Professional Documents
Culture Documents
If the goods have been delivered to him, and he does any act in
relation to them which is inconsistent with the ownership of the
seller; [8] or
3.
If, after the lapse of a reasonable time, he retains the goods without
intimating to the seller that he has rejected them.[9]
[1] If the time and place should not have been stipulated, the payment must
be made at the time and place of the delivery of the thing sold (Paragraph 2,
Article 1582, Civil Code).
[2] CIVIL CODE. Paragraph 1, Article 1582.
[3] Ibid. Paragraph 1, Article 1583. Where there is a sales contract of goods
to be delivered by stated instalments, which are to be separately paid for, and
the seller makes defective deliveries in respect of one or more instalments, or
the buyer neglects or refuses without just cause to take delivery of or pay for
one or more instalments, it depends in each case on the terms of the contract
and the circumstances of the case, whether the breach of contract is so
material as to justify the injured party in refusing to proceed further and suing
for damages for breach of the entire contract, or whether the breach is
severable, giving rise to a claim for compensation but not to a right to treat the
whole contract as broken (Paragraph 2, Article 1583, Civil Code).
Actions for price of goods by seller
In case of breach of sales contract of goods, the seller may have the following
actions against the buyer for the price of goods if:
1.
2.
Accept or keep the goods and set up against the seller, the breach
of warranty by way of recoupment in diminution or extinction of
the price;[9]
2.
Accept or keep the goods and maintain an action against the seller
for damages for the breach of warranty;[10]
3.
4.
Rescind the sales contract and refuse to receive the goods or if the
goods have already been received, return them or offer to return
them to the seller and recover the price or any part thereof which
has been paid;[12]
5.
2.
3.
4.
5.
If the vendor binds himself to pay the taxes on the thing sold;[12]
6.
In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction is to secure the
payment of a debt or the performance of any other obligation.[13]
Money, fruit, benefit considered interest
In any of the above instances considered an equitable mortgage, the money,
fruits, or other benefit to be received by the buyer as rent or otherwise is
considered an interest.[14]
Right to repurchase; Requirements
Before the seller can avail of the right to repurchase, the seller is required
first: (a) to return to the buyer the price of the sale; (b) to pay for the expenses
of the contract, and any other legitimate payments made by virtue of the sale;
and (c) to pay for the necessary and useful expenses made on the thing sold.
[15] If the sale involves a real property, a judicial order, after the seller has
been duly heard, is required for the registration and consolidation of the
ownership in the buyer.[16]
Action against every possessor
To enforce his rights, the seller may initiate an action against every possessor
whose right is derived from the buyer.[17] The seller may do so even if the
contract between the buyer and the possessor does not mention the sellers
right to repurchase, without prejudice to the Mortgage Law and the Land
Registration Law in relation to third persons.[18]
Subrogation by buyer
The buyer is subrogated to the sellers rights and actions despite existence of
right of repurchase.[19]
Creditors to exhaust property of seller
The sellers creditors are required to exhaust the property of the seller before
they can make use of the right of redemption against the buyer.[20]
Undivided immovable property sold jointly
If several persons jointly sell an undivided immovable in the same contract
and it provides for a right of repurchase, each one may exercise his right to the
extent of his respective share only.[21] The same rule applies if a seller has
several heirs.[22] However, the buyer may demand of all the sellers or coheirs that they come to an agreement upon the repurchase of the whole thing
sold.[23] If the sellers or heirs fail to do so, the buyer cannot be compelled to
consent to a partial redemption.[24]
Co-owner may repurchase respective share only
A co-owner who may have sold his share separately may independently
exercise the right of repurchase as regards his own share.[25]The buyer cannot
require said co-owner to redeem the entire property.[26]
Buyers heirs subject to redemption to proportionate share only
The buyers heirs may be the subject of the sellers right of redemption to
their proportionate share only regardless of whether the property is undivided
