TITLE I – OBLIGATIONS Chapter 1: General Provisions OBLIGATIONS Art. 1156. An obligation is a juridical necessity to give, to do or not to do.
Elements of an Obligation: (obligare- to bind) a.) Active subject- called the obligee (if the obligation is to do) or creditor (if the obligation is to give). The possessor of a right; he in whose favor the obligation is constituted. b.) Passive subject- called the obligor (if the obligation is to do) or debtor (if the obligation is to give). He who has the duty of giving, doing, or not doing. The passive subject must be determinate or determinable. a. How can both subjects be determinate or determinable? Obligations where the subjects are completely and absolutely determined at the birth of an obligation. Obligations where one subject is determined at the moment of the birth of the obligation and the other subject is to be determined subsequently at some fixed criterion, which criterion is fixed at the start of the obligation. Obligations in which subjects are determined in accordance with its relation to a real thing. Real rights. c.) Object or prestation- the subject matter of the obligation. It may consist of giving a thing, doing or not doing a certain act. The law speaks of an obligation as a juridical necessity to comply with a prestation. There is a juridical necessity, for noncompliance can result in juridical or legal sanction. Obligation -> prestation (object of the obligation) -> object of the prestation Requisites of the Object of the Obligation: o Licit (Legal) o Possible both in fact and in law o Determinate or determinablecan’t say you’re going to sell something. o Must have pecuniary value d.) Efficient cause- the vinculum or juridical tie. The reason why the obligation exists. e.) Vinculum juris- the legal tie. Consists of the enforceability of the obligation. If the debtor does not conform, the creditor has
the power to go to court to make the debtor perform – coercive. What makes an obligation is the power of the creditor to haul the debtor before the court, summoning powers of the state if needed. Voluntariness goes into entering into an obligation. But once you enter, it becomes involuntary. f.) Form- means manifestation of intent. There is no specific form for a valid obligation. Characteristics of Obligations: BALANE 1. It represents an exclusively private interest. 2. Creates ties which are by nature transitory. a. Because obligations are extinguished. But the period is relative. 3. It involves the power to make the juridical tie defective in case of non-fulfillment through satisfaction of the debtor’s property. Kinds of Obligations (a) Sanction 1) Civil obligation or perfect obligationArt. 1156. The sanction is judicial process. 2) Natural obligation- the duty not to recover what has voluntarily been paid although payment was no longer required. There is no real obligation on the part of the debtor, but due to conscience or guilt, he still fulfills the obligation. (for example, a debt had already prescribed, but the debtor pays the debt because of conscience or guilt) 3) Moral obligation (or imperfect obligation)- the sanction here is conscience or morality. (for example, going to mass) (b)Subject Matter 1) Real obligation- the obligation to give. 2) Personal obligation- the obligation to do or not to do. (for example, refraining from committing a crime) (c) Affirmativeness or Negativeness of the Obligation 1) Positive or affirmative obligation- the obligation to give or to do. 2) Negative obligation- the obligation not to do (which naturally includes “not to give”). (d)Viewpoint of Persons Obliged 1) Unilateral- where only one of the parties is bound. Every obligation has 2 parties; if
only one of them is bound, we have a unilateral obligation. 2) Bilateral- where both parties are bound. a. Reciprocal b. Non-reciprocal- where performance by one is non-dependent upon performance by the other. CRITICISM: the obligation stresses merely the duty of the debtor (the passive element) without emphasizing a corresponding right on the part of the creditor (the active element). The definition is incomplete, in that, it views obligations only from the debit side. There is no debt without a credit, and the credit is an asset in the patrimony of the creditor just as the debt is the liability of the obligor. Ramos: “an obligation is a juridical relation whereby a person (called the creditor) may demand from another (called the debtor) the observance of a determinative conduct (the giving, doing, or not doing), and in case of breach, may demand satisfaction from the assets of the latter. SOURCES OF OBLIGATIONS Art. 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts. Sources of Obligation: no obligation exists if the source is not one of those enumerated under Art. 1157 (exclusiveness of the enumeration). 1. Law- obligations ex lege. BALANE: there is really only one source of obligations, law. Without the law saying the particular contract is enforceable, the contract will not give rise to an obligation. However, “source” can be understood in both the ultimate and immediate sense. In the ultimate sense, law is the solidary sense. In the immediate sense, there are 5. Law is both an immediate and ultimate source. 2. Contracts- obligations ex contractu. 3. Quasi-contracts- obligations ex quasicontractu. (for example, the duty to refund an “over change” of money because of the quasi-contract of solution indebiti or “undue payment”) 4. Crimes or Acts or Omissions Punished by Law- obligations ex maleficio or ex delicto.
5. Quasi-delicts or Torts- obligations ex
delicto or ex quasi-maleficio. (for example, the duty to repair damage due to negligence) CRITICISM : In reality, there are only 2 sources: the law and contracts, because obligations arising from quasi-contracts, crimes and quasi-delicts are really imposed by law. LAW/OBLIGATION EX-LEGE Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable; and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. Meaning of the Article: the obligation must be clearly (expressly or impliedly) set forth in the law. Conflicts between Civil Code and Special Laws: if regarding an obligation ex lege or law, there is a conflict between the New Civil Code and a special law, the latter prevails unless the contrary has been expressly stipulated in the New Civil Code. CONTRACTS/OBLIGATION EX-CONTRACTU Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Obligations ex-contractu: while obligations arising from a contract have the force of law between the parties, this does not mean that the law is inferior to contracts. Before a contract can be enforced, it must first be valid, and it cannot be valid if it is against the law. Moreover, the right of the parties to stipulate is limited. BALANE: combines equity or good faith and strict compliance by the parties. Meaning of the Article: Neither party may unilaterally and upon his own exclusive volition, escape his obligations under the contract, unless the other party asserted thereto, or unless for causes sufficient in law and pronounced adequate by a competent tribunal. OBLIGATIO NS The result of a contract or some other CONTRACTS A contract, if valid, always results in obligations.
source. Contracts obligations
A contract is a meeting of the minds between 2 persons whereby one binds himself, with respect to the other, to give something or to render some service. (Art. 1305) The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided, they are not contrary to law, morals, good customs, public order, or public policy. (Art. 1306) Perfected by mere consent, and from that moment, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. (Art. 1315). From another viewpoint. A contract may itself be a result of an obligation. (for example, if someone engages someone as an agent, you have the contract of agency)
made to the gestor for necessary and useful expenses, as a rule (Art. 2150). b) Solutio indebiti (undue payment)- this takes place when something is received when there is no right to demand it, and it was unduly delivered through mistake. The requisites for the claim of refund: a. He who paid was not under any obligation to do so. b. The payment was made by reason of an essential mistake of fact. OBLIGATION EX DELICTO OR EX MALEFICIO Art. 1161. Civil obligation arising from criminal offenses shall be governed by the penal laws, subject to the provisions of Art. 2177, and of the pertinent provisions of Chap. 2, Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages. Art. 100 of the RPC: Every person criminally liable for a felony is also civilly liable. Oftentimes the commission of a crime causes not only moral evil but also material damage. If no material damage is done, civil liability cannot be enforced. Civil Liability arising from a Crime includes: a) Restitution b) Reparation of the damage caused c) Indemnification for inconsequential damage Damages in case of death: At least P50,000 must be given to the heirs of the victim. (Loss of earning capacity and moral damages, among other things, should be given) Civil Action implicitly instituted in criminal case: as a general rule, whenever a criminal action is instituted, the civil action for the civil liability is also impliedly instituted together with the criminal action. Kind of Proof: a) If a civil action merely is instituted, mere preponderance of evidence is sufficient. b) If a criminal case is brought (and with it, the civil case), the guilt must be established by proof beyond reasonable doubt. OBLIGATIONS EX QUASI-DELICTS OR EX QUASI-MALEFICIO Art. 1162. Obligations derived from quasidelicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special laws.
Innominate Contracts (Contratas Innominado) a.) Do ut des- I give that you may give. b.) Do ut facias- I give that you may do. c.) Facio ut des- I do that you may give. d.) Facio ut facias- I do that you may do. QUASI-CONTRACTS/OBLIGATION EX QUASICONTRACTU Art. 1160. Obligations derived from quasicontracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book. Quasi-contractu: that juridical relation resulting from a lawful, voluntary, and unilateral act, and which has for its purpose that payment of indemnity to the end that no one shall be unjustly enriched or benefited at the expense of another. A quasi-contract is not an implied contract because there is no meeting of the minds. 2 Principal Kinds: a) Negotiorum gestior (unauthorized management)- when a person voluntarily takes charge of another’s abandoned business or property without the owner’s authority (Art. 2144). Reimbursement must be
Quasi-delict: (tort or culpa aquiliana) a fault or act of negligence (or omission of care) which causes damages to another, there being no preexisting contractual relations between the parties. Negligence: “Negligence is the failure to observe, for the protection of the interests of another person, that degree of care, precaution and vigilance which the circumstances justly demand, whereby such other person suffers injury.” Negligence is the omission of that diligence which is required by the circumstances of person, place, and time. Thus, negligence is a question of fact (Civil Code). Test: would a prudent man foresee harm to the person injured as a reasonable consequence of the course about to be pursued? If so, the law imposes a duty on the actor to refrain from the course, or to take precaution against its mischievous results, and the failure to do so constitutes negligence. Reasonable foresight of harm, followed by the ignoring of the admonition born of this provision, is the constitute fact of negligence. Requirements before a person can be held liable for a Quasi-delict: a) There must be fault or negligence attributable to the person charged b) There must be damage and injury c) There must be a direct relation of cause and effect between the fault or negligence on the one hand and the damage or injury on the other hand (proximate cause which is the adequate and efficient cause, which in the natural order of events, necessarily produces the damages or injury complained of) Contractual Liability There is already an obligation which exists prior to or even without a breach. The breach of the contract is immaterial to the legal obligation. Contract and breach may be separable. Quasi-Delict The obligation arises only when there is a violation. Without a violation, there is no obligation. It is the breach itself which gives rise to the obligation. Quasi-delict and breach are inseparable.
the parties requires another standard of care. Duty to exercise diligence: the first effect of an obligation to deliver a determinate thing (as distinguished from a generic thing – or one of a class) is the duty to exercise proper diligence. Unless it is exercised, there is a danger that the property would be lost or destroyed, thus rendering illusory the obligation. Diligence needed: a) That which is required by the nature of the obligation and corresponds with the circumstances of person, time and place. b) Or, if the law or contract provides for a different standard of care, said law or stipulation prevails. TO GIVE: FRUITS Art. 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him. Personal right: jus in personam or jus ad rem. Power demandable by one person of another – to give, to do or not to do. Real right: jus in re. A power over a specific thing (like the right of ownership or possession) and is binding on the whole world. Non nudis pactis, sed traditionis dominia rerym transferatur. As a consequence of certain contracts, it is not agreement but tradition or delivery that transfers ownership. Kinds of Delivery: a) Actual delivery (or tradition)- where physically, the property changes hands. b) Constructive delivery- that where the physical transfer is implied. a. Traditio simbolica (symbolical tradition) b. Traditio longa manu (delivery by mere consent or the pointing out of an object) c. Traditio brevi manu (delivery by the short hand; that kind of delivery whereby a possessor of a thing not as an owner, becomes the possessor as an owner) d. Traditio constitutum possessorium (the opposite of brevi manu; thus, the delivery whereby a possessor of a thing as an owner, retains
Chapter 2: Nature and Effect of Obligations TO GIVE (Art.1163-1166): DUE DILIGENCE Art. 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or stipulation of
Ordinary Delay Merely nonperformance at the stipulated time. creditor’s rights over the fruits is merely personal. Generic obligations are never extinguished by fortuitous events. he may ask that the obligation be complied with at the expense of the debtor. then from the perfection of the contract.
. enjoyment or perfection. After constitution of the obligation and before delivery. there must be a demand for fulfillment. However. To account and deliver to the creditor the fruits if the thing bears fruits upon the time the obligation to deliver it arises. As a rule. 1170. To deliver the accessions and accessories. to take care of it with the proper diligence of a good father of the family. If the obligor delays. TO GIVE: ACCESSIONS AND ACCESSORIES Art. Obligation to deliver arises from: a) If there is no term or condition. 1166. the creditor. Accessions: those joined to or included with the principal for the latter’s better use. The obligation to give a determinate thing includes that of delivering all its accessions and accessories. If the thing is indeterminate or generic. 1163). genus. he shall be responsible for fortuitous event until he has effected the delivery. 3 Accessory Obligations: 1. or even a genuine one. b) Demand rescission or cancellation (in some cases). b) If there is a term or a condition. 1165. BALANE: TO GIVE A DETERMINATE THING Primary obligation: giving what is supposed to be given. 1166). These include alluvium (soil gradually deposited by the current of a river on a river bank) and whatever is built. Accessories: additions to or improvements upon a thing. c) Demand damages either with or without either of the first. Remedies of the Creditor when the Debtor fails to comply with his Obligation: a) Demand specific performance (or compliance) of the obligation. To give a specific thing (set apart from a class) b. (Art. extinguished by a fortuitous event or act of God. where there is no delivery of the object. (Art. then from the moment the term arrives or the condition happens. 2. Generic or Indeterminate Things: when it refers only to a class. To give a generic or indeterminate thing (one of a class) b) Personal obligations (to do or not to do) Specific or Determinate Things: when it is capable of particular designation. 1164).possession no longer as an owner. may compel the debtor to make the delivery. (a) or (b). Classification of Obligation from the Viewpoint of Subject Matter (or Object of the Obligation): a) Real obligations (to give): a.
Effect of Fortuitous Events: a specific obligation is an obligation to deliver a specific thing is. Traditio by the execution of legal forms and solemnities) *A sale which is simulated. accessions and accessories do not have to be included. The two instances where a fortuitous event does not exempt is if the obligor delays (this is default or mora) or if the obligor is guilty of bad faith. does not transfer ownership. even though they may not have been mentioned. or has promised to deliver the same thing to two or more persons who do not have the same interest. TO GIVE: DELIVERY Art. (Art. planted or sown on a person’s parcel of land. Hence. When what is to be delivered is a determinate thing. as a rule. to put a debtor in default. and cannot be pointed out with particularity. but in some other capacity) e. Effect of stipulation: if there is a stipulation to said effect. the demand is being either judicial or extrajudicial. Legal Delay (Default) Delay which amounts to a virtual non-fulfillment of the obligation. in addition to the right granted him by Art. 3. ownership is transferred only by delivery.
TO GIVE Determin ate thing Determin able thing TO DO Very personal
Not very personal
Not applicable because of the prohibitio n against involuntar y servitude. If a person obliged to do something fails to do it. Specific performance. 2. the same shall be executed at his cost.
