Professional Documents
Culture Documents
Kinds of Obligation
Kinds of Obligation
PURE OBLIGATION
One whose effectivity or extinguishment does not depend upon the fulfilment or non- fulfilment of a
conditionor upon the expiration of a term or period. it is demandable at once.
examples
1. I promise to pay you P1 million.
2. I'll pay you P1 million on demand.
CONDITIONAL OBLIGATION
One whose effectivity is subordinated to the fulfillment or non-fulfillment of a future and uncertain fact
or event.
Definition of condition
fulfillment
of
the
condition
results
in
the
extinguishments of rights arising out
of the obligation
Nature of Suspensive
Conditions
the happening of the
event gives rise to an
obligation.
Examples of Suspensive
Conditions
1. I promise to give you a car provided
that you pass the CPA board exam.
2. I will give you P1 million if President
Aquino will die of lung cancer.
Nature of resolutory
condition
The happening of the event
extinguishes the obligation.
Examples of resolutory
Condition
1. I will give you my car now but
should you marry Daniel Padilla, the
donation will not be effective.
2. My house is yours provided that you
shall not win in the presidential
election.
potestative, casual and
mixed
A. Potestative – fulfillment of the condition
depends upon the exclusive will of a party to the
obligation.
B. Casual – fulfillment of the condition depends
upon chance and/or upon the will of a third
person.
C. Mixed – fulfillment of the condition depends
partly upon chance and/or the will of a third
person.
Potestative Conditions
1.) potestative on the part of the debtor:
a) if also suspensive - both the
condition and the obligation are VOID,
for the obligation is really illusory.
Example:
1. I will give you P1 million next month
if I will graduate.
2. Duterte is to give Binay P50,000.00
if Duterte goes to Baguio.
b. if also resolutory - Valid
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;
B. Impossible - condition is not capable
of realization/fulfillment according to
nature, law, public policy or good
customs.
Effects of Impossible/Illegal
Condition
1. if the condition is to do an impossible
or illegal thing - the obligation and the
condition are VOID.
* because the debtor knows that no
fulfillment can be done and therefore
is not serious about being liable.
eample:
1. I will sell you my land if you can
make a dead man alive.
2. I will give you my heart if you
can swim across the Pacific Ocean.
3. I will give you money if you kill
X.
2. if the condition is negative, that is not
to do the impossible or illegal thing, just
disregard the condition, but the
obligation remains to be VALID.
example:
a. I will sell you my land if you cannot
make a circle that is at the same time a
square.
b. I will give you my car if you do not kill
X.
Positive and Negative
A. Positive – condition involves the
performance of an act.
B. Negative - condition involves the
omission of an act.
example of positive conditions:
1. I will give you my land if you marry
Yna this year.
if by the end of the year, Yna is
alsready dead, or you have not yet
married her, the obligation is
extinguished.
Eaxmples of negative obligation:
1. I will give you P1 million if by
January 31, 2016 you have not yet
married Yna.
if by said date, you are not yet
married, or if prior thereto, Yna had
died, the obligation is effective.
Loss, Deterioration, and Improvement
During the Pendency of Condition
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
ALTERNATIVE
FACULTATIVE
1.
Several 1. Only one
prestaions are
prestation, the
due, but the
principal
performance of
obligation, is
one is sufficient
due.
to
extinguish
the debt.
2. If there are 2.
If
void
principal
prestations,
obligation
the others may void,
still be valid, debtor is
hence,
the required
obligation
give
remains.
substitute
the
is
the
not
to
the
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
prestations are principal
impossible
obligation
except
one, impossible,
that which is debtor is
possible must required
still be given
give
substitute
the
is
the
not
to
the
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 is liable only for P5,000.00; B is
liable only for P5,000.00
2. A owes X and Y P8,000.00.
X can collect only P4,000.00; Y
can collect only P4,000.00.
In a solidary obligation,
each debtor is liable for the
whole obligation, and each
creditor is entitled to demand
payment
of
the
whole
obligation.
