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01 Oblicon Premid PDF
01 Oblicon Premid PDF
- The list is exclusive. Thus if the source is not one of the 5, then
General Provisions there is no Obligation to speak of
1. Law
Article 1156 2. Contracts
An obligation is a juridical necessity to give, to do or not to do. 3. Quasi-Contracts
4. Acts or omissions punished by law (delicts)
Q: What is an Obligation? 5. Quasi-Delicts
A: It is a juridical necessity to give, to do, or not to do
Failure to compel with the juridical necessity will subject the Note: numbers 3-5 are also provided by law
debtor to a sanction
Article 1158
4 essential elements of an obligation: Obligations derived from law are not presumed. Only those
1. Active subject – creditor or obligee; person who can demand the expressly determined in this Code or in special laws are demandable, and
fulfillment of an obligation shall be regulated by the precepts of the law which establishes them; and
2. Passive subject – debtor or obligor as to what has not been foreseen, by the provisions of this Book.
3. Object or prestation – object is any of to give, to do or not to do
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4. Efficient cause – judicial tie or vinculum 1 source – LAW
- Those derived from law should not be PRESUMED
Example: X agreed to give his car to Y - Thus, you have to point out a specific provision of the law
Active – Y - This is provided by the Civil law and Special Law (SL should prevail
Passive – X in case of conflict)
Object – obligation to give the car
Efficient cause – agreement Article 1159
Obligations arising from contracts have the force of law between
Giving (as prestation) the contracting parties and should be complied with in good faith.
- Called real obligation
nd
- 2 types of real obligation 2 source – CONTRATCTS
o To give or deliver a specific or determinate thing (ex. - Have the force of law between contracting parties
MY car) - This must be complied with in GOOD FAITH
o to give or deliver a generic or indeterminate thing (ex. - Requires consent from the parties; bound by the terms and
A car) conditions of contracts
- There are limitations for the right over the parties to stipulate
Kinds of Obligation: (they should not be contrary to laws, public policy, good customs,
Viewpoint of Sanction morals, public order)
a. Civil obligation – can be obtained in court
b. Natural obligation – action has already prescribed but creditor Principle of Liberty or Freedom of Contracts
failed to demand within the prescriptive period. Despite the - Parties have the right to agree on terms and conditions as they
prescription, debtor voluntary delivered payment. In this case, may deem it convenient, provided that such are subject to
debtor cannot get back what he paid limitation
c. Moral obligation – ex. Hear mass
Q: What are the essential elements of a contract?
Q: What is the importance of differentiating a specific and generic A: meeting of the minds, consent of the cause and consideration
obligation? a. Consent
A: Effects of the laws for the two obligations are different. In case of b. Cause
fortuitous event (those which cannot be foreseen or can be foreseen but are c. Consideration
inevitable), liability to deliver specific obligations are extinguished. However,
this is not so in the case of generic obligations because you can still deliver
any other thing to the creditor which falls under the same class of the Good Faith – not by the sword that killeth it but by the spirit that giveth life
obligation (genus does not perish) (it does not make law inferior to a contract nor a contract superior than the
law)
To Do or Not to DO (as prestation)
- called Personal obligation Q: What are the difference of an obligation and a contract?
- are either affirmative or negative A:
OBLIGATIONS CONTRACT
Viewpoint of Person Obliged - Result of a contract - Results to an obligation
a. Unilateral – only 1 party has an obligation to perform - Not necessary require meeting of - Always presupposes a meeting
b. Bilateral – 2 parties has an obligation to perform. Example: the minds of the mind (consent of cause
contract of sale (buyer and seller) and consideration)
1 angel‘s notes
OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion
Article 1160 Damage – the loss or the hurt or harm done to another which
Obligations derived from quasi-contracts shall be subject to the usually results from the injury
provisions of Chapter 1, Title XVII, of this Book.
Nature and Effect of Obligations
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3 Source – QUASI – CONTRACTS
- Also provided for by Law (Chapter I, Title XVII of Civil Code) Real Obligation – obligation to deliver a specific and indeterminate thing
- No meeting of the minds
Article 1163
Q: What is a Quasi-Contract? Every person obliged to give something is also obliged to take care of
A: Juridical relation resulting from a lawful, voluntary and unilateral and it with the proper diligence of a good father of a family, unless the law or
which has for its purpose the payment of indemnity to the end that no one the stipulation of the parties requires another standard of care.
shall unjustly enrich himself at the expense of another
- There is an obligation to give something: contemplates on
- 2 common kinds: DETERMINATE OBJECTS ONLY
a. Negotorium Gestio – unauthorized management - Purpose: ensure that the creditor will receive the object. Thus
Ex. Neighbor saved you properties thus had expenses debtor should take care of the object so as to deliver it to the
b. Solution Indebiti – undue payment creditor
- If generic, there is no need to practice good diligence of a father
Article 1161 - In an obligation to deliver a specific thing, while still in the
Civil obligations arising from criminal offenses shall be governed possession of the obligor, he has the responsibility to take care of
by the penal laws, subject to the provisions of Article 2177, and of the such using ordinary diligence (diligence required in the absence of
pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, any stipulation in law or contract)
and of Title XVIII of this Book, regulating damages.
Relate to art. 1173 – the diligence needed is that which is required by the
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4 Source – ACTS OR OMISSIONS PUNISHED BY LAW or DELICT NATURE of the obligation and corresponds with the circumstances of person,
- Criminal liability carries civil liabilities time and place
o Restitution – return the exact thing
o Reparation – pay equivalent price EXCEPTIONS
o Indemnification – consequential damage If the law or contract provides for a DIFFERENT standard of care, said law or
stipulation must prevail (Art. 1163)
Article 1162
Obligations derived from quasi-delicts shall be governed by the Extraordinary diligence –required only if expressly provided by law or parties
provisions of Chapter 2, Title XVII of this Book, and by special laws. expressly provided this in their contract
Good Father of a Family: Standard Care or Diligence given
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5 Source – QUASI DELICT
- Chapter 2 Title XVII of CC or Special Laws Q: What are the other types of standards?
- Torts and damages A:
- Basis: act of negligence or omission of care causing damage to a. Slight –by contract, this can be imposed
another with no pre-existing contractual relations b. Extraordinary – diligence of very cautious persons; ex. Common
carrier custody (airplanes, bus, etc.)
Q: When is there negligence? c. Utmost Diligence – ex. imposed on banks
A: Omission of that diligence which is required by the circumstances of
person, place and time Article 1164
The creditor has a right to the fruits of the thing from the time
Q: When can an obligation arise from a quasi-delict? the obligation to deliver it arises. However, he shall acquire no real right
A: The requirements are as follows: over it until the same has been delivered to him.
1. There must be fault or negligence
2. There must be damage or injury Delivery of fruits is only applicable to SPECIFIC obligations
3. There must be a direct relation of cause and effect between the Fruits – three types contemplated in this article
fault or negligence and damage and injury (the act of negligence is a. Natural – spontaneous product of soil and young of animals
the proximate cause of the damage) b. Industrial – acquire through industry or labor
c. Civil – rent, lease, interest
What is important in quasi-delict is that you have to show that there is no
pre-existing contract between the parties Q: what kind of right does the creditor have over the fruits?
A: distinguish personal right from a real right.
Take note: If the source is not any of the five sources stipulated, then in it is Personal – enforceable only against another party
not considered an obligation (article 1158) Real right – enforceable against the whole world
Ex. Is an employer obliged to provide for legal service to his employee? No,
for the law does not require for such. Q: When does the obligation to deliver it arises?
A: This is qualifiable. It will depend on what is the source of obligation.