NOT TO DO Art. Substitute performance.done by someone else (performed at the expense of the debtor). which as a rule is prohibited under our Constitution). This same rule shall be observed if he does it in contravention of the tenor of the obligation.damages. b) Also. Anyone else can do it (not personalisimo) 1.to obtain damages.done by someone else (performed at the expense of the debtor). 1168. Equivalent performance. it may be decreed that what has been poorly done be undone.damages. unless substitution is permitted.done by someone else (perform at the expense of the debtor). Equivalent performance. TO DO Art. 1167. Substitute performance. 3. Remedies of Creditor if Debtor fails to do: a) To have the obligation performed (by himself or another) at debtor’s expense (only if another can do the performance). 2. Furthermore. Remedies available to the creditor: 1. Substitut e Performa nce When someone else performs or something else is performed at the expense of the debtor. A thing may be ordered undone: a) If made poorly. Equivalent performance. 2. b) If the obligation is a negative one. Not applicable because of the prohibitio n against involuntar y servitude. Specific performance. Specific performance is not a remedy in personal obligations. May be obtained exclusively or in addition to the 1st 2 actions. otherwise.the debtor must perform it personally.
. this may amount to involuntary servitude. Only the obligor can do (personalisimo) 1. Equivalent performance. it shall also be undone at his expense. and the obligor does what has been forbidden him. itself. Can be obtained exclusively or in addition to other actions.Remedies available to the creditor: 1.damages. TO GIVE A GENERIC THING Remedies available to the creditor: 1. May be obtained exclusively or in addition to the 1st action.damages. provided the undoing is possible. Substitute performance.the debtor must perform it personally.damages. Equivalent performance. When the obligation consists in not doing. 2. Here performance by another and damages may be demanded. (Damages alone cannot substitute for performance if owners can do it. if purely personal or special – only damages may be asked. Obligatio n TABLE OF REMEDIES Specific Equivale Performa nt nce Performa nce The The performan payment ce of the of prestation damages. May be obtained exclusively or in addition to the 1st 2 actions.
and already liquidated or determinate in amount. If the debtor is in default.There is no mora in natural obligations. The mere fixing of the period is not enough. 1169. Default in the payment of one installment does not mean default in the whole amount. there must be a provision that if payment is not made when due.there is no mora solvendi in negative obligations (one cannot be late in not doing or not giving). And demand is still needed to put the debtor in default.In a purchase by installments. The demand must be for the obligation that is due (and not for another obligation. In reciprocal obligations. b) When the obligation expressly so provides. There must be non-performance. demand is needed. There must be a demand. as when the obligor has rendered it beyond his power to perform. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. however. unless the demand is not required. (in both cases. The obligation must be due. nor one with a bigger amount. It is not essential for the contract to categorically state that time is of the essence. (When demand is needed. . He may also bear the risk of loss. considering all the circumstances). From the moment one of the parties fulfills his obligation. he may be liable for interests or damages. Mora Solvendi ex re (debtor’s default in real obligations) b. Different Kinds of Mora: a) Mora Solvendi (default on the part of the debtor). proof of it must be shown by the creditor). the contract may provide for an “acceleration clause” (a clause which would make all installments due. However. 3. c) When time is of the essence of the contract (or when the fixing of the time was the controlling motive for the establishment of the contract). essential that his being in default is attributable to his own fault). Necessity of Demand: to put a debtor in default. as when a complaint for specific performance is filed. b) Extrajudicial. default or liability for damages or interests automatically arises. . or (3) When demand would be useless. 3. enforceable. except in certain instances. loss would have occurred just the same. When Demand is not needed to put Debtor in Default: a) When the law so provides. although damages here may be mitigated if he can prove that even if he had not been in default. or (2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract. a.Effects of Mora Solvendi: 1. all that happens will be that the whole amount becomes due. 2.
.NOT TO DO
e) When the obligor has expressly acknowledged
that he really is in default (but it should be noted that his mere asking for extension of time is not an express acknowledgement of the existence of default on his part). . the intent is sufficient as long as this is implied. Mora Solvendi ex persona (debtor’s default in personal obligations) b) Mora Accipiendi (default on the part of the creditor). 2. If there is an acceleration clause. without court proceedings. it is. 4. The demand may be: a) Judicial. delay by the other begins. neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him.the creditor is guilty of default when he unjustifiably refuses to accept
DELAY Art. He is liable even for a fortuitous event. upon default in one installment). as when the obligor has rendered it beyond his power to perform. d) When demand would be useless. the demand by the creditor shall not be necessary in order that delay may exist: (1) When the obligation or the law expressly so declares.Requisites for mora solvendi: 1. .
Moral.if imputable to the
debtor. but generally only if aside from the breach of contract. b) Negligence (fault or culpa)
c) Default or mora.actual losses as well as unrealized profit. Liability for Fraud or Dolo: a) According to time of commission. 5.) That agreed upon b. unless the creditor is in mora accipiendi. the latter would be in default.
d) Violation of the terms of the
obligation (violation). negligence. Fraud in performing a contract. Grounds for Liability in the Performance of their Obligations: a) Fraud (deceit or dolo). both parties are in default. . or delay and those who in any manner contravene the tenor thereof.If an obligation arises ex delicto (as the result of a crime).when the exact amount of damages cannot be determined. so it is as is no one is in default).corrective or to set an example. When Damages or Interest may be lost: a) If the principal obligation is allowed to lapse by prescription. Liability for damages: those liable under Art. 1171. . prejudice or damage was caused. b) If the damages or interest are allowed to prescribe. the debtor-criminal is responsible for loss. 4. either by the law. 3. Some justifiable reasons for refusal to accept may be that the payor has no legal capacity or that there is an offer to pay an obligation other than what has been agreed upon. NEGLIGENCE OR DELAY Art.” (Civil Code) c) Compensatio Morae (when in a reciprocal obligation.predetermined beforehand – by agreement.unless excused in proper cases by fortuitous events. Dolo causante (causal fraud) ii.) In the absence of agreement. Those who in the performance of their obligations are guilty of fraud. (Fraud here may be either: i. fraud may be classified as follows: a. Temperate. said stipulated time controls. IRREGULARITY IN PERFORMANCE: FRAUD. Exemplary. the legal rate of interest.payment or performance at the time said payment or performance can be done. the debtor shall not be exempted from the payment of its price. dolo incidente is not important
. Actual. unless the thing having been offered by him to the person who should receive it. are liable for damages. and the other does not.If the performance is not set on different dates. 6. When neither has performed. here it is as if neither is in default). Dolo incidente (incidental fraud) *while dolo causante is so important a fraud that vitiates consent (allowing therefore annulment). contract. 1170 should pay damages.to vindicate a right. there is compensatio morae (default on the part of both. “When the debt of a thing certain and determinate proceeds from a criminal offense.intentional evasion of fulfillment. Damages in Monetary Obligations: indemnity for damages consists of: a. Nominal. It cannot be recovered unless proved.for mental and physical anguish. Kinds of Damage: damages should be paid by those responsible for them. 1. it is understood that performance must be simultaneous. Liquidated. If a contract of simple loan stipulates the time when interest will be counted.when no other kind of damages may be recovered. Fraud in obtaining consent (may be causal or merely incidental) b. the latter refused without justification to accept it. Responsibility arising from fraud is demandable in all obligations. this is not so for future fraud). whatever may be the cause for the loss. 1170. Any waiver of an action for future fraud is void. Performance may be set on different dates. IRREGULARITY IN PERFORMANCE: FRAUD Art.depend upon each other for performance. c) If the damages or interest are condoned (waived or remitted). If one party performs. or custom. b) According to meaning. even though this be through a fortuitous event. 2. fraud may be past or future (liability for past fraud may be waived.
if the former is insolvent. Proof neededpreponderance of evidence.IRREGULARITY IN PERFORMANCE: NEGLIGENCE Art. Culpa Contractual Negligence is merely incidental.
Accused is presumed innocent until the contrary is proved.
Defense of “good father. 1171 and 2201. As long as it is proved that there was a contract. Responsibility arising from negligence in the performance of every kind of obligation is also demandable. When negligence shows bad faith.
Proof needed in a crimeproof of guilt beyond reasonable doubts.that which results in a breach of contract. Waiver of an action to enforce liability due to future culpa may in a certain sense be allowed. Liability arising from dolo cannot be mitigated or reduced by the courts. Liability due to negligence may be reduced in certain circumstances. and that it was not carried out. 1172. the victim has to prove the negligence of the defendant. but such liability may be regulated by the courts. substantive. and independent. This is not a proper defense in culpa criminal. Culpa Although voluntary (that is. according to the circumstances. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the person. not done through force) still there is no deliberate intention to cause damage. This is because his action is based on alleged negligence on the part of the defendant. incident to the performance of an obligation already existing because of a contract. the provisions of Arts.
(except the duty never to harm others).
Defense of “good father of a family” in the selection and supervision of employees is not a proper complete defense in culpa contractual (though this may mitigate damages).
obligation (a contract. There is a preexisting Culpa Aquiliana Negligence here is direct. If the law or contract does not state the diligence which is to be observed in the performance. substantive. ¶2.” is a proper and incomplete defense (insofar as employers or guardians are concerned) in culpa aquiliana. Here the employee’s guilt is automatically the employer’s civil guilt.
(except of course the duty to be careful in all human actuations).
No pre-existing obligation
No pre-existing obligation
. it is presumed that the debtor is at fault. Proof neededpreponderance of evidence. either express or implied). Culpa Criminal Negligence here is direct. 1173. of the time and of the place. that which is expected of a good father of a family shall be required. and independent of a contract. Dolo There is deliberate intention to cause damage or prejudice.
Art. etc. and it is his duty to prove that there was no negligence in carrying out the terms of the contract.
Stipulations regarding Negligence (future Negligence): a) Gross negligence can never be excused in advance for this would be contrary to public policy b) Simple negligence may in certain cases be excused or mitigated Kinds of Culpa Classified According to the Source of Obligation a) Culpa contractual (contractual negligence).that which results in the commission of a crime or a delict. so prosecution has the burden of proving the negligence of the accused. b) Culpa Aquiliana (civil negligence or tort or quasi-delict) c) Culpa Criminal (criminal negligence). shall apply. Waiver of an action to enforce liability due to future fraud is void.
negligence. 2. 1233) 2. 1171Fraud under Art. b) When expressly declared by stipulation or contract. the debtor is liable. 1172) 1. (Art. Delay is through fault or negligence. Rescission/Resolution. or delay and those who in any manner contravene the tenor thereof. (Art. Person b. Without this deceit. knowing and intending the effects which naturally and necessarily arise from such act or omission. 1170. In fraud. 1173). which is lacking in the latter. Damages in either case (Art. Fraud under Art. negligence results in improper performance.those who in the performance of their obligations are guilty of fraud. Creditor may insist on proper substitute or specific performance (Art.
NEGLIGENCE: The absence of due diligence (Art. or when it is otherwise declared by stipulation or when the nature of the obligation requires the assumption of risk. Fraud preexists the There was already an obligation. fraud exists. 1170). Deceit vitiates consent in contracts. 2. 3. Obligation is demandable and liquidated. 1174. the question is the quality even if performed on time. 1170. 1170) DELAY/MORA: Definition: the non-fulfillment of the obligation with respect to time. negligence. 1170-1171) Definition: the voluntary execution of a wrongful act. 1191). Place Effects: (Art. Creditor may insist on proper substitute or specific performance. Like fraud. even if foreseen. Simple 2. General rule for fortuitous events (caso fortuito. force majeure or unavoidable accident): no liability. c) When the nature of the obligation requires the assumption of risk. b) Impossibility of foreseeing or impossibility of avoiding it. thus the obligation before the obligation is voidable. 1191) 3. Fraud under Art. 2 Types of Negligence: 1. act of God. Distinguished from negligence by the presence of deliberate intent. The deceit occurs by using insidious words machinations. even if the quality is excellent but the performance is not in due time. In the absence of b) that expected of a good father of a family. but it is characterized by lack of care (lack of due diligence in the care of a good father of the family). The deliberate and intentional evasion of the normal fulfillment of the obligation. or willful omission. Requisites: 1.Kinds a) b) c)
of Diligence Under the Civil Code: That agreed upon by the parties. are liable for damages. Creditor requires performance either judicially (through court action) or
Art. Except in cases expressly specified by the law. 1233). 3. In the absence of a) that required by law. fraud. It will depend on: 1. c) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. Gross The determination of due diligence is always relative. BALANE: IRREGULARITY IN PERFORMANCE: ATTRIBUTABLE TO DEBTOR (CULPABLE) Art. Exceptions: a) When expressly declared by the law or is in default.more properly called malice. FRAUD: (Art. Rescission/Resolution (Art. unlike fraud which is characterized by malice. The nature of the obligation 2. Time c. 1170. the other party would not have entered into the contract.
1338 1171 Deceit is antecedent Malice is subsequent fraud. Damages in either case. Art. Nature and circumstances of a. In delay. Essential characteristics of a Fortuitous Event: a) The cause must be independent of the will of the debtor (free from participation or aggravation). or which though foreseen. were inevitable. (Art. Effects: 1. no person shall be responsible for those events which could not be foreseen.
Requisites: o The obligation is demandable and liquidated. Mora Solvendi: Delay in performance incurred by the debtor. If after receipt of demand and the other party does not comply with his obligation. (Art. Exceptions: (Mora solvendi ex re. 1221 but is called ‘loss’ there. What is the form of such a demand? Any communication of a party that he is ready and willing to comply with his obligation. Mora Accipiendi
Related to payment (consignation). (Art. demand is still needed. o When demand would be useless. force majeure. 1174). 3. o When it appears from the nature and controlling motive the obligation that time was a controlling motive for the establishment of the contract. o When the obligation or the law expressly so declares. but the creditor refuses to accept it without just cause. debtor shall not have obligation to pay the same from the time of the delay. Thus. 2. Responsibility of debtor for the thing is limited to fraud and gross negligence. There must be an express stipulation to that stipulates that non-performance on the due date is delay without need of demand. The creditor refuses the performance without just cause. must be independent of the human will. 1169). 3 kinds of delay: 1. o Debtor delays performance either because of dolo or culpa. 2. 1165) o Damages. 3. Requisites: 1. when obligor has rendered it beyond his power to perform. Requisites: 1. In reciprocal obligations (obligations with a counterpart prestation) which require simultaneous performance. An offer of performance by the debtor who has the required capacity. Effects: o When the obligation is to deliver a determinate thing. This does not constitute automatic delay. Creditor becomes liable for damages. NOT ATTRIBUTABLE TO THE DEBTOR (NONCULPABLE) Fortuitous event (Art. o The creditor demands the performance either judicially or extrajudicially. The creditor incurs in delay when debtor tenders payment or performance. General rule: demand is necessary. Act of God Also governed by Art. 4. 3. or the failure to comply with his obligations. a cause for extinguishment of obligation. or if it can be foreseen. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. no delay. he is in delay. 1191) 2.
