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Summary

This lecture covers the final chapter on the nature and effects of obligations, focusing on the distinction between mutuo (money or consumable loans) and commodatum (non-consumable loans). It discusses the legality of interest rates, with a shift from usury laws to more relaxed regulations, and defines legal interest rates. The lecture also explains the requisites for interest agreements, the order of payment between principal and interest, and presumptions in debt payments. It concludes with remedies for monetary obligations, including specific performance and rescission, and the non-transmissibility of obligations, emphasizing the importance of these concepts in contract law.

Takeaways

• 📚 The presentation concludes the chapter on the nature and effects of obligations, moving on to conditional obligations and periods.
• 📅 The confidence of the prelim exam is linked to alternative publication or Article 11, with the exam scheduled for 12:05.
• 💼 The distinction between 'Mutuo' (borrowing money or consumables) and 'Commun' (borrowing non-consumable items) is clarified, with examples provided.
• 📉 Historical context on usury laws is provided, noting the changes from prohibiting excessive interest to allowing parties to agree on any rate, except if unconscionable.
• 📉 The legal rate of interest has fluctuated, from 6% to 12% and back to 6%, influenced by central bank circulars.
• 📝 The three requisites for stipulated interests are outlined: agreement, written form, and lawfulness.
• 💡 The concept of presumptions in law is introduced, differentiating between conclusive and disputable presumptions with examples.
• 💼 The order of payment for debts is discussed, with interest typically paid before the principal, unless otherwise proven.
• 📚 The remedies available to creditors for monetary claims are detailed, including principal remedies like fulfillment and subsidiary remedies like action supererogatory.
• 🏛️ The discussion on the non-transmissibility of obligations and rights is highlighted, with exceptions for inheritance and certain legal prohibitions.

Q & A

What are the two types of obligations discussed in the script?

The script discusses two types of obligations: 'Mutuo' (or simple obligation) which involves borrowing money or consumable things, and 'Commun' which involves borrowing non-consumable items like a ball pen or computer.

What is the difference between legal interest and usurious interest as per the script?

Legal interest refers to the interest rate that is allowed by law, which is currently 6% as per the Central Bank circular. Usurious interest, on the other hand, refers to charging excessive interest rates, which was prohibited before 1983 but has been relaxed with the advent of Central Bank Circular 9:05, allowing parties to agree on any rate of interest except if it's unconscionable.

What is considered unconscionable interest in the context of the script?

Unconscionable interest is described as interest that is shocking to the conscience of man, such as charging 2.5% interest per day.

What are the three requisites for an agreement to pay interest as mentioned in the script?

The three requisites for an agreement to pay interest are: there must be an agreement, the agreement must be in writing, and the interest rate must be lawful.

What is the rule regarding the payment of interest before the principal as per the script?

The script states that interest is paid ahead of the principal. However, if the principal is paid first, there's a disputable presumption that the interest has already been paid.

What are the two types of presumptions discussed in the script?

The script discusses conclusive presumptions, which are fixed and cannot be changed, and disputable presumptions, which can be changed or rebutted.

What is the principal remedy available to creditors for the satisfaction of their monetary claims as per the script?

The principal remedy available to creditors for the satisfaction of their monetary claims is fulfillment, specific performance, or collection of a sum of money.

What are the subsidiary remedies discussed in the script?

The subsidiary remedies discussed in the script include action supererogatory (substitution), action Pauliana (rescission), and the principle of exhausting the debtor's property to satisfy the debt.

What are the exceptions to the rule that interest should be paid ahead of the principal?

Exceptions to the rule that interest should be paid ahead of the principal include when there is a reservation in the receipt, when dealing with taxes, if the creditor proves that the interest is not yet paid, and if the receipt is antedated but the payment is not stated.

What does the script say about the transmissibility of obligations and rights?

The script states that obligations are not transmissible, while rights are generally transmissible unless prohibited by law, stipulation of the parties, or by nature of the right itself, such as the right to vote.