iii. cornhensatio rnorae (Art.

1192)

Central Bank v. Court of Appeals, G.R. No. L-45710, 139 SCRA 46 (1985) •

Fraud or dole (Art. 1171)

dole incidente and dole causante

Woodhouse v. Halili, G.R. No. L-4811, 93 Phil. 526 (1953)

Geraldez u. Court of Appeals, G.R. No. 108253, (1994)

· Negligence (Art 1172, 1173)

- culpa v. dole
culpa i uiliano v. culpa contractual -
standard of care required

US v. Barias, G.R. No. 7567, 23 Phil 434 (1912)

Sarrniento v. Spouses Suez-Cabrido, 401 SCRA 122 (2003)
Crisostomo v. Court of Appeals, G.R. No. 138334, 409 SCRA 528 (2003)

· Contravention of the tenor (Art. 1172)

Arrieta v. NARK, G.R. No. L-15645,10 SCRA 79 (1964)

Chaves v. Gonzales, G.R. No. L-27454, 32 SCRA 547 (1970)
Magat v. Medialdea, G.R. No. L-37120, 206 Phil 341 (1983)

c. Remedies in case of breach

i. Performance

· Specific performance (Art 1165; Section 10, Rule 39, Rules of Court)

· Substituted performance

in an obligation to give generic thing (Art. 1165, par. 2)

undoing of poor work in an obligation to do (Art. 1167)
undoing in an obligation not to do (Art 1168)

ii. rescission (Art 1191--1192)

iii. Damages (Art 1170)

d. Subsidiary Remedies of Creditor

i Accion Subrogatoria (Art. 1177)

ii. Accion Pauliana (Art. 1177; 1381, par. 3)

KHong Cheng v. Court of Appeals, G.R. No. 144169, 355 SCRA 701 (2001)
Siguan v. Lim, G.R. No. 134685, 318 SCRA 725 (1999)
 P N f l N M 1 U 1 1 . 1 ~ 1 SY~~/~ S

iii. Other Specific Remedies (Art. 1652, 1729, 1608, 1 8 9 3 ) e.

Fortuitous Event (Art. 1174)

i. Effect Extinguishment of Liability

ii. Except
ions to Extinguishment (Art. 1174, 1165 par. 3, 552, 2001,
2147)

Austria v. Court of Appeals, G.R. No. L-29040, 39 SCRA 527 (1971)

Juan Nakpil & Sons v. Court of Appeals, G.R. No. L-47851,144 SCRA 597 (1986)
Yobido v. Court of Appeals, G.R. No. 113003, 281 SCRA 1(1997)
Bacolod-Murcia Milling v. Court of Appeals, G.R No. 81100-01,182 SCRA 24
(1990 Philcomsat v. Globe Telecom, G.R. No. 147324, 430 SCRA (2004)

£ Usurious Transactions (Art 1175,1.413,1961, 2209) PD 858; PD

1684;
Monetary Board Circular No. 905-82

Monetary Board Circular No. 799, Series of 2013

Eastern Shipping Lines v. Court of Appeals, G.R. No. 97412, 234 SCRA 781 (1994)
Security Bank v. Regional Trial Court Makati, G.R. No. 113926, 263 SCRA 453 (1996)
Alrneda v. Court of Appeals, G.R. No. 113412, 256 SCRA 292 (1996)
First Metro Investment v. Este del Sol, G.R. No. 141811, 369 SCRA (2001)
Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013
Spouses Mallari v. Prudential Bank of the Philippines, G.R. No. 197861, June 5,
2013

C. Different Kinds of Obligations

1. Pure and Conditional Obligations

· Pure Obligations (Art. 1179, par. 1)

· Conditional Obligations (Art. 1181)

Concept
Condition v. Period or Term

Gaite v. Fonacier, G.R. No. L-11827, 2 SCRA 830 (1961)

Gonzales v. Heirs of Tomas and Paula Cruz,, G.R. No.131784, 314 SCRA 585 (1999)

· Kinds of Conditions

a. As to the effect on the obligation (Art 1181)

i. Suspensive Condition or Condition Precedent

Retroactive effect when condition is fulfilled (Art. 1187)

Coroteel v. Court of Appeals and Akaraz, G.R. No. 103577, 263 SCRA 15 (1996)