Kinds of Solidary Obligation
1. Passive Solidarity
- This is
solidarity on the part of the debtors
example:
A and B, solidary debtors, are
indebted to X for P1 million. X can
demand payment of P1 million from
either A or B. If A pays P1 million, the
obligation is extinguished. A can
demand
reimbursement
of
P500,000.00 from B representing the
latter's share in the debt.
2. Active Subject - This is
solidarity on the part of the creditors.
example:
A owes X and Y, solidary creditors,
P8,000.00. Either X or Y may demand
payment of P8,000.00 from A. If A
pays X P8,000.00, the obligation is
extinguished. X must give P4,000.00
to Y representing the latter's share in
the credit.
3. Mixed solidarity
or solidarity
on the part of both the creditors and
debtors.
example:
A and B, soliary debtors, owe X and Y,
solidary creditors, P12,000.00. X or Y
may collect from A or B the total sum
of 12,000.00. If A pays X P12,000.00,
the obligation is extinguished. B must
reimburse A P6,000.00. On the other
hand, X must give P6,000.00 to Y.
other terms for solidary
obligations
1.
2.
3.
4.
5.
proportionately
pro rata
mancomunada
mancomunada simple
GENERAL RULE
The obligation is presumed
to be joint when there is a
concurrence of two or more
debtors and/or two or more
creditors in one and the same
obligation.
EXCEPTIONS
1. When the obligatio expressly so
states
EXCEPTIONS
2. When the law requires solidarity
EXCEPTIONS
When the nature of the obligation
requires solidarity
problems
1. A, B and C are obliged to give X, Y
and Z P27,000.00. How many distinct
debts are there in the obligation?
answer...
Since the obligation is presumed
to be joint, there are 9 distinct debts
as follows.
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
A
A
A
B
B
B
C
C
C
owes
owes
owes
owes
owes
owes
owes
owes
owes
X P3,000.00
Y P3,000.00
Z P3,000.00
X P3,000.00
Y P3,000.00
Z P3,000.00
X P3,000.00
Y P3,000.00
Z P3,000.00
problems
2. A, B and C, joint debtors, are obliged
to give X, Y and Z, solidary creditors,
P18,000.00. How much may X collect
and from whom?
answer...
X, being a solidary creditor, may
collect the sum of P18,000.00.
However, since the debtors are joint
debtors,
he
may
collect
only
P6,000.00 from each of them. After
collecting the sum of P18,000.00, X
must give Y and Z's share of
P6,000.00 each.
problem
3. A, B and C, solidary debtors, are
obliged to give X, Y and Z, joint
creditors, P18,000.00. How much
may A be held liable?
answer...
A, being a solidary debtor, may be
held liable for P18,000.00. However,
since the creditors are joint creditors,
each of them may collect only
P6,000.00 from A. If A pays the whole
amount of P18,000.00 to the creditors,
A can demand reimbursement of
P6,000.00 each from B and C.
problem
4. A, B and C, solidary debtors, are
obliged to give X, Y and Z, solidary
creditors, P18,000.00. How much
may Z collect and From whom?
answer...
Z may collect P18,000.00 from any of
the solidary debtors each of whom
may be held liable for the entire
obligation. If Z collectgs P18,000.00
from A, Z must give X and Y P6,000.00
each. A, on the other hand, can
demand reimbursement from B and C
at P6,000.00 each.
A and B are solidary
debtors of X and Y,
solidary creditors, in the
amount of P20,000.00.
1. If X renounces or remits the
whole obligation without the
the consent of Y, will the
obligation be extinguished?
answer...
Yes, because the remission made
by
any
solidary
creditor
extinguishes the whole obligation.
However, X has to give Y's share of
P10,000.00 since solidary creditors
may not do anything prejudicial to
his co-solidary creditors.
A solidary creditor who has
caused the extinguishment of the
obligation
by
remission,
novation,
compensation
or
confusion, or who has collected
the debt, shall be liable to the
others
for
the
shares
corresponding to them.
2. Suppose the remission of
the whole obligation was
obtained by A, may A
demand reimbursement from
B?
answer...
No, because the remission of the
whole obligation obtained by one of
the solidary debtors does not entitle
him to reimbursement from his codebtors.
