THE CONCEPT OF CREDIT

A. Credit, Debt and Security

B. Credit and Credit Transactions Defined
Republic Act No. 3765, Sec. 3. (2)
*People v. Concepcion, G.R. No. L-19190, November 29, 1922, 44 Phil 126.
C. Commercial Credit Transactions
Code of Commerce, Art. 1 to 3
LOAN
The Concept of Loan
A. General Concepts
Art. 1933, Art. 1305
1. Obligation to Deliver
Art. 1934
*Garcia v. Thio, G.R. No. 154878, March 16, 2007, 518 SCRA 433.
2. Object of a Loan
Art. 1933, Art. 418
3. Consideration of a Loan
Art. 1933
4. Obligation to Return or Pay
Art. 1933, Art. 1232, Art. 1233
B. Contract To Loan
Art. 1934
*Saura Import and Export Co. Inc. v. Development Bank of the Philippines,
G.R. No. L-24968, April 27, 1972, 44 SCRA 445.
*BPI Investment Corporation v. Court of Appeals and ALS Management & Development Corporation,
G.R. No. 133632, February 15, 2002, 377 SCRA 117.
*Pantaleon v. American Express International, Inc., G.R. No. 174269, August 25, 2010, 629 SCRA 276.
LOAN: COMMODATUM
A. General Concepts
Art. 1933, Art. 1935, Art. 1939
1. Consideration in Commodatum
2. Object of Commodatum
Art. 1937, Art. 1936
*Producers Bank of the Philippines v. Court of Appeals, G.R. No. 115324,
February 19, 2003, 397 SCRA 651.
B. Parties to a Commodatum
1. Ownership by Bailor
Art. 1938, Art. 1933
2. Use by Bailee
Art. 1935, Art. 1940, Art. 1939
3. Solidary Liability of Bailees
Art. 1945
C. Liability for Expenses and Damages
1. Ordinary Expenses
Art. 1933, Art. 1935, Art. 1941, Art. 1943
*Pajuyo v. Court of Appeals, G.R. No. 146364, June 3, 2004, 430 SCRA 492.
2. Extraordinary Expenses
Art. 1949

3. Other Expenses
Art. 1950
4. Abandonment by Bailor
Art. 1952
5. Right of Retention by Bailee
Art. 1944, Art. 1951
D. Liability for Loss
Art. 1933, Art. 1942
*Republic v. Bagtas, G.R. No. L-17474, October 25, 1962, 6 SCRA 262.
E. Obligation to Return
Art. 1933, Art. 1946 to 1948
*Quintos v. Beck, G.R. No. L-46240, November 3, 1939, 69 Phil 108.

LOAN: SIMPLE LOAN

A. General Concepts
Art. 1933, Art. 1953, Art. 1954, Art. 1980
Act No. 2137, Sec. 58 "Fungible goods"
*People v. Puig and Porras, G.R. No. 173654-765, August 28, 2008, 563 SCRA 564.
*BPI Family Bank v. Franco, G.R. No. 123498, November 23, 2007, 538 SCRA 184.
B. Obligation to Pay
Art. 1955, Art. 1249, Art. 1250
C. Interest
1. Conventional Interest
Art. 1933, Art. 1956, Art. 1253, Art. 1958, Art. 1960, Art. 2154, Art. 1423
Act No. 2655, Sec. 1
Central Bank Circular No. 416, series of 1974
Act No. 2655, Sec. 7, Sec. 7-a
*Frias v. San Diego-Sison, G.R. No. 155223, April 3, 2007, 520 SCRA 244.
*Concepcion v. Court of Appeals, et al., G.R. No. 122079, June 27, 1997, 274 SCRA 614.
2. Interest on Interest
Art. 1959, Art. 2212
3. Compensatory, Penalty or Indemnity Interest
Art. 1169, Art. 1226, Art. 2209, Art. 2213, Art. 2226, Art. 2227
*Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78
*Siga-an v. Villanueva, G.R. No. 173227, January 20, 2009, 576 SCRA 696.
*Ligutan v. Court of Appeals, G.R. No. 138677, February 12, 2002, 376 SCRA 560.
4. Finance Charges
R. A. No. 3765, Sec. 4, Sec. 6
*United Coconut Planters Bank v. Samuel and Beluso, G.R. No. 159912,
August 17, 2007, 530 SCRA 567.
5. Usury
a. General Concepts
Art. 1175, Art. 1957, Art. 1961
Act No. 2655, Sec. 1, Sec. 1-a, Sec. 4-a, Sec. 4-b, Sec. 5, Sec. 9-a
Central Bank Circular No. 905, Series of 1982, Sec. 1
b. Usurious Acts
Act No. 2655, Sec. 2 to 4
c. Remedies
Art. 1413
Act No. 2655, Sec. 6 to 10