Dammum absque injuria (Damage without injury) If pure obligation (not subject to any condition or term)- from the
- damage without legal injury time the agreement is entered into or is perfected (it is
- There is damage but there is no injury demandable at once)
- There is no liability in this case If the obligation has a term (X obliged himself to deliver a land to
Y on Nov. 15) – the obligation arise upon the arrival of the term
Injury – illegal invasion of a legal right. You associate it with a If there is a conditional obligation- obligation arise when the
wrongful act or omission which will result to loss or damage condition is fulfilled
2 angel‘s notes
OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion
- This article contemplates on a situation where the debtor has not - Even if the obligation is determinate, if two or more persons who
yet delivered the obligation but that contract was already do not have the same interest is to receive such, the liability will
perfected. In this case, you only have a PERSONAL right that will not be lost
compel the seller to deliver such obligation to the creditor. The - Applies only to DETERMINATE THINGS
buyer thus asks what is due to him.
- The moment the obligation arises, it is only a personal right. The The third paragraph is an exception to the rule on specific obligations which
real right only happens upon delivery. is lost due to fortuitous event
1. If he incurs delay (obligor delays)
ILLUSTRATION Q: When is there delay?
Sam is obliged to give Ben on December 1, 2008, a particular parcel of land A: first distinguish ordinary delay and legal delay or default. What is
Prior to December 1 – the creditor does not have any right over contemplated in delay here is the legal delay or default MORA (debtor fails to
the fruits comply with the obligation on the designated time). Delay happen when you
December 1 (without delivery yet) – from Dec 1 to 15: he is still fail to deliver after there has been a demand whether judicial or extra
entitled to the fruits. However, this is only a personal right judicial
December 15 (actual or constructive receipt) onwards – he
becomes the owner of the fruits and the land only AFTER the date Ordinary – merely non performance at the stipulated time
of receipt (Real Right) Legal delay – delay which amounts to a virtual non-fulfillment of the
obligation (principle behind is “there is no delay if there is no demand”)
KINDS OF DELIERY
1. Actual Delivery Take note: A mere reminder with respect to the due date is not a demand.
- the property changes hands From the time the demand is made, that is only when the debtor will be
- ex. The moment the book is given to you (buying of book: transfer liable for damages.
of possession)
2. Constructive Delivery 2. If obligor is in bad faith because he promised to deliver the same
- The physical delivery is implied thing to two persons with different interest
Kinds of Constructive Delivery Remedies of the Creditor when the Debtor fails to comply with his obligation
a. Tradition simbolica – when you buy a house and the key of the 1. Demand SPECIFIC PERFORMANCE of the obligation
house is given to you 2. Demand RESCISSION or CANCELLATION
b. Tradition longa manu – the object is pointed to you 3. Demand DAMAGES either with or without either of the first two
c. Tradition brevi manu – illustrated in a situation where the person
is occupying the property as a lessee or tenant. Such property is Article 1166
bought by the tenant from the lessor. His possession is thus The obligation to give a determinate thing includes that of delivering
changed from a lessee to an owner all its accessions and accessories, even though they may not have been
d. Tradition constitutum possesorium – opposite of brevi manu. mentioned.
Selling your own property to another but after the sale you enter
into a contract with the owner for you to occupy the property as a - Accessions and Accessories: are included even if not specified in
lessee. the contract
e. Tradition by the execution of legal forms and solemnities – when - Applicable only to DETERMINATE obligations
you buy a parcel of land, you don’t have to be physically placed on
the land. The documents will be considered as a delivery Accessions – attachment that you can no longer separate unless you will
cause damage; additions to or improvements upon a thing
Article 1165
When what is to be delivered is a determinate thing, the
creditor, in addition to the right granted him by Article 1170, may compel Accessories – not attached but are necessary; those joined to or included
the debtor to make the delivery. with the principal for the latter’s better use, perfection, or enjoyment
If the thing is indeterminate or generic, he may ask that the Take Note: So as to not violate this provision – you shall stipulate in your
obligation be complied with at the expense of the debtor. contract what are those accessories or accessions that you wish to exclude in
your sale.
If the obligor delays, or has promised to deliver the same thing
to two or more persons who do not have the same interest, he shall be
responsible for any fortuitous event until he has effected the delivery. Summary
Rights of Creditor in Determinate Obligation (both can be availed by the
- The distinction between generic and specific obligation is Creditor)
presented. 1. Compel specific performance – includes delivery of accessions
- Specific – if lost during fortuitous event, the obligation is - Compel debtor to deliver the thing agreed upon
extinguished 2. Recover damages in case of Breach (article 1170)
- Generic – not extinguished because genus does not perish
Rights of Creditor in Generic Obligations
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1 par – compel the specific thing which was to be delivered 1. Compel performance of obligation
- Debtor cannot compel the creditor to receive another thing other 2. In case he refuses to comply or cannot comply, obligation may be
than that which was specified complied by another person at the debtor’s expense
nd
2 par – debtor should deliver what belongs to the class not inferior or 3. Recover damages in case of Breach (Mental damages)
superior of quality
- You just deliver the regular type Obligations of Debtor in Determinate Obligations
- If A lost the horse, B can buy to C and A will pay C 1. Give the very same thing they agreed upon
rd
3 par – the term INTEREST refers to RIGHT
3 angel‘s notes
OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion
2. Take care of the thing with proper diligence (article 1163; applicable only incumbent upon him. From the moment one of the parties fulfills his
to determinate because generic things can never be lost) obligation, delay by the other begins.
3. Deliver accessions and accessories (article 1166)
4. Pay for damages in case of Breach (1170) - Talks about DEFAULT and DELAY
- Covers the provision of no delay if no demand
Obligations of Debtor in Generic Obligations - Also provides for the exception of the need for the demand
1. Deliver a thing of its class which is neither of superior or inferior
2. Pay for damages in case of breach Kinds of Default
1. Mora Solvendi – default on the part of the debtor
Article 1167 - Note: there is no default in negative and natural obligations
If a person obliged to do something fails to do it, the same shall - Effects: (1) debtor may be liable for interest and damages; (2)
be executed at his cost. may bear the risk of loss; (3) may be liable even for fortuitous
event
This same rule shall be observed if he does it in contravention of 2. Mora Accipiendi – creditor is guilty of default when he
the tenor of the obligation. Furthermore, it may be decreed that what has unjustifiable refuse to accept the payment or performance at the
been poorly done be undone. time such can be done
3. Reciprocal Obligation – depends upon each other for performance
- Is not in relation to article 1166
- Contemplates on obligation TO DO or a PERSONAL OBLIGATION
- Debtor cannot be compelled to do something he is asked because Q: Why is it important to know the Delay?
this will result to INVOLUNTARY SERVITUDE (violation of A: so that you would know when to ask for damages
constitutional right; will result to act of violence
- REMEDY: ask someone to do it but at the expense of the debtor Q: When does Delay come in?
- Example: if construction is ugly, you can have it undone A: It comes in at the time the creditor makes a demand
POSITIVE PERSONAL OBLIGATION Q: What is the purpose of setting the due date?
Remedies of the Creditor if the debtor fails to do A: The due date will determine when the obligation is demandable
To have the obligation performed (by himself or by another) at
the debtor’s expense Q: Does the creditor always have to demand?
