Week 1 – Welcome / Introduction to Law I. 1. 2. 3. 4.

Introduction to Law Not Not Not Not Divine Law, law of religion and faith Natural Law, justice, fairness and righteousness Moral Law, norms of good and right conduct Physical Law, order or regularity in nature Sources of Law i) i) Constitution – Fundamental Law of the land ii) ii) Legislations – Passed by Senate and House of Representatives iii) iii) Administrative issuances – Quasi Legislative Functions iv) iv) Jurisprudence – Decisions of the Supreme Court (SCRA) Stare decisis v) v) Treaties and Generally accepted principles of International Law - Art II Sec 2, Pacta sund servanda vi) vi) Customs – habits and practices through long and accepted usage have become binding rules of conduct vii) vii) Principles of Justice and Equity – common law jurisdiction a. b. b. c. Characteristics of Law Rule of Conduct Obligatory Promulgated by legitimate authority Of common observance and benefit

a. a.

Organization of courts - Supreme Court - Court of Appeals, Sandiganbayan, Court of Tax Appeals - Regional Trial Court - Metropolitan Trial Court, Municipal Trial Court


Quasi Judicial Bodies 1. 1. Comelec 2. 2. NLRC 3. 3. LTFRC 4. 4. ERB

c. d.

Quantum of Evidence - Criminal cases: Proof Beyond Reasonable Doubt Civil cases: Preponderance of Evidencegreater weight of all the evidence which as a whole shows that the act sought to be proved is more probable than not. Administrative cases: Substantial Evidence – Such evidence that a reasonable mind might accept as adequate to support a conclusion Effects and Applications of law Requirement for publication 1. 1. 15 days after publication in OG or newspaper 2. 2. Ignorance of the law excuses no one from compliance 3. 3. Due Process Law is prospective except: 1. 1. If the law provides for retroactivity 2. 2. Penal law insofar as it favors the accused 3. 3. Remedial or curative law Computing time 1. 1. Year is 12 calendar months 2. 2. Month is 30 days, except when it refers to a calendar month 3. 3. First day excluded, last day included Conflict of Laws Provisions i. i. Penal laws apply to all who sojourn to Phils


d. e.







ii. ii. Family Law and inheritance based on national law of the party regardless of where he lives iii. iii. Forms and solemnities of contracts and other instrument based on the place where it is executed e. f. Obligations and Contracts Defined

The body of rules which deals with the nature and sources of obligations and the rights and duties arising from agreements and the particular contracts. Obligation – A Juridical relation whereby a person may demand from another the observance of a determinative conduct (giving, doing, not doing), and in case of breach, may demand satisfaction from the assets of the latter. Contract – Meeting of the mind between two persons whereby one binds himself, with respect to the other, to give something or to render some service. A contract necessarily gives rise to an obligation but an obligation does not always need to have a contract. f. g. Corporation and Partnership Defined

Partnership – Two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. Corporation – Artificial being created by operation of law, having right of succession and the powers, attributes, properties expressly authorized by law or incident to its existence. Weeks 2 to 4 – Obligations I. General Provisions, Nature and Effects of Obligations a. General Provision Juridical Necessity – enforce compliance; seek damages



To give, to do, and not to do – Examples

Four essential requisites of an obligation (i) (i) A passive subject (Debtor – to give; Obligor – to do) (ii) (ii) An active subject (Creditor/Obligee) (iii) (iii) Object (Prestation) – subject matter (iv) (iv) Juridical tie (Vinculum) – Source of Obligation Form as a manifestation of intent; but no specific form unless required by law Kinds of Obligations 1. 1. According to subject matter a. a. Real Obligation – to give b. b. Personal Obligation – to do i. i. Positive – to give or do ii. ii. Negative - not to do or not to give A borrower agreed to pay his debt in 60 days, and in case of non-payment to render free service as driver/servant. When due date came, borrower refused to render free service. Decide. 2. 2. According to person obliged a. a. Unilateral b. b. Bilateral (Reciprocal or non-reciprocal)



(c) (c)

Sources of Obligation 1. 1. LAW – Imposed by law A wife was about to deliver a child. Her neighbor brought her to hospital. Who should pay the hospital bill – Husband or Neighbor? P.D. 1517 grants the right of first refusal to person who has leased for more than 10 years an urban land and who construct his house thereon. Lessee of a Condo in Manila now claims his right of first refusal because he has been living in the unit for almost 15 years. Decide.


as a consequence of which. NPA infested area Fishpond ii. loss of earning capacity of murder victim c. Quasi-contracts – Juridical relations based on the principle that no one shall be unjustly enriched or benefited at the expense of another. Ex. Javier) b. ii. Solutio indebiti – When a person unduly delivers a thing through mistake to another who has no right to demand it. a. Ex. Quasi delict or Torts – The fault or negligence of a person who. but Tide refused to honor it anymore since the ad was posted more than half a year ago. 657 a. there was an offer to replace 30 sachets of Tide for one Venetian cut Glass until the end of the year. he is obliged to continue the same until the termination of the affair or to require the owner to substitute him. without any power from the latter. reparation for damages caused and indemnification for consequential damages. At the end of the year. b. you present your tide sachets. Support for impregnated rape victim. by his act or . Decide. Negotiorum Gestio – When a person voluntarily takes charge of the management of a business or property of another that has been neglected or abandoned. you are liable both criminally and civilly for the consequence of your acts or omissions such as restitution. law) Crimes (acts or omission punished by If you commit a crime.Obligations presumed. i. c. i. (melon bank v. - derived from law are not In a newspaper ad.