. no demand. 2.
extrajudicially (any communication by the creditor to debtor). If the obligation has interest. 5. Compensatio Morae Delay on both sides on reciprocal obligations. Effects: 1. o Rescission/Resolution. 6. Debtor may relieve himself by consignation of the thing. Expenses incurred by the debtor for preservation of thing after the delay shall be chargeable to the creditor. (Mora solvendi expersona). The offer must be to comply with the prestation as it should be performed. Debtor is exempted from risk of loss of thing which automatically pass to creditor. caso fortuioto. Mere setting of due date is not enough. It must be impossible to foresee the event which constitutes caso fortuito. The cause of the unforeseen and unexpected occurrence. it must be impossible to avoid. 3. the risk is placed on the aprt of the debtor. Art. cancel each other out.
3. 2 Presumptions: 1. When the law so provides (Art. Exception: 1. 3. The receipt of a later installment of a debt without reservation as to prior installment.
. Usurious transaction shall be governed by special laws. 1176. Falure of debtor to collect his own credit from a third person either through malice or negligence. present and future. The receipt of the principal by the creditor. chattels or credits. The creditors. Requisites: 1. The debtor’s acts are fraudulent. There is a credit in favor of the plaintiff. goods. 2. d) Accion pauliana (impugn or rescind acts or contracts done by the debtor to defraud the creditors. General Rule: when a debtor is unable to fulfill his obligation because of a fortuitous event or force majeure. 2. Premised on the theory that “the debtor of my debtor is my debtor. 5. giving advantage to other persons. a remedy which gives the creditor the prerogative to act in his own name. Debt payable in installments.” Requisites: 1. 1175. The exaction of excessive interest.
Art. 3. it compensates the damage caused.presumption that interest has been paid if the principal has been received without reservation regarding interest. 1177. Moratory interest. Extent of Debtor’s Liability: the debtor is liable with all his property.
4. 1163) 2. The creditor has no legal remedy. b. may exercise in all the rights and bring all the actions of the latter for the same purpose. This is an exception to the relativity of contracts. Kinds of interest: a. When there is express stipulation. 4. When the nature of the obligation requires the assumption of risk
Art. Arts. Simple Loan (Mutuum): by the contract of simple loan. Rights of Creditors: Enforcement of Creditor’s Remedies a) Exact payment b) Exhaust debtor’s properties. The obligor must be free from any participation in the aggravation of the injury resulting to the creditor. Fortuitous event yields to contrary stipulations. shall give rise to the presumption that said interest has been paid. 5. The creditor is prejudiced by the debtor’s acts which are in favor of third parties and rescission will benefit the creditor. Art.right of creditors to rescind alienations by debtor which are prejudicial to them to the extent of the prejudice. without reservation with respect to the interest. 4. Compensatory interest. Usury: contracting for or receiving something in excess of the amount allowed by law for the loan or use of money. 2.presumption that earlier installments have been paid if the later installment has been received without reservation regarding the previous installments.) Interest given for compensation or use of the money.a direct (not subragatory) action by the creditor against his debtor’s debtor. they may also impugn the acts which the debtor may have done to defraud them. Credit is due and demandable. generally by attachment (except properties exempted by the law) c) Accion subragatoria (subragatory action)exercise all rights and actions except those inherent in the person. save those which are inherent in his person. one of the parties delivers to another money or other consumable things upon the condition tat the same amount of the same kind and quality shall be paid. The debtor has performed an act subsequent to the contract. after having pursued the property in possession of the debtor to satisfy their claims. e) Accion directa. Right (of account) is not intuitu personae. for the fulfillment of his obligations subject to the exemptions provided by law. he cannot be held liable for damages or non-performance. Interest bearing debt.) Interest given by way of damages. Insufficiency of assets of the debtor to satisfy the creditor’s credit. 1380-1389). shall likewise raise the presumption that such installments have been paid. Creditor has a right of credit against the debtor.
In conditional obligations. (Art. In term. (Art. fruits and interest are deemed mutually compensated.Art. The condition that some event happens at a determinate time
shall extinguish the obligation as soon as the time expires or if it has become indubitable that the event will not take place. a fiction is created whereby the binding tie of the conditional obligation is produced from the time of its perfection. Every obligation whose performance does not depend upon a future or uncertain event. the happening of the term determines its demandability. debtor appropriates the fruits. (Art. Subject to the laws. the obligation becomes effective and enforceable. if there have been no stipulation to the contrary. In obligations to do and not to do. 1187) The law does not require the delivery or payment of the fruits or interests accruing before the happening of the suspensive condition. The fulfillment of a suspensive condition results in the acquisition of rights arising out of the obligation. 1188) The happening of the condition extinguishes the obligation. (Art. 1184) The moment the suspensive condition happens. provided there will be no absurdity). must be clearly proved. By the principle of retroactivity. the happening of the condition determines its birth or death. The debtor who paid before the happening of the condition may recover only when he paid by mistake and provided the action to recover is brought before the condition. bring the appropriate actions for the preservation of his right (Art. Pure obligation: one without a condition or a term (hence. 1188). 1178. The right to the fuirts of the thing is not within the principle of retroactivity of conditional obligations. all rights acquired in virtue of an obligation are transmissible. Exceptions: 1) If the law provides otherwise 2) If the contract provides otherwise 3) If the obligation is purely personal *intransmissibility by contractual stipulation. 1187) The creditor may. and not from the happening of the condition. before the fulfillment of the condition. Chapter 3: Different Kinds of Obligations Section 1: Pure and Conditional Obligations DIFFERENT KINDS OF OBLIGATIONS Art. Transmissibility of Rules: General Rule: rights are transmissible. the courts shall use sound discretion to determine the retroactive effect of the fulfillment of the condition. If the obligation is unilateral. the effects of the obligation retroact to the moment when such obligation was constituted or created. 1179. It Is one which is subject to no contingency. (Art. or upon a past event unknown to the parties. therefore. The fulfillment of the resolutory condition results in the extinguishment of rights arising
. demandable at once. without prejudice to the effects of the happening of the event. 1187) If the obligation imposes reciprocal prestations. being the exception to the rule. However. is demandable at once. Conditional obligation: when there is a condition. When an obligation is demandable at once: a) When it is pure b) Or when it has a resolutory condition Classification of Conditions: a Suspensive The happening of the condition ) gives rise to the obligation. A condition is a future and uncertain event. Every obligation which contains a resolutory condition shall also be demandable.
2. the obligation is treated as if it did not exist. 2. 6. Thus. If the condition depends upon the will of the creditor. the character of resolution is principal and retaliatory while the character of rescission is subsidiary. (Art. Art. Upon resolution. the law only talks about the first prestation. 1190) Resolution (Art.
. This notice of resolution is necessary. 5. The exercise of this right
can be the subject of judicial review. The parties are returned to their original situation. The entire obligation is void because there is no juridical tie. If the defaulting party refuses to return it.out of the obligation. the aggrieved party must go to court in order to recover it. Art. so that they may be returned to their original condition before the creation of the obligation. A reciprocal obligation has 2 elements: 1. Summary of rulings on resolution: 1. then the obligation is valid In this case. 1191 uses the term “rescission” but the better term is resolution. the breach is a resolutory condition which extinguishes the obligations. The right to resolve is in inherent in reciprocal obligations. The right of resolution can be exercised extrajudicially and will take effect upon communication to the defaulting party. If the aggrieved party has performed the prestation. An obligation is one which has to be performed regardless of the will of the debtor. In rescission. The right of resolution applies to reciprocal obligations. Depends partly on the will of one of the parties and partly on chance or the will of a third person. Depends on chance or hazard or the will of a third person. Each prestation is designed to be the counterpart of the other. Resolution is different from rescission. 1191) is found on the conditional obligations because if there is a breach. Resolution is based on the nonfulfillment of obligation. the aggrieved party can demand recovery. 7. Rescission is based on economic prejudice. If the resolutory condition is fulfilled. In reciprocal obligations. The breach of obligation must be substantial. then all the aggrieved party has to do is to refuse to perform his prestation. 1182 prohibits a suspensive potestative condition dpendent on the will of the debtor. the plaintiff must show that there is no other recourse. The creditor can compel the debtor to perform the obligation. 2 prestations arising from the same source. 4. This means that in resolution there is no need to show that there is no other remedy. Furthermore. There is no element of compulsion. The fulfillment of the condition depends upon the will of a party to the obligation. If the aggrieved party has not performed the prestation and resolves extrajudicially. there must be mutual restitution of the object and its fruits. the reciprocal prestation is not taken into consideration. Depends upon the will of the debtor. Proof of substantial breach is a prerequisite for resolution. each party is bound to return to the other whatever he has received. 3. there is a vinculum juris. The fulfillment of a condition depends upon chance and/or upon the will of a 3rd person and not on the will of a party.
or because of the intention of the parties. 1180. An act is to be performed. Intent of the debtor to prevent fulfillment of the obligation.Void condition and obligation. if the obligation is divisible and that part of the obligation is not unaffected by the impossible condition. Not capable of partial performance because of the nature of the thing. Requisites: 1. Negative condition to do something impossible . When the condition is not susceptible of partial realization. the obligation shall be deemed to be one with a period. When the debtor binds himself to pay when his means permit him to do so. an impossible condition is simply disregarded. Capable of partial performance. However.
Rights are transmissible unless the rights are personal. The condition is stated. or due to a contradiction in its terms. When the condition is susceptible of partial realization. If only a few of the conditions have to be performed. Negative condition not to do anything illegal . then the obligation is valid (Art. In donations and succession. however. Not capable of fulfillment due to nature or due to the operation of the law or morals or public policy. although voluntary. 1183 refers to onerous obligation whereas donations and succession are gratuitous. Capable of fulfillment in nature and in law. Conjunctive when there are several conditions. Alternative when there are several conditions. 2. Where the act of the debtor. 1. did not have for its purpose the prevention of the fulfillment of the condition. If all the conditions must be performed. only one of which must be realized. subject to the provisions of Art.
. it will not fall under the doctrine of constructive compliance. 2.c )
The fulfillment of a condition depends partly upon the till of a party to the obligation and partly upon chance and/or the will of a third person. The effect of an impossible condition regarding donations and succession is different. 1186). the obligation is valid. 3. The principle underlying constructive fulfillment of conditions is that a party to a contract may not be excused from performing his promise by the non-occurrence of an event which he himself prevented. 1183). all of which must be realized. When the condition involves the performance of an act. 1183). the obligation is void. Something will be omitted. When the condition depends not only upon the will of the debtor. 1197. Actual prevention of compliance. When the condition involves the non-performance of an act.Disregard the condition. but also upon chance or will of the others. Doctrine of Constructive Compliance: the condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment (Art. Positive condition to do something impossible . The distinction can be explained by the fact that Art. When the condition is stated expressly. The effect of an impossible condition is to annul the obligation (Art.Valid condition and obligation. The doctrine applies also to potestative and mixed conditions. Art. The condition merely inferred
When the condition is tacit.
1181. NEGATIVE CONDITIONS
. Rights already acquired are lost once the condition is fulfilled. shall depend upon the happening of the event which constitutes the condition. the court. Art. by law. not to do an illegal thing. b) If the condition is negative. should determine what period was really intended. Illegal conditions: prohibited by good customs. not to do the impossible.depends on chance or upon the will of the third person. the obligation shall take effect in conformity with the provisions of this Code. the law consider this obligation as one with a term or a period. What depends really on him is not payment. If also resolutory. Conditional Perfection of a Contract: if the perfection of a contract depends upon the fulfillment of a condition. if the suspensive condition does not take place. that part thereof which is not affected by the impossible or unlawful condition shall be valid. b) Potestative on the part of the Creditor Art. If the obligation is divisible. Potestative. POSITIVE CONDITIONS Art.also called facultative condition. The condition not to do an impossible thing shall be considered as not having been agreed upon. How long is the term: The general rule is for the creditor to ask the court first for the fixing of the term. both the condition and obligation are valid. c) If the condition is negative. If also suspensive. 1184. i.valid. Resolutory conditions: also called conditions subsequent. Depends on the exclusive will of one of the parties. that is. but the time when payment is to be made. considering the parties’ intentions. 1183. the acquisition of rights. the conditional obligation shall be void. prohibited. or indirectly. Hence. the parties would stand as if the conditional obligation had never existed. If it depends upon chance or upon the will of a third person. Suspensive conditions: the happening of which will give rise to the acquisition of a right (also called conditions precedent or conditions antecedent). Mixed Conditions a) Potestative.both the condition and the obligations are void. those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them.e. Effects: a) If the condition is to do an impossible or illegal thing. 1182. In conditional obligations. Casual. When the fulfillment of the condition depends upon the sole will of the debtor.Debtor to pay “when his means permit”: payment does not depend on debtor’s will. Any action to recover before this is done is considered premature. b) Casual. non-fulfillment thereof means the non-perfection of the contract since the suspensive condition should have been first fulfilled. The condition that some even happens at a determinate time shall extinguish the obligation as soon as the time expires or if it has become indubitable that the event will not take place. public policy. Impossible conditions.
