowners RURAL: (Agricultural) Not > 1 hectare, hectare, & Buyer – already owns a rural land Can A/AJLO repossess? repossess ? (√) URBAN (City) So situated – majority part: no practical use. EXCEPT: if there is a right to be exercised. Acquired for speculation. COURT - least injury to give access. Right of Pre-emption – if not given: Right of Redemption – 2 or more – most beneficial. PRESUMTION OF EQUITABLE MORTGAGE NOT FOR SALE: When place with right to repurchase is usually inadequate. When buyer retains part = PP Buyer extends period of redemption. Seller retains possession Seller pays taxes Real intention – mortgage
To PAY – PAY – terms terms
Co-owners: (e.g. W, X, Y, Z > W, X – absolute sale to Buyer can): Proportionate:
Z rep. what W & X sold?
To ACCEPT delivery
LEGAL
Traditio longa manu - mere pointing object.
Traditio brevi manu - already in possession of the vendee (buyer) at the time of sale. Delivery, no longer required.
Traditio
constitutum
vendor
(seller)
possessiorium
continuous
to
–
have
possession of the thing not as owner but as
tenant or lessee.
Emtio spei – hope, present thing, uncertain.
Emtio re separate – future thing expected to come in existence, certain.
Absolutely Simulated Sale Sale – VOID.
SALE OF REAL ESTATE: (a)
Actual < Stated Area
Reduction of price if actual area <
1/10 of Stated
Rescind the sale if actual area > 1/10
of stated (b)
Actual Area > Stated Area
Accept and pay contract rate.
Accept the stated area and reject the excess.
(c)
Actual Area is not of the quality specified specified
Page 9 of 21
Reduction of price if the inferior value
not
exceed
1/10
of
solidary . EXCEPT: acts of dominion
the
price/rate agreed upon.
which needs Special Power of Atty.
Rescind if inferior value exceed 1/10 of the price/rate agreed upon.
NOTICE OF AGENCY’S APPOINTMENT:
– Newspaper (published) or Notice Letter –
DOUBLE SALE: 1.
Agents – joint. EXCEPT: stipulated –
another agent.
PERSONAL PROPERTY ST
1 Possession in good faith
In public instrument (construction
Del Credere Agent – agent & surety at the
same time.
delivery) – delivery) – public instrument is
preferred over private instrument (same rule with real property)
2.
NOTICE OF REVOCATION: rd
REAL PROPERTY
Newspaper, to bind 3 parties: must be
st
done the same manner as Notice of
st
1 register in good faith
1 possession in good faith
Appointment EXCEPT: if the parties to be
Present the oldest title
notified have actual knowledge.
PERSONS NOT LIABLE FOR BREACH OF WARRANTY: OBLIGATIONS OF an AGENT:
(SAMPO)
S – Sheriff
A – Auctioner
M – Mortgagee
P – Pledgee
O – Other persons
1.
deemed not have exceeded authority.
2. to sell by virtue of
authority in fact/ in law.
AGENCY
By Operation of Law
Express
Implied
3.
stipulation to the contrary: VOID If A exceeds authority, still binding to P,
object belongs to A = authorized to sell Consider – A A fulfilled his P’s option: Consider – authority or ratify.
4.
insolvent (×)
AGENT – if authorized:
To sell → to mortgage (×)
Principal & Agent both NOT present:
To mortgage → to sell (×)
Acknowledgement of receipt of
To lend money → to be borrower(×) borrower(×)
To borrow money → to be lender int. = current
o
the Power of Atty . o
rate (√)
Failure to reply: (Acceptance) If required is to do act: the
Parties:
Principal – capacitated party.
Agent – presumed w/ compensation.
2 or More:
Principal – solidary.
To sell on credit → obligation to make list = of = of ALL buyers on credit otherwise: ALL otherwise: ALL CASH
agent: habitually engaged.
To advance funds: (×)
Principal & Agent both present – objection.
To make accounting of transactions,
EXCEPT: If stipulated: (√), except: if P
receipt of Power of Atty. Is without
To give everything to P, even if not owing P.
- founded upon Trust and Confidence.
To observe instruction of the Principal –
TO APPOINT SUB-AGENT: 1.
With Stipulation : (√) & (P designates Agent) or
2.
