CHAPTER 1: GENERAL PROVISION

ARTICLE 1156
“An obligation is a juridical necessity to give, to do, or not to do”

 Nature of Obligations Under Civil Code

 Civil Obligations (based on the positive law) examples:

 Loan

 Natural Obligations (voluntary) examples:

 obligation to pay interest for use of money, even if not agreed upon in writing.

 duty to support natural or spurious children (even if not recognized voluntarily or

by judicial compulsion and even if there is a judgment denying recognition).

 giving of material and financial assistance to children upon their marriage.

 D voluntarily pays C with the knowledge that his obligation to pay has prescribed.
the reimbursement by the debtor to a third party who paid his prescribed debt to
the creditor without his knowledge or against his will;[4] as in: D voluntarily
reimburses T, who paid C even if the obligation to pay has prescribed.

 Both civil and natural obligations example:

 Molly is the maker of a promissory note with Polly as the payee for
Php200,000.00. If Molly does not pay on due date, Polly can enforce payment by
filing a court action. If Polly does not file a court action against Molly within 10
years from due date which is the prescriptive period for actions upon a written
contract, Polly losses the right to enforce payment by court action. However, if
Molly voluntarily makes the payment to Polly although the obligation has
prescribed, Molly will no longer be allowed to recover the payment because in
equity and moral justice, she still owed Polly the amount of Php200,000.00.
 Essential requisites of an obligation examples:

 Romeo executed a contract of loan to borrow money from Juliet whom he wishes
to spend in courting Juliet. Juliet in turn agreed and lend money to Romeo. In the
preceding example, Romeo is the passive subject while Juliet is the active subject.
Their prestation is the money being borrowed while their efficient cause is the
contract of loan. All of the essential requisites of an obligation are present; hence
such contract creates an obligation.

 Nanghiram yung jowa ko ng pera pambili ng pc set since kulang yung perang
meron siya na pambili, syempre as a mabait na jowa binigyan ko sya ng pera
since need nya din para sa school. Then nagkaroon kami ng verbal agreement na
dadagdagan ko pambili mo di kita ipepressure magbayad agad basta sumunod sya
sa mga kondisyons ko hanggat sa matapos nyang bayaran yung utang nya sa akin.

 Commission na drawing, may nagchat sa akin sa messenger na gusto daw

magpadrawing and tinanong how much yung ganito kalaki and ganito ang pic
then sinabi ko na 3,000 per pic and nagkaroon na ng deal and how long ko
magagawa yung drawing, in the 1st scenario po si customer yung magdedemand
ano ba ang dapat na idrawing kunwari ako yung nagdadrawing, the customer has
the power to deman ano ang dapt kong drawing or I have to fullfill the duty na
nademand ni customer, then if the drawing is done na magkakabaliktad na 2 nd
scenario na is me as an artist has the power to demand payment to the customer
and she has the duty to pay the right amount as what we agreed in our
conversation.

 Form of Obligations examples:

 Oral

 Writing

 Obligation, Right, and Wrong Distinguished:

 Kinds of Obligations according to Subject Matter:

 Real Obligations (Obligation to give)

  Obligasyon kong ibigay yung sukli kay mama na pinambili ko ng gamit sa
school.

 Ideliver yung mga order sa akin sa shopee ng maayos.

 Personal Obligations (Obligation to do or not to do)

o Positive Personal Obligation (to do, render service)

 For us students our obligation is to study.

 Me as a daughter I am obliged to do laundry every week.

 For the teachers, they are obliged to teach.

 For the government, they are obliged to protect and give the citizens what
they need.

 This pandemic we should wear face mask, face shield and do the social
distancing.

o Negative Personal Obligation (not to do)

 Not to violate rules / policies of the school.

 Not to violate laws.

 Not to go out on the said age of the government.

Civil Obligations- positive law, enforce

Ex. Loan – obliged to pay
Natural Obligations- cannot demand compliance, voluntarily
Ex. Quasi contract, Negotiorum gestio
Essential requisites:
Passive- debtor/obligor/duty
Active-creditor/oblige/right
Object/Prestation-observe by the debtor, giving, doing ot not doiing
Juridical or legal tie- bind the party
Ex. Dreian bound himself to fix a laptop for Shaniah. Here, the passive is dreian who has a duty
to do an obligation and the active subject is shaniah who has the right to demand an obligation. The
laptop is the object and there is juridical tie.
If dreaian already fixed the laptop of shaniah, then, shaniah will become a passive because he has
an obligation to pay dreian.
Obligation, right and wrong
Ex. Shaniah failed to pay dreaian for the laptop dreian already fixed under their obligation where
dreian has the legal right and shaniah who has the correlative legal obligation to pay dreian. Dreian has
the right to be paid the agreed compensation because it is base on their contract. Failure on one of them to
do their obligation gives the other the right to recovery indemnity for the loss or damage because he
violates the other party’s right.
Kinds of obligation according to subject matter
Real obligation- obligation to give
Ex. Czarina (seller) binds himself to deliver a skin care product to Aleah (buyer)
Personal obligation- to do or not to do
Positive personal obligation- to do
Ex. I am obliged to study to pass the test tomorrow
Negative personal obligation- not to do/prohibition
Ex. I am obligated not to violate school policies

ARTICLE 1157
“Obligation arises from law, contracts, quasi-contracts, acts or omissions punished by
law, and quasi-delicts” (important provision)

 Source of Obligations

 Law

 Obligations to pay taxes.

 Obligations of the parents to support their children.

 Law does not require us to vote. (Special laws)

 The law does not require us to financially support churches and religious
institutions. (Special laws)
  The law does not require us to support our friend. (Special law)

 Contracts

 Obligation to pay loan with an agreement.

 Quasi-Contracts

 May Nakita kang wallet sa daan you are obliged to give it to the authorities.

 Ibalik yung parang sobraa galling sa utang.

 Ibalik yung pera na mistaken na ibinigay ng ibang tao lalo na kung wala
naman sayong nagutang.

 Nagbayad ka ng pamasahe at sobrang sukli, dpat ibalik kay manong driver.

 Nakita mo yung gamit ng kaibigan mo sa bag mo, you are obliged to give it
back to her kasi hindi naman sayo yun kaya dapat lang na ibalik mo.

 Crimes or Acts or Omission punished by Law

 Carnapper, obliged to return the car

(Civil liability arising from criminal offense) – for damages

 Holdapper, obliged to return the things he gets from other people

 Quasi-Delicts/ torts (fault or negligence)

 Ako may alaga akong aso at nakawala at nakadamage ng isang paninda sa

labasan dahil sa nabangga ito ng aso ko.

 May anak ako at napabayaan ko sa labas na maglaro laro di ko nalaman agad

na naglalaro na pala sila ng apoy at sa kasamaang palad nagkaroon ng sunog
dahil sa dun sa mga batang naglalaro ng apoy.

 Galing ako sa isang bar at sobra akong nalasing dahil sa napasobra ng inom at
dahil wala akong kasama at walang ibang maghahatid sa akin ako na mismo
nagdrive pauwi, at dahil sa kalasingan ako ay nakabangga ng isang matanda
na tumatawid sa kalsada. Then I am liable for the damages na nangyare dahil
sa nagdrive ako ng lasing.

Sources of obligation
Law
 Ex. Obligation to follow the code of ethics in work
Contract
Ex. The obligation of the event manager to give a service to her client based on their agreement.
Quasi contracts/ has the right to recover-contract
Ex. The obligation to return money from the excess of fare
Acts or omission punishable by law/delicts
Ex. The obligation of the holdupper to return the thing he stole
Quasi-delicts or torts- fault, negligence, no contractual
Ex. The obligation of the owner of a dog to the person who bait by the dog for the damage it may
caused because there is negligence to the part of the owner.

ARTICLE 1158
“Obligation derived from law are not presumed. Only those expressly determined in this
Code or in special laws are demandable, and shall be regulated by the precepts of the law
which establishes them; and as to what has not been foreseen, by the provisions of this
Book” (law that must be expressly provided by law)

 Special Laws

 Revised Penal Code, National Internal Revenue Code, Securities Regulation

Code, Revised Corporation Code, Negotiable Instruments Law, Insurance
Code, Labor Code.

 A private school has no legal obligation to provide clothing allowance to its

teachers because there is no law which imposes this obligation upon schools.
But a person who wins money in gambling has the duty to return his winnings
to the loser. This obligation is provided by law.

 A private school has no legal obligation to provide clothing allowance to its

teachers because there is no law which imposes the obligation upon schools.
However, parents are under obligation to support their children. This
obligation is expressly provided by article 195 of the Family Code.

 An employer has no obligation to furnish free legal assistance to his

employees because no law requires this, and therefore, an employee may not
recover from his employer the amount he may have paid a lawyer hired by
 him to recover damages caused to said employee by a stranger or strangers
while in the performance of his duties.

– they are not presumed

Legal obligations
They must be expressly provided by law
Ex. Obligation of the companies to pay his worker’s over time. The company has no obligation to
pay the employee who go to work earlier than the agreed time.

ARTICLE 1159
“Obligation arising from contracts have the force of law between the contracting parties
and should be complied with in good faith”

 Kelby contracted Lor to sell illegal drugs in payment of the debt na meron sya
kay kelby, therefore it is void because it it contrary to the law.

 Me as having a big portion of land / lot na hindi naman nagagamit, I decided

to sell it to my sister who wants to build her own home soon, so since
magkapatid naman kami through verbal lang yung contracts namin and we
must comply with in good faith.

Compliance in Good faith

Ex. Leah agrees to sell his cat to yana. Neither party has no right to withdraw from the contract
without any justifiable reason, or escape from the obligation. Their agreement under the contract is the
law between leah and yana must be complied with in good faith

ARTICLE 1160
“Obligation derived from Quasi-contracts shall be subject to the provisions chapter 1”

 Kinds of Quasi - Contracts

 Negotiorum Gestio

 I am working sa Caloocan pero yung house ko is nasa Bulacan at may alaga

akong aso at I am living at my own at di ko naalala na may bagyo pala dahil
nung umalis ako sobrang maaliwas ng lugar, at nung nasa office na ako to do
my task and I am too focused on the things na kailangan kong tapusin that day
at nabalitaan ko na sobrang lakas ng ulan sa Bulacan at yng place ko is bahain
at nakaimutan ko yung aso ko na nandun sa labas nakabantay, at sa
kabutihang palad may nagmagandang loob na kunin yung aso ko. Ngunit
 nagkaroon sya ng mga bruises dahil sa pagakyat nya sa gate namin. And I
have the obligation to help my neighbor for the injury that he got for saving
my dog.

 Solutio Indebiti

 In an online business most of the time the process of ordering is payment first
before delivering the product. Sometimes business owners are very tired and
madalas lutang na dahil sa dami ng orders, syempre mga chats, pagcheck ng
inventory lalo na kung ikaw lang magisang naghahandle if small business ka
lang then as a customer we order what we want on the specific brand, and then
the payment is already set then nagkaroon ng mistake si owner na at
nakadagdag sya ng isang product na hindi mo inorder or binayaran. And as a
customer aware ka na sobra yung nabigay sayo. We as a good citizen of the
Philippines and a supporter of small business we must give it back or pay it na
lang.

 Me as business owner in if my clients payed full cash and as I count it sobra

ng 2,000, I must return the excess to the customer.

 Other examples

 Dito po sa bahay isang beses po nangyare po ito sa amin na lalo na po nung

nauso po yung mga lutong bahay po then 1 time may dumating pong lecheflan
po sa bahay namin kilala po naman po namin sya then akala po namin
pamigay dahill akala po namin is may birthday po dahil madalas din po
magbigayan ng pagkain lalo nakapag may occasions, after po ng ilang oras
may naninigil na po. Yun po still kahit di pa po namin nakakain we accept the
food po and we plan also to eat the leche flan in dinner so we decided na lang
po to pay it even though we are not aware at first that we must pay it.

Quasi contract -without consent

-not properly a contract (no consent)
-prevent unjust enrichment
-fiction of law there is consent
-semi-contract
Negotiorum gestio- voluntary, without the consent or knowledge of the other
 Ex. Cleio went for a vacation and he left his house and didn’t bring his dog because it is
probihited in the beach. Due to heavy rain in their place the flood came along and the house of cleio is
affected. Due to concern of their neighbor, reah, take care of the dog in order for the dog not to drown.
But the dog bait the neighbor because the dog doesn’t know him and it incurred expenses.
In this case po, cleio has the obligation to reimburse reah’ s expenses although he did not give
consent to reah to save their dog, because cleio benefited from the act of reah who save a life of a dog.

Solutio Indebiti-there is no right to receive the thing delivered

-the thing was delivered through mistake
Ex. Aling nena sells an ice candy for 3 pesos per plastic. Lily buys 5 pcs which cost him 15
pesos. Lily gave 20 pesos to aling nena and lily receive a 10 pesos change. Lily knows that her change
was 5 pesos only so she must give the excess 5 pesos to aling nena.
Other examples of quasi contracts
Ex. Everyday, linda will stop over at lindo’s house to pick some wild chili in order for her to sell
it in their place. At the end of the month, lindo ask for the payment of wild chili to linda.
It is understood that they already create a contract by their act. Obligation on the part of linda to
pay lindo’s wild chili otherwise, she would be unjustly benefited at the expense of lindo.

ARTICLE 1161
Civil obligation arising from criminal offense shall be governed by the penal laws”

 Civil Liability

 Magna Kaw stole the bike of Suma Kay. If Magna Kaw is convicted, the court
will order Magna Kaw 1) to return the bike of Suma Kay (2) to pay for any
damage caused to the bike (3) to pay such other damages suffered by Suma
Kay as a consequence of the crime.

 David driving fast in a school zone or over speeding, where he should drive
slowly dahil madaming tao or specifically students. Ken is crossing to the
pedestrian lane and unfortunately and in a miracle, he slightly hit by the car of
David and run away (hit and run) pero dahil sa gusto makasuhan ng family ni
ken ung nakabangga dahil may nabaling buto kay Ken nahanap nila na si
David ang nagdadrive nun. (1) Makukulong si David for overspeeding and
also sa pagbangga kay Ken (2) at kailangan nyang bayaran yung expenses ni
Ken sa Ospital.

Civil liability arising from crimes or delicts

-moral evil, material damage
-every person criminally liable is also civilly liable for damages
Exception: in crimes without material damage (kung walang damay na iba)
Ex. Drugs, Election
-arising from fault or negligence
Scope of civil liability
Ex. The thief stole the iphone of karen. If the thief is convicted the court will;

1. Restitution- return, if it can return (kung maibabalik pa)

Ex. To return the phone or pay its value if it is lost or destroyed

2. Reparation for the damage caused – if it can’t return, pay the amount to the victim

Ex. To pay for the damage caused to the phone

3. Indemnification for the consequential damages - Other damages, ex. Moral damages
(depress)

Ex. Pay other damages incurred by the thief to karen as a consequence of the crime

ARTICLE 1162
“Obligations derived from quasi delicts shall be governed by the provisions of Chapter 2,
Title XVII of this Book, and by special laws.”

 Requisites of Quasi – Delicts

 Mang Jo is drinking alcohol along with his friends, he is at his friend’s

house, after a couple of drinks when Mang jo is trying to stand dahil gusto
nya na umuwi nahilo sya ng bahagya at alam nya na sa sarili nya na lasing
sya. So while he was walking di nya sinasadya na mabasag nya yung paso
ng kapitbahay. In this case po he is obliged to pay for the damages because
of his negligence or fault.

Obligations arise from quasi delicts

- Act or omission which causes damage to another

Requisities of quasi delict

While playing volleyball in the street, clarenz hit the car parked in front of the house of Lito who
happened to be the owner of the car.
1.There must be an act or omission
Ex. Kicking the ball and hitting the car
 2.There must be fault or negligence
Ex. Clarenz and his friends must play farther in the car where lito parked so that they
didn’t hit the car

3. There must be damage caused:

Ex. The glass of the car was broken

4. There must be a direct relation or connection of cause and effect between the act
or omission and the damage and

Ex. KIcking the ball was the caused and the effect is hitting the car causing the
broken glass of the car.

5. There is no pre existing contractual relations between the parties

Ex. They didn’t know it would happen, there is no agreement

Crime Quasi delicts

Criminal or malicious intent or criminal negligence
Punishment
Public interest, State
Cannot compromise, Settled by the parties themselves
Guilt of the accused must be proved beyond reasonable
doubt
Criminal and civil liability
Negligence only
Indemnification of the offended party
Private interest
Compromise as any other civil liability
The fault of negligence of the defendant need only be
proved by greater evidence
Civil liability

WAG MALITO TANGINAMO!

Sources of law – primary : Constitution, Legislation, Administrative and executive orders, regulations
and rulings
secondary sources: Customs , Other sources
Sources of obligations- Law, contracts, Quasi contract, Delicts/Acts or omission punishable by law,
Quasi delicts
 CHAPTER 2: NATURE AND EFFECT OF OBLIGATIONS

ARTICLE 1163
“Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law or the stipulation of the parties
requires another standard of care.”

 Specific or Determinate Thing

 Wedding Ring with engraved name and date of the wedding.

 My cellphone

 Section shirt with my name at the back

 Customized things

 Generic or Indeterminate Thing

Specific/Determinate thing
- particularly designated
-individuality
-debtor cannot substitute it without the consent of creditor (kahit na same kind or quality, kahit na
superior at inferior)
- if there is consent, pwede
Ex. Serial number of 100 peso bill, breed of dog with specific name, Model of car with specific
plate number
Ex. Cedric obliged to give cellphone to yesha which is Oppo A5s 2020. But with the negligence
of cedric, he lost it. Cedric cannot give other phone to yesha if it is not Oppo a5s 2020 unless otherwise
yesha give consent to cedric.
Generic/Indeterminate
-Specie
-Same class
-Same kind
-the debtor can give/substitute any thing of the same class and of the same kind
 Ex. 100 peso bill, dog, car
Ex. Reigne’s obligation is to deliver to karl a cornetto ice cream which is out of stock. She can
substitute it by magnum because the item is in the same class, which is ice cream.

Duties of debtor in obligation to give a determinate thing

1. Preserve the thing
-real obligations
- diligence of a good father of a family
a. Diligence of a good father of a family – ordinary care
- average person exercises his own property
-standard, if no stipulation
b. Another standard of care
-Stipulation of the parties for another standard or care
- unless the law or the stipulation of the parties requires another standard of care
Ex. Extraordinary diligence as to common carrier as imposed by the law (safety of passengers,
public transportation)
-Presumption of negligence if extraordinary diligence is not followed based on stipulation
c. Factors to be considered
-depends upon the nature of obligation
-circumstances of the person, time and place
-General rule, the debtor is not liable if his failure to preserve a thing is not due to his fault but to
furtuirous event or force majeure
(di nya na kasalanan if may sakuna na hndi naman nya makontrol)
Ex. Pau binds herself to deliver to jac a painting that she made. Pending delivery, pau has the
obligation to took care of the painting with the diligence of a good father of a family. But the children of
pau keep playing in the place where pau put her paintings and in the end the painting was desolated.
Because of failure to exercise proper diligence, pau shall be liable to jac for damages. The accessory
obligation of pau to take care of the painting is demandable even if it is not mention in the contract.
D. Reason for debtor’s obligation
-to insure that the thing to be delivered would be the same condition as it was in contract
-if this is not present, the debtor would be able to be negligent all the time and is not liable for the
damages
2. Deliver the fruits of the thing
3. Deliver the accession and accessories
4. Answer the damages in non-fulfillment or breach
Duties of debtor in obligation to deliver a generic thing

1. Quality

2. Liable for damages in cause of fraud, negligence or delay

CHAPTER 3: DIFFERENT KINDS OF OBLIGATIONS

Section 1 - Pure and conditional obligations

 Article 1179
Every obligation whose performance does not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is demandable at once.
-yung mga obligasyon na hindi naka depende sa future or hindi sure na mga pangyayare o
mga past na hindi alam ng bawat parties ay demandable or kailangan nilang gawin agad
- walang certain days kaya demandable sya anytime.
-Pure obligations
Every obligation which contains a resolutory condition shall also be demandable, without
prejudice to the effects of the happening of the event
-Yung mga obligasyon na may resolutory condition ay demandable din anytime na hindi isina
alang alang kung anong mangyayare sa hinaharap
- Hanggat hndi pa nangyayare yung obligation, within the time may Karapatan mag demand
anytime si creditor
2 classifications of obligation:
 Primary obligation
 Secondary obligation
Primary
1. Pure and conditional obligations
2. Obligations with a period
3. Alternative and facultative obligations
4. Joint and solidary obligations
5. Divisible and indivisible obligations
6. Obligations with a penal cause
Secondary obligation
1. Unilateral and bilateral obligations
2. Real and personal obligations 3. Determine and generic obligations

Pure obligations
- Walang kondisyon/Not subject to any condition
- No specific date is mentioned for its fulfilment
- immediately demandable
-Duration is depend on nature of obligation and circumstances
-Upon demand of the creditor
Ex. I promise to give you 5,000 (no specific term or condition, therefore it is demandable )

Conditional obligations
- consequences are subject in one way or another (magagawa or hindi)
- Subject to condition Future or uncertain event Past and unknown
- Must not be impossible
Ex. Passing the subject oblicon (hindi mo sure kung makakapasa ka, pero hndi rin naman sya
imposibleng mangyare, sa future pa mangyayare)

Two principal kinds of condition

Suspensive condition
-conditon fulfilled, obligation arises
- If hindi mangyare, parang walang juridical tie
- may hope na mangyayare/magagawa yung obligation
Condition Precedent- earlier event/action
Condition Antecedent- thing/event that happened before
-Hindi ka makakpag demand hanggat hindi pa nangyayare yung obligation
ex. I (debtor) will give maria (creditor) a 10k pesos if she passed the major exam, the obligation
is demandable only the time maria take the exam and passed it.
Resolutory condition
- Condition is fulfilled, obligation extuingished
- consider yung juridical tie
- pwedeng magawa, pwedeng hindi gawin (terminate)
- Immediately demandable (anytime pwede mag demand)
- Kapag nafulfill na yung dapat gawin, nawawala na yung obligation
Ex. Cedric and yesha enters into a valid employment contract. The contract says that if the
employee commits a crime, it will be the end of the contract. Mr. Cedric can demand the
immediate leave of Yesha after the committed crime.
When obligation is demandable at once
1. When it is pure (any condition or any period)
2. when it is subject to a resolutory condition
3. When it is subject to a resolutory period
Past events unknowns to the parties
-Kapag hndi alam ng parties yung past events, hindi pa dapat gawin yung obligation sa present
ex. Binenta ni clyde and lupa na pamana sknya ng nanay nya kay alexa. Ngunit hndi nya alam na
may dapat pang bayaran na mga papeles sa lupa na naiwang utang ang nanay nya. Hindi nya
maibebenta ang lupa hanggat hndi pa nya binabayaran ang nasabing utang na hndi nya rin alam.
Kailangan nya muna mabayaran ang utang upang tuluyang mabenta ang lupa

Article 1180
When the debtor binds himself to pay when his means permit him to do so, the obligation
shall be deemed to be one with a period, subject to the provisions of article 1197
- Kapag kaya na bayaran ng obligor yung utang nya, ibig sabihin may period na nakalaan
para bayaran nya ito ( basta may kakayahan na yung debtor magbayad)
-Immediate demandable
-10 yrs. prescriptive period
When duration of period depends Upon the will of the debtor
Period
-Future and certain event
-Obligation either arises or extinguished (magagawa or hindi magagawa)
Ex. On march 10, sa katapusan
1. The debtor promises to pay when his means permit him to do so
-Duration of the period only (hndi naiiwan sknya yung obligation na magbayad ba or hndi kasi
bind naman tlga sya magbayad ang naiiwan lang is yung gaano katagal sya magbabayad)
-If hndi sla mag agree sa isa't isa court na ang bahala
2. Other cases
-when the debtor binds himself to pay "
"little by little"
"as soon as possible"
"from time to time"
"at any time I have money"
"in partial payments"
"when I am in position to pay"

Article 1181
In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the happening of the event which constitute the
condition
-ano ang effect kapag nangyare ang condition
- kapag nagawa or hindi yung condition, nakadepende sa kalalabasan ng mangyayare sa
nakalagay sa kondisyon
- future

Suspensive

- karapatan to demand once na mangyare yung obligation

ex. Makatapos ng pag aaral

Resolutory

- once tapos na yung condition tapos na rin yung obligation hndi na makakapag demand

Ex. Installment basis

1. Acquisition of rights - future and certain events (suspensive condition, cannot demand)
Ex. DJ bind himself to give 10,000 pesos to hazel if hazel can make icerry fall inlove.
2. Loss of rights already acquired (resolutory condition, can demand anytime the period as
long as hndi pa terminated)
Ex. Loraine binds himself to buy a laptop to coleen in an installment basis. Once the installment
payment is complete the obligation shall be extuingished.

Article 1182
When the fulfillment of the condition depends upon the sole will of the debtor, the
conditional obligation shall be void. If it depends upon chance or upon the will of a third
person, the obligation shall take effect in conformity with the provision of this code
-Pinauusapan na dito is yung fulfillment ng obligation, kapag will ng debtor ang
pinaguusapan or sya lang yung magdedesisyon kung kailan nya mafufulfill yung
obligation, VOID yun. Kasi dapat sya yung mag gagawa ng obligation once na sya yung
nagdesisyon parang illusionary lang yung obligation. Kasi hindi sya easily demandable.
Walang juridical tie na nangyare.
- If may involve naman na 3rd party in order to fulfill the obligation, mag take effect yung
obligation depende sa naging desisyon nung 3rd party (Court)
Potestative condition

- Suspensive in nature

- Sole will of one of the contracting parties

- Condition is dependent on either debtor/creditor

- Depende kung sno yung may will na ifulfill yung condition si debtor ba or creditor

Where suspensive condition depends upon will of the debtor (void)

- Yung debtor kasi pabor sakanya lagi na hndi gawin yung obligation

- Naturally inclined

Conditional obligation is void

Ex. I will pay the debt I have from you if I won in the lottery
Only the condition is void

- May chance kasi na void yung condition pero valid yung obligation

Ex. Leah borrowed to manuel a 5,000 pesos within 2 weeks. She also promise that she will pay
manuel after she win in a gamble which manuel agreed. Only the condition is void but the
obligation si valid.

Where suspensive condition depends upon the will of the creditor (valid)

- Kung naka depende naman kay creditor yung will VALID yung obligation.

- Kasi nga creditor is always interested

Ex. I will pay my indebtedness to you if you demand for it

Where resolutory condition depends upon will of debtor (valid)

 - Valid kasi nagiging baligtad yung character nila si debtor nagiging si creditor

Casual Condition (valid)

- Depende sa chance or will ng 3rd person nagiging valid yung obligation

Ex. A will give Php 30,000 to B, IF they won the case

Mixed Condition (valid)

- Depende sa chance partly and partly sa will ng 3rd person

Ex. I will give you my house if you marry Carolina

1. If napatunayan na papaksalan nya talaga si Carolina or may singsing na binigay

2. If pumayag na ung simbahan sya yung 3rd party.

Where suspensive condition depends partly upon will of debtor (valid)

- Depend upon the will of the debtor and partly upon the will of a third person

- If condition is depend upon the debtor the obligation is VOID.

- Condition is same upon the will of the debtor (sa kanya kasi naka laan kung matutuloy or
hindi yung obligation sa suspensive)

Article 1183
Impossible conditions, those contrary to good customs or public policy and those
prohibited by law shall annul the obligation which depends upon them. If the obligation is
divisible, the part thereof which is not affected by the impossible or unlawful condition
shall be valid.

- Eto yung mga kondisyon na hindi dapat gawin kasi imposibleng gawin or bawal sa
mata ng batas, or hindi nakakabuti para sa iba. Kung divisible yung obligation,
meaning partly ay hndi affected ng impossible obligation yung hndi affected ay
valid.

The condition not to do an impossible thing shall be considered as not having been
agreed upon

- Yung mga kondisyon na wag gawin yung imposibleng bagay ay valid or hindi
napagkasunduan
 - Suspensive condition

- Obligation already constituted (naipatupad na)

- Nag exist na yung impossibility nung time na naisapatupad yung obligation

Two kinds of impossible conditions

1. Physically impossible conditions

- Impossible in nature

Ex. I will pay you 20,000 if you carry your whole family

2. Legally impossible conditions

- Contrary to law

Ex. I will give you 100,000 if you walk in green lights in pedestrian lane.

Effect of impossible conditions

1. Conditional obligations void

- Impossible conditions annul the obligation

- Both condition and obligation are void

- If alam na ni obligor na hndi nya mafufulfill obligation nyaa, di na nya gagawin yun.

Ex. I will give you 15,000 if you spit your saliva in our teacher’s face

2. Conditional obligation valid

- Condition is negative

- Not to do an impossible thing

- It is pure and valid

Ex. I will give you 2,000 if you do not kill Ariana

3. Only the affected obligation void

 - If divisible

- Yung part na hndi affected ng impossible condition ay valid

Ex. I will give you 6,000 if you get my laptop in my locker, and a cellphone if you stab nikka

Valid- Obligation to give 6,000

Void- Obligation to give a cellphone because it is dependent upon an impossible obligation

which is stabbing nikka

4. Only the condition is void

- Obligation is pre-existing

- Magkahiwalay yung obligation saka condition, pasabit nalang yung condition

Ex. Pau borrowed 7k to Karl. If karl agreed to stole a phone to reigne before pau will pay him.

Void- condition to stole a phone from reigne

Valid- To pay karl 7,000

Article 1184
- To do

The condition that some event happen at a determinate time shall extinguish the obligation
as soon as the time expires or if it has become indubitable that the event will not take place.
-mawawala na yung obligation kapag nafulfill yung condition sa itinakdang oras kasi nga
determinate time may specific time lang, or if ever na hndi na sya magagawa sa time na
itinakda kasi imposible nang magawa
It refers to positive (suspensive) condition- it is the condition consists in the performance of an
act or the happening of an event at a determinate time also it is the obligation to do. ( ito yung
mga kondisyon or masususpend muna na saka mo makukuha ang nakalagay sa kontrata kapag
natupad mo yung napagkasunduan) the obligation extinguished or stop or ma end when:

1. As soon as the time expires without the event taking place- maaring mapasawalang bisa
na yung obligation kapag na reach na yung nasa kontrata na time tapos di pa nagagawa
ng obligor yung kundisyon.

2. As soon as it has become indubitable that the event will not take place although the time
specified has not expired. (indubitable is mga hindi na maawat na pangyayare. So
 maaring ma extinguished or ma stop na yung obligation kapag may hindi inaasahang
pangyayare ang mangyayare sa may obligor kahit di pa expired yung napagusapan sa
may kontrata in short hindi na magagawa ng obligor yung dapat na obligation nya )

Example:Lea (obligor) obliged herself to give jm (oblige) a brand new car if he got
1.00 in his all subject until his graduation.
So lea (obligor) is liable if jm (oblige) got the grade 1.00 in his all subject until his
graduation.
Lea (obligor) is not liable if jm got 1.25 grade when he is already graduated. In this
case, the time specified which is until his graduation so the condition is expired without
being fulfilled. The obligation is extinguished as soon as jm already graduated.
So if jm (oblige) decided to stop in studying the obligation is extinguished because it
has become indubitable that the condition will not take place.

