San Beda College of Law

193
M EMORY A ID IN C OMMERCIAL L AW

any cash surrender absolute after the

value adjudication of
1. Right of action insolvency but
for tort which is before the final
purely personal in dividend shall have
nature been declared. (Sec.
54)
4. Other contingent
DIVIDEND IN INSOLVENCY debts and contingent
 It is a parcel of the fund arising from liabilities contracted
the assets of the estate, rightfully by the insolvent if
allotted to a creditor entitled to share in the contingency shall
happen before the
the fund whether in the same proportion
order of final
with other creditors or in a different dividend. (Sec. 55)
proportion. (2 A.F. Agbayani) 5. Any debt of the
 It is paid by the assignee only upon insolvent arising
order of the court. (Sec. 43, 44) from his liability to
any person liable as
surety, bail, or
IV. ORDER OF DISTRIBUTION
guarantor or
1. Equitable claims under section otherwise, for the
48 insolvent, who shall
2. Preferred claims with respect to have paid the debt in
specific movable property and full, or in part. (Sec.
specific immovable property 56)
under Art. 2241 and 2242
3. Preferred claims as to VI. COMPOSITION
unencumbered property of the  A proceeding in insolvency
debtor which shall be paid in the proceedings, which is voluntary on the
order named in Art. 2244 part of the debtor and his creditors, in
4. Common or ordinary credits which a debtor offers to pay his creditors
which shall be paid pro rata a certain percentage of their claims in
regardless of dates under Art. consideration of his release from
2245 liability.
 Requisites:
V. PROOF OF DEBTS 1. Offer must be made after the
filing of the Schedule of the
DEBTS THAT MAY DEBTS THAT MAY
debtor’s property and the list of
BE PROVED NOT BE PROVED
1. All debts due and 1. Claims barred by the his creditors;
payable from the statute of limitations. 2. Offer must be accepted in
debtor at the time of (Sec. 29) writing by a majority of the
the adjudication of 2. Claims of secured creditors representing a majority
insolvency. (Sec. 53) creditors with a
mortgage or pledge in of the claims which have been
2. All debts existing
their favor. (Sec. 59) allowed;
at the time of the
adjudication of
3. Claims of creditors 3. Offer must be made only after
who hold an attachment the insolvent deposits the
insolvency but not
or execution on the
payable until a property of the debtor. consideration to be paid to the
future time, a 4. Claims on account of creditors;
discount being made which a fraudulent 4. Accepted offer must be
if no interest is preference was made or
payable by the terms
confirmed by the court.
given. (Sec. 61)
of the contract. 5. Support (2 Agbayani,
3. Any debt of the p. 528.)
insolvent arising 6. A claim fro  Effects of confirmation:
from his liability as unliquidated damages 1.The consideration shall be
indorser, surety, bail arising out of pure tort.
(2 A. F. Agbayani) distributed as the judge shall
or guarantor, where
such liability became direct.

C OMMERCIAL L AW C OMMITTEE
CHAIRPERSON: Garny Luisa Alegre  ASST. CHAIRPERSON:Jayson O’S Ramos EDP: Beatrix I. Ramos SUBJECT
HEADS:
Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario
(Transportation Laws);
Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel
Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)
 San Beda College of Law

194
M EMORY A ID IN C OMMERCIAL L AW

2.The insolvency proceedings

shall be terminated.
3.The title to the insolvent’s
estate shall revest in him

C OMMERCIAL L AW C OMMITTEE
CHAIRPERSON: Garny Luisa Alegre  ASST. CHAIRPERSON:Jayson O’S Ramos EDP: Beatrix I. Ramos SUBJECT
HEADS:
Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario
(Transportation Laws);
Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel
Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)