A No Pedro cannot demand the return of the van until after the expiration of

A no pedro cannot demand the return of the van until

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A: No, Pedro cannot demand the return of the van until after the expiration of the one year period stipulated. However, if in the meantime he should have urgent need of the van, he may demand its return or temporary use. Who shall bear the expenses for the accidental damage caused by the cargo truck, granting that the truck driver and truck owner are insolvent? Explain. A: Both Tito and Pedro shall bear equally the costs of the extraordinary expenses, having been incurred on the occasion of actual use of the van by Tito, the bailee, even though he acted without fault. [Art. 1949(2), NCC] (2005 Bar Question) C. INTEREST AND THE SUSPENSION OF THE USURY LAW Q: What is interest? A: It is nothing more than the compensation to be paid by the borrower for the use of the money lent to him by the lender. Q: What is the rule on interests? A: GR: No interest shall be due unless it is stipulated in writing. (Art. 1956, NCC) XPN: In case of interest on damages or indemnity for damages, it need not be in writing. Q: What is the basis of the right to interest? A: It only arises by reason of the contract (stipulation in writing) or by reason of delay or failure to pay principal on which interest is demanded (Baretto v. Santa Marina, No. 11908, feb. 4, 1918). If the obligation consists of the payment of a sum of money, and the debtor incurs delay, the
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UST G OLDEN N OTES 2011 indemnity for damages shall be the payment of legal interest (Philrock, Inc. v. Construction Industry Arbitration Commission, G.R. Nos. 132848 49, June 25, 2001) Q: Can there be interest in equitable mortgage? A: No. Interest could not be collected on equitable mortgage because the same is not stipulated in writing (Tan v. Valdehueza, G.R. No. L 38745, Aug. 6, 1975). Note: One which, although it lacks the proper formalities or other requisites of a mortgage required by law, nevertheless reveals the intention of the parties to burden real property as a security for a debt, and contains nothing impossible or contrary to law. Q: Can paid unstipulated interest be recovered? A: If paid by mistake the debtor may recover as in the case of solutio indebiti or undue payment. However if payment is made voluntarily, no recovery can be made as in the case of natural obligation. Q: Sabugo granted a loan to Samilin. The loan agreement was not reduced in writing. Thereafter, Sabugo demanded additional interest which was paid by Samilin in cash and checks. Upon advice of her lawyer, Samilin demanded for the return of the amount of interest paid. Is the payment of interest valid? A: No. Payment of monetary interest is allowed only if: 1. there was an express stipulation for the payment of interest; and 2. the agreement for the payment of interest was reduced in writing. The concurrence of the two conditions is required for the payment of monetary interest. Thus, collection of interest without any stipulation therefor in writing is prohibited by law. (Siga an v.
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