CREDIT TRANSACTION REVIEWER TITLE XIII : ALEATORY CONTRACTS GENERAL PROVISIONS

MID-TERM EXAM

ARTICLE 2010 : BY AN ALEATORY CONTRACT, ONE OF THE PARTIES OR BOTH RECIPROCALLY BIND THEMSELVES TO GIVE OR TO DO SOMETHING IN CONSIDERATION OF WHAT THE OTHER SHALL DO OR GIVE UPON THE HAPPENING OF AN EVENT WHICH IS UNCERTAIN, OR WHICH IS TO OCCUR AT AN INDETERMINATE TIME. KINDS OF ALEATORY CONTRACTS 1) UNCERTAINTY OF EVENT: gambling, insurance, etc. 2) UNCERTAINTY OF TIME OF CERTAIN EVENT: life annuity DISTINCTION BETWEEN AN ALEATORY CONTRACT AND A CONTRACT WITH SUSPENSIVE CONDITION ALEATORY CONTRACT CONTRACT WITH A SUSPENSIVE CONDITION Whether or not the event happens, the contract If condition does not happen, the obligation remains; only the effects and extent of profit and never becomes effective losses are determined CHAPTER 1 : INSURANCE

ARTICLE 2011 : THE CONTRACT OF INSURANCE IS GOVERNED BY SPECIAL LAWS. MATTERS NOT EXPRESSLY PROVIDED FOR IN SUCH SPECIAL LAWS SHALL BE REGULATED BY THIS CODE. ARTICLE 2012 : ANY PERSON WHO IS FORBIDDEN FROM RECEIVING ANY DONATION UNDER ARTICLE 739 CANNOT BE NAMED BENEFICIARY OF A LIFE INSURANCE POLICY BY THE PERSON WHO CANNOT MAKE ANY DONATION TO HIM, ACCORDING TO SAID ARTICLE. CHAPTER 2 : GAMBLING

ARTICLE 2013 : A GAME OF CHANCE IS THAT WHICH DEPENDS MORE ON CHANCE OR HAZARD THAN ON SKILL OR ABILITY. FOR THE PURPOSES OF THE FOLLOWING ARTICLES, IN CASE OF DOUBT A GAME IS DEEMED TO BE ONE OF CHANCE. 1) 2) 3) Under the RPC, some forms of gambling include monte, jueteng or any other form of lottery, policy, banking or percentage. Even gambling on the results of a sports game is prohibited. Gambling is a crime because the social scourge of gambling must be stamped. Jai Alai, horse racing on certain days, sweepstakes, lotto, cockfighting on certain days, mahjong at certain hours are some forms of legal gambling.

ARTICLE 2014 ; NO ACTION CAN BE MAINTAINED BY THE WINNER FOR THE COLLECTION OF WHAT HE HAS WON IN A GAME OF CHANCE. BUT ANY LOSER IN A GAME OF CHANCE MAY RECOVER HIS LOSS FROM THE WINNER WITH LEGAL INTEREST ON THE TIME HE PAID THE AMOUNT LOST, AND SUBSIDIARILY FROM THE OPERATOR OR MANAGER OF THE GAMBLING HOUSE. 1) 2) 3) Reason for this article: The law discourages gambling. A Promissory Note issued because of a gambling debt will not produce any effect in the hands of the winner, except if indorsed in favor of an innocent third party. This article is not applicable to debt to payoff gambling debts incurred in favor of others.

ARTICLE 2015 : IF CHEATING OR DECEIT IS COMMITTED BY THE WINNER, HE, AND SUBSIDIARILY THE OPERATOR OR MANAGER OF THE GAME BRING HOUSE, SHALL PAY BY WAY OF EXEMPLARY DAMAGES, NOT LESS THAN THE EQUIVALENT OF SUM LOST, IN ADDITION TO THE LATTER AMOUNT. IF BOTH THE WINNER AND THE LOSER HAVE PERPETRATED FRAUD, NO ACTION FOR RECOVERY CAN BE BROUGHT BY EITHER. EFFECT OF CHEATING: Exemplary damages should be paid. ARTICLE 2016 : IF THE LOSER REFUSES OR NEGLECTS TO BRING AN ACTION TO RECOVER WHAT HAS BEEN LOST, HIS OR HER CREDITORS, SPOUSE, DESCENDANTS OR OTHER PERSONS ENTITLED TO BE SUPPORTED BY THE LOSER MAY INSTITUTE THE ACTION. THE SUM THEREBY OBTAINED SHALL BE APPLIED TO THE CREDITORS CLAIMS, OR TO THE SUPPORT OF THE SPOUSE OR RELATIVES, AS THE CASE MAY BE. This is the RULE if the loser does not bring the action to recover. ARTICLE 2017 : THE PROVISIONS OF ARTICLES 2014 AND 2016 APPLY WHEN TWO OR MORE PERSONS BET IN A GAME OF CHANCE, ALTHOUGH THEY TAKE NO ACTIVE PART IN THE GAME ITSELF. This article may refer to side-bets among spectators in a gambling game.