Plus damages A: No, because there are some exceptions (look at book page 123-124)
When the thing may be ordered undone a. When laws expressly so declares or it is expressly stipulated in the
If made poorly contract
If the obligation is a negative one (you are not suppose to do such TAKE NOTE: It is not enough that you only specify the date of the
act but you do it) – Art 1168 expiry, rather it should be stipulated that the debtor will be at
default upon the arrival of such term or fulfillment of condition
Q: When is 1167 NOT applicable? b. When time is of the essence – time was so important that you
A: cannot have other time (ex. Birthday cake)
1. If debtor posses special qualifications which is the very reason you c. Demand would be useless because it is beyond the debtor’s
agreed in a contract (ex. Concert singers); REMEDY: damages power to perform (ex. If he already sold it to another)
2. If you tried to undo and in doing so, it will result to more damage; d. When obligation is RECIPROCAL: when one does not perform his
REMEDY: you have to be logical and just ask for damages obligation, the other does not delay
Article 1168 Note: stipulations in contract prevails over law except if such contract is void
When the obligation consists in not doing, and the obligor does what
has been forbidden him, it shall also be undone at his expense. Mora – latin term for delay
Take note: if you are a lessee, if the creditor unjustifiably refuses, you should Article 1173
comply with tender of payment and consignation (legal procedure) so as to The fault or negligence of the obligor consists in the omission of
legally relinquish or extinguish yourself with the liability. (This act is in that diligence which is required by the nature of the obligation and
writing, consignation: deposit the money in court). corresponds with the circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of Articles 1171 and
3. Compensatio Morae – when in a reciprocal obligation both 2201, paragraph 2, shall apply.
parties are in default; here it is as if neither is in default (both are
in pari de licto) If the law or contract does not state the diligence which is to be
observed in the performance, that which is expected of a good father of a
- They are debtors and creditors to each other (ex. Contract of family shall be required.
lease and sale) - Defines what constitutes negligence
Article 1170 It is the Omission of that diligence which is required by the nature of the
Those who in the performance of their obligations are guilty of obligation and corresponds with the circumstances of the person, of the
fraud, negligence, or delay, and those who in any manner contravene the time and of the place.
tenor thereof, are liable for damages.
Negligence is the failure to observe, for the protection of the
Q: When are you liable for damages? interests of another person, that degree of care, precaution, and
A: When there is… vigilance which the circumstances justly demand, whereby such
1. FRAUD (deceit or dolo) – deliberate or intentional evasion of the other person suffers injury (US vs. Barrias)
normal fulfillment of an obligation (synonymous to BAD FAITH) –
You can then be liable for bigger damages It is the “want of care required by the circumstances”
2. NEGLIGENCE (fault or culpa) – any voluntary act or omission, Accident and negligence are intrincically contradictory; one
there being no malice, which prevents the normal fulfillment of an cannot exist with the other. Accident occurs when the person
obligation – your damages can be mitigated concerned is exercising ordinary care, which is not caused by fault
of any person and which could not have been prevented by any
3. DELAY (mora) means suggested by common prudence.
4. CONTRAVENTION OF THE TERMS OF THE OBLIGATION – debtor Note: There is really no fault in accidents because the person has practiced
does not comply with the agreement ordinary care; while negligence is defined as the absence of such care.
Kinds of Damages (discussed in torts and damages) Take Note: Negligence + Bad faith = fraud
1. Moral – ex. Damages for sleepless nights; not enough to allege,
you have to prove the extent of the damage TEST FOR DETERMINATION (When is there negligence)
2. Exemplary – setting of an example to others. Deter them from You ask: Would a prudent man in his position foresee harm to the person
doing the same injured as a reasonable consequence of the course about to be pursued? If
3. Nominal – to vindicate your rights so, the law imposes a duty on the actor to refrain from that course, or to take
4. Temperate – damages is not ascertain precaution against its mischievous results, and the failure to do so
5. Actual – this should be proven constitutes negligence. Reasonable foresight of harm followed by the
6. Liquidated – damages already stipulated in the contract (common ignoring of the admonition born of this provision, is the constitutive fact of
in construction contracts: failure to finish the project on time) negligence (Picart vs. Smith)
Article 1171 Ex. Assigning of the most competent person is an indication that there is a
Responsibility arising from fraud is demandable in all foresight of danger. This cannot therefore be considered as an accident,
obligations. Any waiver of an action for future fraud is void. rather it is negligence.
- Talks about FRAUD which is intentional and with malice (1) Reasonable care and caution expected of an ordinary prudent
- This is demandable on all obligation person
- Waiver of an action for future fraud is void because the law
does not want to encourage fraud. If waiver is allowed, it Did the defendant in doing the alleged negligent act use
will not deter the person in committing fraud. reasonable care and caution which an ordinary prudent person
- Damages cannot be mitigated by the court would have used in the same situation. If not, then he is guilty of
negligence (Mandarin Vila, Inc. case)
Q: Can a liability for a past fraud be waived?
A: Yes, such shows the generosity and forgiveness of the creditor towards Negligence is therefore a question of fact, its existence being
the debtor dependent upon the particular circumstances of each case.
5 angel‘s notes
OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion
c. Circumstances of time – during night time you drove your car - Contemplated on USURY LAW. However, such law is no longer
without any headlight applicable today
d. Circumstance of Place – while driving your car at colon street, you - Thus, interests are based on the agreement of the contracting
drove at 60kph parties, which is complied in Good faith
- Rule: If there is consent or agreement, then that will govern the
(2) No hard and fast rule for measuring degree of care relationship
- However: even if USURY law is suspended, the SC reduced the
KINDS OF NEGLIGENCE (refer pg. 143-145 for comparison) amount of interest imposable on the ground that the right is
1. Culpa Contractual – negligence in contracts resulting in breach inequitable or unconscionable (thus, the party is not totally free)
- Ex: you have a contract of common carrier (transportation
contract): passenger can file for damages against operator; Article 1176
you can also demand for culpa criminal and for civil liability The receipt of the principal by the creditor without reservation
2. Culpa Aquiliana – negligence which by itself is the source of an with respect to the interest, shall give rise to the presumption that said
obligation between the parties not so related before by any pre- interest has been paid.
existing contract
3. Culpa Criminal – negligence resulting in the commission of a The receipt of a later installment of a debt without reservation
crime as to prior installments, shall likewise raise the presumption that such
- You will file an action against the driver. If the driver is installments have been paid.
convicted but insolvent, the owner will be subsidiarily liable
- Talks about presumptions which could either be
FRAUD VS. NEGLIGENCE (1) Conclusive or
Deliberate intention to cause No such intention (2) Disputable or rebuttable (what is contemplated in this article)
damage or injury - Presumption applies and is advantageous to debtor or lessee
Waiver of liability for future fraud is Waiver is allowed
void (includes gross negligence) Conclusive – you are no longer allowed to present other evidences to prove
Liability cannot be mitigated May be reduced in certain cases otherwise
- These are evidences which you cannot rebut (ex. We are all
Take note: this is Fraud in the performance of an obligation (dolo presumed to know the law; thus you cannot defend yourself by
incidente); REMEDY: damages saying that you are not aware of such law)
Ex. Instead of delivering a wine, what you deliver is a wine bottle however - Such presumption is reasoned by experience and convenience
what is inside is not wine, then this is dolo incidente; committed in the
performance of the obligation. Disputable – such fact is presumed unless you present other evidences that
will prove otherwise
Dolo causante – Fraud committed in the execution of the contract. Consent is
vitiated by fraud. You should not have entered the contract not unless there Take Note: a creditor can refuse to accept if you do not pay the amount you
was a fraud. REMEDY: annulment of contract. are obliged to pay
ST
Article 1174 1 paragraph of 1176
Except in cases expressly specified by the law, or when it is - Tackles presumption in payments of INTERESTS
otherwise declared by stipulation, or when the nature of the obligation - the first payment is that of the interest and the balance will be on
requires the assumption of risk, no person shall be responsible for those the principal.
