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San Beda College of Law

85

MEMORY AID

IN

CIVIL LAW

OBLIGATIONS AND CONTRACTS


I. OBLIGATIONS
OBLIGATION
A juridical necessity to give, to do,
or not to do (Article 1156), one
impressed with the character of
enforceability.

1.
2.
3.
4.
5.

Requisites:
a. juridical or legal tie or efficient
cause
b. active subject (obligee or
creditor)
c. passive subject (obligor or
debtor)
d. fact, prestation or service
constituting the object of the
obligation

Requisites:
i) it must be licit
ii) it
must
be
possible,
physically & juridically
iii) it must be determinate or
determinable
iv) it must have a possible
equivalent in money
Sources (Article 1157):
Law
Contracts
Quasi-contracts
Delicts
Quasi-delicts

QUASI-CONTRACTS
Those juridical relations arising from
lawful, voluntary and unilateral acts,
by virtue of which the parties
become bound to each other, based
on the principle that no one shall be
unjustly enriched or benefited at the
expense of another.
Principal Kinds of Quasi-contracts:
1. Negotiorum gestio - arises whenever
a person voluntarily takes charge of
the agency or management of the
business or property of another
without any power or authority from
the latter.
CIVIL LAW COMMITTEE

2. Solutio indebiti - arises whenever a


person unduly delivers a thing
through mistake to another who has no
right to demand it.
QUASI-DELICTS
An act or omission by a person
(tortfeasor) which causes damage to
another giving rise to an obligation
to pay for the damage done, there
being fault or negligence but there is
no pre-existing contractual relation
between the parties (Article 2176).

Requisites:
1. There must be an act or
omission;
2. There
must
be
fault
or
negligence;
3. There must be damage caused to
the plaintiff;
4. There must be a direct relation
of cause and effect between the
act or omission and the damage;
and
5. There
is
no
pre-existing
contractual relation between the
parties.

NOTES:
The same negligent act or omission
causing damage may produce civil
liability arising from crime under Art.
100 of the RPC or create an action
for quasi-delict under Article 2176.
While it is true that in order that a
person may be liable for quasidelicts, there must be no preexisting contractual relationship
between the parties, yet, the act
that breaks the contract may also
be a tort. (Air France vs.
Carrascoso, 18 SCRA 155).
Nature of Obligations
1. Personal Obligations - obligations to
do
a. Positive obligation to do
b. Negative obligation not to do
2. Real Obligations - obligations to give

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

86

a. Determinate or specific object


is particularly designated or
physically segregated from all
other of the same class
b. Generic object is designated
merely by its class or genus
c. Limited generic thing when the
generic objects are confined to a
particular
class,
e.g.
an
obligation to deliver one of my
horses (Tolentino, Volume IV, p.
91).
PERSONAL vs. REAL RIGHT
Personal
Real
1. jus ad rem, a
right enforceable
only against a
definite person or
group of persons
2. right pertaining
to the person to
demand from
another, as a
definite passive
subject, the
fulfillment of a
prestation to give,
to do or not to do.

1. jus in re, a right


enforceable against
the whole world
2. right pertaining
to a person over a
specific thing,
without a passive
subject individually
determined against
whom such right
may be personally
enforced

RIGHTS OF A CREDITOR
Determinate
1. compel specific
performance
2. recover
damages in case of
breach of the
obligation,
exclusive or in
addition to
specific
performance
3. entitlement to
fruits, interests
from the time the
obligation to
deliver arises.

Generic

1. ask for
performance of the
obligation
2. ask that the
obligation be
complied with at
the expense of the
debtor

3. recover damages
in case of breach
of the obligation

Principle of Balancing of Equities as


Applied in Actions for Specific
Performance
In decreeing specific performance,
equity requires not only that the
contract be just and equitable in its
provisions,
but
that
the
consequences
of
specific
performance likewise be equitable
2005 CENTRALIZED BAR
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and just. The general rule is that this


equitable relief will not be granted
if, under the circumstances of the
case, the result of the specific
performance of the contract would
be harsh, inequitable, oppressive or
result
in
an
unconscionable
advantage to the plaintiff. The
courts may adjust the rights of the
parties in accordance with the
circumstances obtaining at the time
of rendition of judgment, when
these are significantly different from
those existing at the time of
generation of those rights. (Agcaoili
vs. GSIS, G.R. No. 30056, August 30,
1988)
OBLIGATIONS OF THE DEBTOR
Determinate
Generic
1. deliver the thing
which he has
obligated himself to
give
2. take care of the
thing with the
proper diligence of
a good father of a
family
3. deliver all
accessions and
accessories of the
thing even though
they may not have
been mentioned
4. pay damages in
case of breach of
the obligation by
reason of delay,
fraud, negligence or
contravention of the
tenor thereof

1. deliver the thing


which is neither of
superior nor inferior
quality
2. pay damages in
case of breach of
the obligation by
reason of delay,
fraud, negligence or
contravention of the
tenor thereof

EFFECTS OF BREACH
Positive Personal
Negative Personal
Obligations
Obligations
The creditor can:
If the obligor does
1.
have
the what has been
obligation performed forbidden him, the
or executed at the creditor can:
expense
of
the 1. have it undone at
obligor (except in the expense of the
cases
where
the obligor; and
personal
2. ask for damages
qualifications of the
debtor are taken into
account in which
case the only remedy
is an action for
OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
damages)
2. ask that what has
been poorly done be
undone
3. recover damages
because of breach of
the obligation

Cases where the remedy granted under


Article 1168 is not available:
1. Where the effects of the act which is
forbidden, are definite in character,
in which case, even if it is possible
for the obligee to ask that the act be
undone at the expense of the
obligor, consequences contrary to
the object of the obligation will have
been produced which are permanent
in character
2. Where it would be physically or
legally impossible to undo what has
been undone because of the very
nature of the act itself or because of
a provision of law, or because of
conflicting rights of 3rd persons
NOTE: In either case, the remedy is to
ask for damages.
BREACH OF OBLIGATIONS
1. Voluntary
debtor, in
the
performance of the obligation, is
guilty of:
a. default (mora)
b. fraud (dolo)
c. negligence (culpa)
d. contravention of the tenor of
the obligation
NOTE: debtor is liable for damages
2.

Involuntary - debtor is unable to


comply with his obligation because
of fortuitous event
NOTE: debtor is not liable for
damages

DEFAULT or DELAY
Non-fulfillment of the obligation
with respect to time
Requisites:
1. Obligation is demandable and
already liquidated
2. The debtor delays performance
3. The creditor requires performance
judicially or extra-judicially

IN

CIVIL LAW

3 Kinds:
1. Mora solvendi - delay of the debtor
to perform his obligation. It may be:
a.
Ex re obligation is to
give
b.
Ex persona obligation is
to do
2. Mora accipiendi - delay of the
creditor to accept the delivery of
the thing w/c is the object of the
obligation
3. Compensatio morae - delay of the
parties or obligors in reciprocal
obligation
When incurred:
General Rule: There must be a
demand (judicial or extra-judicial)
before delay may be incurred.
Exceptions:
1. obligation or law expressly so
declares
2. time is of the essence of the
contract
3. demand is useless as when
obligor has rendered beyond his
power to perform
4. there is acknowledgment of
default
NOTES:
There can be delay only in positive
obligations (to give/to do). There
can be no delay in negative
obligations (not to give/not to do).
In reciprocal obligations one party
incurs in delay from the moment the
other party fulfills his obligation,
while he himself does not comply or
is not ready to comply in a proper
manner with what is incumbent upon
him. The general rule is that
fulfillment by both parties should be
simultaneous except when different
dates for the performance of
obligation is fixed by the parties.
Demand is still necessary if their
respective obligations are to be
performed on separate dates
FRAUD

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

88

Deliberate and intentional evasion of


the fulfillment of an obligation

Concept of Diligence of Good Father of


a Family

That reasonable diligence which an


NOTE: Future fraud cannot be waived
because it would result to illusory
obligation.
Incidental
Fraud/dolo
incidente
(Article 1170)

Causal Fraud/dolo
causante
(Article 1338)

1. Present during
the performance
of a pre-existing
obligation

1. Present during the


time of birth or
perfection of the
obligation

2. Purpose is to
evade the normal
fulfillment of the
obligation

2. Purpose is to
secure the consent of
the other to enter
into a contract

3. Results in the
non-fulfillment or
breach of the
obligation

3. Results in the
vitiation of consent

4. Gives rise to a
right of the creditor
to recover damages
from the debtor

4. Gives rise to a
right of an innocent
party to annul the
contract

NEGLIGENCE
Omission of that diligence which is
required by the nature of the
obligation and corresponds with the
circumstances of the persons, of the
time and of the place
NOTE: Negligence can be waived unless
the nature of the obligation or public
policy requires extraordinary diligence as
in common carrier.
Diligence Required
1. That agreed upon by the parties
2. In the absence of stipulation, that
required by law in the particular
case
3. If both the contract and law are
silent, diligence of a good father of a
family

ordinary prudent person would have


done under the same circumstances
Test of Negligence

The test of negligence can be


determined by this standard: If the
defendant, in committing or causing
the negligent act, had used
reasonable care and vigilance which
a man of ordinary prudence would
have employed under the same
situation, he is not guilty of
negligence. Otherwise, he is guilty.
Doctrine of Res Ipsa Loquitur as
Applied in Negligence Cases

The thing or transaction speaks for


itself

When the thing which caused injury,


without fault of the injured person,
is under the exclusive control of the
defendant and the injury is such as
in the ordinary course of things does
not occur if he having such control
use
proper
care,
it
affords
reasonable evidence, in the absence
of explanation from the defendant,
that
the
injury
arose
from
defendants want of care (Africa vs.
Caltex, 16 SCRA 448 and Republic vs.
Luzon Stevedoring, 21 SCRA 279).
FORTUITOUS EVENT
An event which could not be
foreseen or which though foreseen
was inevitable.