Article 1185
-not to do

The condition that some event will not happen at a determinate time shall render the
obligation effective from the moment the time indicated has elapsed, or if it has become
evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may have
probably been contemplated, bearing in mind the nature of the obligation

- Magiging effective lang obligation kapag nasunod yung condition na sumunod sa

dapat na wag gawin *negative condition* kapag nagawa mo yun sa itinakdang
panahon or pwede rin na hndi mangyare yung kondisyon dahil sa ibang bagay
*fortuitous event* basta within the time na binigay.

- Kapag naman po walang time na binigay, iaassume na natupad na yung obligasyon

sa kung kelan nila napagisipan base na lang sa nature ng obligation. May mga
unexpected things po kasi na hndi maiiwasan bago ma fulfill yung obligation

Article 1185
refers to the negative condition- it is an event will not happen at a determinate time also it
is not to do. The obligation shall become effective and binding:

1. From the moment the time indicated has elapsed without the event taking place
 Dito kapag ka na expired o lumagpas na yung date sa kondisyon nila dun na
magiging effective yung napagusapan na obligation.

Example: Lito (obligor) obliged himself to give her daughter Ana (oblige) a ticket trip to
japan in the condition that Ana (oblige) will not be pregnant until she graduated college
at 2022.
So Ana already finished her studies in college of not getting pregnant in that case
the obligation of Lito (obligor) to her daughter Ana (oblige) to give a ticket trip to japan
becomes effective.

2. From the moment it has become evident that the event cannot occur although the time
indicated has not yet elapsed.

Dito naman kahit di pa lumalagpas or na eexpired yung napagusapan nyo na date

basta may di inaasahan na nangyare clear na di na mangyayare yung kung ano
dapat yung kondisyon nyo.

Example: Lito (obligor) obliged himself to give her daughter Ana (oblige) a ticket trip to japan in
the condition that Ana (oblige) will not be pregnant until she graduated college at 2022.
Before Ana (oblige) graduated had elapsed, she go in the doctor for her check-up because of her
irregular menstruation and the doctor said that the result of her irregular menstruation will lead to
her for having a no child. In this case, even before the lapse of 9 years it is clear that the
obligation has become effective because of the result of her check-up.  It is evident that Ana can
never be pregnant anymore so that the obligation of his father will be effective.

Article 1186
The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment

- Dito walang actual fulfillment by the debtor sa kanyang obligasyon pero the law
considered that it will be fulfilled because yung obligor voluntarily prevents its
fulfillment.

- Hindi makakatakas si obligor sa gampanin nya

Article 1186 refers to constructive fulfillment of suspensive condition- refers to an obligation

prevented by the obligor from happening.

There are 3 requisites for the application of this article.

1. The suspension must be suspensive

If di siya suspensive so hindi mo sya pwede e apply dito.

 2. The obligor actually prevents the fulfillment of the condition

Ito yung debtor is prinevent nya na agad para di mangyare yung condition and
also para di sya maging liable.

3. He acts voluntarily

Ito yung pinaka important na requisites kasi dapat voluntary yung kanyang
pagprevent nung obligation.

Intent to Prevent Compliance – The law does not require that the obligor acts with malice or
fraud as long as his purpose is to prevent the fulfillment of the condition. He should not be
allowed to profit from his own fault or bad faith. (so ito nga yung the laws considered nga kahit
walang actual fulfillment by the debtor dahil sa kanyang pagkukusa na ma prevent yung
fulfillment it is as is na nafulfill. Also sa article 1186 wala naman na mention na may malice or
fraud as long as the obligor purposes is to prevent the fulfillment of the condition and it is
voluntary)
Example: Erica (obligor) agreed to give trisha (OBLIGEE) a 10% commission if
trisha find a supplier to buy his ukay bundle at a certain price. KUNYARE trisha
(oblige) already found a supplier who definitely decided to buy the ukay bundle. So to
evade the payment of the commission agreed upon, Erica (obligor) herself sold directly to
the supplier at a lower price without the aid of trisha (oblige) para mabawasan nya yung
commission ng ahente na si trisha sya na lang dumirekta sa may supplier which is yung
buyer.
So in this case the condition imposed by Erica (obligor) kay agent which is Trisha na maghanap
ng buyer para mabigyan ng 10% commission is deemed fulfilled. It means liable na si Erica
(obligor) to give a commission to the agent which is Trisha (oblige) even though si agent or
trisha is hindi talaga sya yung nagbenta this is the constructive fulfillment.
Constructive fulfillment of resolutory condition

- When the obligation is subject to resolutory condition and the obligee unjustifiably
provokes the agreement. It will not be considered fulfilled and there will be no
extinguishment of rights. The obligee cannot be excused from non-compliance of the
obligation.

- Kapag nafulfill na yung obligation, dapat isoli na ni debtor once na mafulfill na yung
condition

Resolutory- the happening of the condition extinguishes the obligation already existing.
Example: The CEO (oblige) of the company bind himself to lend his car to his new
driver (obligor) until he worked for the company. The obligation to lend is immediately
demandable. So the new driver right over the car is extinguised or mag end when he is no
longer the driver of the company so that the driver is obliged to return the car to the CEO.
 Article 1187
The effect of a conditional obligation to give, once the condition has been fulfilled,
shall retroact to the day of the constitution of the obligation. Nevertheless, when the
obligation imposes reciprocal prestations upon the parties, the fruit interest during the
pendency of the condition shall be deemed to have been mutually compensated. If the
obligation is unilateral, the debtor shall appropriate the fruits and interest received, unless
from the nature and circumstances of the obligation it should be inferred that the intention
of the person constituting the same was different.
In obligation to do and not to do, the court shall determine, in each case, the retroactive
effect of the condition that has been complied with.

- Yung conditional to give ay nag tetake effect daw po once na may condition and na
declare na daw po yung obligation. Pero, kapag reciprocal prestations naman po
meaning parehas silang may obligation yung original na utang and tubo ay dapat
iassume na parehas na nilang nabayaran. Kapag naman unilateral meaning isa
lang, dapat na ilaan muna ng debtor yung original na utang at interest na
natanggap hanggat hndi pa nagagawa yung obligation, unless iba yung gustong
mangyare ng debtor.

It refers to retroactive effects of the fulfillment of suspensive condition- means nagbabalik tanaw
ka, ni rerecon mo yung past or from the past.

 Retroactive effects in obligations to give. ( RETRO ACT)

Once the condition is fulfilled, the effects of the conditional obligations shall
retroact to the day of the constitution of the obligation and not on the date when
the condition was fulfilled. ( the obligation to give will not be demandable until or
unless nangyare na yung suspensive condition so the effects is mag reretro act so
it means hindi sa happening ng kondisyon kundi kung kelan ba na constitute yung
obligation)

Remember!! The condition is just an accidental element of a contract because

hindi sya kasama sa contract itself. Also the provision itself will exist even
without the condition.
 Example: On November 9, 2021 cheese (obligor) agreed to give heart (oblige) a
brand new car if she win miss earth pageant on December 2021, if heart won the pageant
in December 2021, he is entitled to the car effective November 9, 2021 because heart
right over the car retroacts to the date when the obligation was constituted.
IN SHORT THE OBLIGATION BECOMES EFFECTIVE FROM THE DAY IT WAS
CONSTITUTED.

 In obligation to do or not to do, there is no fixed rule as regards the retroactive effect.
( WALA KANG RETRO ACT)

With respect to the retroactive effect of fulfillment of suspensive condition there

is no fixed rules is provided (However pwede din iapply yung principles of
retroactivity so here habang sinasagawa palang ung case sa court wala pang
pasahan ng title)

(WALANG EFFECT YUNG RETRO ACT KASI HABANG NASA COURT

NAG UUSAP WALANG PASAHAN TITLE)

 Retroactive effects as to fruits and interests in obligations to give- ( WALA KA

DING RETROACT)

The effect of conditional obligation to give as a rule do not retroact to the date of
the constitution of the obligation.

( WALANG EFFECT YUNG RETRO ACT KASI COMPENSATED HABNG

PENDENCY YUNG CONDITION.)

The following rules shall govern:

1) In reciprocal obligation (like a contract of sale) - the fruits and interest during the
pendency of the condition shall be deemed to have been mutually compensated.
There is no retroactivity because the fruits and interests received during the pendency
of the condition are deemed to have been mutually compensated. (dito is walang
retroactivity effect or pagbabalik tanaw kasi yung fruits at interes na sinasabi dito ay
nakasalalay sa condition nila at kapwa nila binayaran. ) ( DITO DIN DALAWA
YUNG NAKIKINABANG, PENDING PALANG SYA HABANG DI PA NA
FUFULFILL NI CREDITOR YUNG CONDITION HALF HALF PALANG SILA
NI DEBTOR)

Example: cheese agrees to sell and heart agrees to buy cheese parcel of land if heart
won the miss earth pageant on December 2021. If heart won the December 2021, the
obligation becomes demandable. Heart is entitled to all the interests that her money
(with which to pay cheese) may earn while cheese is entitled to the fruits which the
parcel of land may have produced during the pendency of the condition.
 2) In unilateral obligation - the debtor shall appropriate the fruits and interests
received during the pendency of the condition unless a contrary intention appears.

( PENDING PA DIN PERO KAPAG NA FULLFIL NA YUNG CONBDITION

LAHAT PAPUPUNTA NA SA MAY CREDITOR ISA NA LANG AY MAY ARI.)

Example - cheese agreed to give heart a parcel of land if heart won the pageant on
December 2021. Pending the happening of the condition, cheese is entitled to the
fruits which the land may produce heart will deliver only the parcel of land if the
condition is fulfilled, unless a contrary intention appears.

Article 1188
The creditor may, before the fulfillment of the condition bring the appropriate actions for the
preservation of his right.
Yung creditor bago ma fulfill yung condition dapat gumagawa na sya ng actions na makakapag
preserve ng rights nya. Para makakapag demand sya dun sa obligation.
The debtor may recover what during the same time has paid by mistake in case of suspensive
condition.
Yung debtor naman marerecover nya yung nabayad nya sa creditor once na nabayad nya ito by
mistake meaning hndi sya aware sa itinakdang oras sa suspensive condition

Rights of creditor
-authorizes the creditor to take any appropriate actions for the preservation of creditor's right
during the pendency of the condition. (dito anuman naangkop na aksyon ng creditor is pwede as
long as na proprotect nya yung right nya as a obligee)
Example: On November 9, 2021 cheese (obligor) agreed to give heart (oblige) a
brand new car if she win miss earth pageant on December 2021, so habang si heart is
hindi pa nananalo sa pageant so cheese protect his right as a creditor, so cheese annotate
the obligation in the certificate of title in registry of property.
Rights of debtor
-He is entitled to recover what he has paid by mistake prior to the happening of the suspensive
condition. ( so na aallow ung right na to ng debtor if ung creditor is hindi na fulfill yung
condition nila o napagkasunduan so it is the case of solution indebti)
Example: On November 9, 2021 cheese (obligor) agreed to give heart (oblige) a
brand new car if she win miss earth pageant on December 2021, so as sa obligor or debtor
so si cheese akala niya nanalo kana yun pala elimination palang tapos napadala nya na
sayo yung susi ng brand new car so that cheese the debtor may recover what he give
because the condition is not yet fulfill.
 Article 1189
When the conditions have been imposed with the intention of suspending the efficacy of an
obligation to give, the following rules shall be observed in case of the improvement, loss or
deterioration of the thing during the pendency of the condition:

- Kapag may conditions na and in process palang yun so nasususpend yung

obligasyon natin na magbigay/isoli kasi nga suspensive condition, so sa process na
yun, hndi maiiwasan yung improvement, loss or deterioration ng during pendency.

Ex. Pinahiram ko si jac ng libro, kapag nasira yung libro habang nasa kalagayan nya sno may
rights para ipaayos yun?

 Requisites of 1189

- The obligation is to give or real obligation

- The object is a specific or determinate

- The obligation is subject to a suspensive-conditions

- The condition is fulfilled

- There loss, deterioration or improvement of the thing

What is Suspensive Conditions? Suspend the rights and obligation of both parties
kase hndi pa nafufulfill yung prestation.

1. Loss of thing without debtors fault – may fortuitous events. The obligor or debtor is not
liable.

Example: D will sell his car to C, but fortuitous event happened, Nawala yung sasakyan without
the fault of debtor.

2. Loss of the thing with debtors fault – liable na si obligor na damages. Lagging may
damages kapag may negligence.

3. The thing deteriorates without the fault of the debtor – (deteroriates means nagreduce
yung fair value ng isang bagay) the creditor will suffer the loss

Example: Yung sasakyan na ibebenta mo is nabangga or nagasgasan without debtor fault, yung
value ng sasakyan na napag usapan nyong amount ni creditor is marreduce because of the
damages but debtors is not liable to that.

4. The thing deteriorates with debtors fault – liable si debtor sa damages.

- Creditor may choose

 - 1) Recission or cancellation of obligation with damages.

- 2)Fulfillment of obligation with damages.

5. The thing is improved by its nature

Example: Yung value ng car na binenta is tumaas yung fair value. Yung magbebenefit dto is si
creditor.

6. The improvement of the thing is expense by the debtor.

Example: Yung sasakyan na binebenta ni debtor is pinaganda nya at inayos,

What is Usufructuary? A usufruct is a legal right granted to a person or party

which grants a temporary right to use/derive income/benefit from the property of
another individual.

Article 1190
When the conditions have for their purpose the extinguishment of an obligation to give, the
parties, upon the fulfillment of said conditions, shall return to each other what they have
received.

- Once na magsolian na, dun na rin nawawala yung obligation so kapag nafulfill
na yung obligation, it is bound to give back the thing. Yung effects of fulfillment
of resolutary condition, kung ano man yung natanggap ng both parties,
kaylangan magsolian.

Example: D allowed S na gamitin yung sasakyan nya habang nasa probinsya sya, pero pag balik
nya galling probinsya kaylangan na ibalik ni S kay D yung sasakyan without damage.
In case of the loss, deterioration or improvement of the thing, the provisions which, with respect
to the debtor, are laid down in the preceding article shall be applied to the party who is bound to
return. ( kapag nasira dun mag apply ung 1189)

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 the extinguishment of the obligation. (1123) – In
obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of
the condition that has been complied with.
 Article 1191
The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.

- Pwedeng bawiin ng party na agrabyado yung kasunduan nila kung yung isang
party ay hndi sumunod sa dapat nyang gawin( or kapag hindi na fulfilled ng
may obligation pwedeng pumili sa isa lang yung maaring ipagawa)

The injured party may choose between the fulfillment and the rescission of the obligation,
with the payment of damages in either case. He may also seek rescission, even after he has
chosen fulfillment, if the latter should become impossible.

- Yung naagrabyadong party, pwede syang pumili;

1. Fulfillment and recission of obligation

2. Payment of damages

3. Recission + fulfillment

The court shall decree the rescission claimed, unless there be just cause authorizing the
fixing of a period.

- May kapangyarihan ang court na magutos para alisin yung claim ng creditor
over damages, maliban kung acceptable yung reason ng debtor sa pag sasaayos
ng period.

(If Wala ng kakayahan ung debtor papasok na yung court tapos pwedeng humingi ng
palugit yung debtor if napatunayan na or acceptable yung reason bakit si sya naka fulfill)

This is understood to be without prejudice to the rights of third persons who have acquired
the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. (1124)
Dto sa 1191 may karapatan na mamili yung creditor kapag si obligor hndi nya nagawa yung
obligations nya or nagkaroon ng fortuitous event. Kapag kasalanan ni obligor kaya nagakrron ng
damage or hndi ngawa yung obligation, debtor is liable. Pero kapag walang ksalanan si debtor at
nagkaroon ng damages sa obligation, hndi liable si debtor
Unilateral – only one party is obliged in the prestation.
Example: Donor. Isang party lang yung bound to fulfill the obligation.
Bilateral – both parties are bound to each other. Parehas silang creditors and debtors.
Example: Contract of sale. Buyer and Seller. Pag nabigay na yung thing/object, magpapalit na
sila ng position as creditor and debtor.
Reciprocal Obligation – 1 contract
Non-reciprocal Obligation – 2 contract

If the obligor was not able to fulfill the obligation, the creditor may choose;
(alternative)

1. Action with specific performance with damages

2. Action for Recission of the obligation with damages

Example: yung sasakyan na binebenta ni D kay S is bound to deliver in December 1. Pero hndi
nadeliver ni D, si S may right to demand and with the damages.

Article 1192
In case both parties have committed a breach of the obligation, the liability of the first
infractor shall be equitably tempered by the courts. If it cannot be determined which of the
parties first violated the contract, the same shall be deemed extinguished, and each shall
bear his own damages.

- Under this article, parehas may pagkakamali yung dalwang party. Kapag alam
kung sinong unang nagkamali, sya yung liable sa damages, pero marereduce
yung amount non kasi nagkamali din yung isang party.

- Pero kapag parehas na hndi alam kung sinong unang nagkamali sa obligation,
parehas silang mananagutan or parehas silang magsusuffer sa damages ng
obligation.

Both parties have breach of obligation. (Parehas may kasalanan)

Guilty of breach or violate.

1. First infractor known – alam kung sinong unang nagkamali. Sya yung bound to fulfill
sa damages
 - Both parties ay nagviolate pero alam kung sinong unang nagkamali, so sya yung
liable sa damages. Pero marereduce yung damages kasi may violate din yung isang
party

2. First infractor cannot be determined – hndi alam kung sinong may mali. Kanya kanya.
Suffer itself sa kanilang damages. VOID NA YUNG CONTRACT.

Section 2 – Obligations with a Period

Article 1193
Obligations for whose fulfillment a day certain has been fixed, shall be demandable only
when that day comes.

- Kapag may certain day na fixed or napagusapan, makakapag demand lang once
na dumating na yung araw na yun. Suspensive period.

Obligations with a resolutory period take effect at once, but terminate upon arrival of the
day certain.

- Sa resolutory period naman, once lang sya mag take effect pero once na nag take
effect na sya or dumating na yung araw na nagawa na yung obligation,
nateterminate na rin yung obligation or hndi na pwede makapag demand after
nun.

A day certain is understood to be that which must necessarily come, although it may not be
known when.

- Yung napagusapan na araw kailangan possible na mangyare kahit hindi tukoy

kung kalian yun mangyayare. Alam na mamatay pero hindi alam kung kelan
mangyayare.

If the uncertainty consists in whether the day will come or not, the obligation is conditional,
and it shall be regulated by the rules of the preceding Section. (1125a)
Kung hindi sure kung dadating yung araw na yung bali yung obligation is conditional tawag dun
(naka base sa kundisyon ng debtor). Walang period hindi inaasahan dun na mag aarise yung
condition

Article 1193, may mga terms or period na nakapaloob sa contracts. Depende sa period yung
kalian masasabing tapos na yung obligation, or dun palang magsisimula yung obligation.
Example: I will support yung monthly allowance until you finish college. Dto nagsisimula na
yung obligation pero once na makagraduate ka na ng college, tapos na yung obligation ko sayo.
Tapos yung isa, kapag nakapasa ka ng board exam this year bibigyan kita ng 10,000. Hanggat
hndi kapa nakkapasa, wala kang rights na magdemand ng fulfillment of 10,000. Pero once na
makapasa ka this year dun na mag aarise yung obligation ng nangako syo.
Obligation with a period – demandable only in a period or term.
Conditions determine if the obligation will arise or it will cease.
If the period is impossible, it will be void.
Suspensive period – mag aarise lang yung obligations and rights kapag dumating na yung
period or term.
Resolutary period – the obligation will be valid hanggang sa dumating yung period, then after
the peiod and nagawa na yung obligation. Tapos na yung kontrata or mateterminate na.
Legal period – imposed by law.
Example; payment of taxes.
Conventional period - voluntarily agreed by the parties.
Example: kung anong nasa kontrata
Judicial period – fixed by the court.
Example; si court yung magsasabi kung kelan babayaran ng debtor kapag void yung contract ng
both parties.
Definite period – fixed, possible, alam mo na darating yung araw nay un.
Example: January 1,2022
Indefinte period – not fixed, impossible to come, hndi mo alam kung kailang. Yung court na
magdedecide.

ART. 1194.
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. (same to
1189)
- Kapag Nawala, na deteriorate or nagkaron ng improvement yung bagay bago dumating
yung napagusapang date magbe base sa 1189. (Art. 1189 - yung reasons kasi don yun yung mga
dahilan bakit naging delay yung obligation, 1194 - eto yung mga nangyare before the arriv of time
DI SYA MAG CACAUSED NG DELAY KASI MALAYO PA SA PERIOD)

-suspensive period lang to meaning yung araw ng pagfulfill mo ng obligation ay alam mo

na kalian at dun lang mag take effect yung demand
Condition of the Thing Effect

Lost*
 Without fault of the debtor Obligation is extinguished

 Fault of the debtor Obligation to pay damages

Deteriorates
 Without fault of the debtor The impairment is borne by the creditor

 Fault of the debtor The creditor may choose to rescind with indemnity for
damages, or have it fulfilled, but still with indemnity for
damages
Improvement
 By its nature Inures to the benefit of the creditor

 At the expense of the debtor The debtor shall have no other right than that granted to
the usufructuary.

- It is understood that the thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or it cannot be recovered.

 Example:

- Jay (debtor) is obliged himself to sell his yacht to Zola (creditor) at half its
purchasing price on Zola’s graduation, provided Zola graduates on time. On April 25,
2016, Zola graduated, on time and with honors. However, the day before his
graduation, Typhoon Hayan destroyed the yacht. Since the loss happened before the
day certain, and the loss was due to a fortuitous event, the obligation of Jay to sell his
yacht to Zola is extinguished.

ART. 1195.
Anything paid or delivered before the arrival of the period, the obligor
being unaware of the period or believing that the obligation has become due
and demandable, may be recovered, with the fruits, and interests. (similar to
art 1188 paragraph 2)
 - Kapag di aware si debtor sa period and nabayad nya ito earlier sa period sa
creditor pwede nyang ma recover lahat ng binayad nya. (Art. 1195 - Kapag
aware or inisist nang mas maaga sa time period, hanggang sa umabot sa
period, hndi na nya makukuha automatic na nafulfill yung obligation)

 Debtor presumed aware of period

o Kapag aware sa time si debtor kung kailan nya dapat ifullfil yung obligation at
hindi pa due date, by its mistake hindi nya na pwedeng marecover yung binayad
nya, interest lang yung pwedeng marecover.

 Example:

- On December 10, 2015 Nini (debtor) owed 150,000.00 to Nana (creditor) then
the debtor agreed to pay the sum of 150,000.00 with 1% monthly interest or 12%
per annum and the payment of the debt is in June 30 2016. Then on January 5,
2016 Nitzel thought that her obligation is already due and demandable therefore
she paid her debt to Digna with the sum of 150,000.00 plus the 12% interest. On
this case, since Nitzel is unaware of the period, she can recover the interest that
she paid to Digna because it states on this article that “the obligor being unaware
of the period or believing that the obligation has become due and demandable,
may be recovered, with the fruits and interests.”

 No Recovery (Real Obligations to give )

o No right to recover if the debtor had knowledge of the period and he insisted on
paying. (the principles of solutio indebiti will not apply)

(kapag aware si debtor na ito yung tamang period ng pagbayad pero pinipilit nya pa
ding magbayad, hindi na marerecover)

o The debt is already matured. (naglapse na)

 No Recovery (Personal Obligations to do )

o has no application to obligations to do or not to do because as to the former, it is

physically impossible to recover the service rendered, and as to the latter, as the obligor
performs by not doing, he cannot, of course, recover what he has not done.

(kapag service yung binigay para magawa yung isang obigations hindi nya na pwede
pang marecover)
 ART. 1196
Whenever in an obligation a period is designated, it is presumed to have been
established for the benefit of both the creditor and the debtor, unless from the tenor
of the same or other circumstances it should appear that the period has been
established in favor of one or of the other. 

- kapag ang period ay nakaset na, sinasabi lang na ginawa yun para sa benefit ng
creditor at debtor, pero may ibang situations na mas nagbebenefit ay isa lang

 Presumption as to benefit of Period

- When a period is designated in the performance of an obligation, it is presumed

that the period is intended for the benefit of both the creditor and debtor such as a
loan with interest.

- (Kapag ang period of obligation ay itinalaga na, fixed or based on agreement on

both parties, masasabi natin na kapag nagawa na nila mafulfill yung obligation
may benefit silang parehas.)

 Reasons why creditor cannot be compelled to accept before the arrival of

the period

1. Payment of interest. The interest expected to be realized will be lessen if premature

payment is done; - (kapag maaga nagbayad si debtor mawawala yung effectivity ng
interest or mababawasan yung sanang kikitain nya sa pagpautang)
2. Desire of the creditor to have his money invested safely instead of having it in his hands.
- (para maging safe lang muna sa debtor yung pinautang nya imbis na nasa kanya na
pwede nyang magastos anytime)
3. Under the usury law, there is a special prohibition of payment of interest in advance for
more than a year. - (kailangan na maaga bayadan ang interest kaysa sa mismong inutang)

 Example:

- Jac (debtor) borrowed 100k from Cedric (creditor) which is payable on October
19 2025 with 12% interest. Jac decided to pay on September 1 2022, without the
consent of cedric, jac cannot pay before the said date of payment.

 Exemptions to the General Rule

  Term is for the benefit of the debtor alone

- He cannot be compelled (pilitin) by the creditor to pay ahead of the designated

period of fulfilling the obligation, (hindi pwedeng pilitin ng creditor si debtor na
magbayad bago yung period) but he can pay ahead if he desires (gusto) to do so.
(pero pwedeng magbayad si debtor ng maaga kung gugustuhin nya)

 Example:

o Without interest

 Jessica (debtor) borrowed 35k to Juls (creditor) for the repair of her car.
They agreed since they are best friends to pay it without interest and to be
paid within 3years. In this case Jessica (debtor) benefits more than the Juls
(creditor), but Juls cannot compelled Jessica to pay before the said period
of payment.

o Promises to pay

 Jessica (debtor) promises to pay her debt on or before the said period that
the Juls (creditor) given to Jessica.

 Term is for the benefit of the creditor alone

- He can demand the fulfillment even before the arrival of term, but he cannot be
demanded by the debtor to receive the payment before the expiration of stipulated
period.

(pwedeng magdemand ang creditor na magbayad ng maaga si debtor pero, di

pwedeng magdemand si debtor na kunin ni creditor ng maaga yung bayad nya)

 Example:

- (Same examples) but here Juls (creditor) can demand the payment ahead of the
said period, but Jessica (debtor) cannot demand Juls to receive her payment.

 Computation of term of period

 Legal Periods

- “year” consist of 12 months, months consists of 30 days besides the Month of

February, days consist of 24 hrs. Sunset to sunrise

 Example:
 - From January 1, 2022 to January 31, 2022. -months

- From January 1, 2022 to December 31, 2022 – year (one year)

ART. 1197
If the obligation does not fix a period, but from, its nature and the
circumstances it can be inferred that a period was intended, the courts may
fix the duration thereof.

- Kapag walang period, pero sa nature and circumstances nya pwede madetermine,
pwede pumasok ang court. Bawal tagalan kapag walang napagusapan na time
kung hanggang kelan lang gawin.

The courts shall also fix the duration of the period when it depends
upon the will of the debtor.

- Papasok den court kung may intention debtor na gawin yung obligation nya,
kapag sya lang mag isa bawal yun.

In every case, the courts shall determine such period as may under the
circumstances have been probably contemplated by the par ties. Once fixed
by the courts, the period cannot be changed by them.

- If nadetermine na ng court, hindi na mapapalitan ng parties yung fixed period

 Court generally without power to fix a period

 Judicial Period

- Period which if fixed by the court and can never be change by the both parties
(creditor, debtor) (period na inayos ng korte na hindi pwedeng galawin pa ng
creditor at debtor)
  Contractual Period

- Period which fixed by the both parties based on their agreement or contract.
(period na napagusapan ng creditor at debtor)

 Example:

- Joem (debtor) is obliged to pay the remaining 20k to Eloiza (creditor) and in
their contract it does not stipulate a fix period. Court cannot interfere the contract
between them because the contract is the law on both parties.

Note: (kapag ang obligation ay walang nakastate na period at napagusapan talaga na

walang specific period para ifulfill ang obligation, court is not authorized to fix a period
dahil walang karapatan mismo ang court sa contract nila )

 Exceptions to the general rule

 No period is fixed but a period was intended

- Contracts may not have the fixed period but it has an intended to have but fails to
comply. The court is authorized to fix the period.

(hindi nasabi sa contract yung period pero may intension or common sense na
need matapos ng ganitong period. Pwede itong maayos ng court)

 Example:

- Engineer Rowee (debtor) agreed to construct the building of David (creditor)

for his business Coffee Shop. Both parties failes to fix a period when should be
the construction is needed to be done. The court may interfere and they can use as
a guide the practices of engineers oh how long wil it takes to build a particular
building.

 Duration of the period depends upon the will of the debtor

- (article 1180)

- ‘’Little by little’’

 Period fixed cannot be changed by the courts

 If the agreed period is being lapsed, both parties cannot go to court to fix
another period. (kapag nagexpired na yung period hindi na pwede pa ito ipaayos sa
korte.)
  If the parties accept the period fixed by the court, it becomes the law governing
the contract but it can be modified by the parties by providing new agreement.
(kapag ang both parties nagagree na sa terms at pag fix ng period ng court pwedeng
yung napagusapan ay maging guide dun sa contract nila at pwede nilang
mamodified/masunod yun if gusto nila)

ART. 1198

The debtor shall lose every right to make use of the period:

(1) When after the obligation has been contracted, he becomes

insolvent, unless he gives a guaranty or security for the debt; -

(naging insolvent si debtor o wala ng kakayahang magbayad pero magbibigay

at may guaranty or security)

(2) When he does not furnish to the creditor the guaranties or

securities which he has promised;

(hindi nya nabigay yung ipinangako nyang pangcollateral)

(3) When by his own acts he has impaired said guaranties or

securities after their establishment, and when through a fortuitous event
they disappear, unless he immediately gives new ones equally satisfactory; -
(kapag may nangyare na fortuitous event na nagresulta na nasira or
Nawala yung pang collateral)

(4) When the debtor violates any under taking, in consideration of

which the creditor agreed to the period;
(hindi ginawa yung pinagagreehan sa contracts)
(5) When the debtor attempts to abscond. –
(bad faith – may balak na tumakas sa obligation)
 When obligation can be demandable before lapse of period

- The general rule “ the obligation is not demandable before the lapse of the
period” but in this art the debtor may lose the right or the period (hindi nya na
magagamit yung right on the period) (the power of the period is disregarded)
because the creditor has the right to demand even before the lapsed of the period.
(powerful provision to creditor).