 Have the force of law between the contracting parties and should be complied with in good faith. Generic refers to a class or genus and cannot be determined with particularity. To deliver the thing which he has obligated himself to give 2. she got infected by rabies and died. Decide. Contracts  2. Duties of debtor in delivery of generic thing 1. independent from any contractual relation. Generic Thing 1. Specific is designated or physically segregated from others of the same class. 2. Building owner cites the strong wind as force majeure condition indicating no fault on his part. 1. As a result. 2. To take care of the thing with the proper diligence of a good father of a family ♦  The ordinary care that an average or reasonably prudent person exercises over his property (b)(b) (c) (c) . To delivery a thing which must neither be of superior nor inferior quality (1246) 2.   II.omission. 1. causes damage to another person   A 3-year-old child was bitten by a dog of her neighbor. 2. The car owner sues the building owner and demand to replace the car. Can the neighbor be held liable for the acts of the dog?  A signboard of hanging out of a building dropped on a car resulting in total wreck of the car. 2. 2.  Sincerity and Honesty Nature and Effect of Obligations (a) (a) Specific v. To pay damages in case of breach (1170) Duties of debtor in delivery of specific thing 1. 1.

♦  Another standard of c are may be required by law or by stipulation of the parties 3. To deliver all the accessions and accessories 4. b. Civil – derived by juridical relations 2. 2. a. Real rights acquired only when delivered to him a.right over a specific thing without any passive subject. Undone at his expense b. To recover damages (e) (e) Rules on Fruits 1. To Do a. 4. directed against the whole word. 1. a. To have the obligation performed at debtor’s expense b. b. To recover damages 4. 1. Personal rights – right to demand from another debtor the fulfillment of the latter’s obligation (f) (f) Accessions and accessories . b. To recover damages 2. b. To pay damages in case of breach (d)(d) Remedies of Creditors in breach of obligation 1. a. b. 3. a. To Give Indeterminate Thing a. c. 3. Creditor has rights to the fruits from the time the obligation to deliver arises 3. a. a. young and other products of animals b. To ask that obligation be complied with by another at expense of debtor c. Industrial – produced thru cultivation or labor c. 2. To ask for performance of the obligation b. To compel specific performance b. To Give Determinate Thing a. c. b. b. Real rights . Kinds of fruits a. 3. To recover damages 3. Natural – product of the soil. 4. Not to Do a.

Even if not mentioned. 4. 4. Any event which cannot be foreseen or which though foreseen is inevitable. Mora acccipiendi – delay of creditor c. b. Kinds of Delay a. 1. except: . 5. b. Time is of the essence (controlling motive) c. When demand would be useless 3. In reciprocal obligation. render impossible the fulfillment of obligation 2. 1. Compensatio more – delay in reciprocal obligation 5. No demand from creditor necessary in following cases: a. No person shall be responsible for fortuitous events. Mora solvendi – delay on the part of debtor b.♦  Accessions – fruits of a thing or additions to or improvement upon a thing ♦  Accessories – joined to or included with the principal thing for better use or completion. independent of the will or from aggravation of the debtor. a. But obligation to deliver accessions or accessories does not include the principal (g)(g) Legal Delay 1. Liable even for fortuitous event when the obligation is to delivery a determinate thing (h)(h) Fortuitous Events 1. delay by the other begins. Effects of Delay a. a. c. c. 2. When obligation or law expressly so declares b. Liable for interest and damages b. 1. 2. not mere notice 2. 1. a. accessories follow the principal 2. 3. From the time obligee judicially or extrajudicially demand fulfillment. b. from the moment one party fulfills his obligation. 2.

Liable for damages based on breach of contract c. c. c. f. c. Pre-existing contract b. When debtor promises to deliver same thing to two or more persons e. 3. remedy is damages 2. remedy is annulment bec of vitiation of consent 3. 1. a. 2. e. Culpa contractual – Negligence in the performance of contractual obligation. b. Demandable in all obligations 4. a. Obligation for damages based on quasi delict b. Culpa aquiliana – Negligence between parties not so related by any pre-existing contract.a. Dolo causante (Causal Fraud) – Fraud employed at the time of the execution of a contract in order to secure consent. When obligation to deliver arises from criminal offense f. b. No pre existing contract c. When debtor incurs delay d. 2. a. Dolo incidente (Incidental Fraud) committed in the performance of pre-existing obligation. Proof of due diligence in the selection of employee not a defense 2. When obligation is generic (i) (i) Fraud (deceit or dolo) Deliberate or intentional evasion of the normal fulfillment of an obligation. When nature of the obligation requires assumption of risk c. Waiver of future fraud is void (j) (j) Negligence (culpa) Omission of that diligence which is required by the nature of the obligation. 4. Negligence must be proved for recovery of damage . 1. 1. Negligence of employee conclusive presumption of employer’s negligence e. a. a. b. d. Proof of contract and breach is enough for recovery of damage d. but no malice 1. e. Where expressly specified by law or stipulated in contract b. d.