or it has already been partitioned.[27] However, if the inheritance has already
been divided, and the thing sold has already been awarded to an heir, he may
be the subject of an action for redemption for the whole property.[28]
No reimbursement or prorating for fruits
If there were visible and growing fruits at the time of the execution of the sale,
a reimbursement or prorating of existing fruits is not required unless the buyer
paid indemnity when the sale was executed.[29] Conversely, if no fruits were
existing at the time of the sale but later on exist at the time of redemption, the
fruits will be prorated between the redemptioner and the buyer.[30] The
buyers share is to correspond to the time he possessed the land in the last
year, counted from the anniversary of the date of the sale.[31]
Redemptioner to receive property free from charges or mortgages
The redemptioner will receive the property free form all charges or mortgages
which may have been constituted by the buyer.[32]However, the redemptioner
is to respect the leases which the latter may have executed in good faith, and
in accordance with customs of the place where the land is situated.[33]
Legal Redemption
Legal redemption is the right to be subrogated, upon the same terms and
conditions stipulated in the contract, in the place of one who acquires a thing
by purchase or dation in payment, or by any other transaction whereby
ownership is transmitted by onerous title.[34]
Co-owners right of redemption
A co-owner may exercise the right of redemption in case the shares of all the
co-owners or of any of them, are sold to a third person.[35] The redemption is
required only to pay a reasonable one if the price of the alienation is grossly
excessive.[36] If there are two or more co-owners desiring to exercise the
right of redemption, they may only do so in proportion to the share they may
respectively have in the thing owned in common.[37]
Adjoining lot owners right of redemption
For rural land that does not exceed one hectare, the owners or adjoining lands
may exercise the right of redemption unless the grantee/buyer does not have
any rural land.[38] The owner of the adjoining land of smaller area is
preferred should there be several prospective buyers.[39] If the lands have the
same area, the first who requested the redemption is preferred.[40] This right
cannot be exercised on adjacent lands which are separated by brooks, drains,
ravines, roads, and other apparent servitudes for the benefit of other estates.
[41]
Right of pre-emption of adjoining land owner
If a piece of urban land bought for speculation is so small and so situated that
a major portion thereof cannot be used for any practical purpose within a
reasonable time is about to be re-sold, the adjoining land owner has a right of
pre-emption at a reasonable price.[42] If the same has already been sold, the
adjoining landowner has the right of redemption for a reasonable price.[43] If
there are two or more who desires to exercise the right of pre-emption or
redemption, the owner whose intended use of the land in question appears to
best justified is preferred.[44]
Right of pre-emption or redemption when exercised
The redemption may only exercise the right of legal pre-emption or
redemption within 30 days from the notice in writing by the prospective seller,
or by the seller, as the case may be.[45] The said seller is required to
accompany the deed of sale with an affidavit stating therein that he has given
written notice thereof to all possible redemptioners; otherwise, the Registry of
Deeds will not record the deed of sale.[46]
Right of redemption of co-owners excludes adjoining land owners
Should there be a conflict between a co-owner and adjoining land owners, the
right of redemption of co-owners prevails and will exclude the adjoining land
owners.[47]
ASSIGNMENT
law would rather benefit the debtor of such credits rather than the one who
merely speculates for profit
ASSIGNMENT
Subject matter: Intangibles
Form: Consensual
Binding effect to 3rd persons: Recorded in registry of property or in public
instrument
SALE
Subject matter: Tangibles
Form: Consensual
Binding effect to 3rd persons:No recording needed to such effect
EFFECT OF ASSIGNMENT
1. lack of knowledge or consent of debtor not essential for validity but has
legal effects
Barter is a contract whereby one of the parties binds himself to give one thing
in consideration of the other's promise to give another thing. (Art. 1638)
The contract is perfected from the moment there is a meeting of minds upon
the things promised by each party in consideration of the other.
TRANSFER OF OWNERSHIP
1.
2.
1.
2.