If not prohibited: 1&2: notorially, incompetent, insolvent.
If Prohibited, ALL actions of Sub-Agent is VOID.
Page 10 of 21
EXTINGUISHMENT OF AGENCY: (EDWARD)
E – Expiration of term
D – Death of P or A: to sell goods = heirs
BAILEE – leases to others.
If object delivered – with appraisal
(Sangla) – things: SECURITY: collateral (Sangla) –
Take care (GFF) & give notice to P
Agency by operation of law (necessity).
eath – EXCEPT: constituted for the benefit of P or Death –
Pledge Antichresis
Objects
Possession
Movable
CR/pledgee
Immovable
CR/
rd
antichretic CR
A, or 3 person (stip pour autrui), Insolvency, Civil Interdiction, and Insanity.
W – Withdrawal by agent
A – Accomplishment of purpose.
agency – (P) (P) @ will, with R – Revocation of agency –
Mortgage Chattel Real Estate
1.
Movable
DR/ mortgagor
Immovable
DR/ mortgagor
PLEDGE:
or without cause.
Similar to Recto Law
Reason – must be with cause. EXCEPT: Valid Reason –
D – Dissolution of the firm which
established the agency.
Foreclosure then Pu blic Sale → with
notice: → Deficiency or excess: belongs/ suffered
Quasi Traditio – execution of Public
by CR.
Instrument.
– use object = NO, EXCEPT: Pledge (CR) – use If stipulated or necessary to preserve value.
CREDIT TRANSACTIONS
Ownership A. B.
MUTUUM – simple loan COMMODATUM
DR Bailor (CR)
Bidders:
Purpose
Highest Bidder(s)?
To consume
nd
Only 1
(×) EXCEPT: after 2 notice
More than 2
To use
Tie (bet. DR &
(√) (√) DR
3rd person)
MM CM
Object
Obligation
Contracts
Money
To pay
Onerous
Fungible
To replace
Gratuitous
Non-
To return
Essentially
fungible
Gratuitous
If fungible (display/exhibi tion)
Exp.
DR Ord. (bailee) Ex-Ord. Actual use
Pledge is indivisible (on > 1 object) applicable even to heirs.
2.
Accessory follows Principal.
CHATTEL MORTGAGE (Movable)
(50%
Foreclosure: from loan: →Deficiency: DR pays
bailee/
→Excess: Mortgagor (DR) owns
50% bailor)
LOSS WHO SUFFERS?
Guaranty – insurer of debt, subsidiary liable, with benefit of excussion, EXCEPT if waived.
1.
In mutuum: Res Perit Domino = DR
2.
In Commodatum: RPD = Bailor EXCEPT:
BAILEE – guilty of delay
BAILEE – uses object of CM:
Surety – insurer of prompt payment, solidarily liable, no benefit of excussion.
purpose – purpose – different different from what was agreed upon.
BAILEE – guilty of ingratitude – able to save.
BAILEE – allows others to use, EXCEPT: members of household if
Deposit – safe keeping.
Judicial – movable or immovable.
Extra-judicial – movable, agreement.
not prohibited.
Page 11 of 21
Necessary – in compliance
3.
By Estoppel
with law. (e.g. guest-hotels,
4.
Life
passengers-common carrier) Real Estate Mortgage Possession
DR
CR/pledgee
Fruits/Income
DR
CR-to be applied DR’s obligation.
DR
Taxes/expenses
CR-to be charged to DR
3.
At will – if partners agree → continue
Fixed Term – dissolved, if partnership
Antichresis
continues, it will be converted into partnership at will.
LIABILITY: 1.
REAL ESTATE MORTGAGE
Unlimited – General: ALL partners.
Original – up to separate property.
Newly Admitted:
Accessory contract, mortgagor can sell
Existing
at
the
time
of
admission – up to Contributed
the object even without consent of the
Cap.. EXCEPT: stipulation. Cap
mortgagee.
Arising after admission – up to separate property.
2.
PARTNERSHIP
Limited – at least 1 general partner; at least 1 limited partner.
2 or more persons bind to contribute money,
Limited Partner – up to Contri.Cap., EXCEPT: Liable up to Separate Prop. If:
property or industry to a common fund with intention of earning profit.
