Law

OBLIGATIONS- PART 1
 Obligation Concept

 An obligation is a juridical necessity to give, to do, or

not to do. (Art 1156 , Civil Code of the Philippines)
Juridical necessity means that the court may be
asked to order the performance of an obligation if
the debtor does not fulfill it. If an obligation cannot
be enforce through the court, it may be disregarded
with impunity.
 Essential Requisites of obligation

 Active subject  One who has right to demand

(creditor/obligee) performance of the obligation

 Passive subject  One who is obliged to perform the

(debtor/obligor) obligation

 Prestation  The object or subject matter of the

obligation. It may consist of giving,
doing or not doing something
 Efficient Cause
 The vinculum or legal or juridical tie
w/c binds the parties to an obligation.
The efficient cause may be any of the
five sources of obligation
 Example

 D is obliged to transport the goods of C from Manila

to Cebu under a contract of carriage.
C is the active subject;

D is the passive subject;

the transport of the goods is the prestation,

the contract of carriage is the efficient cause.

 Civil Obligation and Natural Obligation
distinguished
Civil Obligation Natural Obligation
 As defined in Art.1156 is  Is based on natural law, it is not
enforceable by court action. the
based on positive law;
obligation, however, exists in
hence, it is enforceable equity and moral justice, such
by court action. that if the debtor voluntarily
performs it, he can no longer
recover what he has given.
Example: M is the maker of a promissory note with P as the payee for
P20,000.00. if M does not pay on due date, P can enforce payment by filing
a court action. If P does not file a court action against M within ten years
from due date which is prescriptive period for actions upon a written
contract, the obligation becomes a natural obligation and P losses the right to
enforce payment by court action. However if M voluntarily makes the
payment although the obligation has prescribed, M will no longer be allowed
to recover the payment bec. In equity and moral justice , he still owed P the
amount of P20,000.00.
 Sources of Obligation: Law
 A rule of conduct, just, and obligatory laid down by
legitimate authority to common observance and benefit.
Obligations derived from law are not presumed. Only
those expressly determined in the Civil Code or in Special
law are demandable and shall be regulated by percepts of
law which establishes them, and as to what has not been
foreseen, by the provisions on Obligations. (Art 1158)

 Examples: the National Internal Revenue Code which

provides for the payment of taxes; the Anti-Mendicancy
Law which prohibits the giving of alms to beggars.
 Sources of Obligation: Contracts

 Is a meeting of minds between 2 persons whereby

one binds himself, with respect to the other, to give
something or render some service (Art.1305).
 Obligations arising from contracts have the force of
law between the contracting parties and should be
complied with in good faith. ( Art 1159)
 Examples: a contract of lease which provides for
the payment of rental by the lessee; a contract of
sale which requires the seller to deliver the thing
sold and the buyer to pay the price.
 Sources of Obligation: Quasi- Contracts

Certain lawful , voluntary and unilateral acts giving rise

to a juridical relation to the end that no one shall be
unjustly enriched at the expense of another. (Art 2142)
 Negotiorum gestio-  Solutio indebiti-
voluntary administration payment by mistake
of the property, business which was not due when
or affairs of another paid. This creates
without his consent or obligation to return the
authority. This creates payment.
the obligation to
reimburse the gestor for
necessary and useful
expenses. ( Art 2150)
 Sources of Obligation: Acts or omissions
punishable by law

 These are crimes or felonies. The commission of a crime

makes the offender civilly liable. Such civil liability
includes restitution, reparation of the damage caused,
and indemnification of consequential damages.