- Pwede mag demand si creditor nang mas maaga pa sa period if feeling nya
tatakbuhan sya ni debtor

- (hindi magagamit ang general rule dito na hindi demandable hanggat hindi due.
Dito sa art na toh pwede magdemand si creditor kahit bago ang due or mas maaga
sa due)

 Exceptions based on the debtor capability to comply

 When the debtor becomes insolvent

- A debtor that can be considered as insolvent is when he/she cannot provide

payment when the obligation is demandable or in due.

(kapag hindi na kayang magbayad ni debtor)

- Also if the debtor is in financial distress where his liabilities is higher than his
assets. (kapag mas mataas na yung utang nya kaysa sa asssets nya)

- Gives sufficient guaranty or security (ito yung mechanism where in sinusure natin
yung payment sa isang debt bukod sa napagusapan, collateral)

 Example:

- Ian (debtor) owes Jayze (creditor) 70k due and payable on October 2022, if Ian
becomes insolvent, we assume that he became insolvent on August 2022, jayze
can demand the payment even before the maturity date of the obligations.

 When debtor does not furnish guaranties or securities promised

- Debtor fails to give the guaranties and securities to the creditor will results of
losing his right on the period stipulated and can be demandable by the creditor.
 (kapag hindi nya nagawa yung naipangako nyang ipapalit kung sakaling hindi nya
mabayaran kung ano mismo yung napagusapan, dito pwede na mag demand si
creditor)

 Example:

- Sabby (debtor) owes 2m to Paula (creditor) and Sabby promised to furnish the
painting that she paints for the debt she has to Paula, but she fails to give the
painting because she sell it to other for her benefit. In this case Paula can demand
the payment and Sabby will lose her right to the period stipulated in the contract.

 When guaranties or securities given have been impaired or have

disappeared.

- The object to be secured in the obligation have been lost or being damaged before
the obligations is demandable.

(kapag nasira or Nawala yung ipapalit nya )

 Example:

- Meme (debtor) has a loan to Hehe (creditor) and Meme decided to furnish his
car as a collateral for the loan, but because of a fortuitous event like carnapped.
So the obligations become demandable, unless magbibigay ulit si meme ng new
security na masasatisfied si hehe.

 When debtor violates an undertaking

- (Kapag hindi nagawa yung napagusapan.)

 Example:

- Rogelyn (debtor) wants to borrow money from Ian (creditor), and Rogelyn
promised Ian that if he let her borrow money she will fix the guitar, and they both
agreed with it since they are friends. But if Rogelyn did not do what she promised
to Ian, Ian can immediately demand the payment.

 When debtor attempt to abscond (escape or nagtatago)

- Sign of bad faith which results to loss his right on the perio stipulated.

(sadyang ginawa yung bagay na yun para makatakas sa responsibiidad)

 Example:
 - Lumipat ng bahay ng walang pasabi sa creditor.

Section 3 – Alternative Obligations

ART. 1199
A person alternatively bound by different prestations shall completely perform one of them.

- Dapat ma perform nya kahit isa kapag maraming prestations (alternative)

The creditor cannot be compelled to receive part of one and part of the other under taking (1131)

- Dapat buong matanggap ni creditor yung isang prestation na pipiliin ni debtor.

Kinds of obligation according to object.

They are:

(1) Simple obligation – 1 prestation

- Deliver of piano

(2) Compound obligation – 2 or more prestation

It may be:
Conjunctive obligation – Several obligations, lahat sila due
Distributive obligation. – 2 or more prestation lang yung due hindi sila lahat.
It may be:

1) Alternative obligation – maraming due na prestation pero kahit isa lang

magawa.

2) Facultative obligation- isa lang prestation pero may substitute na prestation.

Meaning of alternative obligation.

- Maraming due na prestations

- Pero kahit isa lang magawa sa prestation

- General rule: choice lagi ng debtor

 - Dapat isa lang piliin and yung napili dapat icomply ng buo.

Ex. D obliged to deliver a laptop, cellphone or a 5k to C

ART. 1200.
The right of choice belongs to the debtor, unless it has been expressly granted to the creditor.

- Kay debtor lagi yung choice unless pinayagan ni creditor

The debtor shall have no right to choose those prestations which are impossible, un lawful or which
could not have been the object of the obligation. (1132)

- Hindi pwedeng piliin ni debtor yung prestation na imposible, bawal sa batas or

hindi naman sya yung object ng obligation.

Right of choice, as a rule, given to debtor.

- Laging kay debtor yung Karapatan para pumili ng prestations

- Exception: pwede naman kay creditor yung rights sa prestations pero kung expressly
granted to him lang

- Pwede rin sa third person if pumayag si creditor at debtor.

Ex. Insurance of house- X (creditor), Y (debtor)

- Incase masira or mawasak- (damage or loss, reinstate, rebuild the house)

- Kahit silent, si debtor yung may Karapatan pumili ng prestation.

Right of choice of debtor not absolute.

- May limitations lang yung right ni obligor sa prestations

- Hindi pwedeng piliin ni obligor yung mga prestations na; (void)

(a) impossible,
(b) unlawful, or
(c) which could not have been the object of the obligation.
- Kahit wala tong mga to, may iba pa naman kasing choices yung debtor kaya hindi nila
iniivalidate yung obligation
- Kapag isa nalang yung natitirang obligation na pwedeng piliin, wala na syang right nagiging simple
obligation nalang.
- Hindi nalang limitation, pero nawawala na yung right of choice nya na pumili.
- Hindi napapasa kay creditor yung right.

1. Impossible- Imposibleng magawa na prestation

Ex. Delivering of pencils, a laptop and a moon

 Delivering of moon is impossible

2. Unlawful- Bawal sa batas

Ex. Killing ana, Delivering marijuana, giving sack of rice and giving
cellphone

 The debtor can only choose sack of rice and give cellphone

3. Could not have been the object of prestation- hindi sya kasama sa pagpipilian,
or hindi same amount.

Ex. Alison borrowed 3k to Kiyo. They agreed that alison will give his watch,
3k or his t shirt.

 Kiyo has t shirt worth 1,500 and worth 3k, kiyo cannot give 1,500 t shirt

4. Only one prestation is practicable- wala ng ibang natirang choice isa nalang,
due to fortuitous event.

Ex. Kley will deliver his book, his cellphone, and a dog to Mae.

The book and cellphone lost without the fault of kley, Kley has no
choice but to deliver the dog to mae.

ART. 1201
The choice shall produce no effect except from the time it has been communicated. (1133)

- Yung choice dapat lagging mag tetake effect lang the moment na sinabe na kay
creditor ni debtor.

- Orally or writing
 1. Effect of notice

- Hanggat hindi nasasabe ni debtor yung gusto nyang prestation, alternative pa din yung
obligation, dalawa or tatlo pa din yung prestation

- Once nasabe na kay creditor, nagiging simple nalang yung obligation kasi nakapili na ng
prestation.

- Once na makapili na ng prestation, and nasabe na kay creditor hindi na pwede bawiin
nang walang consent ng other party

- Walang Karapatan pumili si creditor

- Kapag nasabe na kay creditor yung choice na prestation, nagiging legal na yung effect.

2. Proof and form of notice

- Yung debtor yung magpo prove na may communication sa kanila ni creditor kasi sya
yung may choice sap restations.

- Walang sinabe yung batas na gumawa ng formal form

- Orally or writing pwede

Ex. Lara obliged himself to deliver Otis his tv, or his refregirator. Lara choose the tv and informed Otis

- Nagiging simple obligation kasi nakapili na

- Hindi na mababago yung prestation na napili hanggat walang consent ng other prty

- After makapili ng prestation, pwede na nila idemand yung right nila parehas.

ART. 1202
The debtor shall lose the right of choice when among the prestations where by he is alternatively
bound, only one is prac ticable. (1134)

- Kapag isa nalang yung practicable prestation, nawawalan na sya ng choice na

pumili.

- Dito, isa lang yung natira sap restations pero kung 1 or 2 yung natira 1200 shall
apply.
 - Magiging simple obligation nalang

ART 1203
If through the creditor's acts. the debtor cannot make a choice according to the terms of the
obligation, the latter may the latter may rescind the contract with damages.

- If kasalanan ni creditor kaya hindi makapili si debtor sap restations, pwedeng

bawiin ni debtor yung contract plus damages

When debtor may rescind the contract

- Rescission- Magsosolian, with their fruits, price and interest

- Hindi kasi makakapili si debtor sap restations if kasalanan ni creditor e diba lagging si
debtor dapat mamimili.

Ex. Yana borrowed 10k to Leah. Nag agree sila na imbis 10k,yana can deliver item 1, 2 or 3.

- If fault ni Leah kaya nasira yung isang item, pwedeng bawiin ni yana yung contract kung
gusto nya.

- If nangyare na yung recission, dapat ibalik ni yana yung 10k with interest, tapos si Leah
dapat bayaran nya yung isang item na nasira plus damages

- If hindi rescission pinili g debtor, pwede syang mamili sa natitirang item plus yung value
ng item na nasira plus damages.

- Pero kapag pumili si yana ng isang item na hindi sira, wala ng obligation at hndi na liable
si Leah sa sirang item kasi iba naman yung pinili nya.

Article 1204
The creditor shall have a right to indemnity for damages when, through the fault of the
debtor, all the things which are alternatively the object of the obligation have been lost, or
the compliance of the obligation has become impossible.

- Kapag naman fault ni debtor, lahat ng prestations Nawala, or hindi na pwedeng

gawin yung obligation may Karapatan si creditor na magdemand ng damages.
The indemnity shall be fixed taking as a basis the value of the last thing which disappeared,
or that of the service which last became impossible.

- Yung value ng indemnity is yung last thing na Nawala, kapag sa service naman
yung last option na hndi na pwedeng magawa.

Damages other than the value of the last thing or service may also be awarded. (1135a)

- Yung value ng last thing or service mag bebase ng indemnity plus damages

Effects of loss of objects of obligation

- Sa article 1203, kasalanan ni creditor, dito sa article 1204 kasalanan ni debtor parehas kay
debtor yung choice.

- Sa article 1205, yung creditor yung may Karapatan pumili.

1. Some of the objects

- Kahit na kasalanan ni debtor, kung yung ibang object/prestation is Nawala or

imposibleng magawa, hindi liable si debtor kasi may iba pa naman syang option.

- Exception to sa article 1170 – negligence

2. All of the objects

- Kapag naman lahat ng object Nawala, or hindi na magagawa kasi kasalanan ni debtor
liable sya sa damages kay creditor kasi wala ng natira sa mga prestations.

- If may fortuitous event, extinguished yung obligations

Basis of indemnity

- Yung basis ng indemnity yung price, naka depende lag isa last thing na Nawala or if
service, sa last thing na hndi magagawa.

- Kaya sa 3 naka depende kasi yun yung last option

 - Kahit kasalanan nya na Nawala yung item 1 and 2 tapos sa 3 hindi na nya kasalanan,
extinguished na yung obligation

- Liable sya kapag fortuitous events kaya Nawala yung 1 and 2 tapos kasalanan nya bakit
Nawala yung 3, liable sya sa damages

Article 1205
When the choice has been expressly given to the creditor, the obligation shall cease to be
alternative from the day when the selection has been communicated to the debtor.

- Kapag nasabe n ani debtor yung choice nya hndi na sya nagiging alternative
nagtetake effect lang to sa araw na nasabe na ni debtor kay creditor.

Until then the responsibility of the debtor shall be governed by the following rules:

(1) If one of the things is lost through a fortuitous event, he shall perform the obligation
by delivering that which the creditor should choose from among the remainder, or
that which remains if only one subsists;

- Kapag Nawala yung bagay na yun thru fortuitous event, dapat ibigay ni debtor
yung bagay na napili ni creditor sa natira

(2) If the loss of one of the things occurs through the fault of the debtor, the creditor may
claim any of those subsisting, or the price of that which, through the fault of the former,
has disappeared, with a right to damages;

- Kapag naman fault ni debtor, Nawala yung isa sa mga prestation, pwedeng mamili si
creditor sa natira or price ng nawala plus damages

(3) If all the things are lost through the fault of the debtor, the choice by the creditor shall
fall upon the price of any one of them, also with indemnity for damages.

- Kapag lahat Nawala sa fault ni debtor, pwedeng mamili si creditor ng price ng kahit ano
sa item na Nawala plus damages

The same rules shall be applied to obligations to do or not to do in case one, some or all of
the prestations should become impossible. (1136a)

- Sa service, same rules

When right of choice belongs to creditor

- Kapag binigyan ni debtor ng right si creditor

- Dito, si creditor naman mamimili

Rules in case of loss before creditor has made a choice

1. When a thing is lost through a fortuitous events

- Kapag nasira yung item 1, may karapatan pa mamili si creditor sa mga natitirang item

2. When a thing is lost through debtor’s fault

- Kapag Nawala yung item, na kasalanan ni debtor pwede mamili si creditor ng iba pa
tapos babayaran yung damages, or price nung Nawala plus damages.

3. When all things are lost through debtor’s fault

- Kapag lahat Nawala tas kasalanan ni debtor, si creditor pwede sya mag demand ng price
ng kahit anong item na Nawala plus damages

4. When all the things are lost through fortuitous event

- Obligation shall extinguish (Article 1174 applied)

Rules applicable to personal obligations

- Same rules lang kung kasalanan nya ba or hindi ni debtor

Article 1206
When only one prestation has been agreed upon, but the obligor may render another in
substitution, the obligation is called facultative.

- Facultative tawag kapag isa lang yung prestation pero may substitution

The loss or deterioration of the thing intended as a substitute, through the negligence of the
obligor, does not render him liable. But once the substitution has been made, the obligor is
liable for the loss of the substitute on account of his delay, negligence or fraud.
 - Yung loss or deterioration ng substitute sa prestation kahit kasalanan ni debtor,
hind sya liable kasi hindi pa nsasabe na may substitute.

- Pero kapag nasabe na na may substitute tapos nagkaron ng loss or deterioration,

liable na si debtor; delay, negligence or fault.

Meaning of facultative obligation

- 1 prestation agreed upon, MAY render another substitution

Ex. Bibigyan kita ng laptop pero bibigay ko den cellphone pang substitute if ever dko mabigay
laptop.

Effect of loss

1. Before substitution

- Kapag Nawala yung principal thing dahil sa fortuitous event, nawawal yung obligation.
Kapag naman kasalanan ni debtor liable sya sa damages.

- Sa substitute naman kapag Nawala tas kasalanan ni debtor or hndi, hndi sya liable.

- Hindi pa kasi due yung substitute.

2. After substitution

- Kapag principal thing Nawala, hndi liable si debtor kasi may choice pa sya

- Kapag Nawala yung substitute depende kung liable ba sya or hndi kapag sya ba may
kasalanan or hndi

- Kapag nakapili na nagiging;

- Simple one

- Nagiging effected lang once na nasabe na kay creditor

Alternative vs. Facultative

  Alternative Facultative
     
2 or more due pero kahit isa 1 prestation lang, pero may karapatan si debtor mag
Number of prestations lang dun gawin bigay ng substitute
     
 Laging si debtor, pero pwede
Right of choice kay creditor if debtor only
napagusapan sa contract and
  3rd party if  
  inallowed ng both parties  
     
Loss through a loss of one or more alternative,
fortuitous events does not loss of the thing due, extinguishes the obligation
extinguished the obligation,
  through  
  fortuitous events  
     
Loss through the fault loss of one of the alternative the loss of the thing due through his fault makes
of debtor does not render him liable
  him liable  
     
kapag si creditor may choice, the loss of substitute, kapag hndi pa na
  the loss of one cocommunicate, hindi sya liable
alternative through the fault of
  the debtor  
  may liability  

Section 4 – Joint and Solidary Obligations

“Joint Obligation is the general rule while solidarity is the exception.”

ARTICLE 1207.
THE CONCURRENCE OF TWO OR MORE CREDITORS OR OF TWO OR
MORE DEBTORS IN ONE AND THE SAME OBLIGATION DOES NOT IMPLY THAT
EACH ONE OF THE FORMERS HAS A RIGHT TO DEMAND, OR THAT EACH ONE
OF THE LATTER IS BOUND TO RENDER, ENTIRE COMPLIANCE WITH THE
PRESTATION.

THERE IS A SOLIDARY LIABILITY ONLY WHEN THE OBLIGATION

EXPRESSLY SO STATES, OR WHEN THE LAW OR THE NATURE OF THE
OBLIGATION REQUIRES SOLIDARITY.

- THIS ARTICLE TALKS ABOUT JOINT AND SOLIDARY OBLIGATIONS. THE CONCURRENCE
OF TWO OR MORE DEBTORS OR CREDITORS. MEANS THERE IS PLURALITY OF BOTH
PARTIES. MARAMING DEBTORS AND CREDITORS YUNG INVOLVE SA IISANG
OBLIGATIONS. PERO KUNG ANONG KLASE YUNG PINAG USAPAN NILA, DUN LANG SILA
MAY KARAPATAN OR RIGHTS NA MAGDEMAND. KAPAG SILENT YUNG OBLIGATION,
JOINT OBLIGATION YUN. YUNG SOLIDARITY IS ALWAYS EXPRESSLY STATED.
 ARTICLE 1208
IF FROM THE LAW, OR THE NATURE OR THE WORDING OF THE
OBLIGATIONS TO WHICH THE PRECEDING ARTICLE REFERS THE CONTRARY
DOES NOT APPEAR, THE CREDIT OR DEBT SHALL BE PRESUMED TO BE
DIVIDED INTO AS MANY SHARES AS THERE ARE CREDITORS OR DEBTORS,
THE CREDITS OR DEBTS BEING CONSIDERED DISTINCT FROM ONE ANOTHER,
SUBJECT TO THE RULES OF COURT GOVERNING THE MULTIPLICITY OF
SUITS.
THIS ARTICLE IS JUST TO SUPPORT THE 1207. PRESUMPTION LANG TO
ABOUT SA JOINT OBLIGATION. BSTA KAPAG TWO OR MORE DEBTORS, OR
TWO OR MORE CREDITOR, ASSUME THAT IS JOINT UNLESS SOLIDARITY IS
STATED.

 KINDS OF OBLIGATIONS ACCORDING TO THE NUMBER OF PARTIES

1. INDIVIDUAL OBLIGATION – ONE WHERE THERE IS ONLY ONE(1) OBLIGOR OR ONE(1)

OBLIGEE.

2. COLLECTIVE OBLIGATION – ONE WHERE THERE ARE TWO OR MORE DEBTORS AND/OR TWO
OR MORE CREDITORS. IT MAY BE JOINT OR SOLIDARY

- JOINT OBLIGATION; TO EACH HIS OWN.

DTO SA JOINT OBLIGATION, KUNG ANO LANG YUNG UTANG NI DEBTOR OR KUNG ANO LANG YUNG
KARAPATAN NA MAGDEMAND NI CREDITOR, YUN LANG ANG PWDENG MAFULFILLED AND
MADEMAND NA OBLIGATIONS

EXAMPLE; (DEBTOR IS TWO OR MORE)

SARAH AND JOYCE ARE JOINT LIABLE TO PAY KHIM AN AMOUNT OF 10,000. EACH OF DEBTOR IS
LIABLE OF 5,000.

SA EXAMPLE NA TO, SI CREDITOR IS MAY RIGHT TO DEMAND NA 5,000 EACH. PERO HINDI NYA
PWEDENG SINGILIN YUNG TOTAL NA 10,000 SA IISANG DEBTOR. 5,000 LANG YUNG PWDE NYANG
SINGILIN DAHIL JOINT OBLIGATIONS NGA. IBIGSABIHIN, PROPORTIONATELY FULFILLED AND
DEMANDED.

NOTE: KAPAG YUNG ISANG DEBTOR IS NAGING INSOLVENCY, HINDING PWDENG BAYARAN OR
IFULFILL NG ISANG DEBTOR YUNG UTANG NYA. AND WALANG KARAPATAN SI CREDITOR NA
SINGILIN SA ISANG DEBTOR YUNG UTANG NG INSOLVENT DEBTOR

- SOLIDARY OBLIGATION; ONE FOR ALL, ALL FOR ONE.

- AN OBLIGATION IS SOLIDARY IF THE WHOLE OBLIGATION CAN BE PERFORMED BY EITHER

OF THE OBLIGORS. THE OBLIGATION CAN DEMAND BY EITHER THE CREDITORS.
 - THERE ARE TWO OR MORE DEBTOR AND CREDITORS NA PWDENG MAGFULFILLED OR
MAGDEMAND SA OBLIGATION

- DTO SA SOLIDARY OBLIGATION, KAHIT SINO SA DEBTOR AY PWDENG SINGILIN O

MAGBAYAD NG PAGKAKAUTANG. KAHIT SINO SA CREDITOR AY MAY RIGHT TO DEMAND
TO EACH OF DEBTOR.

 KINDS OF SOLIDARITY

1. ACCORDING TO THE PARTIES BOUND

A. PASSIVE SOLIDARITY – FROM THE WORD PASSIVE, MEANS DEBTOR OR OBLIGOR.

SOLIDARITY ON THE PART OF THE DEBTORS, WHERE ANY OF THEM CAN BE MADE
LIABLE FOR THE FULFILLMENT OF THE ENTIRE OBLIGATION.

EXAMPLE; (TWO DEBTORS)

SARAH AND JOYCE ARE SOLIDARY DEBTORS TO KHIM IN AMOUNT OF 10,000. HERE, KHIM MAY
DEMAND 10,000 TO SARAH AND JOYCE, PERO HANGGANG 10,000 LANG YUNG PWDE NYANG
MASINGIL. IF NAKAPAGABAYAD NA SI SARAH NG 10,000 KAY KHIM, KHIM NO LONGER HAVE THE
RIGHTS TO DEMAND FROM JOYCE NG ANOTHER 10,000. AFTER THE PAYMENT OF SARAH TO KHM,
THE OBLIGATION WILL BE EXTINGUISHED. BUT SINCE SARAH PAY THE ENTIRE AMOUNT, SARAH
MAY CLAIM TO JOYCE THE CORRESPONDING AMOUNT OF 5,000 OR AMOUNT IN THEIR
CONTRACTS.

B. ACTIVE SOLIDARITY – FROM THE WORD ACTIVE, MEANS CREDITOR OR OBLIGEE.

SOLIDARITY ON THE PART OF THE CREDITORS, WHERE ANY ONE OF THEM CAN
DEMAND THE FULFILLMENT OF THE ENTIRE OBLIGATION.

EXAMPLE; (TWO CREDITORS)

KHIM IS LIABLE TO PAY SARAH AND JOYCE A TOTAL AMOUNT OF 10,000. KHIM MAY PAY
EITHER SARAH OR JOYCE AN AMOUNT OF 10,000. BUT THE AMOUNT CANNOT EXCEED IN 10,000.
SARAH AND JOYCE CAN DEMAND TO THE FULFILLMENT FROM KHIM. IF THE PAYMENT IS MADE
BETWEEN KHIM AND SARAH THE OBLIGATION OF KHIM IS EXTINGUISHED, BUT JOYCE MAY CLAIM
THE CORRESPONDING AMOUNT TO SARAH.

C. MIXED SOLIDARITY – TWO OR MORE DEBTORS AND CREDITORS ARE INVOLVE.

SOLIDARITY ON THE PART OF DEBTORS AND CREDITORS. WHERE EACH ONE OF THE
DEBTORS IS LIABLE TO RENDER AND EACH OF THE CREDITORS HAS A RIGHT TO
DEMAND, ENTIRE COMPLIANCE WITH THE OBLIGATION.
EXAMPLE;

SARAH AND KHIM ARE SOLIDARILY LIABLE TO JOYCE AND KYLA IN THE AMOUNT OF
50,000. SARAH (KHIM) CAN PAY THE 50,000./ JOYCE (KYLA) CAN DEMAND THE 50,000 IN THE
DEBTORS. IF THE 50,000 IS ALREADY PAID BY SARAH (KHIM), THE OBLIGATION IS EXTINGUISHED.
IF THE 50,000 IS ALREADY COLLECTED BY JOYCE(KYLA) THE OBLIGATION IS EXTINGUSHED.

NOTE: IF SARAH PAYS THE ENTIRE AMOUNT, SHE HAS THE RIGHT TO DEMAND TO KHIM THE
LATTER AMOUNT AGREED BETWEEN THEM. IF JOYCE COLLECTED THE ENTIRE 50,000, KYLA HAS
THE RIGHT TO ASK HER LATTER AMOUNT AGREED UPON BETWEEN THEM.

2. ACCORDING TO SOURCE

A. CONVENTIONAL SOLIDARITY – WHERE SOLIDARITY IS AGREED UPON BY THE

PARTIES. IF NOTHING IS MENTIONED IN THE CONTRACT RELATING TO SOLIDARITY,
THE OBLIGATION IS ONLY JOINT. NOTE: SOLIDARY OBLIGATION IS ALWAYS
EXPRESSLY STATED.

B. LEGAL SOLIDARITY – WHERE SOLIDARITY IS IMPOSED BY THE LAW.

C. REAL SOLIDARITY – WHERE SOLIDARITY IS IMPOSED BY THE NATURE OF THE

OBLIGATION

ARTICLE 1209.
IF THE DIVISION IS IMPOSSIBLE, THE RIGHT OF THE CREDITORS MAY
BE PREJUDICED ONLY BY THEIR COLLECTIVE ACTS, AND THE DEBT CAN BE
ENFORCED ONLY BY PROCEEDING AGAINST ALL THE DEBTORS. IF ONE OF
THE LATTER SHOULD BE INSOLVENT, THE OTHERS SHALL NOT BE LIABLE
FOR HIS SHARE

THIS ARTICLE IS ALL ABOUT THE JOINT INDIVISILE OBLIGATION – MEANS

PARTIES ARE MERELY PROPORTIONATELY LIABLE.

 JOINT INDIVISIBLE OBLIGATION – KAPAG YUNG ISA SA DEBTOR IS

UNWILLING TO FULFILL, HNDI MAGAGAWA YUNG OBLIGATION. KAPAG
ISA NAMAN SA CREDITOR IS NOT WILLING TO THE DELIVER OF THE
OBJECT, HNDI MAGAGAWA YUNG OBLIGATION. DAPAT “THEY WILL
ACT TOGETHER AND AGREED TOGETHER”

 JOINT – THE TIE OF THE OBLIGATION

 INDIVISBILE – NAGREREFFER SA OBJECT

 O EXAMPLE; SARAH AND KHIM JOINTLY LIABLE TO GIVE A
BRANDNEW CELLPHONE VALUED 50,000 TO JOYCE. BUT SARAH IS
NOT WILLING TO GIVE. DTO HNDI MAGAGAWA YUNG
OBLIGATION TO GIVE KASI HINDI WILLING SI SARAH NA
MAGBIGAY.

THE BRANDNEW CELLPHONE WILL CONVERT INTO MONEY,

TAPOS PROPORTIONATELY SILA MAGBABAYAD SINCE JOINT
YUNG TIE NILA DTO.

ARTICLE 1210.
THE INDIVISIBILITY OF AN OBLIGATION DOES NOT NECESSARILY GIVE RISE
TO SOLIDARITY. NOR DOES SOLIDARITY OF ITSELF IMPLY INDIVISIBILITY.

Maaring habulin ng kreditor ang sino man sa mga solidary debtors, ilang sa
kanila or kahit lahat sila ng sabay sabay. Ang paghabol sa isa ay hindi hadlang
sa paghabol sa iba hanggat hindi nasasakatuparan ang lahat ng obligasyon.

THE FIRST SENTENCE MEANS THE LIABILITY IN AN INDIVISIBLE

OBLIGATION MAY BE EITHER JOINT OR SOLIDARY.

THE SECOND SENTENCE MEANS THAT IN A SOLIDARY OBLIGATION,

THE SUBJECT MATTER MAY BE DIVISIBLE OR INDIVISIBLE.
DIFFERENCE BETWEEN SOLIDARY AND INDIVISIBILITY.
SOLIDARY – THE JURIDICAL TIE OR BINDS BETWEEN PARTIES.
- IF ONE DEBTORS COMMITS A BREACH OF OBLIGATION, ALL DEBTORS ARE
LIABLE.
- THERE MUST BE TWO OR MORE DEBTORS OR CREDITORS
- THE INSOLVENCY OF ONE DEBTOR, THE OTHER DEBTORS ARE LIABLE TO PAY
THE PART OF THE INSOLVENT DEBTOR.
INDIVISIBILITY – PRESTATION (TO GIVE, TO DO OR NOT TO DO)
- ONLY THE DEBTOR WHO COMMITS BREACH OF OBLIGATION IS LIABLE TO
THE DAMAGES.
- CAN EXIST ALTHROUGH THERE IS ONLY ONE DEBTOR AND CREDITOR
- THE OTHER DEBTORS ARE NOT LIABLE TO INSOLVENCY OF OTHER DEBTOR.

EXAMPLES;
1. JOINT INDIVISIBLE OBLIGTAION – SARAH AND KHIM JOINTLY
LIABLE TO GIVE THE ROLEX WATCH TO JOYCE. (THE
OBLIGATION IS JOINT AND THE PRESTATION IS INDIVISIBLE)
2. SOLIDARY INDIVISIBLE OBLIGATION – SARAH AND KHIM
SOLIDARY LIABLE TO GIVE A BRANDNEW CELLPHONE TO
JOYCE. (THE OBLIGATION IS SOLIDARY AND PRESTATION IS
INDIVISIBLE)
3. JOINT DIVISIBLE OBLIGATION – SARAH AND KHIM JOINTLY
LIABLE TO JOYCE, AMOUNT OF 10,000. (THE OBLIGATION IS
JOINT AND THE PRESTATION IS DIVISIBLE)
4. SOLIDARY DIVISIBLE OBLIGATION – SARAH AND KHIM
SOLIDARY LIABLE TO JOYCE, AMOUNT OF 10,000. (THE
OBLIGATION IS SOLIDARY AND THE PRESTATION IS DIVISIBLE)

ARTICLE 1211.
SOLIDARITY MAY EXIST ALTHOUGH THE CREDITORS AND THE DEBTORS
MAY NOT BE BOUND IN THE SAME MANNER AND BY THE SAME PERIODS AND
CONDITIONS.
Artikulo 1211. Ang pagkakaisa ay umiiral bagamat ang pinagkakautangan at ang
nagkakautang ay maaring hindi nakatali sa parehong paraan at sa parehong panahon at
kondisyon.
DTO SA ARTICLE NA TO, DBA YUNG SOLIDARY OBLIGATION IS ABOUT THE
FULFILLMENT OF ENTIRE OBLIGATION. ETONG ARTICLE NA TO DEFINE NA
PWDENG MAG EXIST YUNG SOLIDARY OBLIGATION KAHIT HNDI PAREHAS YUNG
OBLIGATION NG MGA DEBTORS.
FORMS OF SOLIDARY OBLIGATION ACCORDING TO THE LEGAL TIE

1. Uniform Solidarity – when the debtors are bound by the same terms and
conditions or stipulations.
 2. Non- uniform or Varied Solidarity – when the debtors while bound under the
same obligation (like a loan) are not subject to the same terms and conditions of
payment but to different secondary stipulation or clauses.