Participate in management
2 or more persons – exercise exercise same profession
Allow your partnership to use your name in the Partnership’s
(GPP)
firm name, EXCEPT:
NO PRESUMPTION OF PARTNERSHIP:
o
Such name is also name of the general partner.
1.
rd
3 persons – not partners to each other,
o
rd
nor parties to 3 person, EXCEPT: estoppel:
he joined the partnership.
In pais – silence, declarations, made others believe.
2.
Name is already used when
SHARE IN THE CONTRIBUTION: (As to Object)
By Deed – with documents.
By Laches – by passage of time.
Universal – not allowed to husband & wife
Co-ownership/Co-possession
→ guilty of concubinage/adultery.
→Purpose: Purpose: enjoyment/preservation
1.
Universal
Partnership
of
Present
3.
Sharing of gross returns
Property (UP-PP) – contributed to the
4.
Prima Facie presumption – sharing of net
partnership.
returns, EXCEPT: (GAWID)
– Payment of Goodwill G – Payment
A – Annuity (widow or representative)
principal – principal – partnership. partnership.
of a partner.
W – Wage: employee or Rent: landlord
I – Interest to loan.
D – Debt by installment.
→with stipulation sti pulation – – ownership: ownership:
Partnership (Others) = VALID, EXCEPT: Inheritance, Legacy, Donation, EXCEPT: fruits = VALID
contract: De jure – exist in fact and in law, contract:
P3000 or more – P.I. & reg. SEC, otherwise: De Facto
Immovable – description, signed by parties,
P.I.,
registered
otherwise: VOID 2.
Future Property: →without stipulation – partners – partners
PERSONALITY: 1.
– accessory follows the Fruits – accessory
De Facto – exist in fact, not in law
to
SEC,
2.
Universal Partnership of Profits (UP-P) Highest Bidder(s)?
Contribution
Ownership: Partner Right to Use: Partnership
Future Property
Ownership: Partnership Gratuitous: Partner *if through industry, FP will go to partnership
Page 12 of 21
Preference: Particular (General Partnership) – allowed
→ Partnership CRs – partnership’s assets.
to husband & wife
→Separate CRs – separate – separate assets Receipt of payment (partner and
LOSS due to FORTUITOUS EVENT – “Res Perit Domino”
partnership creditors):
LOSS borne by PARTNERSHIP: 1.
If the thing contributed is fungible.
2.
Contributed for the purpose of selling.
3.
If the thing can’t be kept without
APPLICATION OF PAYMENT If DR assigns application of
payment.
deterioration.
If DR waives AOP, if partner:
Partnership Credit (√)
CLASSIFICATIONS OF PARTNERS: 1.
Proportionate (√)
Contribution
Own Credit (√)
without need-demand. To warrant the thing – thing – against against eviction.
Make additional contribution –
Proportionate (√)
EXCEPT:
imminent loss or/& contribution necessary to save partnership.
Capitalist: YES, EXCEPT:
to sell his interest.
Industrial: NO, EXCEPT: stipulation.
Make Alterations – Immovable – Immovable
If with stipulation:
→ if VALID as stipulated: (a) Share in P/L
(important) – NO, even Major (important) –
(b) Share in profit – profit – stipulation. stipulation. →ALL Partners ( √) → Share in loss – loss – w/out w/out stipulation (c) Exempting – Exempting – partner: partner:
Capitalist
→ Profit (×) → Loss (×)
→similar: NO EXCEPT: stipulated.
→ EXCEPT: industrial
Otherwise: – profit: partnership
If without stipulation:
– Loss: partner
Industrial →similar or →similar or not: NO EXCEPT: stipulated
Capitalist: Capital Contribution
Industrial → Profit – Profit – interest or just equitable
Otherwise: Partner’s option:
share (JES)
(Expulsion or profit=Partnership) + Damages
→ Loss – exempt – Partner → if silent: Share of Capital – Partner
rd
Liability – 3 person , RULE: Joint ; EXCEPT
with least Capital Contribution.
(SOLIDARY):
Partner: course of business, receive Partnership: course of business, receive money = misappropriation
Commit torts: Quasi-delict
Capitalist-Industrial Partner –
2
different rights in the share.
money = misappropriation
Partner when received payment
Interest – Interest – surplus surplus – – profit/loss: profit/loss:
→ Not similar: YES
3.