 Example: if D steals the carabao of C, D’s liability consist

of returning the carabao, paying for its value if he cannot
return it, and indemnifying the consequential damages
suffered not only by C but also of his family or by a third
person by reason of the crime. This will be in addition to
any prison term or other penalty that may be imposed by
the court.
 Sources of Obligation: Quasi delicts (tort or culpa
aquilliana)

 These are acts or omissions that cause damage to

another, there being no contractual relation between
the parties. (Art 2176)

 Example: if a person, while cleaning his window,

causes a flower pot to fall through his negligence
thereby injuring someone passing by, the former is
liable for damages to the latter.
Nature and Effect of Obligation
 Determinate and generic thing

 A thing is determinate  A thing is indeterminate

when it is particularly or generic when it is not
designated or physically particularly designated
segregated from all or physically from all
others of the same class. others of the same class,
( Art 1460) Examples: A i.e, one of a class.
2002, Toyota Corolla Examples: a horse, a car,
with engine no.123456, P10,000.
body 546611, and plate
no. FRS 840; my only AS a rule the loss of a
wristwatch; the house determinate thing
located at 234 Moret St., through a fortuitous
Sampaloc, Manila
event extinguishes the
obligation. (Art 1262)
Obligations of one obliged to give a
determinate thing
1. To take good care of the thing with the diligence of a good
father of a family unless the law requires another standard
of care. ( Art 1163)

 Diligence of a good father of a family means the

ordinary care that an average person exercises in
taking care of his property.
 2. To deliver the thing

 This involves placing the thing in the possession

and control of the creditor either actually or
constructively.
 3. To deliver the fruits of the thing. (Art1164)

 The fruits of a thing may be

 Natural fruits- are the spontaneous products of the soil and the
young and other products of animals. The trees that grow naturally
on the soil w/out the intervention of man and the colt delivered by
a mare are natural fruits.
 Industrial fruits are those produced by land of any kind through
cultivation or labor. Examples are rice, corn, and other crops
produced through the human intervention of human labor.
 Civil Fruits are those which are the results of a juridical relation
such as the rent of a building, price of lease of land and other
property and the amount of perpetual or life annuities.

The creditor has the right to the fruits of a thing from the time the
obligation to deliver it arises. However , he shall acquire no real right
over it until the thing has been delivered to him. ( Art 1164)
When obligation to deliver the thing arises
a. w/out period or condition – upon the perfection of the
obligation.
b. with period or condition – upon arrival of the term of
fulfillment of the condition
Thus, if D is obliged to give C a specific car on Christmas
day next year, the obligation to deliver arises on the arrival of such
date. Or if the obligation of D is to give C if C passes the CPA
examination, then the obligation to deliver arises only upon the
fulfillment of such condition.

Rights of the Creditor

a. personal Right- this is a right that may be enforced by
one person on another, such as the right of the creditor to demand
the delivery of the thing and its fruits from the debtor.
b. real right- this refers to the right or power over a specific
thing, such as possession or ownership , which is a right
enforceable against the whole world. This is the right acquired by
the creditor over the thing and its fruits when they have been
delivered to him.
4. To deliver its accessions and accessories even if
they have not been mentioned.

 a. Accessions- they include everything that is

produced by a thing or is incorporated or attached
thereto, either naturally or artificially,. Such as
alluvium, the soil gradually deposited by the current
of a river on a river bank, or whatever built, planted
or sown on a parcel of land.
 b. Accessories- those joined to or included with the
principal thing for the latter’s better use, perfection
or enjoyment ( such as the keys to a car or a house,
or bracelet of a wristwatch.)
Remedies of the Creditor
1. If the debtor fails to perform his obligation

 a. to compel the debtor to make the delivery. (Art 1165)

 b. to demand damages from the debtor. ( Art 1170)
 Example:
D is obliged to give C a specific car. On due date, C demands
the delivery but D does not deliver. In this case, C can
compel D to deliver the car because there is no other person
in possession or control it. C can also demand payment of
damages from him.
2. If the debtor fails to perform his obligation
to deliver a generic thing