Potestative (Facultative) Condition a) Potestative on the part of the Debtor a. as well as the extinguishment or loss of those already acquired. Art. What characterizes an obligation with a suspensive condition is the fact that its efficacy or obligatory force is subordinated to the happening of a future or uncertain event. both the condition and the obligation are void (because the debtor knows that no fulfillment can be done and therefore is not serious about being liable). and it is only when that term set arrives that he can demand fulfillment. for the obligation is really illusory b. Impossible conditions: illogical condition. directly. Effect if period of fulfillment is not fixed: if the period is not fixed in the contract. just disregard the condition but the obligation remains.
in unilateral obligations. the property cannot be considered a future one. Appropriate actions means to sue in court. If no time has been fixed. Here the period runs from the day the condition was fulfilled. The creditor may. But intention and prevention in the exercise of a lawful right will not render the Article applicable. The condition that some event will not happen at a determinate time shall render the obligation effective from the moment the time indicated has elapsed.Art. after all. 1186 applies only to a suspensive condition. there is a danger the creditor will receive nothing. the following rules shall be observed in case of the improvement. Future property cannot. or it has become evident that the event cannot occur. loss or deterioration of
. 1187. it may sometimes apply to a resolutory condition. In the meantime. When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give. but inasmuch as she is entitled to the land since 2004. as when the object is deliberately destroyed. or prevention without intention is not sufficient. promises to sell to Maria his land provided she passes the bar in 2006 and she does.intention without prevention. Art. it is as is she was entitled to the land since 2004 and any donation or mortgage made by her
in 2004 will be considered valid. undue payment). Actions to preserve Creditor’s rights: if not allowed to take appropriate action. Art. 1189. Same as with mortgages because the mortgagor must be the owner. before the fulfillment of the condition. to the day the obligation was constituted. when the obligation imposes reciprocal prestations upon the parties. be donated. In obligations to do and not to do. 1188. the condition may not materialize. b) Period of prescription. bring the appropriate actions for the preservation of his right. The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition. (for example. unless from the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the same was different. the debtor shall appropriate the fruits and interests received. It is unfair for the creditor to unjustly enrich himself (solution indebiti. In reciprocal obligations. if Jose. once the condition has been fulfilled. the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. If the obligation is unilateral. Applicable of the Article to Resolutory Conditions: although in general. the debtor has lost the use of the object. as a rule. as well as other remedies such as asking for security if the debtor is about to be insolvent or asking the court to prevent alienation or concealment of pendent conditionae. the condition shall be deemed fulfilled at such time as may have probably been contemplated. 1185. the fruits and interests during the pendency of the condition shall be deemed to compensate each other (even though they really be unequal). Art. 1186. the retroactive effect of the condition that has been complied with. Art. Nevertheless. the intent to prevent must be present. debtor gets the fruits and interests unless there is a contrary intent. shall retroact to the day of the constitution to the obligation. hidden or alienated. Art. in 2004. because it can be enforced only from said date. bearing in mind the nature of the obligation. Requisites: 1) Voluntarily made. Retroacts: as a general rule.either maliciously or not. Right of Debtor to recover what was paid by mistake: what was paid by mistake may be recovered because. The debtor is also entitled to fruits or legal interest if the creditor be in bad faith. the courts shall determine. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. Any alienation on the land made by Jose will be considered invalid.) No retroactivity with reference to: a) Fruits or interests. if the creditor knew that payment was being made prior to the fulfillment of the condition. in each case. that is. 2) Actually prevents. The effects of a conditional obligation to give.
1187 shall be observed as regards the effect of the extinguishment of the obligation. Effects when Resolutory Condition is Fulfilled 1. May be lost a. Loss. In case of the loss. gathering and preservation. are laid down in the preceding article shall be applied to the party who is bound to return. 3. the parties should restore to each other what they have received. Through the expense of the debtor c. and 2) The object is specific (not generic) • 3 things that may happen to the object of an obligation pending the fulfillment of a suspensive condition: 1. (5) If the thing is improved by its nature. (6) If it is improved at the expense of the debtor. Aside from the actual things received. The obligation is extinguished. 5. it is understood that the thing is lost when it perishes. With fault of the debtor c. 2. (2) If the thing is lost through the fault of the debtor. b) That would merely be considered a deterioration of the thing. The power to rescind obligations is implied in reciprocal ones. The rules given in Art. Without the fault of the debtor b. Art. 1189 will apply to whoever has the duty to return in case of the loss. May deteriorate (value is reduced or impaired) a. in case one of the obligors should not comply with what is incumbent upon him. deterioration or improvement of the thing. By nature or by time b. May be improved a. the creditor may choose between the rescission of the obligation and its fulfillment. or goes out of commerce. or by time. 1190. As for obligations to do and not to do. Because the obligation had been extinguished and considered to have had no effect. 4. (3) When the thing deteriorates without the fault of the debtor. deterioration. Partly through nature or time and partly by the debtor Loss: it is understood that a thing is lost if a) When it perishes b) When it goes out of commerce
c) When it disappears in such a way that its existence is unknown d) When it disappears in such a way that it cannot be recovered Effects of Partial Loss: a) That would amount to a loss important enough to be considered a complete loss (this will be determined by the courts). and Improvement During the Pendency of the Condition: • Applies only if: 1) The suspensive condition is fulfilled. he shall be obliged to pay damages. Partly with and partly without the fault of the debtor 3. the fruits or the interests thereon should also be returned after deducting of course the expenses made for their production. The courts are given power to determine the retroactivity of the fulfillment of resolutory conditions. (4) If it deteriorates through the fault of the debtor. the parties. Deterioration. the impairment is to be borne without the creditor. Without the fault of the debtor b. the provisions which. the obligation shall be extinguished. the provisions of the 2nd paragraph of Art. with the payment of damages in
.the thing during the pendency of the condition: (1) If the thing is lost without the fault of the debtor. or disappears in such a way that its existence is unknown or it cannot be recovered. he shall have no other right than that granted to the usufructuary. or improvement of the thing. upon the fulfillment of said conditions. with indemnity for damages in either case. the improvement shall inure to the benefit of the creditor. The injured party may choose between the fulfillment and the rescission of the obligation. in which case the rules on deterioration should apply. Partly with and partly without the fault of the debtor 2. With the fault of the debtor c. Art. with respect to the debtor. 1191. When the conditions have for their purpose the extinguishment of an obligation to give. shall return to each other what they have received.
a clause allowing for attorney’s fees for the foreclosure of a mortgage cannot be availed of if the mortgage itself is rescinded. 5) If an action is brought for specific performance. a. Fulfillment (specific performance) (plus damages) b. unless there be just cause authorizing the fixing of a period. The rule is vice-versa. if the latter should become impossible.either case. willing and able to comply with his own obligation. 6. This the rescission referred to here is not predicated on injury to economic interests on the part of the party plaintiff (which is the basis for the rescission mentioned in Arts. the contract stipulate that either party can rescind the same or take possession of the property upon non-fulfillment of the party. The right to rescind needs judicial approval in certain cases. The court shall decree the rescission claimed. the court will not decree rescission. Characteristics of the Right to Rescind or Resolve: 1. 1380 and 1381). Thus: a. The right to rescind is not absolute. He may also seek rescission. which breach is violative of the reciprocity between the parties. 1385 and 1388 and the Mortgage Law. This is understood to be without prejudice to the rights of third persons who have acquired the thing. The right to rescind is implied (presumed) to exist and. therefore. b. and in others. Choice by the Injured Party: 1) The injured party may choose between: a. still ask for rescission (provided that rescission is otherwise proper). Judicial approval is needed when there has already been delivery of the object (unless of course there is a voluntary returning). if neither is ready. Moreover. However. Otherwise. if the plaintiff elects fulfillment of a reciprocal obligation. that if the obligation is reciprocal but with a period. If there be just cause for fixing the period within which the debtor can comply. in the interest of justice partial rescission and partial fulfillment may be allowed. the guilty party cannot rescind. neither can resolve. neither party can demand performance or be considered in default before the expiration of the period. expressly or implied. 5. He who comes to equity must come with clean hands. the damages sought must
. and still insist on the performance of subordinate stipulations. Or in case there has been delivery. Trivial causes or slight breaches will not cause rescission. does not need such approval. provided the court has not yet given final judgment. Be it noted. 4) The injured party who has elected fulfillment may. However. rescission thereof may not be declared at the same time. It can be demanded only if the plaintiff is ready. if fulfillment be impossible. the plaintiff cannot ask for both remedies. in reciprocal contracts or transactions. the obligation or promise of each party is the cause or consideration for the obligation or promise of the other.
c. It is not enough that both parties are indebted to each other. Judicial approval is not needed when there has been no delivery yet. in accordance with Arts. 4. The cause must be indentical and the obligations should arise simultaneously. Hence. the rule is still that the rescission or resolution of a contract has the effect of abrogating it in all its parts. and the other is not. Or rescission (plus damages) 2) The right is alternative and an alternative prayer may be made in a court complaint unless either had been waived previously. need not be expressly stipulated upon. 3) The right is not conjunctive. but on the breach of faith by the defendant. It exists only in reciprocal obligations. 3. Parenthetically. If the property is now in the hands of an innocent third party who has lawful possession of the same. Reciprocal Obligations: refers to obligations where two parties are reciprocally obliged to do or give something. Right to Rescind: means the right to cancel or resolve the contract or reciprocal obligations in case of non-fulfillment on the part of one. in some cases. Thus. 2. The right to rescind may be waived. however. that is. even after he has chosen fulfillment. b. the creditor cannot demand rescission.
The first one is fair to both parties because the second infractor also derived or thought he would derive some advantage by his own act or neglect.be asked in the same action. at a date known beforehand. In the former. which. If it cannot be determined which of the parties first violated the contract. In case both parties have committed a breach of the obligation. A future and certain event. Up to a time
. exerting an influence on an obligation as a consequence of juridical acts. refer even to the past. and either suspends their demandableness. Merely fixes the time or the efficaciousness of an obligation. Always refers to the future. Term: a length of time. it does not militate against its existence. or a time which cannot be determined. because it is presumed that both at about the same time tried to reap some benefit. A day certain is understood to be that which must necessarily come. 1192. and each shall bear his own damages. Obligations for whose fulfillment a day certain has been fixed. the obligation is conditional and it shall be regulated by the rules of the preceding Section. Manresa: a term or a period consists in a space of time which has an influence on obligations as a result of judicial act. In their fulfillment
With reference to time As to influence on the obligation
Period An event which must happen sooner or later. c Ex die A period with a suspensive ) effect. although it may not be known when. the same shall be deemed extinguished. If the uncertainty consists in whether the day will come or not. it cannot prevent the birth of the obligation in due time. Here. Section 2: Obligations with a Period TERM Art. or produces their extinguishment… Obligations with a period are. in other words. but the date of happening is unknown (as in the case of death). The second rule is likewise just. In diem a period or term with a resolutory effect. Indefinite something that will surely happen. 1193. those whose consequences are subjected in one way or another to the expiration of said term. May have a suspensive or resolutory effect. but terminate upon arrival of the day certain. the liability of the first infractor shall be equitably tempered by the courts. Art. the obligation begins only from a day certain. otherwise the damages are deemed waived. If both parties have committed a breach: The above rules are deemed just. Period: a certain length of time which determines the effectivity or the extinguishment of the obligation. b Legal A period granted under the ) provisions of the law. Causes an obligation to arise or to cease. Voluntary Judicial The period or term fixed by the courts for the performance of an obligation or for its termination.
Condition An uncertain event. Conventi Period agreed upon or stipulated onal or by the parties. suspends its demandability or determines its extinguishment. therefore. and in the latter. Obligations with a resolutory period take effect at once. upon the arrival of the period. shall be demandable only when that day comes. under the law.
The Different Kinds of Terms and Periods a Definite The exact date or time is known ) and given.
the creditor must accept the thing in its impaired condition. 6. If the thing is improved at the expense of the debtor. however. but upon the arrival of said period. 1195. The condition is fulfilled or the period arrives. the improvement shall inure to the benefit of the creditor. the obligation terminates. be rebutted by him. If the thing is lost through the fault of the debtor. Art. If the thing is lost without the fault of the debtor. a resolutory condition or term. To be able to recover: 1.certain. after premature payment). 1194. Art. Obligation has a suspensive condition. Art. the debtor shall have the same rights as a usufructuary. 4. the creditor may choose between Resolution (Art. For whose benefit the term has been established:
. Rules: 1. In case of loss. 4. BALANE: Requirements: 1. This is true whether the creditor is in good or bad faith. If the thing deteriorates through the fault of the debtor. When Period of Prescription Begins: it commences from the time the term in the obligation arrives. the rules in Art. 2. the obligation remains valid. Deterioration or Improvement: 1. the obligor being unaware of the period or believing that the obligation has become due and demandable. loss or deterioration before the fulfillment of the condition or the period. not yet due much less can there be recovery of interest. must be shown by debtor. the obligation is extinguished. since the important thing is the knowledge by the debtor of the prematureness (Implied waiver). Even after was not yet due maturity (regarding interest) for after all the creditor was in bad faith. 1196. (But the right prescribes 5 yrs. The obligor must be unaware of the period. 1189 of the Civil Code. Period within which recovery may be made: If the debtor did not Before the debt know that payment matures. it is presumed to have been established for the benefit of both the creditor and debtor. The thing is lost when it perishes. Must have believed that the obligation has become due and demandable. goes out of commerce or disappears in such a way that its existence is unknown or cannot be recovered. Anything paid or delivered before the arrival of the period. Extension of Period: evidence of extension of period. Rules in case of Loss. The obligor is obligated to deliver a determinate thing. 1189) plus damages Fulfillment of the obligation plus damages
5. 3. if any be given. may be recovered. It must be certain (sure to come) but can be extended. Art. 2. Presumption that Debtor knew of Prematureness: the law presumes that the debtor knew of the prematureness. This may. If the thing is improved by nature or by time. Whenever in an obligation a period is designated. unless from the tenor of the same or other circumstances it should appear that the period has been established in favor of one or the other. 1189 shall be observed. If the thing deteriorates without the fault of the debtor. There is improvement. or 2. It must refer to the future. 3. (if eliminated subsequently by mutual agreement. Requisites for a Valid Period or Term: 1. If the debtor knew No recovery can be had that payment was of what has been paid. deterioration or improvement of the thing before the arrival of the day certain. for it is only from that date that it is due and demandable. he must pay damages. 2. the obligation becomes pure and immediately demandable). with the fruits and interests.
and not to a case where the parties have authorized the Court to fix a reasonable term. When the Court may not fix the Term: 1. applies only where the parties to a contract themselves have fixed a period. but from its nature and the circumstances it can be inferred that a period was intended. as when the contract provides that no payment should be made till after a certain given period. For the benefit of the creditor. When no term was specified by the parties because no term was even intended. For the benefit of both a. When the loan is without interest. the debtor is interested because he is given enough time to pay. 2. and he cannot be compelled to accept payment from the debtor prior to the stipulated period. When specific periods are provided for in the law. 2. When the obligation or note is payable on demand. for even if the creditor receives no interest. Term is for the benefit of debtor alone. When the Court may fix a Period: 1. it can be inferred that a period was intended. from the time the right of action accrues. in which case the obligation is really a pure one. The debtor is required to pay only at the end. as in an employment contract where if no period was agreed upon. 1197. In ever case the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. The debtor cannot pay prematurely and the creditor cannot demand prematurely. If the obligation does not fix a period. and demandable at once. Term is for the benefit of the creditor alone. The Court has ruled that the original repairman can be required to pay the person who actually made the needed repairs. When what appears to be a term is really a condition (such as when a debt is payable only after the debtor’s estate’s other debts have been paid. the courts may fix the duration thereof. For the benefit of the debtor a. the period cannot be changed by them.General rule: term is for the benefit of debtor or creditor. Creditor can demand at any time even before the term expires.usually. 2. unless of course absurd consequences would arise. Circumstances which indicate for whom the benefit of the term is 1. When the creditor is interested in keeping his money safely invested (thus making the debtor a sort of depository). however. returns the machine without performing any work on it. 5. Exceptions: 1. for this does not depend upon the exclusive will of the debtor). The courts shall also fix the duration of the period when it depends upon the will of the debtor. still he may have entered into the contract to protect himself against the sudden decline in the purchasing power of the currency. When Prescriptive Period Begins: an action upon a written contract must be brought within 10 yrs. When payment is to be made within a certain period from date of contract. Here. Once fixed by the courts. because it is only from that time that the obligation really becomes enforceable. b. b. he has lost whatever right he originally had to have the period fixed under Art. but he may pay even before. the right of action accrues from the end of the stipulated period. this only exists if there is a stipulation to this effect. This rule. When the duration depends upon the will of the debtor. When there is interest stipulated. this is generally only for the benefit of the debtor. the creditor is interested in the term because of the interests that would be earned. 1197. 3. Acceptance of partial payment even before the expiration of the period means a waiver on the part of the creditor of his right to refuse payment before the end of said period.