2
 • Rights of the creditor and debtor before fulfillment of the condition
(Art. 1188)

ii. Resolutory Condition or Condition subsequent

Central Philippine University v. Court of Appeals, G.R. No. 112127, 245 SCRA 511 ( 1 5 )
Quijada v. Court of Appeals, G.R. No. 126111, 299 SCRA 695 (1998) The
Secretary of Education v. Heirs of Dulay, G.R. No. 364748, January 2Z 2006

b. As to the cause or origin (Art 1182)

i. Po five

· Effect of fulfillment of condition depends solely on the will of the debtor

· Debtor's promise to pay when he can is not a condition (Art 1180)

Osmena v. Rama, G.R. No. 4437,14 Phil. 99 (1909)

Lao Lim v. Court of Appeals, G.R. No.87047,191 SCRA 150 (1990)

ii. Casual
Naga Telephone Co. v. Court of Appeals, G.R No. 107112, 230 SCRA 351 (1994)

Mixed

Smith Bell v. Matti, G.R No. 16570, 44 Phil. 875 (1922)

Hermosa v. Longora, G.R. No. 5267, 93 Phil. 977 (1953)
Rustan Pulp and Paper Mills, G.R. No. 70789, 214 SCRA 665 (1992) Romero v. Court of Appeals,
G.R No. 107207, 250 SCRA 223 (1995)

c. As to possibility (Art. 1183)

Roman Catholic Archdiocese of Manila v. Court of Appeals, G.R. No. 77425,

198 SCRA 300 (1991)

d. As to mode: positive or negative (Art 1184---1185) • Effect of prevention

of the fulfillment of the condition by the obligor (Art 1186)

Taylor v. Utz Tieng Piao, G.R. No. 16109.4 i Phil. 873 (1922)
Sps. Nameal and Lourdes Ronrostro v. Sps. Juan and Constacia Luna, G.R No.172346,
July 2 , 2013

Loss, deterioration or improvement pending the happening of the condition (Art 1189 -
1190)

Heirs of Moreno v. Mactan Cebu International Airport Authority, G.R No. 156273,
413 SCRA 502 (2003)

2. Reciprocal Obligations (Art 1191-1192 v. Art. 1592)

 Read: Art 1786,1788,1484---86, Republic Act No. 6552

Roque v. Lapuz, G.R. No. L-32811, 96 SCRA 741(1980)

Grace Park Engineering Co. Inc. v. Dimaporo, G.R No. L-27482,107 SCRA 266 (1981)
Boysaw v. Interphil Promotions, G.R. No. L-22590, 148 SCRA 365 (1987) Visayan
Saw Mill v. Court of Appeals and RJ Trading, G.R. No. 83851,
219 SCRA 378 (1993)
Deiparine v. Court of Appeals and Trinidad, G.R. No. 96643, 221 SCRA 503 (1993)

3. Obligations with a Period (Art 1193, 1180)

a. Compare Period/Term v. Condition

b. Kinds of Period

i. As to effect

· Suspensive (Art 1193, par. 1)

· Resolutorv (Art 1193, par. 2)

As to expression
· Express
· Implied

As to definiteness

· Definite
· Indefinite

iv. As to source

· oluntar-•
F

Legal
· judicial

c. Loss, deterioration or improvement before arrival of the period ( Art. 1194 & 1189)

d. Effect of Payment in Advance (Art. 1195; 1197, par. 3)

e. Benefit of Period (Art 1196)

i. For whose benefit

· Creditor
· Debtor
· Both

ii. Effects

iii. Presumption (Art 1196) Ponce tie Leon v. PNB, G.R.

No. L-3316, 90 Phil 311(1951)

4
 Buee v. Court of Appeals, G.R. No. 136913, 332 SCRA 151 (2000)

iv When debtor loses right to make use of period (Art. 1198) f.

When Court May Fix A Period

i. Period is implied
ii. Period depends on sole will of the debtor

Araneta v. Philippine Sugar Estate Dev't Co., G.R. No. L-22558, 20 SCRA 330 (1967)
Deudor v. j.M. Tuason, G.R No. L-13768, 2 SCRA 129 (1961)

Alternative Obligations

a. Concept (Art. 1199)

b. Right of Choice (Art 1200)
c. Effect of Notice of Choice
d. When Notice Produces Effect (Art. 1201)
e. Effect of loss or impossibility of one or all prestations (Art. 1202 to 1205)
f. Facultative Obligation (Art 1206)

i. Concept
II. Distinguished from Alternative Obligations
Effect of Substitution

5. joint and Solidary Obligations

a. joint Obligations

i. Concept

• Requisites
Words used to indicate joint obligations

ii. Presumption (Art. 1207, 1208)

iii. Effects (Art 1207, 1208)

• Extent of liability of debtor

· Extent of right of creditor
· In case of novation, compensation, confusion (Art 127T) or remission

b. Solidary

Obligations i.