1) Remedy of Debtor
2) Remedy of Creditor
*Carpo v. Chua & Dy Ng, G.R. Nos. 150773, September 30, 2005, 471 SCRA 471.
DEPOSIT
The Concept of Deposit
Art. 1962, Art. 1964, Art. 1967
Voluntary Deposit
A. General Concepts
Art. 1963, Art. 1968, Art. 1969, Art. 1965, Art. 1966, Art. 1995
*Bank of the Philippine Islands v. The Intermediate Appellate Court and Zshornack, G.R. No. L-66826
August 19, 1988, 164 SCRA 630.
*Triple-V Food Services, Inc. v. Filipino Merchants Insurance Company, Inc., G.R. No. 160544,
February 21, 2005.
B. Obligation to Safekeep
1. Way of the Deposit
Art. 1974 to 1978, Art. 1981, Art. 1982
*CA Agro-Industrial Development Corporation v. Court of Appeals and Security Bank and Trust
Company, G.R. No. 90027, March 3, 1993, 219 SCRA 426.
*The Roman Catholic Bishop of Jaro v. De La Pena, G.R. No. L-6913, November 21, 1913,
26 Phil 144.
2. Liability for Loss and Damage
Art. 1972, Art. 1973, Art. 1977, Art. 1978, Art. 1981, Art. 1979, Art. 1990, Art. 1993
a. Liability of Depositary
b. Liability of Depositor
3. Liability for Expenses
Art. 1992
C. Obligation to Return
1. By Whom and To Whom
Art. 1972, Art. 1970, Art. 1971, Art. 1984, Art. 1985, Art. 1212, Art. 1214, Art. 1986, Art. 1991
2. What to Return
Art. 1983, Art. 1896
3. Where to Return
Art. 1987
4. When to Return
Art. 1988, Art. 1989
5. Right of Retention
Art. 1994
Necessary Deposit
A. General Concepts
Art. 1964, Art. 1967, Art. 1996, Art. 1966
B. Examples of Necessary Deposit
1. Compliance with a Legal Obligation
Art. 1996, Art. 1997
2. On the Occasion of a Calamity
Art. 1996, Art. 1997, Art. 2168
3. Passenger Baggage with Common Carriers
Art. 1754
4. Hotels or Inns
Art. 1998 to 2004
*YHT Realty Corporation v. Court of Appeals, G.R. No. 126780, February 17, 2005, 451
SCRA 638.

Judicial Deposit
Art. 1964, Art. 2005 to 2009
Warehouse Receipts
A. General Concepts
Act No. 2137, Sec. 1 to 7
B. Obligations and Rights of a Warehouseman
1. Obligation to Deliver
Act No. 2137, Sec. 8 to 19, Sec. 36, Sec. 58
2. Liability for Goods
Sec. 20 to 26
3. Warehousemans Lien
Sec. 31 to 36
C. Negotiation and Transfer
Sec. 37 to Sec. 49
D. Criminal Liability
Sec. 50 to Sec. 55
E. General Bonded Warehouses
Act No. 3893, as amended
*Philippine National Bank v. Se et al., G.R. No. 119231. April 18, 1996, 256 SCRA 380.
SECURITY TRANSACTIONS
The Concept of Security
A. General Concepts
1. Distinguished from Securities
R. A. No. 8799, Sec. 3.1
2. Distinguished from Securitization
B. Events of Default
C. Kinds of Security Transactions
1. Personal Security Transactions
2. Real Security Transactions
3. In the Context of Insolvency
R.A. No. 10142, Sec. 4 (p) (ll) (kk) (jj) (qq) (pp) (t)
Letters of Credit
A. General Concepts
Code of Commerce, Art. 567, Art. 568, Art. 2
*Transfield Philippines, Inc. v. Luzon Hydro Corporation Australia, et al.,
G.R. No. 146717, November 22, 2004, 443 SCRA 307.
B. Kinds of Letters of Credit
1. Commercial Letters of Credit
2. Standby Letters of Credit
C. Rule of Strict Compliance
D. Independence Principle
Trust Receipts
A. General Concepts
P.D. No. 115, Sec. 3, Sec. 4
B. Form of Trust Receipts
Sec. 5, Sec. 6
C. Rights of Entruster
Sec. 7, Sec. 8.
D. Obligations of Entrustee