Remission
being
the
gratuitous abandonement by the
creditors of their rights to the
obligation.
3. Suppose that X renounces
or remits A's share amounting to
P10,000.00. However, it turned
out that B had already paid
P20,000.00 to Y two days before.
May B still collect P10,000.00
from A representing A's share?
answer...
Yes, B may still collect from A
P10,000.00. The remission made by
the creditor of the share which affects
one of the solidary debtors does not
release the latter from responsibility
to his co-debtors, in case the debt has
been totally paid by anyone of them
before the remission was affected. A's
remedy will be to go after X or Y to
collect the sum he paid to B.
A is indebted to X, Y and Z,
solidary creditors, for P24,000.00.
Suppose X makes a demand against A,
to whom shall A pay?
answer...
A must pay to X. If A pays to
another solidary creditor, say Y, the
sum of P24,000.00, the payment,
as a rule, is valid only with respect
to Y's share of P8,000.00. Thus, if X
and Z do not receive their
respective shares from Y, A can still
be held liable for P16,000.00
A, B and C, solidary
debtors, borrowed P30,000.00
from X. The obligation is
evidenced by a promissory
note signed by the debtors.
1. X demands payment from A.
However, A pays only P12,000.00.
May X still go after B and/or C?
answer...
Yes, X may still go after B or C or both
of them for the balance of P18,000.00.
The creditor may proceed against
anyone of the soliday debtors or some
or all ofthem simultaneously. The
demand made against one of them
shall not be an obstacle to those
which may subsequently de directed
against the others, so long as the debt
has not been fully collected.
2. If A pays X P30,000.00, what
are the rights of A?
answer...
A can demand reimbursement from B
and C at P10,000.00 each together
with interest from the date of
payment. However, if payment is
made by A before due date, he
cannot collect interest during the
intervening period, i.e., from date of
payment to due date.
3. A pays X P30,000.00. However, C
has become insolvent. How much
may
A
demand
from
B
as
reimbursement?
answer...
A may demand P15,000.00 from B. If
an insolvent debtor cannot reimburse
his share to the debtor who paid the
obligation, such share shall be borne
by all his co-debtors, in proportion to
the debt of each. Thus, A and B shall
bear C's share at P5,000.00 each.
4. If A pays X P30,000.00 more than 10
years after the note had become
due,
can
he
syill
demand
reimbursement?
answer...
No, he can no longer demand
reimbursement. Payment by a
solidary debtor after the obligation
has prescribed does not entitle
him to reimbursement. The same
rule applies if payment is made
after the obligation has become
illegal.
A, B, C and D are solidarily liable to X
for the delivery of a specific ring
valued at P20,000.00. What is the
rule if the ring is lost:
1. through a fortuitous event?
2. through the fault of D?
answer...
1.
The
obligation
shall
be
extinguished. This is according to the
rule that no person shall be
responsible for fortuitous events.
2. All the solidary debtors shall be liable
for the payment of the price of the ring
plus damages and interest. However, the
soliary debtor making the payment can
recover what he has paid from the guilty
debtor. Thus, if X goes after A and A pays
the price of the ring, and the damages
and
ineterest,
A
can
demand
reimbursement
of
P20,000.00
plus
damages and interest from D, the guilty
or negligent debtor.
Existence of solidarity despite different
periods and conditions
Solidarity
exists
although the creditors and
the debtors may not be
bound by the same periods
and conditions
example
A, B and C are solidarily liable
to X for P9,000.00. The parties
stipulated that the share of A is
payable on demand; the share
of B on Christmas next year;
and the share of C, if X passes
the CPA board examinations.
X may demand payment of the share
of A of P3,000 anytime from either A,
B or C. On Christmas day next year,
X may demand payment of the share
of B of P3,000.00 from either A, B or
C. When X passes the CPA board
examination,
he
may
demand
payment of the share of C of
P3,000.00 from either A, B or C.