. the time of employment depends upon the time for payment of salary. In obligations with the benefit of the term given
to both debtor and creditor. Art. When a repairer of a machine has been given something to repair but without a period within which to do the work. 3. 2. When although the obligation does not fix a period. or when the creditor wants to protect himself from the dangers of currency depreciation. This Art. 4. is not absolute.
4. is to ask the court to fix the period within which the debtor must pay for the simple reason that the fulfillment of the obligation itself cannot be demanded until after the court has fixed the period for its compliance. The Action to bring out this Article: the only action which the creditor can bring upon an obligation that does not fix a term. Instances when the Fruits cannot be recovered: 1. thus the courts cannot change it. the period becomes part of the contract. 1180). The debtor shall lose every right to make use of the period: 1. but to be counted from the perfection of the contract. If prepayment is made and the debtor was aware that the period had not yet arrived. The presumption is that the period is for the benefit of both the debtor and the creditor (Art. When the debtor loses the benefit of the period: meaning the debtor shall lose every right to make use of the period – the term is extinguished. If the Court actually fixes the term. for example. Extrajudicial demand is not therefore essential for the creation of the cause of action to have the period fixed. The parties may of course change the period by mutual agreement. the obligation is one with a term (Art.” And ordinarily specific performance cannot be demanded at the same time that the court is asked to fix the period. Although Art. Applicability of the Article to the Obligations Contemplated therein: Art. The effect of this presumption is that the creditor cannot demand payment before the period arrives nor can the debtor
. 1196). asks for “such other and further relief as to the court may appear just and equitable. 3. 4. The creditor is entitled to the fruits since the obligation is demandable only when the period arrives. When the obligation is reciprocal and there has been prepayment on both sides. The Court may fix a period.6. 5. There are 2 views about who is entitled to the fruits which have been produced in the meantime: 1. The Court merely enforces or carries out an implied stipulation in the contract. the law treats it as a term. BALANE NOTES: When the debtor binds himself to pay when his means permit him to do so. or may even disregard the same in which case. How the Courts Fix a Period: The Court determines the period by considering the time probably contemplated by the parties. then the debtor waives the benefit of the term. 1180 looks like a condition dependent on the sole will of the debtor. unless he immediately gives new ones equally satisfactory. the Court does not amend or modify the obligation. When the obligation is a loan and the debtor is bound to pay interest. Once the period is fixed by the courts. then the thing and the fruit can be recovered (Art. 1198. When after the obligation has been contracted. and the obligation is demandable at once. he becomes insolvent. 1195). When the debtor attempts to abscond. the obligation becomes a pure one. so long as the prayer. in consideration of which the creditor agreed to the period. Art. This is because the right exists by operation of law from the moment of such an agreement. even if this has not been specifically asked. 3. 2. When the period is exclusively for the creditor’s benefit. When the debtor is aware of the period and pays anyway – waiver. Within what period must the action to fix the period be brought: within the proper prescriptive period for specific performance if a period had been originally fixed. 2. When he does not furnish to the creditor the guaranties or securities which he had promised. and when through a fortuitous event they disappear.
2. and demandable at once. If prepayment is made without the debtor being aware that the period had not yet arrived. but where a term was indeed intended. 1197 should be considered as part and parcel (or automatically incorporated) in all obligations which are contemplated therein. The debtor is entitled to the fruits produced in the meantime. unless he gives a guaranty or security for the debt. When by his own acts he has impaired said guaranties or securities after their establishment. When the period within which to ask the Court to have the period fixed has itself already prescribed. such action for specific performance being premature. When the debtor violates any undertaking.
the creditor may either claim another thing in its stead or demand immediate payment of the principal obligation (Art.
If the obligation does not fix a period. 5.refers to a fixed known date or time. o Section 3: Alternative Obligations ACCORDING TO PLURALITY OF OBJECT Art. Indefinite. 1198). hence to ask for specific performance would be illogical.when period is specifically stated. The insolvency here need not be judicial. 1198). 2.when it is fixed by the courts. If the period is for the benefit of the creditor only. Contract of services for an indefinite period. Instances when Court may fix a period: 1. When the debtor violates any undertaking. Art. you cannot ask for specific performance because fixing a period contemplates something in the future. When the obligation does not fix for a period. 1198). 2109). o When the obligation is worded such that payment is to be made “on or before”. Tacit. When he does not furnish to the creditor the guarantees or securities which he has promised (Art. Generally. but the debtor cannot compel him to accept payment before the period expires. Exceptions: 1. the creditor can demand performance at any time. 2.the period is resolutory when the performance must terminate upon the arrival of the period. unless no immediately gives new ones equally satisfactory (Art. the debtor may oppose a premature demand for payment.
demand the creditor to accept payment before the period arrives. 1198). 1197). When the debtor attempts to abscond (Art. Art. 11. They should fix a period which was probably contemplated by the parties. 7. It can be actual insolvency.when it is granted by law. Art. Express. 1687.when a person undertakes to do some work which can be done only during a particular season. Types of periods: Suspensive (ex die). the period is for the benefit of the debtor. Definite. 3.when it is stipulated by the parties. 1682 and 1687. 4. 1197. Art. 4. 1198). 6. 2. Art. When after the obligation has been contracted. o 2 steps involved in an action for fixing a period: 1. Original 9. 3. 1199. Judicial. Art. The court should determine that the obligation does not fix a period but it can be inferred that a period was intended due to the circumstances or the period is dependent on debtor’s will. the period is for the benefit of the debtor. and when through a fortuitous event they disappear. 10. 3. but may validly pay at any time before the period expires. 2. the courts may fix the duration thereof (Art. When by his own acts he has impaired the said guaranties or securities alter their establishment. 1180. 8. Court shall decide what period was probably contemplated by the parties. in consideration of which the creditor agreed (Art. 2.when the obligation becomes demandable only upon the arrival of the period. Pacto de retro sales (Art. The debtor shall lose every right to make use of the period: 1. but from its nature and circumstances it can be inferred that a period was intended. o When the obligation is worded such that payment is to be made within 6 mos. 6. A person alternatively bound by different prestations shall completely perform one of them. the debtor becomes insolvent unless he gives a guaranty or security for the debt (Art. Legal. Grace.an extension fixed by the parties or by the court.. Voluntary. 1191. Resolutory (in diem). 3. 1606). 4. When the creditor is deceived on the substance or quality of the thing pledged. 1197.refers to an event which will necessarily happen but the date of its happening is unknown. 5. 5.court cannot fix a period or else it would amount to involuntary servitude. If the period is for the benefit of the debtor only.
or the compliance of the obligation has become impossible. 7. expressly or impliedly (since all rights in general may be waived. 1203. Damages other than the value of the last thing or service may also be awarded. Made properly so that the creditor or his agent will actually know. Art. if tender of the same has been made. Made voluntarily and freely (without force. Made in due time. By way of exception.
1. implying that he may allow it to remain in force insofar as the possible choice or choices are involved. the law says that the debtor may rescind. Alternative rights of creditor when Loss or Impossibility occurs before Debtor’s Choice: applies when
Limitation on the Debtor’s Choice: 1. Art.) Art. depending upon your choice. Alternative Obligation: (facultative) where out of the two or more prestations which may be given.The creditor cannot be compelled to receive part of one and art of the other undertaking. therefore. 2. coercion or undue influence). before or upon maturity (otherwise. it may belong to the creditor when such right has expressly been granted to him. the obligation becomes a simple obligation to do or deliver the object selected. Alternative obligation with reference to benefit The general rule is that the debtor has the right of choice. 1201. The right of choice belongs to the debtor. Art. Unlawful prestations 3. intimidation. If through the creditor’s acts the debtor cannot make a choice according to the terms of the obligation. Impossible prestations 2. Who has the right of choice: as a general rule. 1204. if there be joint creditors. The debtor shall lose the right of choice when among the prestations whereby he is alternatively bound. *the contract is not automatically rescinded. Obligation with a term The general rule is that the term is for the benefit of both the debtor and creditor. no longer alternative. May be waived. Made without conditions unless agreed to by the creditor (otherwise. 1200. Reason for Communicating the Choice to the Creditor: To inform the creditor that the obligation is now a simple one. 1202. or that of the service which last become impossible. The creditor shall have a right to indemnity for damages when. Effect of Notice that Choice has been made: Once notice has been made that a choice has been done. the latter may rescind the contract with damages. the creditor can sue him in court with an alternative relief as give this or that. and he will not. 6. Requisites for the Making of the Choice:
. Made with full knowledge tat a selection is indeed being made. The indemnity shall be fixed taking as a basis the value of the last thing which disappeared. it can be said that no real choice is being made). all the things which are alternatively the object of the obligation have been lost. that is. 5. unlawful or which would not have been the object of the obligation. Hence. Thus error in appreciating the meaning of alternative obligations will give rise to vitiated consent. through the default of the debtor. and if already due. The choice shall produce no effect except from the time it has been communicated. only one is due. only one is practicable. Made to all the proper persons. all of them must be notified. unless it has been expressly granted by the creditor. Or which could not have been the object of the obligation Art. An election once made is binding on the person who makes it. for the creditor to receive the object being delivered. be permitted to renounce his choice and take an alternative which was first open to him. 3. the right belongs to the debtor. and the choice can later on be annulled. The debtor shall have no right to choose those prestations which are impossible. 4.
1.1. 1202). then the obligation is extinguished. then the creditor can sue for damages. When 1 or some of the objects are lost through fortuitous events. 1203). in the alternative. When some are lost through the debtor’s fault. Rules when the choice has been given to creditor: 1. c. the choice by the creditor shall fall upon the price of any one of them. When all the objects are lost due to the creditor’s fault. Upon the other hand. for the debtor does not know what to deliver. Exception: 1. for in such case it is the debtor who can choose. it should be understood that the creditor loses the right to choose if only one of the prestations is practicable. the right must be expressly given to him. f. the obligation is extinguished.
. When some things are lost due to the debtor’s fault but there are still some things remaining. with resultant damages if any. The loss or impossibility happened before selection was made Art. General Rule: the right of choice belongs to the debtor. If all the things are lost through the fault of the debtor. he shall perform the obligation by delivering that which the creditor should choose from among the remainder. d. does not apply when the contract does not state to whose the right to choose Is given. When 1 or some of the objects are lost due to the debtor’s faults. the obligation ceases to be alternative (Art. When all the things are lost due to the debtor’s fault. also with indemnity for damages. As in the case of the debtor. there is only 1 prestation left. then the debtor can choose from what’s left. b. 1191) plus damages (Art. 3. a. For the choice to be given the creditor. the obligation shall cease to be alternative from the day when the selection has been communicated to the debtor. 2. 6. at the creditor’s option. 5. When all the objects are lost due to a fortuitous event. When the choice has been expressly given to the creditor. e. 1205. some or all of the prestations should become impossible. If one of the things is lost through a fortuitous event. he may petition the court to compel creditor to accept it. When all the things are lost due to a debtor’s fault. or that which remains if only one subsists. The debtor’s obligation had ceased to be alternative and had become a simple one. 3. Effect of Creditor Delays in making a choice: he cannot yet hold the debtor in default. When through fortuitous event or through the debtor’s acts. the creditor can sue for damages (Art. 2. When all but 1 of the things are lost due to a fortuitous event. if the debtor wants to relieve himself. When all the things are lost due to a fortuitous event. notwithstanding the lapse of maturity. then the creditor chooses from the remainder. or the price of that which. the creditor may choose from the remainder or get the value of any of the objects lost plus damages in either case. This Art. the creditor chooses from the remainder.
BALANE: ALTERNATIVE: when several objects or prestations are due. Until then the responsibility of the debtor shall be governed by the following rules: 1. the creditor can get the value of any of the object s lost plus damages. the creditor may claim any of those subsisting. through the fault of the former has disappeared with a right to damages. then the debtor has the remedy of resolution (art. The right to choose belonged to the debtor 2. 1204). but the payment or performance of 1 of them would be sufficient. 3. 2. 7. When it is expressly granted by the creditor. When the choice of the debtor is limited through the creditor’s own acts. 4. When all but one of the things are lost through the debtor’s own acts and the last object is lost through the fortuitous event. the obligation is extinguished. If the loss of one of the things occurs through the fault of the debtor. the obligation is extinguished. The same rules shall be applied to obligations to do or not to do in case one. and the last object is lost through the debtor’s fault.
give the principal. The creditor has to communicate his choice to the debtor so that the debtor will know. There is a solidary liability only when the obligation expressly so states. Arising from tort/damages 2. When only one prestation has been agreed upon. But once the substitution has been made. and it is that one which generally is given. the obligation is called facultative. entire compliance with the prestation. 1206. and there is no necessity of giving the substitute. Solidary Obligations One for all. The act of making the choice is called concentration. Liability of principals.
If one of the prestations is illegal. Bear a resemblance to alternative obligations particularly when the choice in an alternative obligation is with a debtor. Facultative Only one thing is principally due. 1207. When the law declares the obligation to be solidary. if it is impossible to give the substitute. If the principal obligation is impossible. does not render him liable. but the other (the substitute) may be given to render payment or fulfillment easy. Legal provisions regarding the obligations of devisees and legatees 4. When it is agreed upon by the parties
that a 3rd person shall make the choice. but the debtor may deliver or render another in substitution. the other may be valid and the obligation remains. Joint Obligations To each his own.
