ANSWERS:

1) As a general rule, the guarantor can bind himself for less but not for more than the principal
debtor. Exemption; When the guaranty is penal in nature or when the guarantor is in default.
2) Yes, If the creditor accepts
3) No, If the guarantor pays before the obligation is due he cannot immediately seek
reimbursement from the principal debtor. This is because as far as the debtor is concerened
obligation is not yet due and demandable.
4) Before payment, otherwise if after the debtor may set up defenses.
5) It is not available for the same reason that the benefit of axhaustion is not available.
a. waiyed by the guarantor
b. If G solidarity binds himself to D because his obligation is direct and primary
c. If D is insolvent, there is no need for declaration of insolvency
d. When D cannot be sued because he absconded
e. presumed when the execution will not satisfy the credit judgment
6) When there are several guarantors for one and the same debtor and debt, the obligation to
answer for the same is divided among them.
7) Guaranty can be extinguished through: negligence of the creditor extension payment of the
principal debt, accidental lose, remission of debt, merger, compensation, novation, death and
failure to send notice of default.
8) Each installment is considered as separate and distinct obligation such that an extension in
one installment does not result in the extension of all installments.
9) The giving notice of existing obligation was a condition precedent to further liability of S and
that in default of such notice, liability on the board ceases.
10) Partial payment does not entitle the debtor of partial discharge except when the pledge or
mortgage covers several things, each guaranty only a determinate portion of the credit.
11) Commodatum – where the bailor delivers to the bailee a non-consumable thing so that the
latter may use it for a certain time and return the identical thing.

Simple loan or mutuum – where the lender delivers to the borrower money or other
consumable thing upon the condition that the latter shall pay the same amount of the same kind
and quality.
12) a. To take good care of the thing with the diligence of a good father of the family;
b. To use the thing loaned only for the purpose for which it was loaned and for no other
purpose.
c. To pay ordinary expenses for the use and preservation of the thing and a portion of
extraordinary expenses arising from the actual use of the thing; and
d. To return and to not retain the thing loaned except under certain circumstances.
13)
 a. A loan or forbearance;
 b. An understanding between the parties that the loan shall or may be returned;
 c. An unlawful intent to take more than the legal rate for the use of money or its
equivalent;
 d. The taking or agreeing to take for the use of the loan of something in excess of what is
allowed by law
14) 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.

15) a. The obligation to keep the thing.

b. The obligation to not use the thing
c. The obligation to return the thing

16) a. To return the thing deposited when delivered closed and sealed, in the same condition;
b. To pay for damages should the seal or lock be broken through his fault which is presumed
unless proved otherwise; and
c. To keep the secret of the deposit when the seal or lock is broken, with or without his fault

17) A warehouse receipt is a written acknowledgement by a warehouseman that he has received

and holds certain goods therein described in store for the person to whom it is issued.

18) a. By surrendering possession thereof; and

b. By refusing to deliver the goods when a demand is made with which he is bound to
comply under the provisions of the Warehouse Receipts Law

19) The guarantee shall comprise of the following:

a. The principal obligations of the debtor;
b. The accessory obligations pertaining to the principal obligation;
c. The obligations that arise as a matter of law from the guaranteed obligations, such a s
the payment of interest on case of delay; and
d. The obligation to pay judicial costs incurred after the guarantor has been judicially
required to pay.

20) a. He possesses integrity

b. He has capacity to bind himself; and
c. He has sufficient property to answer for the obligation which he guarantees.

21) a. Precariom – where the bailor may demand the thing loaned at will under the conditions
set forth in Article 1947. The use of the thing by the bailee depends on the pleasure of the bailor

b. Ordinary commodatum – where the bailor cannot just demand the return of the thing at
will because there is a period agreed upon which must be respected.

22) a. Fungible Thing – is one where the parties have agreed to allow the substitution of the
thing given or delivered with an equivalent thing.
b. Non-fungible Thing – is one where the parties have the intention of having the same
identical thing returned after the intended use.

23) Deposit is a contract whereby a person (called depositor) delivers a thing to another (called
depository) for the principal purpose of safekeeping it with the obligation of returning it when
demanded.
24) 1. Judicial constitution – when there is a court order.
2. Extrajudicial Constitution – when it is created under Art, 1968 (voluntary) and under
Art. 1996 (necessary)

25) Barter is defined as a contract where one of the parties binds himself to give one thing to
another in consideration of the latter’s promise to give another thing.

26) Notices posted in the hotel including those posted in individual rooms, announcing that the
hotel-keeper is not liable for articles brought by the guest or traveler cannot be freed from former
responsibility for losses damages suffered by the latter.

27) Yes, under the law, it is allowed if the purpose of the contract is not the consumption of the
object, as when it is merely for exhibition.

28) It is when the deposit by an order of the court takes place or sequestration; when an
attachment of seizure of property in litigation is ordered.

29) a. Failure to mark “duplicate” on subsequent receipts

b. Misdelivery of goods
c. Failure to take care of the goods with the diligence of a good father of a family.

30) These are stipulations which are not contrary to the provisions of Warehouse Receipts Law;
and those stipulations which would not, in any wise, impair his obligation to exercise the degree
of care over goods delivered to him which a reasonably prudent businessman would exercise
with respect to similar goods of his own.

