Chapter 3.

Different Kinds of Obligations

I. Pure and Conditional Obligations

A. Pure Obligations- Art. 1179 par. 1

Case
HSBC v. Spouses Broqueza, G.R. No. 178610, November 17, 2010

B. Conditional Obligations- Art. 1181

1. Condition
a. Concept
b. Condition v. Period/Term
Cases
Gaite v. Fonacier, 2 SCRA 830 (1961)
Gonzales v. Heirs of Thomas, 314 SCRA 585 (1999)
2. Kinds of Conditions
a. As to effect on obligation- Art. 1181

i. Suspensive (condition precedent)

- retroactive effect when condition is fulfilled Art. 1187
Cases
Coronel v. CA, G.R. No. 103577, October 7, 1996
- rights of creditor and debtor before fulfillment of condition-
Art. 1188
ii. Resolutory (condition subsequent)
Cases
Parks v. Province of Tarlac, 49 Phil. 142 (1927) Central
Philippine University v. CA, 246 SCRA 511 (1995)
Quijada v. CA, G.R. No. 126444, December 4, 1998.

b. As to cause or origin- Art. 1182

i. Potestative
- effect if fulfillment of condition depends solely on the will
of the debtor (Cf. term)
- debtor’s promise to pay when he can is not a
conditional obligation- Art. 1180
 Case
Lim vs. CA, G.R. No. 87047, October 31, 1990.
ii.Casual
Case
Naga Telephone Co., Inc. v. CA, G.R. No. 107112,
February 24, 1994.
iii. Mixed
Cases
Osmeña v. Rama, 14 Phil. 99 (1909)
Hermosa v. Longora, 93 Phil. 971 (1953)
Taylor v. Uy Tieng Piao, 43 Phil. 873 (1922)
Smith Bell v. Sotelo Matti, 44 Phil. 875 (1922) Rustan
Pulp and Paper Mills v. IAC, 214 SCRA 665 (1992)
Romero vs. CA, G.R. No. 107207, November 23, 1995
c. As to possibility- Art. 1183
i. Possible
ii.Impossible
- effect
Case
Roman Catholic Archbishop of Manila v. CA, 198 SCRA
300 (1991)
Heirs of San Miguel v. CA, G.R. No. 136054,
September 05, 2001

d. As to mode
i. Positive- Art. 1184
ii. Negative- Art. 1185

3. Rules in case of loss, deterioration or improvement pending the happening of

the condition- Art. 1189, 1190
a. Meaning of “loss” (Art. 1189[2]), “deterioration” and “improvement”
b. Effect of loss or deterioration
i. without debtor’s fault
ii. with debtor’s
fault
c. Effect of improvement
i. by nature or time
ii. at the debtor’s expense

4. Effect of prevention of the fulfillment of the condition by

the obligor- Art. 1186
Cases
Taylor v. Uy Tieng Piao, supra
Herrera v. Leviste, G.R. No. 55744, February 28, 1985.
Int’l Hotel Corp v. Joaquin, Jr., G.R. No. 158361, April 10, 2013

AI. Reciprocal Obligations- Art. 1191, 1192

1. Concept

2. Alternative remedies of injured party in case of breach

a. Action for Fulfillment

i. when fulfillment no longer possible; effect
b. Action for Rescission
i. requisites
ii. how made
iii. effects
Cases
Song Fo v. Hawaiian-Philippines, 47 Phil. 821 (1925)
Boysaw v. Interphil Promotions, 148 SCRA 365 (1987)
U.P. v. De Los Angeles, 35 SCRA 365 (1970)
De Erquiaga v. CA, 178 SCRA 1 (1989) Angeles
v. Calasanz, 135 SCRA 323 (1985) Ong v. CA,
310 SCRA 1 (1999)
Iringan v. CA, 366 SCRA 41 (2001)
Visayan Saw Mill vs. CA and RJ Trading, GR. 83851, March 3,
1993
Deiparine vs. CA and Trinidad, GR. 96643, April 23, 1993
See also Art. 1786, 1788; Arts. 1484-86; RA 6552
 AI. Obligation With a Period- Art.1193, 1180

A. Period or Term
1. Concept
Case
Solante v. COA, G.R. No. 207348, August 19, 2014

2. Period/Term vs. Condition

B. Kinds of Period/Term
1. As to effect
a. Suspensive (Ex die)- Art. 1193 par. 1
b. Resolutory (In diem)- Art. 1193 par. 2
2. As to expression
a. Express
b. Implied
3. As to definiteness
a. Definite
b. Indefinite
4. As to source
a. Voluntary
b. Legal
c. Judicial