The kinds and scope of agency depend on the terms and conditions of the
agency contract.
General and special agency
An agency may be general or special.[1] A general agency comprises all the
business of the principal.[2] A special agency comprises one or more
specific transactions.[3]
Agency couched in general terms
If an agency is couched in general terms, it comprises only act of
administration even if: (a) the principal should state that he withholds no
power or that the agent may execute such acts as he may consider appropriate,
or (b) the agency should authorize a general and unlimited management.[4]
Limited powers
A special power to sell does not include the power to mortgage.
[5] Conversely, a special power to mortgage does not include the power to
sell.[6]
A special power to compromise does not authorize submission to arbitration.
[7]
The agent is required to act within the scope of his authority.[1] If the agent
acts outside the scope of his power, his acts are ultra vires[2] resulting in their
nullity and they cannot be given any effect.[3]
Best Legal Practices:
Secure board resolution from authorized representative of a corporation
When transacting with an authorized representative of a corporation or firm,
secure the board resolution evidencing the authority and power granted to
such person. As corporate powers are exercised by the board of directors, the
proper legal document showing that the board authorized a representative is a
board resolution.
Scope and extent of power expressly stated in written power of attorney The
agent should ensure that the scope and extent of the powers granted to him by
the principal be expressly stated in the written power of attorney.
Duties and responsibilities also stipulated in written power of attorney The
agent should also ensure that the exact duties and responsibilities be
stipulated in the written power of attorney.
Insofar as third persons are concerned, an act is deemed to have been
performed within the scope of the agents authority, if such act is within the
terms of the power of attorney, as written, even if the agent has in fact
exceeded the limits of his authority according to an understanding between the
principal and the agent.[4]
In the above mentioned situation, the third person cannot set up the fact that
the agent has exceeded his powers if the principal has: (a) ratified it, or (b)
signified his willingness to ratify the agents acts.[5]
To be obligated by third person to present power of attorney
The third person may require the agent to present the power of attorney, or the
instructions as regards the agency, both coming from the principal.[6]
Third persons who have relied upon the power of attorney or instructions
shown them cannot be prejudiced by private or secret orders and instructions
of the principal.[7]
By default, the agent is required to observe all that a good father of a family
would do, as required by the nature of the business.[11]
To not to act in a way that it will manifestly result in loss or
damage to principal
The agent cannot carry out an agency if its execution or performance would
manifestly result in the loss or damage to the principal.[12]
The agent is liable for damages if, there being a conflict between his interests
and those of the principal, he should prefer his own.[13]
The agent may be the lender at the current rate of interest if he was
empowered to borrow money.[14] If the agent is authorized to lend money at
interest, he cannot borrow it without the consent of the principal.[15]
Agent to turn-over any and all property received The agent is required to
turn-over any and all property received by him even if the same is his
commission or compensation. Otherwise, the agent may open himself to
criminal liability forestafa, among others.
If the principal has not prohibited it,[18] the agent may appoint a substitute
but he remains responsible for the acts of the substitute when: (a) when the
agent was not given the power to appoint one,[19] or (b) he was given such
power, but without designating the person, and the person was notoriously
incompetent or insolvent.[20]
The agent is liable for fraud and negligence, which shall be judged with more
or less rigor by the courts, according to whether the agency was or was not for
compensation.[32]
When a contract of agency is at will, the principal may compel the agent to
return the document evidencing the agency at any time.[7] If the agency was
constituted in order to contract with specified persons, the revocation of the
agency does not prejudice the latter if they were not given notice thereof.
[8] Notice in these cases are crucial.
1.
2.
3.
4.
2.
3.
4.
5.
6.