events which could not be foreseen, or which, though foreseen, were
inevitable. TAKE NOTE: the creditor can rebut such claim wherein the lessee will say that
he has already paid the interest for the receipt shows payment for principal,
FORTUITUIOUS EVENT however the burden of proof is that of the creditor
1. Act of man
2. Act of God The creditor can specify in the receipt a RESERVATION with regards to the
interest so that even though it is specified in the receipt that payment is for
GR: no liability in fortuitous event the principal amount, there will be no presumption that the interest has
Exceptions already been paid.
a. When expressly declared by law nd
b. When expressly declared by stipulation 2 paragraph of 1176
c. Nature of obligation requires assumption of risk - Tackles presumptions in payments of INSTALLMENTS
- Ex. A receipt acknowledging the payment of rentals of march
gives the presumption that rentals for January and February is
Requisites: paid
1. Event happened without any participation of the debtor - You can likewise, as a lessor, note the reservation
(independent of his will)
2. Event cannot be foreseen, or if foreseen is inevitable Q: What if no date is specified with regards to the month rental but the date
3. By reason of the event, it was impossible for him to comply with of the receipt is dated march, can this raise a presumption that payment for
the obligation in a normal manner January and February were made?
4. There is no contributory negligence on the debtor’s part A: NO, because such date only tackles the date of receipt and not on the date
that corresponds to the payment of such
Article 1175
Usurious transactions shall be governed by special laws. Take Note: Yearly Taxes are not installment payments and the law provides
for such presumption on installments alone!
6 angel‘s notes
OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion
Article 1177
The creditors, after having pursued the property in possession of the
debtor to satisfy their claims, may exercise all the rights and bring all the
actions of the latter for the same purpose, save those which are inherent in
his person; they may also impugn the acts which the debtor may have done
to defraud them.
- Remedies of creditor when the debtor does not comply with the
obligation
Article 1178
Subject to the laws, all rights acquired in virtue of an obligation are
transmissible, if there has been no stipulation to the contrary.
7 angel‘s notes
OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion
KINDS OF OBLIGATIONS (Classification) Classification of Conditions
A.
PRIMARY 1. Suspensive (conditions precedent or conditions antecedent) – the
1. Pure Obligation – there is no condition or term to fulfill; happening of the condition gives rise to the obligation
Demandable at the time the contract is perfected 2. Resolutory (conditions subsequent) – the happening of the condition
2. Conditional Obligation – there is a condition which should be extinguishes the obligation
fulfilled B.
a. Suspensive – the condition is awaited. The obligation 1. Potestative – the obligation arises from the personal will of the debtor;
arises the moment the condition is satisfied fulfillment of the condition depends upon the will of a party to the
b. Resolutory – the condition is to be avoided. The obligation
obligation is extinguished the moment the condition is 2. Casual – obligation depends on chance or hazard or the will of a third
satisfied person (winning of lotto)
3. Obligation with a Period or Term – that which necessarily must 3. Mixed – depends partly on the will of the debtor and that of a third
come regardless of whether the parties know when it happen or person or on chance (if I pass the bar)
not C.
4. Alternative or Faculative 1. Divisible – capable of partial performance or realization
5. Conjunctive 2. Indivisible – not capable of partial performance because of the nature
6. Joint – there are more than one person who is liable for the of the thing, or because of the intention of the parties
obligation. They have equal share of responsibility D.
7. Solidary – upon the insolvency of one of the parties who is 1. Positive – an act is to be performed
responsible for the obligation, the other party is to fulfill the full 2. Negative – something will be omitted
liability of the contract E.
8. Divisible – the fulfillment of the obligation may be done at 1. Express – the condition is stated
separate times 2. Implied – the condition is merely inferred
9. Indivisible – the fulfillment of the obligation must be done at one F.
time 1. Possible – capable of fulfillment in nature and in law; condition is
10. With a Penal Clause capable of realization according to nature, law , public policy or good
customs
SECONDARY 2. Impossible – not capable of fulfillment due to nature or due to the
1. Unilateral – only one person or party has an obligation to perform operation of law or morals or public policy; or due to a contradiction in its
2. Bilateral – two parties has an obligation to perform terms
3. Real – right which is demandable upon the whole world upon the G.
delivery of the debtor of the obligation to the creditor 1. Conjunctive – when there are several conditions, all of which should be
4. Personal – right of the creditor to demand upon the debtor the realized
delivery of the obligation as its due period has already lapsed 2. Alternative – if only one or a few of the conditions have to be
5. Determinate – specific object is the subject of the obligation performed or realized
6. Generic – the subject of the obligation belongs to a particular
class
7. Positive – there is a need for the performance of the obligation Q: When is a pure obligation demandable?
8. Negative – equivalent to omission; something should not be done A: At once, the moment you said such obligation or such contract has been
or is to be omitted perfected. (Immediately)
9. Legal
10. Conventional Condition – future and uncertain event
11. Penal Period – that which necessarily must come
12. Civil – obligation arises according the Civil law
13. Natural – obligation arises according to natural law Q: What is the effect of the happening of the resolutory condition?
A: The obligation is extinguished.
Article 1179
Every obligation whose performance does not depend upon a Article 1180
future or uncertain event, or upon a past event unknown to the parties, is When the debtor binds himself to pay when his means permit
demandable at once. him to do so, the obligation shall be deemed to be one with a period,
subject to the provisions of Article 1197.
Every obligation which contains a resolutory condition shall also
be demandable, without prejudice to the effects of the happening of the - This provision contemplates on an obligation with a TERM or
event. PERIOD. The term is due upon the capacity of the debtor to pay
such obligation.
- What is contemplated here are the types of obligations which are - “Payment does not depend on the debtor’s will, rather, what is
DEMANDABLE at once dependent on the debtor is the TIME when payment by him can
st
- 1 paragraph Simply stated: an obligation with no terms or be made. “
conditions is demandable at once
nd
- 2 paragraph: Resolutory conditions are also demandable at once Q: How long is the term?
without prejudice to the extinguishment of the obligation once A: The term is not solely dependent neither on the creditor nor the debtor. In
the condition is fulfilled this case, Article 1197 is also applied wherein the Court is obliged to fix the
duration of the period. Upon arrival of this period, the creditor can now
Past Events – would refer to the FUTURE KNOWLEDGE OF PAST EVENTS, demand for the payment.
which will determine whether or not an obligation will arise
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Article 1181
In conditional obligations, the acquisition of rights, as well as the This means that if the obligation is subject to a resolutory and potestative
extinguishment or loss of those already acquired, shall depend upon the condition, the condition is VALID (valid because it is already demandable at
happening of the event which constitutes the condition. once)
Ex of mixed: I will give you 100 if I sell my parcel of land. “or if it has become indubitable that the event will not take place”
- The selling is not solely dependent on the will of the debtor coz Ex. On Nov. 15, X died, then the obligation is extinguished because you can
such is as well dependent on the buyer or price no longer marry
If it made to depend upon the will of the creditor – valid Article 1185
If upon the debtor – void The condition that some event will not happen at a determinate
time shall render the obligation effective from the moment the time
Take note: the precept contained n the first sentence of Article 1182 is only indicated has elapsed, or if it has become evident that the event cannot
applicable only to a SUSPENSIVE CONDITION occur.