C. Rules in case of loss, deterioration or improvement before arrival of period-Art.

1194, 1189

D. Effect of payment in advance- Art.

1195 Note: Art.1197 par. 3

E. Benefit of Period

1. For whose benefit

a. creditor
b. debtor
c. both
2. Effects
3. Presumption- Art. 1196
Cases
Lachica v. Araneta, 47 OG No. 11, 5699, August 4, 1949
Ponce de Leon v. Syjuco, 90 Phil. 311 (1951)
Buce v. CA, 332 SCRA 151 (2000)
 4. When debtor loses right to make use of period- Art.1198

F. When Court May Fix Period- Art. 1197

1. Period is implied
2. Period depends solely on will of debtor (Cf. condition)
Cases
Araneta v. Philippine Sugar Estate Development Co., 20 SCRA 330
(1967)
Central Philippine University v. CA, supra
BI. Alternative Obligations

A. Concept- Art.1199
Case
Arco Pulp and Paper Co, v. Lim, G.R. No. 206806, June 25, 2014

B. Right of choice- Art. 1200

C. Effect of notice of choice
D. When notice produces effect- Art. 1201
E. Effect of loss or impossibility of one or all prestations- Art. 1202 to 1205
F. Facultative Obligation- Art. 1206
1. Concept
2. Distinguished from Alternative Obligation
3. Effect of Substitution

IV. Joint and Solidary Obligations

A. Joint Obligations
1. Concept
a. Requisites
b. Words used to indicate joint obligations
2. Presumption- Art. 1207, 1208
3. Effects- Art. 1207, 1208
c. Extent of liability of debtor
d. Extent of right of creditor
e. In case of novation, compensation, confusion (Art. 1277), remission
2.
 3.
B. Solidary Obligations
4.
1. Concept
a. Requisites
b. Words used to indicate solidary obligations
2. Kinds
a. As to source- Art. 1208
i. Legal- Art. 1915, 1945, 2194; Art. 119 of RPC
ii. Conventional
iii. Real
b. As to parties bound
i. Active
ii. Passive
iii. Mixed
c. As to uniformity
i. Uniform
ii. Varied/Non-uniform- Art. 1211
- effects
5. Cases
6. Inchausti v. Yulo, 34 Phil. 978 (1916)
7. Lafarge Cement Phil vs. Continental Cement, GR
155173, November 23, 2004
8. 3. Effects
9.
10.
11.
 a. Solidary creditor in relation to:
i. common debtor
- right to demand- Art. 1215, 1214, 1216, 1217 par. 1
- in case of novation, compensation, confusion, remission by a creditor-
Art. 1215 par. 1
ii. solidary co-creditor/s
- in case of novation, compensation, confusion, remission- Art. 1215 par. 2
- prejudicial acts prohibited- Art. 1212
- assignment of rights not allowed- Art. 1213
b. Solidary debtor in relation to:
i. common creditor
- obligation to perform- Art. 1207
- in case of novation, compensation, confusion, remission by a creditor-
Art. 1215 par. 1
ii. solidary co-debtor
- in case of payment by a co-debtor- Art. 1217, 1218, 1220, 1219
- in case of fortuitous event- Art. 1221
12. Cases
13. Jaucian v. Querol, 38 Phil. 718 (1918)
14. RFC v. CA, O.G. No. 6, p. 2467
15. Quiombing v. CA, 189 SCRA 325 (1990)
16. Inciong v. CA, 257 SCRA 578 (1996)
17. Vigilla v. Phil. College of Criminology, Inc., G.R.
200094, June 10, 2013
18. Cruz v. Sps. Basister, G.R. No. 196576, January 30, 2012
19. Diamond Builders v. Country Bankers, G.R. No.
171820, December 13, 2007
20. 20.
4. Defenses available to a solidary debtor against the creditor- Art. 1222
a. Types
i. those derived from the nature of the obligation
ii. personal defenses
iii. defenses pertaining to his share
iv. those personally belonging to the other co-debtors
b. Effects
21. Cases
22. Inchausti v. Yulo, supra
23. Alipio v. CA, 341 SCRA 441 (2000)
24.
 25.
C. Joint Indivisible Obligations
26.
1. Concept
i. Distinguished from Joint Obligations
ai. Distinguished from Solidary Obligations
2. Indivisibility distinguished from solidarity- Art. 1210
3. Effects- Art. 1209
a. Liability for damages in case of breach- Art. 1224
27.
28.
V. Divisible and Indivisible Obligations
29.
A. Divisible Obligations
1. Concept
2. Effects- Art. 1223, 1233
30.
B. Indivisible Obligations
1. Concept
a. Distinguished from solidary obligations
31. Case
32. Capalla v. COMELEC G.R. 201112, October 23, 2012
2. Kinds
a. Natural- Art. 1225 par. 1
b. Legal- Art. 1225 par. 3
c. Conventional- Art. 1225 par. 3
3. Presumptions
a. Of indivisibility- Art. 1225 par. 1
b. Of divisibility- Art. 1225 par. 2
4. Divisibility and indivisibility in obligations not to do- Art. 1225 par.
3 5. Effects- Art. 1223, 1233, 1224
- see Joint Indivisible Obligations
6. Cessation of indivisibility
33.
34.
35. VI. Obligations with a Penal Clause
36.
A. Concept
37.
1. Principal vs. Accessory Obligation
2. Distinguished from Conditional Obligations
3. Distinguished from Alternative Obligations
4. Distinguished from Facultative Obligations
5. Distinguished from Guaranty
38.
 39.
B. Kinds of Penal Clause
40.
1. As to effect
a. Subsidiary
b. Complementary
2. As to source
a. Conventional
b. Legal
3. As to purpose
a. Punitive
b. Reparatory
41.
C. Demandability of Penalty- Art. 1226 par.
2 42.
D. Effects of Penal Clause
43.
1. Substitute for indemnity for damages and payment of interest- Art. 1226
44. a. Exception- Art. 1226
45. Cases
46. Makati Dev’t Corp. v. Empire Insurance Co., 20 SCRA 557 (1967)
47. Antonio Tan v. CA, 367 SCRA 571 (2001)
48. Country Bankers Insurance vs. CA, GR. 85161, Sept 9, 1991
49. 49.
2. Not exempt debtor from performance- Art. 1227
a. Exception- Art. 1227
3. Creditor cannot demand both performance and penalty at the same time-Art. 1227
a. Exceptions- Art. 1227
4. Creditor cannot collect other damages in addition to penalty- Art. 1226
a. Exceptions- Art. 1226
50.
E. When penalty shall be equitably reduced- Art. 1229
51.
F. Nullity of Principal Obligation or Penal Clause
1. Effects- Art. 1230
2. Rationale
52.
 53. Chapter 4. Extinguishment of Obligations
54.
55. I. Modes of Extinguishment- Art. 1231
56.
A. Payment or Performance
B. Loss or Impossibility
C. Condonation or Remission
D. Confusion or Merger
E. Compensation
F. Novation
G. Other Causes
57.
58. II. Payment or
Performance 59.
A. Concept- Art. 1232
60.
B. Requisites
61.
1. Who can pay
a. in general
b. third person who is an interested party
i. meaning of “interested party”
ii. effects- Art. 1302[3]
c. third person who is not an interested party but with consent of
debtor i. effects- Art. 1302[2], 1236 par. 1
62. d. third person who is not an interested party and without
knowledge or against the will of the debtor
i. effects- Art. 1236 par. 2, 1237, 1236 par.1
63. e. third person who does not intend to be reimbursed- Art. 1238
f. in obligation to give- Art. 1239, 1427
64. i. effect of incapacity
g. in case of active solidarity- Art. 1214
65.