2.
To engage in another business
Due to Partnership is not yet due.
To specific partnership profit.
beneficially, EXCEPT: stip.
1.
administration – administration – YES
2.
Onerous due to Partners.
PROPERTY RIGHTS:
Minor (not important) –
not a managing partner.
stipulation or insolvent. Otherwise – Otherwise – can can be compelled
Not managing partner Partnership Credit (√)
To effect delivery; day agreed upon/
Managing partner
3.
To participate in management – Who – Who will be managing partners? (d) One – appointment * Article of Partnership – Partnership – power power is
rd
In the eyes of the 3 persons, partners are
irrevocable without just without just cause.
equally liable (joint)
Page 13 of 21
→ can EXECUTE ALL acts of admin. = GOOD
Direct Attack – office of the Solicitor
FAITH, despite objection of other partners
General
* Not Article of Partnership – Partnership – power power is
Collateral Attack - (×)
revocable. (e) 2 or more * With stipulation – should should act as 1, can’t be
4.
Legislative Act – if Congress possess a law which makes business of partnership illegal.
alleged. EXCEPT: grave/ EXCEPT: grave/ irreparable injury to partnership. * Without stipulation – should – should act as 1,
5.
anyone can act, EXCEPT act, EXCEPT:: o
Loss of the thing = LOSS To be contributed – RPD = LOSS
If managing partner objects – objects –
→UP-PP: ( √)
majority of partners, if tie.
√) →UP-P: ( √)
o
Controlling interest, if tie.
o
Majority of ALL of ALL partners if tie.
o
Controlling interest.
Contributed only usufructuary, LOSS =
Partner, EXCEPT:
– Mutual Agency → No one Appointed – Mutual RULE:
o
Fungible
o
To be sold
o
Can’t be kept without deterioration
Every partner/ agent/ partnership,
→UP-PP: →UP-PP: (×)
anyone can act EXCEPT:
→UP-P: →UP-P: ( √)
A partner objects – objects – majority majority of all partners, tie – C.I.
Unusual Acts: Acts of Dominion, requires consent
6.
D – Death, I – Insolvency, C – Civil Interdiction, I – Insanity, J Judicial (DICI-J)
of ALL partners, EXCEPT: A partner has been
authorized. Bus. Of Partnership was
LIQUIDATION:
Winding Up?
abandon.
(a) With Stipulation – as stipulated UNUSUAL ACTS: must be presented to ALL partners (SACRED.D)
(b) Without Stipulation – not guilty. All deadlegal rep of last surviving partner.
S – Submit partnership claims/ General
liability to arbitration.
Limited
A – Assign partnership property –
*Outside CR
*Outside CR
trust = CRs
*Inside CR
*Limited
C – Confess judgment
R – Renounce / Abandon partnership claims.
-obligation -share in profits, if any -return on contri. cap.
*Return on
*General
Contributed Cap.
-obligation
E – Enter into compromise.
D – Dispose goodwill.
-share in profits, if any
D – Do any act = impossible=
-return on contri. cap.
partnership continue business.
*Share in Profit, if any
DISSOLUTION:
CORPORATION 1.
Without Violation of partnership agreement.
artificial being created by operation of law
Term expires
with the right of succession and powers (express,
By will – one, some, or all partners
implied, incidental), attributes and properties
Expulsion – a partner
expressly authorized by law incidental to its
Fulfillment – purpose
existence.
2.
With Violation – partnership agreement
3.
Quo Warranto – de facto
Artificial being = person = citizenship = THEORIES:
Page 14 of 21
– laws observed in Incorporation – laws
NOT ALLOWED to HAVE NO PAR: (BITPuB)
companies Philippine Laws = Domestic
– Banks B – Banks
Foreign Laws
– Insurance companies I – Insurance
– Trust companies T – Trust
– Public institutions Pu – Public
– Buildings and loan associations B – Buildings
Resident: E.T.B.
Non-resident: N.E.T.B.
– citizenship of owners. Control test – citizenship
– principal office. Domiciliary – principal
KINDS of CORPORATION:
voting rights, they can TO VOTE: with or without voting vote in: (A-ASIIMID)
1.