Section 4: Joint and Solidary Obligations ACCORDING TO PLURALITY OF SUBJECT Art. that last one must still be given. or when the law or the nature of the obligation requires solidarity. the obligor is liable for the loss of the substitute on account of his delay. (The nullity of the principal carries with it the nullity of the accessory or substitute) If it is impossible to
When there are two or more debtors or two or more creditors. The relationship between the active and the passive subjects is so close that each of the former or of the latter may demand the fulfillment of or must comply with the whole obligation. When the nature of the obligation requires liability to be solidary. through the negligence of the obligor. Whoever has the right of choice must communicate it to the other party (Art. Arising from quasi-contracts 3. The loss or deterioration of the thing intended as a substitute. The concurrence of 2 or more creditors or of 2 or more debtors in one and the same obligation does not imply that each one of the former has a right to demand. Some instances: 1.
give all except one. or that each one of the latter is bound to render. then the obligation is concentrated in one object. but the obligor may render another in substitution. Alternative Various things are due. then everything is annulled. Each obligor answers only for a part of the whole liability and to each obligee belongs only a part of the correlative rights. If the principal obligation is void. but the giving of one is sufficient. the substitute does not have to be given. the principal must still be given. Facultative Obligation: it is one where only one prestation has been agreed upon but the obligor may render another in substitution. negligence or fraud. all for one. When there is a stipulation in the contract that the obligation is solidary.
If it is impossible to
. The right of choice is given only to the debtor. The right of choice is always with the debtor. 1201).
The right to choose may be given either to debtor or creditor. Once the choice has been made.2. FACULTATIVE: when only 1 object or prestation has been agreed upon by the parties to the obligation.
the obligation is presumed joint and as a consequence: 1. Insolvency of one debtor does not make others responsible for his share. The creditors or the debts will be distinct from one another. Presumption that Obligation is Joint: when there are two or more debtors or creditors. This means that ordinarily one creditor may sue one of the debtors for the latter’s share of obligation but to obtain a just. But they are subject to the Rules of Court governing the multiplicity of suits. or the nature of the wording of the obligations to which the preceding article refers the contrary does not appear. the others are not affected.) 3. BUT regarding the bringing of the action in court. speedy and inexpensive determination of every action or proceeding. it would be better to sue all the necessary parties at the same time. but not the others since the debts are distinct. (for example. Defenses of one debtor are not necessarily available to all the others. 4. it doesn’t make the other debtors share bigger to compensate for his share. Distinct Shares: In joint obligations. while the others have not. if A and B were joint debtors of C for P1000 and A’s consent was obtained by C through fraud. or vice-versa. When the creditor interrupts the running of the
accomplices and accessories of a felony 5. *The obligation may be joint on the side of the creditors and solidary on the side of the debtors. Art. Vitiated consent on the part of one debtor does not affect the others.Mancomunada Mancomunada simple Proportionate Pro rata
We promise to pay (when there are two or more signatures) Some consequences: 1. If from the law. 2. 1208. the Rules of Court governing the multiplicity of suits will be followed. the right of the creditors may be prejudiced only by their collective acts. They must pay only for theirs. the creditor debt shall be presumed to be divided into as many equal shares as there are creditors or debtors. and the debt can be enforced only by proceeding against
. subject to the Rules of Court governing the multiplicity of suits. B would still be liable for P500 while A will not be liable because the 2 debts are considered distinct from each other. If the division is impossible. (if one is insolvent. the credits or debts being considered distinct from one another. Art. the different shares of the debt or the credit are considered distinct from one another. 1209. Demand by the creditor on one joint debtor puts him in default. It is possible that the share of one debtor has prescribed. The debt shall be divided into as many shares as there are creditors or debtors. 5. Bailees in commodation Joint and several In solidum Mancomunada solidaria Juntos o separadamanete Individually and collectively Each will pay the whole value I promise to pay (when there are two or more signatures)
prescriptive period by demanding judicially from one.) 2.
in the case of rescission or condonation (which is really prejudicial. although each for his part. there is no doubt that the other creditor’s rights are endangered. If any one of the joint debtors be insolvent. there will be liability for damages. and therefore. delivery must be made to all. Each one of the solidary creditors may do whatever may be useful to the others. Non-assignment of rights by Solidary Creditor: General rule: solidary creditor cannot assign his rights. who are merely proportionately liable. 1210. otherwise. On the side of the creditors. 1211. 2. Art. Art. 1213. Uniform. unless solidarity has been stipulated by the parties or by the law.
Passive solidarity Mixed solidarity
Conventional Solidarity Legal solidarity
obligees On the part of the debtors or obligors On the part of the obligors and obligees. The peculiarity of this obligation. A solidary creditor cannot assign his rights without the consent of the others. without prejudice to his liability to other creditors. 4. are nevertheless not subject to the same secondary stipulations and clauses. The obligation to pay monetary damages is no longer indivisible then.
Different Kinds of Solidarity Active solidarity
On the part of the creditors or
. Should the assignee or substitute do acts which would prejudice the others. 5. Indivisible Joint obligation: indivisible refers to the object. Solidarity despite different terms or conditions: 1. the others shall not be liable for his share. The obligation is joint but since the object is indivisible. If one of the latter should be insolvent.all the debtors. Each joint creditor is allowed to renounce his proportionate credit. in which case it becomes a solidary indivisible obligation. however. If there be joint creditors. 1212. unless that one be specifically authorized by the others. the creditor may go against each debtor individually. Prejudicial Acts: should not be performed. joint refers to the tie between the parties. Exception: if all the others consent. the creditor must proceed against ALL the joint debtors. Characteristics: 1.where the obligors though liable for the same prestation. the others shall not be liable for his share. is that fulfillment requires the consent of all the debtors.when the debtors are bound by the same stipulations and clauses 2. or on the part of the debtors and the creditors Agreed upon by the parties That imposed by law
Art. a solidary obligation implies mutual agency and mutual confidence. Manresa: the obligation is in a sense midway between the joint and the solidary. and the obligation is extinguished. Indivisibility Refers to the Subject Matter Solidarity Refers to the tie between the parties. Otherwise. although it preserves the two characteristics of the joint obligation in that: (a) no creditor can do an act prejudicial to the others. be made on ALL the joint debtors. Reason: essentially. but not anything which may be prejudicial to the latter. Solidarity may exist although the creditors and the debtors may not be bound in the same manner and by the same periods and conditions. 6. collective action is also required for acts which may be prejudicial. The indivisibility of an obligation does not necessarily give rise to solidarity. Art. However. hence. Demand must. for compliance is possible only if all joint debtors act together. and (b) no debtor can be made to answer for the others. and not merely to one. If any one of the debtors does not comply with his monetary obligations for damages. therefore. 3. Nor does solidarity itself imply indivisibility. the necessity of their consent. the solidary creditor is allowed to so remit.
in their own right. It can also apply to mixed solidarity. If a principal debtor receives an extension. The creditor who may have executed any of these acts.Art. Total compensation automatically extinguishes the obligation. 1214. has been made by one of them. That which takes place when two persons. The creditor may proceed against any one o the solidary debtors or some or all of them simultaneously. or by subrogating the person of the debtor. judicial or extrajudicial. or several of the debtors (but not all) there is no waiver against those not yet sued. shall be liable to the others for the share in the obligation corresponding to them. The surety can be reimbursed for everything he had paid. depending upon the amount involved.
be directed against the others. If a solidary debtor receives an extension of the period for payment. or by subrogating a third person in the rights of creditor. Differences The solidary debtor is indebted for his own share only. To Whom Debtor Must Pay: 1. the others are still liable for the whole obligation now.1215. or by substituting the person of the debtor. the surety is released. regarding the insolvent debtor’s share. It applies to what is called passive solidarity (solidarity among the debtors). payment should be made to him. for in the latter. 1216. Both can demand reimbursem ent. shall extinguish the obligation. confusion or remission of debt. To any of the solidary creditors 2. or all of the solidary debtors – simultaneously. as well as he who collects the debt. whether known or unknown to the parties. Remission may be total or partial. It may be total or partial. Applicability: applies only to solidary obligations. so long as the debt has not been fully collected. Effect of not proceeding against all: if the creditor sues only one. some. That which takes place when the characters of creditor and debtor are merged in the same person. or two. but if any demand. compensation. 1219. That act of liberality whereby a creditor condones the obligation of the debtor. Novation The modification of an obligation by changing its object or principal conditions. not to joint ones. without prejudice to the provision of Art. The demand made against one of them shall not be an obstacle to those which may subsequently
. without the surety’s consent. minus the share of the debtor who has received the extension (but same share can be demandable also from them upon the arrival of the extended term).The debtor may pay any one of solidary creditors.
Effect of Compensa tion
Effect of Confusion (or Merger) Effect of Remission or Waiver
Art. that where the creditor tells the debtor to forget about the whole thing. Exception: payment must be made to solidary creditor who made a demand (judicial or extrajudicial). The solidary debtor can be reimbursed what he has paid minus his own share. Novation. made by any of the solidary creditors or with any of the solidary debtors. Solidarit y Similarities Both the solidary debtor and the surety guarantee for another person. The surety is indebted only for the share of the principal debtor. They may be proceeded against later. failure to collect from one joint debtor his share does not authorize the creditor to proceed against the others. Art. Against whom Creditor may proceed: against any. are creditors and debtors of each other.
1218. such share shall be borne by all his codebtors. 1221. the thing is lost or the performance has become impossible after one of the solidary debtors has incurred in delay through the judicial or extrajudicial demand upon him by the creditor. Thus. there is nothing more to remit. This Art. If with fault. An
example of a partial defense is that a certain amount is not yet due. Personal defenses. A solidary debtor may. 3. The remission of the whole obligation. Loss because of a fortuitous event after default. The remission made by the creditor of the share which affects one of the solidary debtors does not release the latter from his responsibility towards the co-debtors. the obligation shall be extinguished. with the interests for the payment already made. The difference is whether such defense would result in total or partial exculpation.personal defenses may either be total or partial defenses. Art. because of his insolvency. 1220. or pertain to his own
. reimburse his share to the debtor paying the obligation. Hence. the obligation of the others to reimburse him arises only from the time payment is made. the provisions of the preceding paragraph shall apply.The debtor can only avail himself of these defenses only with regard to the part of the debt which his co-debtors are responsible for.here. the debtor has to pay for those amounts which are due. If the thing has been lost or if the prestation has become impossible without the fault of the solidary debtors. 1219. Effect of Loss or Improbability: 1. If without fault. He who made the payment may claim from his co-debtors only the share which corresponds to each. Basis of the right to be reimbursed: The fact of payment (and not the original contract) is the basis of the right to be reimbursed. in actions fled by the creditor. These defenses are partial. Real defenses.there is liability (also for damages and interest).Art. 3. all shall be responsible to the creditor for the price and the payment of damages and interest. 2. • The debtor sued can invoke all three kinds of defenses. It benefits all the debtors. If two or more solidary debtors offer to pay. 1217. 2.no liability. obtained by one of the solidary debtors. Art. Defenses which are personal to the other co-debtors. Payment made by one of the solidary debtors extinguishes the obligation. Art. Payment by a solidary debtor shall not entitle him to reimbursement from his co-debtors if such payment is made after the obligation has prescribed or become illegal. 1222. Reason for the Provision: since payment extinguishes the obligation. If through a fortuitous event. When one of the solidary debtors cannot. Payment: one of the ways by which an obligation is extinguished and consists in the delivery of the thing or the rendition of the service which is the object of the obligation. 3 Kinds of Defenses 1.these are defenses derived from the nature of the obligation. without prejudice to their action against the guilty or negligent debtor. applies only when the whole obligation is remitted. no interest for the intervening period may be demanded. Art. If there was a fault on the part of any one of them. Art. there will be liability because of default. avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him. A real defense is a total defense. If the payment is made before the debt is due. does not entitle him to reimbursement from his co-debtors. in proportion to the debt of each. It is partial since there may be amounts which are already due. for not until then had he the right to be reimbursed. Remission of the whole obligation: Remission is essentially gratuitous. the creditor may choose which offer to accept. in case the debt had been totally paid by anyone of them before the remission was effected. An example of a total personal defense is if the consent of the debtors were all vitiated.
Passive solidary. he can recover from his codebtors their respective shares. BALANE: SINGLE: only 1 debtor and 1 creditor. and in solidum. Agreement of the parties. that s. 2. Exceptions: 1. The debtor may pay any of the creditors. A credit once paid is shared equally among the creditors unless a different intention appears. Kinds of Defenses: 1.there are multiple debtors and creditors. but if any demand. The demand of 1 creditor on 1 debtor will not constitute a demand on the others. Divisible One capable of partial performan ce. he must pay only to the one demanding payment (Art.