ARTICLE 2018 : IF A CONTRACT WHICH PURPORTS TO BE FOR THE DELIVERY OF GOODS, SECURITIES OR SHARES OF STOCK IS ENTERED INTO WITH THE INTENTION THAT THE DIFFRENCE BETWEEN THE PRICE STIPULATED AND THE EXCHANGE OR MARKET PRICE AT THE TIME OF THE PRETENDED DELIVERY SHALL BE PAID BY THE LOSER TO THE WINNER, THE TRANSACTION IS NULL AND VOID. THE LOSER MAY RECOVER WHAT HE HAS PAID. This article applies to transactions partake of gambling and thus void. ARTICLE 2019 : BETTING ON THE RESULT OF SPORTS, ATHLETIC COMPETITIONS, OR GAMES OF SKILLS MAY BE PROHIBITED BY LOCAL ORDINANCES. ARTICLE 2020 : THE LOSER IN ANY GAME WHICH IS NOT ONE OF CHANCE, WHEN THERE IS NO LOCAL ORDINANCE WHICH PROHIBITS BETTING THEREIN, IS UNDER OBLIGATION TO PAY HIS LOSS, UNLESS THE AMOUNT THEREOF IS EXCESSIVE UNDER THE CIRCUMSTANCES. IN THE LATTER CASE, THE COURT SHALL REDUCE THE LOSS TO THE PROPER SUM. CHAPTER 3 : LIFE ANNUITY

ARTICLE 2021 : THE ALEATORY CONTRACT OF LIFE ANNUITY BINDS THE DEBTOR TO PAY AN ANNUAL PENSION OR INCOME DURING THE LIFE OF ONE OR MORE DETERMINATE PERSONS IN CONSIDERATION OF A CAPITAL CONSISTING OF MONEY OR OTHER PROPERTY, WHOSE OWNERSHIP IS TRANSFERRED TO HIM AT ONCE WITH THE BURDEN OF THE INCOME. Life annuity differs from life insurance as the annual income is not a payment of interest on the capital given, but as a consideration for the transfer of ownership of the capital. ARTICLE 2022 : THE ANNUITY MAY BE CONSTITUTED UPON THE LIFE OF THE PERSON WHO GIVES THE CAPITAL, UPON THAT OF A THIRD PERSON, OR UPON THE LIVES OF VARIOUS PERSONS, ALL OF WHOM MUST BE LIVING AT THE TIME THE ANNUITY IS ESTABLISHED. IT MAY ALSO BE CONSTITUTED IN FAVOR OF THE PERSON OR PERSONS UPON WHOSE LIFE OR LIVES THE CONTRACT IS ENTERED INTO, OR IN FAVOR OF ANOTHER OR OTHER PERSONS. WHOSE LIFE THE ANNUITY MAY BE CONSTITUTED? 1) life of the annuitant; 2) life of third persons; 3) lives of various persons. WHO MAY BE THE BENEFICIARY? 1) the person or persons upon whose life or lives the contract is entered into; 2) another person or persons. ARTICLE 2023 : LIFE ANNUITY SHALL BE VOID IF CONSTITUTED UPON THE LIFE OF A PERSON WHO WAS ALREADY DEAD AT THE TIME THE CONTRACT WAS ENTERED INTO, OR WHO WAS AT THE TIME SUFFERNG FROM AN ILLNES WHICH CAUSED HIS DEATH WITHIN TWENTY DAYS FOLLOWING THE SAID DATE. This article gives two instances when the contract is void. ARTICLE 2024 : THE LACK OF PAYMENT OF THE INCOME DUE DOES NOT AUTHORIZE THE RECIPIENT OF THE LIFE ANNUITY TO DEMAND THE REIMBURSEMENT OF THE CAPITAL OR TO RETAKE THE POSSESSION OF THE PROPERTY ALIENATED, UNLESS THERE IS A STIPULATION TO THE CONTRARY. HE SHALL HAVE ONLY A RIGHT JUDICIALLY TO CLAIM THE PAYMENT OF THE INCOME ON ARREARS AND TO REQUIRE A SECURITY FOR THE FUTURE INCOME, UNLESS THERE IS A STIPULATION ON THE CONTRARY. This article applies if income due is not paid(effect) ARTICLE 2025 : THE INCOME CORRESPONDING TO THE YEAR IN WHICH THE PERSON ENJOYING IT DIES SHALL BE PAID IN PROPORTION TO THE DAYS DURING WHICH HE LIVED; IF THE INCOME SHOULD BE PAID BY INSTALLMENTS IN ADVANCE, THE WHOLE AMOUNT OF THE INSTALLMENT WHICH BEGUN TO RUN DURING HIS LIFE SHALL BE PAID. ARTICLE 2026 : HE(Creditors of the recipient) WHO CONSTITUTES AN ANNUITY BY GRATUITOUS TITLE UPON HIS PROPERTY, MAY PROVIDE AT THE TIME THE ANNUITY IS ESTABLISHED THAT THE SAME SHALL NOT BE SUBJECT TO EXECUTION OR ATTACHMENT ON ACCOUNT OF THE OBLIGATION OF THE RECIPIENT OF THE ANNUITY. IF THE ANNUITY WAS CONSTITUTED IN FRAUD OF CREDITORS, THE LATTER MAY ASK FOR THE EXECUTION OR ATTACHMENT OF THE PROPERTY. ARTICLE 2027 : NO ANNUITY SHALL BE CLAIMED WITHOUT FIRST PROVING THE EXISTENCE OF THE PERSON UPON WHOSE LIFE THE ANNUITY IS CONSTITUTED.