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‘OBLIGATION — sridical necessity to ave, to do or rot to do 4 ELEMENTS OF OBLIGATION 1 ACTIVE SUBIECT (cechofeble) SCPAGSIE SUIECT (detorebtbe7) io or noe tm co 3. OBIECT/PRESTATION ~ subject matt 4. JURIDICAL /IEGAL TIE (vinculum/eficient cause) ~ reason whose obiigtion is nas duty 0 ave, to [EVEL OBLEATION ——"TRATURAL CBLTEXTION “Gerived fom pestivelaw | derived ror equity ste ‘ivoreaatla by cout aaion | nck enforceable by cour Beton ‘5 SOURCES OF OBLIGATION Law 2: CONTRACTS 3. QUASE-CONTRACTS - arse fom lef, voluntary ats; 0 ‘ne shall be unjustly enriched. Zao 2, Solutio indebit = something recelved (devered on a mistake), 0 right > demens ». Negationum gestia- voluntary mgt of propety/affars of ‘another w/o Ris Knowenge/corsent 4. QUASHDELICT/TORTS/CULPA AQUILIANA - ore from Semege;feut/negigerce SUCRIMES/ACTSVOMISSIONS punished by lan = aise Tom coi fabity rats @ consequence of a criminal omense DILIGENCE OF A GOOD FATHER OF A FAMILY ri care peed to be exercsed by 2 cebtor to Gellver/give determinate thing Exception: When law/scpulston of partes requires differnt standard of care (sight/extraordinarydiigence). Wien creditor fe entitled to the fruits Rule: The creditor Tas personal right (ight to sek for Gelivery) from the ime tre cligatin to deliver ers. ‘But NO real right (nant enforceable agaist te whole Word) ‘le is cetvered. 2 KINDS OF FRUITS 1. NATURAL — w/o human intervention 2, INDUSTRIAL — w/ human intarvertion 5. CIVIL derived by virtue of juridical relation Creditor’s rights If debtor fells to comply w/ the ‘obligation Sr beterm?nase Performance BL Bemages’ 2. Ganene 2. Pertormance ». Damagas € Obligation be camplied at debtor's expense Creditor’s rights if debtor does in contravention 1 Damages 2° Ask tbe UNDONE at debtor's expense FORTUITOUS EVENT - camnct be foreseen, If foreseen, Inevtabie ‘General Rule: No person isle to fortultous event Exceptions: = Clawataes 2 stipulsbonvcontract states 5. Assumpton or nse 4. Daley 5 Debtor promises deliver to 2/more persons who do not have same interest (bad faith) EFFECTS OF FORTUITOUS EVENT to thing to be delivered “extinguish the obligation if determinate; generic does not ‘ecinguish the obigation MISCELLANEOUS RULES ON PERFORMANCE OF ‘OBLIGATION Tr When delve. determinate, accessions (adctons/ Improvements) and accessones jnecincued with the Drincipal) are INCLUDED even At mentioned. 2. IF debtor fells to do, t shall be DONE AT HIS EXPENSE, ‘same with doing the contravention; paory done be tnena, 3. Imoblgetion not to do, and obigar does what is Forbidcen, shall Be UNDONE AT HIS EXPENSE. ‘4 GROUNDS; debtor able for camages 1. Defautymore 2. Freudidole 231 Neglgence/cupa 4. Contrary to tems of obligation 41 DEFAULT/MCRA ~ delay. "3KINDS 2. Mora solvendl- debtors delay to give (real cb}, todo (oesonal 22) b, Mora accilendt— creditors delay to accent € Compensate Maree - delay of both im reciprocal ebigaten CONCEPT OF DELAY ‘General Rule: No demand, No delay Exceptions: Saw sates 2 Obligation states 3. Time e the exsence 4 Daman be wees st aetey 5. Debtor guilty of dey EFFECTS OF DELAY 1 Damages 2. When fo delver determincte thing, STILL LIABLE in Foret event 2. FRAUD/DGLO- corsciaus, delbarete, ntentoal {Evasion of fulfilment 2 Kinds 9. Dok_coveente/Causel_ fraud - froud_in taining ‘coreent; concent fe defertve, correct ks Vodebe. Remedy: annumant i iidenteosantal faut - frasl w/e vias coreent Remedy: demoges 3, NEGLIGENCE/CULPA ~ voluntary ect/omission; no bad faith intended ‘3 KINDS 2. Culpa eauliana/ Cl. nelgngs — gus! ce tors ©: Culpa contrectuel/ Contrectuel ncaligence Stpreach ©: Cuba criminaunming nealigence - erme/deict 4. Contrary to the terms of obligation ‘2 RULES OF PRINCIPAL @ INSTALLMENT 1. Recelpt of princnal wio mention of intrest, presumed Interests paid aco 2. Receipe of latter instalment w/o mention of prior installment, presumed pier Installments paid aso. 4 SUCCESSIVE RIGHTS OF CREDITOR to satisfy claim against DEBTOR TrBxaet payment 2. Attach debtor’ properties 5. elon subrogetoie ~ exercise rights & actions except innerent in person 4.Acoon pauline ~ cancel acts/cortracts by debtor to defraud creator ‘TRANSMESSIBILITY OF RIGHTS General Ral: ALL RIGHTS are transmissible Exceptions: Taw seme 2 Coneract states 5 Oblgaton s pura personal 10 Kinds of Obiigation 1 Pure 2! Coneitionet 3. akemetive 6 Soledery 7: Desble 6 Inde 5! Gaigation w/ 2 pened 20, Oigaion w/ @ pera clauze +. PURE OBLIGATION wie eeration, demaneable ot once (pure has rezolsory conditon/gered) 2, CONDITIONAL OBLIGATION * thre s coeition in performance; future & uncertain 2raNs 2. Suspensive condition ~ happening of condition gives 1 Se calgon Sorditio ~ happening ef conation * EINGUISHES colon 6 MISCELLANEOUS RULES ON CONDITIONAL, SBLIGATION 1 Impoecble conditions, contrary to lew, shall ANNUL bligabon. 2. The condtion not to do an impossibe thing s considered not agreed upon. 3. The ‘condition that happens in determinate time, EXTINGUISHES bigaton. 4, The condition tak happens ia INDETERMINATE time, obligation only effective at arrival ‘Te coneltion is flied f DEBTOR prevents fulimant. The effect of conditional obigation, ence hile (give: retract tothe day of conabltion of ezligation fae reciprocal prestatiors fats & interests be mit. Compensated has unilateral obligation: debtor shell give fruits & sntereste RULES in case of Lacs, Improvement, or Deterioration of thing during the pendency of condition Tiosr 2m debtors fut - damages ‘adebror's fault ~ extinguishes obligation 2. DETERIORATION 2. debtor's Faue ~ (3) cancel obligation & darages; or (2) a bligtion w/ domoges . wo debtor's fut ~ creditor sufer impairment 2. pmovenent bene to crecitor 2 Byniuertime ~ Dek expense of cebtor ~ debtor no right than thet grantes to usiructuary (debtor no night to compensate arnount for ‘marevement) [EFFECTS OF FULFILLMENT OF SUSPENSIVE CONDITION ‘General Rule: The obligation becomes effective retroactively ene day ebigation was constnied, Exceptions: 1 Inreciprecal obligation, fruts & interests during perdercy of canation shall compensate each other 2. In unioteral obigetion, debtor gets ‘ruts & interests Unless there i @ contrary intent 2. EFFECTS OF FULFILLMENT OF RESOLUTORY ‘conorrion 1. Extinguish obligation 2, Both parties festore what they received plus fruts & frees. 