LAW 01: LAW ON OBLIGATIONS AND CONTRATS

Obligations – juridical necessity to give, to do, or not to do.

ELEMENTS OF OBLIGATION:
 Active Subject – Creditor/Obligee
 Passive Subject – Debtor/Obligor
 Prestation – Object/Subject Matter
 Efficient Cause – Legal/Juridical Tie
SOURCES:
1. Law – there should be a law, can’t be presumed.
2. Contracts – Meeting of minds > Offer > Accepted
3. Quasi-Contracts – no meeting of minds
a. Solutio Indebiti – undue payment
b. Negotiorum Gestio – unauthorized management.
4. Delicts (Crimes) – acts or omissions punishable by law, if accused:
a. Convicted – civil & criminal obligation.
b. Acquitted – civil obligation only.
 Did not commit act, no civil obligation
5. Quasi-Delicts – tort, culpa, negligence.

  Start Result
Quasi-Contracts Lawful Benefit
Quasi-Delicts Lawful Injury/Damages
Delicts Unlawful Injury/Damages

TO GIVE: (POSITIVE, REAL)

 Whether specific or generic, you can’t go to the court for specific performance in case of
refusal.
 Specific – CAN’T be extinguished through other parties.
 Generic – CAN be extinguished through other parties.
TO DO: (POSITIVE, PERSONAL)
 Specific performance by court NOT allowed in case of refusal, ONLY damages are
allowed because of breach of contract.
NOT TO DO: (NEGATIVE, PERSONAL)
 Anything done shall be undone at the Debtor’s expense.
FRUITS:
 Determinate Thing: right belongs to Creditor from the time the obligation to deliver
arises.
TIME OBLIGATION TO DELIVER ARISES:
 With Suspensive Condition – from the time the condition is fulfilled.
 With period; with suspensive effect – when period arises.
 Without period and condition – upon perfection of the contract (meeting of minds).
DELIVERY:
CONSTRUCTIVE:
 Traditio Symbolica
 Traditio Longa Manu – mere consent or agreement.
 Traditio Brevi Manu – objects is already in the hands of the debtor.
 Traditio Constitutum Posesorium – vendor continues in possession.
 Quasi-Traditio – with documents.

DAMAGES – harm doe and the sum of money that can be reovered.
SOURCES:
1. FRAUD (DOLO)
a. Causal Fraud (Causante) – voidable
b. Incidental Fraud (Incidente) - valid
2. NEGLIGENCE (CULPA)
a. Contractual – with existing contract.
b. Aquiliana – without existing contract.
c. Criminal – with or without existing contract.
DILIGENCE:
 As required by law
 As stipulated by parties
 Absence of 1 & 2, diligence of a good father of a family.

DEGREE OF DILIGENCE
Stipulated Increase Valid
by parties Decrease Void
Common Stipulated: GFF Void
Carrier Required by Law: utmost care Extraordinary
Agency Req. by Law: extraordinary Valid
Stipulated: GFF Diligence
 GFF
GENERAL RULE: “No one is liable in fortuitous events.”
Except:
 When law so provides
 When parties stipulate
 Nature of the obligation requires assumption of risks. (Example: Insurance)

 Res perit Domino

“The thing perishes with the owner”
3. DELAY (MORA)
a. Solvendi (Debtor)
 Ex re – real obligation, to give,
 Ex Persona – personal obligations, to do.
b. Accipiendi (Creditor)
c. Compensatio Morae – both debtor and creditor.
d. Contravention of Tenor – violation of terms.
GENERAL RULE: “No demand. No delay”
Except:
 When law so provides
 Contract stipulates
 Time is of the essence
 Demand would be useless
 Reciprocal obligation
KINDS: (MENTAL)
 M – Moral
 E – Exemplar
 N – Nominal
 T – Temperate
 A – Actual/Compensatory
 L – Liquidated
Liab./Responsibilit Demandable Court-Reduce
y
Fraud √ ×

Negligence   √ √

DEBT:
 Oral Principal (√) Interest (× ) VOID

Written Principal (√ ) Interest (√ )  

 “No delay. No penalty.”

 The creditor can’t be compelled to accept partial payment. Except: if there is a
stipulation.