Public
2.
Quasl-public: Quasl-public: “as if”
3.
Private
MAJORITY of B.O.D & MAJORITY of Sh./M; Sh./M; A – Amendment/Adoption: by laws;
INCORPORATORS:
EXCEPT: power to amend by laws is 1.
Of legal age
already delegated to the B.O.D by 2/3
2.
At least 5 but not more than 15 (natural
votes of Sh. /M.
person) 3.
Majority: Resident of the Philippines
MAJORITY of B.O.D & 2/3 Sh./M: A – Amendment of articles in Incorporation
Primary Franchise : right to organize a corporation.
S – SLEMP of all or substantially all of corporate profits property.
ARTICLES OF INCORPORATION:
I – Incurring/creating/increasing bonded 1.
indebtedness.
Name: neither similar, nor confusingly similar to existing corps
I – Increase/decrease of capital stock
2.
Purpose: principal and secondary
M – Merger or consolidation
3.
Principal office
I – Investment to another company
4.
Incorporators: names, nationality and
D – Dissolution
residence 5.
Capital: Profit = stocks/shares
6.
Board of Directors: Names, Nationality &
S – Sales – Sales / B – Lease – Lease / E – Exchange – Exchange / M – Mortgage – Mortgage / P – Pledge – Pledge
Residence.
KINDS OF SHARES: 1.
Capital shares
2.
– exclusive right Founder’s share – exclusive
3.
Redeemable shares (Callable Shares) –
Of all or substantially all corporate corporate property.
Treasurer’s Affidavit: at least 25% of:
Authorized Cap. Stock = par / ACS = no par
Subs. Paid = money/property (@FMV)
with or without RE, provided such redemption will not result to:
Insolvency of the corporation
Difficulty in paying maturing obligations
4.
5.
REJECTS: 1.
Purpose: unconstitutional, illegal/ immoral, contrary to gov’t. gov’t .
Preferred shares
Dividends – Dividends – CP, CP, C/NP, NC/P, NC/NP
2.
Treasury’s Affidavit: Affidavit: False
Assets
3.
Failure to meet minimum Filipino ownership.
Common shares (Gambler’s Shares) – below par (x)
6.
SECURITY of EXCHANGE and COMMISSION:
4.
Failure to observe form prescribed.
Promoter share 5.
Failure to submit: favourable recommendation from the appropriate gov’t agency in charge of the activity you are proposing.
Page 15 of 21
to exercise such power as may be
ACCEPTS: (Approved)
delegated by B.O.D
Then issue “ Certificate Certificate of (birth of Corp.) Incorporation” Incorporation” (birth Exercise Secondary franchise
EXCEPT:
To commence operation within 2
approval
years; otherwise automatically dissolve.
Amend by laws
Distribute cash dividends (Impliedly
COMMENCE OPERATIONS:
include stock dividends)
ELECTION: 1.
Fill up vacant seat seat in the B.O.D
VACANCIES: Grounds:
BOARD:
Acts that require shareholders’
– by stockholders Directors – by
Removal, expiration of terms,
(Cumulative or straight (√))
increase in # of BOD = SHs
Not convicted by final judgment =
Others: remaining members of
imprisoned: more than 6 years
BOD:
Not violated corporate code within 5
years prior to election.
With quorum = BOD
Without quorum = SHs
Must own at least 1 share, EXCEPT: by-laws require greater or other
number otherwise.
Amend acts previously approved by the B.O.D.
Trustees – non-stock (Cumulative(x))
B.O.D declares cash dividends while stock
Not convicted by final judgment =
dividends needs 2/3 of shareholder’s
imprisoned: more than 6 years
approval.
Not violated corporate code within 5
years
4.
Must be a member of the corp.
To ENTER CONTRACTS:
Regular/Ordinary: rd
With 3 person:
2.
OFFICERS:
– member ber of B.O.D President – mem Presides meeting of
with quorum = BOD
without quorum = SHs
With own Directors:
shareholders & B.O.D Except: if
Fair and reasonable
in the By-Laws.