3. Receipt of later installment of debt without reservation of prior ones = presumption that prior ones paid Remedies to satisfy claim 1. d. except those inherent to person 3. Exhaust property of debtor 2. 2. Can be regulated by the Court depending on circumstance 4. Receipt of principal without reservation as to interest = presumption of interest paid 2. 1. Subrogated to rights and actions of debtors. e. Negligence of employee prima facie presumption of employer’s negligence e. Waiver of future negligence allowed (k) (k) Presumptions 1. Due diligence in the selection and supervision of employee is a valid defense 3. Impugn all of acts by debtor done to defraud creditor (l) (l) . 2. 3. 1.d. 4.

a. Potestative.   . the obligation is void (2)(2) If resolutory condition depends on will of debtor. Mixed  Casual – Depends on chance or will of third party (Valid)  Potestative – Depends on the will of one of the contracting parties (1) (1) If suspensive condition depends on will of debtor. Resolutory  In suspensive condition. the obligation is valid (3)(3) If depends on will of creditor. b. Pure Obligation – One whose effectivity or extinguishments does not depend upon the fulfillment or nonfulfillment of a condition or upon the expiration of a term or period.II.  b. it is valid. Conditional Obligation – Effectivity is subordinated to the fulfillment or non-fulfillment of a future or uncertain fact or event   a. fulfillment extinguishes obligation – loss of rights acquired Casual. Characterized by Immediate Demandability. 2.   Future and uncertain event or  Past event and unknown to the parties Suspensive v. Different Kinds of Obligations (a) (a) Pure and Conditional Obligations 1. fulfillment give rise to an obligation – acquisition of rights  In resolutory condition. 2. 1.

the fruits are deemed mutually compensated ii. Negative c. If reciprocal. d. obligation is valid. e. ii. i. c. Positive v.  As soon as time expired without event taking place  As soon as it becomes evident the event cannot occur Reciprocal v. Condition deemed fulfilled when obligor prevents its fulfillment . d. part not affected by impossible condition is valid. whole obligation is void If “not to do”. i. i. Positive Condition (event will happen) extinguished:    As soon as time expires without the event taking place  As soon as it becomes indubitable that the event will not take place ii. fruits and interest belongs to debtor 3.  Mixed – Depends partly upon the will of a party and partly upon chance or third party (Valid) Impossible Conditions Physically Impossible or legally impossible If “to do”. Unilateral i. as if not written If divisible. ii. 3. If unilateral. Negative Condition (event will not happen) effective:   e.

5. or disappear in such a way that its existence unknown or cannot be recovered a. option for rescission . inure to the benefit of creditor f. 7. If lost thru fault of debtor. 6. or by time. When improved by debtor. c. Alternative remedy not cumulative – can choose one but not both d. Creditor may before the fulfillment of the condition bring appropriate actions for the preservation of the rights. creditor may rescind or fulfillment with damages e. f.4. d. b. a. 7. or set off against damage 8. a. 5. b. When deteriorate with fault of debtor. 4. d. b. When improved by nature. the obligation is extinguished b. Remedies in reciprocal obligation Specific Performance or Rescission With damages in either case c. a. Debtor may recover what he has paid by mistake before the fulfillment of condition. no right to be indemnified. After action for specific performance impossible. If without the fault of debtor. Effects of the fulfillment of a condition retroacts to the day of the constitution of the obligation. Rule on loss or deterioration. 8. 6. go out of commerce. creditor bores the impairment d. c. When deteriorate without fault of debtor. improvements before the fulfillment of condition   Lost – when perished. but may remove such improvement. e. obliged to pay damages c.

where first infractor not know. 2. If paid or delivered before period arrives. deterioration. 5. h. Rules on loss. debtor may recover the thing. g. a. 7. Except where automatic rescission expressly stipulated ii. 5. both parties bear own damages (b)(b) Obligations with a Period 1. with fruits and interests. i. g. b. Term or period – future and certain event 3. h. improvements of conditional obligation applicable 4. Debtor becomes insolvent. e. but period Period fixed by court cannot be changed 7. 6. Where both parties have breach. Power of the court to fix period Subject to right of good faith third party Substantial breach not slight breach i. Debtor loses right to make use of the period a. ii. Court may fix period a. 4. If obligation does not fix a period b. Or where there is no performance yet f. Demandability or extinguishments subject to expiration of a term or period 2.e. Depends on will of debtor   “When means permit” not condition. 1. i. i. unless otherwise stated 6. a. Injured party must resort to judicial rescission. 3. unless he gives guaranty or security . f. liability of first infractor equitably tempered. Established for the benefit of both debtor and creditor.

e. a. 6. unlawful. If two or objects remain. When debtor violates an undertaking e. 5. not liable for damages . If 2 or more objects remain. If lost due to fortuitous event.b. b. When debtor does not furnish guaranties or securities promised c. b. Right of choice to debtor. obligation is extinguished 6. 2.  debtor When right of choice belongs to a. debtor can choose from remaining.  If lost due to fault of debtor. a. Debtor may rescind the contract with damages if thru creditor’s acts debtor cannot make a choice 5. it becomes simple obligation c. 2. 4. When debtor attempts to abscond (c) (c)   Alternative Obligations  Alternative – several objects or prestations but performance of one sufficient  Facultative – One object or prestation but debtor may substitute. If none remains. unless expressly granted to creditor   Except those impossible. If only one object remain. Choice no effect until irrevocable once communicated communicated. c. a. which could not have been the object of the obligation or only one prestation is practicable 3. Must completely perform one of them 1. the obligation subsists b. 3. 1. When guaranties or securities impaired or disappear d. d. c. 4.