If the agent had general powers, the revocation of the agency will not
prejudice third persons who acted in good faith and without knowledge of the
revocation.[9] Consequently, notice of the revocation in a newspaper of
general circulation is a sufficient warning to third persons.[10]
When the principal appoints a new agent for the same business or transaction,
the previously appointed agent loses his authority and his agency is effectively
revoked from the day on which notice thereof was given to him.[11]
In some instances, the principal directly manages the business entrusted to the
agent and/or deals with third persons. This results in the revocation of the
agency.[12]
For situations wherein two or more principals have granted a power of
attorney for a common transaction, either one of them may revoke the agency
without the consent of the others.[13]
Meanwhile, the general power of attorney is revoked by a special power of
attorney of another agent as regards only to the special matter involved in the
latter authority.[14]
In any mode of revocation, it is a best practice to inform third parties of the
termination of the authority of the agent so as to avoid liabilities. To be clear,
the revocation of the authority of the agent may bind the latter but not
necessarily third parties who were not properly informed as required by law.
By the withdrawal of the agent
As agency is a contract, the agent may choose to withdraw from his duties and
responsibilities for valid reasons.[15] However, the law expressly requires that
the agent should give due notice to the principal.[16]
The agent may held liable for any damages suffered by the principal by reason
of the withdrawal unless it is on the ground of impossibility of continuing the
performance of the agency without grave detriment to himself.[17]
Best Legal Practices:
Send written notice of withdrawal While the law does not expressly state
that the notice of withdrawal should be in writing, the agent should send a
written notice of withdrawal to the principal. The agent should retain a
receiving copy or any proof of service to serve as documentary evidence.
Reasonable time for notice There is no expressly stated time as when the
notice should be given. As such, the notice should be given within a
reasonable time prior to actual termination in order to give the principal
ample time to respond accordingly. The reasonable time may vary per
industry and on a case-to-case basis.
Exercise caution in withdrawing Due to the potential liability, the agent
should execise caution in withdrawing. The agent should communicate first
the intent to withdraw prior to the actual termination date.
CONTRACT OF LOAN
Document damages caused by agents withdrawal On the other hand, the
principal who suffers damage due to the agents withdrawal should document
them to serve as evidence later on.
Even if the agent withdrew for a valid reason, he must continue to act until the
principal has had reasonable opportunity to take the necessary steps to meet
the situation.[18]
By the death, civil interdiction, insanity or insolvency of the
principal or of the agent
As a general rule, the death of the principal extinguishes the agency.
[19] However, the contract of agency may survive despite the death of the
principal in these situations: (a) if the agency has been constituted in the
common interest of the principal and the agent; (b) in the interest of a third
person who has accepted the stipulation in his favor.[20]
If the agent dies, his heirs are obligated to notify the principal.[21] In the
meantime, they are required to adopt such measures as the circumstances may
demand in the interest of the principal.[22]
> The abovementioned defines the two kinds of loan and gives their
characteristics
CHARACTERISTICS OF THE CONTRACT
1. Real contractbecause the delivery of the thing loaned is necessary for
the perfection of the contract
2. Unilateral contractonce the subject matter has been delivered, it
creates obligations on the part of only one of the parties
KINDS OF LOAN
1. COMMODATUMwhere the bailor delivers to the bailee a nonconsumable thing so that the latter may use it for a certain time and
return the identical thing
If the contract of agency specifically and expressly provides that the agency is
created for a particular object or purpose and the same has been achieved, then
the agency agreement automatically terminates.[24]
1. In commodatum, if you do not return the thing when it is due, you will be
liable for estafa because ownership of the property is not transferred to the
borrower.
For contracts of agency which carry a period and the same has already lapsed,
the agency agreements ipso facto terminates as the same has been agreed upon
by the parties.[25]
Best Legal Practices:
Expiration of power of attorney The power of attorney should have an
expiration which may be a date certain or the completion of a task or
undertaking.
2. In loan, the borrower who does not pay is not criminally liable for
estafa. His liability is only a civil liability for the breach of the obligation
to pay. This is because in loan, ownership of the thing is transferred
to the borrower, so there is no unlawful taking of property belonging to
another.
