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Kinds of Obligation PDF
Kinds of Obligation PDF
OBLIGATION
Primary classification under the
civil code
1. Pure obligation
2. Conditional obligation
3. Obligation with a period
4. Alternative obligation
5. Facultative obligation
6. Joint obligation
7. Solidary obligation
8. Divisible obligation
9. Indivisible obligation
10.Obligation with a penal clause
Pure and Conditional
Obligations
PURE OBLIGATION
example.
Duterte is to allow the use of his car
by Binay until Duterte returns from
Baguio.
2. potestative on the part of the
creditor. - it is VALID whether the
condition is suspensive or resolutory.
example:
a. I will give you my sign pen if you
desire to have it.
b. Poe is to give Roxas P50,000.00 if
Roxas goes to Baguio.
c. Poe is to allow the use of her car by
Roxas until Roxas returns from Baguio.
Casual Condition
example:
1. Duterte is to give Binay P100
million if Duterte wins in the
presidential election
2. Duterte is to give Binay P100
million if Poe withdraws her
presidential bid.
Mixed Condition
example:
1. David will give Angelo P1 million
if Angelo will marry Yna.
2. I'll give you my car if I can sell
my land.
Possible/Legal and
Impossible/Illegal
A. Possible – one that is capable of
realization/fulfillment according to
nature, law, public policy or good
customs;
1. may be lost
2. may deteriorate
3. may be improved
the object may be lost...
a. without the fault of the debtor - the
obligation shall be extinguished
b. with fault of the debtor - debtor is
obliged to pay damages
c. partly with and partly without the
fault of the debtor -
the object may
deteriorate...
1. without the fault of the debtor - the
impairment is to be borne by the
creditor
2. with the fault of the debtor - the creditor
may choose between the rescission of
the obligation and its fulfillment, with
indemnity for damages in both cases
3. partly with and partly without the fault of
the debtor
the object may improve...
1. by nature or by time - the
improvement shall inure to the
benefit of the creditor
2. through the expense of the debtor -
he shall have no other right than
that granted to the usufructuary.
3. partly through nature or time and
partly by the debtor
DEFINITION OF LOSS
1. when it perishes
e.g. when a house is burnt
to ashes.
2. when it goes out of
commerce
e.g. as when the object
heretofore unprohibited
becomes prohibited
3. when it disappears in
such a way that its
existence is unknown
e.g. when a particular car
has been missing for some
time.
4. when it disappears in
such a way that it
cannot be recovered
e.g. when a particular
diamond ring is dropped in
the middle of the pacific
ocean
Illustrative problems
(a) A promised to give B his car if B
passes the CPA board exam. Pending
the results of the said exams, the car
was destroyed by a fortuitous event,
without any fault at all on the part of
the debtor.
An obligation where
only one prestation is due but
the debtor may render
another in substitution.
example
D is obliged to give a
specific ring to C with the
agreement that D may deliver
a specific watch as a
substitute.
Rules is case of loss of principal thing
and substitute
1. Before Substittution (i.e., before the
debtor has informed the creditor of
the substitution)
(a) Principal thing
(1) If lost due to fortuitous event, the
obligation is exringuished
(2) If lost due to the debtor's fault,
debtor shall pay damages.
2. After substitution
(a) Principal thing
The loss of the principal thing
whether through a fortuitous
event or through the debtor's fault
imposes no additional obligation
on the debtor because the thing
due is already the substitute.
After the substitution has
been communicated, the
thing is due is the substitute.
The obligation also ceases to
be a facultative obligation and
becomes a simple obligation.
(b) Substitute thing
1.) If lost through fortuitous
event, the obligation is extinguished.
ALTERNATIVE FACULTATIVE
1. Several 1. Only one
prestaions are prestation, the
due, but the
principal
performance of
one is sufficient obligation, is
to extinguish due.
the debt.
2. If there are 2. If the
void principal
prestations, obligation is
the others may void, the
still be valid, debtor is not
hence, the required to
obligation give the
remains. substitute
3. The right of 3. The right of
choice is with choice belongs
the debtor, to the debtor
unless only
expressly
given to the
creditor
4. If all 4. If the
prestations are principal
impossible obligation is
except one, impossible, the
that which is debtor is not
possible must required to
still be given give the
substitute
Joint and Solidary Obligation
In a joint or solidary
obligation, there is a
concurrence of two or more
debtors and/or two or more
creditors in one and the same
obligation.
In a joint obligation, each
debtor is liable only for
proportionate part of the debt,
and each creditor is entitled only
to a proportionate part of the
credit.
example
1. A and B are indebted to X for
P10,000.00.
A penal clause is
attached to an obligation
in order to insure
performance and has a
double function:
1. To provide for liquidated
damages, and
D is obliged to deliver 10
sacks of rice to C on May
10. The parties agreed that
if D fails to deliver on due
date, he will pay a penalty
of P500.00.
1. Supposing that D failed
to deliver on due date, may
he just pay the penalty of
P500.00?
answer...