Types of Solidary Obligations: 1.share. and any if the creditors is entitled to demand the entire obligation. The demand of 1 creditor on 1 debtor will not constitute a demand on the others. Types of Joint Obligations: 1. tort feasors are solidarily liable) 3. 3. but if any demand. 2. Exceptions: Kinds of indivisibility: 1. The prescription of 1 of the debts will not affect the other debts. The prescription of 1 of the debts will not affect other debts.by common agreement. joint and individual. Essential nature: there are as many obligations as there are creditors multiplied by as many debtors. Section 5: Divisible and Indivisible Obligations ACCORDING TO PERFORMANCE Art. this Is only a partial defense. (This is a complete defense generally.because
. Passive Joint. 3. Conventional. If the debtor pays a creditor who did not make a demand. 2. 3. Law (i. But the payment to the demanding creditor can be reduced by the share of the paid creditor. he must pay only to the one demanding payment (Art.there are multiple debtors. The divisibility or indivisibility of the things that are the object of obligations in which there is only one debtor and only one creditor does not alter or modify the provisions of Chap. the payment is considered a payment to a third person. 2.there are multiple debtors. The debtor can still recover from the paid creditor (unjust enrichment). he will still be liable except for his own share in the meantime). 1214). The debtor may pay any of the creditors. Each debtor may be required to pay the entire obligation but after payment. 2 of this Title. is made on him. Mixed solidary. Mixed joint. The insolvency of 1 of the debtors will not affect the burden of the other debtors. Each debtor may be required to pay the entire obligation but after payment. JOINT: when each of the debtor is liable only for a proportional part of the debt. Those personal to the others (partial defense regarding share of others involved).there are multiple creditors. With respect to those which personally belongs to the others. Active solidary. Rule: Obligations are indivisible: Indivisible One not capable of partial performance. Also called joint and several. 1214). 2. The parties so agree. General: joint obligations are less onerous. judicial or extrajudicial is made on him. judicial or extrajudicial. 1223. SOLIDARY: when any of the debtors can be held liable for the entire obligation.e. Gen. Those derived from the nature of the obligation (this is a complete defense). When: 1. The debtor can still be made to pay by the one who made a demand on him. he can recover from his co-debtors their respective shares. A credit once paid is shared equally among the creditors unless a different intention appears. When the law so provides. but if the defense is non-fulfillment yet of the term. 2. Nature of the obligation. he may avail himself thereof only as regards that part of the debt for which the latter are responsible. Active Joint.there are multiple creditors. Problematic: the debtor cannot pay the other non-demanding solidary creditors only if one of the solidary creditor makes a judicial demand. When nature of the obligation requires the obligation to be solidary.there are multiple creditors and debtors. Those personal to the debtor sued. Natural or absolute. It cannot be validly performed in parts. and each creditor is entitled only to a partial part of the credit. 3.
depends on quantity. divisibility or indivisibility shall be determined by the character of the prestation in each particular case. Obligations that are deemed indivisible: 1. When the object of the obligation is the execution of a certain number of days of work.if so provided for by law. Qualitative. 3. 1225). The obligation is converted into a monetary one for indemnity. Intellectual or moral division. 2. Divisibility of the object does not mean that the obligation is also divisible. Obligations to give definite things. 3. The fault of one is not the fault of the others. The fault of one is the fault of the others. Indivisibility Refers to nature of obligation. Nevertheless. Section 6: Obligations with a Penal Clause ACCORDING TO SANCTION FOR BREACH Art. May exist even if there is only one debtor and only one creditor. For the purposes of the preceding articles. if there is no stipulation to the contrary. 2. an obligation is indivisible if: . Obligations that are deemed divisible: 1. Legal.one that exists merely in the mind and not in physical reality. Even if the thing is physically divisible. it may be indivisible if so provided by law. A joint indivisible obligation gives rise to indemnity for damages from the time anyone of the debtors does not comply with this undertaking. 1226. it may be indivisible if such was the intention of the parties concerned. . Art.Intended by the parties. damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of obligation. Those which are not susceptible of partial performance. But indivisibility of the object necessarily means an indivisible obligation. When the object of obligation is the accomplishment of work by metrical units. irrespective of quantity.
Solidarity Refers to tie between the parties. When the purpose of the obligation is to pay a certain amount in installments. an obligation is indivisible if so provided by law or intended by the parties. Effect of Non-Compliance: 1. 4. the penalty shall substitute the indemnity for damages and the payment of interests in case of non-compliance.depends on quality.of the nature of the object of undertaking (Art. Quantitative. The debtors who may have been ready to fulfill their promises shall not contribute to the indemnity beyond the corresponding portion of the price of the thing or of the value of the service in which the obligation consists. However. even though the object or service may be physically divisible. 1225. 4. if the illegal terms can be separated from the legal ones. In obligations with a penal clause. 3. Art. 2. When the object of the obligation is the accomplishment of work susceptible of partial performance. the latter may be enforced. Even if the thing is physically divisible. obligations to give definite things and those which are not susceptible of partial performance shall be deemed to be indivisible. The test of divisibility of an obligation is whether or not it is susceptible of partial performance. it shall be divisible. even thought the object or service may be physically divisible. the accomplishment of work by metrical units. 1224.
Kinds of Division: 1. Effect of illegality on a Divisible contract: in case of a divisible contract.
work. In obligations not to do. When the obligation has for its object the execution of a certain number of days of
. However. or analogous things which by their nature are susceptible of partial performance. Needs at least two debtors or creditors. 3.So provided by law.
The reason for the third exception is clear: there can be no renunciation of an action to enforce liability for future fraud because. The debtor cannot exempt himself from the performance of the obligation by paying the penalty. Functions of a Penal Clause: 1. the provisions on liquidated damages since a penal clause is the same as liquidated damages. as we have seen. To strengthen the coercive force of the obligation by the threat of greater responsibility in case of breach.
One that is imposed by the law. Governed by Arts. and sometimes jointly with it. 3. 2 Characteristics of a Penal Clause: 1. When both the principal contract and the penal clause can be enforced.1226) General rule: the penalty clause takes the place of other damages. the performance thereof should become impossible without his fault. Its principal purpose is to insure the performance of an obligation and also to substitute for damages and the payment of interest in case of noncompliance. Art. Stipulates a penalty which is greater than one without a penal clause. However. the creditor has to choose whether to demand the principal or the penalty. Exception: the principal obligation and the penalty can be demanded when the penal clause is joint or cumulative. The implied right must be one ascertainable from the nature of the obligation. When only the penalty may be asked. 2. the penalty may be enforced only when it is demandable in accordance with the provisions of the Civil Code. That which has been agreed upon by the parties. A penal clause is an accessory undertaking to assume greater liability in case of breach. Condition
Penal Clause The former does not. save in the case where this right has been expressly reserved for him. May become demandable in default of the unperformed principal obligation. Subsidiary or alternative (Art. Penal Cause: it is a coercive means to obtain from the debtor compliance from the debtor. • Breach of obligation without fraud cannot constitute one of the exceptions. Neither can the creditor demand the fulfillment of the obligation and the satisfaction of the penalty at the same time. May any penalty be demandable: No.
The latter constitutes an obligation although accessory. 2. one of which states that the penalty may be reduced if it is iniquitous or unconscionable. This occurs when the creditor has been clearly granted such right. When there is express stipulation to the effect that damages or interest may still be recovered. Exclusive (Art. It is attached to obligations in order to insure their performance. The only limitation that the courts will reduce the liquidated damages if the same is scandalously unconscionable. Kinds of Penal Clauses Legal Penal Clause Conventi onal Penal Clause Subsidiar y Joint
condition is never demandable. To provide liquidated damages The creditor can demand liquidated damages without having to prove actual damages. 1227) General rule: upon breach of the obligation. When the debtor is guilty of fraud or dolo in the fulfillment of the obligation.2226-2228. Instances when ADDITIONAL DAMAGES MAY BE RECOVERED: 1. this is against public policy and against the express provisions of law. the penalty may be enforced. despite the presence of the penalty clause. unless this right has been clearly granted him. When the debtor refuses to pay the penalty imposed in the obligation. 2.The penalty may be enforced only when it is demandable in accordance with the provisions of this Code. It may be reduced by the courts if unconscionable. if after the creditor has decided to require the fulfillment of the obligation. 1227. while the former or the
. either expressly or impliedly.
The nullity of the penal clause does not carry with it that of the principal obligations. The word expressly means that any implied reservation is not allowed.
2. 1230. CHAPTER 4: EXTINGUISHMENT OF OBLIGATION General Provisions EXTINGUISHMENT OF OBLIGATION Art. He can only do so if the right has been expressly reserved. the creditor does not have this right to demand fulfillment of the obligation and the penalty at the same time.when the obligation has been partly complied with by the debtor. the penalty may also be reduced by the courts if it is iniquitous or unconscionable. The reason is that if he can just pay. By payment or performance 2. are governed elsewhere in this Code. payment or performance consignation Substitution of Resolutory condition or performance condition subsequent. Art. just because the penal clause is not valid. and the void penal clause will just be disregarded. Obligations are extinguished: 1. it is a lawful means for repairing losses and damages. Debtor cannot substitute penalty for the principal obligation: The general rule is that the debtor is not allowed to just pay the penalty instead of fulfilling the obligation. By the condonation or remission of the debt 4. Creditor cannot demand both fulfillment and the penalty at the same time: as a general rule.) The debtor is guilty of fraud (malice) in the performance of the obligation. Reason: when a penal clause has been agreed upon in a contract. Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded. it does not mean that its nullity will also make the principal obligation null and void. rescission. the penal clause will have no more use for existence and is therefore also considered null and void. By novation Other causes of extinguishment of obligations. Irregular Performance. 1228.Exception: both the penalty and actual damages may be recovered in the following: 1. be demanded without the necessity of proving actual damages. more as a punishment for the infraction thereof than a mere security. Classification of Causes of Extinguishment of Obligations: CASTAN Voluntary Involuntary Performance By failure to bring an action. fulfillment of the obligation will be considered an alternative one. and upon evidence of the violation of the conditions stipulated. the injured party is not obliged to prove losses and damages suffered.When the
obligation has been irregularly complied with by the debtor. Unconscionable or Iniquitouswhen the penalty is iniquitous or unconscionable. fulfillment of a resolutory condition.) Express stipulation 2. and prescription. Generally. By the loss of the thing due 3. Art. Compensation Novation
. Generally. 1231. By compensation 6. No Necessity in Proving Actual Damages: the penalty may. Even if there has been no performance. When Penalty may be reduced by the Court: 1. By the confusion or merger of the rights of creditor and debtor 5. The nullity of the principal obligation carries with it that of the penal clause. Partial performance. 3. The principal obligation can stand alone. 1229.) Refusal by the debtor to pay the penalty 3. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Upon the other hand. nor the extent of the same in order to demand the enforcement of the penal clause agreed upon. such as annulment. Art. Effect of Nullity of the Penalty Clause: if the principal obligation is null and void. in the proper case. The exception arises when such a right has been clearly granted to him. even if there has been no performance at all.
Payment or performance ily by 2. for valid reasons. PAYMENT OR PERFORMANCE Art.death of a party in case the other obligation is a personal one causes . Indebtedness has been defined as an unconditional and legally enforceable obligation for the payment of money. there is no payment.resolutory term here the obligation ceases upon the arrival of the term . may properly be rejected.Compromise Simultaneous with creation of obligations .Dacion en pago (datio in solutum) Agreement to release Subsequent obligation . of an obligation. b) If the debt is the delivery of a thing or things. Loss of the thing due 3.compromises . Acceptance by Creditor: for payment to properly exist. Payment means not only the delivery of money but also the performance.Natural waiver . Completeness of Payment: Requisites a) The very thing or service contemplated must be paid b) Fulfillment must be complete How Payment or Performance is Made: a) If the debt is a monetary obligation. by refraining from doing the action. If no such obligation exists.Resolutory term or extinctive period . by delivery of the thing or things.Remission . by the performance of said personal undertaking.Fulfillment of resolutory ned in condition Art. delivery of money 2. . the performance in any other manner of an obligation Pre-existing Obligation: a person pays a preexisting obligation. Novation Other . Art. the creditor has to accept the same.Unilateral waiver . as the case may be. by delivery of the money. unless of course otherwise stipulated in the contract.Resolutory condition or condition subsequent
Section 1: Payment or Performance By reason of the object.Mutual dissent (disenso) . 1232.Annulment causes . Payment. expressly or implicitly. Payment: that mode of extinguishing obligations which consists of: 1. Condonation or remission of the debt or waiver 4.change of civil status .impossibility of fulfillment . c) If the debt is the doing of a personal undertaking. Effect of Payment made under a Void Judgment: if the judgment upon which the aggrieved party made payment is null and void. The amount paid must be full. 1233.fortuitous event
. A debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered or rendered. the payment made thereunder is also null and void. Confusion or merger of the rights of creditor and debtor 5. e) An alleged creditor has the burden of showing that a valid debt exists. Once he
Classification according to the Civil Code: Ordinar 1.mutual dissent .Rescission mentio . strictly speaking. in any other manner. d) If the debt is not doing of something. Compensation 6.prescription 1231 but govere ned under other Chapter s Still .
within which the obligation can be fulfilled. hence. he is allowed only beneficial reimbursement. he can recover only insofar as the payment has been beneficial to the debtor. If the obligation has been substantially performed in good faith. it follows that the right to rescind cannot be used simply because there have been slight breaches of the obligation. or mortgage. penalty clause. but with the stipulation that the surety or guarantor of the debtor should give consent to prevent the surety or guarantor from later on alleging that the creditor had given an extension of time to the debtor.” A creditor who gives a receipt for partial payment does not necessarily acquiesce to such incomplete payment. 1234. When legal compensation had already taken place. at its discretion. enabling the former to exercise all the rights and actions that could have been exercised by the latter. Hence. 2. the obligee is benefited. the debtor has the burden of proving that he has paid the same. When the debt had prescribed b. This last condition affords a just compensation for the relative breach committed by the obligor. there is what is called “qualified acceptance of incomplete or irregular payment. less damages suffered by the obligee. His actuations may show his dissatisfaction. even a joint debtor).does this. a period to a person in default. Qualified Acceptance: there is a possibility that a protest or objection can be made. subject to stipulation in a conventional subrogation. such as those arising from a mortgage. Art. be they guarantors or possessors of mortgages. the obligor may recover as though there had been a strict and complete fulfillment. Without the debtor’s knowledge or against his will. Subrogation: the act of putting somebody into the shoes of the creditor. and therefore the Court may even grant. Substantial Performance in Good faith: a) In case of substantial performance. guarantor. the payor is entitled to reimbursement and subrogation to such rights as guaranty. So the obligor should be allowed to recover as if there had been a strict and complete fulfillment. Art. A creditor may conditionally accept performance by the debtor after the time of maturity. When the debt had been completely remitted c. Right of Creditor to Refuse Payment by 3rd Person: 1. d. Here. the obligation is deemed fully complied with.1235. When the obligee accepts the performance. either against the debtor or against the third persons. unless there is a stipulation to the contrary. 1236. the surety or guarantor cannot claim that he had been released from the obligation. 1235. With the knowledge and consent of the debtor. cannot compel the creditor to subrogate him in his rights. guaranty or penalty. Payment by a 3rd Person: 1. Whoever pays on behalf of the debtor without the knowledge or against the will of the latter. Whoever pays for another may demand from the debtor what he has paid. c) Inasmuch as substantial performance in good faith may already be equivalent to “fulfillment” or “payment”. 2. Subrogation Reimbursement
. Art. Subrogation transfers to the person subrogated the credit with all the rights thereto appertaining. and without expressing any protest or objection. Other instances when recovery can be had from the creditor and not from the innocent debtor: a. Such right to rescind is not absolute. When the debt has already been paid. Art. 1237. Here. except that if he had paid without the knowledge or against the will of the debtor. The creditor is not bound to accept payment or performance by a third
person who has no interest in the fulfillment of the obligation. knowing its incompleteness or irregularity. less damages suffered by the obligee. If said third person has an interest in the fulfillment of obligation (co-debtor. the payor is not entitled to subrogation. If there is a stipulation allowing this. b) The liability of the debtor for damages suffered by the creditor in case of substantial performance does not arise under the conditions set forth in Art. In this way.