Concept

Requisites
Words used to indicate sol.idary obligations

Escao v. Ortigas, Jr., G.R No. 151953, 526 SC 26 (2007)

ii. Kinds
5
 • As to source (Art. 1208)
o Legal (Art. 1915, 1945, 2194, Art 119 of the RPC)
o Conventional
o Real

• As to parties bound
o Active
o Passive
o Mixed

• As to uniformity
o Uniform
o Varied/non---uniform (Art. 1211)

lnchausti v. Yulo, G.R. No. 7721, 34 Phil. 978 (1914)

iii. Effects

* Solidary creditor in relation to:

o common debtor

O right to demand (Art. 1214--1216,1217, par. 1)

C~ in case of novation, compensation, confusion, remission by a

creditor (Art. 1215, par. 1)

o solidary co--creditors

in case of novation, compensation, confusion, remission by a co---

creditor (Art 1215, par. 2)
prejudicial acts prohibited (Art. 1212)
assignment of rights not allowed (Art_ 1213)

· Soiidarv debtor in relation to:

o common creditor

obligation to perform (Art. 1207)

in case of novation, compensation, confusion,
remission by a creditor (Art. 1215, par. 1)

o solidary co---debtor

in case of payment by a co-debtor (Art. 1217 - 1220) 0 in

case of fortuitous event (Art. 1771)

jaucian v. Querol, G.R. No. 11307, 38 Phil. 707 (1918)

Quiorrmbing v. Court of Appeals, G.R. No. 93010, 189 SCRA 325 (1990)
Inciong v. Court of Appeals, G.R. No.96405, 257 SCRA 578 (1996) GSIS v.
NLRC, G.R. No. 180045, November 17, 2010

6
 iv. Defenses Available to a Solidary Debtor Against the Creditor (Art. 1222)
· Types

o those derived from the nature of the obligations

o personal defenses
o defenses pertaining to his shares
o those personally belonging to the other co--debtors

· Effects

Ir;chausti v. Yulo, supra.

Lafarge Cement PhiL V. Continental Cement, G.R. No. 155173, 443 SCRA 522 (2004)
Varoricut Shipping Co. Inc. v. NLRC, G.R. No. 164940, November 28, 2007

c. joint Indivisible Obligations

i. Concept

· Distinguished from joint obligations

· Distinguished from solidary obligations

ii. Indivisibility distinguished from solidarity (Art. 1210)

iii, Effects (M.1209,1224)z

6. Divisible and Indivisible Obligati®

a. Divisible Obligations

i. Concept

ii. Effects (Art 1773, 1B3)

b Indivisible Obligations

i. Concept distinguished from solidary obligations

d. ICn_ds

· Natural (Art 1225, par. 1)

· Legal (Art 1225, par. 3)
· Conventional (Art 1775, par. 3)

iii. Presumptions of divisibility and indivisibility (Art. 1225)

iv. Divisibility and indivisibility in obligations not to do (Art 1225, par.3 )

v. Effects (Art 1223,1223,1224)

O. Cessation of Indivisibility

7
 7. Obligations with a Penal Clause

a. Concept

· Principal v. Accessory Obligation

b. Kinds of Penal Clause

· As to effect
o Subsidiary
o Complimentary

As to source

0 Conventional 0
Legal

· As to purpose

o Punitive
o Reparatory

c. Derrtandabilitt of Penalty (Art. 1226, par. 2)

d. Effects of Penal Clause: General Rule and Exceptions

· Substitute for indemnity for damages and payment of interest (Art. 2726)

Makati Dev't Corp. v. Empire Insurance Co., G.R. No. L-21780, 20 SCRA 557 (1367)
Tan v. Court of Appeals, G.R No. 116285, 367 SCRA 571 (2001)
Country Bankers Insurance v. Court of Appeals, G.R. No. 85161, 201 SCRA 458 (1991)