5. The ule on L, or ill apply to person who has to return the thing. ‘When ane of debtors in reciprocal obligation dees nat ‘comply w/ his obligation 1 The ight of injured partys (1) cancel contract 8 damages: © @) fli obligation & damages 3 Kinds of Obligation (Accting to PERSON OBLIGI 1 UNILATERAL ~ only 1 party eblged to ccmply 2. BILATERAL - both parties; performance not same time 5. RECIPROCAL ~ both parties; performer same tine 3. OBLIGATION W/ A PERIOD “demenoblity/edtingsishment subject to the expration of period [PERIOD - intervelof time; ether suspends demandebilty oF Produces extinguishment DAY CERTAIN - rust come, ot known wher 7 CASES CONSIDERED TO BE “OBLIGATION W/ A Perron" EU by tle 2. In partial payment 3. Payabia ABee Len an ators it ‘5. Wren I have te money 8. Wnen Lam abe to 77. When my means permit me to de 30 [PEMop ———~——Teonorrron Catan ria ature only Future pest CUTE Cinflusnea upon obigabon) | ©) on the very existence oF aly upen fs demandabiliy | obigation self FOR WHOSE BENEFITIS THE PERIOD? General Rule: Both the debtor & creditor ‘Therefore, NEITHER of them can Gemand pecformence of bligabon. Exception: ifthe term of ligation Has to favor one ofthe. § INSTANCES WHEN DEBTOR LOSES RIGHT TO USE “peRtoo™ 1 Debtors inslvent. 2 Debtor attempts to abscond, 5. Impairment of guarertees/securites 4 Fare to furish quoranezes’sacuntes promised. 5: Violation of undertang, 4, ALTERNATIVE OBLIGATION, ‘a Zor move prestatone, only | is dus. [5 FACULTATIVE OBLIGATION 7 ONLY 1 prestation But can be substituted. ALTERNATIVE prestations LOST w/ debtor's fault Cragitor entitled to damages but necds (requisites 1 Dabterean choces, 2. All prestabons lostbecome Impossible due to debtors jaut. ‘RETERNATIVE FACULTATIVE OBLIGATION. OBLIGATION. several _prestatins due, | one prestation doe, Bik Cah ving one is sumidene "| be subtitites ght to choose (Gebior} | right to choose OEBTOR | unless grarted to creditor | ONLY Te 1 of the prestaton | nulty propa cari w egal, others may be vale, | ienulity of accessory! obligation remaing gubentee. ea Drestatic's | due, wo | prestaton due, wo debtor's Gebtors faut, extngushes | out, ‘extinguishes obligation bligation (3) SUMMARY OF RULES, OBLIGATIONS, & RIGHTS OF DEBTOR IN, SLTERNATIVE OBLIGATION 1.1 of prestatons lost through foreutous event, shall sti be perform by checsing (credit) from the remeinder. 2.1 VF prestations lost through debtor’ au, creditor may {aim any of remeinders w/ damages. 3. PALL presiatons lest through debtor's faut, crestor ose price Ww) domoges. RULES on LOSS/ DETERIORATION of the thing intended ‘98 SUBSTITUTE in FACULTATIVE OBLIGATION To If there sa. los/deteriorason of thing intended as bettie, debtor is NOT liable f NOT HIS FAULT. But f substitution is already made, debtor is table for loss of Substitute when in DELAY, NEGLIGENCE, of FRAUD. 6. JOINT OBLIGATION = obligation Is to be paid proportionately by debtors or to be demanded proportionately by creators 7. SOLIDARY OBLIGATION = cach one of debtors has rght to render or each ne of creditors hes fight to demand ths entre complence W) prestatlen i tyes, HAIRS SOINT Obigation_| Te exch Rs owe" |p ‘SOLOARY “One for alla Shiget forone™ (3) SOLIDARY OBLIGATION DaST ONLY 4: “RULES Slaw states 2 Stipuletion states Nature of abligaton requires 12 PRESUMPTIONS THAT OBLIGATION IS 20INT The dents be chided as many shares 25 there are cebtors/eredtors, 2. The debtors/eredtors are dstnc from one another. (8. DIVISIBLE OBLIGATION “prestabion ls capable of paral performance 9. THDIVISIBLE OBLIGATION + prestation Incapable of partial performance 4210, OBLIGATION W/ A PENAL CLAUSE “one w/ sezessory Undertaking attached to cbigation to lssume greater lay In case of braach/ren-fulflmant of obligation {3 PURPOSES OF PENAL CLAUSE 1. Grave performance of ebigation 2. Substitute for damages @nterest incase of noncompliance 53! Panalize debtor Incase of breach {In case obligation has 2 PENAL CLAUSE ‘General Rule: Penalty takes te place of damaces & interest Incase of non-compliance. Exceptions: 1 Stpufabon states. 2, Debtor refuse to pay penalty. 3: Debtor gully of fraud in performance of blgation. NULLITY OF PRINCIPAL OBLIGATION OR THE PENAL cause Nulity of pringpal obligation = nulityof pana clause Nulty of penal cause = NOT nulity of principal obligation 7. Fuitiment of resoikory conition 8, Reseiaon 9, Annulment 10. Presenpton 1. PAYMENT/ PERFORMANCE “payment means Galvery of money & performance of eblgation 2 PLACE OF PAYMENT 1 At place agreed upon 2. Ifwlo agreement ‘2, Object is indeterminate ~ paid et comic of DEBTOR . Object is decerminate ~ place of thing at the ome of consttution of ebligation 4 SPECIAL MODES OF PAYMENT 2. Application of payment. 6 cession «Tender of payment 8. consignetion 4. Daclon n payment 12, APPLICATION OF PAYMENT * designation of debt to w/e peyment rust be appied when, Gebtor has several abigators of same kind in favor of same creator. 2 REQUISITES OF APPLICATION OF PAYMENT 1. Only 1 debtor & 1 creditor 2 2ior more debts, same Kind 3. debts are due 4 Insutcent paymnent to exinguish ALL debts 3 RIGHTS TO MAKE APPLICATION OF PAYMENT 1 Right belongs to CREDITOR. 2. debtor Joes net aval, cradter can give him recent Séelgnating Ue debt from which payment ll be appied 3. debtor accepts the recalpt, ne earnct complain unless ‘THERE IS just cause to invalidate the contre. ‘.CESSION «debtor abendons ALL his property for crsitor's benefit obtain payment fem pruceeds of his property 5 REQUISITES OF VALID CESSION 1. Loebtor & 2 or more creditors 2! Debtor iin parta/otal nssvency 3. Debtor to deiver ALL his property fo creditors Debts due & demandsbie. 5: Creditors must sell the properties & apply the proceeds to thai respective credits proporionatey. ‘&.DACION IN PAYMENT (dacion en pago) ‘lenaton of property tothe creditor satisfaction of debt {3 REQUISITES OF DACION IN PAYMENT Consent of credor NOT prejucial to another crector 5. Debtor not Insolvent declared by 2 judicel decree eSSTON ‘DAGTON IN PAYHENT [al properties —— NOT all properties require more taf i Creditor | NOT require a8 creator NOT act of novation act of novation OF rarsfer ownership | transfer ownership requires patio Hey happen dung Insohenay. solvency of debtor 4, TENDER OF PAYMENT & CONSIGNATION ‘TENDER OF PAYMENT ~ act cf ofering the Credor what is dus to im w/ a comand thatthe creator accept ‘CONSIGHATION oct of depositing thing due w/ the cout ‘nen creditor cannot refutes acceptance of poyment {5 REQUISITES OF CONSIGNATION 1. Debt due. 2. Creditor refsed the tender of payment w/o just cause 5. Netice of consignetion already gven to persons interested in tutttment of obligation 4 Caneignstion of thig/amourt due 5, Subaquent note of consignotion to interested persons |5 VALID CONSIGNATION W/O PREVIOUS TENDER OF PAYMENT 1. Creo s abser/unkeonn, 2. Grcitr is incapactate to receive at ume tis due. 5, Creditor refuse give @ receipt, w/o Jus eause. 