 To ask that the obligation be complied with at the

expense of the debtor. (Art.1165)
 To demand damages from the debtor. ( Art 1170)
 Example: D is obliged to deliver 10 sacks of rice to C. If D does
not perform his obligation as stipulated, C can obtain 10 sacks
of rice from other sources at the expense D. C can do so
because the thing is generic and thus can be replaced with the
same kind. C can also ask for damages from D.
3. If the debtor fails his obligation in obligation
to do
 a. if the debtor fails to perform the
obligation or performs it but
contravenes the tenor thereof-
 The creditor may have the obligation
executed at the expense of the debtor. (
Art 1167)
 He may also demand damages from the
debtor. (Art.1170)
Example :D is obliged to construct a

hollow block fence for C. By the
agreement the fence will be 2 m high and
10m long, fine finished and painted. If D
does not perform his obligation, C can ask
another person to, or he himself may,
construct the fence at the expense of D. C
can also claim for damages from D. C
cannot compel D to perform the
obligation because compulsion will
violate D’s right against involuntary
servitude. If D construct the fence but did
not follow the measurements agreed
upon. C will have the same right.
 b. If the debtor performs the
obligation but does it poorly
 Creditor may have the same
be undone at the debtor’s
expense, ( Art.1167)
 Creditor may also demand
damages from the debtor.
(Art.1170)
 Example: If in the same
illustration, D constructs the
fence following the
measurements but it was not
properly aligned, the finishing
was rough , and materials used
were substandard. C can have
the fence be demolished by
another person or even by
himself at D’s expense. C can
also demand damages from D.
4. If the debtor does what has been forbidden
him.
 a. the creditor may demand that what has been
done be undone.
 He may also demand damages from the debtor
(Art1168)
 Example: B bought a farm lot from S. However the only
access from the road to B’s lot is the lot of D. So B entered
into contract with D for right of way over a period of ten
years and paid a sum therefore. It was agreed that for the
duration of the contract D would not construct any fence
between B’s lot and his. Sometime thereafter, however, D
constructed a fence in violation of the agreement. B may
demand that D remove the fence at D’s expense and pay
damages.
 Grounds for liability to pay damages
 Fraud
 Negligence
 Delay
 Contravention of the tenor of the obligation.
(Art.1170)
 Damages

Distinguished from injury:

 Damages refer to harm done and the sum of money
that may be recovered.
 Injury refers to the wrongful, unlawful or tortuous
act. It is the legal wrong to be redressed.
 Kinds of damages
 Actual or compensatory damages- these refer to the pecuniary
loss, (such as loss in business or profession) that may be
recovered. It includes the value of loss suffered and profits not
realized. (Art2199)
 Moral damages- they include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. (Art 2217)
 Nominal damages-damages to vindicate a right. (Art2221)
 Temperate or moderate damages- they are more than nominal
but less than compensatory damages, but may be recovered if the
court finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with
certainty. (Art2224)
 Liquidated damages-those agreed upon by the parties to a
contract, to be paid in case of breach. (Art.2226)
 Exemplary or corrective damages- imposed by way of example or
correction for public good, in addition to the moral, temperate,
liquidated or compensatory damages. (Art2229)
 Proof of Pecuniary Loss

 Actual Damages- proof is required unless provided

by law or stipulation. (Art.2199)
 Other Damages- proof is not required in order that
moral, nominal, temperate or liquidated or
exemplary damages may adjudicated. The
assessment of such damages, except liquidated ones,
is left to the discretion of the court, according to the
circumstances of each case. (Art.2216)
 Fraud

IS THE DELIBERATE OR INTENTIONAL

EVASION BY THE DEBTOR OF HIS
OBLIGATION IN A NORMAL MANNER. THIS
ACTUALLY REFERS TO FRAUD COMMITTED
AT THE TIME OF THE PERFORMANCE OF THE
OBLIGATION.
 Kinds of fraud in general
a. According to meaning
1.) Fraud in Obtaining Consent
 Casual Fraud( dolo causante)- fraud w/out which consent would not
have been given. Renders the contract voidable.
 Example: B bought a ring from S who told him that the ring was
embellished w/ diamonds. However, S knew all along that the
embellishment was not diamond but ordinary glass. B here gave his
consent because of the fraud employed by S; hence, the contract is
voidable.
 Incidental fraud or Dolo incidente- fraud w/out which consent would
have still been given but the person giving it would have agreed on
different term. The contract is valid but the party employing it shall be
liable for damages.
 Example: C hired D to teach in the school of C. D placed in his
application that he had earned units in MBA. However, D actually
dropped the subjects for the said units. If C would have hired D even if
D did not complete the said units but that he would have given a lower
salary to d, the fraud committed by D was only incidental but it would
entitle C to recover damages.
 Kinds of fraud in general