Presence of such Director
– resident citizen of the Secretary – resident
not necessary to
Philippines.
constitute quorum
– no requirement. Treasurer – no
Vote of such D does not
necessary or approval Incompatible OFFICE: one person:
Otherwise: needs SHs
P&S / P&T
approval – approval – 2/3
1. Managing
BOARD OF DIRECTORS: 1.
2.
2. Managed;
– as required by laws QUORUM – as
Management:
Majority of BOD and majority of SHs:
EXCEPT:
Absence: ½ + 1 (Majority)
– reasonable (per diem & COMPENSATION – reasonable
Interlocking Directors
Shareholders: o
allowances)
outstanding Sh.
given – max 10% of NI before IT of if given – o
preceding year 3.
To Create EXECUTIVE COMMITTEE allowed – by by laws If allowed – at least majority: B.O.D
Substantial = 20% of
1/3 Outstanding Sh.
Max of 5 years , EXCEPT: natural resources.
5.
To ACQUIRE OWN SHARES: Provided corporation has RE, EXCEPT: redeemable.
Page 16 of 21
To remove DELIQUENT subscription:
Subscriber:
Underlying Doctrines:
Not delinquent : rights
Trust Fund Doctrine: capital stock = separated by assets
o
vote (√)
Do not issue shares until
o
dividends (√)
fully paid.
Delinquent: rights
to be not liable on liable on
o
vote (x)
watered shares:
o
dividends (√)
– send object in writing – send
– to be applied to Cash – to
to secretary
unpaid subscription.
– to be withheld Stock – to
until full payment of
Functions: SH’s CRs – can’t
subscription.
collect from corp. EXCEPT:
To qualify as BIDDER, pay:
Piercing the Veil of Corporate
using corp. to commit fraud.
unpaid subscription, subscription, unpaid expenses, interest
Special Circumstances
– least # of shares HIGHEST bidder – least
– Duty of Disclosure Doctrine – Duty
– corporation NO bidders – corporation
to SHs what’s happening to
To remove FRACTIONAL shares
the Corporation.
To pay DISSENTING shares
Appraisal right – right – payment payment = FV
of shares o
Doctrine of Bus. / Corp. – related to Opportunity – related
Options:
loyalty to the Corporation.
To accept will = 1/3
To exercise appraisal right,
EXCEPT:
– Doctrine of Limited Capacity – all acts must must be within:
* Act=abandoned by corp.
(express, implied, incidental) =
/ rejected-SEC
intra-vires o
– 3 members, APPRAISAL COMMITTEE – 3
Chosen BY:
outside = ultra-vires
(a) Legal
(1) By SHs (Dissenting)
– can be executed – can
(1) By Corp.
by ratified by
(1) By rep. of both Corp and SHs
stockholder – should executory – should
o
Who bears expense of Committee?
be abandoned
- recorded amount:
– cannot be ratified (b) Illegal – cannot
1M = SHs
those involved;
more than 1M = Corporation
liable (members of BOD)
6.
– from unissued To ISSUE NEW SHARES – from
SUITS: (Corporation can sue and can be sued)
shares. SHs given PRE-EMPTIVE right, EXCEPT:
Corporation (de jure) vs. 3 person or SHs
public offering of shares.
SHs:
To acquire property needed by
Derivative: SHs vs. Board
corporation.
Individual : SHs vs. Corp Representative: SHs vs. Corp
To pay creditors.
7.
rd
In compliance with law required
rd
3 party vs. Corporation 2 or more – more – same same class = class suit
To OBSERVE:
Threefold duties: (OLD)
– Obedience to by laws O – Obedience
– Loyalty to the Corporation L – Loyalty
– Diligence D – Diligence
MEETINGS: 1.
BOARD:
– once a month Regular – once
– as need arises Special – as
Page 17 of 21
– anywhere Place – anywhere
– personal (√) proxy (x) Attendance – personal
NEGOTIABLE INSTRUMENT 2.
SHAREHOLDERS: – once a year, as fixed in by Regular – once
PURPOSE:
laws, if silent, any day in April – as need arises Special – as – within city / municipality of Place – within Principal Office
If practicable: Principal Office Attendance – personal (√), proxy (√)
Foreign
With
Without
Corporations
License
License
1. Sue?
(√)
(x), EXCEPT:
Facilitate exchange
Substitute money
Accommodation of Secondary Contracts
Increase credit circulation
PARTIES:
Promissory Promissor y Note
Bill of Exchange
Maker
Acceptor
Indorser
Drawer
Primary Liable Secondary Liable
Violation of property rights
2. Be sued?
(√)
(√)
Intellectual property rights:
REQUISITES: 1.