80.

69. 83.
2. To requisites
whom c. third person- Art. 1241 par. 2
payme 67. i. requisites
nt may 68. ii. when proof of benefit not required- Art. 1241 par.
be 3, 1242
made d. in case of active solidarity- Art. 1214
a. in
gen 3. What is to be paid (“Identity”)
eral a. in general
- b. in obligations to:
Art 70. i. give a specific thing- Art. 1244
. 71. ii. give a generic thing- Art. 1246
124 72. iii.. pay money- Art. 1249, 1250; R.A. 529, R.A. 4100
0 73. Cases
b. inc 74. Arrieta v. NARIC, supra
apa 75. Kalalo v. Luz, 34 SCRA 377 (1970)
cita 76. St. Paul Fire and Marine Insurance v. Macondray,
ted 70 SCRA 122 (1976)
per 77. Papa v. Valencia, 284 SCRA 643 (1998)
son 78. PAL vs. CA 181 SCRA 557 (1990)
- 79.
Art c. payment of interest- Art. 1956
.
124 4. How is payment to be made (“Integrity”)
1 a. in general- Art. 1233
par 81. General Rule: Partial payment is not allowed- Art. 1248
.1 82. Exceptions:- Art. 1248
66. i. b. substantial performance in good faith- Art. 1234
84
.

96.

97.

85.

86.