Sec. 9 to 13
E. Rights of Purchaser
Sec. 11
*Colinares & Veloso v. Court of Appeals, G.R. No. 90828, September 5, 2000, 339 SCRA 609.
SECURITY TRANSACTIONS: GUARANTY
A. General Concepts
Art. 2047, Art. 2048, Art. 2051
B. Form of Guaranty
Art. 2055, Art. 1403
C. Obligations Secured
Art. 2052 to 2054
D. Parties to a Guaranty
Art. 2056. Art. 2057, Art. 2049, Art. 2064, Art. 2065
E. Benefit of Excussion
Art. 2058 to 2064, Art. 2081
*Tupaz IV & Tupaz v. Court of Appeals & Bank of the Philippine Islands, G.R. No. 145578,
November 18, 2005, 475 SCRA 398.
F. Right to Protection
Art. 2071
G. Right to Indemnification
Art. 2066, Art. 2050, Art. 1236, Art. 2069, Art. 2070, Art. 2072
H. Right to Subrogation
Art. 2067, Art. 2050, Art. 1237, Art. 2068, Art. 2080
I. Rights of Co-Guarantors
1. Benefit of Division
Art. 2065, Art. 2078
2. Right to Reimbursement
Art. 2073 to 2075.
J. Extinguishment and Right of Release
Art. 2076, Art. 2077, Art. 2079, Art. 2080
SECURITY TRANSACTIONS: SURETY
A. General Concepts
Art. 2047, Art. 1211, Art. 1216,Art. 2082 to 2084
B. Form of Surety
Art. 1403
C. Obligations Secured
Art. 2053
*Security Bank & Trust Company v. Cuenca, G.R. No. 138544. October 3, 2000, 341 SCRA 781.
D. Distinguished from Standby Letter of Credit
E. Distinguished from Guaranty
Art. 2047
*Palmares v. Court of Appeals & M.B. Lending Corporation, G.R. No. 126490, March 31, 1998,
288 SCRA 422.
*E. Zobel, Inc. v. Court of Appeals, G.R. No. 113931, May 6, 1998, 290 SCRA 1.
*International Finance Corporation v. Imperial Textile Mills, Inc., G.R. No. 160324,
November 15, 2005, 475 SCRA 149.
*Philippine Blooming Mills, Inc. & Ching, v. Court of Appeals, G.R. No. 142381,
October 15, 2003, 413 SCRA 445.
F. Distinguished from Joint and Solidary Obligations
Art. 2047, Art. 2066, Art. 2067, Art. 1217
*Escano & Silos v. Ortigas, Jr., G. R. No. 151953, June 29, 2007, 526 SCRA 26.