4 Zor more persons claim the right to calle 15 Te o cigation lost 2, LOSS OF THING DUE etahes, dssppeers, oF goes out of commerce; exitance fe Alon; cannot be recovered 3 REQUISITES TO EXTINGUISH OBLIGATION DUE TO toss’ 1, Determinate thre, 2. We deotors fou. 3. No dlay. 3. CONDONATION/ REMISSION *grebltous abandonment of right by the creditor 3 REQUISITES OF A VALID CONDONATION/ REMISSION 1. Rrmustbe gratuitous. 2. Acepted by obligor. 3. Obigetion ts cemendooie, 4, CONFUSION/ MERGER EEE meeting in 1 person of qualities debtor 8 creditor vi same obligation {3 REQUISITES OF VALID CONFUSTON/ MERGER 4. The merger of characters of debtor 8 crestor rust bein sare person. 2 Take place between principal debtor 8 crete. 3. clear’ denne | COMPENSATION ‘2 persons are debtors & creditors of each other (5 ESSENTIAL REQUISITES OF COMPENSATION 1. Parties both principal debtors & credo" ofeach other. 2! Compensation snot prohoited by low. 3. No retwenon controversy by 34 person, 3.2 debts ae due a damandatie, 5.2 debts are liquidated 6.2 debts both in money/consurnsble tings. (2) CLASSES OF COMPENSATION Ast erect 2. TOTAL obligations completely extinguished. DL PARTIAL © Balance rome 2 Ast origin or cause 3 LEGAL by law 5. VOLUTARY/CONVENTIONAL - agreement of partes JUDICIAL ~ crear from the esurt 4. FACULTATIVE 1 of parece can cheoee/oppoce claiming eampensatioe 6. NOVATION ubsuastion/change of obligation * Substitution of debtor 1 Eurogation ef erecior (3) OBLIGATIONS May BE MoDIFTED BY: 1 Chenging ebject/princpal coneiticre. (REAL NOVATION) 2 chonging the person of debtor/ereitor. (PERSONAL Novanion) 2, Substation - change of debtor Subrogation - change of creditor 3. Changing person ofthe partes & the objects of principal ‘oralton. (HDXED NOVATION) 4 REQUISITES OF NOVATION 10id vale obignton 2 Agreement of parties to new ebigaton. 5. exunguishnert of old cbigaten 4. Validity of nen obligation 2 FORMS OF NOVATION BY SUBSTITUTION OF DESTOR 1. EXPROMISION ~ w/ consent of creditor, NO consent of old debtor es, | 2 Iniatve of person i Consent of credit, | 2.DELEGACION ~ al must agree (creditor, od debtor, new ‘eaton) ‘REQUISITES Tniative from old debtor. acceptance by crete. 7. SUBROGATION | “change ofereditor 2 KINDS OF SUBROGATION [CONVENTIONAL consent of original parses &. 34 person 2, LEGAL - by law 8, creditor pays enotner prefered creditor even w/o debtors knomleoge by 3 person pays the express approval of debtor 3 person pays even we knowledge of dabtor EXERCISES: Tk Xe under obigation to celver Ys car to te latter. However, before delivery Z destroys the car, Which FB incorect? ‘2X5 cbiigation to delver the car to ¥ eaanguished Xs allowad te recover from 2 "2 has the right fo brirg an ection against 2 5 ignot obliged to give Van aquwalane valve ofthe cr 1 is obliged to give © a soeofie ang. the partes 2yread Gat D may give @ specie bracelet os 9 Stile, Which is TRUE? 2.) the fing iE lect through a fortutous event vefore substhixion, the obligation Is extn b. TP the bracelet is lost through 9 fertultous ‘vent before substiution, the obigation 1 extinguishes & TPthe rng 5 ost through a fortutous event afer “subsbtutn, the cbigalion ‘inguched 4. Tfthe rng Is lst through the debtor's fout after