Effect of Unauthorized assignment of
creditor's right
The solidary creditors are bound by
mutual trust and confidence. Hence,
a solidary creditor cannot assign his
right to a third person without the
consent of the other solidary
creditors because the assignee may
not enjoy the trust and confidence of
the non-assigning creditors.
If the assiginment is without
the consent of the co-creditors, the
assignment is not valid as to them.
Accordingly, they can recover their
respective shares from the assigning
creditor in case the assignee who
collected the debt fails to give them
their shares.
Defense Available to solidary
debtors
1. Those derived from the
nature of the obligation (such
as
prescription
of
the
obligation, illegality of cause)
2. Those personal to the
creditor being sued, or those
that pertain to his own share
(such as incapacity of the
debtor or non-fulfillment of a
suspensive condition as ti his
share)
3. Those personal to the other
debtors with respect to their
own share (such as incapacity
of another debtor or nonfulfillment of a suspensive
condition with respect to
other debtors' shares)
Joint indivisible obligation, concept and
characteristics
General Rule:
The penalty takes the place
of the damages and interest
in case of non-compliance.
Exception:
1. When there is a stipulation to that
effect.
2. When the debtor refuses to pay
the penalty
3. When the debtor is guilty of fraud
in the performance of the obligation
problems
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
payment
must
or
be
exceptions:
a. If the obligation has been
substantially performed in good faith,
the obligor may recover as though
there had been strict and complete
fulfillment, less damages suffered by
the obligee.
example:
S agreed to deliver 20 fire
extinguishers to B. After S has
delivered 18 fire extinguishers to B,
there are no more fire extinguishers
available. He wants to complete the
delivery but there is no more stock
available. S can recover the cost of
20 fire extinguishers less damages
suffered by B.
b. When the obligee accepts the
performance
knowing
its
incompleteness or irregularity, and
without expressing any protest or
objection, the obligation is deemed
fully complied with.
example
D agreed to repair the car of C and
to paint it red. D repaired the car but
painted it maroon. C accepted the
car without any objection. D's
obligation is fully complied with
notwithstanding the irregularity of
the performance.
Who must make the
payment?
Payment must be made by
the debtor.
Is payment made by third person
allowed?
and
Application of Payment
It is 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:
1. there must be only 1 debtor & only
1 creditor
2. there must be 2 or more debts of
the same kind
3. all of the debts must be due
4. amount paid by the debtor must not
be sufficient to cover the total
amount of all the debts
GENERAL RULE:
The right to designate thedebt
to which the payment shall be
applied primarily belongs to the
debtor
EXCEPTION:
If the debtor does not avail
ofsuch
right and he accepts from
the creditor a receipt in which
the application is made.
If the above rule is not
applicable
1. The debt most onerous to the debtor
shall be deemed satisfied.
2. If the debts due are of the same
nature and burden, payment shall be
applied to all proportionately.
Illustrations 1
D owes the following distinct
debts: P1,000.00 due on May 1;
P1,000.00 due on May 5; P1,000.00
due on May 10; P1,000.00 due on
May 15; and P1,000.00 due on May
20.
a. If today is May 16, and D has only
P1,000.00 but wants to pay C, D may
apply the payment to any of the
debts due on May 1, May 5, May 10 or
May 15. He cannot apply the payment
to the debt due on May 20 beause it
is not yet due unless he is allowed by
stipulation with C or the benefit of the
period was given to him.
b. If D does not apply the payment, the
right to apply it is shifted to C. C may
apply the payment to any of the
debts due on May 1, May 5, May 10 or
May 15. He cannot apply the payment
to the debt due on May 20 because it
is not yet due unless he is allowed by
stipulation with D or the benefit of the
period was given to him.
c. If neither D nor C applies the
payment, payment shall be applied
proportionately to the debts due on
May 1, May 5, May 10 or May 15 at
P250.00 each. In case the debts due
on May 5 is secured by a pledge,
then payment shall be applied to
such debts because it is more
onerous to D.
Illustration 2
D owes C P7,000.00 due on May 1;
5 sacks of rice worth P5,000.00 on
May 5; and P5,000.00 due on May 8.