SECURITY TRANSACTIONS: PLEDGE AND MORTGAGE

A. General Concepts
Art. 2085, Art. 2087
B. Obligations Secured
Art. 2086, Art. 2052, Art. 209
C. Contract to Pledge or to Mortgage
Art. 2092
D. Remedies of Pledgee and Mortgagee
E. Indivisibility of a Pledge or Mortgage
Art. 2089, Art. 2090
F. Pactum Commissorium
Art. 2087, Art. 2088
1. Elements
2. Effect on Pledge or Mortgage
*Development Bank of the Philippines v. Court of Appeals, G.R. No.118342,
January 5, 1998, 284 SCRA 14.
*Bustamante v. Rosel, G. R. No. 126800, November 29, 1999, 319 SCRA 413.
*Ong v. Roban Lending Corporation, G.R. No. 172592, July 9, 2008, 557 SCRA 516.
G. Equitable Mortgage
Art. 1602 to 1605

SECURITY TRANSACTIONS: PLEDGE

A. General Concepts
Art. 2085, Art. 2087, Art. 2123
B. Form of Pledge
Art. 2096
C. Obligations Secured
D. Object of Pledge
Art. 2094, Art. 2095, Art. 416, Art. 417
E. Ownership of Collateral
Art. 2103, Art. 2102, Art. 2101, Art. 1951, Art. 2108, Art. 2112, Art. 2097
*Estate of Litton v. Mendoza & Court of Appeals, G.R. No. L-49120, June 30, 1988, 163 SCRA 246.
F. Rights of Third Party Pledgor
Art. 2120, Art. 2117, Art. 2066 to 2070, Art. 2079 to 2081
G. Right to Possession
Art. 2093, Art. 2110
1. Right of Retention
Art. 2098, Art. 2109, Art. 2099, Art. 2100, Art. 2104, Art. 2106
2. Right to Payment
Art. 2102, Art. 2118
*Manila Banking Corporationv. Teodoro, Jr. and Teodoro, G.R. No. 53955,
January 13, 1989, 169 SCRA 95.
*Citibank, N.A. & Investors Finance Corporation v. Sabeniano, G.R. No. 156132,
October 12, 2006, 504 SCRA 378.
H. Return of Collateral
Art. 2105, Art. 2107, Art. 2108, Art. 2110, Art. 2111

I. Foreclosure of Pledge
Art. 2112, Art. 2119
1. Who May Bid
Art. 2113, Art. 2114
2. Effect of Notarial Sale
a. Extinction of Principal Obligation
Art. 2115, Art. 2116
b. Right of Redemption
*Paray & Espeleta v. Rodriguez, et al., G.R. No. 132287, January 24, 2006, 479 SCRA 571.
c. Right to Surplus or Deficiency
Art. 2115
J. Legal Pledges
Art. 2121
1. Examples of Legal Pledges
Art. 1944, Art. 1951, Art. 1994, Art. 2004, Art. 546, Art. 1731
2. Foreclosure of Legal Pledge
Art. 2122, Art. 2121
SECURITY TRANSACTIONS: CHATTEL MORTGAGE
A. General Concepts
Art. 2085, Art. 2087, Art. 2140, Art. 2141
*PCI Leasing & Finance, Inc. v. Trojan Metal Industries Inc., et al., G.R. No. 176381,
December 15, 2010, 638 SCRA 615.
B. Form of Chattel Mortgage
Act No. 1508, Sec. 4 to 6
C. Obligations Secured
Act No. 1508, Sec. 5
*ACME Shoe, Rubber & Plastic Corporation v. Court of Appeals, G.R. No. 103576,
August 22, 1996, 260 SCRA 714.
D. Object of Chattel Mortgage
Art. 2124, Art. 416, Art. 417
Act No. 1508, Sec. 2
*Makati Leasing & Finance Corporation v. Wearever Textile Mills, Inc. & Court of Appeals,
G.R. No. L-58469, May 16, 1983, 122 SCRA 296.
1. Reasonable Description Rule
Act No. 1508, Sec. 7
2. After Acquired Properties
Act No. 1508, Sec. 7
E. Ownership of Collateral
*Dy v. Court of Appeals, G.R. No. 92989, July 8, 1991, 198 SCRA 826.
F. Foreclosure of Chattel Mortgage
Act No. 1508, Sec. 8, Sec. 14
A.M. No. 99-10-05-0
1. Equity of Redemption
Act No. 1508, Sec. 13, Sec. 14
2. Right of Redemption
*Rizal Commercial Banking Corporation v. Royal Cargo Corporation, G.R. No. 179756,
October 2, 2009, 602 SCRA 545.
3. Right to Possession
*Servicewide Specialists, Inc. v. Court of Appeals, G.R. No. 110048, November 19, 1999, 318 SCRA 493.
4. Right to Surplus or Deficiency