No, because the debtor cannot
exempt himself from the
preformance of the obligation by
just paying the penalty, exept
when this right has been
epressly reserved for him.
2. May C demand the
delivery of 10 sacks of rice
and the payment of the
penalty at the same time
upon default of D?
answer...
No. The creditor cannot demand
fulfillment of the obligation and the
payment of the penalty at the same
time except when this has been
clearly granted to him, or if after
requiring fulfillment of the obligation,
the performance thereof becomes
impossible without his fault, he may
also enforce the penalty.
When the court may reduce the
penalty
1. When the obligation has been partly
complied with by the debtor.
2. When the obligation has been
irregularly complied with by the
debtor
3. When the penalty is iniquitous or
uncoscionable even if there has been
no performance
Effect of nullity of principal obligation,
penal clause
example...
D borrowed P10,000.00 from C. On due
date, D paid the debt to C who had
become insane. If C kept only
P4,000.00 and threw away P6,000.00,
then payment will be valid only up to
P4,000.00
b. Insofar as the payment has been
beneficial to him.
example...
In the above example, if C used
P3,000.00 to buy his foods, and lost the
balance, payment will be valid only up
P3,000.00, the amount beneficial to
him.
Payment to an unauthorized third
person
As a general rule, payment to an
unautthorized third person is not
valid.
exceptions:
1. If payment has redound to the
benefit of the creditor, which
benefit need not be proved in the
following cases:
a. If after the payment, the third
person acquires the creditor's right
(such as when the third person
becomes the assignee of the
instrument evidencing the credit.
b. If the creditor ratifies the
payment to the third person.
c. If by the creditor's conduct, the debtor
has been led to believe that the third
person had the authority to receive
payment.
(Such as when a water service company
gives a collector's uniform to a third
person who is not its employee and the
debtor gives his paymnet to such third
person believing that he is the authorized
collector.)
2. If the payment is made in good
faith to a third person in
possession of the credit
2) Voluntary or conventional —
this is due to the agreement of the
parties.
Example of voluntary
compensation
D owes C P5,000.00 due on
September 20, 2016, while owes
D P5,000.00 due on September
30, 2016. On September 1,
2016, for instance, D and C may
agree that their debts be
compensated.
3) Judicial (also termed “set-off”) — this
must be pleaded; it can be made
effective only by an order from the
court.
Example of judicial
Compensation
T, a travel agent, sued P for collection of
P10,000.00 representing the balance of P
for a guided tour in Bangkok which T
arranged. In his answer, P claimed that T
owed him damages amounting to
P10,000.00 which he (P) and his family
sustained as a result of the substandard
hotel accomodation that T booked for
them. P was able to prove his right to said
damages and the amount thereof. Any
compensation declared by the court in
this case is one of judicial compensation.
4) Facultative — here, one of the
parties has the choice of
claiming the compensation or of
opposing it (perhaps because not
all the requisites of legal
compensation are present).
Example of Facultative
Compensation
A owes B P1 million demandable and
due on Jan. 12, 2004. B owes A P1
million demandable and due on or
before Jan. 31, 2004. On Jan. 12, 2004 B,
who was given the benefi t of the term,
may claim compensation because he
could then choose to pay his debt on
said date, which is “on or before Jan. 31,
2004.” If, upon the other hand A claims
compensation, B can properly oppose it
because B could not be made to pay
until Jan. 31, 2004.
Requisitesof Compensation
1. there must be two (2) parties, who,
in their own right, are principal
creditors & principal debtors of each
other
2. both debts must consist in money,
or if the things due are fungibles,
they must be of the same kind &
quality
example...
D is obliged to give C a sign pen and
C is obliged to give D a sign pen.
problem...
D is obliged to give C a specific
Pilot ballpen and C is obliged to give
D a specific Panda ballpen. Can there
be a legal compensation?
3. both debts must be due
4. both debts must be liquidated &
demandable
Liquidated -
means the amount of the debts
has already been determined or is
easily determined.
Demandable -
means both debts must be
enforceable.
5. there must be no retention or
controversy commenced by 3rd
persons over either of the debts &
communicated in due time to the
debtor compensation must not be
prohibited by law
example...
D owes C P10,000.00. C owes D
P10,000.00. C also owes X P10,000.00.
X sues C and asks the court to order D
not to pay C so that in the event the
court renders judgment in favor of X, D
will have to pay X. The court issues the
order to D. There can be no legal
compensation between D and C
because there is an order of retention
to D with respect to his debt to C.
Compensation in Solidary
Obligation
A is indebted to X, Y, and Z, solidary
creditors, for P30,000.00 due on
February 1, 2016. X in turn owes A
P30,000.00 due on February 1, 2016.
Both obligations being due, they are
extinguished by compensation.
However, X has to give Y and Z their
respective shares at P10,000.00 each
because compensation made by any of
the solidary creditors shall render him
liable to the others for the share in the
obligation corresponding to them.
Novation
By novation is 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.
examples
D owes C P10,000.00.