Art. 1934. An accepted promise to deliver something by way of commodatum
or simple loan is binding upon parties, but the commodatum or simple loan
itself shall not be perfected until the delivery of the object of the contract. (n)
> Is there a contract of loan at this point? No, because loan is a real
contract and is perfected only upon delivery of the thing.
thing loaned. If this is the case, then the subject matter may be that
of a consumable thing
6. The bailor NEED NOT BE THE OWNER of thing loaned
FORMALITY IN LOAN
> There are no formal requisites for the validity of a contract of loan except
if there is a stipulation for the payment of interest. A stipulation for the
payment of interest must be in writing.
COMMODATUM
Consequently:
a. The death of either the bailor or the bailee extinguishes the contract;
b. The bailee can neither lend nor lease the object of the contract to a third
person. However, the
members of the bailee's household may make use of the thing loaned, unless
there is a stipulation to
the contrary, or unless the nature of the thing forbids such use.
NATURE OF COMMODATUM
OBLIGATIONS OF THE BAILEE
Art. 1935. The bailee in commodatum acquires the used of the thing loaned
but not its fruits; if any compensation is to be paid by him who acquires the
use, the contract ceases to be a commodatum. (1941a)
KINDS OF COMMODATUM
1. ORDINARY COMMODATUM
2. PRECARIUMone whereby the bailor may demand the thing loaned
at will
Art. 1936. Consumable goods may be the subject of
commodatum if the purpose of the contract is not the consumption
of the object, as when it is merely for exhibition. (n)
Art. 1937. Movable or immovable property may be the object of
commodatum. (n)
Art. 1938. The bailor in commodatum need not be the owner of the
thing loaned. (n)
Art. 1939. Commodatum is purely personal in character .
Consequently:
Art. 1941. The bailee is obliged to pay for the ordinary expenses for
the use and preservation of the thing loaned. (1743a)
Art. 1942. The bailee is liable for the loss of the thing, even if it should be
through a fortuitous event:
(1) If he devotes the thing to any purpose different from that for
which it has been loaned;
(2) If he keeps it longer than the period stipulated, or after the
accomplishment of the use for which the commodatum has been
constituted;
(3) If the thing loaned has been delivered with appraisal of its value,
unless there is a stipulation exemption the bailee from responsibility in
case of a fortuitous event;
(4) If he lends or leases the thing to a third person, who is not a member
of his household;
(1) The death of either the bailor or the bailee extinguishes the contract;
(5) If, being able to save either the thing borrowed or his own thing, he
chose to save the latter. (1744a and 1745)
(2) The bailee can neither lend nor lease the object of the contract to a
third person. However, the members of the bailee's household may make
use of the thing loaned, unless there is a stipulation to the contrary, or
unless the nature of the thing forbids such use. (n)
Art. 1943. The bailee does not answer for the deterioration of the thing
loaned due only to the use thereof and without his fault. (1746)
Art. 1940. A stipulation that the bailee may make use of the fruits of the
thing loaned is valid. (n)
NATURE OF COMMODATUM SUMMARIZED
Art. 1944. The bailee cannot retain the thing loaned on the ground that
the bailor owes him something, even though it may be by reason of
expenses. However, the bailee has a right of retention for damages
mentioned in Article 1951. (1747a)
Art. 1945. When there are two or more bailees to whom a thing is
loaned in the same contract, they are liable solidarily. (1748a)
of his household;
e. If, being able to save either the thing borrowed or his own thing, he chose
to save the latter. (JPSP:
should be considered as an exemption. This is actually based on
ingratitude. Nonetheless, this
provision tends to control ones instinct for self-preservation)
4. The bailee is not liable for the deterioration of the thing loaned due
only to the use thereof and without his fault
5. He cannot retain the thing loaned on the ground that the bailor owes him
something, even though it may be for the reason of expenses. He can
have the right to retain though for damages as mentioned in Article
1951The bailor who, knowing the flaws of the thing loaned, does not
advise the bailee of the same, shall be liable to the latter for the damages
which he may suffer by reason thereof.