Act No. 1508, Sec. 14

*PAMECA Wood Treatment Plant, Inc. v. Court of Appeals, G.R. No. 106435,
July 14, 1999, 310 SCRA 281.
SECURITY TRANSACTIONS: REAL ESTATE MORTGAGE
A. General Concepts
Art. 2085, 2087
B. Form of Real Estate Mortgage
Art. 2125, Art. 2131
C. Obligations Secured
*Prudential Bank v. Alviar & Alviar, G.R. No. 150197, July 28, 2005, 464 SCRA 353.
D. Object of Real Estate Mortgage
Art. 2124, 415
1. After Acquired Properties
*Peoples Bank & Trust Company & Atlantic Gulf and Pacific Co. of Manila v. Dahican Lumber
Company, et al., G.R. No. L-17500, May 16, 1967, 20 SCRA 84.
2. Effect and Extent
Art. 2126, Art. 2127, Art. 2129
E. Right to Alienate Real Estate Mortgage Credit
Art. 2128, Art. 1625, Art. 1627
F. Right to Alienate Collateral
Art. 2085, Art. 2130
G. Foreclosure of Real Estate Mortgage
1. Judicial Foreclosure
a. Complaint for Foreclosure
Rules of Court, Rule 68, Sec. 1
b. Judgment on Foreclosure
Rules of Court, Rule 68, Sec. 2
*Korea Exchange Bank v. Filkor Business Integrated, Inc., et al., G.R. No. 138292,
April 10, 2002, 380 SCRA 381.
c. Equity of Redemption
Rules of Court, Rule 68, Sec. 2
d. Foreclosure Sale
Rules of Court, Rule 68, Sec. 3 to 5, Sec. 7, Sec. 8
Rules of Court, Rule 39, Sec. 31, Sec. 32, Sec. 34
e. Right of Redemption
*Huerta Alba Resort, Inc. v. Court of Appeals, G.R. No. 128567, September 1, 2000,
339 SCRA 534
f. Right to Surplus or Deficiency
Rules of Court, Rule 68, Sec. 4, Sec. 6
Rules of Court, Rule 86, Sec. 7
2. Extrajudicial Foreclosure
a. Special Powers
Act No. 3135, Sec. 1
b. Foreclosure Sale
Act No. 3135, Sec. 2
A.M. No. 99-10-05-0, as amended
1) Requirement of Notice
*Grand Farms, Inc. & Philippine Shares Corporation v. Court of Appeals, et al., G.R. No. 91779,
February 7, 1991, 193 SCRA 748.
2) Conduct of Sale
Act No. 3135, Sec. 4, Sec. 5
A.M. No. 99-10-05-0

c. Right of Redemption
Act No. 3135, Sec. 6
A.M. No. 99-10-05-0
1) Who may Redeem
Act No. 3135, Sec. 6
Rules of Court, Rule 39, Sec. 27
*Medida, et al. v.Court of Appeals, et al., G.R. No. 98334, May 8, 1992, 208 SCRA 887
2) How to Redeem
Rules of Court, Rule 39, Sec. 28, Sec. 29, Sec. 30, Sec. 33
d. Right to Deficiency
Rules of Court, Rule 86, Sec. 7
e. Right to Surplus
*Suico v. Philippine National Bank, G.R. No. 170215, August 28, 2007, 531 SCRA 514.
f. Right to Possession
1) During Redemption Period
Act No. 3135, Sec. 7 to 9
2) After Consolidation of Ownership
Rules of Court, Rule 39, Sec. 33
3) When Held by a Third Party
Rules of Court, Rule 39, Sec. 33, Sec. 16
*BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc.,
G.R. No. 176019, January 12, 2011, 639 SCRA 405.
SECURITY TRANSACTIONS: ANTICHRESIS
A. General Concepts
Art. 2132, Art. 2133, Art. 2135, Art. 2138, Art. 2139, Art. 2085, Art. 2089, Art. 2090,
Art. 2091
B. Form of Antichresis
Art. 2134
C. Right of Retention
Art. 2136
D. Foreclosure of Antichresis
Art. 2137
*Diego v. Fernando, G.R. No. L-15128, August 25, 1960, 109 Phil 143