Trade Name/Mark Copyright
In writing & signed by maker or drawer.
True Name: complete/ abbreviation/ misspelled
Patent
Assumed Name: trade/ business/ alias
DISSOLUTION: 1.
Automatic:
2.
Expiration of term as fixed in the
Symbols/signature
Contain unconditional promise or order to pay sum certain in money. money.
Articles of Incorporation Max. term = 50 years EXCEPT: if
Subsequent events does not cure
intended, max of 50 years per
non-negotiability of Non-
extension.
negotiable Instrument.
Non-use
Sum Certain:
failure to commence within 2
years from issuance of Certificate
With interest
Installment: stated, with
of Incorporation
acceleration clause
2.
Grounds:
(N) / DR (NN)
Non-use
Failure to resume operation within
Operation.
Legislative Enactment
– Office of the Solicitor Quo-Warranto – Office General/ direct attack.
3.
Payable to:
Order - of a specific person - Specific person or order
– by order of the court. Judicial – by
With cost of collection or Atty.’s Fee
– shortening life of Amendment of Aol – shortening corporation.
With dollar exchange rate whether fixed or current
5 years from Stoppage of
If silent: choice: holder
PAYEE: - (√) B (√) B - (√) B & C (both should
LIQUIDATION:
winding up = 3 years
– be filed ALL actions for/against Corporation – be actions – receiver receiver After 3 years - pending actions – To reserve enough funds to meet pending
act, EXCESS: Shareholders.
indorse) - (√) B or C (either can indorse) INDORSEE:
- (√) L / L 60.00 (×) / L 40.00 remaining unpaid - (√) L & M
Page 18 of 21
- (×) L 50.00 & M 50.00
Incomplete but delivered
- (√) L or M
Complete but Undelivered
Absence or failure of Consideration
- so expressed bearer
Illegal Consideration
- Specified person or
Fraud Inducement
Insertion of wrong date/ discharge by
Bearer
bearer.
payment before maturity.
- Order of fictitious person. - Does not purport to
2.
holder (HIDC/HFV)
name any person.
Incomplete and undelivered
Minority or other form of incapacity
Forgery
Fraud in Factum or in Esse Contractus
– expressed, no date, Demand – expressed,
Discharge at or after maturity
overdue
Illegality of contract
Fixed Date
Material Alteration (if silent: Personal)
– time Determinable Future time – time
- Only or last indorsement: Blank
4.
– can be used against any Real Defense – can
Payable on:
certain to come.
TO NEGOTIATE:
Time
-
KNOWN:
– indorsement + delivery Order – indorsement
before/at/upon/after
– delivery Bearer – delivery
-
A person who negotiated through
UNKOWN: at/after
is only liable to the party delivery is
5.
whom he presented the note.
Bill of Exchange (B.of.E) - Drawee must be named or indicated with reasonable certainty.
DRAWEE:
INDORSEMENT: 1.
Special
2.
Qualified
Pay to C, w/o recourse (@ your own risk) (B)
-
(√) W
3.
Blank
__________ __________ (B)
-
(√) W and Y
4.
Conditional
Pay to C, If….. (B)
-
(×) W or Y (alternative)
-
(×) W, in his absence Y (succession)
Pending fulfilment of the condition:
Pay to C (B)
Maker – option to disregard condition and pays:
AGENT: to be not liable:
Sign within scope of authority
Obligation extinguished
Disclose-principal
Without incurring any liability
Indicate in what capacity
C holds money in trust of B until C fulfills condition
Agent with limited authority:
Sgd. Name: Per Procuration / Per Proc.
Maker – may honor/respect condition
Maker can refuse to pay, such refusal
/ P.P. / p.p.
is not a dishonor, C has no recourse.
DEFENSES: 1.
Personal Defense
5.
Facultative
(a) Can be used against:
HFV whose title did not come
(b) indorsement: binds indorser
HFV whose title come from a
HIDC, but he is party to the
HIDC
HFV whose title came from a HIDC not a party to the defect.