c. creditor can choose the one lost and ask value of object lost and damages. Joint debtor cannot be compelled to answer for liability of other debtors d. If none remains. Default rule is obligation is JOINT b. d. debtor not liable. c. obligation extinguished. b. 7. If alternative object still remain. debtor indemnify damages based on value of last object   When right of choice belongs to creditor a. it is lost thru fortuitous event. “Pro rata”. Debtor liable for loss due to his fault once substitution has been made d. Joint Obligation – Each of creditor has right to demand. If lost before substitution. Right of choice only to debtor b. Joint creditor cannot act in representation of the other creditors c. a. “We promise to pay”. b. c. b. if creditor choose the remaining object.b. debtor to indemnify for damages based on the price of the object chosen by the creditor plus consequential damages 7. 1. c. If after substitution. debtor not liable (d)(d) Joint and Solitary Obligations 1. simple obligation to deliver remaining c. debtor cannot be liable for damages b. with his proportionate part of the prestation a. a. If none remains. b. “proportionately” . a. Facultative Obligation a. d. “Jointly”. If only one remain. and each debtor is bound to render compliance.

1. a. 2. “I promise to pay” c. ii. Ex. b. 2 or more persons liable for quasi delict 8. accomplices. Partners in partnership 3.2. together and/or separately. 5. 1. Solidary Obligation – Each creditor has a right to demand. “Jointly and severally”. If 2 or more possession of estate heirs take 2. in solidum. iii. 4. but as to co-debtor he is liable only for his share a. 2 or more bailees to whom a thing is loaned 6. 9. 6. 7. 2 or more officious managers. “Solidarily”. iii. and accessories of a felony. ii. with the entire prestation. Accident fr “Kabit” system b. When nature of obligation requires solidarity 1. Instances when obligation is solidary: When obligation expressly states so When law requires solidarity: 1. Creditors and debtors need not be bound in the same manner and by the same periods and conditions . and each debtor is bound to render compliance. If principal allowed agent to act as though he has full power 4. c. 2. i. If 2 or more appointed an agent for common undertaking or transaction 5. 2 or more payees when there has been payment of what is not due 9. i. 8. 3. Principal. unless management was assumed to save thing from imminent danger 7.

if none demanded. Solidary refers to Indivisibility refers to prestation ii. ii. f. i. Solidary creditors may do whatever may be useful to others. h. Remission of the whole obligation obtained by a solidary debtor does not entitle him to reimbursement from his co-debtors k. A solidary creditor cannot assign his rights without the consent of the others. if solidary debtor becomes insolvent. e. Debtor must pay to the creditor who made demand. except if to co-creditors g. Solidary requires plurality of subjects iii. but not anything which may be prejudicial to the others f. In indivisible obligation. iv. g. compensation.d. i. then he may pay any one of the solidary creditor h. Not same as indivisible obligation vinculum. d. iii. j. confusion or remission of a solidary creditor shall extinguish the obligation but the creditor who did these acts shall be liable to the other creditors i. Novation. i. In solidary. In indivisibility. i. all debtors liable for breach of obligation. i. the co-debtors bore his debt in proportion e. other debtors not liable for insolvency. k. No re-imbursement if payment made after obligation prescribed or illegal j. Defenses available to solidary debtors Derived from nature of obligation . only debtor guilty of breach of obligation is liable for damage iv.

b. incapacity. 3. b. c. No need to prove actual damage 3. a. a. When court may reduce penalty a.  Payment. prescription. If penalty is iniquitous or unconscionable . remission. To insure performance b. If principal obligation partly complied with b. Personal to the debtor   Insanity. minority iii. When obligor is sued for refusal to pay agreed penalty c. 2. Shall substitute for damages and interest. To punish the obligor in case of breach 2. c. When obligor is guilty of fraud 4. 4. ii. c. except a. 1. When there is stipulation to the contrary b. iii. a. non performance of condition mistake. violence. ii. Personal to the other solidary debtors   Partial defense (e) (e) Obligations with a Penal Cause 1. With accessory undertaking in case of breach of obligation a. If principal obligation irregularly complied with c. To liquidate the amount of damage to be awarded c. illegality. b. fraud.

Weeks 5 to 7 . Death of a party in personal obligation 8.Extinguishments of Obligations Modes of Extinguishing Obligations 1. Payment or performance 2. Loss of the thing due 3. a. Confusion or merger of the rights of creditor and debtor 5. performance of obligation (ii) (ii) If substantially performed in good faith. Compensation 6. When there is stipulation to the contrary b. a. b. Subrogated to all the rights of creditor . Recover from debtor the entire amount ii. Prescription I. Payment (a) (a) General Provisions Payment (i) (i) Complete Delivery of money. ii. If payment made with the consent of the debtor i. obligor may recover as though there had been complete fulfillment less damages (iii) (iii) Third party cannot compel creditor to accept payment or performance. Annulment or Rescission of contract 9. Novation 7. i. Condonation or remission 4. Arrival of Resolutory period or fulfillment of resolutory conditon 10. Impossibility of fulfillment 11. When third person has an interest in the fulfillment of obligation (iv) (iv) Rights available to third party who pays: a. except a.