INSOLVENCY
The Concept of Insolvency
Art. 2236, Art. 2237
R. A. No. 10142, Sec. 2, Sec. 4, Sec. 146 to Sec. 148
A. Nature of Insolvency Proceedings
R. A. No. 10142, Sec. 3, Sec. 7, Sec. 6
B. Civil and Criminal Liability in Insolvency Proceedings
R. A. No. 10142, Sec. 10. Sec. 145

CONCURRENCE AND PREFERENCE OF CREDITS

A. General Concepts
R. A. No. 10142, Sec. 62, Sec. 133
B. Classification of Credits
1. Special Preferred Credits
Art. 2241, Art. 2242
R.A. No. 10142, Sec. 136
Art. 2243, Art. 2246 to 2250
*De Barreto, et al. v. Villanueva, et al., G.R. No. L-14938, January 28, 1961, 1 SCRA 288,
*Resolution on Motion to Consider, December 29, 1962, 6 SCRA 929.
*Development Bank of the Philippines v. Court of Appeals, G.R. No. 126200,
August 16, 2001, 363 SCRA 307.
*J.L. Bernardo Construction v. Court of Appeals, G.R. No. 105827,
January 31, 2000, 324 SCRA 24.
2. Ordinary Preferred Credits
Art. 2244
P. D. No. 442, Art. 110
R. A. No. 10142, Sec. 133
Art. 2251
3. Common Credits
Art. 2245, Art. 2251
*Cordova v. Reyes Daway Lim Bernardo Lindo Rosales Law Offices, et. al, G.R. No. 146555,
July 3, 2007, 526 SCRA 300.
INSOLVENCY: SUSPENSION OF PAYMENTS
A. General Concepts
R.A. No. 10142, Sec. 2, Sec. 94. Sec. 95
1. Automatic Stay
Sec. 96
2. Suspension Order
Sec. 96
3. Injunction Against Debtor
Sec. 95
B. Commissioner
Sec. 95, Sec. 97
C. Creditors Meeting
Sec. 97, Sec. 99, Sec. 100
D. Proposed Agreement
Sec. 94, Sec. 101, Sec. 102
E. Treatment of Claims
Sec. 96, Sec. 98, Sec. 101
1. Secured Creditor Claims
2. Exempt Claims
3. Excluded Claims

INSOLVENCY: REHABILITATION
A. General Concepts
R.A. No. 10142, Sec. 2
B. Court-Supervised Rehabilitation
1. Voluntary Proceedings
Sec. 12
2. Involuntary Proceedings
Sec. 13, Sec. 14
3. Provisions Common to Voluntary and Involuntary Rehabilitation Proceedings
a. Commencement Order
Sec. 15 to 17, Sec. 19, Sec. 21
b. Stay or Suspension Order
Sec. 16, Sec. 20
1) General Concepts
*Rizal Commercial Banking Corporation v. Intermediate Appellate Court,
G.R. No. 74851, December 9, 1999, 320 SCRA 279.
*Sobrejuanite v. ASB Development Corporation, G.R. No. 165675,
September 30, 2005, 471 SCRA 763.
2) Exceptions to Stay or Suspension Order
Sec. 18, Sec. 16
*Metropolitan Waterworks & Sewerage System v. Daway and Maynilad Water
Services, Inc., G.R. No. 160732, June 21, 2004, 432 SCRA
559.
*Panlilio, et al. v. Regional Trial Court, Branch 51, City of Manila,
G.R. No. 173846, February 2, 2011, 641 SCRA 438.
c. Subsequent Actions
Sec. 22, Sec. 24 to 27
d. Rehabilitation Receiver
1) General Concepts
Sec. 28 to 30, Sec. 32 to 35, Sec. 40
2) Powers, Duties and Responsibilities
Sec. 47, Sec. 24, Sec. 31, Sec. 39, Sec. 41
e. Creditors Committees
Sec. 42, Sec. 43, Sec. 8, Sec. 9
f. Management Committee
Sec. 47, Sec. 36 to 38
g. Claims
Sec. 4(c)
1) Determination of Claims
Sec. 16, Sec. 44 to 46
2) Treatment of Claims
a) Secured Creditor Claims
Sec. 60, Sec. 61
b) Employee Claims
Sec. 56, Sec. 16
c) Excluded Claims
Sec. 23
h. Treatment of Assets
Sec. 47
1) Unencumbered Assets
Sec. 48, Sec. 49, Sec. 52
2) Encumbered Assets