It consists in the citation of some stranger to the litigation. Art.
time of the payment. 1241). Payment by payor must be made in good faith but payor may be in bad or good faith. Only a personal action to recover the amount. If after the payment. Exceptions: when a minor between 18 and 21 yrs. The payee must be in possession of the credit itself (not merely the document evidencing the credit). Payment is not valid – if accepted. If by the creditors conduct. voluntarily pays a sum of money or delivers a fungible thing in fulfillment of obligation. with exactly the same rights as the old one. who is the
Art. or insofar as the payment has been beneficial to him. To the successor-in-heirs. Payment to a person who is incapacitated to administer his property shall be valid if he has kept the thing delivered. There can be a recovery
No such recourse. but a new creditor. Something more than a personal action of recovery. If the recipient is not authorized. Payment made to a third person shall also be valid insofar as it has been redounded to the benefit of the creditor. 1242. the debtor has been led to believe that the third person had authority to receive the payment.Recourse can be had to the mortgage or guaranty or pledge. Art. Requisites: 1. Payment shall be made to the person in whose favor the obligation has been constituted. there shall be no right to recover the same from the obligee who has spent or consumed it in good faith. or his successor in interest. Art. without prejudice to the provisions of Art.1241. 2. The remedy of consignation would not be proper. Creditor cannot even be compelled to accept it. 3. which requires the debtor’s consent. Garnishment: the proceeding by which a debtor’s creditor is subjected to the payment of his own debt to another. 1240. In obligations to give. the payment is generally not valid (w/o prejudice to Art. Such benefit to the creditor need not be proved in the following cases: 1. To any person authorized to receive it. payment made by one who does not have the free disposal of the thing due and capacity to alienate it shall not be valid. 1239. appears on the scene. 2. or any person authorized to receive it. to what has been paid. 3. the third person acquires the creditor’s rights. But the payment is in any case valid as to the creditor who has accepted it. 1238. not the original creditor at the time the obligation was constituted. 2. This refers to the creditors at the
. Payment made in good faith to any person in possession of the credit shall release the debtor. The new creditor has different rights. 1243. 1247 under the Title on “Natural Obligations”. 2. Payment made to the creditor by the debtor after the latter has been judicially ordered to retain the debt shall not be valid. To the person in whose favor the obligation has been constituted (the creditor). To whom payment has been made: 1. so it is as if there has indeed been an extinguishment of obligation. Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a donation. Payment by an incapacitated person General rule: if person paying has no capacity to give: 1. Art. Payment made after Judicial Order to retain: the judicial order may have been prompted by an order of attachment. of age has entered into a contract without the consent of parents or guardian. 3. The debt is extinguished in one sense. injunction or garnishment (garnishment takes place when the debtor of a debtor is ordered not to pay the latter so that preference would be given to the latter’s creditor). Reason for consent: no one should be compelled to accept the generosity of another. Art. If the creditor ratifies the payment to the third person.
whose quality and circumstances have not been stated. shall be governed by the law in sales. 3. Interpleader: it is the technical name of the action in which a certain person in possession of certain property wants claimants to litigate among themselves for the same. the creditor cannot demand a thing of superior quality. Neither can the debtor deliver a thing of inferior quality. The giving of the price may generally end the obligation of the buyer. who is the creditor in the main litigation. 1244). Art.
the debtor in dation in payment is the extinguishment of his debt. an act or forbearance cannot be substituted by another act or forbearance against the obligees will. That mode of extinguishing an obligation whereby the debtor alienates in favor of the creditor.debtor of one of the parties to the action. Dation in payment. In case there is another agreement resulting in either: 1. 1244 does not apply: 1. Injunction: a judicial process by virtue of which a person is generally ordered to refrain from doing something. Waiver: If the contract does not specify quality: 1. If the debtor is not judicially declared insolvent. from the viewpoint of
viewpoint of the seller). property for the satisfaction of monetary debt. from the viewpoint of the creditor. 1245) 2. If the dation in payment will not prejudice the other creditors. 2. It is called preliminary injunction if the prohibition is during the pendency of certain proceedings. 1291) 3. for here his property is supposed to be administered by the assignee. Art. whereby property is alienated to the creditor in satisfaction of a debt in money. 2. it is the acquisition of the object offered in credit. or the obtaining of the object (from the viewpoint of the buyer)
There is greater freedom in the determination of the price. In case of facultative obligations. he may deliver one of superior (provided it is not of a different kind. When the obligation consists in the delivery of an indeterminate or generic thing. Dation: datio in solutum or adjudicacion en pago. although the latter may be of the same vale as. With regard to judicial costs. In obligations to do or not to do. Instances where Art. 1247. or more valuable than that which is due. Art. but to the new creditor. In case of waiver by the creditor (expressly or impliedly). If the creditor consents. such debtor-stranger becomes a forced intervenor. By this means. The debtor cannot deliver a thing of inferior quality. for a sale presupposes the consent of both parties. the Rules of Court shall govern. Dation in payment (Art. The debtor of a thing cannot compel the creditor to receive a different one. 2. Unless it is otherwise stipulated. 1244. the extrajudicial expenses required by the payment shall be for the account of the debtor. for this might lead the debtor to connive with one creditor in defrauding the other creditors. The purpose of the obligation and other circumstances shall be taken into consideration. Art. not to his former creditor. but if he so desires. 1245. 1246.
. having acquired jurisdiction over his person by means of the citation required of him to pay his debt. There is less freedom in determining the price. The giving of the object in lieu of the credit may extinguish completely or only partially the credit (depending on the agreement).
Conditions under which a Dation in Payment would be valid: 1. Novation (Art. SALE There is no pre-existing contract This gives rise to obligations The cause or consideration here is the price (from the DATION IN PAYMENT There is a pre-existing credit This extinguishes obligation The cause or consideration here. and the court. Art. he may demand and accept one of inferior quality). The creditor cannot demand a thing of superior quality (but if he so desires.
it follows that a balance is left. 3. If there is none
. the additional expenses shall be borne by him. • Applied only during the Japanese occupation. Art. If there is a stipulation – in the place designated. If the debtor charges his domicile in bad faith or after he has incurred in delay.
Art. 1250. When there is stipulation to this effect. then in the currency which is legal tender in the Philippines. when the debt is in part liquidated and in part unliquidated. Exceptions: 1. 1233. Art. a debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered or rendered. unless there is an agreement to the contrary. The payment of debt in money shall be made in the currency stipulated. When a solidary debtor pays only the part demandable because the rest are not yet demandable on account of their being subject to different terms and conditions. When a joint debtor pays his share or the creditor demands the same. Since the value of money here tends to increase. or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed. Where Payment must be made: 1. When work is to be done by parts. but it is still a partial fulfillment of the whole obligation. 5. There being no express stipulation and if the undertaking is to deliver a determinate thing. 6. Neither may the debtor be required to make partial payments. when one debt is larger than the other. This is a complete payment of his share. as the case may be. or when through the fault of the creditor they have been impaired. In any other case the place of payment shall be the domicile of the debtor. the value of the currency at the time of the establishment of the obligation shall be the basis of the payment. the creditor cannot be compelled partially to receive the prestations in which the obligation consists. Legal tender: that which a debtor may compel a creditor to accept in payment of the debt (whether public or private). in which case performance of the liquidated part may be insisted upon either by the debtor or the creditor. When a debt is in part liquidated and in part unliquidated. partial performance is not allowed generally under this Article. The delivery of promissory notes payable to order. In the meantime. In case an extraordinary inflation or deflation of the currency stipulated should supervene. 7. 2. However.Debtor pays generally for extrajudicial reasons: it is the debtor who benefits primarily since his obligation is thus extinguished. the payment shall be made wherever the thing might be at the moment the obligation was constituted. Art. Payment shall be made in the place designated in the obligation. the creditor may demand and the debtor may effect the payment of the former without waiting for the liquidation of the latter. In case of compensation. 2. Hence. Judicial Costs: generally. When the different prestations are subject to different conditions or different terms. costs shall be awarded to the winning party but this is subject to the discretion of the court. the action derived from the original obligation shall be held in abeyance. Performance should generally be complete: Under Art. and if it is not possible to deliver such
currency. the natural result is an increase in the price of goods or services. These provisions are without prejudice to venue under the Rules of Court. Exception is when there is a stipulation to the contrary. 1251. 1248. 4. Unless there is an express stipulation to that effect. Inflation: a sharp sudden increase of money or credit or both without a corresponding increase in business transaction. 1249.
Express stipulation and if the debts are liquidated and unliquidated in parts(Art. IDENTITY.1. 1248) – Unless there is an express stipulation to that effect. it has only a provisional effect. they have been impaired. then in the place where the thing might be at the time the obligation was constituted (if temporary. However. the creditor cannot be compelled partially to receive the prestations in which the obligations consists. 1245)when property is alienated to the creditor in satisfaction of a debt in money. No. The creditor can validly refuse if the performance is not in one act.when the obligee accepts the performance. the payment shall be applied to all of them proportionately. 1254. the debtor cannot give a thing of inferior quality (Art. 1249. o Payment: The payment of debts in money shall be made in the currency stipulated. R. 529 has been repealed by R. 8183.if the debts due are of the same nature and burden. Neither may the debtor be required to make partial payments. then in the currency which is legal tender in the Philippines (Art. the creditor cannot demand a thing of superior quality. and if it is not possible to deliver such currency. 2nd ¶) . There is payment only in the ff (Art.A. o Exceptions: 1. 2.means the very prestation must be performed. 3. 1233) o Exceptions: Substantial compliance in good faith (Art. delivery is in domicile of debtor.A. 1248). When obligations are entered into. 1246). then in the domicile of the debtor). In application of payments if the debts are equally onerous (Art. 1235). INTEGRITY. A certified check or a manager’s check may not be considered as legal tender and thus. If it is an obligation to deliver a determinate specific thing. the creditor can refuse to accept. which allows payment in a different currency but in the absence of an agreement. when the debt is in part liquidated and unliquidated. 1234). 2nd ¶): • When they have been honored and cashed. the obligor may recover as though there had been a strict and complete fulfillment. 1249. BALANE: Payment refers to obligations to give while performance refers to obligations to do.means that the entire prestation must be performed – completeness (Art. the creditor may demand and the debtor
. Generic. knowing its incompleteness or irregularity. the parties except payment or performance. without protest or objection. o Exceptions: Dacion en pago (Art. REQUISITES OF PAYMENT: As to Prestation: 1. All other modes of extinguishing payment are abnormal modes. INDIVISIBILITY. it shall be made in pesos. 1st ¶). less damages suffered by the obligee. o If the prestation: Specific. the obligation is deemed fully complied with.the debtor must give or deliver the specific thing which was agreed upon (Art.the obligor must perform the prestation in one act and not in installments (Art. 1244).
• When through the fault of the creditor. Novation 2. If the obligation is any other thing. However. If the negotiable papers and other commercial documents are accepted by the creditor. No. Negotiable papers and other commercial documents can be refused by the creditor unless there is a stipulation to the contrary.if the obligation has been substantially performed in good faith. Waiver (Art.
the accomplishment of work by metrical units.when the obligation has for its object the execution of a certain no. 1208). 2.if from the law. 6. The creditor’s successor or transferee (Article 1240) 3. it is required that the debt should not be garnished (Article 1242). Provided it redounded to the creditor’s benefit and only to the extent of such benefit (Article 1241. guarantor) Anyone can consents. CREDITOR Who may be the Payee 1. was without the Debtor’s
PAYEE. but also to exercise all the rights which the creditor could have exercised – subrogation (Articles 1236. In case of impossibility or extreme difficult of a single performance As to the Parties:
entitled not only to recover what he has paid. the General Rule is that demand is still necessary. With the consent of the creditor o
1. or the nature or the wording of the obligations to which the preceding article refers to the contrary does not appear. 1225.g. The creditor’s agent (Article 1240) 4. In solidary obligations when the debtors are bound under different terms and conditions (Article 1211). 1. or analogous things which by their nature are susceptible of partial performance. the benefit is total. AS TO TIME AND PLACE OF PERFORMANCE When Payment should be made • Payment should be made when it is due. 3.
Exception: No subrogation if intended to be a donation (Article 1238). (2) and (3). There is no extinguishment of the obligation but a change in the active subject. OBLIGEE. OBLIGOR. 5. Time is the controlling motive for the establishment of the contract 3. pay if the creditor
2. 2nd ¶).may effect the payment of the former without waiting for the liquidation of the latter. Any third person subject to the following conditions: a. DEBTOR: Who may be the Payor 1. If there is payment despite garnishment. 2nd ¶). • Even if the payment is due. 7. it shall be divisible. If it falls under Article 1241 ¶2 (1). In compensation when there is a balance left (Art. 2nd par) b. The creditor himself (Articles 1240. the credit or debt. of days of work. When the obligation or the law
expressly so declares 2. Demand would be useless Where Payment Should be Made o Primary Rule: Agreement of the Parties
Effect of payment by a third person. • Article 1169 provides the instances when demand is not necessary
PAYOR. 1290). Payment Consent
The 3rd person may demand repayment to the extent that the debtor has benefited (Article 1236. Payment was with the Debtor’s Consent
General Rule: The payor steps into the shoes of the creditor and becomes
. 1720). 5. then there is no payment. 4. In case of several guarantors who demand the right of division (Article 2065) 8. If work is to be deliver partially. the price or compensation for each part having been fixed (Art. In joint divisible obligations (Art. In prestations which necessarily entail partial performance (Art. Without the consent of the creditor o o o o The debtor himself The debtor’s heirs or assigns The debtor’s agent Anyone interested in the fulfillment of the obligation (e. Anyone in possession of the credit (Article 1242) * In all these 5 instances. 1237). 1626) 2.
Dacion en pago is governed by the law on sales (Article 1245). He believes that it is neither a sale nor a novation but a special form of payment. It is not novation since there is no new obligation.o
Secondary Rule: Place where the thing was at the time the obligation was constituted if the obligation is to deliver a determinate thing.
. Dacion en pago is a special form of payment since it does not comply with the requisite of identity. Castan has another view of dacion en pago. It is a species/variation of payment implying an onerous transaction similar to but not equal to a sale. dation en paiement and datio in solutum. By agreement of the parties. There are 2 ways of looking at dacion en pago.
4 Special Forms of Payment a. the modern view is to look at dacion en pago as a novation. However. The traditional way is to view dacion en pago as a sale. Tertiary Rule: Debtor’s domicile (not residence). It is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted performance/payment of an obligation. Dacion en pago extinguishes the obligation up to the value of the thing delivered unless the parties agree that the entire obligation is extinguished (Lopez vs. Other terms for dacion en pago include dation in payment.Dacion en pago is the act of extinguishing the obligation by the substitution of payment. the prestation is changed. CA). Dacion en pago will take place only if the parties consent. Dacion en pago (Article 1245).