(1250) . Promissory notes. checks not legal tender.b. bills of exchange. b. (1241. 1242) Presumption of benefit in the following case:  If after payment. To the person in whose favor obligation has been constituted b. b. Possessor of the credit    (vi)(vi) Payment must be in Legal Tender a. e. They produce effect of legal tender only when encashed or impaired thru the fault of creditor (1249) c. Any person authorized to receive it d. the basis is the value of currency at the time obligation is established. b. a. d. a. c. In case of extraordinary inflation or deflation. third person acquires creditor’s rights  If creditor ratifies payment to third party  If creditor’s conduct let debtor to believe that the third person had authority to receive payment e. His Successor in interest c. If payment made without the knowledge or against the will of debtor. Foreign currency may be used as currency of contract b. c. he can recover only insofar as payment has been beneficial to the debtor (v) (v) To whom payment must be made (1240) a. Third person provided it has redounded to benefit of creditor.

2. cession accepted by creditors (d)(d) Dacion en pago  Dation in payment is the transmission of the ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of an obligation. a. 4. c. e. Older debts more onerous than newer ones b. debtors insolvent.(b)(b) Applications of Payments 1. debtor still required to pay balance 3. One bearing interest more onerous than one that is not c. 1.  . 3. If creditor issues a receipt designating the debt to be applied. 1. d. but if he does not exercise it. Unless stipulation to contrary. Secured debt more onerous than unsecured d. Cession does not make the creditors owners of the property 2. 2. The right belongs to the debtor. it shall be applied on the debt which is most onerous a. Requires two or more creditors. debtor can accept or reject 3. Where neither debtor nor creditor made a choice. payment shall be applied proportionately  (c) (c) Payment by Cession  Assignment or abandonment of all the properties of the debtor for the benefit of his creditors in order that the latter may sell same and apply proceeds thereof to 1. If similar nature and burden. Debt as principal more onerous than debt as guarantor e. 3. Solidary obligation more onerous than sole debtor 4. creditor may do it 2. b.

1. Previous notice of the consignation had been given to persons interested in fulfillment of obligation d. d. Debt Due b. e. When he is incapacitated to receive payment . a. b. When creditor is absent or unknown or does not appear at place of payment b. d. c. c. Thing or amount due has been deposited with judicial authority e. 1. Exception to requirement for tender of payment: a. Dacion does not involve all the property of debtor d. b. a. e. Dacion makes creditor owner of the property e. 2. a. b. Dacion does not require insolvency c. Dacion usually only one creditor b. Difference between Dacion and Cession a. Subsequent notice of consignation to interested parties 2. Dacion is a novation   (e) (e) Tender of Payment and Consignation  Tender of payment – The act of the debtor of offering to the creditor the thing or amount due  Consignation – Deposit of the object or the amount due with the proper court after refusal or inability of the creditor to accept the tender of payment 1.  Governed by law on sales 1. Tender of payment by debtor and refusal by creditor to accept it without justifiable reason c. Requisites of Consignation a.

2. 2. When debtor promises to deliver same thing to two or more persons 6. Co-debtor. When title of the obligation has been lost 3. 3. When debtor is at fault. When obligation to deliver arises from criminal offense 7. Loss of the Thing Due (a) (a) Lost – when perished. 1. and 2. Debtor not in delay thing is (c) (c) No person shall be responsible for fortuitous events. 3. Expenses of consignation for Creditor’s account a.c. partly 4. guarantors. When two or more persons claim same right to collect e. 4. a. go out of commerce. sureties shall be released. 5. When obligation is generic (d)(d) In case of partial loss the court shall determine whether it is so important as to extinguish the obligation . d. II. If creditor allows debtor to withdraw the consignation. or so difficult as to be manifestly beyond the contemplation of the parties (b)(b) The obligation to deliver specific extinguished if 1. When nature of the obligation requires assumption of risk 3. Without the fault of debtor. When he refuses to give receipt. creditor lose preference over the thing. 7. without just cause d. Where expressly specified by law or stipulated in contract 2. e. or disappear in such a way that its existence unknown or cannot be recovered Or becomes legally or physically impossible to perform. When debtor incurs delay 5. c. 1. except: 1. 6.

presumption is it is his fault   Except earthquake.(e) (e) In case lost when the thing is in the possession of debtor. . storm or other natural calamity (f) (f) Creditor shall have right to go against any third person responsible for the loss. flood.

c. Act of liberality by virtue of which creditor abandons his right   Gratuitous   Accepted by debtor   Obligation must be demandable   Parties must be capacitated   Donation not inofficious   Forms in express condonation h. a. Compensation a. i. h. b.III. b. a. Implied remission Delivery of private document evidencing credit .Renunciation of principal extinguish accessory obligation - IV. Extinguish only the portion of the joint obligation corresponding to the creditor and debtor merged c. Between principal debtor and principal creditor 2. Merger of one solidary debtor with creditor extinguishes obligation V. III. 2. c. Merger of debtor and creditor benefits the guarantor b. Complete and definite merger a. Compensation may be total or partial . Confusion or Merger of Rights   Creditor and Debtor merged in the same person 1. 1. Guarantor can set up compensation of what principal debtor may owe creditor c.If thing pledge is found in the possession of debtor or owner of thing . Condonation or Remission of Debt g. Persons who in their own rights are debtors and creditors of each other extinguishes the debts to the concurrent amount b.

