Assignment of Credit Barter of Exchange

Assignment of credit – is a contract by which one person Art. 1638. By the contract of barter or exchange one of the parties
(assignor/creditor) transfers to another his rights and actions against binds himself to give one thing in consideration of the other's promise
a third person (debtor) in consideration of a price certain in money or to give another thing.
its equivalent. (see Art. 1468.)
The contract of barter is similar to sale with the only difference that
Warranties of the assignor of credit. instead of paying a price in money another thing is given in lieu
thereof.
(1) When a creditor assigns his credit, he warrants only the (a)
existence and (b) legality of the credit at the perfection of the Perfection and consummation of the contract of Barter.
contract. He is not even liable for the warranty if the credit had been
sold as doubtful. (1) The contract of barter is perfected from the moment there is a
(2) There is no warranty as to the solvency of the debtor un less it is meeting of minds upon the things promised by each party in
expressly stipulated or unless the insolvency was already existing consideration of the other.
and of public knowledge at the time of the assignment.
If there be any breach of the above warranties, the assignor vendor (2) It is consummated from the time of mutual delivery the
shall be held answerable therefor. contracting parties of things they promised.

Liabilities of the assignor of credit. Art. 1639. If one of the contracting parties, having received the thing
(1) For violation of the above warranties, the liability o the vendor promised him in barter, should prove that it did not belong to the
(assignor) in good faith is limited only to the P rice received and to person who gave it, he cannot be compelled to deliver that which he
the expenses of the contract, and any other legitimate payments by offered in exchange, but he shall be entitled to damages.
reason of the assignment.
Art. 1640. One who loses by eviction the thing received in barter may
(2) The assignor in bad faith is liable not only for the payment of the recover that which he gave in exchange with a right to damages, or
price and all expenses, but also for damages. An assignor in bad faith he may only demand an indemnity for damages. However, he can only
is one who has knowledge of any of the circumstances mentioned make use of the right to recover the thing which he has delivered
above while an assignor in good faith is one who is ignorant of them. while the same remains possession of the other party, and without
prejudice to the rights acquired in good faith in the meantime by a
It is really a sale. Thus, the subject matter is the credit or right third person.
assigned; the consideration is the price paid for the credit or right;
and the consent is the agreement of the parties to the assignment of
the credit or right at the agreed price.
The Bulk Sales Law
It depends. Art. 1630. One who sells an inheritance without
enumerating the things of which it is composed, shall only be Merchandise – must be construed to mean such things as are usually
answerable for his character as an heir. bought and sold in trade by merchants. It means something that is
sold every day, and is constantly going out of the store and being
It depends. Art. 1626. The debtor who, before having knowledge of replaced by other goods.
the assignment, pays his creditor shall be released from the
obligation. Fixtures – refers to such articles or merchandise usually possessed
and annexed to the premises occupied by merchants to enable them
better to store, handle, and display their wares and which are
commonly known as trade fixtures, although removable without
General Provisions material injury to the premises at or before the end of tenancy.
Thing or chose in action – is any claim or right which may be pleaded A sale and transfer in bulk under the Bulk Sales Law is any sale,
in a suit at law, such as claim of reparation for a tort (civil wrong) or transfer, mortgage or assignment of
right guaranteed under certain types of contracts.
(1) A stock of goods, wares, merchandise, provisions or materials
Legal tender – is that currency which a debtor can legally compel a otherwise than in the ordinary course of trade and the regular
creditor to accept in payment of a debt in money when tendered by prosecution of the business;
the debtor in the right amount. Both are not included in the term
"goods." (2) All or substantially all, of the business or trade; or

"Document of title to goods" includes any bill of lading, dock warrant, (3) All or substantially all, the fixtures and equipment used in the
"quedan," or warehouse receipt or order for the delivery of goods, or business of the vendor, mortgagor, transferor, or assignor.
any other document used in the ordinary course of business in the
Purpose of the law. The "Bulk Sales Law" is designed to prevent the
sale or transfer of goods, as proof of the possession or control of the
defrauding of creditors by the secret sale in bulk of all or substantially
goods, or authorizing or purporting to authorize the possessor of the
all of a merchant's stock of goods.
document to transfer or receive either by indorsement or by delivery,
goods represented by such document. Scheme of the law. The general scheme of the law is to declare such
bulk sales fraudulent and void as to creditors of the vendor, or
A person is insolvent within the meaning of this Title who either has
presumptively so, unless specified formalities are observed, such as
ceased to pay his debts in the ordinary course of business or cannot
the demanding and the giving of a list of creditors, the giving actual
pay his debts as they become due, whether insolvency proceedings
or constructive notice to such creditors, by record or otherwise, and
have been commenced or not. (3) Goods are in a "deliverable state"
the making of an inventory.
within the meaning of this Title when they are in such a state that the
buyer would, under the contract, be bound to take delivery of them.

It depends. Art. 1637. The provisions of this Title are subject to the
rules laid down by the Mortgage Law and the Land Registration Law
with regard to immovable property.