92. 91.
 a. in general- Art. 1169
c. b. see Chapter 2: Delay
6. Where payment is to made- Art. 1251 par. 1
a. if no place is expressly designated- Art. 1251 par. 2 to par. 4
7. Expenses of making payment- Art. 1247

C. Application of Payments

1. Concept- Art. 1252

87. Cases
W 88. Reparations Commission v. Universal Deep Sea
h Fishing, 83 SCRA 764 (1978)
e 89. Paculdo v. Regalado, 345 SCRA 134 (2000)
n 90. 90.
2. Requisites
p 3. Rules in application of payments- Art. 1252, 1253
a a. if rules inapplicable and application cannot be inferred- Art. 1254
y i. meaning of “most onerous to debtor”
m
d.e D. Payment by Cession
n
t 1. Concept- Art. 1255
93. Case
i
s 94. DBP v. CA, G.R. No. 118342, January 5, 1998 95.

2. Requisites
t
3. Effects
o
E. Dation in Payment
b
e
1. Concept- Art. 1245
a. distinguished from Payment by Cession
m
98. Case
a
99. Development Bank of the Philippines vs. Court Of Appeals,
d
e G.R. No. 118342, January 5, 1998.

100. 100.
 2. Requisites
3. Effects
101. Case
102. Filinvest Credit Corporation vs. Philippine Acetylene, GR L-
103. 50449, Jan 1982
104.
F. Tender of Payment and Consignation
105.
1. Tender of Payment
a. Concept
b. Requisites
2. Consignation
a. Concept
i. purpose
b. Requisites
i. when tender and refusal not required- Art. 1256 par. 2
ii. two notice requirement- Art. 1257 par. 1, 1258 par. 2
106. -effects of noncompliance
c. Effects- Art. 1260 par. 1
d. Withdrawal by debtor before acceptance by creditor or
107. approval by court; effects- Art.1260 par. 2
e. Withdrawal by debtor after proper consignation- Art. 1261
i. with creditor’s approval; effects
ii. without creditor’s approval; effects
f. Expenses of consignation- Art.1259
108. Cases
109. De Guzman v. CA, 137 SCRA 730 (1985)
110. TLG International Continental Enterprising, Inc.
v. Flores, 47 SCRA 437 (1972)
111. McLaughlin v. CA, 144
SCRA 693 (1986)
112. Soco v. Militante, 123
SCRA 160 (1983)
113. Sotto v. Mijares, 28 SCRA
17 (1969)
114. Chan vs. CA (March 3, 1994, 230 SCRA)
115. Meat Packing Corp vs. Sandiganbayan (June 22,
2001, 359 SCRA)
116. Pabugais v. Sahijwani, G.R. No. 156846,
February 23, 2004
117. Spouses Cinco v. CA, G.R. No. 103068, June
22, 2001
118. 118.
 119. 119.
BI. Loss or Impossibility
120. 120.
A. Loss of Thing Due
121.
1. Concept- Art. 1189[2]
2. Kinds
a. As to extent
i. Total
ii. Partial
3. Requisites- Art.
1262
4. Presumption- Art. 1265, 1165
a. when not applicable
5. Effects
a. in obligation to give a specific thing- Art. 1262, 1268
b. in obligation to give a generic thing- Art. 1263
c. in case of partial loss- Art. 1264
d. action against third persons- Art. 1269
122. Case
123. Gaisano v. Insurance Company, G.R. No. 147839, June 8, 2008
124. 124.
B. Impossibility of
Performance 125.
1. Concept- Art. 1266, 1267
2. Kinds
a. As to extent
i. Total
ii. Partial
b. As to source
i. legal
ii. physical
3. Requisites- Art. 1266
4. Effects
a. in obligations to do- Art. 1266, 1267, 1262 par. 2 (by analogy)
i. “impossibility” distinguished from “difficulty”
126. Cases
127. Occeña v. CA, 73 SCRA 637 (1976)
128. Naga Telephone Co. v. CA, 230 SCRA 351 (1994)
129. PNCC vs. CA, GR 116896, May 5, 1997
130.
131. b. in case of partial impossibility- Art. 1264
132.
 133.
134. IV. Condonation or
Remission 135.
A. Concept
136.
B. Kinds
137.
1. As to extent
a. Total
b. Partial
2. As to form- Art. 1270 par. 1
a. Express
b. Implied
138.
C. Requisites
139. a. when formalities required- Art. 1270 par. 2
140. Case
141. YAM vs. CA, G.R. No. 104726, February 11, 1999.
142.
D. Presumptions- Art. 1271, 1272, 1274
143.
E. Effects
144.
1. in general
2. in case of joint or solidary
obligations 145.