ARTICLE 1212.
EACH ONE OF THE SOLIDARY CREDITORS MAY DO WHATEVER MAY BE
USEFUL TO THE OTHERS, BUT NOT ANYTHING WHICH MAY BE PREJUDICIAL
TO THE LATTER.

Bawat isa sa magkakasamang nag papautang ay puweding gumawa ng mga paki-

pakinabang na hakbang para sa kapya at kasama niyang nag papautang maliban nalang sa
mga hakbang na makaka pinsala sa kanila.

YUNG SOLIDARY CREDITOR MAY ACT WHAT IS USEFUL FOR THEM BUT NOT
ANYTHING PREJUDICED OR IKSASAMA (IKAKAPAHAMAK NG IBANG
CREIDTORS).

The general rule is that a solidary creditor may do any act which may be useful to the other
solidary creditors such as:

1.) making of judicial or extra judicial demands to the debtor;

2.) filing of complaint so that the obligation may bear legal interest.

But not anything which may be prejudicial to the latter such as the acts of novation,
compensation, confusion or merger of rights, remission or condonation.

EXAMPLE; SARAH IS LIABLE TO PAY KHIM AND JOYCE WHICH IS SOLIDARY

CREDITORS AMOUNT OF 1,000,000. UNDER THE LAW, KHIM MAY FILE A JUDICIAL
DEMANDS TO HAVE THE INTEREST, IN THIS CASE BOTH CREDITORS WILL BE
BENEFITED.

Article 1213
A SOLIDARY CREDITOR CANNOT ASSIGN HIS RIGHT WITHOUT THE CONSENT OF THE
OTHERS.

- General rule hindi pwedeng i-assign ng isang creditor ang right niya without the consent of other
creditor and if mag consent naman is walang problema kapag hindi nag consent walang magagawa.
So dito ang isang nagpapautang or creditor is hindi siyang pwedeng magtalaga ng third person para
gawin yung dapat na gawin niya or yung right niya as a creditor kapag walang consent ng other
creditor.

-
 Example:
Si ju is may utang kay sab at shai. So sab is hindi siya pwedeng mag assign ng third person na
singilin si ju without the consent of shai. Kasi ang may karapatan lang na magdemand ng payment kay ju is
either si sab at shai lang wala ng iba pa.

And if kunyare si sab nag assign na sya ng third person na walang pahintulot kay shai at nagbayad naman
dun si ju yung obligation is hindi na fulfill kasi nga ang may right lang ng demand sa payment is yung
creditor lang. Pero ayun nga kapag ang naningil is kahit sino sa isang creditor okay yun kahit walang
pahintulot ng other creditor.

Article 1214:

The debtor may pay any one of the solidary creditors; but if any demand, judicial or extrajudicial,
has been made by one of them, payment should be made to him.

- Payment to any of the solidary creditors. So if ikaw si debtor pwede kang magbayad sa
kahit na sinong solidary creditors pero kapag may nagdemand sayo judicially or sa
court, extrajudicial or nag send ng demand letter yun yung prepared mo na dapat
bayaran para maayos or smooth lang yung transaction niyo or para na ding evidence
yun na nagbayad ka talaga.

Example:
Si karl is liable siya to pay reign and pau sila yung solidary creditors amounting to 30,000. So si karl pwede
siyang magbayad in any demand like judicial or extrajudicial, Assume na si pau nag demand judicially so si
karl ung payment should be made to pau.

Pero kunyari si pau yung nagdemand tapos si karl kay reign siya nagbayad, so assume na hindi binigay or
tinakbo ni reign yung para kay pau dun sa binayad ni karl, ang mangyayare si karl is liable pa din siya kay
pau kahit nagbayad na siya kay reign.

And if kapag yung dalawang creditor is nagdemand ng same time yung debtor is kailangan niyang bayaran
yung dalawang yun kahit na same time.

Lastly, kapag dalawa na yung debtor at nagdemand ng payment yung isang creditor pwedeng kahit sino sa
kanila yung magbayad sa creditor at dun lang dapat nila ibayad sa nagdemand.

ARTICLE 1215
 Novation, Compensation, Confusion or remission of the debt, 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.

The creditor who may have executed any of these acts, as well as he who collects the debt, shall be liable to the
others for the share in the obligation corresponding to them.

-If nagkaroon ng apat nayan kahit sa debtor or obligor ung obligation is ma eextinguish. And ang
nagpapautang na maaaring nagpatupad ng anuman sa mga kilos na ito, pati na rin siya na nangongolekta
ng utang, ay mananagot sa iba para sa bahagi sa obligasyong naaayon sa kanila. So in short yung apat
nayun ayun ung modes of extinguishment so if ever na yung solidary creditor is ginawa yung isa dyan sa
apat ibig sabihin matatapos na or ma eestinguised na yung obligation.
Pero kung sinong creditor man ang mag commit ng any of the acts ibig sabihin magiging liable sya sa co-
creditor nya.
LIABILTY OF SOLIDARY CREDITOR IN CASE OF NOVATION ETC.

- Ito nga yung sinasabi ko kanina na kunyare siya lang or yung isang creditor lang nag wave
or nag grant or nag accept ng kulang na bayad ng solidary debtor so that magiging liable siya
sa kapwa niya creditor.

Four (4) Modes of extinguishment of obligations.

1. Novation – binago yung obligation

2. Compensation- may utang sa isat isa.

3. Confusion – iisang tao lang a creditor at debtor.

4. Remission or Condonation – pagpapatawad ng nag kautang

Example:
Si hazel ay may utang so sya yung debtor and shai, ju at ced ung solidary creditors in the amount of
60,000. If si shai is kinunsinti niya na ang bayaran nalang ni hazel is 45,000 imbis na 60,000 so may
kulang . at ang ginawa ni shai nay un is hindi beneficial sa ibang creditors so si shai is liable sya sa kulang
ni hazel na 15,000, so dapat diba tig 20,000 silang tatlo naging tig 15,000 nalang. So yung 15,000 na
kulang is liable si shai dun so need nya ireimburse or bayaran yung dalawa nyang kasama na creditor.
At if si shai is naka collect ulit ng 15,000 kay hazel ayun is hahatiin niya sa kanilang tatlo equally na.
EFFECT OF EXTENSION OF TIME GIVEN BY CREDITOR TO A SOLIDARY DEBTOR

- In case na yung isang creditor is grinant nya ng extension of time payment yung isa sa
solidary debtor ang mangyayari is sasaluhin netong co-debtor yung natitirang utang.

EXAMPLE:
Jen and ken is a solidary debtor kay rain na solidary creditor amounting 500k, and yung solidary creditor
is grinant niya lang na bigyan niya ng extension of time payment si jen amounting 250k,
So yung other debtor is siya yung sasalo ng natitirang amount which is 250k. Parang yung sa kanya na
muna yung ibabayad.
And kapag naman nag elapsed na yung extension of time yung solidary creditor isa can demand na sa
payment na kulang from kahit na sino sa dalawang solidary debtor, kahit yung nagbayad na pwede pa
ding na siya yung singilin depende sa kung sino yung gusto ni creditor na singilin.
EFFECT NG NOVATION ETC. WHERE OBLIGATION IS JOINT

- So yung joint obligation kapag na commit yung isa sa apat na modes of extinguishment
walang effect sa obligation kasi nga diba sa joint kanya kanya naman yun kung sino yung
may utang siya lang yung dapat na singilin. While diba sa solidarity obligation kapag na
commit naman yung isa sa apat nay un ma eextinguish na yung obligation.

Article 1216
The creditor may proceed against anyone of the solidary debtors or some or all of them
simultaneously. The demand made against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has not been fully collected.

- Ang creditor or nagpautang is pwedeng magdemand sa kahit na sino sa solidary debtor

or sa kahit na sino sa kanilang may obligation hanggat hindi pa na na kokolekta ng buo
yung obligation. And hindi to applicable sa joint obligation and the creditor is pwedeng
mamili sa kung kanino niya gustong singilin.

RIGHT OF CREDITOR TO PROCEED AGAINST ANY SOLIDARY DEBTOR

(1) Since the liability is solidary, the other, solidary debtors are not indispensable parties in a suit filed
by the creditor. (De Castro vs. Court of Appeals, 384 SCRA 607 [2002].)

 In case na hindi makapag bayad yung isang solidary debtor yung solidary creditor is pwede
siyang mag sampan ng kaso sa kahit na sinong solidary debtor. So kung pwede siyang
maningil sa kung sino sa solidary debtor so that pwede din siyang magsampa ng kaso sa kahit
na sino sa solidary debtor.
(2) The bringing of an action against a solidary debtor to enforce the payment of the obligation is not
inconsistent with and does not preclude the bringing of another to compel the others to fulfill their
obligations. (see Phil. National Bank vs. Confessor and Diaz, [CA] 37 0.G. 2395-)

 so kahit na nakapagsampa na ng kaso si solidary creditor pwede pa din siyang

magdemand ng payment sa solidary creditor

(3) In case of death of one of the solidary debtors, the creditor may proceed against the estate of the
deceased solidary debtor alone or against any or all of the surviving solidary debtors whose liability
is independent of and separate from the deceased debtor, instead of instituting a proceeding for the
settlement of the estate of the deceased debtor wherein his claim could be filed. (Imperial Insurance,
Inc. vs. David, 133 SCRA 317 [1984].)
  In case na may namatay na solidary debtor yung solidary creditor is pwede siyang
magdemand ng payment dun sa mga natitira o nabubuhay pang solidary debtors.
So ang mangyayare ang nabubuhay pa na solidary debtors sila yung sasagot o
sasalo sa shares ng namatay na co debtor nila. Kasi solidary obligation kapag utang
ng isa utang ng lahat.

(4) The choice is left to the solidary creditor to determine against whom he will enforce collection. (Phil.
National Bank vs. Independent Planters Assoc., Inc., 122 SCRA 113 [1983]; Dimayuga vs. Phil.
Commercial and Industrial Bank, 200 SCRA 143 [1991].)

 Si creditor may right sya kung sino yung pagbabayarin nya ng utang.

Example:
Sila David, Jomari, migz is may utang kay lance ng 6,000. So si lance is pwede siyang mag collect
kahit sino sa tatlong debtor, pwedeng magsabay sa dalawa at pwede ding silang tatlong sisingilin
sabay sabay.
Pero kapag ang demand is ginawa lang kay david si david is hindi niya pwedeng idamay pa si
jomari or si migz kasi nga sya yung tinalaga ng creditor na gawin yung obligation. Pero si creditor
is kapag nagkaroon ng kasuhan sa court may choice si solidary creditor kung sino yung party
defendants niya.
Lastly kung si david is nagbayad lang ng 2,000 yung creditor is right niya pa ding maghabol sa
balance na natititra sa dalawang debtor hanggat hindi pa nabubuo ung obligation.

ARTICLE 1217
Payment made by one of the solidary debtors extinguishes the obligation.  If two or more solidary
debtors offer to pay, the creditor may choose which offer to accept.
He who made the payment may claim from his co-debtors   only the share which corresponds to
each, with the interest for the payment already made.  If the payment is made before the debt is
due, no interest for the intervening period may be demanded.
When one solidary debtors cannot, because of his insolvency, reimburse his share to the debtor
paying his obligation, such share shall be borne by all his co-debtors, proportion to the debt of each.

It is refers to the effects of payment by a solidary debtor

1. Between the solidary debtors and creditors- Ang pagbabayad ng full payment ng
isang nagutang ay maaring tatapos sa obligasyon nila. Kung ang isa o higit pang
solidary debtors ang mag alok ng bayad yung creditor is mamimili sa kung sino sa
kanila yung tatanggapin.

2. Among the solidary debtors- And kung sino man yung nagbayad para sa utang nilang
lahat maari niyang singilin yung mga kapwa niya may utang sa kung magkano yung
para sa kanila na babayaran kasama na din yung interest ng utang nila pero kapag
 nagbayad siya ng maaga wlaang interes na babayaran so wala siyang dapat singilin sa
kapwa niya may utang. So if yung isa sa may utang is hindi niya mababayaran yung
dapat na bahagi niya sa utang ang mangyayari is babayaran yun ng mga natitirang
kapwa niya may utang at hahatiin yun sa kanila equally.

3. Among the solidary creditors- so yung nag collect na solidary creditor you have the
responsibility to deliver proportionate yung para sa mga kapwa mo creditors.

Example:
Si Cams, trisha at kyle is jointly and severally liable or solidary liable kay diane at dyosa sa halagang
6,000 due on October 9.
So if both nag offer si cams at trisha na bayaran si diane sa oct 9 so pipili yung creditor sa kung kaninong
offer pipiliin niya. And if si cams is binayaran nya full payment yung 6,000 so yung obligation nila is
tapos na.
And yung pagbayad ni cams is may right sya sa reimbursement kay trisha at kyle na tig 2k each at may
interest kapag nagbayad sya ng exactly oct 9. Pero kapag si cams is nagbayad siya before oct 9 wala
syang karaptan na maningil ng reimbursement at interest sa dalawa kasi wag dapat bida bida. Kasi ung
reimbursement with interest isa only arise from oct 9.
So if kunyare si kyle na insolvent na yung dalawa na other debtor is need ishoulder yung dapat na share ni
kyle. So bali 2k yung paghahatiin nila si cams is mag aask sya kay trisha na mag add ng another 1k para
paghatian yung dapat na kay kyle. So bali tig 3k na yung babayaran nila pero kapag nag improve naman
na yung finances ni kyle pwedeng mag collect sa kanya yung dalawa na tig 1k.
Last yung nag collect na creditor is may responsibility siya na ideliver yung dapat na sa kapwa niya
creditor kahit sa kanya binayad ng debtor.

ARTICLE 1218
Payment by a solidary debtor shall not entitle him to reimbursement from his co-debtors if such payment
is made after the obligation has prescribed or become illegal
-Ang pagbayad ng isang solidaryong debtor o may utang ng buo sa may creditor ay hindi magbibigay sa
kaniya ng karapatang makuha muli ang binayad mula sa kaniyang mga kasamang solidary debtors kung
ang pagbabayad ay ginawa pagkatapos matapos ang takdang oras ng pagbayad o ang obligasyon ay
naging hindi legal.
- so ditto yung obligation is nag elapsed na at illegal na pero one of the solidary debtor is still nag fulfill
ng obligation or still paid the amount ng kanilang utang so:

Paying the debtor has no right to reimbursements-

1. If na prescribed na - means wala siyang karapatan na mag collect sa kapwa niya

solidary debtor para maibalik yung binayad niya kasi nag elapsed na at illegal na.
Dito papasok yung prescription na may karapatan magcollect yung creditor pero
may time limit. Kagaya sa written contract hanggang 10 yrs. Pag oral 6 yrs, to
 exercise their rights as a creditor and it is provided by law so kapag nag elapsed
na yung time wala ng karapatan magcollect yung creditor.

Example:
John and mark solidary indebted to fil in the amount of 20,000. But the dept is prescribed and still
nagbayad pa din si john so that si john is wala syang karapatan na singilin si mark para sa reimbursement
kasi wala na e nag elapsed na yung time baket mo kasi binayaran diba. Kahit na sabihin na
nakokonsensya ka kaya binayaran mo wala kappa din karapatan na singilian for reimbursement yung mga
kapwa mo debtor.

2. If become illegal- kapag napatunayan na yung transaction is illegal tapos may

bida bida pa ding nagbayad it cannot be reimburse.

Article 1219
The remission made by the creditor of the share which affects one of the solidary debtors
does not release the latter from his responsibility towards the co-debtors, in case the debt
had been totally paid by anyone of them before the remission was affected. (1146a)
(Kapag ang cancellation daw ng obligation ay galing sa creditor na nakakapekto sa isang
solidary debtors lamang hindi ito magapply sa responsibility ng isa pang co debtors na magbayad
in case na nabayad na ng isang debtor ng buo lalo kung bago ang pagdeclare ng cancelation ng
payment na sabi ni creditor)

 Effects of remission of share after payment

- If the payment is made first, the remission has no effect.

(Kung nauna yung bayad kaysa sa cancelation, yung cancelation ay wala ng epekto sa
obligation)

- Kung nagbayad man ng buo yung isang solidary debtor at ang cancelation ay after nyang
magbayad walang effect yun kay nagbayad (solidary debtor who pays) na magdemand sa
co-debtors nya to pay. So liable parin ang co-debtors to pay dun sa nagbayad ng buo.

 Example:

(1) Apple and Boy owe Catty a P100,000, then Boy has more income than Apple so he
insists to pay 100k to Catty. (after remission) But then Catty decided to remit
(cancel) of share of Boy. Boy can demand return of 50k from Catty and;

(before remission) if there is no return of payment Apple is still liable now to pay
Boy 50k because the remission has no effect for the reason of the obligation have
been extinguished already by the payment. (Sinasabi lang dyan na wala ng effect
yung pagcancel kasi yung obligation na nangyare ay naterminate na dahil dun sa
pagbayad ng isang debtor)
 (2) Insolvent debtor – kapag wala ng kakayahan na magbayad ang isang debtor
kailangan itong paghatian ng natirang debtor to fulfill the obligation.

Article 1220
The remission of the whole obligation, obtained by one of the solidary debtors, does not
entitle him to reimbursement from his co-debtors. (n)
(kapag ang creditor nagdeclare na wag na nilang lahat bayaran yung kani kanilang share dahil sa
impluwensya ng isang solidary debtor, hindi sya pwede magdemand ng bayad sa iba nyang co-
debtor dahil sa kanyang impluwaensya or ambag kung bakit hindi na sila dapat magbayad.)

 No right to reimbursement in case of remission

- (same explanation sa taas)

- Remission is essentially gratuitous. It is really a donation.

 Example:

Me (creditor) I lend money to my BFF Jessica, Julia and Jac (sol debtor), since Jek mas may
impluwensya sa akin kasi bff ko sabi ko sa kanya wag na nila bayaran kasi parang libre ko na
lang yun sa kanila. Jessica is not allowed to demand payment from Julia and Jac because of her
influence on not paying sakin.

Article 1221
If the thing has been lost or if the prestation has become impossible without the fault of the
solidary debtors, the obligation shall be extinguished.
(kapag yung bagay ay nawala or yung napagusapan ay hindi na magagawa, at walang
kasalanan ang solidary debtors yung obligation eh mateterminate)
If there was fault on the part of any one of them, all shall be responsible to the creditor, for
the price and the payment of damages and interest, without prejudice to their action
against the guilty or negligent debtor.
(kapag may kasalanan ang isa sa kanila, lahat sila ay may reponsibilidad sa creditor sa
price, sa payment ng mga damages at interest)
If through a fortuitous event, the thing is lost or the performance has become impossible
after one of the solidary debtors has incurred in delay through the judicial or extrajudicial
demand upon him by the creditor, the provisions of the preceding paragraph shall apply.
(1147a)
(kung dahil sa isang fort event dun nawala at nag karoon pa ng delay (after) pwede magdemand si
creditor dun sa mga debtor)
 Rules in case thing has been lost or prestation has become impossible

o Loss is without fault and before delay

- kapag walang fault ang debtor at bago yung delay yung obligation dapat ay materminate or
ma extinguished.

 Example:

Si angelica at kendrick nagpromise sila na idedeliver nila sa akin yung isang set ng plates para
daw sa bago kong bahay. Pinaship pa kasi galing Pampangga sabi nya otw na kaya nagaantay na
ako pero nung ilang araw na wala pa din kaya chinat ko na at sabi nya nakarating na daw pero
wala akong natanggap. Dito mateterminate na yung obligation namin ksi wala naman kaslanan si
debtor kasi hindi naman sya mismo ang may kaslanan bat nawala.

o Loss is due to fault on the part of a solidary debtor

- kapag ang may kasalanan ay isa lang sa mga sol debtor lahat sila responsible for the
damages at dun sa nawalang thing.

 Example:

Same example, pero dito sila angelica at Kendrick namali ng address na nailagay si Kendrick
dahil siguro nalito sa address without confirming it to me. So lliable sila for the price of the
product and also for the damages.

o Loss is without fault and before delay

- kapag walang fault ang debtor at pagtapos ng demand yung delay yung obligation or bago
mangyare yung fort events may delay na talaga liable pa din si debtor.

 Example:

Same example, kapag si debtor talagang nagkaroon na ng delay talaga sabihin na natin di napick
up yung product delay yung pagdeliver at after ng delay nagkaroon pa ng fort events liable pa
din si debtor dun sa product na idedeliver kay creditor
Article 1222
A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which
are derived from the nature of the obligation and of those which are personal to him, or
pertain to his own share. With respect to those which personally belong to the others, he
may avail himself thereof only as regards that part of the debt for which the latter are
responsible. (1148a)
(Dito kung sakali mang gumawa ng aksyon si creditor laban sa kanila na mga sol debtor, pwede
nilang idepensa yung kanilang rights.)

 Defenses available to a solidary debtor

 1. Defenses derived from the nature of the obligation –

2. Defenses personal to, or which pertain to share of debtor sued

3. Defenses personal to other solidarity debtors

Section 5 – Divisible and Indivisible Obligations

Article 1223
The divisibility or indivisibility of the things that are the object of obligations in which
there is only one debtor and only one creditor does not alter or modify the provisions of
Chapter 2 of this Title. (1149)
(Ang pagkakahati o ‘di pagkakahati ng bagay na sa isang obligasyon kung saan may isa lamang na
nangutang at isa lamang na nagpautang ay hindi binabago ang probisyon ng Chapter 2 ng titulong
ito.)

 Meaning of divisible and indivisible

1. Divisible Obligation – the delivery or performance of the object is capable of partial

fulfillment. (yung pagdeliver or maggawa nung obligation or ng object ay pwedeng
installment or partial)
- is the susceptibility of an obligation to be performed partially
[ex. Obligation to deliver 100 pcs watches of a particular brand and quality, money]

 Example:
D agreed to pay C P2,000.00 in four equal monthly installments. The obligation of D is
divisible because it is capable of partial performance. But if the agreement is that D will pay
C on a certain date the full amount of P2,000.00, the obligation is indivisible although money
is physically divisible because the intention of the parties is that the obligation must be
fulfilled at one time and as a whole (not partially). The divisibility of an obligation should
not, therefore, be confused with the divisibility of the thing which is the object thereof.

2. Indivisible Obligation - the delivery or performance of the object is not capable of

partial fulfillment. (yung pagdeliver or maggawa nung obligation or ng object ay hindi
pwedeng installment or partial)
- is the non-susceptibility of an obligation for partial performance realizing the purpose of which the
obligation seeks to obtain.
[ex. Obligation to deliver a particular car, book, cellphone,]
Example:
S obliged himself to deliver to B a specific car on November 15. This obligation is indivisible
because it is not capable of partial performance. The car must be delivered at one time and as a
whole.
Classification of Divisibility
1.Qualitative Division – divisibility depends on the quality of the thing; not homogenous (not on the
same kind) (e.g., Inheritance – real & personal property)
Example: David’s heirs are Kervin and JD, Kervin inherited the house and lot while JD inherited the cars.
2.Quantitative Division – divisibility depends on the numbers of the things; homogeneous (e.g., 1000
hectares of land can divide into how many parts)
3.Ideal / Intellectual Division – non-material divisibility; only mental & intellectual (e.g., Corporation).

Kinds of Indivisibility
Legal Indivisibility – indivisibility provided by law
Conventional Indivisibility – indivisibility will or agreed upon by both parties
Natural Indivisibility– indivisibility by reason of the nature of the object or subject matter of the
obligation.

Indivisibility (1)   vs Solidarity (2)
1.(1) Indivisibility is the Nature of the obligation; (2) Solidarity is the “vinculum” or juridical tie existing
between the parties
2.(1)one debtor & creditor involved in the obligations (2)there must be at least be two debtors or creditor
3.In indivisibility, does not consider the fault of one party as the fault of others; in solidarity the fault of
one is considered the fault of the other
4.(1)The death of the debtor does not extinguish the prestation bec. the heirs are bound to perform by the
unfulfilled prestation.  (2) the debt of the debtor is not tranferred to heirs, therefore, terminates the
solidarity.

Article 1224
A joint indivisible obligation gives the rise to indemnity for damages from the time anyone
of the debtors does not comply with his undertaking. The debtors who may have been
ready to fulfill their promises shall not contribute to the indemnity beyond the
corresponding portion of the price of the thing or of the value of the service in which the
obligation consists.
(kapag hindi nakacomply ang isang debtor dun sa joint indivisible obligation or ito yung
magkaibang bayad yung mga sol debtor tas indivisible yung bagay which is hindi partial
yung pagdedeliver ng object, ang obligation na lang nila ay macoconvert sa isang payment
of damages.)

 Example:
Mila and Ligaya promised jointly to give a specific car worth P2,400,000 to Jose. In the
meantime, the car is with Honda Motors Co. Mila’s share is, therefore, P1,200,000. If Mila,
because of gambling, does not have the money, but Ligaya has P1,200,000 it is clear that they
cannot get the car from Honda Motors Co. So they also cannot comply with their obligation of
delivering the car to Jose. Here, the obligation to give the car is converted to a monetary
obligation to give P2,400,000 to Jose. Ligaya is not responsible for Mila’s insolvency, so she is
duty bound to give only P1, 200,000. Mila will be indebted to Jose for her share of P1,200,000.

 Example:

Kristia, Ryan and Johannes owe a particular sports car to Ann, on or before November 1. Three days
after November 1 Ann demands but Johannes is not ready because of his incarceration. Kristia and
Ryan must each contribute their share in the value of the sports car and deliver the amount to Ann.
Indivisible object becomes a money obligation. Johannes who is unable to comply will later on settle
his obligation to Ann or Ann may sue Johannes for 1/3 the value of the van, which is actually
Johannes share, plus interest, plus damages.

Article 1225
Indivisible – Isahang bigay, gawa
Divisible- partial fulfillment ng delivery or performance
For the purposes of the preceding articles, obligations to give definite things and those which are
not susceptible of partial performance shall be deemed to be indivisible

- Kapag definite things, at performance pinaguusapan indivisible dapat or isahang gawin

dapat hindi sya pwedeng gawin partially.

When the obligation has for its object the execution of a certain number of days of work, the
accomplishment of work by metrical units, or analogous things which by their nature are
susceptible of partial performance, it shall be divisible

- Kapag may number of days of work, metrical units, or yung nature ng obligation nila ay
partial ginagawa, divisible. (Partial)

However, even though the object or service may be physically divisible, an obligation is indivisible if
so provided by law or intended by the parties.

- Kahit na physically divisible yung object or service meaning pwede naman ibigay
partially, kapag yung obligation indivisible kapag provided ng law or ng parties itself
In obligations not to do, divisibility or indivisibility shall be determined by the character of the prestation
in each particular case
Obligations deemed indivisible (isahang gawa)

1. Obligations to give definite things

- Kapag definite things kasi, hindi sya kayang ibigay ng partial fulfillment, so isahang
bagay dapat palagi kapag definite things

Ex. Cellphone

2. Obligations which are not susceptible of partial performance

- Kapag performance naman, hindi pwedeng partial lang din

Ex. Hosting in wedding event, hindi naman pwedeng mag host ka lang kapag kainan na sa
venue.

WARNING: WHAT IF MORE THAN ONE PARTICIPANT?

- Divisible na sya kasi yung gagawa ng performance by part na sila

3. Obligations provided by law to be indivisible even if thing or service is physically

divisible

- Kapag provided ng law, divisible yun kahit pwede naming ibigay na divisible by nature.

Ex. Sahod ng teachers, kahit pwedeng partial lang ibigay, sa law natin dapat pa swelduhin ng
buo yung mga teachers.

4. Obligations intended by the parties to be indivisible even if thing or service is

physically divisible

- Kapag naman intended ng parties na maging indivisible yung obligation, kahit na pwede
namang divisible stick sa napagkasunduan

Ex. Karl obliged himself to pay Deremy 5,000 pesos in October 21 as a whole.

WHAT IF? YUNG 5K DALAWA PALA MAY UTANG KAY DEREMY, SI KARL AT CED?

- It becomes divisible kasi by parts yung utang, pero since si karl lang may utang kay
deremy babayaran yung 5k as a whole ng isahan
Ex. Tailoring of uniform- Inutos ni Julia kay Sabel

- Yung tailoring of uniform yung indivisibility. Walang Karapatan mag demand si Sabel
ng pera kay ju as long as dpa tapos ni sabel yung uniform

Obligations deemed divisible (pwedeng partially yung fulfillment)

1. Obligations which have for their object the execution of a certain number of days or work

Ex. Painting (portrait)

2. Obligations which have for their object the accomplishment of work by metrical units

Ex. Paggawa ng table na may meter (sinusukat)

3. Obligations which by their nature are susceptible of partial performance

Ex. The obligation to teach in one year, Installment

Divisibility or indivisibility in obligations not to do (wag gawin)

1. Indivisible obligations (tuloy tuloy)

- Ex. Wag ka magcutting for 3 months

- Dapat continuously sa 3 months hindi sya makapag cutting

2. Divisible obligations (partial)

- Tuwing sabado dapat hindi ka magcutting

Section 5 – Obligations with a Penal Clause

Article1226
In obligations with a penal clause, the penalty shall be substitute the indemnity for damages and the
payment of interests in case of non- compliance, if there is no stipulation to the contrary.

- Sa obligations with a penal clause, yung penalty pwede syang ipalit sa damages and
interest if there is no stipulation bet. The parties.

Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty or fraud in
the fulfillment of the obligation.
 - If ayaw bayaran yung penalty, yung damages nalang babayaran nya or if guilty sya sa
fraud or pagtakas sa fulfillment ng obligation.

The penalty may be enforced only when it is demandable in accordance with the provisions of this code

1. Principal obligation

- Can stand itself

- Hindi naka depende sa iba pang obligation

2. Accessory Obligation

- Eto naman yung naka attached sa principal obligation

- Cannot stand alone

Penal clause – accessory na naka attached sa obligation. Para tumaas yung babayaran nung debtor if ever
may breach of contract, or hindi nya sya nakakapag complied regularly.