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Paras and Atty. Valencia’s Class Discussion
If no time has been fixed, the condition shall be deemed fulfilled 2008 – date of happening of the suspensive condition
at such time as may have probably been contemplated, bearing in mind the - As far as the fruits are concerned: If the obligations are
nature of the obligation. UNILATERAL , the debtor shall appropriate the fruits and interests
received
- This deals with a NEGATIVE CONDITION - In between – the debtor is still the owner of the fruits
- Similar with 1184 however, what is contemplated is a condition
that some event will NOT happen at a determinate or specific Reciprocal Obligation
time. - in between (in pendency) – fruits shall be deemed to have been
- The obligation is effective from the moment the time indicated mutually compensated
has elapsed or is evident that it cannot occur - Buyer is not obliged to pay interest, neither the seller obliged to
- If no specific date when the obligation is fulfilled: you consider the give the fruits
circumstances surrounding the agreement; what is contemplated - Why? Because it will be inconvenient between the parties to
by the parties compute the interest and fruits
- The condition shall be deemed fulfilled when the obligor - This article contemplates on (1) actions to preserve Creditor’s
voluntarily prevents its fulfillment Rights and (2) Right of the Debtor to Recover what was Paid by
- Contemplates generally of SUSPENSIVE conditions Mistake
- This deals with CONSTRUCTIVE or PRESUMED fulfillment - (1): bring appropriate actions for the preservation of his rights;
- Requisites: ask for security if debtor is about to be insolvent; ask the court to
a. Voluntary prevent alienation or concealment
b. Actually PREVENTS fulfillment - (2): This is a case of SOLUTIO INDEBITI
- Applicable to RESOLUTORY conditions if the DEBTOR is at FAULT
Ex. A sold land now to B on a condition that B should marry C Q: Why is there a need for such provision?
within 1 year, otherwise B should return the land. If A kills C, B A: So that while the condition has not yet happened, the creditor’s right is
does not have to return the land because A is at fault. safeguarded
- Can only be applied to suspensive conditions and not to
resolutory conditions Q: What can the creditor do to protect his rights?
A: You can have an annotation in the papers.
Article 1187
The effects of a conditional obligation to give, once the condition Take Note: During the pendency of the condition, the obligee or creditor has
has been fulfilled, shall retroact to the day of the constitution of the only a MERE HOPE OR EXPECTANCY. The hope and expectancy is protected
obligation. Nevertheless, when the obligation imposes reciprocal by law. This is for the protection and preservation of his right. Without this
prestations upon the parties, the fruits and interests during the pendency of protection, the right of the creditor becomes meaningless.
the condition shall be deemed to have been mutually compensated. If the
obligation is unilateral, the debtor shall appropriate the fruits and interests Q: What is the appropriate action?
received, unless from the nature and circumstances of the obligation it A: have the property annotated or registered in the registry of property
should be inferred that the intention of the person constituting the same (caveat emptor). So whoever acquires the land will be bound to such
was different. obligation.
In obligations to do and not to do, the courts shall determine, in each Take Note: When the obligation imposes reciprocal prestations upon the
case, the retroactive effect of the condition that has been complied with. parties, the fruits and interests during the pendency of the condition shall be
deemed to have been mutually compensation.
- The effects of a conditional obligation to GIVE generally retroacts
to the day of the constitution of the obligation (applicable only to Article 1189
CONSENSUAL contracts When the conditions have been imposed with the intention of
- Exception to the General Rule: with regards to FRUITS or suspending the efficacy of an obligation to give, the following rules shall be
INTERESTS and PERIOD OF PRESCRIPTION (for reciprocal observed in case of the improvement, loss or deterioration of the thing
obligations because it is presumed they are mutually during the pendency of the condition:
compensated; however, in a unilateral prestation, you should (1) If the thing is lost without the fault of the debtor, the
deliver the fruits and interest unless it can be inferred that the obligation shall be extinguished;
intention is otherwise) (2) If the thing is lost through the fault of the debtor, he shall be
- In an obligation to DO, the COURT will determine the retroactive obliged to pay damages; it is understood that the thing is lost
effect of the condition when it perishes, or goes out of commerce, or disappears in such
a way that its existence is unknown or it cannot be recovered;
Scenario: (3) When the thing deteriorates without the fault of the debtor,
- You have a date of the constitution of the obligation to the date the impairment is to be borne by the creditor;
of the happening of suspensive condition (ex. In year 2004, I (4) If it deteriorates through the fault of the debtor, the creditor
obliged myself to give you a parcel of land if you pass the bar may choose between the rescission of the obligation and its
examination) fulfillment, with indemnity for damages in either case;
(5) If the thing is improved by its nature, or by time, the
Unilateral Obligation (example) improvement shall inure to the benefit of the creditor;
2004 – date of the constitution of obligation
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Paras and Atty. Valencia’s Class Discussion
(6) If it is improved at the expense of the debtor, he shall have no other - Power to rescind applies only to RECIPROCAL (created and
right than that granted to the usufructuary. established at the same time, out of the same cause, and which
result in mutual relationship between the parties; the parties are
- if the obligation is to deliver a specific thing, 3 things can happen debtors and creditors to each other) obligations due to breach of
during the pendency of the suspensive condition bad faith
a. the specific thing promised to be delivered may be lost - REMEDY: either (1) fulfillment (file an action for specific
b. there is deterioration performance; demand the person in delay) + damages or (2)
c. there could be improvements rescission + damages (NOTE: the right is not conjunctive thus the
plaintiff CANNOT ask for BOTH remedies
Rules governing in these situations: (during the pendency of the condition) - Note however that you can file for rescission after choosing
fulfillment if the latter becomes impossible
Loss – when it perishes, disappears, its existence is unkown
a. due to fault of debtor – the debtor is obliged to PAY DAMAGES Rescission (or Resolve) – abrogates the contracts from its inception and
b. not due to fault of debtor – the obligation is EXTINGUISHED requires a mutual restitution of benefits received; it’s as if no contract has
been made (restore the parties to their relative positions)
Deterioration TAKE NOTE: the cause must be IDENTICAL and the obligations should arise
a. due to fault of debtor – the creditor may choose between simultaneously
recission of the obligation and its fulfillment with indemnity for
damages Note: the right to rescind belongs to the Injured Party. The injured Party is
b. not due to fault of debtor – the impairement shall be borne by the the one who has complied with his part of his obligation.
creditor (creditor will accept)
Characteristics of the Right to Rescind or Resolve
Improvements 1. Only exists in reciprocal obligations (note: if there is a period, you
a. by nature – inure to the benefit of the creditor cannot declare default before the expiration of the period)
b. by passage of time - inure to the benefit of the creditor 2. It can be demanded only if the plaintiff is ready, willing and able
c. introduced at the expense of the debtor – debtor have the right to comply with his own obligations, and the other is not
than that granted to the usurfructuary (if improvement cannot be 3. The right to rescind in NOT absolute (look at limitations)
removed without causing damage, then the debtor is not entitled a. Trivial causes or slight breaches will not cause
to the improvement. But if it can be removed without causing rescission
damage, the debtor can remove such improvement) b. If there be a just cause for fixing the period within
which the debtor can comply, the court will not decree
Article 1190 rescission
When the conditions have for their purpose the extinguishment c. If the property is now in the hands of an innocent third
of an obligation to give, the parties, upon the fulfillment of said conditions, party who has lawful possession of the same
shall return to each other what they have received. 4. The right to rescind needs judicial approval when there has
already been delivery of the object. However, if it is expressly
In case of the loss, deterioration or improvement of the thing, stipulated in the contract that despite delivery rescission can be
the provisions which, with respect to the debtor, are laid down in the made without going to court, such contract remains valid.
preceding article shall be applied to the party who is bound to return. The right to rescind need not have a judicial approval when there
has been no delivery yet
As for the obligations to do and not to do, the provisions of the
second paragraph of Article 1187 shall be observed as regards the effect of Note: if the question is whether there was a violation in the
the extinguishment of the obligation. contract, you should go to court and resolve such.