F. Governing Rules- Art. 1270
146.
G. Renunciation of Principal or Accessory
Obligation 147.
1. effects- Art. 1273
2. rationale
148.
V. Confusion or Merger of Rights
149.
A. Concept
150.
 B. Requisites
151.
C. Effects
152.
1. in general- Art. 1275
2. in case of joint (Art. 1277) or solidary obligations
153.
D. Confusion in Principal or Accessory Obligation- Art.
1276 154.
155. VI. Compensation
156.
A. Concept- Art. 1278
157. Case
158. Bangko Sentral v. COA, G.R. No. 168964, January 23, 2006
1. Distinguished from Confusion
159.
B. Kinds
160.
1. As to extent
a. Total
b. Partial
2. As to origin
a. Legal
b. Conventional- Art. 1279 inapplicable, 1282
c. Judicial- Art. 1283
d. Facultative
161.
C. Legal Compensation
162.
1. Requisites- Art. 1279, 1280
a. “due” distinguished from “demandable”
163. Cases
164. Gan Tion v. CA, 28 SCRA 235 (1969)
165. BPI v. Reyes, 255 SCRA 571 (1996)
166. PNB v. Sapphire Shipping, 259 SCRA 174 (1996)
167. Silahis Marketing Corp vs. IAC (Dec 7, 1989, 180
SCRA) 168. BPI vs. CA (GR 116792, March 29, 1996, 255
SCRA) 169. UCPB v. CA, G.R. No. 126890, April 02, 2009
170.
2. Effects- Art. 1290, 1289
171.
D. When Compensation is Not Allowed- Art. 1287,
1288 172.
E. Compensation of Debts Payable in Different Places- Art.
1286 173.
F. Effect of Nullity of Debts to be Compensated- Art.
1284 174.
G. Effects of Assignment of
Credit 175.
1. with consent of debtor- Art. 1285 par. 1
2. with knowledge but without consent of debtor- Art. 1285 par. 2
 3. without knowledge of debtor- Art. 1285 par. 3
a. rationale
176.
177. VII. Novation
178.
A. Concept- Art. 1291
179.
B. Kinds
180.
1. As to form
a. Express
b. Implied
2. As to origin
a. Conventional
b. Legal
3. As to object
a. Objective or Real
b. Subjective or Personal
181.
C. Requisites- Art. 1292
182. Cases
183. Millar v. CA, 38 SCRA 642 (1971)
184. Dormitorio v. Fernandez, 72 SCRA 388 (1976)
185. Magdalena Estate v. Rodriguez, 18 SCRA 967 (1966)
186. Reyes v. Secretary of Justice, 264 SCRA 35 (1996) \
187. Conchingyan vs. RB Surety and Insurance (June 30, 1987)
188. Broadway Centrum Condominium Corp
vs. Tropical Hut (July 5, 1993)
189. California Bus Line vs. State Investment
(GR 147950, December 11, 2003
190. Ong v. Bognabal,, G.R. No. 149140, September
12, 2006
191. Sps. Reyes v. BPI Family, G.R. No. 149840,
March 31, 2006
192.
D. Effects
193.
1. in general- Art. 1296
2. when accessory obligation may subsist- Art.
1296 194.
E. Effect of the Status of the Original or New
Obligation 195.
1. nullity or voidability of original obligation- Art. 1298
2. nullity or voidability of new obligation- Art. 1297
3. suspensive or resolutory condition of original obligation- Art. 1299
 196.
F. Objective Novation
1. meaning of “principal
conditions” 197.
G. Subjective
Novation
198.
1. By change of debtor
a. Expromision
i. requisites- Art. 1293
ii. effects- Art. 1294
b. Delegacion
i. requisites- (vs. Art. 1293)
ii. effects- Art. 1295
199. Cases
200. Garcia v. Llamas, 417 SCRA 292 (2003)
201. Quinto vs. People, G.R. No. 126712, April 14, 1999.
202. 202.
2. By change of creditor: Subrogation of a third person in the rights of the
creditor- Art. 1300
203. a. Conventional subrogation
i. requisites- Art. 1301
ii. distinguished from Assignment of Credit
iii. effects- Art. 1303, 1304
204. Case
205. Licaros v. Gatmaitan, G.R. No. 142838,
August 9, 2001. 206.
207. b. Legal subrogation
i. requisites
ii. when presumed- Art. 1302
iii. effects- Art. 1303, 1304
208. Cases
209. Astro Electronics Corp. vs. Philippine Export And
Foreign Loan Guarantee Corporation, G.R. No. 136729,
September 23, 2003
210. Metrobank v. Rural Bank of Gerona, G.R. No.
159057, July 5, 2010