substitution, the debtor shall pay damages. entered into 2 contract with B by hich & promised to dalver at price stpulated inthe contract. Sh Selivery fe to'be made on February 1, 2018 wit Denalty In case of defi. In ths Case, no further omar by 8 on Ais noceasary to consicer Ain dslay becnaze: “Time is ofthe asserce ie ebligaton ewprecely so provides The demand would be Useless Answer nek gen ‘promissory note signed by Adated March 15, 2038 |S worded ag follows promise t pay B the sum of fity thousand pesos provided that if she should fe Ih October 2018 CPA Exam, sha shall return to re the sila amount." The sbove ncte gles rise fa ‘obligation with ‘3 Suspensive cordon Casual concen esolutory condition S Anawer nok gen 2 nas buen mizing fr some ume leaving no one to ‘manage ne propertesA ay janky faa charge Of tre management thet. However, due (0 the faut of Khe properties of X were domaged. The ISBALy therfore te fr darnoges shat be ‘one anal be asle Seth aha be ty ble © Sotho be str tbe They are nok bbl sce tt fou A bought strawberry Jams fom a grocery store of B Corp. and was hosptalized due to feed poisoning 25 2 recut of fone substance contained in the sald jn Sold Dy B Corp. Als now suing the said Corporation For damages. Deed: a. nas no rhe to claim damages from the producer berause ‘there was ne contract betircen ther . B Corp isnot lable to A because the latter snes negigent in eating Ue straw buny Jams Gesplte the presence of hart suintance erin. Armust aim damages from the grocery store Because under quasi ~ contact due © 1 fegigence in ‘the preparation of the stawberry jams causing damage tA. = Corp. lable for damages under quasi ~ eli due to Rs negligence inthe preparation of the strawberry jams thus causing damage wea XY2 are jointly ond severally Habe to Andrew for P30, 000_which matures on June 15, 2018. On Moy 1, 2018, X ard Andrew forthe wrote arcurt oe debe. Fen Dec. 1, 2018, X wil be reimbursed by, er wl be lable for: 10, 090 with intrest from June 15, 2038 to Dectrnber 1, 2018 2. 10,000 without ineerest ‘¢. P10,000 with interest orn May 2, 2038 to dune 15, 2018 4. PHC 908 wet wrenest fom May 22018 to Dec. 1, 2018 8. A owes 2 9150.000 due cx October 3, 2018. A ‘te guaranty he opegaton. On Ocicber 15,288, the ‘osing os tans OY af expected Sr.” On Gerber 19, 2089, 8 damended poymart famn AIS SS demand! veel? ‘SNe The cbigation is one wth » definite pero, thas the creditor cannot demard Eaimert of the obligation before sie. 1, No. The merigage was extingulsheduacause Fie contract ws lst ver Craghebraugh 3 foraains event. Yes. The debt becomes du at oncebcsuse {he gunraniae nos lost even thoughwough 2 fortatous event, unless the Olli can ‘mortgage another performance ever before the coe dete. 4. Yes. The debt becomes due at oncetecause the periads benelt & given soley to the 50,000. @ "may cole from CP 12, GOD, 1. Rand 8 promised to deliver a cor valued at R200, {oC enor before December 15, 2018. Dec. 252018 ‘ene and Upon demand by C of calvary fromeand Brats wing to deliver bet 8 refused to Ger. 1 \ vot bore Tan action for spocifc performance mi We ath A snd 5 'b. Both And Bshaillbe lable for SOARES sth aamoges &Bhallbe table for P50,000 withovt messes ‘Sed A stl be Imble. for" P50,052 mith

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