31) These are the right to reimbursement; the right to subrogation to the rights of the creditor;
and when the debtor agrees to extend the period of the principal debt with the creditor without
the guarantor’s consent, the latter is released from his obligation.

32) In guaranty, the guarantor is the insurer of the following of the debtor and thus binds himself
to pay while a surety is the insurer of the debt, and he obligates himself to pay if the principal
does not pay.

33) The various depositors of the mingled goods shall own the entire mass in common and each
depositor shall be entitled to such portion of the entire mass as the amount deposited by him
bears to the whole.

34) a. Upon the loss or destruction of the thing deposited

b. In case of a gratuitous deposit
c. upon the death of either the depositor or the depository

35) a. If the guarantor has expressly renounced it;

b. If he has bound himself solidarily with the debtor;
c. In case of insolvency of the debtor
 d. When he has absconded, or cannot be sued within the Philippines unless he has left a
manager or representative
e. If it may be presumed that an execution of the property of the principal debtor would
not result in the satisfaction of the obligation.

36) Credit transactions include all transactions involving the loan of money goods, or the
purchase or delivery of goods and services in the present, with a promise to pay or deliver in the
future.

37) a. Simple Interest

b. Compound Interest
c. Legal Interest
d. Lawful Interest
e. Unlawful or Usurious Interest
38) Voluntary Deposit is one wherein the delivery is made by the will of the depositor.
39) The following contracts are voidable or annullable, even though there may have been no
damage to the contracting parties:
a. Those where the consent of the parties is incapable of giving consent to a contract.
b. Those where the consent is vitiated by mistakes, violence, intimidation, undue
influence or fraud

40) A warehouseman is a person lawfully engaged is the business of storing goods for profit.

41) a. payment of interest must be expressly stipulated

b. agreement to pay must be in writing
c. The interest must be lawful

42) a. When judicially demanded or provided under the law

b. When there is an express stipulation made by the parties.

43) Precarium is a kind of commodatum where the bailor may demand the thing at will. Under
Art. 1947, the following cases considered precarium:
a. If neither the duration of the contract nor the use to which the thing loaned should be
devoted, has been stipulated.
b. If the use of the thing is merely tolerated by the owner.
44) The depository shall observe the diligence of a good father of a family in the performance of
obligation to protect and preserve the thing deposited.

45) All bonds including “Judicial Bonds” are contractual in nature. Bonds exist only in
consequence of a meeting of minds under the condition essential to a contract.

46) Judicial Bond constitute a special class of contract of guaranty, characterized by the fact that
they are given in virtue of a Judicial Order.

47) Consensual Contract, Accesory Contract, Conditional Contract, unilateral Contract,

Subsidiary Contract, Formal Contract, Nominate Contract
48) A. Application for damages must be filed before trial or before entry of
judgment;

B. Due notice must be given to the other party and his surety; and
C. There must be a proper hearing and the award of damages, if any must be
included in the final judgment.

49) A. He must set up the right of excussion against the creditor upon the latter’s
demand for payment from him.

B. He must point out to the creditor the available property of the debtor, not
exempted from execution, found within the Philippine territory.
50) A. The guarantor must set up the right of excusiion against the creditor upon
the latter’s demand from him

B. He points out to the creditor the available properties of the debtor found in
the Philippines and sufficient to cover the amount of debt.
51) As to purpose: In deposit the principal purpose is safekeeping while in
commodatom the purpose is the use of the thing loaned

As to Nature: Deposit may be gratuitous or onerovs, while commodatom is

always gratitours by its essence
As to Object: In extra-judicial deposit, while both movable and immovable
property may be an object of commodatom
As to Demandability: Depositor can demand the thing at will, while return of
the thing cannot be demanded until the lapse of the period in commodatom.
52) Temporary use of the thing loaned

53) Ordinary expenses for use of the thing-bailee

Ordinary expenses for the preservation of the thing-bailee

Extraordinary expenses for the preservation of the thing-bailor
Extraordinary expense arising from the actual use of the thing-equally by
bailor&bailee (Art 1949)
other expenses for the use of the thing-bailee
54) A. Pay to the lender a equal amount of the same kind and quality (Art 1953)

B. Pay interest if expressly stipulated in writing (Art 1956)

55) indemnity for damages

interestaccausing from unpaid interest

56) to maintain the stauts quo during the pendency of the litigation of to insure the
right of the parties to the property in case of a favorable judgment

57) to the holder of a receipt for the goods

 to the depositor
58) Under Art. 1952 the bailor cannot exempt himself from the payment of expenses
or damages by abandoning the thing to the bailee

59) the document be surrendered, negotiation is enjoined, the document is

impounded by the court

60) the warehouseman shall be liable according to the terms of the receipt as they
were before alteration

61) voidable contracts-valid cobntracts, unenforceable contract

62) delivery of property to another for some particular use of for deposit upon a
contract that after the purpose has been fulfilled, it shall be re-delivered to the
person who delivered it.

63) a bailor and a bailee

64) To demand return of the thing for acts of ingratitude, to demand return of the
things when loan is for unland/purpose

65) personal right to use the thing unless otherwise stipulated