* Not exempt debtor from performance ( Art. 1227)

· Cannot demand both performance and penalty at the same time (Art. 1227)

· Creditor cannot collect other damages in addition to penalty (Art. 1226)

Continental Cement v. Asea Broum BovcYri, G.R. No. 171660, October 17, 2011

e. When penalty shall be equitably reduced (Art. 2229)

f. Nullity of Principal Obligation of Penal Clause (Aft 1230)

O. Extinguishment of Obligations (Art: 1231)

2. Payment or Performance (Art, 1232)

a. Requisites

i. Who can pay

8
 · General Rule

· Exceptions:

o third person who is an interested party; effects (Art. 1302[3j)

o third person who is not an interested party but with the consent of debtor (Art
1302j2],1236, par. 1)
o third person who is not an interested party and without the consent of the
debtor, without the knowledge or against the will of the debtor (Art, 1236,
par. 2; Art 1237, M 6 , par. 1)
o third person who does not intend to be reimbursed (Art 1238)

· in an obligation to give (Art. 1239, 1427)

· in case of active solidarity (Art. 1214)

ii. To whom payment can be made

* General rule (Aft 1240) Sps. Dela Cruz v. Cmacepcima, G.R.

No. 172825, October 11, 2012

· Exceptions:

o incapacitated person (Art. 1241, par. 1)

o third person (Art 1241, par. 2)
o when proof of benefit not required (Art 1241, par. 3; M . 1242) o
in case of active solidarity (Art. 1214)

iii. What is to be paid (Identity)

· General Rule

· Specific cases:

o To give a specific thing (Art. 1244)

o To give a generic thing (Art. 1246)
o To pay money (Art, 1249, 1250; R.A, 529, R.A. 4100, R.A. 8183)

St. Paul Fire and Marine Insurance v. Macmzdraii, G.R. No. L-27796, 70 SCRA 122 (1976)
Papa v. A.V. Vales:cia, G.R. No. 105188, 284 SCRA 643 (1998)
Philippine Airlines v. Conn of Appeals, G.R. No. 49188, 181 SCRA 557 (1990)

· Payment of Interest ( 1956)

4rt.
Lima, et at, v. Development Batik of the Philippines, G.R. No. 177050, July 1, 2013

iv. How payment is to ne made

* General Rule - Integrity (Art 1233)

9
o Partial payment is not allowed; exceptions (Art. 12413)

10
 · Substantial performance in good faith (Art. 1234)
· Estoppel (Art. 1235)
· Presumptions in payment of interests and installments (Art 1176)

v. When is payment to be made

General Rule (Art 1169)

·No demand, no delay; Exceptions
Solar Harvest, Inc. v. Davao Corrugated Carton Corp., G.R. No. 176868, July 26, 2010

vi. Where payment is to made

· Place expressly designated (Art. 1251, par. 1)

* When place of payment is not expressly designated (Art. 1251,
paragraphs 2 to 4)

vii. Who pays for expenses for making payment (Art. 1247)) D
c. Application of Payments (Art 1252)

Reparations Commission v. Universal Deep Fishing, G.R. No. L-219,96, 83 SCRA 764
(1978) /
Paculdo v. Regalado, G.R. No. 123855, 345 SCRA 134 (2000

i. Requisites

Rules in Application of Payments (Art. 1252-1253)

· If rules are not applicable or cannot be inferred (Art 1254)
· Meaning of the "most onerous debtor"

d. Payment by Cession (Art 1255)

i Requisites

ii. Effects

fit. Compared to Assignment of Receivables

e. Dation in Payment (Art. 1245)

• Distinguished from Payment by Cession

Dev't Bank of the Phils. v. Court of Appeals, G.R No. 118342, 284 SCRA 14 (1998)

i. Requisites
ii Effects

Filinvest Credit Corporation v. Philippine Acetylene, G.R No. L-50449,

111 SCRA 421 (1982)

f. Tender of Payment and Consignation

11
 i. Tender of Payment

Rural Bank of Caloocan v. Court of Appeals, G.R. No. L-32116,104 SCRA 151 (1981)

ii. Consignation

• Requisites

o When tender and refusal not required (Art 1256, par. 2)

o Two notice requirement (Art. 1257, par. 1; Art. 1258, par. 2);
Effects of non-compliance

· Effects (Art. 1260, par 1)

o Withdrawal by debtor before acceptance by

creditor or approval of court (Art. 1260, par. 2)
o Withdrawal by debtor after proper consignation (Art 1261)
With creditor approval
Without creditor approval
· Expenses of Consignation Sotto v.