- May accessory

- Demandable kapag hindi nagawa obligation

Condition

- Walang accessory

- Never demandable

Legal obligations- by law

- By agreement of parties

Obligation with a penal clause

- If na breach yung principal obligation, yung accessory obligation yung babayaran

Unilateral Obligations- one party is bound to fulfill the obligation

Ex. Debt
Bilateral obligations- both parties are bound to perform an obligation
Ex. Contract of sale
Purposes of penal cause

(1) to insure their performance by creating an effective deterrent against breach, making the
consequences of such breach as onerous as it may be possible. (Yulo vs. Chan Pe, 101
Phil. 134.) This is the general purpose of a penal clause; and

- para maensure na magagawa talaga yung obligation. Para mas maging mabigat yung parusa sa
lalabag sa contract

- Reparation

(2) to substitute a penalty for the indemnity for damages and the payment of interests in case of non
compliance (Art. 1226.); or to punish the debtor for the non fulfillment or violation of his obligation.
- Substitue sa damages and interest. Or para parusahan yung debtor.
- punishment
Kinds of penal clause

1. As to origin

a. Legal penal clause- provided by law

b. Conventional penal clause- stipulation of parties

2. As its purpose

a. Compensatory penal clause- penalty takes place of damages

b. Punitive penal clause- penalty is just a punishment for breaching of contract

3. As to its demandability or effect

a. Subsidiary or alternative penal clause- when only penalty can be enforced

b. Joint or cumulative penal clause- both principal obligation and penal clause
enforced

Penal Substitutes for damages and interests

- General rule in obligation with penal clause: yung penalty nalang yung pumapalit sa
damages and interest if ever hindi magawa yung obligation.

- Hindi porket may proof si creditor ng damages, hindi necessary na penalty kagad.

When creditor may recover damages

 1. When so stipulated by the parties

- Base sa contract

2. When the obligor refuses to pay the penalty in which case the creditor may recover legal
interest thereon; or

- Kapag ayaw bayaran yung penalty, pwedeng interest nalang bayaran

3. When the obligor is guilty of fraud in the fulfillment of the obligation, in which case the
creditor may recover damages caused by such fraud

- Kapag fraud, pwedeng pabayaram yung damages nung fraud na yun.

Ex. Construction of house – X (debtor) to Y (creditor)

- May penal clause na 100k If hindi ma construct yung bahay

- If ever 40k lang yung damages kay Y obligado pa rin si X magbayad ng 100k as a whole

- Yung penalty na 100k pinalitan nya na yung 40k na damages unless stipulated sa usapan
nila. Pwede ring both damages and penalty

- If ayaw bayaran ni debtor yung penalty, may interest na mag aarise. Yung interest nay un,
bagong damages yun sa hindi pagbayad ng penalty

- If fraud naman ginawa ni X liable sya sa damages

- Dapat may proof na fraud yung ginawa ni debtor para liable na makuha ni creditor yung
penalty na ibibgay kay debtor

When penalty may be enforced

- Breach of obligation

- Not contrary to the law, morals, good customs, public order, or public policy

ART. 1227.
The debtor cannot exempt himself from the performance of the obligation by paying the penalty,
save in the case where this right has been expressly reserved for him.

- Hindi maeexempt ni debtor sarili nya sa obligation if penalty lang babayaran nya, pero if
ever granted naman sa kanya, pwede.
Neither can the creditor demand the fulfillment of the obligation and the satisfaction of the penalty
at the same time, unless this right has been clearly granted him.

- Hindi makakapag demand si creditor ng fulfillment ng obligation and penalty ng sabay,

unless malinaw na nakalagay na may Karapatan syang gawin yun.

However, if after the creditor has decided to require the fulfillment of the obligation, the
performance thereof should become impossible without his fault, the penalty may be enforced.
(1153a)

- Kapag nag demand na si creditor ng fulfillment ng obligation, tapos wala naman fault si
creditor, pwede na sya mag demand sa penalty.

Penalty not substitute for performance

- Hindi pwedeng piliin nalang ni debtor yung penalty over performance kasi yung penalty,
sinesecure nya lang na magagawa ni debtor yung obligation.

- Nagiging alternative kasi kapag may choice sya.

Penal clause presumed subsidiary

- Hindi pwede idemand ni creditor yung obligation and penalty at the same time.

- Purpose ng penalty para hikayatin si debtor na gawin yung main obligations

1. When there is performance

- Kapaag nagawa yung performance, walang penalty.

- EXCEPTION: unless clearly stated na granted

Ex. Nadelay ng deliver si sarah kay ana.

- Once na tinanggap ni ana kahit delay, hindi na sya makaka demand sa penalty. Unless
stipulated sa contract nila.

2. Where there is no performance

- Penalty or Performance

- Alternative

- Magkaka penalty lang kapag may breach of contract

 - Kapag may fraud sa part ni debtor, pwedeng penalty at damages.

Ex. If hindi nakapag deliver si sarah pwedeng mamili si ana sa mga to

1. Fulfillment, hindi na sya makakapag demand sa penalty unless hindi pa rin magawa yung
fulfillment ng walang fault si ana.

2. Kapag naman penalty pinili nya, hindi na sya pwede mamili ng fulfillment. If hindi
naman mabayaran yung penalty, pwede nya piliin yung fulfillment

3. If fraud both yung fulfillment at penalty.

With penal clause joint

- May Karapatan si debtor bayaran yung penalty kesa gawin yung performance only kapag
binigay sa kanya yung right na to.

- If granted kay debtor yan kay creditor naman, pwede sya mag demand ng penalty and
performance kapag clearly granted din sa kanya.

- Kapag walang proof na na breach yug contract, only damages lang, walang penalty.

- Kapag hindi binayaran yung penalty may Karapatan si creditor mag demand sa principal
obligation and penalty with legal interest.

ART. 1228.
Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be
demanded.

- Kahit may proof ng actual damages, hindi necessary na penalty agad yung idemand.

Penalty demandable without proof of actual damages

- Sa obligation with a penal clause, dapat ma prove ni creditor na na violate ni debtor yung
obligation para liable sa penalty

- Hindi porket may damages or losses, penalty na kaagad.

- Para maiwasan yung kagahaman

- Pwede I enforce yung penalty may damages man or wala, pero dapat yung amount sa
penalty lang na napagusapan bawal lumagpas.
Damages recoverable in addition to penalty must be proved

- Yung penalty pwede I substitute sa damages

- Dapat kung ano yung amount nung penalty, stick lang dun and pwede idagdag yung
damages basta hindi lalagpas sa penalty

ART. 1229.
The judge shall equitably re duce 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. (1154a)

- Babawasan ng court yung amount kapag partly or irregularly naming ginawa. Kahit
walang performance, if sobra sobra yung amount irereduced din ni court

When penalty may be reduced by the courts;

1. When there is partial (fulfillment) or irregular (manner) performance

- Ma babawasan penalty kapag may partial fulfillment naman na binibigay

Ex. Building of house within 4 months, may usapan sila na kapag may breach of contract, may
penalty na 100k.
Natapos nya after 4 months

- Babawasan ng court yung delay kasi nag benefit naman si creditor sa ibang tapos na na
part ng bahay.

2. When the penalty agreed upon is iniquitous or unconscionable

- Kahit walang performance si obligor irereduce ng court kasi sobra yung amount or hindi
maka tao

Ex. Same example pero 5k per day of delay

- Babawasan ng court kasi sobra sobra naman yung amount.

ART. 1230.
The nullity of the penal clause does not carry with it that of the principal obligation.

- Kapag null yung penal clause, valid yung principal obligation kasi yung penal clause is
just an accessories

The nullity of the principal obligation carries with it that of the penal clause.

- Kapag null yung obligation null na din yung penal clause.

Effect of nullity of the penal cause

- Accessory follow the principal

- Penal clause is void, principal obligation is valid and demandable

- Penal clause is disregarded

- Only indemnity for damages yung applicable if null yung penal clause

Ex. Sol will deliver a laptop to Mon. provided in their contract that if sol delays, sol will deliver
a illegal drugs.

Valid- Delivering of laptop

Void (penal clause) – deliver of illegal drugs

Effect of nullity of the principal obligation

- Kapag null yung principal obligation null na din yung penal clause.

- Penal Clause cannot stand alone

- Pero kapag kasalanan ni debtor kung bakit null yung obligation, due to bad faith and nag
suffer si creditor, pwedeng ienforce yung penalty

Ex. S will deliver to b a illegal drugs. In case of non compliance, s will pay 10k

-parehas void
 CHAPTER 4: EXTINGUISMENT OF OBLIGATIONS

Article 1231
Obligations are extinguished:
(1) By payment or performance;
(2) By the loss of the thing due;
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor and debtor;
(5) By compensation;
(6) By novation.

Other causes of extinguishment of obligations, such as annulment, rescission,

fulfillment of a resolutory condition, and prescription, are governed elsewhere in this Code.
(1156a)

Ang mga obligasyon ay mawawala o matatapos kapag nangyari na ang mga sumusun
od na bagay:
(1.) Sa  pagbabayad o pag ganap;
(2.) Sa  pagkawala ng bagay na kailangan ibayad o ibigay;
(3.) Sa  pagbibigay ng kapatawaran o ng pagbabalewala ng utang;
(4.) Ang pagsasama sa iisang tao ng obligasyon ng pagiging nagpautang  at  umutang;
(5.) Palitan ng obligasyon;
(6.) Pagpapalit ng panibagong obligasyon.

Ang mga ibang dahilan ng pagkatapos o pagkawala ng obligasyon

katuladng annulment, rescission,at pagsagawa o katuparan ng resolutory condItion,and pr
escription,ay pinamamahalaan ng ibang artikulo mula sa Code na ito.
Other causes of Terminating Obligations:
Death of a party in case when the obligation is requiring personal service.
(dito kung yung obligation is a personal obligation (to do or not to do) tapos kapag namatay yung debtor
specifically yung obligation ay mateterminate na)
Example: When Jammy, a singer dies before the concert.

Mutual Agreement / Mutual desistance or withdrawal

(dito kapag meron silang mutual agreement magkakaroon sila ng mutual contract at kapag dumating yung
time na nagkaroon sila ng mutual disagreements or hindi pagkakasunduan mateterminate yung obligation)

Example:

Arrival of Resolutory Period

(dito kapag ang obligation ay resolutory obligation na immediate demandable pero may nakatakdang
araw kailan ito matatapos, kapag dumating na sa resolutory period nateterminate na ang obligation)

Example: Jack will support her sister Kira until she turns 25.
Compromise-
Happening of Fortuitous Event
(dito kapag may nangyare daw na hindi inaasahan katulad ng bagyo, lindol, sunog, etc. extinguish na
yung obligation)

Example: Merla’s car who she was supposed to deliver it to Carl burned out without Merla’s fault.

Article 1232

Payment means not only the delivery of money but also the performance, in any
other manner, of an obligation.

(Ang pagbabayad ay hindi lamang ang pagdadala ng pera ito rin ay may kasamang
pagsasagawa, kahit sa ano mang kaparaan, ng isang obligasyon.)

 Meaning of payment

 Parlance terms – payment refers only to the delivery of money.

 (dito ang common (parlance) meaning daw ng payment ay sa pagbibigay lang ng
pera.)

 Legal mode of extinguishing an obligation (wider meaning) – payment is not only

consist of delivery of money but also giving other thing, doing of an act, or not doing
of an act. (to give, to do, or not to do)

(dito legal terms ang pagbabayad daw sa isang obligation di lang nababase sa pero,
pwede din yung pagbayad gamit isang bagay, or paggawa ng service or hindi
paggawa ng service)

 When a debtor pays damages or penalty instead of fullfiling the obligation there is also a
payment.

(kapag si debtor nagbayad ng damages or penalty kaysa sa gawin yung pinaka obligation
magtatawag pa din syang payment)

 In law, payment and performance are synonymous.

(sa batas ang pagbabayad at pagsagawa ng isang bagay ay parehas lang)

 Example: Mar obliged himself to give the drawer to Bella. (to give)

Mar obliged himself to repair the electric fan of Bella. (to do)

Bella will give him 100k if he did not cut in class. (not to do)

Article 1233

A debt shall not be understood to have been paid unless the thing or service in
which the obligation consists has been completely delivered or rendered, as the case may
be. (1157)

(Ang utang ay hindi masasabing nabayaran na hangga’t ang bagay or serbisyo na

binigay sa obligasyon ay buong nabigay na o nagawa na, alin man sa dalawang nabanggit.)
(ito yung general rule)

 When debt is considered paid

Debt is not necessarily to paid by money it depends on the prestation of the obligation (to
give, to do, or not to do)
 (sinasabi lang na ang utang hindi agad agad na pera ang ipangbabayad mo depende ito sa
prestation ng obligation)

 Requisites

 Integrity of prestation - debt to deliver a thing or to render service is not understood

to have been paid unless the thing or service has been completely delivered or
rendered. Partial or irregular performance will not produce the extinguishment of the
obligation “general rule”

(dito sinasabi lang na hindi pa masasabing bayad na ang utang kapag hindi pa
kompletong naibigay yung bayad or hindi pa kompletong narerender yung
obligation. Kailangan lagging kompleto. Kaya pasok dito ang partial or irregular
payment or performance at hindi pwedeng materminate ang obligation as a
general rule)

 Example: Junny obliged himself to deliver a 10 box of ballpens for my

school supplies store. If Junny delivers only 6 box of ballpens. Under the
law me as a creditor can refuse to pay the 6 box ofballpens because it is
kulang sa napagusapan hanggat hindi pa na dedeliver yung kulang hindi
pa ako dapat magbayad.

 Identity of prestation - the very prestation due must be delivered or performed.

(dito kapag Idedeliver or ipeperform yung obligation dapat kung ano yung
napagusapang prestation yun dapat yung ibigay or gawin)

 Example: Junny obliged himself to deliver a 10 box of ballpens for my

school supplies store. But he delivers exact 10 box pero pencil yung
laman. Hindi obligado dito si creditor na magbayad dahil mali yung item
or object or prestation na idineliver kaysa sa napagusapan. Nagmamatterr
dito yung item na napagusapan.

 Pareho dapat itong mga requisites ay macomply para masabi na ang debt is completely
paid

Article 1234

If the obligation has been substantially performed in good faith, the obligor may recover as though there
had been a strict and complete fulfillment, less damages suffered by the obligee.
(Kung ang obligasyon ay natupad o nagawa substantially in good faith kahit hindi complete pwede
na syang masabing bayad na.) (1st exception to the general rule)
  Recovery allowed in case of substantial performance in good faith

 1st exception to the general rule (ART. 1233)

 (Kung ang obligasyon ay natupad o nagawa substantially in good faith kahit

hindi complete pwede na syang masabing bayad na)

 Requisites for the application of the Exemption

 There must be substantial performance - the important or essential part of the

contract has been performed and only a minor part thereof has not been carried out.

(ibig sabihin dito na kaya siya substantially perform lalo na kung pinakaimportanteng
part na ng obligation ang naperform or nagawa, kaya kahit na hindi magawa yung iba
pang part ng obligation.)

 must be in good faith – must show that the debtor attempted to comply in good faith.

(dito dapat maipakita ni debtor na willing at nagbigay siya effort na magcomply kahit
na di talaga at in good faith)

 Example: Hans obliged himself to give 40 sacks of soil for the garden of
Sel. But because of the shortage soil, he delivers only 35 sacks of soil, and
even he can’t comply completely we can say that Hans wants to comply
the obligation completely, but he could not do because for reason beyond
his control. Still Hans must show that he attempted to comply in good
faith with his obligations. At pwede nga icollect yung payment only on the
no. of sacks he deliver

Article 1235

When the obligee accepts the performance knowing its incompleteness or irregularity, and without
expressing any protest or objection, the obligation is deemed fully complied with.
(Kapag ang pinagkakautangan ay tumangap ng hindi sapat o hindi tama at hindi sya nagreklamo o
umangal, ang obligasyon ay paniniwalaan na nagawa na ng buo.) (2nd exception to the general rule)
Recovery allowed when incomplete or irregular performance is waived
2nd exception to the general rule
It is founded on the law of principle of estoppel - prevents someone from arguing something or asserting
a right that contradicts what they previously said or agreed to by law. It is meant to prevent people from
being unjustly wronged by the inconsistencies of another person's words or actions.
(bawal yung urong sulong
1. If the payment is incomplete or irregular, the creditor may properly reject it. (kapag ang pagbayad ay
hindi kompleto yung creditor pwede niya ireject yung bayad)
2. In case of acceptance, the law considers that he waives his right and the whole obligation is
extinguished. (kapag daw nagbayad si debtor ng hindi kompleto at tinanggap ni creditor ibig sabihin
nawaive or napawalang bisa na yung power niya to demand pa dahil dun sa pagaccept niya ng payment
kahit di buo mateterminate na yung obligation)

Requisites for the application of exception

 The creditor knows that the performance is incomplete or irregular.

(dapat si creditor mismo alam na hindi macocomply ni debtor ang obligation dapat
aware siya)

 Creditor accepts the performance without expressing any protest or objection.

(kapag tinanggap ni creditor yung bayad ni debtor kahit kulang ng walang ibang
reklamo or hindi umangal)

(dito masasabi na natin kapag naapply to lahat the obligation is extinguished and
consider paid on the part of debtor)

 Example: Katy promised to give Perry a bucket of chicken in Jollibee. But

unfortunately, the bucket of chicken in Jollibee is already sold out. Katy
will inform Perry that she cannot be able to get the specific bucket of
chicken so she decided to buy in KFC. So Perry without any objection
accept the bucket of chicken from KFC, then the obligation is fully
complied and already extinguish. (This is considered complete or regular)

Article 1236

The creditor is not bound to accept payment or performance by a third person who has no interest
in the fulfillment of the obligation, unless there is a stipulation to the contrary.
(Ang (creditor) nagpapautang ay hindi dapat o nasasakop ng pagtanggap ng pagbabayad ng
ikatlong tao na walang kinalaman o interes sa paggawa ng obligasyon, maliban kung mayroong
kasunduan)
Whoever pays for another may demand from the debtor what he has paid, except that if he paid
without the knowledge or against the will of the debtor, he can recover only insofar as the payment
has been beneficial to the debtor. (1158a)
(Kung sino man yung nagbayad para sa iba ay maaaring makapaningil sa nangutang para dun sa
kanyang binayaran, maliban na kung siya ay nagbayad ng hindi alam at hindi ayon sa kagustuhan
ng nagpautang, mababawi o masisingil lamang niya ito kung ang pagbabayad ay may
kapakinabangan sa umutang.)
Persons from whom the creditor must accept payment

 Debtor – nangutang

 Any person who has an interest in the obligation when where there is stipulation
that he can make payment – guarantor (ito yung kapag hindi nakapabayad yung
principal debtor ito yung pwedeng habulin ng creditor)

- Co-debtor (kung solidary obligation pwedeng isa muna ang magbayad ng buo at
magbabayad na lang sa co-debtor yung isang co debtor)

 Example: sa penthouse, yung nagutang na si Joo Dan Tae nagkapirmahan sila

ng creditor at napagusapan nila na kapag hindi siya nakapagbayad si Cheo Jin
ang magbabayad.

 A third person who has no interest in the obligation when there is stipulation
that he can make a payment

 Creditor may refuse payment by a third person

- "Under the old Civil Code, the creditor cannot refuse payment by a third person but
the Commission believes that the creditor should have a right to insist on the liability
of the debtor. Moreover, the creditor should not be compelled to accept payment from
a third person whom he may dislike or distrust.

(dati sa old civil code sinasabi lang na si creditor walang rights na tumanggi sa bayad
ni third person pero sa new civil code may rights na si creditor na tumanggi sa bayad
ng 3rd person lalo na hindi ito katiwa tiwala at hindi niya gusto. May right na si
creditor kung sino ang dapat maging liable for payment ng obligation)

 Effects of payment by a third person

 If the payment made without the knowledge or against the will of the debtor -
The payer can recover from the debtor only insofar as the payment has been
 beneficial to the latter. In other words, the recovery is only up to the extent or amount
of the debt at the time of payment.

(marerecover lang ni third person kay principal debtor yung payment hanggang doon
lang sa magkano yung nagbenefit lang si debtor)

 Example: Piggy owes 6,500 to Piglet and Hammy is the 3 rd person, as for Hammy he
pays the whole amount to Piglet in the debt of Piggy, and because Hammy pays
without the knowledge of Piggy he doesn’t know that Piggy already paid the 500
pesos. So Hammy cannot recover to Piggy the whole 6,500 because the only amount
benefited to Piggy is the 6,000 pesos.

 If made with the knowledge of the debtor. - The payer shall have the rights of
reimbursement and subrogation, that is, to recover what he has paid (not necessarily
the amount of the debt) and to acquire all the rights of the creditor.

(dito since may knowledge si principal debtor the 3rd person may Karapatan na sya na
irecover yung kung magkano yung binayad niya kay creditor at pwede nyang makuha
yung mga rights as a creditor)

 Example: Piggy owes 6,500 to Piglet and Hammy is the 3 rd person, as for Hammy he
pays the whole amount to Piglet in the debt of Piggy, and Piggy has the knowledge na
babayaran ni Hammy si Piglet ng whole amount, Hammy has the right to recover the
whole 6,500 to Piggy and Hammy now is the new creditor of Piggy

Article 1237

Whoever pays on behalf of the debtor without the knowledge or against the will of the latter, cannot
compel the creditor to subrogate him in his rights, such as those arising from a mortgage, guaranty, or
penalty. (1159a)
(Sinuman magbayad sa ngalan ng umutang ng hindi nito alam o hindi ayon sa kanyang
kagustuhan, hindi mapipilit ang nagpautang upang mapalitan sya sa kanyang mga karapatan,
tulad ng mga bagay mula sa pagkasanla, garantiya o multa.

 Subrogation and reimbursement distinguished.

 Subrogation
- the person who pays for the debtor is
put into the shoes of the creditor.
- The payor acquires not only the right
to be reimbursed for he has paid but
also all other rights which the creditor
could have exercised pertaining to the
credit either against the debtor or
against third persons, be they
guarantors or possessor of mortgages.
Reimbursement
- the third person entitled by reason of
payment has merely the bare right to
be refunded to the extent provided in
the second paragraph of Article 1236
without the right to the guarantees
and securities of the original
obligation.

- In subrogation, however, there is no

real extinction of the obligation, but
only a change of creditor.

- Kung sino yung nabayad sa creditor - Refund lang

siya yung mapupunta sa position ni
creditor bilang creditor na - Dito kung saan lang benefited si
magdedemand dun sa ibang debtor. debtor.

- Mas powerful ang subrogation dahil

makukuha lahat ng rights ng
nagbayad yung rights ng creditor.

- Dito walang termination ng obligation

pero maiiba lang yung creditor.

 Example: Franz owes Jen 500,000, Yeri is the 3rd person and Eula is the guarantor. If
the case is Yeri (3rd person) pays 500k to Jen (cr) in time of reimbursement, Yeri can
reimburse up to the amount where Franz wa benefited.

If Franz cannot pay the Yeri, Yeri cannot go to Eula (Guarantor), because having the
thought of without consent of the debtor he is not entitled for subrogation even if the
creditor agrees), But if the case is with the consent of the debtor, he has the rights like
a creditor and go to the guarantor if debtor cannot pay the 3rd person.

Article 1238

Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a
donation, which requires the debtor’s consent. But the payment is in any case valid as to the creditor who
has accepted it. (n)
(Ang bayad na ibinigay ng 3rd person para sa inutang ni principal debtor na hindi niya intension na
kunin pa ito kay debtor ay kinokonsidera na isang donasyon, na nangangailangan ng kaalaman ni
debtor. Ito ay may bisa kung sakaling tinanggap ito ng nagpautang.)

 Payment by a third person who does not intend to be reimbursed

- "Embodies the idea that no one should be compelled to accept the generosity of another."
If the paying third person does not intend to be reimbursed, the payment is deemed a
donation which requires the debtor's consent to be valid.

- However, if the creditor accepts the payment, it shall be valid as to him and the payor
although the debtor did not give his consent to the donation.

(kung ang 3rd person ay wala namang intension na magrefund ng binayad niya dun sa debtor
kahit may consent o wala valid pa din ito na iconsider at donation, at kung naaccept din ni
creditor yung bayad ni 3rd person)

 Example: Cardo owes Alyana P1,000.00. nena is the 3 rd person, Without the
intention of being reimbursed dahil close friend silang dalawa, Nena paid
Cardos’s obligation. Cardo had previously accepted Nenas’s generosity. In
this case, Cardo is not liable to Nena and his obligation to Alyana is
extinguished. But if Cardo did not consent to the donation, Nena may
recover from Cardo since there has been no donation, although originally
Cardo did not intend to be reimbursed. Nevertheless, the obligation of
Cardo to Alyana is extinguished because the payment is valid as to Alyana
who has accepted it.

Article 1239

In obligations to give, payment made by one who does not have the free disposal of the thing due
and capacity to alienate it shall not be valid, without prejudice to the provisions of Article 1427
under the Title on “Natural Obligations.” (1160a)
(kapag obligation na magbigay, at yung payment ay ginawa ng isang party na hindi free disposal sa
bagay at walang capacity na magbigay ng bagay sa ibang tao ay hindi valid.)
Meanings:
Free disposal of the thing due – dapat yung bagay na ibibigay mo sa creditor ay hindi na subject sa
anumang claim ng ibang tao.
Capacity to alternate - dapat ang party ay hindi incapacitated (minor) na pumasok sa isang contract.
GENERAL RULE: kapag ito ay real obligation, yung ibabayad ng party ay dapat pasok doon sa dalawa,
kapag hindi pasok hindi valid ang bayad kaya yung bagay na nabayaran ay pwedeng marecover.
 Article 1240

Payment shall be made to the person in whose favor the obligation has been constituted, or his
successor in interests, or any person authorized to receive.
(Ang pagbabayad ay maaaring lang gawin sa taong kung saan ay may pabor ang obligasyon na
kung anong nilalaman, o sa kanyang tagapagmana na may interes, o kahit kaninong tao na
pinahihintulutan na tumanggap.)

 Person to whom payment shall be made

 Creditor / Obligee – person who has the right to demand.

 His successor in interest – like an heir or assignee.

 Any person authorized to receive it

- The creditor referred to must be the creditor at the time the payment is to be made, not at
the constitution of the obligation.

(dito masasabi na creditor ka kapag dumating na yung oras or araw ng bayaran, hind isa mismo
kailan nagsimula yung obligation dahil pwedeng mabago yung creditor)

- Hence, if a person is subrogated to the right of the creditor, payment should be made to
the new creditor.

(dito kapag naman subrogated yung right ng isang creditor, yung pagbabayad ay dapat ibigay sa
bagong creditor)

 Example: Karen (creditor) have a rental house in Baguio and Gan wanted to rent
the house without specific time. In case that something happens to Karen like
death, Gan must pay the rent to the person whose Karen is authorized to receive
payment and it must be provided by law. If Gan pays to any other person who is
not authorized by Karen, the payment is not valid even though he acted as good
faith paying to other party is not an excuse so he must pay again.

(dito kung namatay man si creditor still the obligation of te debtor na magbayad
ay nandun pa din pero sa iba ka na magbabayad doon sa itinalaga niyang tao to
receive the payment)

 Meaning of “any person authorized to receive it”

  Authorized by the creditor

 Family member

 Friend

 Whom he may trust

 Authorized by law

 Guardian

 Executor / Administrator of the estate of a deceased

 Assignee / Liquidator of a partnership or corporation

 Other person who may be authorized by law

Article 1241

Payment to a person who is incapacitated to administer his property shall be valid if he has kept the
thing delivered, or insofar as the payment has been beneficial to him.

(Ang kabayaran sa isang taong walang kakayahang pangasiwaan ang kanyang ari-arian ay valid
kapag nabigay nya ang bagay na hinihingi sa kanya, o hangga’t ang kabayaran ay naging
benepisyal sa kanya.)

Payment made to a third person shall also be valid insofar as it has redounded to the benefit of the
creditor.  Such benefit to the creditor need not be proved in the following cases:

(Ang kabayarang ibinigay sa 3rd person ay valid hangga’t ito ay benepisyal sa inutangan.  Ang
benepisyong hindi na kailangan pa iproved)

If after the payment, the third person acquires the creditor’s rights;
(Kung pagkatapos ng bayad, ang 3rd person ay nakuha ang karapatan ng creditor)

If the creditor ratifies the payment to the third person;

(Kung nabigyan ng consent ng creditor ang ibabayad para sa 3rd person)
If by the creditor’s conduct, the debtor has been led to believe that the third person had authority
to receive the payment. (1163a)
(Sa pamamagitan ni creditor, na kung saan si debtor ay napaniwala na ang 3rd person na ang may
kakayanan na kumuha ng bayad)

Effect of payment to an incapacitated person.

- Payment to a person incapacitated to administer or manage his property is not valid

unless such incapacitated person kept the thing paid or delivered (so that it is not
necessary that it should have been invested in some profitable venture), or was benefited
by the payment.

(dapat ikaw as a debtor or 3rd person hindi ka dapat magbayad sa mga incapacitated person dahil
magiging void yung pagbayad niyo doon, pero kung naitago naman ng uncapacitated person
yung bagay or hindi nagbenefit)

o Incapacitated person

 Minors

 Under guardianship

In the absence of this benefit, the debtor may be made to pay again by the creditor's guardian or
by the incapacitated person himself when he acquires or recovers his capacity. Proof of such
benefit is incumbent upon the debtor who paid.

(Kung magbenefit yung incapacitated person, need magbayad ulit ni debtor sa creditor.
Kailangan din as a debtor na maproved niya na hindi nawala at beneficial pa din sa debtor)

 Effect of payment to a third person

- Payment to a third person or wrong party is not valid except insofar as it has redounded
to the benefit of the creditor.

(ang pagbayad daw sa 3rd person or sa wrong party ay hindi valid except kung hanggat sa
nakakabenefit ito kay creditor)

 When benefit to creditor need not be proved by debtor

- Subrogation of the payer in the creditor’s rights – kapag ang right of creditor nainherit
na ng payer or 3rd person na nagbayad.

 Example: Fred (debtor) owes 400,000 from Herd (creditor), and a 3 rd person who
is a friend of Fred (debtor) which is si Jerry (3 rd person), in this case Herd
(creditor) borrowed also 400,000 to Jerry, so since sabi ni creditor na friend
 naman kayo sure yan babayaran ka nyan. Now the rights as a creditor to demand
payment to Fred changed to Jerry who is also a creditor of Herd.

- Ratification by the creditor – kapag nagbigay ng consent si creditor.

 Example: Fred (debtor) owes 400,000 from Herd (creditor), and a 3 rd person who
is a friend of Herd (creditor) which is si Jerry (3 rd person), in this case Fred pays
the whole amount to Jerry without the knowledge pa ni Herd, tas later sinabi din
agad ni Fred na nagbayad sya kay Jerry at nagbigay nman ng consent si Herd.