Sec. 17, Sec. 50, Sec. 51, Sec. 53

i. Treatment of Contracts
1) Confirmation or Termination of Contracts
Sec. 57, Sec. 16
2) Avoidance Proceedings
Sec. 58, Sec. 59
j. Rehabilitation Plan
1) General Concepts
Sec. 62, Sec. 54, Sec. 55
2) Cram Down Effect
Sec. 63 to 73
*Bank of the Philippine Islands v. Securities & Exchange Commission, et al.,
G.R. No. 164641, December 20, 2007, 541 SCRA 294.
k. Termination of Proceedings
Sec. 74, Sec. 75
l. Conversion to Liquidation Proceedings
Sec. 92
C. Pre-negotiated Rehabilitation
Sec. 76 to 82, Sec. 92
D. Out-of-Court Rehabilitation
Sec. 83, Sec. 84.
1. General Concepts
2. Benefits of Out-of-Court Rehabilitation
Sec. 85 to 89
INSOLVENCY: LIQUIDATION
A. General Concepts
Art. 2238 to 2240
R.A. No. 10142, Sec. 2, Sec. 4
B. Liquidation of Insolvent Individual Debtor
1. Voluntary Liquidation
R. A. No. 10142, Sec. 103, Sec. 104
2. Involuntary Liquidation
a. Acts of Insolvency
Sec. 105
b. Show Cause Order; Injunction; Default
Sec. 106, Sec. 107
c. Absent Individual Debtor
Sec. 108
d. Custody of Property; Sale of Property
Sec. 109, Sec. 110
C. Liquidation of Insolvent Juridical Debtors
Sec. 93
1. Voluntary Liquidation
Sec. 90
2. Involuntary Liquidation

D. Provisions Common to Liquidation of Individual and Juridical Debtors

Sec. 111
1. Liquidation Order
Sec. 112, Sec. 113
2. Liquidator
a. General Concepts
Sec. 115 to 118, Sec. 29
Sec. 120, Sec. 122
b. Powers, Duties and Responsibilities
Sec. 119, Sec. 113, Sec. 123, Sec. 126, Sec. 129, Sec. 131, Sec. 132, Sec. 121
3. Claims
Sec. 4(c)
a. Determination of Claims
Sec. 112, Sec. 123 to 126
b. Treatment of Claims
1) Secured Creditor Claims
Sec. 113, Sec. 114
*Consuelo Metal Corporation, v. Planters Development Bank &
Maningas, G.R. No. 152580, June 26, 2008, 555 SCRA 465.
2) Unsecured Creditor Claims
Sec. 123, Sec. 113
4. Treatment of Contracts
a. Termination or Breach of Contracts
Sec. 113
b. Avoidance Proceedings
Sec. 127, Sec. 58, Sec. 128
5. Liquidation Plan
Sec. 129 to 133
6. Termination of Proceedings
Sec. 121, Sec. 134, Sec. 135
E. Ancillary Proceedings
1. Securities Market Participant
Sec. 136
2. Banks and Other Financial Institutions Under Rehabilitation Receivership Pursuant to a State-funded or
State-mandated Insurance System.
Sec. 137, Sec. 138
3. Cross-Border Insolvency Proceedings
Sec. 139 to 142
INTEREST
Read the case of RCBC v. Alfa RTW Manufacturing Corp., et al., G.R. No. 133877, November 14, 2001, as an
example of how the various types of interest are computed.