Mijares, G R. No. L-23563, 28 SCRA 17 (1969)

TLG International Continental Enterprising, Inc. v. Flores, G.R No. L-35381,

47 SCRRA 437 (1972)
Soto v. Militante, G.R. No. L-58961,123 SCRA 160 (1983)
Licuanan v. Diaz, G R. No. 59805,175 SCRA 530 (1989)
Riesettbeck v. Court of Appeals, G.R No. 90359, 209 SCRA 557 (1992)
T'ibajta v. Court of Appeals, G.R. No. 100290, jam 4, 1 0 3

2. Loss or Impossibility

a. Loss of the Thing Due (Aft 1189, par. 2) L Kinds

· Total
· Partial

ii. Requisites (Art 1262)

iii. Presumption (Art. 1265)

iv. Effects

= In an obligation to give a specific thing (Art 1262,1258) •

In an obligation to give a generic thing ( t . 1263)
· In case of partial loss (Art 1264)
· Action against third persons (Art. 1269)

12
 b. Impossibility of Performance (Art.1266,1267)

i. Kinds

· Total
· Partial

ii Requisites (Art. 1266)

iii. Effects

· In obligations to do (Aft 126--1267; Art. 1262, par. 2)

· Impossibility distinguished from difficulty
· In case of partial impossibility (art. 1264)

Occefta v. Court of Appeals, G.R. No. L - 3 4 9 , 73 SCRA 637 (1976)

Naga Telephone Company v. Court of Appeals, G.R. No. 107112, 230 SCRA 351
(1994) PNCC v. Court of Appeals, G.R. No. 116896, 272 SCRA 183 (1997)
3. Condonation or Remission a. Kinds

· Total or partial
· Express or implied (Art 1270, par. 1)

b. Requisites (Art. 1270, par. 2)

Yam v. Court of Appeals, G.R. No. 104726, 303 SCRA 1(1999)

c. Presumptions (Art 1271--1271;1274)

d. Effects

In general
In case of joint or solidary obligations

e. Governing Rules (Art. 1270)

f. Renunciation of Principal or Accessory Obligation (Art 1273)

4. Confusion or Merger

a. Requisites

b, Effects

· In general (Art. 1275)

· In case of joint or solidary obligations (Art. 1277)
d. Confusion in Principal or Accessory Obligations (Art. 1276)
)

L
13
 5. Compensation (Art. 1278)

a. Kinds

i. Total or Partial
ti. Legal
iii. Conventional (Art 1279, AA. 1282)
iv, Judicial (Art. 1283)
v. Facultative

b. Legal Compensation

Requisites (Aft. 1279--MO): Due distinguished from demandable

Galt Tion v. Court of Appeals, G.R. No. L-22490, 28 SCRA 235 (1969)
Perez v. Court of Appeals, G.R. No. L-56101,127 SCRA 636 (1984)
Villanueva v. Tantuit , G.R. No. 53585,182 SCRA 263 (1990)
BPI v. Court of Appeals, G.R. No. 116792, 255 SCRA 571 (19%)
Philippine National Bank v. Sapphire Shipping, G.R. No. 108052, 259 SCRA 174 (7996)
CKH Industrial Development v. Court of Appeals, G.R. No. 111890, 272 SCRA 333
(1997)

d. ii. Effects (Art 1290, 1289)

When Compensation is not allowed (Art 1287---1288)

e.
Compensation of Debts Payable in Different Places (Art 1286)
f.
Effect of Nullity of Debts to be Compensated (Art. 128?)
g.
Effects of Assignment of Credit
i. with consent of debtor (Art 1285, par. 1)
ii. with knowledge but without consent of debtor (Art 1285, par. 2)
iii. without knowledge of debtor (.Art. 1285, par. 3)
I ~/IS
b 6. Novation
a. Concept (Art. 1291)
· Change in debtor
· Change in object
· Change in third person who is subrogated
· Change in creditor with its consent or at its instance is not novation

b. Kinds

i. As to form: express or implied

ii. As to origin: conventional or legal
iii. As to object
• objective or real
• subjective or personal

14