Requisites:
1. cause is independent of the will of
the debtor
2. the event must be unforeseeable or
unavoidable
3. occurrence must be such as to
render it impossible for the debtor
to fulfill his obligation in a normal
manner
4. debtor must be free from any
participation in

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
5.

the aggravation of the injury


resulting to the creditor (Lasam vs.
Smith, 45 Phil. 657)
NOTE: It must not only be the
proximate cause but it must be the
ONLY and SOLE CAUSE.

GENERAL RULE: No liability in case of


fortuitous event.
EXCEPTIONS:
1 When expressly declared by law
NOTE: e.g. Article 552(2),
1165(3), 1268, 1942, 2147, 2148
and 2159 of the Civil Code.
2 When expressly declared by
stipulation or contract
3 When the nature of the
obligation
requires
the
assumption of risk
4 When the obligor is in default or
has promised to deliver the same
thing to 2 or more persons who
do not have the same interest
[Article 1165(3)].
EFFECT OF FORTUITOUS EVENT
Determinate
Generic Obligation
Obligation
obligation is
extinguished

obligation is not
extinguished based
on the rule that a
genus never perishes
(genus nunquam
peruit)

PRINCIPLE UNDER ARTICLE 1176


Before the presumption that a prior
installment had been paid may arise,
the receipt must specify the
installment for which payment is
made.

REMEDIES

OF
CREDITOR
TO
PROTECT CREDIT:
1. Exhaustion of debtors property
2. Accion subrogatoria - to be
subrogated to all the rights and
actions of the debtor save those
which are inherent in his person.
CIVIL LAW COMMITTEE

IN

CIVIL LAW

Accion pauliana - impugn all the acts


w/c the debtor may have done to
defraud them.
NOTE: 2nd & 3rd remedies are
subsidiary to the first
3.

GENERAL RULE: Rights acquired by


virtue of an obligation are transmissible
in character

EXCEPTIONS:
1. When they are not transmissible
by their very nature e.g. purely
personal right
2. When there is a stipulation of
the parties that they are not
transmissible
3. Not transmissible by operation of
law
PURE OBLIGATION
One
whose
effectivity
or
extinguishment does not depend
upon the fulfillment or nonfulfillment of a condition or upon the
expiration of a term or period and is
demandable at once.
CONDITIONAL OBLIGATION
One
whose
effectivity
is
subordinated to the fulfillment or
non-fulfillment of a future AND
uncertain fact or event
Kinds of conditions:
1. Suspensive - fulfillment of the
condition results in the acquisition of
rights arising out of the obligation
2. Resolutory - fulfillment of the
condition
results
in
the
extinguishments of rights arising out
of the obligation
3. Potestative - fulfillment of the
condition depends upon the will of a
party to the obligation
4. Casual - fulfillment of the condition
depends upon chance and/or upon
the will of a third person
5. Mixed - fulfillment of the condition
depends partly upon chance and/or
the will of a third person

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

90

2005 CENTRALIZED BAR OPERATIONS

6. Possible - condition is capable of


realization according to nature, law,
public policy and good customs
7. Impossible - condition is not capable
of realization according to nature,
law, public policy and good customs
8. Positive - condition involves the
performance of an act
9. Negative - condition involves the
omission of an act
10. Divisible - condition is susceptible of
partial realization
11. Indivisible - condition is not
susceptible of partial realization
12. Conjunctive - where there are
several conditions, all of which must
be realized
13. Alternative - where there are several
conditions but only one must be
realized
Rule in Potestative Conditions
a. If
the
fulfillment
of
the
potestative condition depends
upon the sole will of the debtor,
the condition as well as the
obligation itself is void. It renders
the obligation illusory. (Applicable
only to a suspensive condition and
to an obligation which depends
for its perfection upon the
fulfillment of the potestative
condition and not to a preexisting obligation.)
b. If
the
fulfillment
depends
exclusively upon the will of the
creditor, both the condition and
obligation is valid.
NOTE: In case of simple potestative
condition, e.g. right of first refusal,
such condition is valid.
Rule in Impossible Conditions
GENERAL RULE: They shall annul the
obligation which depends upon them.
EXCEPTIONS:
1. pre-existing obligation
2. if obligation is divisible
3. in simple or renumeratory donations
4. in testamentary dispositions
5. in case of conditions not to do an
impossible thing
Effects of Suspensive Condition
1. Before fulfillment of the condition,
the demandability as well as the

2.
3.

4.

5.

6.

acquisition or effectivity of the


rights arising from the obligation is
suspended
After the fulfillment of the
condition, the obligation arises or
becomes effective
The effects of a conditional
obligation to give, once the
condition has been fulfilled, shall
retroact to the day of the
constitution of the obligation
When
the
obligation
imposes
reciprocal prestations upon the
parties, the fruits & interests shall
be deemed to have been mutually
compensated
If the obligation is unilateral, the
debtor shall appropriate the fruits &
interests received, unless from the
nature & circumstances it should be
inferred that the intention of the
persons constituting the same was
different
In obligations to do or not to do, the
court shall determine the retroactive
effect or the conditions that has
been complied with

Constructive fulfillment of Suspensive


Condition

The condition shall be deemed


fulfilled when the obligor actually
prevented
the
obligee
from
complying with the condition and
such prevention must have been
voluntary and willful in character.

Effects of Resolutory Condition


1. Before the fulfillment of the
condition, the right which the
creditor has already acquired by
virtue of the obligation is subject to
a threat of extinction.
2. If condition is not fulfilled, rights are
consolidated; they become absolute.
3. Upon fulfillment of the condition,
the parties shall return to each other
what they received including the
fruits
SUMMARY:
SUSPENSIVE
CONDITION
1. if fulfilled,
obligation arises

RESOLUTORY
CONDITION
1. if fulfilled,
obligation is

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
or becomes
effective
2. if not fulfilled,
no juridical
relation is created
3. rights are not yet
acquired, but
there is hope or
expectancy that
they will soon be
acquired

extinguished
2. if not fulfilled,
juridical
relation is
consolidated
3. rights are
already
acquired, but
subject to the
threat or danger
of extinction

Effects of Loss, Deterioration and


Improvement in real obligations (during
the pendency of the condition)
1. Loss
a. without
debtors
fault
obligation is extinguished
b. with debtors fault - debtor pays
damages
2. Deterioration
a. without
debtors
fault
impairment to be borne by the
creditor
b. with debtors fault - creditor
may
choose
between
the
rescission of the obligation and
its fulfillment with indemnity for
damages in either case
3. Improvement
a. by the things nature or by time improvement shall inure to the
benefit of the creditor
b. at the debtors expense - debtor
shall have no other right than
that granted to a usufructuary
NOTE:
things

Applies

only

to

determinate

A Thing is Lost when it:


1. perishes
2. goes out of commerce
3. disappears in such a way that its
existence is unknown or it cannot be
recovered
RECIPROCAL OBLIGATIONS
Those which are created or established
at the same time, out of the same cause,
CIVIL LAW COMMITTEE

IN

CIVIL LAW

and which result in mutual relationships


of creditor & debtor between the parties
TACIT RESOLUTORY CONDITION
If one of the parties fails to comply
with what is incumbent upon him, there
is a right on the part of the other to
rescind the obligation.

RIGHT TO RESCIND (ART 1191)


GENERAL RULE: The right to rescind
needs judicial approval.
EXCEPTIONS:
1. If there is an express stipulation
of automatic rescission
2. When the debtor voluntarily
returned the thing
NOTES:
Article 1191 refers to judicial
rescission. It does not apply if there
is an express stipulation to rescind,
in which case such stipulation must
prevail. There is nothing in the law
which prohibits the parties from
entering into an agreement that
violation of the terms of the
contract would cause its cancellation
without court intervention. Said
stipulation is in the nature of
facultative
resolutory
condition
(Angeles vs. Calasanz, 135 SCRA
323).
Rescission will be ordered only
where the breach is substantial as to
defeat the object of the parties in
entering into the agreement.
The injured party may choose
between fulfillment and rescission of
the obligations, with the payment of
damages in either case. These
remedies are alternative,
not
cumulative.
However,
should
fulfillment become impossible, the
injured party may also seek
rescission.
The right to rescind belongs
exclusively to the injured party.