6. When there are two or more bailees to whom a thing is loaned in
the same contract, they are liable solidarily to the bailor
a. To safeguard effectively the rights of the lender b. Law presumes that
the bailor takes into account the personal integrity and responsibility of
all the bailees and that, therefore, he would not have constituted the
commodatum is there were only one liable
OBLIGATIONS OF THE BAILOR
1. The primary obligation of the bailor is to allow the bailee the use of
the thing loaned for the duration of the period stipulated or until the
accomplishment of the purpose for which the commodatum was constituted
a. However, the lender may demand its return or temporary use if he
has the urgent need of the thing or if the borrower commits an act
of ingratitude
2. PRECARIUM: a kind of commodatum where the bailor may demand the
thing at will. In this kind of commodatum, the lender may demand at will
the return of thing under the following circumstances:
a. If neither the duration of the contract nor the use to which the thing
loaned should be devoted, has been stipulated; or
b. If the use of the thing is merely tolerated by the owner.
c. the law recognizes the urgency as well as it is gratuitous.
d. Take note that in precarium, there is no stipulated period or the use is
merely tolerated
Article 1953. A person who receives a loan of money or any other fungible
thing acquires the ownership thereof, and is bound to pay the creditor an equal
amount of the same kind and quality
WHAT IS DEPOSIT?
6. For expenses other than ordinary expenses and expenses for the
preservation and use of the thing, the bailor is not liable for the same.
DEPOSIT IN GENERAL
Art. 1962. A deposit is constituted from the moment a person
receives a thing belonging to another, with the obligation of safely
keeping it and of returning the same. If the safekeeping of the thing
delivered is not the principal purpose of the contract, there is no
deposit but some other contract. (1758a)
CREATION OF DEPOSIT
Deposit may be created by virtue of a court order or by law and not
by the will of the parties
Art. 1965. A deposit is a gratuitous contract, except when there is an
agreement to the contrary, or unless the depositary is engaged in the
business of storing goods. (1760a)
VOLUNTARY DEPOSIT
One wherein the delivery is made by the will of the depositor
Generally, the depositor must be the owner of the thing deposited
But it may belong to another person
The depositary cannot dispute the title of the depositor to the thing
deposited
Art. 1972. The depositary is obliged to keep the thing safely and to return it,
when required, to the depositor, or to his heirs and successors, or to the
person who may have been designated in the contract. His responsibility, with
regard to the safekeeping and the loss of the thing, shall be governed by the
provisions of Title I of this Book.
If the deposit is gratuitous, this fact shall be taken into account in
determining the degree of care that the depositary must observe.
(1766a)
The above provision shall not apply to contracts for the rent of safety
deposit boxes. (n)
of ownership
1. If the purpose of the contract is still for safekeeping, then it retains its
concept as a deposit
2. If the purpose has become for the use or consumption of the thing
a. Commodatumif the purpose is for a non-consumable thing
b. Mutuumif the purpose is for a consumable thing or money
Art. 1979. The depositary is liable for the loss of the thing through a
fortuitous event:
(1) If it is so stipulated;
(2) If he uses the thing without the depositor's permission;
(3) If he delays its return;
(4) If he allows others to use it, even though he himself may have been
authorized to use the same.(n)
Art. 1984. The depositary cannot demand that the depositor prove his
ownership of the thing deposited.
Nevertheless, should he discover that the thing has been stolen and
who its true owner is, he must advise the latter of the deposit.
If the owner, in spite of such information, does not claim it within the
period of one month, the depositary shall be relieved of all
responsibility by returning the thing deposited to the depositor.
