Practice question
A creditor and a prospective substitute sign an arrangement expressly requiring the debtor bank’s conformity before the substitute takes over the creditor’s position. The bank never assents. Under Licaros v Gatmaitan, may they disregard that requirement merely by relabeling the arrangement an assignment?
- No; the intended conventional subrogation cannot evade the required debtor conformity
- Yes; every label conclusively overrides the terms
- Yes; debtor consent is never relevant to subrogation
- Yes; the absent bank is deemed to sign automatically
- Yes; the creditor alone may amend the requirement retroactively
Legal references
- Civil Code RA386: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html Articles1300–1303.
- Licaros v Gatmaitan GR142838 August9,2001 MAIN: https://lawphil.net/judjuris/juri2001/aug2001/gr_142838_2001.html Conventional subrogation distinguished from assignment.
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