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

92

OBLIGATION WITH A PERIOD


Those whose demandability or
extinguishment is subject to the
expiration of a term or period
Requisites:
1. future
2. certain
3. possible, legally and physically
CLASSIFICATION OF TERM OR PERIOD
1. a. suspensive (ex die) obligation
becomes demandable only upon
arrival of a day certain
b. resolutory (in diem) arrival of
day certain terminates the obligation
2. a. legal granted by law
b. conventional stipulated by
parties
c. judicial fixed by courts
3. a. definite date/time is know
beforehand
b. indefinite the date/time of day
certain is unknown
TERM

CONDITION

1. interval of time
w/c is future &
certain
2. interval of time
w/c must
necessarily come,
although it may
not be known when
3.exerts an
influence upon the
time of
demandability or
extinguishment of
an obligation
4. does not have
any retroactive
effect unless there
is an agreement to
the contrary
5. when it is left
exclusively to the
will of the debtor,
the existence of
the obligation is
not affected

1. fact or event w/c


is future and
uncertain
2. future and
uncertain fact or
event w/c may or
may not happen
3. exerts an
influence upon the
very existence of the
obligation itself
4. has retroactive
effect

5. when it is left
exclusively to the will
of the debtor, the
very existence of the
obligation is affected

GENERAL RULE: When a period is


designated for the performance or
fulfillment of an obligation, it is
presumed to have been established for
the benefit of both creditor and debtor.

EXCEPTION: When it appears from the


tenor of the obligation or other
circumstances that the period has been
established in favor of one or of the
other.
When court may fix period:
1. if the obligation does not fix a
period, but from its nature and
circumstances it can be inferred that
a period was intended by the parties
2. if the duration of the period depends
upon the will of the debtor; and
3. If the debtor binds himself when his
means permit him to do so (Article
1180)
NOTE: The only action that can be
maintained is an action to ask the court
to fix the duration of the term or period.
The fulfillment of the obligation itself
cannot be demanded until after the
court has fixed the period for
compliance therewith, and such period
has arrived. However, such technicality
need not be adhered to when a prior and
separate action would be a mere
formality and would serve no other
purpose than to delay (Borromeo vs. CA,
47 SCRA 65).
Reason for Fixing the Period (ART 1197)
There can be no possibility of any
breach of contract or failure to
perform the obligation unless the
period is fixed by courts.
When debtor loses right to make use of
period: (IGIVA)
1.
when after the obligation has
been contracted, he becomes
insolvent, unless he gives guaranties
or securities for the debt (the
insolvency need not be judicially
declared)
2.
when he does not furnish to the
creditor the guaranties or securities
he promised
3.
when by his own act he has
impaired
said
guaranties
or
securities after their establishment,
and when through fortuitous event
they disappear, unless he gives new
ones equally satisfactory when
debtor violates any undertaking, in

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
consideration of which the creditor
agreed to the period or
4.
when
debtor
attempts
to
abscond
FACULTATIVE
Obligations

ALTERNATIVE
Obligations

1. comprehends
only one object or
prestation which is
due, but it may be
complied with by
the delivery of
another object or
performance of
another prestation
in substitution

1. comprehends
several objects or
prestations which are
due but may be
complied with by the
delivery or
performance of only
one of them

2. fortuitous loss
extinguishes the
obligation

2. fortuitous loss of
all prestations will
extinguish the
obligation

3. culpable loss
obliges the debtor
to deliver
substitute
prestation without
liability to debtor

3. culpable loss of any


object due will give
rise to liability to
debtor

4. choice pertains
only to debtor

4. choice may pertain


to creditor or even
third person

NOTES:

In alternative obligations, choice

takes
effect
only
upon
communication of the choice to the
other party and from such time the
obligation ceases to be alternative.
The debtor cannot choose those
prestations or undertakings which
are impossible, unlawful or w/c
could not have been the object of
the obligation.

EFFECT OF LOSS OF OBJECT OF


OBLIGATION:
1. If right of choice belongs to debtor
a. If through a fortuitous event debtor cannot be held liable for
damages
b. If 1 or more but not all of the
things are lost or one or some
CIVIL LAW COMMITTEE

2.

IN

CIVIL LAW

but not all of the prestations


cannot be performed due to the
fault of the debtor, creditor
cannot hold the debtor liable for
damages because the debtor can
still comply with his obligation.
If right of choice belongs to the
creditor
a. If 1 of the things is lost through
a fortuitous event, the debtor
shall perform the obligation by
delivering that which the
creditor should choose from
among the remainder, or that
which remains if only 1 subsists
b. If the loss of 1 of the things
occurs through the fault of the
debtor, the creditor may claim
any of those subsisting, or the
price of that which, through the
fault of the former, has
disappeared with a right to
damages
c. If all the things are lost through
the fault of the debtor, the
choice by the creditor shall fall
upon the price of any 1 of them,
also with indemnity for damages

JOINT AND SOLIDARY OBLIGATIONS


GENERAL RULE: Obligation is presumed
joint if there is concurrence of two or
more debtors and/or creditors.
EXCEPTIONS:
1. when expressly stated that
there is solidarity
2. when the law requires solidarity
3. when the nature of the
obligation requires solidarity
JOINT DIVISIBLE OBLIGATIONS
Each creditor can demand for the
payment of his proportionate share
of the credit, while each debtor can
be held liable only for the payment
of his proportionate share of the
debt.
A joint creditor cannot act in
representation of the other creditors
while a joint debtor cannot be
compelled to answer for the acts or
liability of the other debtors.
JOINT INDIVISIBLE OBLIGATIONS

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

94

1. If there are 2 or more debtors, the


fulfillment of or compliance with the
obligation requires the concurrence
of all the debtors, although each for
his own share. Consequently, the
obligation can be enforced only by
proceeding against all of the
debtors.
2. If there are 2 or more creditors, the
concurrence or collective act of all
the creditors, although each for his
own share, is also necessary for the
enforcement of the obligation.
Effect of breach If one of the joint
debtors fails to comply with his
undertaking, the obligation can no
longer be fulfilled or performed.
Consequently, it is converted into one of
indemnity for damages. Innocent joint
debtors shall not contribute to the
indemnity beyond their corresponding
share of the obligation.
Effect of insolvency of a debtor If one
of the joint debtors should be insolvent,
the others shall not be liable for his
share.
INDIVISIBILITY

SOLIDARITY

1. refers to the
prestation which
constitutes the
object of the
obligation
2. plurality of
subjects is not
required
3. in case of breach,
obligation is
converted into 1 of
indemnity for
damages because of
breach, indivisibility
of the obligation is
terminated

1. refers to the
legal tie or vinculum
juris & consequently
to the subjects or
parties of the
obligation
2. plurality of
subjects is
indispensable
3. when there is
liability on the part
of the debtors
because of the
breach, the
solidarity among the
debtors remains

KINDS OF SOLIDARITY
1. Active solidarity
solidarity of creditors
each creditor is empowered to
exercise against the debtor not only
the rights which correspond to him,
but also all the rights which
correspond to the other creditors,

with the consequent obligation to


render an accounting of his acts to
such creditors
creates a relationship of mutual
agency among solidary creditors
2. Passive solidarity
solidarity of debtors
liability of each debtor for the
payment of the entire obligation,
with the consequent right to demand
reimbursement from the others for
their corresponding shares once
payment has been made
3. Mixed solidarity
solidarity among creditors and
debtors
Effect of Assignment by Solidary
Creditor Without Consent of Others
1. assignee is co-creditor no violation
of Article 1213 because there can be
no invasion of the personal or
confidential relationship
2. assignee is third person cocreditors and debtors are not bound
by the assignment
Effect of Novation upon Solidary
Obligation
1. If the novation is prejudicial, the
solidary creditor who effected the
novation shall reimburse the others
for damages incurred by them
2. If it is beneficial and the creditor
who effected the novation is able to
secure
performance
of
the
obligation, such creditor shall be
liable to the others for the share
which corresponds to them, not only
in the obligation, but also in the
benefits
3. If the novation is effected by
substituting another person in place
of the debtor, the solidary creditor
who effected the novation is liable
for the acts of the new debtor in
case
the
is
deficiency
in
performance or in case damages are
incurred by the
other solidary
creditors as a result of the
substitution.
4. If the novation is effected by
subrogating a third person in the
rights of the solidary creditor
responsible for the novation, the
relation between the other creditors

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
not substituted and the debtor or
debtors is maintained.
Effect of Compensation and Confusion
upon Solidary Obligation
1. If the confusion or compensation is
partial,
the
rules
regarding
application of payment shall apply.
This is without prejudice to the right
of other creditors who have not
caused
the
confusion
or
compensation to be reimbursed to
the extent that their rights are
diminished or affected.
2. If the confusion or compensation is
total, the obligation is extinguished,
what is left is the ensuing liability
for reimbursement within each
group:
a. The
creditor
causing
the
confusion or compensation is
obliged to reimburse the other
creditors
b. The debtors benefited by the
extinguishments
of
the
obligation
are
obliged
to
reimburse the debtor who made
the confusion or compensation
possible.
Effect of Remission upon Solidary
Obligation
1. If the remission covers the entire
obligation, the obligation is totally
extinguished and the entire juridical
relation among the debtors is
extinguished all together.
2. If the remission is for the benefit of
one of the debtors and it covers his
entire share in the obligation, he is
completely released from the
creditors but is still bound to his codebtors.
3. If the remission is for the benefit of
one of the debtors and it covers only
a part of his share in the obligation,
his character as a solidary debtor is
not affected.
Effect of Payment by Solidary Debtor
1. Whole or partial extinguishment of
debt
2. Right to recover against co-debtor
3. Right to recover interest from time
the obligation becomes due
CIVIL LAW COMMITTEE

IN

CIVIL LAW

Effect of Loss or Impossibility of


Performance
1. If it is not due to the fault of the
solidary debtors, the obligation is
extinguished.
2. If the loss or impossibility is due to
the fault of one of the solidary
debtors or due to a fortuitous event
after one of the solidary debtors had
already incurred in delay, the
obligation is converted into an
obligation of indemnity for damages
but the solidary character of the
obligation remains.

