2S_OCAVA_MIDTERMS_CREDIT

1.

A. FALSE

B.TRUE

C.TRUE

D.TRUE

E.FALSE

2. Yes, ABC Bank can proceed directly to Rosella upon kevin’s default even if not proceeding
against Kevin first because Rosella is a surety from the moment she agrees to sign the
continuing guaranty agreement and solitarily binding herself to the obligation in case of kevin’s
default.

3.

A. No. according to Article 1956 of the Civil Code states that no interest shall be due unless it
has been expressly stipulated in writing. Hence, the payment of interest in not valid.

B. Yes, the doctrine of Solution Indebiti shall be applied because a person cannot enrich himself
at the expense of another. Such payment of interest cannot be demanded by Siga-an for it lacks
of writing vis a vis Art 1956 of the new civil code. Furthermore, if there is no right to received or
demand such interest, the obligation arises to deliver the said excess payment to the rightful
owner.

4. No, Ms. Manalo’s contention is incorrect. The latter cannot argue that she did sign the surety
agreement as a corporate officer / president. The law explicitly states that in signing such
agreements, corporate officer signing such contracts should put their designation as a corporate
officer otherwise the person will urtake to guaranty personally the payment of the obligation.

5.

A. When the obligation is breached In the absence of stipulation, the rate of interest shall be 6%
per annum to be computed from default from judicial or extrajudicial demand under article 1169
of the new civil Code.

B. When the obligation does not constitute a loan or forbearance of money it is when an interest
on the amount of damages awarded may be imposed at the discretion of the court at 6% per
annum. However, no unliquidated claims or damages shall be declare until such demand can be
established
6.

A. Not valid. Escalation clause is a stipulation which the court declares it to be valid as long as it
is for the stability of finance. However, the case of Silos v. PNB if such stipulation is a contrary
to the principle of mutuality on contracts as stated in Art. 1308 of the new civil code and as
such is purely potestative in nature such escalation clause in void. In the present case, it is
within the limits of the bank policies approved by the monetary board. Such policies are not law
to begin with hence, it is invalid.

B. Yes, such Escalation clause in this present case is valid. The requisites for its validity is first if
such clause is in compliance with the nature of contracts resulted to agreement of parties.
Second is that it must be consistent with the law for equity, as if it will be paired and balance of
de-escalation clause and ultimately, the mutuality of contract is present. Contract is a meeting
minds between person. Hence it shall not be potestative in nature nor prejudicial to one party, it
should be balance.

7.

A. If I am the counsel for ABC, I would suggest to file for criminal charge of Estafa as expressly
stated in PD 115 against PJ for the Trust Receipts law recognizes the impossibility of imposing
the penalty of imprisonment on a corporation. Hence, if the entrustee is a corporation, the law
makes the officers or employees or other persons responsible for the offense liable to suffer the
penalty of imprisonment. 

B. In the present case, that ABC negotiated the LOC. ABC, can file for injunction as stated in
the case of Transfield v. Luzon hydro to the court if such fraud exception exist. In the present
case, PJ fraudulently conceals the first payment of ecodoors from the ABC. Hence, the bank
can stop the beneficiary from selling ecodoors to PJ. ABC shall not be liable for any liabilities of
PJ to scrap metals because of independence rule.

C. 10M with 10% per annum. But if there is default on the part of PJ the 10% shall have a
compound interest of 6% provided that upon default of PJ on the payment of the proceeds of
the sale.

8.

A. Contract of Deposit, as stated in the case of Durban v. Pioneer Insurance that a contract of
deposit is when a person receives an object belonging to another with the obligation of safely
keeping it and returning the same. A deposit may be constituted even without any consideration.
It is not necessary that the depositary receives a fee before it becomes obligated to keep the
item entrusted for safekeeping and to return it later to the depositor.

B. The hotel is negligent for the loss of the car itself, or of its pecuniary value thereof.

C. Yes in accordance to same case mentioned above and pursuant to art. 1998 of the new civil
code, when it comes to Hotels or Inns, the belongings of travelers shall be regarded as
necessary and that the keepers, hotels or inns will be responsible for them as depositaries.