1. Brook asked Lucy for a loan of Php100,000.00. Lucy agreed to lend the money on
the condition that Brook gives security to guarantee Lucy’s payment. Brook then
requested his wealthy friend Astrid to act as surety to which Astrid accedes to. Is
this contract of loan a secured or unsecured transaction? (5 pts)
Answer:
The Contract of Loan is an Unsecured Transaction. An Unsecured Transaction or
contracts of personal security are those that are secured or supported only by a promise to
pay or the personal commitment of another.
2. Rocky is a senior in the city public school. Because of the pandemic, classes have
been conducted online. Since Rocky had no gadget to use for his online learning, he
borrowed his neighbor’s laptop. His neighbor agreed to lend Rocky the laptop with
the condition that Rocky return it at the end of the schoolyear. With the laptop,
Rocky complied with his school’s assignments and participated consistently in
online classes. Rocky soon discovered the world of social media. When the
schoolyear ended, Rocky kept the laptop so he could continue going online. A week
after the schoolyear ended, a strong earthquake hit the city causing Rocky’s house to
collapse. The laptop was buried under the rubble and could no longer be retrieved.
(15 pts)
A) What kind of contract was entered into between Rocky and Mrs. Cruz?
B) Considering that the cause of the damage was an earthquake, should Rocky be
held liable for the loss of the computer?
Answer:
A. The contract entered into between Rocky and Mrs. Cruz is one of a Commodatum.
B. Yes, Rocky should be held liable. Article 1942 of the New Civil Code provides that a
bailee is liable for the loss of the thing, even if it should be through a fortuitous
event if he keeps it longer than the period stipulated, or after the accomplishment of
the use for which the commodatum has been constituted.
3. Sam borrowed Troy’s pick up for the purpose of moving his things into his new
apartment. As soon as he finished unloading his things, Sam set out to return the
pick up to Troy. But as he was cautiously driving within the speed limit along the
highway, a car driven by a drunk driver crashed into the rear end of Troy’s pick up
causing damage amounting to Php 50,000.00. Sam now claims that since it was an
accident and he acted without fault, it should be Troy who should spend for the
repair. After all, there was no transfer of ownership and in consonance with the
maxim res perit domino, the owner should bear the loss. Do you agree with Sam?
(10 pts)
Answer: Sam is not correct. Article 1949 of the New Civil Code provides that if the
extraordinary expenses arise on the occasion of the actual use of the thing by the bailee,
even though he acted without fault, they shall be borne equally by both the bailor and the
bailee, unless there is a stipulation to the contrary.
4. On January 1, 2021, Tom agreed to lend his cellphone to Gab for a period of 5
months. On March 1, 2021, Tom borrowed Php 5,000.00 from Gab and promised to
pay on May 15, 2021. When the loan became due, Tom could not pay Gab the Php
5,000.00 and failed to pay the same until the time for the return of the cellphone.
Gab now refuses to return the cellphone claiming that he is merely exercising his
right of retention. (10 pts)
A) Is Gab correct?
B) Can Gab use the cellphone and use the proceeds to settle the loan of Tom to him?
Answer:
A. No. Gab is not correct. Article 1944 of the New Civil Code provides that 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.
B. No Gab cannot use the cellphone and use the proceeds to settle the loan of Tom to
him because the contract entered into between Gab and Tom is one of a
Commodatum, thus the use of the cellphone is the purpose and it must be returned
after a certain time.
5. A. The action will prosper. While it is true that the interest ceilings set by the Usury
Law are no longer in force, it has been upheld that PD NO. 1684 and CB Circular No.
905 merely allow contracting parties to stipulate freely on any adjustment in the
interest rate on a loan or forbearance of money but do not authorize a unilateral
increase of the interest rate by one party without the other’s consent. It will violate
the principle of mutuality of contracts.
B.No. Since the change of interest must be mutually agreed upon by the parties. The
debtor not having given his consent to the increase in interest, the increase is void.
6. A. In this case, the value of the rice shall be appraised at Php 1,200.00. Article 1958
of the New Civil Code provides that in the determination of the interest, if it is
payable in kind, its value shall be appraised at the current price of the products or
goods at the time and place of payment.
B.The loan must be settled at the current price of the products or goods at the time
and place of payment.
7. A. No, I will not allow Jack to collect the 5% Interest. Article 1956 of the New Civil
Code provides that no interest shall be due unless it has been expressly stipulated in
writing.
C. Reduce the Php 35,000.00
8. A. The Contract that arose between Bernie and Cedric is one of a Necessary deposit
on occasion of calamity.
B.Article 2168 of the New Civil Code discussed Quasi-Contract, which this necessary
deposit arising from calamity-fire, falls down. The depositary must be paid by the
depositor a just compensation for saving the property from destruction.
9. X, the depositary, may return the Mercedez Benz to either Tom,Vick and Harry.
10. Yes, robbery in this case is a fortuitous event. Art 2001, the act of a thief of or
robber, who has entered into the hotel is not deemed force majeure, unless it is done
with the use of firearms or through an irresistible force. Art 1998 of the New Civil
code provides that 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.