Defenses available to a Solidary Debtor


1. Defenses derived from the very
nature of the obligation
2. Defenses personal to him or
pertaining to his own share
3. Defenses personal to the others, but
only as regards that part of the debt
for w/c the latter are responsible
DIVISIBLE OBLIGATIONS
Those which have as their object a
prestation which is susceptible of
partial performance without the
essence of obligation changed.
INDIVISIBLE OBLIGATIONS
Prestation is not susceptible of
partial performance, otherwise, the
essence of the obligation will be
changed
NOTES:
Divisibility or indivisibility of the
obligation refers to the performance
of the prestation and not to the
thing which is the object thereof.
Intention of parties should be taken
into account to determine whether
obligation is divisible or not.
GENERAL RULE: The creditor cannot be
compelled partially to receive the
prestation in which the obligation
consists; neither may the debtor be
required to make partial payments.
EXCEPTIONS:

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

96

1. When the obligation expressly


stipulates the contrary;
2. When the different prestations
constituting the objects of the
obligation
are
subject
to
different terms and conditions;
and
3. When the obligation is in part
liquidated
and
in
part
unliquidated.
OBLIGATIONS WITH A PENAL CLAUSE
One
to
which
an
accessory
undertaking is attached for the
purpose of insuring its performance
by virtue of which the obligor is
bound to pay a stipulated indemnity
or perform a stipulated prestation in
case of breach.

Purpose of Penalty:
1. To insure the performance of the
obligation;
2. to liquidate the amount of
damages to be awarded to the
injured party in case of breach
of the principal obligation
(compensatory); and
3. in certain exceptional cases, to
punish the obligor in case of
breach
of
the
principal
obligation (punitive).

GENERAL RULE: The penalty fixed by


the parties is a compensation or
substitute for damages in case of breach.
EXCEPTIONS:
1. when there is a stipulation to the
contrary;
2. when the debtor is sued for
refusal to pay the agreed
penalty; and
3. when debtor is guilty of fraud
NOTE: Article 1228 does not apply to
these exceptions; there must be
proof of actual damages.
NOTES:
The debtor cannot exempt himself
from the performance of the
principal obligation by paying the
stipulated penalty unless when the
right has been expressly reserved for
him.

The creditor cannot demand the


fulfillment of the principal obligation
and the satisfaction of the stipulated
penalty at the same time unless the
right has been clearly granted him.
When penalty may be reduced
1. If the principal obligation has been
partly complied with;
2. If the principal obligation has been
irregularly complied with; and
3. If the penalty is iniquitous or
unconscionable even if there has been
no performance.
MODES
OF
EXTINGUISHMENT
OF
OBLIGATIONS (LFC3NARP2)
1. loss of the thing due
2. fulfillment of resolutory condition
3. compensation
4. condonation or remission of the debt
5. confusion or merger of rights of the
creditor and debtor
6. novation
7. annulment
8. rescission
9. prescription
10. payment or performance
Payment or Performance
Means not only the delivery of
money but also the performance, in
any other manner, of an obligation.
Integrity of Payment
GENERAL RULE:
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, as the case may
be.
EXCEPTIONS:
1. When the obligation has been
substantially performed in good
faith;
2. When
the
obligee
accepts
performance,
knowing
its
incompleteness or irregularity &
w/out expressing any protest or
objection;
3. When there is an express stipulation;
and
4. When the debt is in part liquidated
and in part unliquidated.

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
Identity of Payment
requires that the very thing, service
or forbearance, as the object of the
prestation, must be performed or
observed
Persons who may pay the obligation:
1. the debtor himself or his legal
representative
2. any third person
GENERAL RULE: Creditor is not bound
to accept payment or performance by a
third person.
EXCEPTIONS:
1. when made by a third person
who has an interest in the
fulfillment of the obligation;
2. when there is a stipulation to the
contrary.
Rights of 3rd person who paid the
obligation:
1. If payment was made with
knowledge and consent of the
debtor:
a. can
recover
entire
amount paid
b. can be subrogated to all
the
rights
of
the
creditor.
2. If payment was made without
knowledge or against the will of
the debtor, he can recover only
insofar as the payment has been
beneficial to the debtor.
To whom payment must be made:
1. The person in whose favor the
obligation has been constituted;
2. His successor in interest; or
3. Any person authorized to receive it.
GENERAL RULE: If payment is made to
a person other than those enumerated,
it shall not be valid.
EXCEPTIONS:
1. Payment made to a 3rd person,
provided that it has redounded
to the benefit of the creditor.
Such benefit to the creditor is
presumed in the following cases:

CIVIL LAW COMMITTEE

IN

CIVIL LAW

If after the payment, the


third person acquires the
creditors rights;
If the creditor ratifies the
payment to the third
person;
If by the creditors conduct,
the debtor has been led to
believe that the third
person had authority to
receive the payment.
2. Payment made to the possessor
of the credit, provided that it
was made in good faith.
Obligation to Deliver a Generic Thing
If the quality and circumstances
have not been stated, the creditor
cannot demand a thing of superior
quality; neither can the debtor
deliver a thing of inferior quality.

Rules in Monetary Obligations:


1. Payment in cash - must be made in
the currency stipulated; if it is not
possible to deliver such currency,
then in the currency which is legal
tender in the Philippines.
2. Payment
in
check
or
other
negotiable
instrument
not
considered payment; not considered
legal tender and may be refused by
the creditor. It shall only produce
the effect of payment:
a. when it has been cashed or
b. when it has been impaired
through the fault of the creditor.
LEGAL TENDER
Such currency which may be used for
the payment of all debts, whether
private or public. The kind of
currency which a debtor can legally
compel a creditor to accept in
payment of a debt in money when
tendered by the debtor in the right
amount.
Legal tender of the Philippines would
be all notes and coins issued by the
Central Bank.
Section 52, R.A. No. 7653

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

98

1. 25c and above, legal tender up


to P50
2. 10c and below, legal tender up
to P20

Extraordinary inflation or deflation


unusual or beyond the common
fluctuation in the value of currency,
which the parties could not have
reasonably foreseen or which was
manifestly
beyond
their
contemplation
at the time the
obligation was established.
Applies
only
to
contractual
obligations
Requisites:
a. The decrease in the value of the
currency could not have been
reasonably foreseen by the
parties
or
beyond
their
contemplation at the time the
obligation was established ;
b. There must be a declaration of
such extraordinary inflation or

deflation by the Bangko Sentral.


Without such declaration, the
creditors cannot demand an
increase,
and
debtors
a
decrease, of what is due to or
from them. (Ramos vs. CA, 275
SCRA 167 and Mobil Oil Phils. vs.
CA, 180 SCRA 651)
Place of payment
1. Place stipulated by the parties.
2. No stipulation and the obligation is
to deliver a determinate thing,
payment shall be made at the place
where the thing might be at the time
the obligation was constituted.
3. In any other case, the payment shall
be made at the domicile of the
debtor.
Special
a.
b.
c.
d.

Forms of Payment:
Application of payment
Dation in Payment
Payment by Cession
Tender
of
payment
Consignation

a. Application of Payment

and

Designation of the debt to which the


payment must be applied when the
debtor has several obligations of the
same kind in favor of the same
creditor.
Requisites:
a. there must be only 1 debtor &
only 1 creditor;
b. there must be 2 or more debts of
the same kind;
c. all of the debts must be due;
except: if theres stipulation to
the contrary; or application of
payment is made by the party
for whose benefit the term has
been constituted; and
d. amount paid by the debtor must
not be sufficient to cover the
total amount of all the debts.