- In short means: Once the resolutory conditions is fulfilled, the 5. The right to rescind is implied (presumed) to exist and therefore,
obligation is extinguished need not be expressly stipulated upon
- Because obligation is extinguished, the parties should restore to 6. The right to rescind may be waived, expressly or impliedly
each other what they have received – this would include the fruits
and interests after deducting the expenses made for their Take note: extrajudicial rescission of a contract is not possible without an
production, gathering and preservation express stipulation to that effect
- In this situation, the creditor becomes the debtor in his obligation
to return Limitations on the Right to Rescind
a. The power of the court to fix the period – if there are minor
Article 1191 violations
The power to rescind obligations is implied in reciprocal ones, in b. Resort to the courts
case one of the obligors should not comply with what is incumbent upon c. Right of third person – those who come into possession and is not
him. in bad faith are protected; in such case, the only remedy of the
injured party is to proceed against the party responsible for the
The injured party may choose between the fulfillment and the transfer or conveyance for damages
rescission of the obligation, with the payment of damages in either case. He d. Violations should be Substantial or serious so as to allow a
may also seek rescission, even after he has chosen fulfillment, if the latter rescission of contract
should become impossible. e. Waiver of the right (right to ask for a rescission)
The court shall decree the rescission claimed, unless there be just Obligation of a Seller
cause authorizing the fixing of a period. 1. Deliver a car
This is understood to be without prejudice to the rights of third persons who 2. Transfer ownership
have acquired the thing, in accordance with Articles 1385 and 1388 and the
Mortgage Law.
11 angel‘s notes
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Paras and Atty. Valencia’s Class Discussion
Take note: if buyer, due to rescission, is obliged to return the car but 3. Judicial – the period or term fixed by the courts
destroyed it, could no longer proceed in the process. This is because, if you C
file for rescission, you should also be ready to return the object subject of the 1. Ex die – a period with suspensive effect. Obligation begins only
obligation. from a day certain, upon the arrival of the period
2. In diem – term with a resolutory effect. Up to a time certain, the
rd
If 3 party is in bad faith, the only remedy of the injured party is to proceed obligation remains valid, but upon the arrival of said period, the
rd
against the 3 person who acted in bad faith for damages. You can also go obligation terminates
rd
after both the seller and 3 party if both of them acted in bad faith.
Condition – when you are not even sure if something will happen as a fact or
Article 1192 not
In case both parties have committed a breach of the obligation,
the liability of the first infractor shall be equitably tempered by the courts. Acceleration Clause – clause which expressly stipulates that upon failure to
If it cannot be determined which of the parties first violated the contract, pay installment for a certain month, the whole debt should thereupon
the same shall be deemed extinguished, and each shall bear his own become at once payable.
damages.
Take note:
- In case both parties committed a breach: A lease on a “month-to-month basis” is one with a DEFINITE term.
o Determine the first infractor – he is to pay the liability In this kind of agreement, the lease is deemed from month to month, and
(but this can be tempered because both committed a the lessor is allowed to terminate the lease after each month, provided there
breach) is due notice.
o If it cannot be determined – each shall bear his own
damages REQUISITES FOR A VALID PERIOD OR TERM
1. It must refer to the FUTURE
CONDTITIONS WITH A TERM 2. It must be CERTAIN (sure to come) but can be EXTENDED
3. It must be PHYSICAL and LEGALLY possible
Article 1193
Obligations for whose fulfillment a day certain has been fixed, Effect of a Fortuitous event
shall be demandable only when that day comes. - No one is still liable for this. The obligation is extinguished
Obligations with a resolutory period take effect at once, but Article 1194
terminate upon arrival of the day certain. In case of loss, deterioration or improvement of the thing before
the arrival of the day certain, the rules in Article 1189 shall be observed.
A day certain is understood to be that which must necessarily
come, although it may not be known when. - In case of loss, deterioration or improvement of the thing BEFORE
the arrival of the day certain, the rules in article 1189 shall be
If the uncertainty consists in whether the day will come or not, observed
the obligation is conditional, and it shall be regulated by the rules of the - Contemplates on a SUSPENSIVE term
preceding Section.
Article 1195
- Contemplates on obligations with a period – that such is Anything paid or delivered before the arrival of the period, the
demandable only when that day comes obligor being unaware of the period or believing that the obligation has
Period become due and demandable, may be recovered, with the fruits and
- Certain length of time which determines the effectivity or the interests.
extinguishment of obligations
- Interval of time which either suspends its demandability or - Talks about PREMATURE payment
produces its extinguishment - Simply means that a debtor can recover his payments of debts as
Note well as the fruits and interests if he paid before the arrival of
Suspensive term – only specifies when the obligation is demandable period and he was unaware that the time has not yet accrued.
- Only apply to OBLIGATIONS TO GIVE
PERIOD vs. CONDITION
PERIOD CONDITION Take note: if debtor knew that the arrival of period has not yet come but
Fulfillment - event which must happen - is an uncertain event paid, he can no longer recover what he paid for.
sooner or later even if time (future and uncertain)
cannot be determined If both the debtor and creditor implicitly changed the period, the
Reference to time - Always refers to- the - may under the law debtor could no longer recover payment.
future refer to the past
Influence on the - merely fixes the time or - Causes an obligation Q: Within what period must recovery be made if the debtor did not know
obligation the efficaciousness of an to arise or to cease that payment was not yet due?
obligation A: Before the debt matures (regarding what was paid). Even after maturity
Different Kinds of Terms and Periods (regarding interest) for after all the creditor was in BAD FAITH. But note that
A the right prescribes 5 years after premature payment.
1. Definite – the exact date or time is known and given
2. Indefinite – something that will surely happen, but the date of Article 1196
happening is unknown Whenever in an obligation a period is designated, it is presumed
B to have been established for the benefit of both the creditor and the debtor,
1. Legal – period granted under the provision of the law unless from the tenor of the same or other circumstances it should appear
2. Conventional or Voluntary – period agreed upon or stipulated by that the period has been established in favor of one or of the other.
the parties
12 angel‘s notes
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Paras and Atty. Valencia’s Class Discussion
- The designation of a period is generally for the BENEFIT of BOTH (2) When he does not furnish to the creditor the guaranties or securities
the creditor and the debtor which he has promised;
Ex. When there is INTEREST stipulated (debtor – given enough (3) When by his own acts he has impaired said guaranties or securities after
time to pay; creditor – can earn from the interest) their establishment, and when through a fortuitous event they disappear,
unless he immediately gives new ones equally satisfactory;
General rule: creditor cannot demand performance of the obligation before (4) When the debtor violates any undertaking, in consideration of which the
expiration of the period and debtor cannot perform the obligation before the creditor agreed to the period;
expiration of the period. (5) When the debtor attempts to abscond.