- Estoppel on the part of the creditor – may katiwala

 Example: Fred (debtor) owes 400,000 from Herd (creditor), and a 3rd person who
is a secretary of Herd, so kapag isa kang company owner malamang yan may
secretary ka na maguguide sayo sa mga gawain mo every day. Dito kahit na
nagbayad si Fred kay Jerry no need na to prove na nagbayad si debtor kay creditor
dahil katiwala nya naman ito at naging beneficial naman to the creditor

Article 1242

Payment made in good faith to any person in possession of the credit shall release the debtor.
(Ang pagbayad in good faith o ginawa nang walang daya doon sa may hawak ng obligation ay
mateterminate na ang obligasyon.)
Payment to the 3rd person in possession of credit
Another valid payment to the 3rd person.
(itong article na toh ang isang rason bakit valid ang bayad ni debtor kay 3rd person)
"possession" – refers to the credit not to the document of that validates the obligation.
(masasabi na ang obligation ay nasa possession ng isang party kapag ang pinakaobligation ay nasa
isang party mismo hindi doon sa document na makakapagdetermine ng bayad.)

Hence, mere possession of the instrument (unless transferable by delivery) does not entitle the
holder to payment nor does payment release the debtor.Furthermore, the payer must act in good
faith, that is, in the honest belief that he is making a valid payment and that the payee is the owner
of the credit. Good faith is presumed.

Example: D is indebted to C in the amount of P1,000 which indebtedness is evidenced by a

promissory note signed by D in favor of C. C lost the promissory note which was later found by T
who demanded payment from D. (yung utang may promissory note pero hindi mahanap ni creditor
at si 3rd person ang nakahanap at nagdemand ng payment kasi sya nakahanap nung note)
Payment to T is not valid because T is the possessor merely of the document evidencing the credit
and not of the credit itself. (yung pagbayad kay 3rd person ay hindi valid dahil ang nasa kanya lang
naman ay yung note pero hindi yung mismong obligation to demand payment, kumabaga wala sa
kanya yung rights as a creditor)
If the promissory note is payable to bearer or holder (Negotiable Instruments Law [Act No. 2031],
Sec. 9), the obligation will be extinguished if D pays T in good faith. (dito kung hindi naman sinabi
na dapat kay creditor ka magbayad, at kung nagbayad ka man in good faith kay 3rd person
mateterminate na yung obligation)
Similarly, if the promissory note was indorsed by C to T, under a private agreement that T would
not collect from D, payment by D in good faith to T will also extinguish the debt. The right of C will
be against T. (

Article 1243

Payment made to the creditor by the debtor after the latter has been judicially ordered to retain the
debt shall not be valid.
(Ang bayad na ginawa sa creditor ng debtor pagkatapos masabihan ng court na wag muna
magbayad nang kanyang utang ay hindi valid)
When payment to creditor is not valid
Kapag ang creditor 1 ay may utang sa ibang creditor 2 at umabot ito sa korte, during ng pendency
ng case si debtor ay sinasabihan ng korte na ihold muna ang bayad doon sa creditor 1 hanggang sa
ma resolves na yung kaso ng cr 1 at cr 2
Kung sakali man na nanalo si cr 2 yung debtor ni cr 1 ay pwedeng magarnish doon sa utang ni cr 1.
Pero kung sinabihan ako ng korte na hold muna pero naginsist pa din ako ng bayad kay cr 1 hindi
ito valid.

Example: Hans (debtor) owes 1,000,000 to Jac (Creditor 1), and also Jac (cr 1) owes money to Kerv
(creditor 2), if Kerv give an action to Jac where they go in court. Court may hold the obligation of
Hans to pay his debt to Jac until the case is solved. If Kerv wins the case Hans payment will garnish
the debt of Jac. But if Hans still pays Jac the payment is not valid because it is may considered
made in bad faith because Jac still received the payment.

Article 1244

The debtor of a thing cannot compel the creditor to receive a different one, although the latter may
be of the same value as, or more valuable than that which is due.
(Ang debtor ay hindi dapat pilitin ang creditor na tanggapin yung bayad lalo na kung yung thing or
prestation ay hindi yung bagay na napagusapan kahit na same value pa ito or mas mahal kaysa sa
thing na napagusapan)
In obligations to do or not to do, an act or forbearance cannot be substituted by another act or
forbearance against the obligee’s will. (1166a)
(Kung ang obligation ay performance or yung to do or not to do hindi pwedeng magsubstitue ng
ibang performance lalo na kung hindi sangayon ang creditor)
Very prestation due must be compelled with
In real obligation (to give) – yung bagay na ibibigay ay hindi same sa napagusapan ay hindi dapat ito
yung ibigay sa creditor or in other case hindi pwedeng idemand ng creditor na ibang bagay ang
ipambayad ni debtor lalo na kung parehas naman silang against. (Specific thing)
Example: Peng kapatid ko bibigyan niya ako ng violet stabilo highlighter, pero ang binili nya pink pero
stabilo.
In personal obligation (to do or not to do) – kung against sa will ng creditor hindi dapat magsubstitute
ng performance.
In Facultative obligation (substitution) - Pwede masubstitute kapag may consent.
Example: Bibigyan ko ng 5,000 kapatid ko kapag sumayaw siya, pero kumanta siya.

Article 1245

Dation in payment, whereby property is alienated to the creditor in satisfaction of a debt in money,
shall be governed by the law of sales. (n)
Ang pagbabago sa pagbabayad, na kung saan ang pagaari ay nailipat sa nagpautang upang
matugunan ang nautang na salapi, ay dapat na mapamahalaan ayon sa batas ng bentahan
Special forms of payment
Dation in payment
Application of payments
Payment by cession
Tender of payment and consignation

 Dation in payment

- the conveyance of ownership of a thing as an accepted equivalent of performance

(yung pagbibigay or pagpapalit ng thing na meron si debtor na accepted na katumbas nung
obligation niya)

- It is a special form of payment because it is not the ordinary way of extinguishing an

obligation. An existing debt in money is satisfied, not by payment of money (Art 1244.)
but by the alienation of property.

(kaya sya special form of payment kasi hindi yung ordinary way ng pagterminate nung
obligation, lalo na kung yung utang ay pera, kung hindi kayang magbayad ng pera si debtor
magbibigay na lang siya ng ibang thing or property para sa satisfaction ni creditor)

 Example: Marie owes 50,000 to Jun, with the consent of Jun, Marie delivers an
appliance worth 45,000, the obligation still on the process or will not be
terminated until she complies with the full amount of her debt. But if Jun accepts
and agrees that the payment of appliances is considered as a full payment then the
obligation is totally extinguished.

Article 1246

When the obligation consists in the delivery of an indeterminate or generic thing, whose quality and
circumstances have not been stated, the creditor cannot demand a thing of superior quality. Neither
can the debtor deliver a thing of inferior quality. The purpose of the obligation and other
circumstances shall be taken into consideration. (1167a)
(Kung ang obligasyon ay ang pagbibigay ng isang bagay na indeterminate or generic thing, at kung
walang nakastate na quality ng bagay, si creditor ay hindi pwedeng magdemand ng thing na
mataas ang value, at si debtor ay hindi pwedeng magbigay ng bagay ng thing na mababa ang
value .)

Rule of the medium quality

Kapag kasi determinate or specific thing yun dapat ang ideliver ni debtor, but kapag ang thing ay
indeterminate of generic dapat daw may take ito into consideration para madeterminen natin ano
ba talaga yungg quality or ano ba talaga yung klase ng thing yung dapat na ideliver ni debtor.
Dito hindi pwede magdemand si creditor ng mas superior pero pwede syang makatanggap ng
superior thing kung ibibigay yun ng kusa ni debtor or inferior thing if okay lang kay creditor, kung
kay debtor naman hindi sya pwedeng magdeliver ng inferior thing pero pwede syang magdeliver ng
superior thing if gusto nya.

Example: Ju promised to deliver a bag to Jac, Jac cannot demand super expensive brand of bag
like Hermes and LV and neither Ju cannot deliver bag from ukay ukay.
If Ju wants to deliver a bag like LV to Jac, Jac can accept the bag without any rules. Or if Jac is
okay with the bag in ukay ukay then Ju can deliver bag from ukay and the obligation will be
terminated.

Article 1247
Unless it is otherwise stipulated, the extrajudicial expenses required by the payment shall be for the
account of the debtor. With regard to judicial costs, the Rules of Court shall govern. (1168a)
-Si debtor ung may obligation to pay extra judicial expenses
( ito yung mga dagdag na gastos na ginamit para sa mga demand letter ganern) unless may stipulation na
si creditor ang magbabayad ng mga extra judicial expenses for the payment and if wala sa agreement
kung sino ang magbabayad sa extra judicial expenses required na ang payment is si debtor ang
magbabayad kasi ayun ung provided sa article 1247 at ayun ung sabi ng batas. And ang reason naman
kasi is ung debtor is mag bebenefit dahil kapag na execute nya na ung payment after all extinguised na
yung obligation.
-Para naman sa judicial cost
-ang panuntunan ng hukuman ang siyang masusunod kung sino ang magbabayad, kunyare sa agreement
nila is nasa court na ganun by that ang court and magdedecide kung sino ang magbabayad ng judicial
cost. So ditto ung court yung maghusga na ang alinmang partido ay dapat magbayad ng mga gastos o
pareho silang magbabayad pero hinati naman sa kanila ng pantay at patas.
Example:
Si Mr. Jonas is ang may ari ng apartment na rerentahan ni Mr. Fil so napagkasunduan nila na 5k kada ika-
22 ng buwan ang babayaran ni Mr. Fil.
So assume na hindi nakabayad si Mr. Fil ng apat na buwan. So si Mr. Jonas kumuha na ng abogado, at
ang gusto nyang mangyare iwan ni mr. Fil lahat ng ari arian nya sa apartment hanggat di pa nababayaran
ung hindi pa nababayad na renta sa kanya.
So sa pagkuha ng abogado ni Mr. Jonas nagbayad sya ng 5k. So nagpadala na ng demand letter si
abogado kay mr. fil at nakagastos ng 500. So later on si mr. fil sinettle nya nalang ung obligation nya para
ma extinguised na bali ang gagawin nya iiwan nalang nya na bakante ung nirentahan nya at babayaran
nya lahat ng utang nya, kasama ung sa renta at mga nagastos ni mr. Jonas sa pag hire kay abogado.

Article 1248
Unless there is an express stipulation to that effect, the creditor cannot be compelled partially to
receive the prestations in which the obligation consists. Neither may the debtor be required to make
partial payments.
However, when the debt is in part liquidated and in part un-liquidated, the creditor may demand
and the debtor may affect the payment of the former without waiting for the liquidation of the
latter.
Performance of obligation should be complete
-So alam naman natin na sa general rule ung payment must be complete hindi sya pwedeng partial
performance pero kapag nasa agreement naman ng both parties na pwedeng partial ung performance so
that pwede yun. Ditto sa unang paragraph sinasabi lang na hindi pwedeng pilitin na kulang ang
marereceived na payment ng creditor sa debtor. At hindi din naman pwedeng kulang or pilitin ni creditor
si debtor na kalahati lang muna ung babayaran ng debtor sa kanya.
When partial performance allowed

 when there is an express stipulation to that effect- unless kung may nakalagay sa
agreement ng parties na partial ung performance.

 when the debt is in part liquidated and In part unliquidated- Ito naman ung exemption
niyang unang paragraph sinasabi dito na kapag ka naman due na ung obligation, and ang
damages is hindi pa na dedetermine kung magkano ang exact na amount na babayaran ng
debtor pero ung utang ng debtor is known liquidated and due na by that ung creditor is
pwedeng magdemand na ng amount na utang talaga sa kanya ni debtor then later on
nalang babayaran ung sa amount ng damages kasi nga ung damages is unliquidated hindi
pa alam kung magkano talaga ung sa damages so to be follow nalang.

 When the different prestations in which the obligation consists are subject to different
terms and conditions which effect some of them- dito kapag ka yung prestation nyo is
need talaga sya ipeperform partially kagaya nga ng installment pero dapat kahit na
ganyan need pa din ma perform completely para masabi na extinguished na yung
obligation

Article 1249
The payment of debts in money shall be made in the currency stipulated, and if it is not possible to
deliver such currency, then in the currency to which is legal tender in the Philippines.
The delivery of promissory notes payable to order, or bills of exchange or other mercantile
documents shall produce the effect of payment only when they have been cashed, or when through
the fault of the creditor they have been impaired.
In the meantime, the action derived from the original obligation shall be held in abeyance. (1170)
-Yung payment is kung ano ang napag usapan na currency, pero kapag ka hindi possible na
ideliver ung currency na napag usapan ang gagamitin is ung legal tender sa pilipinas.
- And kapag ang binayad is yang mga yan hindi pa extinguised ung obligation or wala pang effect
ung payment hanggat hindi pa na eencashed ung mga binayad na mga yun o kung ang
pagkakamali ng creditor ung mga instrument na binayad is nasira or di talaga sapat.
- so maaring ung obligation is hindi pa muna maging demandable kapag ka ung mga instrumental
payment is later pa magiging payable at pumayag naman si creditor by that is sya pwedeng
maningil agad agad.
Legal tender- ito mismo ung pera na gamit sa pagbabayad ng utang, na kung saan hindi pwedeng
tanggihan ng creditor kapag binayad ni debtor in short ung cash so sa pilipinas ito ung mga cash na
iniisyu ng banko sentral ng pilipinas.
So meron namang fixed na monetary board ang bsp, so pwedeng bayaran ng debtor si creditor ng 50
pesos na puro tig singkwenta sintabo kapag ang utang is 50 pesos and kapag ka 20 pesos ung utang pwede
namang puro ten centavo ibayad at dapat tanggapin yun ni creditor. So ung 1 peso above is ayun ung mga
legal tender na valid so kunyare puro 5 pesos sa halagang 1k pwede yun.
Payments by means of instruments of credits therefore hindi cash ung binayad
1. Right of creditor to refuse or accept- so dito ung mga promissory notes, checks, bills of exchange and
other commercial documents so sila ung mga hindi legal tender na tinatawag. So kunyare binayad sa
creditor ng debtor is cheke so may right si creditor kung iaccept nya ba yun or hindi na pangbayad sa
utang ng debtor so sya ung may right kung tatanggapin o hindi.
2. Effect on obligation- kapag ang payment is mercantile documents (ayun ung nagpapatunay na pag
mamay ari ung property or goods) so by that kapag ka hindi pa na eencashed yan hindi pa ma
eextinguised ung obligation kasi di mo naman alam kung ung mga documents na binabayad sayo is sapat
ba na amount yun para sa inutang sayo.

Example.
Si jen is nangutang kay des ng 10,000 payable on dec 25, 2021. Si jen is nagbayad sya ng promissory note
amounting 10k din. So si des pwede nyang tanggihan ung pag bayad sa kanya ni jen ng promissory note.
Pero pwede naman nyang iaccept ung bayad sa kanya by the means of promissory note option naman nya
yun. And kapag inaccept nya ung payment is hindi pa effected kasi nga di pa naman na eencashed ung
promissory note.
In case na ung promissory note na binayad ni jen is payable pa sya in 2 months and si des is pumayag
dun. Pero si des is di na makapag hintay at gusto nya nang singilin ngayon si jen, hindi yun pwede kasi
nga pumayag na sya na payable 2 months by that hindi demandable ung obligation.

Article 1250
In case an extraordinary inflation or deflation of the currency stipulated should supervene, the
value of the currency at the time of the establishment of the obligation shall be the basis of
payment, unless there is an agreement to the contrary.
-Dito may dalawang requisites una may official declaration of extraordinary inflation or deflation
from BSP second ung obligation is contractual in nature. Kapag ka may pagkakataon na sobra
sobra ung pagtaas ng pera o pagbaba ng pera, ang halaga ng pera sa oras na nagawa ang obligation
ang magiging batayan sa pagbayad maliban lamang kung iba ung napagkasunduan.
Inflation- ito ung pagtaas ng halaga ng pera na walang kaukulang pagtaas ng transaksyon sa negosyo.
Deflation- pag bawas naman sa halaga ng pera na nagreresulta sa pagtanggi ng pangkalahatang presyo.

Example:
Ako is nanghiram kay ate ng 5k payable sya in 4 years pa. On the maturity ng obligation ung value ng 5k
is bumaba ng 2k because of deflation or pwedeng nag increased sya into 8k because of deflation. So
assuming na 4 years after na at may extraordinary na inflation or deflation, ung basis ng payment is yung
halaga ngayon ng inutang ko nung 4 years ago which is 5k.
So ako liable ako kay ate ng 2k kapag inflation, kapag ka naman deflation liable ako ng 8k. Pero kapag ka
naman may napagkasunduan sa may contract namin na ung babayaran ko lang talaga is 5k kahit na may
inflation or deflation na mangyare edi 5k lang talaga babayaran ko.

Article 1251
Payment shall be made in the place designated in the obligation.
There being no express stipulation and if the undertaking is to deliver a determinate thing, the
payment shall be made wherever the thing might be at the moment the obligation was constituted.
In any other case the place of payment shall be the domicile of the debtor.
If the debtor changes his domiciles in bad faith or after he has incurred in delay, the additional
expenses shall be borne by him.
These provisions are without prejudice to venue under the Rules of Court.
-So dito ung payment or ung pagbabayad ng debtor is mangyayare kung saan pinagusapan kung
saan ung bayad sa obligation.
-First rule kapag ka walang nakalagay sa contract ng both parties, and ang obligation is mag
deliver ng specific thing ang kabayaran ay dapat gawin kung saan ung thing na yun nakalagay or
kung nasaan mismo kayo bumuo ng obligation.
-Kapag ka naman walang nakalagay sa contract ng both parties and ang idedeliver is generic, ang
pagbabayad ay dapat sa kung saan nakatira ung nangutang debtor
-And kapag ka naman si debtor is lumipat ng bahay nung nag karoon na sya ng delay or default
ung additional expenses is sa kanya din ipapabayad, or ung gastos papunta sa nilipatan nya na
bahay para singilin sya ay babayaran nya rin.
Example:
Ung lalamove is inobliged nya ung sarili nya na magdeliver sa bahay ko ng specific television. So
napagkasunduan namin na ung television is idedeliver sa bahay ko so ung bahay ko is ung place of
delivery.
Kapag ka naman wala kaming napagkasunduan kung saan ung place of delivery at ang contract namin is
napagkasunduan namin kunyare sa bahay ni mama so ung delivery ng television is sa bahay ni mama.
Example:
Sa obligation ko naman na magbabayad sa lalamove ng pera so generic thing, ung place of payment is
kung saan nabuo ung obligation, bali kina mama.
At kung hindi naman, ung lalamove yung pupunta sa bahay ko para singilin ako so ung expenses
shoulder sya ng lalamove na maniningil papunta sa bahay ko.
Kapag ka naman ako is kunyare hindi na nakapag bayad agad at lumipat ako ng bahay, ung pagsingil
sakin ni lalamove papunta sa nilipat ko na bahay is ako na mag shoshoulder nun kasama ung pera na
dapat singilin sakin.
 SUBSECTION- APPLICATION OF PAYMENT
Article 1252
He who has various debts of the same kind in favor of one and the same creditor, may declare at the
time of making the payment, to which of them the same must be applied.
-Ang taong may maraming utang sa isang nagpapautang lang. Sa oras na sya ay magbabayad
dapat sabihin nya kung alin dun ung babayaran sa mga utang nya at kung saan i-aapply ung
binayad nya.
Unless the parties so stipulate, or when the application of payment is made by the party for whose
benefit the term has been constituted, application shall not be made as to debts which are not due.
-Pero kapag may napag kasunduan na ang ang bayad ng debtor na ito is para lang sa specific na
utang nya by that ang application ng payment ay hindi dun sa ibang utang na hindi dapat bayaran
ng debtor doon dapat iapply sa may sinabi ng debtor.
If the debtor accepts from the creditor a receipt in which an application of payment is made, the
former cannot complain the same, unless there is a cause for invalidating the contract.
-Kapag ka naman ang ginawa ni debtor is basta nalang nagbayad at hindi alam kung saan ung
dapat i fulfilled dun sa mga utang nya kapag ganyan, ang debtor is hindi maaring magreklamo
kung saan inapply ni creditor ung bayad nya sa mga utang nya kapag binigyan na sya ng receipt ni
creditor maliban nalang kung may dahilan pa na ipawalang bisa ung contrata kagaya ng may
ginawang fraud or violence na ginawa si creditor.
Definition of application of payments- It is the designation of the particular debt being paid by e debtor
who has two or more debts or obligations of the same kind in favor of the same creditor to whom the
payment is made. (Ito ung debts ng debtor is marami maaaring dalawa or higit pa pero same creditor pa
din and kung saan iapply ung binayad ng debtor
Example:
Ako nangutang ako kay sab ng 200k and in another transaction ulit nangutang ako ulit ng 300k at another
transaction ulit nangutang naman ako ng 400k. And ang due is bukas na pero ang pera ko is 700k lang so
hindi enough yung pera ko para mabayaran lahat ng utang ko, and hindi din alam saan iaaply ung bayad
ko sa lahat ng utang kaya dapat alam natin ung application of payment so ito yun:
Requisites of application of payments

1. May one debtor and creditor dapat

2. May two or more na utang si debtor
3. Ung debt is same kind lang kunyare puro pera ang utang
4. Lahat ng debts is must be due
5. Ung bayad ng debtor is hindi sapat para ma extinguish ung obligation or ung debt nya.

So paano ngayon iaapply ung payment ng debtor kay creditor ayun na ung sa title ng provision.
Example:
Ju may utang kay shai netong mga to:
1. Ung 1k is payable sa oct 10
2. Ung 700 is payable sa oct 19
3. May specific na ref worth 2k ang dedeliver din sa oct 19
4. Another 500 is payable sa nov 9

So dumating na ung oct 19 si ju nagbayad kay shai ng 1k. So ano ang gagawin ng debtor sa
application of payment, ung debtor pwede nyang iapply ung utang nya sa exact amount sa una nyang utang
na 1k, kung ayaw nya naman sa debt 2 nya na 700 na due sa araw na nun kasi ang due pa lang sa utang nya
is ung debt 1 at 2 so kapag ang pinili nya bayaran si debt 2 may balance pa sya na 800 so dat pwede nyang
iapply dun sa debt 1 nya and hindi nya pa pwedeng iapply ang balance sa debt 4 kasi hindi pa naman due yun
and ung debt 3 is hindi same kind ung utang nya kaya di yun pwedeng iapply.
Kapag ka naman si ju is nagbayad lang ng 800 hindi nya pwedeng ipangbayad yun sa utang nya na
1k kasi hindi pwedeng magreceived si shai ng partial payment dapat complete kahit na due na yun.

Article 1253

If the debt produces interest, payment of the principal shall not be deemed to have been made until the
interests have been covered. (1173)

-Sa pag babayad naman talaga ng utang unang babayaran is ung interest to be followed nalang ung pinaka
principal amount nya.
-So mandatory to hindi pwedeng sabihin ng debtor na ang una nyang babayaran is ung principal amount
saka na ung interes so by that pwedeng tumanggi si creditor unless nung sinabi ni debtor na ayun ung
uunahin na bayaran is okay lang kay creditor so walang problema dun.
Example:

ako nangutang ako kay shai na 15k na may interest na may 12% na interest. Assume na dumating na ung
time payment and ang nabayad ko lang is 15k so that kulang pa ng 12% na interes na ang dapat bayaran ko
is 16,800 kasama na ang interes.

Sa pag apply ng payment ung interest muna ang mauuna, so sa 15k na binayad ko 1,800 ung interes dun so
ung matitira na 13,200 dun na iapply sa may principal amount so that magkakaroon ng balance na 1,800
hindi to ung interes amount ito yung balance sa may pinaka principal amount basta palagi lang unang
mababyaran dapat is yung interes.

Article 1254
 When the payment cannot be applied in accordance with the preceding rules, or if application cannot be
inferred from other circumstances, the debt which is most onerous to the debtor, among those due, shall be
deemed to have been satisfied.If the debts due are of the same nature and burden, the payment shall be
applied to all of them proportionately. (1174a)

Application of payment to most onerous debt (pinaka mabigat, burdensome and no fixed rule)

In case walang application of payment na ginawa si debtor and creditor, the ung payment shall be applied sa
pinaka mabigat na debt and kapag ung debt is same nature and burden by that babayaran sila
proportionately.
Example ng more onerous debt:
1Kahit na nauna ang non-interest bearing debt sa interest bearing debt mas mabigat pa rin yung may
interest kasi lalaki at lalaki yun kapag hindi nabayaran so yung interest bearing debt ung ipapataw.
2Ung debt daw ng sole debtor is mas mabigat sa solidary debtor kasi nga shoulder nya lahat walang ibang
sasalo sa utang nya o mag aabono so yung sole debtor iapapataw
3. Ung lahat ng debt is equal na walang interest ung pinaka older debts ung pinaka mabigat kasi nga malay
mo ayun ung pinaka malaki na utang mo ang demandable sya palage kasi yun ung pinaka una mong inutang.
4. Ung utang na may mortgage or by pledge kasi kapag hindi ka nakapagbayad ng utang makukuha yung
mga property mo.
5. Yung obligation with penal clause may onerous sya kesa sa walang penal clause kasi kapag hindi ka
nakapag bayad may penalty ka pang babayaran.
Rules in case no application of payment has been voluntarily made:
1. Apply nga sa pinaka mabigat na debt.
2. Kapag ung utang is in the same nature and burden ung pag apply ng payment is shall be made sa kanilang
lahat na utang proportionately.

SUBSECTION 2- PAYMENT BY CESSION

Article 1255

The debtor may cede or assign his property to his creditors in payment of his debts. This cession, unless there
is stipulation to the contrary, shall only release the debtor from responsibility for the net proceeds of the
thing assigned. The agreements which, on the effect of the cession, are made between the debtor and his
creditors shall be governed by special laws. (1175a)

Payment by Cession is another special form of payment.  It is assignment and abandonment of all the
properties of the debtor for the benefit of his creditors in order that the latter may sell the same and apply
the proceeds thereof to the satisfaction of their credits. (Isa to sa special form of payment na kung saan
ung debtor is itatalaga nya na lahat ng pag mamay ari nya sa inutangan nya)
Requisities of payment of cession:

1. Dapat may two or more creditors

2. Yung debtor si partially insolvent na
3. Yung pagtalaga ng debtor is lahat ng ari arian nya
4. Ung pag bayad ng cession na yun is must be accepted ng creditor

Effect of payment by cession

Kapag ka ung yung ibabayad is yung property nga ng debtor and hindi yun sapat sa inutang nya magiging
liable pa din sya balance ng utang nya, pero kapag ka naman sobra yung amount ng property nya sa utang
nya entitled pa din sya sa may property nya.

Example:
Si jom is may pagkakautang sya sa may several creditors na inutangan nya amounting 3m, Ung assets nya is
in sufficient para mabayaran nya lahat ng utang nya.

With the consent ng mga creditors iaassign nya nalang ung mga property to them to be sold and para ma
satisfy ung mga creditors. Pero ung net proceeds of the sale amount ng mga ari arian nya is 2.5m lang, ung
balance na 500k liable pa din sya, pero kapag may nakalagay naman na stipulation sa contract nya na ung
assignment nya ng property nya is the sull satisfaction sa kanyang debt by that extinguised na ung obligation
nya.

Dation in payment and cession distinguised:

1. Ung dation isa lang ung creditor, ung cession is madami or several ung creditor.
2. Ung dation hindi insolvent ung debtor while sa cession insolvent na ung debtor
3. Dation hindi involve ung lahat ng property sa pag pay ng debt while ung sa cession naman po lahat lahat
ng arian ng debtor is subject sa execution.
4. Dation ung creditors ung magiging owner sa thing na binigay ni debtor, while sa cession ung creditors has
the right to sell nung bagay and iaapply yung nabenta na yun sa mga utang sa kanila ni debtor.
5. Dation is act ng novation or may pwedeng substitute sa pag pay ng debr ung session is not an act of
novation kasi ang payment dito si ung ari arian talaga.

SUBSECTION 3- TENDER OF PAYMENT AND CONSIGNATION

ARTICLE 1256
 If the creditor to whom tender of payment has been made refuses without just
cause to accept it, the debtor shall be released from responsibility by the
consignation of the thing or sum due.
Consignation alone shall produce the same effect in the following cases:
1. When the creditor is absent or unknown, or does not appear at the place of
payment;
2. When he is incapacitated to receive the payment at the time it is due;
3. When, without just cause, he refuses to give a receipt;
4. When two or more persons claim the same right to collect;
5. When the title of obligation has been lost.

Tender of payment is an act of the debtor offering to the creditor the thing or amount due. And dapat ung
inooffer ni debtor is nasa kanya ung thing or amount na yun sa kung kelan nya inoffer.
Consignation is depositing to the proper court the thing or the amount due when the creditor does not
receive it. ( Ito lang ung pagdedeposit sa halagang dapat bayaran ng debtor sa court kapag ka ang
nagpautang is hindi nya natanggap ito)
Requisites of a valid consignation:
-so bago ung debtor is ma released sa may obligation by the consignation thing ito ung mga requisites:
1. Existence of a valid debt which is due, may due and demandable debt and dapat may utang and hindi ba
nag prescribed.
2. Tender of payment by the debtor and refusal without justifiable reason by the creditor to accept it ( so
yung debtor dito is nag offer ng tender payment pero tinanggihan ni creditor at ung reason is hindi malaman
kung baket.)
3. Previous notice of consignation to persons, interested in the fulfillment of the obligation (bago magdeposit
sa court dapat may prior notice yung mga guarantors etc. sa kanila dapat muna iaanounced para maaring
maiwasan na umabot pa sa court)
4. Consignation of the thing or sum due (may actual na consignation nan a deposit na yung thing that is due)
5. Subsequent notice of consignation made to the interested parties ( dalawang notice una sa prior notice next
is yung pagtapos na at notice nanaman pagtapos ng deposit
Example:
Ako is may utang kay jona , and nagoffer ako ng bayad kay jona kasi due date na pero tinanggihan nya yun
sa hindi malaman na kadahilanan.
Ung obligation ko is hindi ma eextinguised hanggat walang valid consignation. By that kapag nakagawa kana
ng tender of payment and ayaw nga tanggapin ng creditor ang marerelived lang is ung di mo pagbayad ng
interest sa araw na yun.

Pero kasi ako as a debtor magiging anxious ako kasi the more na di ka makapag bayad sa due date pwede
kang maging liable sa damages at penalty at interest.
 So ang batas is nakita yun so gumawa ang batas ng remedity para sa mga may willing magbayad pero di
inaaccept ni creditor. So yun nga mag make ng valid consignation sa court si debtor, kasi hindi porket nag
tender of payment na na relieved na sa payment ung debtor ang gagawin is pumunta sa court and gumawa
ng judicial consignation of the payment, by that pwedeng ung debtor is sa court na sya mag bayad or ilagay
sa custody ng court.

May instances din na ung tender of payment is not required:

1. Kapag nagbayad ung debtor and wala ung creditor sa napagkasunduan na place kung saan babayaran ung
utang.
2. Kapag walang kakayahan ung creditor na tumanggap ng utang sa debtor.
3. Ung creditor is tinangihan nya na magbigay ng receipt
4. May two person na nag claclaim ng bayad mo na hindi si mismong creditor
5. Ung titulo ng obligation is nawala.