If the depositary has reasonable grounds to believe that the thing has
not been lawfully acquired by the depositor, the former may return
the same. (1771a)
Art. 1980. Fixed, savings, and current deposits of money in banks and
similar institutions shall be governed by the provisions concerning
simple loan. (n)
The depositary who receives the thing in deposit cannot require that
the depositor prove his ownership over the thing
Art. 1981. When the thing deposited is delivered closed and sealed, the
depositary must return it in the same condition, and he shall be liable for
damages should the seal or lock be broken through his fault.
Art. 1983. The thing deposited shall be returned with all its products,
accessories and accessions.
Should he discover that the thing has been stolen and who its true owner is,
he must advise the latter of the deposit
If the owner, in spite of such information, does not claim it within the
period of one month, the depositary shall be relieved of all
responsibility by returning the thing deposited to the depositor
If the depositary has reasonable grounds to believe that the thing has
not been lawfully acquired by the depositor, the former may return the
same.
Authority to make deposit should be ascertained. Take note that before the
deposit, proof of ownership may be required. The prohibition applies
subsequent to the deposit. There is required due diligence review.
Art. 1985. When there are two or more depositors, if they are not
solidary, and the thing admits of division, each one cannot demand more
than his share.
Art. 1994. The depositary may retain the thing in pledge until the
full payment of what may be due him by reason of the deposit. (1780)
Art. 1997. The deposit referred to in No. 1 of the preceding article shall
be governed by the provisions of the law establishing it, and in case of
its deficiency, by the rules on voluntary deposit.
The deposit mentioned in No. 2 of the preceding article shall be regulated
by the provisions concerning voluntary deposit and by Article 2168.
(1782)
WHEN DEPOSIT IS NECESSARY
1. When it is made in compliance with a legal obligation
2. When it takes place on the occasion of any calamity, such as fire, storm,
flood, pillage, shipwreck, or other similar events
3. Travelers in hotels or inns
4. Made by passengers with common carriers
NECESSARY DEPOSIT IN COMPLIANCE WITH A LEGAL
OBLIGATION
1. The judicial deposit of a thing the possession of which is being
disputed in a litigation by two or more persons
2. The deposit with a bank or public institution of public bonds or
instruments of credit payable to order or bearer given in usufruct when
the usufructuary doesnt give proper security for their conservation
3. The deposit of a thing pledged when the creditor uses the same without
the authority of the owner or misuses it in any other way
4. Those required in suits as provided for in the Rules of Court
5. Those constituted to guarantee contracts with the government. In
this last case, the deposit arises from an obligation of a public or
administrative character.
Art. 1998. The deposit of effects made by the travelers in hotels or
inns shall also be regarded as necessary. The keepers of hotels or
inns shall be responsible for them as depositaries, provided that notice
was given to them, or to their employees, of the effects brought by
the guests and that, on the part of the latter, they take the
precautions which said hotel-keepers or their substitutes advised
relative to the care and vigilance of their effects. (1783)
Art. 1999. The hotel-keeper is liable for the vehicles, animals and
articles which have been introduced or placed in the annexes of the hotel.
(n)
DEPOSIT BY TRAVELLERS IN HOTELS AND INNS
1. They have been previously informed about the effects brought by their
guests
2. The latter have taken the precautions prescribed regarding their
safekeeping
EXTENT OF LIABILITY OF KEEPERS OF HOTELS AND INNS
The liability isnt limited to effects lost or damaged in the hotel rooms
which come under the term baggage or articles such as clothing as are
ordinarily used by travelers but include those lost or damaged in hotel annexes
such as vehicles in the hotels garage
The responsibility extends to all those who offer lodging for a
compensation, whatever may be their character
DEFINITION OF TERMS
1. Travelers or guestsit refers to transients and not to boarders.
Non-transients are governed by the rules on lease.
2. Hotel-keeper and inn-keeper
a. Hotela house or large building that supplies rooms and food for
pay to travelers and others;
inn.
b. Inna place where travelers and others can get meals and a room to
sleep in. Hotels have largely
taken the place of the old inns.
c. Motela roadside hotel or group of furnished cottages or cabins
providing overnight lodging for
motorists; motor court.