Note: this article applies if the setting of period is voluntary or conventional. - Debtor lose every right to make use of the period when:
It is NOT applicable if period is set BY COURT (judicial) o He becomes insolvent, unless he gives a guaranty or
security for the debt
- Exceptions: Q: When is a debtor considered insolvent? Should there be a
o Term is for the best of the debtor alone (debtor judicial proceeding or declaration?
required to pay only at the end) A: Judicial declaration is not necessary in this case. He is insolvent
o Term is for the benefit of the creditor alone (creditor if his obligation exceeds his assets.
can demand at any time, but he cannot be compelled
to accept payment before the expiration of the period) o He does not furnish the creditor the guarantees or
securities which he has promised (making a mortgage
Article 1197 in favor of a third person instead of the creditor)
If the obligation does not fix a period, but from its nature and o By his own acts he has impaired said guarantees or
the circumstances it can be inferred that a period was intended, the courts securities after their establishment; through fortuitous
may fix the duration thereof. event they disappear (the security will disappear)
unless he immediately gives new ones equally
The courts shall also fix the duration of the period when it satisfactorily
depends upon the will of the debtor. There are two situations in this provision
Take note: The security, if destroyed during the fortuitous event,
In every case, the courts shall determine such period as may under the DO NOT extinguishes the obligation because this is not the real
circumstances have been probably contemplated by the parties. Once fixed subject of the obligation. The more because of the fact that such
by the courts, the period cannot be changed by them. is also a generic thing.
o Debtor violates any undertaking
- If the obligation has no fixed period but there was a clear o Debtor attempts to abscond (debtor tries to escape
intention to have one, the court may fix the duration thereof. the obligation is a sign of bad faith. Intent is sufficient)
Court also fixes period if period is based on the will of the debtor
- Applies only where a CONTRACT OF LEASE clearly exists Article 1199
A person alternatively bound by different prestations shall
SUMMARY OF 3 INSTANCES THAT COURT FIX PERIOD completely perform one of them.
1. If the obligation does not fix a period, but from its nature and the
circumstances it can be inferred that a period was intended by the The creditor cannot be compelled to receive part of one and part
parties of the other undertaking.
2. If the duration of the period depends upon the will of the debtor (
I will pay you when I like or the day that I fix) - Person alternatively bound by different prestation shall
3. If the debtor binds himself to pay when his means permit to do so completely perform one of them
- Creditor should not accept a portion of the different prestations
Note: once the date is fixed, parties could no longer change it
Article 1200
When the Court MAY NOT fix the Term The right of choice belongs to the debtor, unless it has been
1. When no term was even intended (PURE obligation) expressly granted to the creditor.
2. When obligation is PAYABLE on DEMAND
3. When specific periods are provided for in the law (LEAGL PERIOD) The debtor shall have no right to choose those prestations which
ex. Employment contract: time for payment of salary are impossible, unlawful or which could not have been the object of the
obligation.
Q: Within what period must the action to fix the period be brought?
A: within the proper prescriptive period for specific performance if a period - The right to choose which of the prestation should be acted upon
had been originally fixed, but to be counted from the perfection of the is on the hands of the DEBTOR unless it is EXPRESSLY granted to
contract the creditor
The PRESCRIPTIVE PERIOD IS 10 YEARS - Debtor cannot choose those which are impossible, unlawful or
which could not have been the object of the obligation
Take Note: Court determines the period by considering the time probably 1. Those undertaking which are not included among those
contemplated by the parties. The parties my of course change the period by from which the obligor may select
mutual agreement, or may even disregard the same in which case, the 2. Those which are not yet due and demandable at the time
obligation becomes a pure one, and demandable at once. the selection is made
3. Those which by reason, is… (changed looks because of fault)
Article 1198
The debtor shall lose every right to make use of the period: Article 1201
(1) When after the obligation has been contracted, he becomes insolvent, The choice shall produce no effect except from the time it has
unless he gives a guaranty or security for the debt; been communicated.
13 angel‘s notes
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Paras and Atty. Valencia’s Class Discussion
- The choice among the alternative obligations should be - If the alternatives are lost due to the negligence or fault of the
communicated ORALLY or WRITTEN (implied or expressed) to the debtor, the creditor have the right to indemnity for damages
creditor before it takes effect
Q: What is the basis for the indemnity?
Note: any form may be employed provided that the other party is properly A: the value of the last thing which disappeared or service which last become
notified of the selection impossible
- Once choice is made, debtor can NO LONGER RENOUNCE IT and Note: if alternative 1 and 2 are destroyed due to debtor’s fault but the third
take an alternative which was first open to him is destroyed due to fortuitous event, the obligation is extinguished!
Note: once choice is communicated to the creditor, the obligation becomes Article 1205
simple thus ceasing to be alternative. When the choice has been expressly given to the creditor, the
obligation shall cease to be alternative from the day when the selection has
Reason behind the need for Communication: been communicated to the debtor.
- It is to inform the creditor that the obligation is now a simple one,
no longer alternative, and if already due, for the creditor to Until then the responsibility of the debtor shall be governed by
receive the object being delivered the following rules:
(1) If one of the things is lost through a fortuitous event, he shall
REQUISITES FOR THE MAKING OF THE CHOICE perform the obligation by delivering that which the creditor
1. Made properly – creditor or agent is informed should choose from among the remainder, or that which remains
2. Full knowledge that a selection is indeed being made if only one subsists;
3. Made voluntary and freely (2) If the loss of one of the things occurs through the fault of the
4. Made in due time – before or upon maturity (otherwise, the debtor, the creditor may claim any of those subsisting, or the
creditor can sue him in court with an alternative relief as “give price of that which, through the fault of the former, has
this or that”) disappeared, with a right to damages;
5. Made to all the proper persons (3) If all the things are lost through the fault of the debtor, the
6. Made without the conditions unless agreed to by the creditor choice by the creditor shall fall upon the price of any one of
7. May be waived, expressly or impliedly them, also with indemnity for damages.
14 angel‘s notes
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The loss or deterioration of the thing intended as a substitute,
through the negligence of the obligor, does not render him liable. But once Remember: if there is only one debtor and creditor, the rules in this article
the substitution has been made, the obligor is liable for the loss of the DO NOT apply
substitute on account of his delay, negligence or fraud.
- Contemplates on FACULTATIVE OBLIGATION GENERAL RULE (when there are 2 or more debtors or creditors): JOINT
o It is one where only one prestation has been agreed - In the absence of any fact or law which would make the
upon but the obligor may render another in defendants solidarily liable, the presumption is that they are only
substitution JOINTLY liable
Exceptions:
ALTERNATIVE VS. FACULTATIVE OBLIGATION a. There is a stipulation in the contract that the obligation is solidary
b. When the nature of the obligation requires liability to be solidary
ALTERNATIVE FACULTATIVE c. When the law declares the obligation to be solidary
1. If object 1 is lost due to fortuitous 1. If object 1 is lost due to fortuitous
event, debtor will have to deliver even, the obligation is Article 1208
object 2 extinguished (no need to deliver If from the law, or the nature or the wording of the obligations
object 2) to which the preceding article refers the contrary does not appear, the
2. Various things are due, but the 2. Only one thing is principally due credit or debt shall be presumed to be divided into as many shares as there
giving of one is sufficient are creditors or debtors, the credits or debts being considered distinct from
3. If one of the prestation is illegal, 3. If the principal obligation is void, one another, subject to the Rules of Court governing the multiplicity of
the others may be valid and the and there is no necessity of giving suits.
obligation remains the substitute. (the nullity of the
principal carries with it the nullity - Talks about the general rule when there are 2 or more debtor or
of the accessory or substitute) creditor
4. If it is impossible to give all except 4. If it is impossible to give the - CONSEQUENCE:
one, that last one must still be principal, the substitute does not o The debt shall be divided into as many shares as there
given have to be given; if it is impossible are creditors or debtors
to give the substitute, the o The credit or the debts will be distinct from one
principal must still be given another, BUT regarding the brining of the action in
5. The right to choose may be given 5. The right of choice is given only to court, the Rules of Court governing the multiplicity of
either to debtor or creditor the debtor suits will be followed
15 angel‘s notes
OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion
- Contemplates on INDIVISIBLE JOINT OBLIGATION (joint with Each solidary debtor, insofar as the creditor or creditors are concerned, is the
respect to the parties but indivisible with respect to the debtor of the entire amount; however, with respect to his co-debtors, he is a
fulfillment of the obligation) debtor only to the extent of his share in the obligation.