Assignment made with consent of debtor   Debtor cannot set up compensation against previous creditor ii. Both debts are due and demandable 4. Assignment with knowledge but without consent   Debtor can set up compensation for debts before the notification   Debtor cannot set up compensation with respect to debts which matured after notification iii. Debts from Contracts of Depositum (A person receives a thing belonging to another for safekeeping and of returning the same. e. g. they may be compensated before they are judicially rescinded or avoided f. Compensation after assignment i.d. h. 1. Claims for support due by gratuitous title iv. not bank deposits) ii. Assignment without knowledge of debtor   Debtor can set up compensation for debts maturing before he learned of assignment c. No retention or controversy commenced rd by 3 party b. f. When one or both debts are rescissible or voidable. 5. Debts from Criminal offense . 4. Two debts are liquidated (amount is certain) 5. Parties are principal creditors and debtors of each other 2. d. Both debts consist in sum of money or consumable of same kind and quality 3. Requisites of legal compensation (by operation of law ): 1. Debts from Commodatum (One person delivers to another something for him to use and return it) iii. Compensation cannot take place in following case: i. 3. 2. Parties may agree to compensate debts not yet due e.

Insolvency of new debtor will revive action against old debtor if insolvency was already existing and of public knowledge. Payment by new debtor gives him right to beneficial reimbursment 2. e. Delegacion – Substitution made at the instance of old debtor 3. 1. the original one shall subsists f.v. If new obligation is void. 2. novation is void. VI. ii. 3. Previous valid obligation Agreement to enter new obligation Extinguishments of old iv. Must be declared in unequivocal terms c. Substitution of Debtor i. b. iii. 1. If original obligation is void. 2. Expromision – Without the knowledge or consent of debtor. d. Non fulfillment of obligation by new debtor will not give rise to liability of old debtor 5. or known to the debtor when he delegated his debt e. Taxes Novation – extinction of an obligation through the creation of a new one which substitutes it a. at the instance of the new debtor 1. a. c. Payment by new debtor entitles him to reimbursement and subrogation 4. Insolvency or non fulfillment of obligation by new debtor will not give rise to liability of old debtor ii. f. Or incompatible on every point – Test: Whether old and new contract can stand together each having its own independent existence d. g. Requisites: i. Subrogation – Substitution of Debtor . Creation of new valid obligation b. except when annulment may be claimed only by debtor or when voidable acts have been ratified g.

i. even without the knowledge of debtor . 2. pays with the express or tacit approval of debtor 3. When creditor pays another creditor who is preferred. not interested in the obligation. 3. When a third person. by operation of law 1. debtor and the new creditor ii. 1. Legal –Without agreement. Conventional – By express agreement of the old creditor. When a third person interested in the fulfillment of obligation pays. even without the debtor’s knowledge 2.

Perfection – birth of the contract 2.fulfillment Essential characteristics of Contracts 1. Autonomy – parties are free to enter such stipulations. 4. their assigns and heirs      Stipulation pour autrui accepted by third party  Where third persons comes into possesion of the object of contract creating real rights  Where contract is to defraud a third person Where third person induces a contracting party to violate his contract a. 2. Relativity – takes effect only bet parties. whose decision shall be binding only when communicated to both parties  Unless such determination be evidently inequitable 4. a. Different Classes of Contracts  According to perfection . Obligatory force – must be complied with in good faith 2. terms and conditions – Clauses and condtions must not be contrary to:      3. Consummation . clauses. 3. 1. 2. 3. with respect to the other To give something or to render some service Different phases or stages in the life of a contract 1. Preparation – Preliminary to formation 1.   LAW Morals Good Customs Public Order Public Policy Mutuality – contract must bind both parties  Determination can be left to third party.Definition of a Contract     A meeting of the minds Between two persons Whereby one binds himself.

like donation. since it depends upon the happening of an uncertain event. mortgage According to nature of vinculum – Unilateral – Obligation of one party only – Bilateral – Reciprocal obligations for both parties According to cause – Onerous – Giving of an equivalent or compensation – Gratuitous – Given without compensation. just pure liberality According to risks involved Commutative – Prestation is pecuniarily appreciable and determined at the moment of celebration of contract – Aleatory – Pecuniarily appreciable but not yet determined at the moment of celebration. but also the delivery of the object  – –  According to form Common – Do not require particular form Formal – Those which require particular form.– Consensual – Perfected by mere agreement of the parties – Real – Requires not only consent. Insurance – According to name – Nominate – with specific names or designation in law – Innominate – no specific name Essential Requisites of Contracts       Consent of the contracting parties Object certain subject matter of the contract Cause of the obligation which is established Elements of Consent . Ex.