GENERAL RULE: The right to designate


the debt to which the payment shall be
applied primarily belongs to the debtor.
EXCEPTION: If the debtor does not
avail of such right and he accepts from
the creditor a receipt in which the
application is made.
Legal Application of Payment (ART1254)
1. If neither the debtor nor the creditor
makes any application of payment,
or if it cannot be inferred from other
circumstances, the debt which is
most onerous to the debtor, among
those which are due, shall be
deemed to have been satisfied.
2. If the debts due are of the same
nature and burden, payment shall be
applied
to
all
of
them
proportionately.
b. Dation in Payment (DACION EN
PAGO)
Delivery
and
transmission
of
ownership of a thing by the debtor to
the creditor as an accepted
equivalent of the performance of the
obligation.
Requisites:
a. existence of a money obligation
b. alienation to the creditor of a
property by the debtor with the
consent of the former
c. satisfaction of the money
obligation of the debtor

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
c. Payment by Cession
Debtor abandons all of his property
for the benefit of his creditors in
order that from the proceeds
thereof, the latter may obtain
payment of their credits.
Requisites:
a. plurality of debts
b. partial or relative insolvency of
the debtor
c. acceptance of the cession by the
creditors
DATION IN
PAYMENT

1.
plurality
creditors

2. not necessarily
in state of financial
difficulty

2. debtor must be
partially
or
relatively insolvent

3. thing delivered
is considered as
equivalent
of
performance

3. universality of
property of debtor is
what is ceded

4.
payment
extinguishes
obligation to the
extent of the value
of
the
thing
delivered as agreed
upon, proved or
implied from the
conduct
of
the
creditor

4. merely releases
debtor
for
net
proceeds of things
ceded or assigned,
unless
there
is
contrary intention

It is the principal act and judicial in


character.

Special Requisites:
a. The debt sought to be paid must
be due;
b. There must be a valid and
unconditional tender of payment
or any of the causes stated by
law for effective consignation
without previous tender of
payment exists;
c. The consignation of the thing
due must first be announced to
the persons interested in the
fulfillment of the obligation;
d. Consignation shall be made by
depositing the things due at the
disposal of judicial authority;
and
e. The consignation having been
made, the interested parties
shall also be notified thereof.

Effects of consignation:
1. If the creditor accepts the thing
or amount deposited without
contesting
the
validity
or
efficacy of the consignation, the
obligation is extinguished.
2. If the creditor contests the
validity or efficacy of the
consignation or if the creditor is
not interested or unknown or is
absent, the result is a litigation.
If the debtor complied with all
the requisites, the obligation is
extinguished.

of

d. Tender of Payment and Consignation


Tender of Payment
Manifestation of he debtor to the
creditor of his decision to comply
immediately with his obligation.
It is the preparatory act and
extrajudicial in character.
Consignation
Deposit of the object of the
obligation in a competent court in
accordance with the rules prescribed
by law, after the tender of payment
has been refused or because of
circumstances which render direct
payment to the creditor impossible
or inadvisable.
CIVIL LAW COMMITTEE

CIVIL LAW

PAYMENT BY
CESSION

1. one creditor

IN

GENERAL RULE: Consignation shall


produce effects of payment only if there
is a valid tender of payment.
EXCEPTIONS: (TIRAT or TRAIT)
1. creditor is absent or unknown, or
does not appear at the place of
payment
2. creditor incapacitated to receive
payment at the time it is due
3. when two or more persons claim the
right to collect
4. when the title of the obligation has
been lost
5. when without just cause creditor
refuses to give a receipt

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

100

2005 CENTRALIZED BAR OPERATIONS

NOTES:

It

is the consignation which


constitutes a form of payment and
must follow, supplement or complete
the tender of payment in order to
discharge the obligation.
A valid tender of payment has the
effect of exempting the debtor from
payment
of
interest
and/or
damages.
If tender is made by means of a
check, such tender is valid because
it is an exercise of a right. Article
1249 is not applicable.

LOSS OF THE THING DUE


In Determinate Obligations to Give
GENERAL
RULE:
Obligation
is
extinguished.
Requisites:
1. The thing which is lost is
determinate;
2. The thing is lost without the
fault of the debtor; and
3. The thing is lost before the
debtor has incurred in delay.
EXCEPTIONS:
1. when by law, obligor is liable
even for fortuitous event;
2. when by stipulation, obligor is
liable even for fortuitous event;
3. when the nature of the
obligation
requires
the
assumption of risk;
4. when the loss of the thing is due
partly to the fault of the debtor;
5. when the loss of the thing occurs
after the debtor incurred in
delay;
6. when the debtor promised to
deliver the same thing to two or
more persons who do not have
the same interest; and
7. when the debt of a certain and
determinate thing proceeds from
a criminal offense
In Generic Obligations to Give
GENERAL RULE: Obligation is not
extinguished because the genus of a
thing cannot perish.

EXCEPTION: In case of generic


obligations whose object is a particular
class or group with specific or
determinate qualities (Limited Generic
Obligations)
In Obligations to Do
Obligation
is
extinguished
when
prestation becomes legally or physically
impossible.
Effect of Relative Impossibility or
Doctrine of Unforeseen Events (ART
1267)
When the service has become
difficult as to be manifestly beyond
the contemplation of the parties,
the obligor may also be released
therefrom, in whole or in part.
Requisites:
1.
The event or change in
circumstances could not have
been foreseen at the time of the
execution of the contract;
2.
It
makes
the
performance of the contract
extremely difficult but not
impossible;
3.
The event must not be
due to the act of any of the
parties; and
4.
The contract is for a
future prestation.
Principle of Subjective Impossibility
When there is no physical or legal
loss but the thing object of the
obligation belongs to another, the
performance by the debtor of the
obligation undoubtedly becomes
impossible. Failure of performance is
imputable to the debtor. Thus, the
debtor must indemnify the creditor
for the damages suffered by the
latter. (Tolentino, Volume IV, p. 336)
Effect of Loss on Reciprocal Obligations
First view (Tolentino, Volume IV, pp.
337-338) If an obligation is
extinguished by the loss of the thing
or impossibility of performance
through fortuitous events, the
counter-prestation
is
also
extinguished. The debtor is released

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
from liability but he cannot demand
the prestation which has been
stipulated for his benefit. He who
gives nothing has no reason to
demand anything.

Second View (JBL Reyes) The loss or


impossibility of performance must be
due to the fault of the debtor. In this
case, the injured party may ask for
rescission under Article 1191 plus
damages. If the loss or impossibility
was due to a fortuitous event, the
other party is still obliged to give the
prestation due to the other.

CONDONATION OR REMISSION OF THE


DEBT
An act of pure liberality by virtue of
which the obligee, without receiving
any price or equivalent, renounces
the enforcement of the obligation,
as a result of which it is extinguished
in its entirety or in that part or
aspect of the same to which the
remission refers.
It is the gratuitous abandonment by
the creditor of his right.
Requisites:
a. It must be gratuitous
b. It must be accepted by the
debtor
c. The
obligation
must
be
demandable
NOTE: Express condonation or remission
must comply with the formalities of
donation.
CONFUSION OR MERGER OF RIGHTS
Merger of the characters of the
creditor and the debtor in one and
the same person by virtue of which
the obligation is extinguished.
Requisites:
a. that the characters of creditor &
debtor must be in the same
person;
b. that it must take place in the
person of either the principal
creditor or the principal debtor;
and
c. it must be complete & definite
CIVIL LAW COMMITTEE

IN

CIVIL LAW

COMPENSATION
Extinguishment in the concurrent
amount of the obligation of those
persons who are reciprocally debtors
and creditors of each other.
Requisites:
a. there must be 2 parties, who, in
their own right, are principal
creditors & principal debtors of
each other (except in case of
guarantor, Article 1280);
b. both debts must consist in
money, or if the things due are
fungibles, they must be of the
same kind & quality;
c. both debts must be due;
d. both debts must be liquidated &
demandable;
e. there must be no retention or
controversy commenced by 3rd
persons over either of the debts
& communicated in due time to
the debtor; and
f. compensation must not be
prohibited by law.
Compensation
1. two persons
who are mutual
debtors and
creditors of each
other
2. there must be
at least two
obligations

Compensation

Confusion
1. one person
where qualities of
debtor and creditor
are merged
2. only one
obligation

Payment

1. The requisites prescribe by law for


compensation are different from those
prescribed by law for payment.
2. Takes effect by
2. Takes effect by
operation of law
act of the parties
3. Capacity to
3. Capacity to give
give and to
and to acquire is
acquire is not
essential
necessary
4. As a rule, it is
4. As a rule,
partial
complete and
indivisible

Compensation

Counterclaim

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

102

1. Requires 2
debts must consist
in money or if
fungibles, same
kind and quality

1. Not necessary

2. Both debts
must be
liquidated

2. Does not require


that debts be
liquidated

3. Need not be
pleaded

3. Must be pleaded
to be effectual

Kinds of Compensation
1. Legal takes effect by operation
of law
2. Voluntary agreed upon by the
parties
3. Judicial takes effect by judicial
decree
4. Facultative when it can be
claimed by one of the parties
who, however, has the right to
object to it
Debts not subject to Compensation:
1. debts arising from contracts of
deposit
2. debts arising from contracts of
commodatum
3. claims for support due by
gratuitous title
4. obligations arising from criminal
offenses
5. certain obligations in favor of
government
NOTE: Taxes are not subject to set-off or
legal
compensation
because
the
government & taxpayers are not
mutually creditors & debtors of each
other (Francia vs. IAC, 162 SCRA 753).
Facultative Compensation
This is compensation which can be
set up only at the option of a
creditor, when legal compensation
cannot take place because of want
of some legal requisites for the
benefit of the creditor. The latter
can renounce his right to oppose the
compensation and he himself can set
it up. It differs from conventional
compensation because it is unilateral
while the latter depends upon the

agreement
of
both
parties.
(Tolentino, Volume IV, p. 367)
NOVATION
Substitution or change of an
obligation by another, resulting in its
extinguishment
or
modification,
either by changing its object or
principal
conditions,
or
by
substituting another in place of the
debtor, or by subrogating a third
person in the rights of the creditor.
Requisites:
a. a previous valid obligation;
b. agreement of the parties to the
new obligation;
c. extinguishment of the old
obligation; and
d. validity of the new obligation.
Kinds:
As to its essence
a. Objective/Real - refers to the
change either in the cause,
object or principal conditions of
the obligations
b. Subjective/Personal - refers to
the substitution of the person of
the debtor or to the subrogation
of a 3rd person in the rights of
the creditor
c. Mixed
2. As to its form/constitution
a. Express - when it is declared in
unequivocal terms that the old
obligation is extinguished by a
new one w/c substitutes the
same.
b. Implied - when the old & new
obligation are incompatible w/
each other on every point.
1.