- Fulfillment of obligations requires the consent of all the debtors,
although each for his part. On the side of the creditors, collective Article 1212
action is also required for acts which may be prejudicial. Each one of the solidary creditors may do whatever may be
useful to the others, but not anything which may be prejudicial to the
Characteristics: latter.
1. Creditor must proceed against ALL the joint debtors, for
compliance is possible only if all the joint debtors would act - Solidary creditors may do useful, not prejudicial acts
TOGETHER o Beneficial – to interrupt the running of prescription
2. Demand is made on ALL the joint debtors Note: the prescription of actions is interrupted when
3. If any of the joint debtors be insolvent, the others shall not be they are filed before the courts
liable for his share Ex. You demand full payment from debtor will stop the
4. If there is joint creditors, delivery must be made to all, unless prescriptive period
someone is specifically authorized by the others o Prejudicial – remission or condonation
5. Each joint creditor is allowed to renounce his proportionate credit - Note: as far as the solidary creditors are concerned, the creditor
who performed the act shall incur the obligation and damages to
Note: A demand by one joint creditor is not a demand by the others his fellow creditors
- The indivisibility of an obligation does not necessarily give rise to - GR: a solidary creditor cannot assign his rights without consent of
solidarity. Nor does solidarity of itself imply indivisibility the others
- Reason for such rule: because such obligation implies mutual
In effect you can have a joint divisible obligation (ex. Monetary obligation), agency and mutual confidence. If a creditor does acts that is
joint indivisible obligation (ex. Car), solidary divisible obligation, solidary prejudicial to the others, then their rights are endangered, hence,
indivisible obligation the necessity of their consent.
- Criticism: at some cases, there is really no TRUST that exists
Indivisibility – refers to the SUBJECT MATTER between two solidary creditors when the reason why they
Solidarity – refers to the TIE BETWEEN THE PARTIES became solidary is due to the operation of law (except when it
arises from voluntary contracts)
DIFFERENT KINDS OF SOLIDARITY - If one of the creditors assigned without consent and the person
1. Active Solidarity – on the part of the creditor or obligee assigned collects from the debtor, such collection is not
2. Passive Solidarity – on the part of the debtor or obligor considered valid. This is to avoid connivance so as to result
3. Mixed Solidarity – on both parts extinguishment of obligation through payment
rd
4. Conventional Solidarity – agreed upon by the parties - Note: debtor can also refuse to pay 3 person if the latter claims
5. Legal Solidarity – that imposed by law to have been assigned by one of the creditors.
Article 1211 Q: what if assignment was made in favor of another solidary creditor without
Solidarity may exist although the creditors and the debtors may the consent of the other creditor?
not be bound in the same manner and by the same periods and conditions. A: there is no violation. In such case there can be no invasion of the personal
or confidential relationship among the solidary creditors.
- Debtors may still be solidarily liable despite the difference on
terms or conditions Article 1214
- To do: the whole solidary obligation can be recovered from ANY The debtor may pay any one of the solidary creditors; but if any
of the solidary debtors MINUS the share of those with unmatured demand, judicial or extrajudicial, has been made by one of them, payment
conditions or terms should be made to him.
EFFECT OF ACTIVE SOLIDARITY (it will only happen if the obligation stipulates
or the law so provides or the nature of the obligation so requires) - Simply contemplates to whom the debtors must pay
o To any of the solidary creditors (if there is no demand
Mutual Agency – each creditor is empowered to exercise against the debtor made)
or debtors not only the rights which corresponds to him, but also all the o Exception: payment must be made to solidary creditor
rights which correspond to the other creditors, with the consequent who made a demand (judicial or extrajudicial)
obligation to render an accounting of his acts to such creditors. - Note: if one of the creditors already sued for action, it is essential
that the first action be first terminated before other creditors
Anyone of the creditors can collect the full amount from the debtor but he could demand. However, if the first action was just an
must make an account and reimburse the shares of his fellow creditors extrajudicial demand and the debtor does not pay, the other
creditor may now file a judicial demand.
EFFECT OF PASSIVE SOLIDARITY
Article 1215
Anyone of them is compelled to make the full amount but has the right to Novation, compensation, confusion or remission of the debt,
obtain reimbursement from other debtor plus the interest. made by any of the solidary creditors or with any of the solidary debtors,
shall extinguish the obligation, without prejudice to the provisions of Article
1219.
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Paras and Atty. Valencia’s Class Discussion
The creditor who may have executed any of these acts, as well as 3. If a solidary debtor receives extension, the other debtor does not
he who collects the debt, shall be liable to the others for the share in the get the same extension. If a principal debtor receives an extension
obligation corresponding to them. without the surety’s consent, the surety is released.
- Contemplates on the different prejudicial acts of the creditor In suretyship, there is but one contract, and the surety is bound
- Effect: shall extinguish the obligation, without prejudice to the by the same agreement which binds the principal
provision of article 1219 (look at the provision) Demand on the sureties is not necessary before bringing suit
1. Novation against them since the commencement of the suit is sufficient
- Modification of an obligation by changing its object or demand
principal conditions, or by substitution the person of the A surety is not entitled to be given notice of the principal’s default
debtor, or by subrogating the person of the debtor, or by
subrogating a third person in the rights of creditor Note: guarantor – your liability is subsidiary. Creditor should first demand
- It gives rise to a new obligation from the principal. It is only when the principal is insolvent that the creditor
could go after the guarantor
2. Compensation
- Takes place when two persons, in their own right, are Article 1217
creditors and debtors of each other Payment made by one of the solidary debtors extinguishes the
- May be total or partial depending on the amount involved obligation. If two or more solidary debtors offer to pay, the creditor may
choose which offer to accept.
Total Compensation: automatically extinguish the obligation
He who made the payment may claim from his co-debtors only
3. Confusion or Merger the share which corresponds to each, with the interest for the payment
- Takes place when the characters of creditor and debtor are already made. If the payment is made before the debt is due, no interest for
merged in the same person (original debtor eventually the intervening period may be demanded.
becomes a creditor of his own payment)
- Usually happens when the creditors endorse debtors’ When one of the solidary debtors cannot, because of his
payment to another person and such person endorses the insolvency, reimburse his share to the debtor paying the obligation, such
payment back to one of the debtors. share shall be borne by all his co-debtors, in proportion to the debt of each.
- In this case, the solidary obligation is EXTINGUISHED
- Payment made by one of the solidary debtors extinguishes the
4. Remission or Waiver obligation
- Act of pure liberality whereby a creditor condones the - He who made the payment may claim from his co-debtors only
obligation of the debtor. (tells the debtor “forget about the the share which corresponds to each, with the interests for the
whole thing”) payment already made
- Remission may be TOTAL or PARTIAL (in partial, can remit - When one of the solidary debtors cannot reimburse his share due
only one of the debtors obligation) to his insolvency, such share shall be borne by all his co-debtors,
- In this case, the co-debtor in a total remission benefits from in proportion to the debt of each. (insolvency of one should be
the act of remission shouldered by the rest)
Article 1228
Proof of actual damages suffered by the creditor is not necessary
in order that the penalty may be demanded.
Article 1229
The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even
if there has been no performance, the penalty may also be reduced by the
courts if it is iniquitous or unconscionable.
Article 1230
The nullity of the penal clause does not carry with it that of the
principal obligation.
- the nullity of the penal clause does not carry with it that of the
principal obligation
- the nullity of the principal obligation carries with it that of the
penal clause
- this is based on the principle that the accessory follows the
principal and not the other way around
reason: the penal clause is merely an access
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OBLIGATIONS & CONTRACTS
Paras and Atty. Valencia’s Class Discussion