LAGUNA STATE POLYTECHNIC UNIVERSITY

COLLEGE OF LAW
MIDTERM EXAMINATION IN COMMERCIAL LAWS I

1. Freya opened a savings account with RGP bank. She made an initial deposit of
₱500,000.00. He was required to sign a Holdout Agreement which provided that should
she incur any obligations or liability to the bank, the bank shall have the right to
immediately take over her savings account deposit. After she opened her deposit
account. RGP discovered a scam wherein the funds in the account of another in the bank
was withdrawn by an impostor. RGP Bank suspected Freya to be the impostor and filed a
criminal case of estafa against her. While the case was still pending with the prosecutor’s
office, the bank took over Freya’s savings deposit on the basis of the Holdout Agreement.
(10%)
a) What kind of contract is created when a depositor opens an account with a bank?
b) In this case, did the bank have the right to take over Freya’s bank deposit? Explain
briefly.

2. a. Distinguish equity of redemption from right of redemption. (5%)

b. Differentiate Guaranty from Suretyship. (5%)

3. In order to secure a loan, PLC Corp. surrendered its deposit certificate, with a maturity
date of 15 May 2024 to the bank. The corporation defaulted on the due repayment of the
loan, prompting the bank to encash the deposit certificate. PLC Corp. questioned the
above action taken by the bank as a case of pactum commissorium. The bank disagrees.

a) Explain the concept of pactum commissorium. (5%)

b) Can the bank validly encash the deposit certificate of PLC Corp? (5%)

4. With regard to an award of interest in the concept of actual and compensatory damages,
what are the guidelines regarding the manner of computing legal interest in the following
situations:
a) When the obligation does not constitute a loan or forbearance of money. (5%)
b) When the obligation is breached, and it consists in the payment of loan or
forbearance of money. (5%)

5. Gab sold to Aikka a motor vehicle for ₱240,000, to be paid in twelve monthly equal
installments of ₱20,000.00. each being due and payable on the 1 st day of each month
starting Jan,2024. To secure the promissory note, Aikka
(a) executed a chattel mortgage on the subject motor vehicle, and (b) furnished a security
boned issued by StarLife. Aikka failed to pay more than two installments.
Gab went after the security but was only able to obtain three-fourths (¾) of the total
amount still due and owing from Aikka. He now seeks your advice if he can still recover
the deficiency. What would be your advice? (10%)

6. Hana is an owner of a banana plantation which she can no longer manage as she and
her family decide to migrate abroad. To finance their plan to migrate, she borrowed
₱300,000.00 to Kimberly. She asks the latter to manage the plantation and apply the
harvest as payment of her debt, principal and interest, until her indebtedness shall have
been fully paid. Kimberly agrees.
a) What kind of contract is entered into between Hana and Kimberly? (2.5%)
b) What obligations are imposed by law to Kimberly by reason of the contract? (2.5%)
c) Does the law require any form for the validity of their contract? (2.5%)
d) Can Hana insist on reacquiring the property even before her indebtedness has been
fully paid? (2.5%)

7. What are the stages in the life of security interest? Explain. (10%)

8. In June 2024, Lyella wanted to enter into a security agreement with Lyra for the
continuation of the construction of her commercial building. Lyella wants to offer her
brand-new Nissan Van as a collateral however is it yet to be delivered to Lyella in
October 2024. Lyra declined such offer as she contends that future property as collateral
is not allowed. Is Lyra’s contention, correct? (10%)

9. a. Febbie was the owner of a BMW car which was insured with the First Insurance
Company for loss and damage. When she checked in at Shera Hotel before midnight,
Ken, its parking attendant got the key to said BMW. At about two in the morning, Febbie
was awakened in her room by a telephone call from the Hotel Chief Security Officer who
informed her that her BMW was carnapped while it was parked unattended at the parking
area of the bank near the hotel. May the insurance company, by right of subrogation,
recover from the hotel the damages it paid to Febbie? (10%)

10. Explain Benefit of Excussion? When is the guarantor not entitled to the same? (10%)

GOOD LUCK! 
KCD