Test of Incompatibility
Whether or not the old and new
obligations can stand together, each
having
its
own
independent
existence. If they can stand
together, there is no incompatibility;
consequently, there is no novation. If
they cannot stand together, there is
incompatibility; consequently, there
is novation.
Forms of Substitution of Debtors:

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
1.

2.

Expromision - effected with the


consent of the creditor at the
instance of the new debtor even
without the consent or even
against the will of the old
debtor.
Requisites:
a. Initiative for substitution must
emanate from the new debtor
b. Consent of the creditor to the
substitution
Delegacion - effected with the
consent of the creditor at the
instance of the old debtor, with
the concurrence of the new
debtor.
Requisites:
a. Initiative for substitution must
emanate from the old debtor
b. Consent of the new debtor
c. Acceptance by the creditor

Effect of insolvency of new debtor


1. Expromision the new debtors
insolvency or nonfulfillment of
the obligation shall not revive
the original debtors liability to
the
creditor
whether
the
substitution is effected with or
without the knowledge or
against the will of the original
debtor.
2. Delegacion the creditor can sue the
old debtor only when the
insolvency was prior to the
delegation and publicly known or
when the old debtor knew of
such insolvency at the time he
delegated the obligation.
NOTE: A change in the incidental
elements of, or an addition of such
elements to an obligation, unless
otherwise expressed by the parties, will
not result in its extinguishment.
CONVENTIONAL
SUBROGATION

ASSIGNMENT OF
RIGHTS

1. governed by Arts.
1300 to 1304

1. governed by Arts.
1624 to 1627

2. debtors consent
is required

2. debtors consent
is not required

CIVIL LAW COMMITTEE

IN

CIVIL LAW

3. extinguishes the
obligation and gives
rise to a new one

3. transmission of
right of the creditor
to third person
without modifying or
extinguishing the
obligation

4. defects and
vices in the old
obligation are cured
5. takes effect
upon moment of
novation or
subrogation

4. defects and vices


in the old obligation
are not cured
5. as far as the
debtor is concerned,
takes effect upon
notification

Kinds of Subrogation
1. Conventional takes place by
agreement of the parties; this kind
of
subrogation
requires
the
intervention and consent of 3
persons: the original creditor, the
new creditor and the debtor.
2. Legal takes place without
agreement but by operation of law
because of certain acts (Article
1302).
GENERAL RULE: Legal subrogation
cannot be presumed.
EXCEPTIONS:
1. Creditor pays another creditor who is
preferred,
without
debtors
knowledge;
2. A third person not interested in the
obligation pays with the express or
tacit approval of the debtor; or
3. Even without debtors knowledge, a
person interested in the fulfillment
of the obligation pays without
prejudice to the effects of confusion
as to the latters share.
II.

CONTRACTS

CONTRACT
A contract is a meeting of minds
between two persons whereby one
binds himself, with respect to the
other, to give something or to render
some service (Article 1305).
Elements
1. Essential those without which
there can be no contract.
a. Consent
b. Object or Subject Matter

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

104

2.
3.

c. Cause or Consideration
Natural those derived from the
nature of the contract and ordinarily
accompany the same.
Accidental those which exist only
when the parties expressly provide
for them for the purpose of limiting
or modifying the normal effects of
the contract.

Nominate contracts
Those which have their own
distinctive individuality and are
regulated by special provisions of
law.
Innominate contracts
Those which lack individuality and
are not regulated by special
provisions of law.
Regulated by the stipulations of the
parties, by the general provisions of
the Civil Code on obligations and
contracts, by rule governing the
most analogous nominate contracts
and by the customs of the place.
Kinds:
a. Do ut des - I give that you give
b. Do ut facias - I give that you do
c. Facio ut des - I do that you give
d. Facio ut facias - I do that you do
NOTE:
According
to
some
authorities. do ut des in no longer an
innominate contract. It has already
been given a name of its own, i.e.
barter or exchange (Article 1638).
Characteristics of Contracts: (ROMA)
1. Relativity (ART 1311)
2. Obligatory Force and Consensuality
(ART 1315)
3. Mutuality (ART 1308)
4. Autonomy (ART 1306)
Relativity
GENERAL RULE: Contracts take effect
only between parties, their assigns and
heirs.
EXCEPTIONS:
1. Stipulation pour atrui stipulation in favor of a third
person.
Requisites:
a. the stipulation must be a
part, not the whole of
the contract;

b. the contracting parties


must have clearly and
deliberately conferred a
favor upon a third
person, not a mere
incidental benefit or
interest;
c. the third person must
have communicated his
acceptance
to
the
obligor
before
its
revocation;
d. the favorable stipulation
should
not
be
conditioned
or
compensated by any kind
of obligation whatever;
and
e. neither
of
the
contracting parties bears
the legal representative
or authorization of the
third person.
Test of Beneficial Stipulation the
fairest test to determine whether the
interest of a 3rd person in a contract is a
stipulation pour atrui or merely an
incidental interest is to rely upon the
intention of the parties as disclosed by
their contract. Determine whether the
contracting parties desired to tender him
such an interest (Uy Tam vs. Leonard, 30
Phil. 471).
2. When a third person induces a
party
to
violate
contract
(ART1314)
Requisites:
a. Existence of a valid contract;
b. knowledge of contract by
third person; and
c. interference by third person
without legal justification or
excuse.
3. Third persons who come into
possession of the object of the
contract creating real rights
4. Contracts entered into in fraud
of creditors
Mutuality
The contract must bind both parties;
its validity or compliance must not

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID

be left to the will of one of them.


(ART 1308)
The contract cannot have any
stipulation authorizing one of the
contracting parties (a) to determine
whether or not the contract shall be
valid, or (b) to determine whether
or not the contract shall be fulfilled.

Autonomy
The parties are free to stipulate
anything they deem convenient
provided that they are not contrary
to law, morals, good customs, public
order and public policy. (ART 1306)
Consensuality
Contracts are 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
consequences which, according to
their nature may be in keeping with
good faith, usage and law.
CONSENT
Manifested by the concurrence of
the offer and acceptance upon the
thing and the cause which are to
constitute the contract.
Requisites:
a. Legal capacity of the contracting
parties
b. Manifestation of the conformity
of the contracting parties
c. The parties conformity to the
object, cause, the terms and
conditions of the contract must
be intelligent, spontaneous and
free from all vices of consent
d. The said conformity must be real
and not simulated or fictitious
Offer
A proposal made by one party to
another to enter into a contract.
It must be certain or definite,
complete and intentional.
NOTE: Offer/proposal may be withdrawn
so long as the offeror has no knowledge
of acceptance by offeree.
Acceptance
CIVIL LAW COMMITTEE

IN

CIVIL LAW

Manifestation by the offeree of his


assent to the terms of the offer.
It must me absolute.
A qualified acceptance constitutes
counter-offer.