Waiver of protest/presentment/n protest/presentment/notice otice of dishonor/ Protest
defect.
(b) Cannot be used against:
WAIVER: (a) face of instrument: binds all parties
from a HIDC
Pay to C, notice of Dishonor waived, (B)
6.
Restrictive
Prohibits further negotiation of Instrument:
Pay to C only (B)
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Constitute Indorsee as mere Agent:
WARRANTIES (Liabilities)
Pay to C for collection (B)
Indorsers
Qualified
General (Special)
(√)
(√)
Indorsement is genuine in all aspect it purports to be Good title
(√)
(√)
Capacity of primary
(√)
(√)
(√)
-
-
(√)
-
(√)
Vest title to the Indorsee in trust for Another:
Pay to C in trust for D (B)
INTERVENING PARTIES: (there is Compensation) = compensation Discharged = Can be revived (negotiation):
(√) new party (√) prior party
– in order to (×) intervening party – in avoid multiplicity of suits
STRIKE OUT (INDORSERS): -
parties No knowledge/defect/value less Instrument is valid & subsisting If presented accepted paid if dishonored – “I will pay.”
Only allowed if: (a) No prior parties (new parties only)
Never strike out the PAYEE
Only if the the last indorsement is blank.
PRESENTMENT FOR ACCEPTANCE (B.of.E) -
Unless stipulated.
(a) Payable elsewhere other than the
EXCEPTION: Renegotiation
usual place/business of Drawee
(b) Prior parties
– payable after sight. (b) Fix maturity – payable
Intervening parties not liable anymore.
A party primary liable can collect from a
KINDS OF ACCEPTANCE:
party secondarily liable if he is an
(a) Absolute
accommodation party.
– accepted (b) Qualified – accepted
ADMISSION:
– admits: MAKER – admits:
Existence & Capacity of the Payee
I will pay according to the tenor of
Payable @: place
Payable if: condition
DISHONORED BY NON-ACCEPTANCE: 1.
the instrument.
by N.A. to PSL To give Notice of Dishonor by
within 24 hours; EXCEPT: N.O.D. not required
– admits: DRAWEE/ACCEPTOR – admits:
Existence & Capacity of the Payee
Existence, Capacity, and Authority of
On due date: PFP (×) / collect from PSL (√)
accepted
due date:
the Drawer
o
PFP (×)
Signature of the drawer genuine
o
Collect from PSL (√)
“I will pay according to tenor of
acceptance.”
PFP
Dishonored by Nonpayment: o
Collect from PSL (×)
o
Give N.O.D. by NP to PSL (√)
– admits: DRAWER – admits:
Evidence and Capacity of the Payee.
If Presented Accepted Paid:
a.
Notary Public (NP)
If Dishonored Necessary
b.
Absence of NP – NP – rep. & 2 witnesses
2.
To protest
Procedures Observed “ I will pay.” pay.” – 2 or more parts bill BILLS IN SET – 2 -
Every part accepted in the hands of a HIDC is considered bill.
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PRESENTMENT FOR PAYMENT PRESENTMENT OF CHECK PRESENTMENT OF BILL OF EXCHANGE
NOT COVERED BY NEGOTIABLE INSTRUMENTS LAW (NIL): (a) Warehouse receipt: not sum certain in money. (delivery of goods) (b) Bill of Lading: goods not money
(c) Letter of Credit: Payable to specified person.
(d) Postal Money Order: Payable to specified person. (e) Certificate of Stock: not sum certain in money with condition # of Shares. (f) Quedan: sweet (g) Treasury Warrant: Subject to Condition.
DISCHARGE OF NEGOTIABLE INSTRUMENT: 1.
Instrument (PP-IPO)
Payment in due course by/on behalf of Principal DR.
Payment in due course by accommodated party.
Intentional Cancellation of the Instrument.
Principal DR becomes the holder @/after maturity
Other means: discharge-simple obligation
2.
Person secondary liable (DD-IVER)
Discharge of instrument
Discharge of Prior Party/ Payment made by prior party
By a valid tender of payment – prior party
Intentional cancellation of his signature
Release of the Principal DR
By extension of the time payment.
-NRBF
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