 Prima Facie – “Disputable/Assumption”

RIGHTS OF CREDITOR:
1. Exact fulfillment/to demand payment = court.
2. Exhaust the properties of debtor. EXCEPT: from the execution
Write attachment > Public Sale > Proceeds
3. Accion Pauliana – to rescind. To impugn (question/challenge) the acts of the debtor.
 Designed to defraud creditor.
 Creditor deprived right to enforce claim.
4. Accion Subrogatoria – to exercise rights of the Debtor.
ACTS OF DEBTOR:
    To Rescind:
Donates (gratuitous) Donee: BF (√ ) GF (√ )

Sells (Onerous) Buyer: BF (√ ) GF (×)

EXCEPT: if there are remedies

KINDS OF OBLIGATIION:
1. Demandable at once
 Pure/Simple – no period/condition
 Resolutory – with condition
 With resolutory effect – with period.
2. With a period
 Benefit of both creditor & debtor.
 Cannot be demanded before due date, court can ONLY fix period.
3. With Condition
4. With Condition and period
“WILL IT HAPPEN?”

  Fulfillment of Obligation
  Before After
 MAYBE (not sure):
Condition    
 Suspensive No Obligation Obligation arises
Obligation Obligation end
 Resolutory arises (ext.)
YES (sure): Period    

 Condition must not be impossible and not contrary to law, morals, public policy,
public order, and good customs.
FULFILLMENT OF CONDITION:
1. Potestative – depends on sole will of one of the parties.

If Debtor: Suspensive: VOID Resolutory: VALID

If Creditor: Suspensive: VALID Resolutory: VALID

2. Casual – depends on chance (valid) or third party (valid).

3. Mixed – depends on:
 Will of one of the parties & third party (VALID).
 Will of one of the parties & chance (VALID).
 DEEMED FULFILLED PRINCIPLE: “When the debtor voluntarily prevented the
fulfillment of the condition, the condition is deemed fulfilled.”
  Pending fulfillment: rights
  Principal Fruits
Resolutory CR DR
Suspensive DR CR
SUBJECT MATTER: (Before Fulfillment)

LOST Fortuitous Event: EXTINGUISHED

  Fault of DR: LIABLE (Value + Dameges)
IMPAIRED Fortuitous Event: CR BEARS LOSS
Fault of DR: LIABLE (Spec.Per. +
  Damages)
IMPROVE
D By Nature: CR BEARS IMPROVEMENT
  Efforts of DR: DR given right to usufruct

DEBTOR DEPRIVED OF PERIOD: (IGIVA)

 I – Debtor INSOLVENT (total or partial)
 G – Fails to GIVE (guaranty or security).
  I – guaranty or security: IMPAIRED (fault DR or lost (FE/fault of DR).
 V – DR VIOLATES undertaking.
 A – DR attempts to ABSCOND.

 Prestation "Choice"
 
Alternative Obligation 2 or more DR. unless stipulated

Facultative Obligation 1 (with substitute) Debtor if stipulated

Conjoint Obligation 2 or more Fulfillment: ALL

Obligation with a penal cause    

Obligation Liable:
    Exting? Damages?
ALTERNATIVE FE: (×) (×)

  Fault-DR (×) (×)

VS.      

  FE: (√) (×)

FACULTATIVE Fault-DR (×) (√)

2 OR MORE DEBTOR OR CREDITOR

1. JOINT – “to each his own”
 If silent, presumed joint.
2. SOLIDARY – “all for one, one for all”
 When the law so provides or stipulated.
MODE OF EXTINGUISHMENT OF OBLIGATION:
1. PAYMENT OR PERFORMANCE
 By Whom:
 Debtor, representative/agent, estate (executor/admin)
 Third Person (interested in fulfillment of obligation liable if principal
debtor can’t pay)
 To Whom:
 CR., representative/agent. Estate (executor/admin)
 Third Person (redounded to the benefit of the Creditor)
 Presumed Benefit:
CR/DOUBT: burden of proof = DR

Except: Ratification, Subrogation, Estoppel

  When:

 
Paid before maturity:
 DR "aware" of period
 DR "not aware" of
period
On or After Maturity (not aware
Principal/Recovery?
 
(×) - waiver of right to period
(√) + interest + fruits
(×) Only interest + fruits

 Where:

To give specific thing:

 With stipulation Place as stipulated
 Without stipulation Where object is located @perfection
of contract
 
To give generic thing or to pay money:
 With stipulation Place as stipulated
 Without stipulation Where debtor resides

 How:
To pay (money):
 With stipulation Currency as stipulated
 Without stipulation Legal Tender
 

To give:
 Specifi
c As stipulated, no substitute
 Generi
c As stipulated, neither inferior/superior
To do:  A stipulated
 If poorly done: undo @the expense of the
debtor.
 SPECIAL FORMS OF PAYMENT:
A. Application of payment
 Gives DR privilege (right to choose)
 2 or more obligation is due
 If silent: apply proportionately
B. Dation en payment
C. Payment by Cession
D. Tender of payment and Consignation