NOTE: Acceptance may be revoked


before it comes to the knowledge of the
offeror.
Amplified Acceptance
Under certain circumstances, a mere
amplification on the offer must be
understood as an acceptance of the
original offer, plus a new offer which
is contained in the amplification.
(Tolentino, Volume IV, p. 452)
Rule on Complex offers
1. Offers are interrelated contract is
perfected if all the offers are
accepted.
2. Offers are not interrelated single
acceptance of each offer results in a
perfected contract unless the offeror
has made it clear that one is
dependent upon the other and
acceptance of both is necessary.
NOTES:
Consensual contracts are perfected
from the moment there is a
manifestation
of
concurrence
between
the
offer
and
the
acceptance regarding the object and
the cause.
Real contracts like deposit, pledge
and commodatum requires delivery
of object for perfection.
Solemn contracts are those which
requires compliance with certain
formalities prescribed by law, such
prescribed form being an essential
element (i.e., donation of real
property).
An offer made inter praesentes must
be accepted IMMEDIATELY. If the
parties intended that there should
be an express acceptance, the
contract will be perfected only upon
knowledge by the offeror of the
express acceptance by the offeree of
the offer. An acceptance which is
not made in the manner prescribed
by the offeror is NOT EFFECTIVE BUT

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

106

2005 CENTRALIZED BAR OPERATIONS

A COUNTER-OFFER which the offeror


may accept or reject. (Malbarosa vs.
CA, et al., G.R. # 125761, April 30,
2003)
Contracts under the Civil Code
generally adhere to the Cognition
Theory (contract is perfected from
the moment the acceptance comes
to the knowledge of the offeror),
while transactions under the Code of
Commerce use the Manifestation
Theory (it is perfected from the
moment the acceptance is declared
or made).
PERSONS INCAPACITATED TO GIVE
CONSENT:
1. Minors
EXCEPTIONS:
Contracts where the minor is
estopped to raise minority as a
defense
through
his
own
misrepresentation
Contracts for necessaries
Contracts by guardians or legal
representatives
Voluntary fulfillment of a natural
obligation provided that the
minor is between 18-21 years of
age
Contracts of life, health or
accident insurance taken on the
life of the minor
2. Insane or demented persons, unless
the contract was entered into during
a lucid interval
3. Deaf-mutes who do not know how to
read and write
Effect of Misrepresentation of Age by
the Minor
Misrepresentation by minors with
regard to their age when entering
into a contract shall bind them in the
sense that they are estopped
subsequently from impugning the
validity of the contract on the
ground of minority. It is necessary
that the misrepresentation must be
active (e.g. when minors specifically
stated in a contract that they were
of age), not merely constructive.
VICES OF CONSENT (VIMFU)

1.
2.

3.

4.

5.

Violence - when in order to wrest


consent, serious or irresistible force
is employed.
Intimidation - when 1 of the
contracting parties is compelled by
a reasonable & well-grounded fear
of an imminent & grave evil upon his
person or property, or upon the
person or property of his spouse,
descendants or ascendants, to give
his consent.
Mistake - should refer to the
substance of the thing which is the
object of the contract, or to those
conditions which have principally
moved one or both parties to enter
into the contact.
Must be mistake of fact and not of
law, except under Article 1334.
Requisites under Article 1334:
a. Mistake must be with respect
to the legal effect of an
agreement
b. Mistake must be mutual
c. Real purpose of the parties
must have been frustrated.
Fraud - when, through insidious
words or machinations of 1 of the
contracting parties, the other is
induced to enter into a contract
which, without them, he would not
have agreed to.
Undue influence - when a person
takes improper advantage of his
power over the will of another,
depriving the latter of a reasonable
freedom of choice.

Reluctant Consent
A contract is valid even though one
of the parties entered into it against
his wishes and desires or even
against
his
better
judgment.
Contracts are also valid even though
they are entered into by one of the
parties without hope of advantage or
profit. (Martinez vs. Hongkong and
Shanghai Bank, 15 Phil. 252)
Simulation of Contracts
1. Absolute when the contracting
parties do not intend to be bound by
the contract at all. Thus, an

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
absolutely simulated contract is
VOID.
2. Relative when the contracting
parties
conceal
their
true
agreement. A relatively simulate
contract binds the parties to their
real agreement, when it does not
prejudice a 3rd person and is not
intended for any purpose contrary to
law, morals, good customs, public
order or public policy.
OBJECT
The thing, right or service which is
the subject matter of the obligation
arising from the contract.
Requisites:
a. It must be w/in the commerce of
man
b. It must be licit or not contrary
law, morals, good customs,
public order or public policy
c. It must be possible
d. It must be determinate as to its
kind
Things which Cannot be the Object of
Contract
1. Things which are outside the
commerce of men
2. Intransmissible rights
3. Future inheritance, except in
cases expressly authorized by
law
4. Services which are contrary to
law, morals, good customs,
public order or public policy
5. Impossible things or services
6. Objects which are not possible of
determination as to their kind
CAUSE
The immediate, direct and most
proximate reason which explains and
justifies the creation of obligation.
Requisites
a. Cause should be in existence at
the time of the celebration of
the contract
b. Cause should be licit or lawful
c. Cause should be true
Rules:
1. In onerous contracts, the cause is
understood
to
be,
for
each
CIVIL LAW COMMITTEE

IN

CIVIL LAW

contracting party, the prestation of


promise of a thing or service by the
other.
2. In remuneratory contracts, the
service
or
benefit
w/c
is
remunerated.
3. In contracts of pure beneficence,
the mere liberality of the donor or
benefactor.
4. In accessory contracts (mortgage or
pledge), the cause is identical with
the cause of the principal contract,
that is, the loan from which it
derives its life and existence.
CAUSE
1. Absence of cause
2. Failure of cause
3. Illegality of cause
4. Falsity of cause

5. Lesion

EFFECT
the contract confers
no right and produces
no legal effect
does not render the
contract void
the contract is null
and void
the contract is void,
unless the parties
show that there is
another cause which
is true and lawful
does not invalidate
the contract, unless
(a) there is fraud,
mistake or undue
influence; or (b)
when the parties
intended a donation
or some other
contract

FORM OF CONTRACTS
GENERAL RULE: Contracts shall be
obligatory, in whatever form they may
have been entered into, provided all the
essential requisites for their validity are
present.
EXCEPTIONS:
1. When the law requires that a
contract be in some form in order
that it may be valid
2. When the law requires that a
contract be in some form in order
that it may be enforceable
NOTES:

Parties may compel each other to


comply with the form required once

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

108

the contract has been perfected.


(Article 1357)
Contracts under Art 1358 which are
required to be in some specific form
is only for the convenience of parties
and does not affect its validity and
enforceability as between them.

RA 8792 (E- COMMERCE ACT) provides


that the formal requirements to make
contracts effective as against third
persons and to establish the existence of
a contract are deemed complied with
provided that the electronic document is
unaltered and can be authenticated as to
be usable for future reference.
REFORMATION OF INSTRUMENTS
Requisites:
a. meeting of the minds to the
contract

b. true intention is not expressed in


the instrument by reason of
mistake,
accident,
relative
simulation, fraud, or inequitable
conduct
c. clear and convincing proof of
mistake,
accident,
relative
simulation, fraud, or inequitable
conduct
Instances when there can be no
reformation:
1. Simple unconditional donations
inter vivos;
2. Wills;
3. When the agreement is void;
When one of the parties has brought an
action to enforce the instrument, no
subsequent reformation can be asked.

COMPARATIVE TABLE OF DEFECTIVE CONTRACTS


VOID

VOIDABLE

RESCISSIBLE

UNENFORCEABLE

1. Defect is caused
by lack of essential
elements or illegality

Defect is caused by vice


of consent

Defect is caused by
injury/ damage either
to one of the parties of
to a 3rd person

Defect is caused by
lack
of
form,
authority, or capacity
of both parties not
cured by prescription

2. Do not, as a
general rule produce
any legal effect

Valid and enforceable


until they are annulled
by a competent court

Valid and enforceable


until they are rescinded
by a competent court

Cannot be enforced
by a proper action in
court

3. Action for the


declaration or nullity
or inexistence or
defense of nullity or
inexistence does not
prescribe

Action for annulment or


defense of annulability
may prescribe

Action for rescission


may prescribe

Corresponding action
for recovery, if there
was total or partial
performance of the
unenforceable
contract under No. 1
or 3 of Article 1403
may prescribe

4. Not cured
prescription

Cured by prescription

Cured by prescription

Not
cured
prescription

Can be ratified

Need not be ratified

Can be ratified

by

5. Cannot be ratified

by

6. Assailed not only Assailed only by a Assailed not only by a Assailed only by a
by a contracting contracting party
contracting party but contracting party
party but even by a
even by a third person
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
third person whose
interest is directly
affected
7. Assailed directly
or collaterally

CIVIL LAW

who is prejudiced or
damaged
by
the
contract
Assailed directly
collaterally

RESCISSIBLE CONTRACTS
Contracts validly agreed upon but,
by reason of lesion or economic
prejudice may be rescinded in cases
established by law.
What contracts are rescissible
1. those entered into by guardians
where the ward suffers lesion of
more than of the value of the
things which are objects thereof;
2. those agreed upon in representation
of absentees, if the latter suffer
lesion by more than of the value
of the things which are subject
thereof;
3. those undertaken in fraud of
creditors when the latter cannot in
any manner claim what are due
them;
4. those which refer to things under
litigation if they have been entered
into by the defendant without the
knowledge and approval of the
litigants and the court;
5. all
other
contracts
especially
declared by law to be subject to
rescission; and
6. payments made in a state of
insolvency on account of obligations
not yet enforceable

IN

Requisites:
a. the contract must be rescissible
b. the party asking for rescission
must have no other legal means
c. to obtain reparation for the
damages suffered by him
d. the person demanding rescission
must be able to return whatever
he may be obliged to restore if
rescission is granted
e. the things w/c are the object of
the contract must not have
passed legally to the possession

CIVIL LAW COMMITTEE

or

Assailed directly only

f.

