CREDIT is the ability to borrow money by virtue of trust and confidence reposed in him by a lender that he will pay

y what he may promise within a specified perio d. COMMODATUM is a contract of loan whereby one person delivers to another, non cons umable, movable or immovable things, so that the latter may enjoy the use of the thing and returns the same either upon (a) demand; (b) stipulation; or (c) atta inment of purpose or fulfillment of use. PRECARIUM is a kind of commodatum where the bailor may demand the return of the thing at will. Is a contract by which the owner of a thing, at the request of an other person, gives the latter the thing for use as long as the owner shall plea se. MUTUUM is a contract of loan whereby one person delivers to another, money or an y other fungible things/property so that the other may use by consuming it with understanding that the latter may pay either (a) money of equal amount; or (b) p roperty of the same kind, quality or quantity. INTEREST a compensation, damage, or penalty allowed by law or fixed by the parti es for loan or forbearance of money, goods, or service. USURY is contracting for or receiving something in excess of the ceiling rate fi xed by law for the loan or forbearance of money, goods, or chattel. DEPOSIT is a contract whereby one person receives a thing belonging to another, with obligation of safekeeping it and of returning the same kind. NEGOTIABLE WAREHOUSE RECEIPT - is a negotiable receipt issued by licensed wareho useman in favor of the bearer or to the order of for the deposited goods by the depositor. GUARANTY is a contract whereby a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latte r should fail to do so. SURETY a relation which exists where taken an obligation and another person ry obligation or other duty to a third ne performance, and as between the two her should person. one person (principal or obligor) has under (surety) is also under a direct and prima person (oblige), who is entitled to but o who are bound, the one rather than the ot

PLEDGE is a contract whereby the debtor or third person delivers to the creditor a movable property or document evidencing incorporeal right s for the purpose o f securing the fulfillment of a principal obligation with understanding that whe n the principal obligation is fulfilled, the thing delivered shall be returned w ith all its fruits and accessions. If the principal obligation is not fulfilled, the same shall be disposed off at a public auction and the proceeds thereof sha ll be applied to answer for the principal debt. REAL MORTGAGE is a contract whereby the debtor or third person, owner of immovab le property which secures the performance of an obligation by registering the ag reement to the Registry of Deeds so that if not performed, the said property sha ll be disposed at a public auction and the proceeds may use to settle the obliga tion. CHATTEL MORTGAGE is a contract whereby a personal or movable property is recorde d in the Chattel Mortgage Registry as a security for the fulfillment of the prin cipal obligation

EXCUSSION is a right of the guarantor not to be compelled to pay the debtors obli gation unless the latter has exhausted all property of the debtor and has resort ed to all legal remedies against the debtor. CONCURRENCE OF CREDITS is a possession held by two or more creditor with equal r ights and privileges upon the same property or all of the property of the debtor . LIEN is a charge, security or encumbrance upon the property for the payment of d ebt. PREFERENCE OF CREDIT is the right held by a creditor to be preferred in the paym ent of his claim above others out of the debtors assets. INSOLVENCY is the state of a person whose liabilities are more than his assets. PACTUM COMMISSORIUM is a stipulation whereby the thing pledged or mortgaged shal l automatically become the property of the creditor in the event of nonpayment o f debt within the term fixed. FORECLOSURE is the remedy available to the unpaid mortgagee by which the mortgag ed property is made subject of a public sale in order that the proceeds may be a pplied to the principal obligation. TIPO OR STIPULATION OF UPSET PRICE is an agreement by the parties to set minimum price of the property in a public auction in case there is a foreclosure. This is prohibited by law and a null and void stipulation. SEQUESTRATION aka judicial deposit whereby the court orders a person to deliver the property to court or to custodio legis. ANTICHRESIS is a contract whereby a real property is delivered to the creditor s o he may apply the fruits for the payment of the interest and the principal obli gation. RIGHT OF REDEMPTION is the right of mortgagor in case of extrajudicial foreclosu re to redeem the mortgaged property within a certain period after it was sold fo r the satisfaction of the mortgage credit. EQUITY OF REDEMPTION is the right of mortgagor in case of judicial foreclosure t o redeem the mortgaged property after his default in the performance of the cond itions of the mortgage but before the confirmation of the sale of the mortgaged property. COMPOSITION is an agreement upon sufficient consideration between the insolvent or embarrassed debtor and his creditors, that the latter agree to accept the div idend less than the whole amount of his claim for the payment due to him out of the debtors properties, to be distributed pro rata for the discharge and fulfillm ent of the obligation.

STEPS IN SUSPENSION OF PAYMENTS 1. 2. 3. 4. 5. 6. Filing of the petition by the debtor; Issuance by the court of an order calling a meeting of creditors; Publication of the order and service of summons; Meeting of creditors for the consideration of the debtors proposition; Approval by the creditors of the debtors proposition; Objections, if any, to the decision which must be made within ten days f

ollowing the meeting; 7. Issuance of an order by the court directing that the agreement be carrie d out in case the decision is declared valid, or when no objection to said decis ion has been presented.

STEPS IN VOLUNTARY INSOLVENCY 1. lvency; 2. ; 3. 4. 5. 6. 7. 8. 9. 10. Filing of the petition by the debtor praying for the declaration of inso Issuance of an order of adjudication declaring the petitioner insolvency Publication and service of the order; Meeting of the creditors to elect the assignee in insolvency; Conveyance of the debtors property by the clerk of court to the assignee; Liquidation of the debtors assets and payment of his debts; Composition, if agreed upon; Discharge of the debtor on his application, except a corporation; Objection, if any, to the discharge; Appeal to the Supreme Court in certain cases.

ESSENTIAL REQUISITES OF PLEDGE/MORTGAGE 1. 2. 3. ties. Valid principal obligation Pledgor or mortgagor is the owner Free disposal of property and does not restrainst form any legal infirmi

MUTUUM vs COMMODATUM DEPOSITUM vs MUTUUM GUARANTY vs SURETY REAL ESTATE MORTGAGE vs ANTICHRESIS PLEDGE vs CHATTEL MORTGAGE Note: forgot to include steps in Involuntary Insolvency