for property under his guardianship o o Agents. deaf-mutes who do not know how to write. insane or demented.Vices of the will   Mistake . for property entrusted to them o o Executor/administrator o Public officers. consciously . judges. unless option is founded on consideration o If offer made thru agent.False notion of a thing or a fact materrial to the contract • Simple mistake gives rise to correction . freely given. by reason of office o o Persons with fiduciary relations o o Guardian. for property under their jurisdiction o o   Intelligently. accepted when communicated to the agent By parties with legal capacity to contract o Not minors. spouse. civil interdiction. incompetents under guardianship. or insolvency o Qualified acceptance is a counter offer o Perfected when acceptance comes to knowledge of offeror o Offer can be withdrawn anytime before acceptance. civil interdiction o Minor can be liable if he misrepresents his age o Prohibited by law from entering into contracts   Husband and Wife to each other o o Insolvents o o Persons prohibited from giving donations o o Adultery. concubinage o o In consideration of criminal offense o o Made to public officer. Concurrence of the offer and the acceptance o Definite Offer that may be exactly fixed o Assent to the terms without qualifications or conditions o Conveyed before the death. insanity.

irresistible and serious to wrest consent  Intimidation – Moral compulsion to influence another to give his consent thru fear of imminent or grave evil o o Force employed must be serious or irresistible o o Determining cause for the party in entering into the contract   Undue Influence – Improper advantage of his power over the will of another depriving the latter of reasonable freedom of choice • •  Confidential. which without them he would not .• Render voidable in following cases:   Mistake as to object of the contract o Identity of thing. Spiritual and other relations or  Person influenced suffering from mental weakness. Condition  Quantity only if principal reason o o  Mistake of Law . o Will not make it voidable except: Mutual error as to the legal effect of an agreement when the real purpose of the parties is frustrated  Mistake as to person o If such identity or qualification is principal cause of contract    Violence – Employment of external physical force. financial distress     Fraud – Insidious words or machinations of one of the contracting parties induced the other to enter into a contract. Substance. Family. ignorant.

Failure of one party to disclose facts to other party when there is a duty to reveal them Dolo incidente (Incidental Fraud) .have agreed. right or service which is the subject matter of the obligation created or established . o o but not by both or by third parties o o Must be Serious o Must have induced the other party to enter into the contract - - Vices of Declaration  Simulated Contracts 1. Absolute – Contracting parties do not intend to be bound by the contract at all – –Void 2. remedy is annulment bec of vitiation of consent o o Must be employed by one of the contracting parties. remedy is damages Dolo causante (Causal Fraud) – Fraud employed at the time of the execution of a contract in order to secure consent. Relative – Contracting parties conceal their true intentions – Real agreement binding on the parties if it does not prejudice third person Objects  Thing.committed in the performance of pre-existing obligation.

Contract shall be obligatory on all provided all the essential requisites are present  Two exceptions:   When Law requires a certain form for validity  When Law requires form for enforcement   Must appear in Writing to be valid: o o Donation exceeding P 5. Except: When it predetermines the purpose of the contract    Form  Whatever may be the form.  Thing or service must be within the commerce of man o o The law prohibits future inheritance as object of contract o o Transmissible and can be appropriated o o Not contrary to Law Moral Good Conduct Public Order Public Policy o o Real or possible o o Determinate or determinable Cause  Essential reason why the parties enter into the contract o Cause should be in existence o Licit or lawful o True Interchangeable with consideration.000 . but not same as motive o General rule: Particular motive of the party in entering into a contract are not material.

fraud. Requisities   Must be a meeting of the minds of the parties   True intention is not expressed in the instrument  Failure due to mistake. or renunciation of hereditary rights. repudiation. or those of conjugal partnership of gains   Power to administer property  Cession of actions or rights proceeding from an act appearing in a public document Reformation  When the true intention of the parties are not expressed in the instrument. sales or extinguishments of real rights over immovable properties   Cession. modification.Creditor acquires rights to fruits of immovable but applying to payment of interest o o Agreement regarding payment of interest  Must appear in Public Instrument to be valid:   Donations of immovable property  Partnership where immovable or real rights are contributed   Must appear in Public Instrument for Enforcement   Creation.o o Sale of piece of land or interest therein by an agent o o Antichresis . transmission. one of the party may ask for the instrument to be changed so that true intention may be expressed. inequitable conduct or accident  .

  What may be reformed   Mutual mistake of parties cause failure to disclose real agreements   One party mistaken and the other acted fraudulently or inequitably   One party was mistaken and the other knew that instrument did not state real agreement. yet concealed it   Ignorance.Injury or damage o o Voidable .Valid until annulled o o Unenforceable ..Vitiation of consent or legal capacity o o Unenforceable .Lack of an element of a valid contract As to effect o o Rescissible and Voidable .Cannot be enforced by action in court o o Void .No legal effects at all o o . negligence or bad faith on the part of person drafting it  Where parties agree on mortgage. but instrument states property is sold absolutely or with right to repurchase o o What o o o o o o may not be reformed Simple Donations with no condition Wills Those where real agreement is void Defective Contracts o o As to defect o o Rescissible . lack of skill.In excess of authority or do not complyy with S of Fraud o o Void .

o o As to parties who can file action o o Rescissible and Void – May be attack directly By contracting parties or by third parties o o Voidable and Unenforceable . only party to the contract o Causes  Failure of one party to comply w/ obligation o Kind of contract  Reciprocal obligation only o Power of the courts  Can grant extension for performance  Rescissible Contracts  than     Guardian who represent ward. lession of ¼ In fraud of creditor who is unable to collect Things under litigation. lession of more ¼ of the value of the thing  In representation of absentee. entered into by defendant without approval of litigants and court  Payment made in state of insolvency where debt not yet due o Those which may be declared by law • • •  o o o o  Partition (1098)  Result of deterioration (1189) Unpaid seller (1526 and 1534)  Badges of Fraud o Cause or consideration is inadequate o Transfer made after suit has begun or pending o Sale on credit by an insolvent debtor o Evidence of large indebtedness or complete insolvency o o Transfer of all or nearly all of debtor properties .Cannot be attacked by third persons Resolution (Rescission of reciprocal obligation  o Party who may institute action  For resolution.