2. Fraud in the performance of the obligation

This is the deliberate act of evading fulfillment of an
obligation in a normal manner. This presupposes an
existing obligation; hence, the fraud has no effect on the
validity of the contract since it was employed after the
perfection. However, the party employing it shall be
liable for damages. (Art1170)
 Example: B ordered 10 bags of powder soap from S who agreed to
deliver the same after 2 days. On due date, S delivered 10 bags of
powder soap which he mixed with chalk. This is the fraud in the
performance of obligation which entitles B to recover damages. The
fraud, however, does not have any effect on the validity of the
contract.
 Kinds of fraud in general

b. According to the time of commission

 Future Fraud – a waiver of an action for future fraud cannot be
made. If there is an agreement for its waiver, the same is void.
(Art1171) Thus, the debtor will still be liable for damages if he
commits fraud in the performance of his obligation despite the
waiver.
 Past Fraud- a waiver of an action for past fraud may be made
since the commission of fraud can no longer be encouraged.
Such waiver is an act of liberality on the part of the creditor.
 Negligence

IT IS THE OMISSION OF THAT DILIGENCE

WHICH IS REQUIRED BY THE OBLIGATION
AND CORRESPONDS WITH THE
CIRCUMSTANCES OF THE PERSON, ON THE
TIME, AND OF THE PLACE. ( ART.1173).
In the absence of agreement the debtor must observe
the diligence of a good father of a family.

 Examples:
 If the obligation is to deliver a specific window glass, the debtor must
ensure that the glass is well-protected when he transports it as
required by the nature of the obligation. Otherwise , he will be
negligent.
 A baby-sitter, 21 years old, strong and healthy, will be negligent if she
sleeps while on duty considering the circumstances of her person
were considered when she was hired for the job.
 If the driver of a car drives at night without any headlight, he will be
considered negligent considering that the circumstances of nighttime
requires such light.
 If the same car driver drives at 50 km per hour along a busy street
where many people are crossing, he will be negligent because the
circumstances of the place require that he should drive slowly.
 Kinds

 Culpa Contractual (contractual Negligence)-

negligence in the performance of a contract (such as
the negligence committed by the driver of a bus
when a passenger is hurt during a trip because there
is here a breach of contract of carriage.) Here the
master-servant rule applies, i.e., the negligence of
the servant is the negligence of the master.
Accordingly, the defense of a good father of family in
the selection and supervision of the employees is not
a defense on the part of the employer although it
may mitigate the liability. Thus, in the example, the
negligence of the bus driver is also the negligence of
the bus owner.
 Kinds

 Culpa Aquiliana (civil negligence or tort or quasi-delict or

culpa extra-contractual) – these are acts or omissions
that cause damage to another, there being no contractual
relation between the parties. (Art.2176)
The master-servant rule does not apply. Hence, the
defense of a good father of a family in the selection and
supervision of employees is a defense on the part of the
employer to escape liability. Thus, if a pedestrian is hit by
a bus through the reckless driving of the driver, the
latter’s negligence is not the negligence of the owner.
 Kinds

 Culpa Criminal (Criminal Negligence)- Negligence that

results in the commission of a crime.
Defense of a good father of a family is not proper because
the employee’s guilt is automatically the employer’s civil
guilt if the former is insolvent.
The passenger of the bus may bring a court action not
only for culpa contractual against the bus owner, but also
one for culpa criminal against the bus driver for physical
injuries through reckless imprudence. In the same way,
the pedestrian may bring not only a suit for culpa
aquiliana against the driver and the owner, but also culpa
criminal against the bus driver for physical injuries
through reckless imprudence.
 Delay ( default or Mora)

IS THE NON FULFILLMENT OF AN

OBLIGATION WITH RESPECT TO TIME

Note: There is no delay in obligation not to do as

one cannot be in delay for not doing something
 Kinds

 Mora solvendi- delay on the part of the debtor.