If none of the debts have been paid
as of May 8 and D has P5,000.00, D
cannot apply the payment to the
debt consisting of 5 sacks of rice
becuase it is not payable in money, it
is of different kind.
D may not apply the payment due
of the debt due on May 1 because
the payment would not be complete
unless C consents. D may, however,
apply the payment to the debt due
on May 8.
Dation in Payment (DACION EN
PAGO)
It is the transmission of ownership
of a thing by the debtor to the
creditor as an accepted equivalent of
the performance of the obligation.
Requisites:
1. existence of a money obligation
2. alienation to the creditor of a
property by the debtor with the
consent of the former
3. satisfaction of the money
obligation of the debtor
Payment by Cession
The 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:
1. plurality of debts
2. partial or relative insolvency of
the debtor
3. the debtor abandones all his
properties except those which
are exempt from execution
4. acceptance of the cession by
the creditors
Illustration
D owes X, P50,000.00; Y, P20,000.00;
and Z, P30,000.00. All the obligations
are due but D has assets worth
P80,000.00 only. D offers to assign
his assets to X, Y and Z so that they
may sell them and apply the
proceeds to their respective claims.
X, Y and Z accepted the offer.
If the assets are sold for
P70,000.00, then D will be
released from his obligations
only up to that amount, unless
the creditors agreed to release
him completely of his debts.
CESSION Distinguished from DACION
EN PAGO
DACION EN PAGO
CESSION
1. does not affect 1.
in
general,
ALL
the
affects ALL the
properties
properties of the
debtor
2.does not require 2. requires more
plurality
of
than
one
creditors
creditor
3. only the specific 3. requires the
or
concerned
consent of all
creditor’s consent
the creditors
is required
4. may take place
4. requires full or
during
the
partial
solvency of the
insolvency
debtor
5.
transfers 5.
does
ownership upon
transfer
delivery
ownership
not
and,
such
the
Effects if Consignation Has Been Duly
Made
If
its
date
of
(c) As regards its form:
1) implied or tacit Such as when the creditor voluntarily
delivers
the
private
document
evidencing the credit to the debtor.
2) express or formal (this requires the
formalities of a donation if inter vivos;
of a
will or codicil if mortis causa)
Effect of Delivery of Private
Document Evidencing the
Credit
With the delivery of the
private instrument, a remission
or renunciation is presumed.
Example Steffi made a promissory note in
favor of Agassi in the amount of
P100 million. After some time,
Agassi voluntarily delivered the
promissory note to Steffi without
collecting the P100 million. Steffi
is now in possession of said note.
There
is
a
disputable
presumption that there has been
a remission. The presumption is
merely
disputable
and
not
conclusive because it may be
that
the
instrument
was
delivered only for examination by
Steffi or for collection.
Nota Bene:
Renunciation
of
Principal
Extinguishes Accessory, But Not
Vice-Versa.
This follows the rule of
“accessory follows the principal.”
Example A remission of the penalty does
not remit the principal obligation, but
if the principal debt is condoned, the
penalty is also condoned.
Nota Bene:
It is presumed that the
accessory obligation of pledge
has been remitted when the
thing pledged, after its delivery
to the creditor, is found in the
possession of the debtor, or of a
third person who owns the thing.
Remission of Pledge 1. Note here that only the
accessory obligation of pledge is
presumed remitted. The principal
obligation (the loan) remains in force.
2. The presumption is only
disputable, for the debtor or the
third
person
may
be
in
possession of the property by
theft or because it had been sent
for repairs, or for similar causes.
CONFUSION OR MERGER OF
RIGHTS
It is the meeting in one person
of the qualities of creditor and
debtor with respect to the same
obligation.
Example 1. M makes a promisory note
payable to P or order. P indorses the
note to A; A to B; B to C and back to
M.
The
obligation
here
is
extinguished because M is now the
creditor of himself.
2. A makes a check payable to
bearer, and hands the check to
C, who hands it to D who finally
hands it to A. Here A owes
himself. This is a clear case of
merger, and hence the obligation
of A is extinguished.
Effect if Mortgagee Becomes the Owner of the
Mortgaged
Property