undue influence Convalidation  Prescription (Four years)  From time incapacity ceases  From discovery of such fraud or mistake  Ratification or confirmation  Loss of the thing by thru the fault of the person who has right to annul Effects of annulment of Voidable Contract – If not consummated. Statute of Fraud –Purpose is to prevent fraud. with fruits and interests. fraud. not to aid the commission of fraud – – Basic and fundamental principles   Applies only to executory contracts   Cannot apply if action is not for damage bec of violation of agreement or for specific performance   Exclusive   May be waived . violence. there will be apportionment of damages –Incapacitated party not obliged to make restitution except for what he was benefited Unenforceable Contracts  Those entered into in the name of another person by one who has been given no authority or legal representation or who has acted beyond his powers  Those not complying with Statute of Frauds. with any of above circumstances o o Failure of vendee to take exclusive possession Voidable Contracts  Where one party is incapable of giving consent to a contract  Where the consent is vitiated by mistake.o o Between father and son. plus damages – If to do or not to do. intimidation. then parties are released from obligation – If consummated. parties are to restore to each other what they have given.

A party to a deed. object. Estoppel by Deed . not credibility Does not apply if action is to claim reformation Following must be in writing or in some notes or memorandum: – Agreement not to be performed within a year from the making thereof – A special promise to answer for debt.     –      Personal defense Contracts are not void Rule of exclusion Concerns admissibility of evidence. admissions or silence. or public policy – Absolutely simulated or fictitious – Cause or object did not exist at the time of the transaction – Object outside commerce of men – Impossible service – Intention of the parties relative to principal object cannot be ascretained – Prohibited or declared void by law Estoppel  Estoppel in pais . or from denying any material fact asserted therein. culpable negligience induces another to believe certain facts to exist and such other rightfully relies and acts on such belief. defaults or miscarriage of another – Agreement in consideration of marriage – Sales of goods. things above P500 – Lease of more than one year –Representation as to credit of another Void Contracts – No concurrence of offer/acceptance – Cause. good customs. are precluded from aasserting against the other party to the deed any right or title in derogation of the deed. representatioons. morals. chattels. public order.by one’s conduct or acts. purpose contrary to law.  .

A party precluded from denying the truth of matters set forth in a record. (a) (a) Action for revocation or reduction of donation based on supervening birth. (a) (a) Action by husband against wife to impugn child’s legitimacy if husband is in the same place as wife. (a) (a) Action for reduction of price for rescission in case of breach of sale of real estate. (b)(b) Action for revocation of donation for acts of ingratitude. appearance or adoption of a child. Estoppel by Record . Estoppel by Laches  Estoppel by Laches  Failure or neglect to enforce a right for an  Unreasonable and unexplained length of time  Despite knowledge or notice EXTINCTIVE PRESCRIPTION (Arts. (c) (c) Action for forcible entry or unlawful detainer. whether judicial or legislative. 1139-1155) 40 days 6 months Redhibitory action based on defects of animals. (b)(b) Action for revocation of 1 year 2 years 3 years 4 years . Action to impugn child’s legitimacy if husband is in the Philippines but not in same place as wife. (d)(d) Action for defamation. Action to impugn child’s legitimacy if husband is abroad. (b)(b) Action for warranty against hidden defects of thing sold. either with a statement of its area at a certain price for a unit of measure or number. (e) (e) Action for rescission or for damages if immovable sold is encumbered with non-apparent burden or servitude.

3. Lack of parental consent. (g)(g) Action for annulment of voidable contracts. intimidation or undue influence. (c) (c) Action upon a mortgage . (e) (e) Action for warranty of solvency of debtor if credit is assigned to coheir during partition. (d)(d) Action upon injury to rights of plaintiff. 4. (c) (c) Action to claim legitimacy if child should die during minority or in state of insanity. 2. (a) (a) Action for legal separation. (f) (f) Action for rescission of rescissible contracts. (b) (b) Action for recovery of ownership of immovables (accion reinvindicatoria) if possessor is in good faith.5 years 6 years 8 years 10 years donation based on fulfillment of condition. (c) (c) Action for recovery of movable (replevin) if possessor is in good faith. Action for recovery of movables (replevin) if possessor is in bad faith. Force. (e) (e) Action upon a quasi-delict. Fraud. (d)(d) Action for declaration of incapacity of heir. (b)(b) Action for annulment of marriage based on 1. Physical incapacity and afflicted with a sexuality transmissible disease. (f) (f) All other actions whose periods are not fixed by law. (a) (a) Action for recovery of possession of immovables (accion publiciana) if real right of possession is lost. (b)(b) Action upon a quasi-contract. (a) (a) Action upon oral contract.

(e) (e) Action upon an obligation created by law. (f) (f) Action upon a judgment. (a) (a) Action to claim legitimacy. (d)(d) Action upon a written contract. (b)(b) Action to obtain declaration of illegitimate filiation. .Lifetime contract.