 Ex re- delay in real obligations(obligation to give)

 Ex persona- delay in personal obligations (obligation to do)

 Mora accipiendi- delay on the part of the creditor.

This exist when the creditor refuses to accept the
thing due without justifiable reason.
 Compensatio morae- delay in the reciprocal
obligation, both parties are in default. Here, it is as if
there is no delay.
When debtor incurs delay in obligations to give or to
do requisites

 General rule: The debtor incurs in delay from the time

the creditor demands fulfillment of the obligation but the
debtor fails to comply with such demand (no demand,
no delay as a rule). The following are the requisites of
delay;
 a. the debtor does not perform his obligation on the date it is due.
 The creditor demand the performance of the obligation.

 The debtor does not comply with creditor’s demand.

Example: D owes C P5,000.00. the obligation is due on May 15. If D

does not pay him on May 15, he is not yet in delay. But if C makes a
demand on him to pay on that date or thereafter and D does not
comply, then D will be in delay
 Exceptions, i.e., delay will exists even w/out demand

 When the law so stipulates

 Thus where the law provides for the payment of penalty if the obligation is not
performed on due date (such as in the case of taxes), then demand shall not be
necessary.
 When the obligation expressly so declares.
 Hence, no demand is necessary if a lease contract provides that the rental shall be paid
by the lessee within the first five days of the month in advance w/out need of demand.
 When the time is of the essence of the contract.
 Thus where a rent a car company is obliged to provide for the bridal car during a
wedding at a particular date, time and place, the said company is liable if it fails to
perform the said obligation notwithstanding the absence of demand since time was a
controlling motive for establishment of the contract.
 When demand would be useless.
 Thus the debtor will be in delay even without demand from the creditor if the thing he is
obliged to deliver has been destroyed through his fault or he has delivered it to another
person.
 In reciprocal obligations, where the obligation arise out of the same cause and
must be fulfilled at the same time, from the moment one of the parties fulfills his
obligation, delay by the other begins notwithstanding the absence of demand.
 Effects of Delay

 The debtor shall be liable for the payment of damages.

(Art1170)

 If the obligation consists in the delivery of a determinate

thing, he shall be responsible for any fortuitous event until
he has effected the delivery. (Art1165)
 Fortuitous Events

EVENTS THAT COULD NOT BE FORESEEN, OR WHICH,

THOUGH FORESEEN ARE INEVITABLE.(ART 1174)

EXAMPLES ARE: NATURAL CALAMITIES OR ACTS OF

GOD SUCH AS EARTHQUAKE, TYPHOON AND
LIGHTNING, AND ACTS OF MAN(“FORCE MAJEURE”)
SUCH AS WAR AND ARMED ROBBERY.
 Characteristics

 The cause must be independent of the debtor’s will

 There must be impossibility of foreseeing the event

or of avoiding it even if it can be foreseen.

 The occurrence of the event must be of such

character as to render it impossible for the debtor to
perform his obligation in a normal manner.
 Liability for fortuitous event
 General Rule:
No person shall be liable for
fortuitous events, i.e., his
obligations will be
extinguished
 Exceptions to rule:
 When the law expressly provides
for liability even in the case of
fortuitous events(such as that
provided in Art.1165 where the
obligor is liable for fortuitous
events if he delays or has promised
to deliver the same thing to two or
more persons who do not have the
same interest).
 When the parties have declared
liability even in case of fortuitous
event.
 When the nature of the obligation
requires the assumption of risk(
such as the obligation of an insurer
who must pay the policy holder
even if the loss is cause by a
fortuitous event if the cause thereof
is the risk insured against).
 Presumptions on receipt of principal or of later
installment (these are disputable presumptions and
evidence may be introduces to the contrary by the
creditor.) (Art 1176)

1. THE RECEIPT OF THE PRINCIPAL WITHOUT

RESERVATION AS TO INTEREST SHALL GIVE RISE
TO THE PRESUMPTION THAT THE INTEREST HAS
BEEN PAID.