Art. 2000. The responsibility referred to in the two preceding
articles shall include the loss of, or injury to the personal property of
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A guaranty is a contract where a person (the guarantor) binds himself to the
creditor to fulfill the principal debtor's obligation in case the principal debtor
can't do it. It must be in writing (Art. 1403, Civil Code) or it can't be enforced.
It also cannot be presumed. In case of a married woman, she binds herself
with her separate property with 2 exceptions: if she binds the conjugal
property or if in cases which benefits the family -in both cases, her husband's
consent is required.
A guaranty isn't presumed. It requires the guarantor's consent for the assurance
that the guarantor will bind himself and to make certain that when it is made,
the guarantor will proceed accordingly.
A guaranty is generally gratuitous except it there is a stipulation to the
contrary. Also, the guarantor's liability can't exceed the amount of the
principal obligation but can be lesser than the principal obligation's amount.
The exceptions are the following:
1.) Interest, judicial costs and attorney's fees may be recovered as part of
damages. Creditors suing on a surety bond can recover legal interest,
attorney's fees and judicial costs from the surety if appropriate, even if there is
no stipulation and even if the surety would become liable for more than the
amount in the bond. This is because the surety is made to pay, not by virtue of
the contract, but his failure to pay when demanded by the creditor resulted in
the filing of a case. The interest starts to accumulate either (a) when the
complaint is filed (upon judicial demand) or (b) the time demand was made on
the surety until the principal obligation is fully paid (upon extra-judicial
demand.)
2.) The penalty may be provided in the bond and the surety can be held liable
for the violation so penalized.
Classifications
A guaranty is personal if it's the credit given by the person who guarantees the
fulfillment of the principal obligation and real if the guaranty is movable or
immovable property. It is conventional if agreed on by the parties, legal if
imposed by law or judicial if ordered by the court to guarantee the eventual
right of one of the parties to the case. If the guarantor doesn't receive any
payment for acting as a guarantor, it's gratuitous; if he does, it's onerous. A
single guaranty is constituted solely for the purpose of securing the principal
obligation; a double guaranty, on the other hand, is constituted to secure the
fulfillment by the guarantor of a previous obligation. It is definite if secured
only for the principal obligation or a part of it and indefinite/simple if the
guaranty includes the principal's accessory obligations.
A surety is a contract where a person engages himself to answer for the debt,
default or miscarriage of the principal debtor.
Nature and Extent of the Guaranty
1.) Consensual
2.) Accessory to a principal obligation (can't exist without the principal
obligation)
3.) Makes the guarantor subsidiarily liable
4.) Unilateral (may be entered into even without the principal debtor's
consent)
Double/Sub-guaranty
This happens when another guarantor is bound to answer for the first
guarantor. It should not be confused with several guarantors being bound to
guarantee the same obligation.
Art. 2004. The hotel-keeper has a right to retain the things brought into the
hotel by the guest, as a security for credits on account of lodging, and
supplies usually furnished to hotel guests. (n)
Extinguishment of Guaranty
The following instances will extinguish a contract of guaranty:
1.) Release in favor of one of the guarantors, without the others' consent, will
benefit all to the extent of the share of the guarantor who was released from
his liability.
2.) If the creditor voluntarily accepts immovable or other property in payment
of the debt, even if he loses them later through eviction or conveyance of
property.
3.) Effect of eviction: revival or the principal property but not the guaranty
4.) If by an act of the creditor the guarantors, though solidarily liable, can't be
subrogated to the creditor's rights, mortgages and preferences.
5.) For the same causes as all obligations under Art. 1231 of the Civil Code
(extinguishment
of
obligations:
payment/performance,
loss,
condonation/remission, confusion/merger of rights, compensation, novation,
annulment, recission, prescription and fulfillment of a resolutory condition.)
6.) When the principal obligation is extinguished.
7.) Extension granted by the creditor to the debtor without the guarantor's
consent.