Article 1257

In order that the consignation of the thing due may release the obligor, it must first be announced to the
persons interested in the fulfillment of the obligation.
The consignation shall be ineffectual if it is not made strictly in consonance with the provisions which
regulate payment. (1177)
-So para ma release ung debtor sa obligation kailangan ma notice sa person interested.
-And ung consignation is maaring mapawalang bisa kapag ung consignation is hindi ginawa sa paraang
naayos sa nag aayos ng mga kabayaran so ung consignation must be complied sa may regulation of payment
and rules in payment kagaya na ung pag bayad should be in legal tender.

Prior notice to the persons interested required:

Ung person interested is yung mga guaranters, mortgages, mga solidary debtor and creditors, so kapag
walang prior notice sa kanila ung consignation is void.

And yung purpose naman kasi ng mga prior person is para bigyan ung creditor ng chance to reflect sa
refusal nya sa pag accept ng payment considering na lahat ng expenses sa consignation ng debtor is si
creditor magshoshoulder and kapag naman nawala ung thing na cinonsigned ni debtor si creditor ang
magbabayad.

Article 1258
Consignation shall be made by depositing the things due at the disposal of judicial authority, before whom the
tender of payment shall be proved, in a proper case, and the announcement of the consignation in other cases.
The consignation having been made, the interested parties shall also be notified thereof.

- So ung provision na to is nag sasagot sa tanong paano ba ung consignation actually made. So bali sabi
ung consignation is nangyayare kapag ka nagdeposit ng due things si debtor sa may judicial authority and
na proved na ung thing na yun is tender payment and ni refuse ni creditor. And dapat after ng
consignation is may notice ng prior person interested yung purpose ng second notice is para yung creditor
is withdrawin nya na yung dineposit ni debtor kay judicial court kung sakaling tanggapin ng creditor ung
consignation.

Article 1259

The expense of consignation, when properly made, shall be charged against the creditor.
- Ang mga gastos sa consignation, kapag naayos na ay maipapataw laban sa creditor or nagpautang kasi
sya naman talaga yung nag refuse ng ibabayad sa kanya ni debtor kung tinanggap nya naman yun di
naman aabot na mapupunta pa sila sa may court.

Article 1260

Once the consignation has been duly made, the debtor may ask the judge to order the cancellation of the
obligation.
Before the creditor has accepted the consignation, or before the judicial declaration that the consignation has
been properly made, the debtor may withdraw the thing or the sum deposited, allowing the obligation to
remain in force.

- Ano ang effect kapag ung consignation is duly made or nagawa na, ung debtor pwede syang humiling sa
court na ung obligation is ma cacancel na.
Withdrawal by debtor of thing or sum deposited:
Pero bago pa ma accept ni creditor ung consignation, or bago pa ung judge is magdeclare na ung
consignation is nagawa na pwede ma withdraw ni debtor ung thing or ung na deposit nya by that maaring
ung obligation nya na bayaran si creditor is remain in force pa din kasi winithdraw nya na e and sya pa
din naman ung owner ng pera and lahat ng expenses is si debtor na magshoushoulder.
Pero tandaan kapag na accept na ni creditor ung consignation at na declare na ni court ung consignation
hindi na pwedeng ma withdraw ni debtor ung amount na ni deposit nya pero kapag ka ganun may
pagkakataon pa din naman nya na withrawhin yun pero dapat may consent na or authorized ni creditor.
Ano ung right ng creditor sa pag prevent from exercising right to withdraw ng debtor, dapat agad agad
iaccept ng creditor ung consignation.
If yung consignation was in not properly made what is the effect:
1. Ung obligation is remain kasi nga ung consignation is hindi effective as a payment. Ung obligation ng
debtor is andun pa din na bayaran nya si creditor.
2. Kapag dismissal of the case naman for the consignation bali dinismiss ng court also wala pa din effect
ung consignation.

Article 1261
If the consignation having been made, the creditor should authorize the debtor to withdraw the same, he
shall lose every preference which he may have over the thing. The co-debtors, guarantors and sureties
shall be released. (1181a)
-Bali dito ung consignation is na accept na ng creditor and na declare na din ni court na properly made na
ung consignation, pwede pa ding ma withdraw ni debtor ung dineposit nya basta may consent ni creditor.
Pero kapag pumayag si creditor na withdrawhin ni debtor ung deneposit nya by that ung obligation is
remain pa din nandun pa din, may obligation pa din si debtor kay creditor. By that ung creidot is
mawawala na sa kanya ung kagustuhan na maaring mayroon siya sa bagay na yun, maalis na din is ung
mga gurantors and sureties.
Example:
Si far is may utang kay cost na 1m, so sa due date nagbayad na si far pero tinanggihan ni cost. So si far
gumawa ng proper consignation, nag compiled naman sya sa lahat ng requisites sa consignation. And
pagtapos ng court na iconsoled ung consignation.

Si far is winithdraw nya ung deneposit nya after nakahingi sya ng consent kay cost so may consent si cost na
winithdraw nya yung deneposit nya. So later on si far is naging insolvent by that si cost hindi na sya pwedeng
humingi ng tulong sa mga guarantors nya kasi na loss nya na to dun palang sa pumayag sya na withdrawhin
ni far ung deniposit nya.

SECTION 2.- Loss of the Thing Due

ART. 1262.
An obligation which consists in the delivery of a determinate thing shall be extinguished if it should
be lost or destroyed without the fault of the debtor, and before he has incurred in delay.

- Kapag determinate thing yung dinedeliver, tapos may lost or na destroy nang walang
fault ni debtor, and wala ding delay extinguished na obligation.

When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the thing does
not extinguish the obligation, and he shall be responsible for damages. The same rule applies when
the nature of the obligation requires the assumption of risk. (1182a)
 - Liable si debtor kapag stated ng law or agreed ng parties kahit wlaa syang kasalanan or
kahit fortuitous event, plus damages.

- Same rule sa assumption of risk

When a thing is considered lost

- Mawawala yung thing kapag nasira

- Kapag sobrang nasira na tapos hindi na mababalik sa dati yung bagay

- Kapag hindi na marerecover

- Kapag Determinate thing yung Nawala, impossible na na magawa yung obligation

- To give and to do

When loss of thing will extinguish an obligation to give

- Requisites ng lost of the thing para masabe na extuingished na obligation

(1) The obligation is to deliver a specific or determinate thing

- Kapag determinate thing kasi, extuingished na obligation

(2) The loss of the thing occurs without the fault of the debtor; and
- Walang fault si debtor sa pagkawala ng thing para kusang ma extuingished yung obligation
(3) The debtor is not guilty of delay.
- Hindi nag incurred ng delay si debtor
When loss of thing will not extinguish liability
There are cases, however, when the loss of the specific thing even in the absence of fault and delay will
not exempt the debtor from liability. They are:

- May instances kasi na kahit walang kasalanan si debtor, and walang delay tapos nasira or
Nawala yung specific thing hindi sya makakatakas sa liability

(1) when the law so provides (Arts. 1170, 1165 [par. 3], 1263.);

-base sa law

(2) when the stipulation so provides;

- base sa contract

(3) when the nature of the obligation requires the assumption of risk (par. 2; see Art. 1174.); and
- kapag nature na ng obligation na dapat may risk yung thing na due
Ex. Insurance

(3) when the obligation to deliver a specific thing arises from a crime. (see Art. 1268.)

- Kapag ninakaw nya lang yung specific thing na yun so against yun sa law, so dito, liable
si debtor na isoli yung specific thing na yun and if may damages, liable din sya dun.

ART. 1263
In an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does
not extinguish the obligation.

- Kapag determinate thing Nawala, hindi nawawala yung obligation kasi pwede nya pa
naman gawin kasi pwede pa syang magbigay ng thing as long as same kind.

Effect of loss of a generic thing.

- So kahit may fortuitous event, liable sya dito.

- Pwede magdeliver si debtor ng same kind

- Bawal sya mag demand ng superior quality

- Si debtor naman bawal sya magbigay ng inferior quality

ART. 1264.
The courts shall determine whether, under the circumstances, the partial loss of the object of the
obligation is so important as to extinguish the obligation.

- Court yung magdedecide kung yung partial ba na Nawala sa object nay un ay ganun ka
importante para sabihing extinguished na yung obligation

Effect of partial loss of a specific thing.

- May mga bagay kasi na portion nya lang yung nawawala or nasisira.

- Yung partial na yun yung nagiging dahilan bakit hindi nagagawa yung performance.

- Kapag hindi nagkasundo yung parties, yung court na magdedecide.

 - Yung desisyon ng court wether kung ganon ba ka importante yung bagay na Nawala to
the point na complete loss yung epekto nya.

Ex. Lyca deliver cellphone to Anica. Nasira yung camera ng cellphone thru delivery (permanent
na).

- Kapag kasalanan ni Lyca bakit nasira yung camera, liable sya sa value ng camera plus
damages.

- Kapag naman sisirain pala yung phone ni buyer kaya nya binili, yung pagkasira ng
cellphone na cam hindi na liable sa payment si seller dun sa damages nalang if meron
man.

ART. 1265.
Whenever the thing is lost in the possession of the debtor, it shall be presumed that the loss was due
to his fault, unless there is proof to the contrary, and without prejudice to the provisions of article
1165. This presumption does not apply in case of earthquake, flood, storm or other natural
calamity. (1183a)

- Kapag nasa possession ni debtor laging presumed na kasalanan nya kapag Nawala yung
thing, unless mapapatunayan nyang hindi.

- Pero kapag due to fortuitous event, hindi sya liable kasi nasa possession nya.

Presumption of fault in case of loss of thing in possession of debtor.

- Kapag nasa possession ni debtor laging presumed na kasalanan nya kapag nawala yung
thing (liable)

- Si debtor lang makakapg explain bakit may lost dahil nasa kanya yung item, walang
kinalaman si creditor dun.

- Kapag naman hindi nya fault, pero may delay, (liable)

- Kapag din nakapag promise sya ng magdeliver same thing sa two or more persons
(liable)

Ex. Dj borrowed a speaker to Lj. Nawala yung speaker kasi hinablot sa edsa.
 - Hindi sapat na evidence ni dj na wala syang kasalanan, kaya liable pa din sya dito.

When presumption not applicable.

- Kapag may fortuitous event, hindi liable si debtor.

- Ex. Dj borrowed a speaker to Lj. Binaha yung speaker.

- Hindi na liable si Dj kasi, napatunayan naman na binaha sila. Unless, mapatunayan ni Lj

na may kasalanan talaga si Dj.

ART. 1266.
The debtor in obligations to do shall also be released when the prestation becomes legally or
physically impossible without the fault of the obligor. (1184a)

- Yung debtor hindi na liable kapag impossible na magawa yung performance legally or
physically ng wala syang fault.

Effect of impossibility of performance.

- Kapag kasi impossible na magawa yung performance, nawawala na yung obligation

- After mapagusapan yung obligation, dun palang nagtetake effect yung impossibility ng
performance

- Kapag impossible na agad, bago pa may contrac, VOID NA KAAGAD.

Kinds of impossibility.

- Purely personal obligations

o Physical impossibility- hindi na magagawa ng obligor kasi impossible na

physically.

Ex. He died, Physically incapacitated

Ex. Julia (debtor, the painter), Jac (creditor, the buyer)

- If within the process naaksidente si Julia and nabali yung kamay hindi na sya liable sa
obligation nya.
 - UNLESS: stipulated sa contract nila na kahit na bali kamay nya tatapusin nya yung
painting. If that’s the case, liable sya sa damages dahil di nya ginawa yung obligation
nya.

o Legal Impossibility- imposible sa mata ng batas.Kahit na physically possible or

to perform

Ex. C construct a commercial building to D.

- Pero yung lugar na pagtatayuan nila ay pagmamay ari ng government, therefore, hindi na
magagawa yung obligation.

ART. 1267.
When the service has become so difficult as to be manifestly beyond the contemplation of the
parties, the obligor may also be released therefrom, in whole or in part. Arts.

- Kapag sobrang hirap ng performance to do, or hindi na sakop sa nakapag kasunduan ng

parties, ung obligor released na sa obligation or sa part lang na impossible magawa.

- To do, to give

Effect of difficulty of performance.

- General rule: impossibility of performance released the obligor

- Release na obligor sa obligation kapag sobrang hirap or or hindi na sakop sa nakapag

kasunduan ng parties.

- Violence na kapag pinilit na gawin yung obligation

- May fortuitous event or unforeseen na situation

Ex. Fixing of wires near tabing ilog- P and L

- Si p, released na sa obligation nya whole or in part para gawin yung wires.

ART. 1268.
When the debt of a thing certain and determinate proceeds from a criminal offense, the debtor shall
not be exempted from the payment of its price, whatever may be the cause for the loss, unless the
thing having been offered by him to the person who should receive it, the latter refused without
justification to accept it. (1185)

- Kapag yung bagay or determinate thing na galling sa criminal offense, ay nawala or kung
ano man dahlian, dapat LIABLE pa rin si obligor sa payment nung price na yun.

Effect of fortuitous event where obligation proceeds from a criminal offense.

- Hindi porket may fortuitous event, exempt na sa obligation si debtor.

- Kahit hindi kasalanan ni debtor kung bakit nasira yung thing or nawala, liable pa rin sya
sa payment nun.

- Kapag naman inoffer sa kay creditor tapos tumanggi sya, need pa rin bayaran ni debtor
due to his fault.

Ex. Nagnakaw si D ng kwintas ni L worth 50k

- Nag arise yung obligation ni D sa pagnanakaw na punishable by law

- Kapag nasira yung kwintas nang walang kasalanan si D, liable sya sa price nung kwintas

- Kapag naman sinoli ni D tapos ayaw kunin ni L, tapos nasira yung kwintas due to his
fault, liable pa rin si D.

ART. 1269.
The obligation having been extinguished by the loss of the thing, the creditor shall have all the
rights of action which the debtor may have against third persons by reason of the loss. (1186)
Right of creditor to proceed against third persons.

- Yung obligation nawawala kapag nawala na rin yung thing.

- May right yung creditor para habulin yung damages sa third party na nakawala.

Ex. Binay oblige herself to deliver a dog to Diokno. Due to duterte’s fault, the dog died

- Nawawala na yung obligation ni binay kay Diokno and hindi sya liable
 - Wala na rin hahabulin si Binay kay Duterte

- In protection of Diokno, pwede syang mag bring an action to court and recover the price
of Dog with damages

SECTION 3: Condonation or Remission of Debt

ART. 1270.
Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It
may be made expressly or impliedly.

- Dapat kapag dinonate nalang ni creditor yung donation, dapat tanggapin ni obligor.
Expressly (oral or writing) or implied yung donation.

One and the other kind shall be subject to the rules which govern inofficious donations. Express
condonation shall, furthermore, com ply with the forms of donation. (1187)
Meaning of condonation or remission.
Condonation or remission- nawawalan na ng right si creditor maningil kay debtor thru donation.
Requisites of condonation or remission.
The requisites are the following:

(1) it must be gratuitous

- free of charge
(2) It must be accepted by the obligor;
- tanggapin dapat ni obligor
(3) The parties must have capacity;
(4) It must not be inofficious; and
- hindi pwedeng makuha by law
(5) If made expressly, it must comply with the forms of donations.
Kinds of remission (donation).
They are:
(1) As to its extent:
(a) Complete. - when it covers the entire obligation; or
- lahat ng obligation donation
 (b) Partial.- when it does not cover the entire obligation.
- partial lang yung donation
(2) As to its form:
(a) Express. - when it is made either verbally or in writing; or
(b) Implied - when it can only be inferred from conduct
(3) As to its date of effectivity:
(a) Inter vivos. - when it will take effect during the lifetime of the donor; or
- lifetime lang nung donor means habang buhay lang sya saka magtetake effect yung donation
(b) Mortis causa. - when it will become effective upon the death of the donor. It must comply
with the formalities of a will.
- Kapag namatay na yung donor, saka lang magtake effect yung donation
Effect of inofficious remission

- Dapat yung donations, sapat lang sa kaya nyang ibigay otherwise, babawasan mismo ng
court yung sobra and yung sobra hindi pwede sa court.

- Kapag nagpetition yung mga heir na bawasan, need bawasan.

- Legitime- property ng testator na bawal nya I dispose or ibigay sa iba kasi naka reserved
yun by law sa heirs nya

- Compulsory heir- tatanggap ng property ni testator

ART. 1271.
The delivery of a private document evidencing a credit, made voluntarily by the creditor to the
debtor, implies the renunciation of the action which the former had against the latter

- Kapag yung delivery ng private document (evidence sa utang), kusang ginawa ni creditor,
ibig sabihin nun remitted na utang ni debtor

If in order to nullify this waiver it should be claimed to be inofficious, the debtor and his heirs may
uphold it by proving that the delivery of the document was made in virtue of payment of the debt.
(1188)

- Kapag bawal sa court dapat ma prove ni debtor or ng heirs nya na yung document na yun
ay kasunduan sa pambayad ng debt nya at hind isa remission ng debt.

Presumption in case of voluntary delivery of document of indebtedness by creditor.

 1. Presumption of implied remission

- Kapag hindi pa bayad ni debtor utang nya, need ni creditor na gumawa ng document para
singilin utang nya.

- If voluntarily nya dineliver, ibig sabihin nya dun remission na matik yung obligation

2. Contrary evidence

- Prima facie or rebuttable by contrary evidence

- dito pinadala lang ni creditor yung contract na may pirma nya pra tignan ng lawyer ni debtor at
mabayaran ni debtor yung lawyer nya.

3. Extent of remission

- Joint obligation

- Kung sino lang may remission sa utang nya, sya lang may Karapatan wag magbayad

- Kapag solidary

- Lahat ng obligation remitted na or napatawad na lahat.

4. Presumption applicable only to private document

- Kapag public document, hindi mapapatunayan na totoo kasi madali lang gumawa ng
copied document kasi nga public.

Payment, not remission of debt.

- Null and void yung remission kapag napatunayan na inofficious.

- Yung debtor or yung heirs nya dapat iprove na yung delivery ng document ay ginawa
para sa debt hindi para sa remission

ART. 1272.
Whenever the private document in which the debt appears is found in the possession of the debtor,
it shall be presumed that the creditor-delivered it voluntarily, unless n the contrary is proved.
(1189)

- Kapag na kay debtor na yung private document na naglalaman ng utang, presumed na

natin na dineliver yun ni creditor ng kusa unless proved.

Presumption in case document found in possession of debtor.

- Kadalasan kasi na kay creditor yung document

- Kaya nasa kanya kasi pinoprove nya na hndi pa nagbabayad si debtor unless
mapatunayan ni debtor na nagbayad na sya.

Ex. D owes C P1,000 evidenced by a promissory note. The note, signed by D, is given to C.

- If the promissory note is voluntarily delivered to D, the presumption is that the debt must
have been paid by D.

- Voluntarily dineliver ni creditor = Na paid na yung debt

- If it is known that D has not yet paid C, it must be presumed that the obligation has been
remitted by C. (Art. 1271.)

- Kapag alam naman na hindi pa nagbayad si D, tapos kusa pa ding binigay ni creditor =
Remitted

- Suppose it is not known how D came into possession of the promissory note. The
presumption is that it was voluntarily delivered by C, unless C proves the contrary. (Art.
1272.)

- Kapag hindi alam ni debtor pano napunta sa kanya, means voluntarily dineliver ni
Creditor unless ma proved ni creditor na hindi

ART. 1273.
The renunciation of the principal debt shall extinguish the accessory obligations; but the waiver of
the latter shall leave the former in force. (1190)
 - Kapag hindi na magagawa yung principal debt, hidni na rin magagawa yung accessory
obligations.

- Pero kapag yung accessory yung hindi magagawa, as is yung principal debt

Effect of renunciation of the principal debt of the accessory obligation.

- Accessory follows the principal

ART. 1274.
It is presumed that the accessory obligation of pledge has been remitted when the thing pledged,
after its delivery to the creditor, is found in the possession of the debtor, or of a third person who
owns the thing. (1191a)

- Inaassume natin na remitted na yung collateral kapag nasa possession na sya ni debtor
ulit or ng 3rd person na may ari nung collateral.

Presumption in case thing pledged found in possession of debtor.

- Dapat common agreement nila na may pledge si debtor or 3rd party.

- Kapag bumalik kay debtor yung pledge or sa third party, may utang pa din si debtor kay
creditor which is yung principal debt.

- Dapat ma prove na kusang binalik ni creditor yung collateral

SECTION 4.; Confusion or Merger of Rights

ART. 1275.
The obligation is extinguished from the time the characters of creditor and debtor are merged in
the same person. (1192a)

- Extinguished na yung obligation kapag yung creditor at debtor ay naging iisang tao

Meaning of confusion or merger.

Confusion or merger- Qualities of creditor and debtor are on the same person with the same
obligation
Reason or basis for confusion.
 - Extuingish yung obligation kasi, hindi mo naman mahihingian ng bayad yung sarili mo.

- Kung sino Nakagawa ng obligation, sa kanya din narerealized yung obligation

Requisites of confusion.

1. It must take place between the principal debt and creditor

2. It must be complete

Ex.

(1) D owes C 10,000, for which D executed a negotiable promissory note in favor of C. C
indorsed the note to E who, in turn, indorsed it to F. Now F bought goods from the store
of D. Instead of paying cash, F indorsed the promissory note to D.

Here, D owes himself. Consequently, his obligation is extinguished by merger.

(2) X and Y are the heirs of Z. In his will, Z gave to X a parcel of land in usufruct for 10
years. The naked ownership to the same parcel was given to Y. Later, Y sold his interest
in the land to X.

In this case, the usufruct is naturally extinguished and X will now have full ownership over the land.

(3) D borrowed money from C. As security, D mortgaged his land. Subsequently, D sold the
land to C.

In this case, the mortgage is extinguished, but the obligation subsists. The extinguishment of the
accessory obliga tion does not carry with it that of the principal obligation.

ART. 1276.
Merger which takes place in the person of the principal debtor or creditor benefits the guarantors.

- Yung mga merger binebenefits nila yung guarantors

Confusion which takes place in the person of any of the latter does not extinguish the obligation.
(1193)

- Kapag extuingish yung guaranty, nandon pa rin principal obligation

Effect of merger in the person of principal debtor or creditor.

- merger in the person of principal debtor or creditor extinguishes the obligation (means
mawawala na obligation).
 - Yung liability ng debtor at creditor hindi kasama yung guarantor dun.

- Kapag may accessory obligation, nateterminate na din kasi naka depende ito sa principal
obligation

Ex.
D is indebted to C with G as guarantor. The merger of the characters of debtor and creditor in D shall free
G from liability as guarantor.
Similarly, merger which takes place in the person of C benefits G because the extinction of the principal
obligation carries with it that of the accessory obligation of guaranty.
Effect of merger in the person of guarantor.

- Kapag nawala accessory, hindi nawawala principal.

- Kahit mawala yung guaranty, as is pa din yung principal obligation

Ex.
Suppose, in the example above, C assigns his credit to E who, in turn, assigns the credit to G, the
guarantor.
In this case, the contract of guaranty is extinguished, However, D's obligation to pay the principal
obligation subsists. G now, as the new creditor, can demand payment. from D.

Article 1277.
Confusion does not extinguish a joint obligation except as regards the
share corresponding to the creditor or debtor in whom the two characters
concur.
Hindi mapapawalang bisa ang joint obligation ng pagsasanib ng karakter
ng nagpautang at umutang, maliban sa mga bahagi na may pag-aari o na
napataw sa mga karakter na ito.

 Confusion in a joint obligation – there are as many debts as there are debtors and as
many credits as there are creditors, the debts and/or credits being considered distinct and
separate from one another.

 Confusion in a Solidary Obligation – merger in the person of one of the solidary

debtors shall extinguish the entire obligation because it is also a merger in the other
solidary debtors.

 (Kung sino yung nagbayad ng whole obligation, may rights sya na magclaim or
magdemand ng reimbursement sa mga co debtors nya.)
 Section 5: COMPENSATION

Article 1278.

Compensation shall take place when two persons, in their own right, are
creditors and debtors of each other.
Ang kabayaran ay mangyayari sa dalawang tao ayon sa kanilang mga
karapatan kung sino ang nagpautang at sino ang umutang.

(art 1278 ineexplain lang yung meaning ng compensation, mangyayare lang yung
compensation sa obligation kapag yung dalawang parties is debtor and creditor of each
other.

 Compensation is the extinguishment to the concurrent amount of the debts of two

persons who, in their own right, are debtors and creditors of each other.

Example: Jac owes Shai an amount of P 10,000

Shai owes Jac an amount of 15,000

 Sa example na to, parehas si Jac and Shai na debtor and creditor. Pero yung
compensation dto is yung 10,000. Tapos in respect to Jac, si shai may liability pa din
na amount na 5,000 kasi yung 10,000 nacompensate na kaya extinguished na yung
10,000

 Kapag same yung amount ng debts nila between them, there is TOTAL
COMPENSATION/equal lang sila. Kapag same yung amount ng debs automatic na
extinguishes na yung obligation kaht hndi na sila magpalitan ng pera. Kasi same lang
din naman.

 Object of Compensation – is the prevention of unnecessary litigation and payments. This

is accomplished through the mutual extinguishment by operation of law of concurring
debts of two persons.
  Compensation is often called simplified payment because it provides a more convenient
and less expensive effectuation of payments between two persons who are reciprocally
creditors and debtors.

 Compensation and Confusion Distinguished/Differences

CONFUSION COMPENSATION

Only one person himself. (sya lang yung Two persons involved. (both debtor and
debtor an creditor ng isang obligation) creditor sila sa isat isa.)

Iisa lang yung obligation Dalawa yung obligation. (reciprocal sa

dalawang tao)

Impossibility of payment. (syempre sarili nya Indirect Payment. (mababayaran yung utang
lang yung debtor and creditor kaya parang nila sa isa isa pero yung compensation
tanga nalang sya kung babayaran nya pa nalang matitira at yun nalang yung
sarili nya) obligation na babayaran nila)

Pwdeng joint or solidary obligation.

Kinds of Compensation

1. By its effect or extent.

a. Total- when both obligations are of the same amount.

b. Partial- when the two obligations are of different amounts.

 Eto yung mas Malaki yung utang ng isang taong involve sa obligation, yung
differences sa amount yun yung compensation.

2. By its cause or origin:

a. Legal- when it takes place by operation of law even without the knowledge of the
parties.

b. Voluntary- when it takes place by agreement of the parties.

 c. Judicial- when it takes place by order from a court of litigation.

d. Facultative- when it can be set up only by one of the parties.

Legal compensation

 takes place by operation of law even against the will of the interested parties and
even w/ their consent
 takes place the moment there exists a reciprocal concurrence of debts and all the
requisites of law are present

Voluntary/conventional compensation

 affords the parties the freedom to agree on terms

Article 1279.
In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the
same time a principal creditor of the other;

(2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if the latter
has been stated;

(3) That the two debts be due;

(4) That they be liquidated and demandable;

(5) That over neither of them there be any retention or controversy,

commenced by third persons and communicated in due time to the debtor.

 Requisites of legal compensation

1. The parties are principal creditors and principal debtors of each other.

Example: Isabel owes Jac 10,000

 Jac owes Isabel 10,000

(parehas silang principally liable to each other.) – total compensation

2. Both debts consist in a sum of money, or of consumable things of the same kind
and quality.

Example: Shai owes Hazel 100,000

Hazel owes Shai an Iphone 13 worth 100,000

3. The two debts are due or demandable.

Example: Ced owes Pau 25,000 due and demandable on November 20,2021

Pau owes Ced 25,000 due and demandable on November 30,2021

4. The two debts are liquidated.

Example: Isabel owes David 5,000

David owes Isabel the share of his part in their Rent expenses in their apartment.

(hndi mangyayare dto yung compensation hanggat yung utang ni David hndi pa
nailiquidate)

5. No retention or controversy commenced by a third person.

Example: Mare owes Migs 10,000

Migs owes Mare 10,000, on the other hand Migs owes Lance 10,000.

(sa situation na to dapat si Migs iassign nya ng maayos yung compensation sa

mga utang nya. Kung sinabi nya na kay mare na saknila mangyyare yung
compensation, so si migs may liability pa din kay Lance.

Article 1280.
Notwithstanding the provisions of the preceding article, the guarantor may set
up compensation as regards what the creditor may owe the principal debtor.
Sa kabila ng mga probisyon ng naunang artikulo, ang tagapanagot ay
maaaring mag-ayos  ng kabayaran sa kung ano ang maaaring ipagkaloob ng
pinagkakautangan sa pangunahing may utang.

 Compensation benefits guarantor – this article is an exception to the general that only
the principal debtor can set up against his creditor what the latter owes him.

Example: Paula owes Karl 40,000 with Isabel as guarantor.

Karl owes Paula 40,000.

(si Isabel pwde nyang iset off as compensation yung utang nilang dalawa)

Article 1281.
Compensation may be total or partial. When the two debts are of the same amount,
there is a total compensation.

 Total and Partial Compensation applies to all the different kinds of compensation.

 TOTAL COMPENSATION results when the two debts in the obligation are same
amount.

 PARTIAL COMPENSATION with respect to the larger debt.

Article 1282.
The parties may agree upon the compensation of debts which are not yet due.

Ang magkabilang partido ay maaring mamayagan sa pagbayad ng utang na

wala pa sa panahon ang singilan.

 Voluntary compensation -This provision of law is an exception to the general

rule that only debts which are due and demandable can be compensated.
 - Voluntary or conventional compensation includes any compensation which takes
place by agreement of the parties even if all the requisites for legal compensation
are not present.

Example: Katrina owes Katy 50,000 that is payable in January 1,2022.

Katy owes Katrina 50,000 due in December 25,2021. In November 20,2021,

Katrina and Katy agreed to settle the payment of the obligation.

Article 1283.
If one of the parties to a suit over an obligation has a claim for damages
against the other, the former may set it off by proving his right to said
damages and the amount thereof. 

Kung ang isa sa ang mga partido sa isang suit sa isang obligasyong ay may
karapatan para sa mga pinsala laban sa isa, ang nauna ay maaaring ipawalang
bisa ito sa pamamagitan ng pagpapatunay ng kanyang karapatan sa nasabing
mga pinsala at ang halaga hinggil doon.

 Judicial Compensation - Compensation may also take place when so declared by a

final judgment of a court in a suit. A party may set off his claim for damages against his
obligation to the other party by proving his right to said damages and the amount thereof.

Example: Karl owes Reign Php 10, 00. When Karl demanded payment, Reign failed to pay. In
anger, Karl damaged the property of Reign worth 8,000 of damages.

Reign can set off the obligation to Karl by compensating the amount of damages na ginawa ni
Karl sa property ni Reign

Article 1284.
When one or both debts are rescissible or voidable, they may be compensated
against each other before they are judicially rescinded or avoided.
(sa article na to si debtor gumawa sya ng paraan (illegal) para si creditor magkautang din
sakanya, so pagdating sa court magkakaroon sla ng compensation.)