2. THE RECEIPT OF A LATER INSTALLMENT

WITHOUT RESERVATION AS TO PRIOR
INSTALLMENTS, SHALL GIVE RISE TO THE
PRESUMPTION THAT SUCH PRIOR INSTALLMENTS
HAVE BEEN PAID.

The above presumptions are disputable hence,

they may be rebutted by contrary evidence. If the
presumption is conclusive, then no evidence to the
contrary may be admitted.
Remedies of creditor to enforce payment of his claims against
debtor (Art1177)

1. Pursue the property in the possession of the debtor except those

exempt by law.
1. This is usually by the attachment where the creditor files a court action to
exact fulfillment with a prayer that the court sets aside a property belonging to
the debtor. If the court decides in favor of the creditor the debtor does not pay,
the property attached will be ordered sold and the proceeds thereof applied to
the payment of the obligation.
2. Exercise all the rights and bring all the action of the debtor except
those personal to him (accion subrogatoria).
1. Example: A owes D. D owes C. If C files a court action against D to collect, he
may ask the court to order A not to pay D so that in the event that the court
rules in favor of C. A will be required to pay C. In effect, C is exercising the
right to collect from A which is a right that belongs to D.
3. Impugn the acts which the debtor may have done to defraud his
creditors (accion pauliana)
1. D owes C P50,000.00. to defraud C, D sells his lot, his only property to B who
knows of the fraudulent intention of D. C may ask the court to order the
rescission of the sale made by D.
Rule on transmissibility of rights and exceptions
thereto(Art.1178)
General rule: All the rights acquired in virtue of an obligation are transmissible.
(Thus, a creditor may assign his credit to a third person or such right is
transmitted to the heirs upon his death).
 Exceptions:
1. If the law prohibits the transmission of the right.
1. Thus the rights of a general partner in a partnership are not
transmitted to his heirs upon his death.
2. If the parties agreed against the transmission.
1. Thus the right is not transmitted to an assignee or to the heirs if
there was a stipulation to that effect between the parties.
3. If the right is by nature not transmissible
1. Example: S was granted a scholarship grant by a school after a series
of examination and interviews. S, however, dies with two years
remaining before he finishes his studies. The right of S to enjoy the
scholarship grant is not transmitted to his heir because it is strictly
personal.
Different Kinds of Obligations

1. PURE OBLIGATION
2. CONDITIONAL OBLIGATION
3. OBLIGATION W/ A PERIOD
4. ALTERNATIVE OBLIGATION
5. FACULTATIVE OBLIGATION
6. JOINT OBLIGATION
7. SOLIDARY OBLIGATION
8. DIVISIBLE OBLIGATION
9. INDIVISIBLE OBLIGATION
10. OBLIGATION W/ A PENAL CLAUSE
 Pure Obligation

A PURE OBLIGATION IS ONE WITHOUT A

TERM OR CONDITION AND IS DEMANDABLE
AT ONCE
Example: I promise to give you P5,000.00. This is
immediately demandable since there is no term that
must expire or a condition that must happen for the
obligation to be demandable.
 Conditional obligation
• IS ONE WHOSE DEMANDABILITY OR
EXTINGUISHMENT DEPENDS UPON THE
HAPPENING OF A CONDITION
• Examples: 1. I will give you my car if you pass the CPA
Examinations. The condition here is suspensive. You
nay not demand the delivery of my car until you pass
the CPA examination..
• 2. “ I will let you use my car until you pass the CPA
Examination. The condition is resolutory. You may
demand the delivery of my car now but you must return
it to me when you pass the CPA examination.
 Condition

Concept:
it is an uncertain event which wields an influence on
legal relationship.

 Classification
 Suspensive and resolutory
 Potestative, casual and mixed

 Possible and impossible

 Positive and negative

 Divisible and indivisible

 Suspensive and Resolutory

 Suspensive- the happening of which give rise to the

obligation. This is also called condition antecedent or
condition precedent. The demandability of the
obligation is suspended until the happening of the
condition.
 Resolutory- the happening of which extinguishes the
obligation. This is also called condition subsequent.
The obligation is demandable at once but it shall be
extinguished upon the happening of the condition.
 Potestative, Casual and Mixed

 Potestative-depends upon the will of one of the contracting parties.