Assailed directly
collaterally

or

of a 3rd person acting in good


faith
the action for rescission must be
brought w/in the prescriptive
period of 4 years

BADGES OF FRAUD:
1. Consideration of the conveyance
is inadequate or fictitious;
2. Transfer was made by a debtor
after a suit has been begun and
while it is pending against him;
3. Sale upon credit by an insolvent
debtor;
4. Evidence of indebtedness or
complete insolvency
5. Transfer of all his property by a
debtor when he is financially
embarrassed or insolvent;
6. Transfer made between father &
son, where there is present any
of the above circumstances
7. Failure of the vendee to take
exclusive possession of all the
property
Rescission in
Article 1191
1. It is a principal
action retaliatory in
character.
2. The only ground is
non-performance of
ones obligation/s or
what is incumbent
upon him.
3. It applies only to
reciprocal obligation
4. Only a party to the
contract may demand
fulfillment or seek
the rescission of the
contract.
5. Court may fix a
period or grant

Rescission Proper
in Article 1381
1. It is a subsidiary
remedy.
2. There are 5
grounds to rescind.
Non-performance by
the other party is not
important.
3. It applies to both
unilateral and
reciprocal
obligations.
4. Even a 3rd person
who is prejudiced by
the contract may
demand the
rescission of the
contract.
5. Court cannot grant
extension of time for

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

110

extension of time for


the fulfillment of the
obligation.
6. Its purpose is to
cancel the contract.

fulfillment of the
obligation.
6. Its purpose is to
seek reparation for
the damage or injury
caused, thus allowing
partial rescission of
the contract.

VOIDABLE CONTRACTS
Those in which all of the essential
elements for validity are present,
although the element of consent is
vitiated either by lack of capacity of
one of the contracting parties or by
VIMFU.
What contracts are voidable
1. Those where one of the parties is
incapable of giving consent to a
contract
2. Those where the consent is vitiated
by mistake, violence, intimidation,
undue influence or fraud
Causes of extinction of action to annul:
1. PRESCRIPTION
the action must be commenced
within 4 years from:
a. the time the incapacity
ends;
b. the time the violence,
intimidation
or
undue
influence ends; or
c. the time the mistake or
fraud is discovered.
NOTE: Discovery of fraud must be
reckoned to have taken place from
the time the document was
registered in the office of the
register of deeds. Registration
constitutes constructive notice to
the whole world. (Carantes vs. CA,
76 SCRA 514)
2. RATIFICATION
Requisites:
a. there must be knowledge of
the reason which renders
the contract voidable
b. such reason must have
ceased and
c. the injured party must have
executed an act which
expressly
or
impliedly

conveys an intention to
waive his right
3. By loss of the thing which is the
object of the contract through fraud
or fault of the person who is entitled
to annul the contract.
NOTE: If the object is lost through
fortuitous event, the contract can still
be annulled, but the person obliged to
return the same can be held liable only
for the value of the thing at the time of
the loss, but without interest thereon.
UNENFORCEABLE CONTRACTS
Those which cannot be enforced by
proper action in court unless they
are ratified
What contracts are unenforceable
1. those entered into in the name of
another by one without or acting in
excess of authority;
2. those where both parties are
incapable of giving consent; and
3. those which do not comply with the
Statute of Frauds
Agreements within the scope of the
Statute of Frauds (EXCLUSIVE LIST):
1. Agreements not to be performed
within one year from the making
thereof;
2. Special promise to answer for the
debt, default or miscarriage of
another;
NOTE: This does not refer to the original
or independent promise of the
debtor to his own creditor. It refers
rather to a collateral promise.
3. Agreement in consideration of
marriage other than a mutual
promise to marry;
4. Agreement for the sale of goods,
etc. at a price not less than P500.00;
5. Contracts of lease for a period longer
than one year;
6. Agreements for the sale of real
property or interest therein; and
7. Representation as to the credit of a
third person.
NOTES:

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID
The contracts/agreements under the

Statute of Frauds require that the


same be evidenced by some note,
memorandum or writing, subscribed
by the party charged or by his agent,
otherwise, the said contracts shall
be unenforceable.
The statute of frauds applies only to
executory contracts, not to those
that are partially or completely
fulfilled.

Ratification of contracts in violation of


the Statute of Frauds
1. Failure to object to the presentation
of oral evidence to prove such
contracts
2. Acceptance of benefits under these
contracts
VOID CONTRACTS
Those where all of the requisites of a
contract are present but the cause,
object or purpose is contrary to law,
morals, good customs, public order
or public policy, or contract itself is
prohibited or declared void by law.
What contracts are void
1. Those whose cause, object or
purpose is contrary to law, morals
good customs, public order or public
policy;
2. Those whose object is outside the
commerce of men;
3. Those
which
contemplate
an
impossible service;
4. Those where the intention of the
parties relative to the principal
object of the contract cannot be
ascertained; and
5. Those
expressly
prohibited
or
declared void by law.
INEXISTENT CONTRACTS
Those where one or some or all of
the requisites essential for the
validity of a contract are absolutely
lacking.
What contracts are inexistent
1. Those
which
are
absolutely
simulated or fictitious; and
CIVIL LAW COMMITTEE

IN

CIVIL LAW

2. Those whose cause or object did not


exist at the time of the transaction.
NOTE: The principle of In Pari Delicto is
applicable only to void contracts and not
as to inexistent contracts.
Principle of In Pari Delicto
GENERAL RULE: When the defect of a
void contract consists in the illegality of
the cause or object of the contract and
both of the parties are at fault or in pari
delicto, the law refuses them every
remedy and leaves them where they are.
EXCEPTIONS:
1. Payment of usurious interest
2. Payment of money or delivery of
property for an illegal purpose,
where the party who paid or
delivered
repudiates
the
contract before the purpose has
been accomplished, or before
any damage has been caused to
a 3rd person.
3. Payment of money or delivery of
property
made
by
an
incapacitated person
4. Agreement or contract which is
not illegal per se & the
prohibition is designed for the
protection of the plaintiff
5. Payment of any amount in excess
of the maximum price of any
article or commodity fixed by
law or regulation by competent
authority.
6. Contract whereby a laborer
undertakes to work longer than
the maximum # of hours fixed by
law.
7. Contract whereby a laborer
accepts a wage lower than the
minimum wage fixed by law.
8. One who lost in gambling
because of fraudulent schemes
practiced on him is allowed to
recover his losses [(Art. 315, 3
(b), RPC] even if gambling is a
prohibited one.
Rules when only one of the parties is at
fault:
1. Executed Contracts:
a. Guilty party is barred from
recovering what he has given to
the other party is barred from

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

2005 CENTRALIZED BAR OPERATIONS

112

2.

recovering what he has given to


the other party by reason of the
contract.
b. Innocent party may demand for
the return for the return of
what he has given.
Executory Contracts - Neither of the
contracting parties can demand for
the fulfillment of any obligation
from the contract nor may be
compelled to comply with such
obligation

NATURAL OBLIGATIONS
They are real obligations to which
the law denies an action, but which
the debtor may perform voluntarily.
It is patrimonial, and presupposes a
prestation.
The binding tie of these obligations
is in the conscience of man, for
under the law, they do not have the
necessary efficacy to give rise to an
action.
Examples
of
natural
obligations
enumerated under the Civil Code:
1. Performance
after
the
civil
obligation has prescribed;
2. Reimbursement of a third person for
a debt that has prescribed;
3. Restitution by minor after annulment
of contract;
4. Delivery by minor of money or
fungible thing in fulfillment of
obligation;
5. Performance after action to enforce
civil obligation has failed;
6. Payment by heir of debt exceeding
value of property inherited; and
7. Payment of legacy after will have
been declared void.

2.

Technical Estoppel
a. Estoppel by deed
b. Estoppel by record
c. Estoppel by judgment
d. Estoppel by laches

LACHES or STALE DEMANDS


Failure
or
neglect,
for
an
unreasonable and unexplained length
of time, to do that which, by
exercising due diligence, could or
should have been done earlier; it is
negligence or omission to assert a
right
within
reasonable
time,
warranting a presumption that the
party entitled to assert it either has
abandoned it or declined to assert it.

Elements:
a. Conduct
on
part
of the
defendant, or of one under
whom he claims, giving rise to
the situation of which complaint
is made and for which the
complaint seeks a remedy
b. Delay
in
asserting
the
complainants
rights,
the
complainant having knowledge
or notice, of the defendants
conduct
and
having
been
afforded the opportunity to
institute a suit
c. Lack of knowledge or notice on
the part of the defendant that
the complainant would assert
the right on which he bases his
suit
d. Injury to the defendant in the
event relief is accorded tot the
complainant, or the suit in not
held to be barred

ESTOPPEL
A condition or state by virtue of
which an admission or representation
is rendered conclusive upon the
person making it and cannot be
denied or disproved as against the
person relying thereon.
Kinds:
1. Estoppel in Pais (by conduct)
a. Estoppel by silence
b. Estoppel by acceptance of
benefits
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS

Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law),
Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial
Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)

San Beda College of Law


85

MEMORY AID

LACHES

IN

CIVIL LAW

PRESCRIPTION

1. concerned with
effect of delay

1. concerned
fact of delay

with

2.
question of
inequity
of
permitting the claim
to be enforced

2.
question
matter of time

or

3. not statutory

3. statutory

4. applies in equity

4. applies at law

5. not based on a
fixed time

5. based on a fixed
time

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma.
Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease),
John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)