 Compensation of rescissible or voidable debts.

- Rescissible and voidable obligations are valid until they are judicially rescinded
or avoided. Prior to rescission or annulment, the debts may be compensated
against each other.

Example: Ron owes Kim 1,000,000. Dahil walang pambayad si Ron kay Kim,
pinilit or through force, si Kim pumirma na sya din daw is may utang kay Ron ng
1,000,000.

Yung utang dto ni Ron is valid but yung kay Kim is voidable. Kapag nadala na sa
court yung obligation, Kim may retroact yung ginawang pagpipilit saknya ni Ron
para palabasin na may utang din sya. Kapag napatunayan yun sa court, Yung
utang ni Ron na 1,000,000 ay kaylangan nya pa ding bayaran)

Article 1285.
The debtor who has consented to the assignment of rights made by a creditor
in favor of a third person, cannot set up against the assignee the compensation
which would pertain to him against the assignor, unless the assignor was
notified by the debtor at the time he gave his consent, that he reserved his
right to the compensation.

 (Consent and Notification by the debtor are essential)

Example: Jade has a debt of 100,000 to Tim. Tim owes Jade a 50,000. Assume na may legal
compensation sila, yung amount na 50,000 is automatic extinguished. So si Jade may babayarang
compensation na 50,000 kay Tim. But later on, sinabi ni Tim na yung 100,000 na utang ni Jade
ni 100,000 is pambabayad nya kay Gabriele sa utang nya. Jade is agree.

Assume naten na si Tim is may utang kay Gabriele (third person) na 100,000. Yung utang ni
Jade kay Tim is kay Gabriele na ibabayad.

If the creditor communicated the cession to him but the debtor did not
consent thereto, the latter may set up the compensation of debts previous to
the cession, but not of subsequent ones.
(Assignment Made with the Knowledge but Without the Consent or Against the Will of the
Debtor)

Example: Kim owes Shaina 100,000. Shaina owes Kim 20,000. The amount of 20,000 is
extinguished. So, 80,000 nalang natitira. Later on, with the knowledge but without consent of
Kim, Shaina signed the contract to Isabel na si Kim na yung magbabayad ng utang ni Shaina kay
Isabel, Pero yung masisingil lang ni Isabel dto is only 80,000 to respect with 20,000 of Kim.

If the assignment is made without the knowledge of the debtor, he may set up
the compensation of all credits prior to the same and also later ones until he
had knowledge of the assignment. 

(Assignment Made Without the knowledge of the Debtor)

Example:

 Compensation-It is a source of balancing two obligations. It is the

extinguishment in the concurrent amount of the obligations of those persons
who are reciprocally debtors and creditors of each other. It shall take place
when two persons, in their own right, are creditors and debtors of each other.

Article 1286.
Compensation takes place by operation of law, even though the debts may be
payable at different places, but there shall be an indemnity for expenses of
exchange or transportation to the place of payment.

 Compensation where debts payable at different places – this article applies to legal
compensation. The indemnity contemplated above does not refer to the difference in the
value of the things in their respective places but to the expenses of monetary exchange
(money or things).

Example: Lj owes Marie 50,000 payable in dollar rate in USA. Marie owes Lj 40,000 in peso. If
Lj claims the 50,000, Lj shoulder the expenses ng pagpapdala sa USA from Philippies

Article 1287.
Compensation shall not be proper when one of the debts arises from a
depositum or from the obligations of a depositary or of a bailee in
commodatum.
Neither can compensation be set up against a creditor who has a claim for
support due by gratuitous title, without prejudice to the provisions of
paragraph 2 of Article 301.

Ang kompensasyon ay hindi tama kung ang isa sa utang ay nagmula sa

depositum o mula sa obligasyon ng depositarya o ng bailee sa commodatum.

Hindi rin maaari na ang kompensasyon ay ayusin laban sa isang inutangan na

may karapatan para sa suportang angkop dahil sa gratuitous na titulo, nang
walang pagkiling sa mga probisyon ng talata 2 ng Artikulo 301.

 Instances when legal compensation is not allowed by law

1. Where one of the debts arises from a depositum – a deposit is

constituted from the moment a person receives a thing belonging to
another with the obligation of safely keeping it and of returning the
same.

Deposit is a special real contract whereby the depositor entrusts to the

depository something for safe keeping. There is a bailment created which
imposes upon the depository the duty to return the property. The
depository does not even have the right to use it.

Example:

2. Where one of the debts arises from a commodatum – Commodatum

is a gratuitous contract whereby one of the parties delivers to another
something not consumable so that the latter may use the same for a
certain time and return. The borrower cannot retain the thing loaned to
offset something the lender may owe him even though this may be for
expenses.

Example: Mylene owes Marie 10,000. Mylene deposited a necklace worth

10,000. If Mylene failed to pay 10,000 to Marie. Marie can claim the
necklace as compensation.

3. Where one of the debts arises from a claim for support due by
gratuitous title – Support comprises everything that is indispensable for
sustenance, dwelling, clothing, medical attendance, education and
transportation, in keeping with the financial capacity of the family. The
right to receive support cannot be waived nor transferred because
support is necessary for subsistence and the right is purely personal to
the recipient.

Article 1288.
Neither shall there be compensation if one of the debts consists in civil liability
arising from a penal offense.

4. Where one of the debts consists in civil liability arising from a penal
offense – if one of the debts consists in civil liability arising from a
criminal offense, compensation would be improper and inadvisable
because the satisfaction of such obligation is imperative.

Example: Deanna owes Jessica 50,000. Deanna stole the cellphone of

Jessica worth 50,000.

The amount or the compensation of Deanna is not valid or not proper. On

the other hand, Jessica can demand for the compensation of 50,000.

Article 1289.
If a person should have against him several debts which are susceptible of
compensation, the rules on the application of payments shall apply to the
order of the compensation.

Kung ang isang tao ay maraming pagkakautang, ang palatuntunin sa

aplikasyon ng kabayaran ay masusunod sa pagkakasunod ng kabayaran.

 Rules on application of payments applicable to order of compensation.

- Compensation is similar to payment. If a debtor has various debts which are

susceptible of compensation, he must inform the creditor which of them shall be
the object of compensation. In case he fails to do so, then the compensation shall
be applied to the most onerous obligation.

Example: Anna owes Joy in the amount of;

1. 30,000 without interest due today.

2. 30,000 with 10% interest due yesterday

3. 30,000 with 20% interest due also today.

Joy owes Anna 10,000. Unang una dto si Anna ang debtor. If si anna
hndi sinabi agad yung specific na pagbabayad nya sa utang nya at hndi
sya nakapili agad sa mga rules na binigay, yung pinakamabigat na
obligation yung susundin ni Joy which is number 3.
 Article 1290.
When all the requisites mentioned in Article 1279 are present, compensation
takes effect by operation of law, and extinguishes both debts to the concurrent
amount, even though the creditors and debtors are not aware of the
compensation.

Kung merong lahat ng rekisitos na nabanggit sa Art. 1279, ang kabayaran ay

magiging epektibo bilang operasyon ng batas, at magkakalas ng magkaparehas
na obligasyon sa magkaparehas na halaga, kahit na ang mga debtor at mga
kreditor ay walang alam.

 Consent of parties not required in legal compensation.

4. Compensation occurs automatically by mere operation of law. —

From the moment all the requisites mentioned in Article 1279 concur,
legal compensation takes place automatically even in the absence of
agreement between the parties and even against their will, and
extinguishes reciprocally both debts as soon as they exist
simultaneously, to the amount of their respective sums. It takes place
ipso jure from the day all the necessary requisites concur, without need
of any conscious intent on the part of the parties and even without their
knowledge, at the time of the co-existence of such cross debts.

5. Full legal capacity of parties not required. — As it takes place by

mere operation of law, and without any act of the parties, it is not
required that the parties have full legal to give or to receive, as the case
may be. On the other hand, in order that there may be a valid payment,
the parties must have the free disposal of the thing due and capacity to
alienate it and to receive payment as the case may be.

Section 6: NOVATION

Article 1291.
Obligations may be modified by:
(1) Changing their object or principal conditions;

(2) Substituting the person of the debtor;

(3) Subrogating a third person in the rights of the creditor. 

(yung mismong title yung meaning ng novation)

 Novation is the total or partial extinction of an obligation through the creation of a

new one which substitutes it.

- It is the substitution or change of an obligation by another, which extinguishes or

modifies the first, either by changing its object or principal conditions, by or
substituting another in place of the debtor, or by subrogating a third person in the
rights of the creditor.

 Dual Function of Novation – novation is a contract containing two stipulations:

extinguish or modify an existing obligation, the other to substitute a new one in its place.
It does not operate as an absolute but only as a relative extinction of an obligation which
is only modified. The novation is actually a new obligation/contract based upon a former
one, but containing one or more material changes.

 Kinds of Novation

1. According to Origin:

a. Legal – takes place by operation of law.

b. Conventional – takes place by agreement of the parties.

2. According to how it is constituted:

a. Express – when it is so declared in unequivocal terms.

b. Implied – when the old and new obligations are essentially

incompatible with each other.

3. According to extent or effect:

a. Total or Extinctive – when the old obligation is completely

extinguished.

b. Partial or modificatory – when the old obligation is merely

modified, the change is merely incidental to the main obligation.

4. According to the subject:

 a. Real or objective – when the object (cause) or principal conditions
of the obligation are changed.

Example: Marie agreed to deliver motorcycle to Lance, later on

they both agree that instead of motorcycle, Marie will deliver a car.

(napalitan yung object, extinguished na yung motorcycle, car na

yung new obligation.)

b. Personal or subjective – when the person of the debtor is

substituted and/or when a third person is subrogated in the rights of
the creditor.

Example: Both parties agreed that Joyce will substitute to Ron as

debtor in the obligation with Lance as creditor.

(napalitan yung debtor)

c. Mixed – when the object and/or principal conditions of the

obligations and the debtor or the creditor, or both parties are
changed. It is a combination of real and personal novations.

Example: If both parties agreed that Shai will deliver a car instead
of motorcycle to Lance. They also agreed that Migs will deliver
instead of Marie.

(napalitan yung object, napalitan din yung debtor)

Article 1292.
In order that an obligation may be extinguished by another which
substitute the same, it is imperative that it be so declared in unequivocal
terms, or that the old and the new obligations be on every point incompatible
with each other. 

Upang ang pananagutan ay mapawalng bisa ng tao na nagpalit nito, ito ay

kailangan na maipahayag sa malinaw na pamamaraan o kaya ang luma at
bagong obligasyon sa lahat ng punto ay di ayon sa isat isa.

 4 Requisites of novation

1. A previous valid obligation

 2. Capacity and intention of the parties to modify or extinguish the
obligation

3. The modification or extinguishment of the obligation

4. The creation of a new valid obligation.

 Novation is not presumed – novation is never presumed. It must be clearly and

unmistakably established either by the express of agreement of the parties or acts of
equivalent.

 Test of incompatibility between two obligations or contracts – the test is

whether they can stand together, each one having an independent existence. If they
cannot, they are incompatible. The subsequent obligation novates the first, upon such
novation the former obligation losses all its forced and effect and only new obligation can
be enforced.

Example: Maria agreed to deliver a watch to Mario. Later on, Maria will deliver a cellphone.
(there is no novation, kasi hindi clealy stated na nag agreed silang dalawa)

Article 1293.
Novation which consists in substituting a new debtor in the place of the original
one, may be made even without the knowledge or against the will of the latter, but not
without the consent of the creditor. Payment by the new debtor gives him the rights
mentioned in Articles 1236 and 1237.

Article 1293 speaks of passive subjective novation (substitution of the debtor), not
active subjective novation (substitution of the creditor)

 Kinds of Personal Novation

 1. Substitution – when the person of the debtor is substituted.

2. Subrogation – when a third person is subrogated in the rights of the

creditor.

 Kinds of Substitution

1. Expromision - initiative comes from a third person. The old debtor must
be released from his obligation; otherwise, there will be no expromision,
there will be novation.

(dapat yung original or old debtor ay ma released from his obligation,

kasi pag hindi walang expromission and walang novation)

2. Delegacion - initiative comes from the debtor, for it is he who delegates

another to pay the debt, and thus, he excuses himself. Here, the three
parties concerned—the old debtor, the new debtor, and the creditor—
must agree.

(dapat yung original or old debtor ay ma released from his obligation,

kasi pag hindi walang expromission and walang novation)

 Consent of creditor necessary – In either of the two modes of substitution, the consent
of the creditor is an indispensable requirement.

 Right of new debtor who pays;

1. In expromision – the payment by the new debtor gives him the right to
beneficial reimbursement.

2. In delegacion – if the payment was made with the consent of the

original debtor, the new debtor is entitled to reimbursement and
subrogation.

Article 1294.
If the substitution is without the knowledge or against the will of the debtor, the
new debtor’s insolvency or non-fulfillment of the obligations shall not give rise to
any liability on the part of the original debtor.
  Effect of new debtors insolvency or non-fulfillment of the obligation in expromision.
- Because the substitution of the debtor is done without the knowledge or consent of the
debtor. The substitution is without the consent or even just knowledge of the debtor, the
inability of the new debtor to pay the obligation he has shouldered shall not in any way
make the old debtor who is now free from liability, much less must the original debtor be
affected by insolvency of the new debtor in whose choosing the former never
participated.

(once na nangyare na yung expromission sa obligation, at kapag nagging insolvent yung new
debtor, hindi na pwdeng singilin ni creditor si old debtor kasi extinguished na yung obligation
nya sa nangyareng novation)

ART. 1295.
The insolvency of the new debtor, who has been proposed by the original debtor and accepted by
the creditor, shall not revive the action of the latter against the original obligor, except when said
insolvency was already existing and of public knowledge, or known to the debtor, when he
delegated his debt. (1206a)

- Kapg insolvent yung bagong debtor, hindi liable si original debtor dun kasi in the first
place tinanggap ni creditor yung bagong debtor.

- EXCEPT: kung yung insolvency nay un existing nab ago pa sya iaccept or alam ng
lumang debtor bago nya ireccomend, liable si old debtor.

Effect of new debtor's insolvency or non-fulfillment of the obligation in delegacion.

- Delegacion – ni recommend ni old debtor si new debtor tapos pumayag si creditor.

- Insolvency lang pinaguusapan dito pero kapag non fufilment hndi pa rin liable si old
debtor

- GENERAL RULE: old debtor is not liable to creditor in case of the insolvency of the
new debtor

EXCEPTION (DITO LIABLE NA SI OLD DEBTOR);

1. Existing na yung insolvency and naka public knowledge (kahit hindi alam ni old
debtor) at the time of delegacion

2. May insolvency na bago pa magka delegacion and alam ng debtor (kahit hindi naka
public) at the time of delegacion
  Kaya may exception para maiwasan yung posibleng gawin na fraud ni old debtor.

Ex.
D owes C P10,000. D proposed to C that I would substitute him as debtor. C agreed to the proposal.
If, at the time of the delegacion, T was already insolvent but his insolvency was neither of public
knowledge nor known to D, then D is not liable. Neither is D liable if the insolvency of T took place after
he delegated his debt.
It is believed that D is also not liable if Chad knowledge that I was insolvent at the time the debt was
delegated to him.

ART. 1296.
When the principal obligation is extinguished in consequence of a novation, accessory obligations
may subsist only insofar as they may benefit third persons who did not give their consent. (1207)

- Kapag nawala yung principal obligation dahil sa novation, yung accessory obligations sa
3rd person naiiwan pa rin unless pumayag yung 3rd person sa bagong novation.

Effect of novation on accessory obligations.

- Extinguishment of the principal obligation carries with it that of the accessory obligations

- Nandon pa rin yung accessory obligations sa 3rd party unless pumayag sya sa novation

Ex.
A owes B P2,000 with interest at 14%. B owes C P280.
A It was agreed among the parties that A would pay the interest of P280 to C. In this case, besides the
principal obligation of A, there is a stipulation in favor of C, a third person. (see Art. 1311, par. 2.) Later
on, A and B executed another contract whereby they agreed that A would deliver to B a television set in
payment of the loan.
In spite of the novation, the accessory obligation to pay the interest of P280 to C still subsists unless C
gives his consent to the novation

ART. 1297.
If the new obligation is void, the original one shall subsist, unless the parties intended that the
former relation should be extinguished in any event.

- Kapag void yung bagong obligation, babalik sa original obligation unless pumayag yung
parties na
Effect where the new obligation void.

- Dapat laging valid yung new obligation

- Walang novation kapag yung bagong obligation ay void

- Yung original na obligation yung mag sasubsists

- Hindi kasi mapapalitan nung second obligation yung original obligation kasi nga void.

Effect where the new obligation voidable.

- Voidable means hindi pa totally void, hanggat hindi pa annulled ng court, valid pa rin sya

- Pwede na mag novation dito

- Pero kapag annulled na, hindi na pwede yung novation, babalik sa original obligation,
unless otherwise iba gusto ng parties

ART. 1298.
The novation is void if the original obligation was void, except when annulment may be claimed
only by the debtor, or when ratification validates acts which are voidable. (1208a)

- Void yung novation kapag yung original obligation void den.

Effect where the old obligation void or voidable.

- Yung old obligation cannot be novated kasi nga void, walang ipapalit hindi ma nonovate.

- Pero kapag voidable palang yung unang obligation, valid yung novation or pwedeng
palitan.

Ex.

(1) S agreed to deliver prohibited drugs to B. Later on, it was agreed that S would pay B
P100,000 instead of delivering the drugs.

The novation is void because the original obligation is void

(2) Suppose S was induced through fraud committed by B to sign a contract whereby S
obliged himself to deliver a car to B. Subsequently, it was agreed between S and B that S
would give B P100,000 instead of the car. (see Art. 1293.)
The original obligation of S is voidable. As it has not yet been annulled at the instance of S (see
Art. 1397.), the second contract is valid.

(3) In the same example, if S subsequently confirmed his obligation to deliver the car and the
right of B thereto, his ratification cleanses the contract from all its defects (Art. 1396.)
and makes it valid and, therefore, the novation is also valid.

Article 1299
If the original obligation was subject to a suspensive or resolutory condition, the new obligation shall be
under the same condition, unless it is otherwise stipulated.
(Kapag ang orihinal na obligasyon ay subject sa suspensive o sa resolutory na kondisyon, ang
bagong obligasyon ay dapat nakailalim sa parehong kondisyon, maliban kung ito ay stipulated.)

- If first obligation is subject to a suspensive or resolutory condition, the 2nd obligation is

deemed subject to the same condition unless otherwise stipulated

- The reason for the rule is that the efficacy of the new obligation depends whether the
condition which affects the old obligation is complied with or not. 

- If condition is suspensive and it is not complied with, no obligation arises

- If it is resolutory, and it is complied with, old obligation is extinguished

 Example: Jahan promise to give a car to Jonah if she turns 24, but later they
agreed that instead of car a luxury bag na lang yung ibibigay. So nagbago man ung
thing sa unang contract still Jonah will get the bag when she turns 24.
Article 1300
Subrogation of a third person in the rights of the creditor is either legal or conventional. The
former is not presumed, except in cases expressly mentioned in this Code; the latter must be clearly
established in order that it may take effect.
(Ang subrogation ng 3rd person sa mga karapatan ng creditor ay maaaring legal o konbensyonal.
Ang dating creditor ay hindi masasabi na tama hanggat walang ebidensya, maliban sa mga cases na
malinaw na nabanggit sa Code na ito; ang obligation ay dapat na malinaw na itinatag upang ito ay
magkabisa.)
Meaning of Subrogation
Ang pagsubstitute ng isang tao (subrogee) at position ni creditor (subroger) doon sa rights and
claims ng dating creditor to enfornce payment sa debtor.
Kinds of Subrogation
Conventional – expressly by the agreement ng original parties, or ng 3 rd person.
- kailangan clearly maestablished para maging epektibo.
Legal – walang agreement ng parties pero galing sa law.
- not presumed except kung sinabi mismo sa law.

Article 1301
Conventional subrogation of a third person requires the consent of the original parties and of the
third person. (n)
(Ang conventional subrogation ng 3rd person ay kaylangan magbigay ng pahintulot ang orihinal
parties at ng ikatlong tao.)
Consent of all required
The debtor – kasi siya yung magcocomply at siya ang liable dun sa new creditor at new obligation to
pay.
The old creditor – siya maalis na frame dahil naterminate na yung power niya to demand to the debtor.
The new creditor – baka hindi niya magustuhan or wala syang tiwala dun sa debtor na babayaran siya.

Kaya need talaga ng consent para fair at beneficial sa kanila yung subrogation na mangyaayre.

Article 1302
It is presumed that there is legal subrogation:

(1) When a creditor pays another creditor who is preferred, even without the debtor’s knowledge;
(2) When a third person, not interested in the obligation, pays with the express or tacit approval of the
debtor;
(3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the
obligation pays, without prejudice to the effects of confusion as to the latter’s share. (1210a)
Cases of legal subrogation
1. Creditor pays another another creditor who is preferred even without the debtors knowledge

Example:
Si che is nangutang kay austin and zian. Ang utang nya kay austin na 1m is secured by mortgage,
and ang utang nya kay zian is 500k.
And if ang ginawa ni zian is without che knowledge binayaran nya austin ng 1m which is ung utang
ni che kay austin. So dito si zian nasa kanya na ung right sa may mortgage creditor at ordinary
creditor kasi nabayaran nya na ung dapat na utang ni che kay austin na 1m. So kapag si che is hindi
 nya nabayaran ung 500k na utang nya din kay zian ung mortgage for closed bali ung property ni che
din kasi naging mortgage creditor na din sya.

2. Third person without interest in the obligation pays with the approval of the debtor.

Example: Si ley ay may utang kay ali ng 500k which is due sa dec 25, 2021, tapos si diane is pumunta
sya kay ali at sya ang nag bayad ng 500k with the approval ni ley. So dito si diane is subrogated to
the right of ali na.

3. When a third person with interest in the obligation pays even without the knowledge of the debtor

Example:
Si ju ay may utang kay shai na 10k and secured sya by mortgage and guaranteed by sab. If si
sab is binayaran nya si shai kahit walang pahintulot or knowledge ni ju ng 10k, so sya ung na subrogate
sa lahat ng right ni shai kasi as a guarantor sya is interested in the payment of the obligation nung
binayaran nya ung dapat na obligation ng creditor obviously nagkaroon ng legal subrogation even
without the knowledge of debtor.

Article 1303
Subrogation transfers to the persons subrogated the credit with all the rights thereto appertaining, either
against the debtor or against third person, be they guarantors or possessors of mortgages, subject to
stipulation in a conventional subrogation. (1212a)

-Ung provision na to talks about lang sya sa effects ng subrogation

Example:
Si ishang is may utang kay camille na 10k and guaranted by kyle. If ang third person is sya ung nagbayad
kay camille ng 10k without sa consent ni ishang so that subrogated na ni third person ung right or place ni
camille, so kapag si ishang is hindi nya na mababayaran si third person with reimbursement si third
person pwede syang lumapit sa guarantor which is si kyle, so that pwedeng singilin ni third person si kyle
sa utang ni ishang.

Article 1304
A creditor, to whom partial payment has been made, may exercise his right for the remainder, and he shall be
preferred to the person who has been subrogated in his place in virtue of the partial payment of the same
credit.

-Ito is partial subrogation means, may dalawang creditor may old creditor still remains a creditor dahil sa
balance sa kanya ni debtor kasi partial payment na bali hindi pa buo nabayaran ni debtor and may new
creditor na. Pero ang preferred na bayaran is still ung original creditor pa din.
Example:
Si trish is may utang sya kay andrei ng 500k with a consent ng dalawa si trish at andrei. Itong si cams
binayaran nya si andrei ng 250k lang kasi ayun lang ung pera nya so bali meron pang remaining na 250k
din. So that naging creditors na silang dalawa ni debtor which is si trisha kasi nga diba si cams is
binayaran nya ung sana na babayaran ni trish pero kulang lang kaya bali still may utang pa din si trish kay
andrei na natira at nagkautang na din sya kay cams kasi binayaran ung kalahati na utang nya.
So assume na si trish is may 250k nalang na pera, na pang bayad ang tanong kanino nya dapat ibayad
yun ang sagot dun dapat sa original creditor ibayad kasi sya ung preferred na bayaran dahil sa right to
remainder as to the remaining balance.

NATURAL OBLIGATIONS

Article 1423.
Obligations are civil or natural. Civil obligations give a right of action to compel their performance.
Natural obligations, not being based on positive law but on equity and natural law, do not grant a
right of action to enforce their performance, but after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or rendered by reason thereof. Some natural
obligations are set forth in the following articles.
Civil Obligation give a right of action to compel their performance

 Enforceable by court action

 Based on positive law
o Positive laws are human-made laws that oblige or specify an action.
o positive laws which are only applicable to a geographically defined political territory
such as that controlled by a government.
Natural obligations, not being based on positive law but on equity and natural law, do not grant a
right of action to enforce their performance,

 Not enforceable by court action

 Based on natural law
o natural law emphasizes the inherent relationship between law and morality
o natural laws are God-given laws inherent in our being
o natural laws are universal

but after voluntary fulfillment by the obligor, they authorize the retention of what has been
delivered or rendered by reason thereof. Some natural obligations are set forth in the following
articles.

 Natural obligation still exists but only in equity and moral justice (Konsensya), so if the debtor
voluntarily performs or fulfill it, he can no longer recover what he has given. He can no longer
demand for the return of what he has given or render
 Article 1424.
When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who
voluntary performs the contract cannot recover what he has delivered or the value of the service he
has rendered.

 If the prescriptive period ends and the debtor voluntarily fulfill or makes the payment, he can no
longer recover the payment he has given

Article 1425.
When without the knowledge or against the will of the debtor, a third person pays a debt which the
obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later
voluntarily reimburses the third person, the obligor cannot recover what he has paid.
When without the knowledge or against the will of the debtor

 Without the knowledge or even if the debtor is against the payment

a third person pays a debt which the obligor is not legally bound to pay because the action thereon
has prescribed

 A third person pays the debt or perform the obligation for the debtor even though the debtor is not
legally bound or doesn’t need to perform it anymore
 The obligation of the debtor has already prescribed meaning, it Is a natural obligation and not
civil obligation
o Not enforceable by court action, the creditor doesn’t have the right to demand to debtor to
perform the obligation
o The right to demand or the right to sue of the creditor has already gone
 For a written contract – 10 years AFFTER the due date of the obligation is the
prescribe period or the period where the creditor can sue the debtor
 For an oral contract - 6 years AFFTER the due date of the obligation is the
prescribe period or the period where the creditor can sue the debtor
but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he
has paid.

 Since the obligation prescribed, the debtor is not liable to reimburse the payment made by the
third party but if he decided to reimburse it, he can no longer demand for return.

Article 1426.
When a minor between eighteen and twenty-one years of age who has entered into a contract
without the consent of the parent or guardian, after the annulment of the contract voluntarily
returns the whole thing or price received, notwithstanding the fact the he has not been benefited
thereby, there is no right to demand the thing or price thus returned.
When a minor between eighteen and twenty-one years of age who has entered into a contract
without the consent of the parent or guardian,
  Minor, ages 18-21, has entered a contract without the consent of the guardian or parents, the
contract is not valid
after the annulment of the contract voluntarily returns the whole thing or price received,
notwithstanding the fact the he has not been benefited thereby,

 After the annulment of cancellation of contract, the minor will return what he received
o Notwithstanding or except to the things he has not been benefitted or he haven’t used on
himself

there is no right to demand the thing or price thus returned.

 Even though the minor is not liable to return for the part of the price he hasn’t been benefitted if
he still pays it, he can’t demand for return of the payment given

Article 1427.
When a minor between eighteen and twenty-one years of age, who has entered into a contract
without the consent of the parent or guardian, voluntarily pays a sum of money or delivers a
fungible thing in fulfillment of the obligation, there shall be no right to recover the same from the
obligee who has spent or consumed it in good faith.
voluntarily pays a sum of money or delivers a fungible thing in fulfillment of the obligation, there
shall be no right to recover the same from the obligee who has spent or consumed it in good faith.

 Once the creditor or the obligee consumed or used the fungible things that has been delivered by
the minor, the minor cannot demand for the recovery of the item given that the item was
consumed in good faith or the creditor/obligee doesn’t have the knowledge that the one he’s
making deal with is a minor
o Fungible things – consumable things
o Consumed with good faith – the creditor doesn’t know that the one he’s making deal with
is a minor
 If it is consumed by bad faith, then the creditor/obligee is liable to return what he has received
o Consumed in bad faith – Has a knowledge that he’s making a deal with a minor and yet
still continue with the deal

Article 1428.
When, after an action to enforce a civil obligation has failed the defendant voluntarily performs the
obligation, he cannot demand the return of what he has delivered or the payment of the value of the
service he has rendered.
When, after an action to enforce a civil obligation has failed

 The debtor/obligor failed to fulfill his obligation and the creditor sue the debtor, then
debtor wins the case thus making him free not to perform the obligation
o The obligation changes from civil to natural obligation the moment the creditor
loses the case
the defendant voluntarily performs the obligation, he cannot demand the return of what he has
delivered or the payment of the value of the service he has rendered.

 If the defendant/debtor/obligor still perform or fulfill the obligation even though he is not
legally liable, he cannot demand for return for the value he has given

Article 1429.
When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the
property which he received by will or by the law from the estate of the deceased, the payment is
valid and cannot be rescinded by the payer. 

 The heirs are only liable to pay the debt of the dead person as to the extent of he received
from the dead person
o Thus, if the dead person leave a 100,000 debt and he only leave 50,000 worth of
asset, the heirs are only liable to pay the 50,000 in the liability since it is the extent of
what they have inherited
 If the heirs decided to pay the full amount of the debts even it exceeds what
he has received and they are not liable, the heirs cannot demand to return
what he has given

Article 1430.
When a will is declared void because it has not been executed in accordance with the formalities
required by law, but one of the intestate heirs, after the settlement of the debts of the deceased, pays
a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable.
When a will is declared void because it has not been executed in accordance with the formalities
required by law

 When a will or testament made by the dead person doesn’t undergo with the formalities
required by the law, the will is void (Invalid)
o As the dead person without having a heir, his property will belong to his interstate
heir
 Interstate heir – heir that was assigned by the law incased the dead person
does not leave any will or the void become void
 Usually composed of immediate family like when a father died, his
interstate heir will be the wife and children
after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the
defective will, the payment is effective and irrevocable.

 After the interstate heir settled all the debts, he can choose whether to pay the legacy of the
dead person
 o The dead person originally has a will, though it has not been legally accepted, it is
still what the dead person wants to do with his property so it gives rise to the moral
duty to the interstate heir to fulfill it or not
 If the interstate heir decided to pay the legacy, the interstate heir cannot demand to return
for his payment given to the legacy