 Postestative on the part of the debtor
 If suspensive-the obligation is void. Even if the condition is fulfilled, the obligation
is not demandable. (Example: D is to give C P50,000.00 if D goes to Baguio.) –no
debtor would want an obligation *illusory in nature
 If resolutory-the obligation is valid.(Example: D is to allow the use of his car by C
until D returns from Baguio.) *because this will extinguish the debtor’s obligation
 Potestative on the part of the creditor- the obligation is valid whether the
condition is suspensive or resolutory. (Example: D is to give C P50,000 if C
goes to Baguio.)
 Casual- depends upon chance or upon the will of a third person.
(Example: D is to give C P50,000.00 if D wins first prize in the lotto on
a bet he had placed this morning.)
 Mixed- depends partly on the will of one of the parties and partly upon
chance or upon the will of a third person. (Example: D is to give C
P50,000.00 if C will marry X.)
 Possible and impossible

 Possible- capable of fulfillment in its nature and by

law.
 Impossible- not capable of fulfillment in its nature or
due to operation of law, such as “if you can swim
across the Pacific Ocean” or “if you kill X”. In this
case the obligation and condition are void. (Art1183)
 Note if the condition not to do an impossible thing, it
shall be deemed as not having been agreed upon.
(Art1183) Thus, the obligation is immediately
demandable. (Example: D is to give C 50,000 if C
does not swim across the Pacific Ocean.)
 Positive and negative

 Positive- the condition that some event happen at a determinate time.

Here, the obligation is extinguished as soon as the time expires or it has
become indubitable that the event will not take place. (Art.1184)
 Example: D is to give C P50,000.00 if C will marry X on or before June
30,2004. the obligation will be extinguished on July 1,2004 if C has not yet
married X as of June 30,2004. if X dies on June 1,2004 before C has married
her, then the obligation is extinguished on such date because there is no more
doubt that the marriage will not take place.
 Negative- the condition that some event will not happen at a determinate
time. Here the obligation becomes effective as soon as the time indicated
has elapsed or it has become evident that the event will not occur.
(Art1185)
 Example: D is to give C P50,000.00 if C will not marry X on or before June
30,2004. the obligation becomes effective on July 1, 2004 if C has not yet
married X as of June 30,2004. If X dies on June 1,2004 before C has married
her, then the obligation becomes effective on such date because there is no
more doubt that the marriage will not take place.
 Divisible and Indivisible

 Divisible- capable of partial performance.

 Under Art. 1183, if the obligation is divisible that part thereof which is not
affected by the impossible or unlawful condition shall be valid.
 Examples: a.) D is to give C a car if C finishes his law course, and
P1,000,000.00 if C tops the bar Examination. If D finishes his law course,
he may demand the delivery of the car. However, he may not demand the
payment of P1,000,000.00 if C does not top the Bar. b.) D is to give C a
car if he finishes his law course and P1,000,000.00 if C can get a copy of
the test questions in the Bar Examination in advance. Even if both the
conditions are fulfilled, C can only ask for the delivery of a car from D
because the second condition is unlawful
 Indivisible-not capable of partial performance by its nature or by law or
agreement of the parties
 Example: D is to give C a car if C finishes his law course and tops the Bar.
C must comply with both conditions before he can ask for the delivery of a
car from D.
 Effect of fulfillment of Suspensive Condition (Art.1187)

General Rule: The effect of the fulfillment of the suspensive condition retroacts to
the day of the constitution of the obligation.
 Exceptions: there shall be no retroactive effect with respect to the fruits and
interest as follows:
 1. in reciprocal obligations, the fruits and interest shall be deemed to have been
mutually compensated, i.e., each party shall keep the fruits and interest received by him
prior to the fulfillment of the condition.
 Example: On May 1, 2001, S agreed to sell his land to B and B agreed to pay the price
of P50,000.00 if X finishes his Accounting degree on March 15,2004. X finished his
degree as stipulated. It was as if S was entitled to the price and B to the land
beginning on May 1,2001. however, S shall keep the fruits on the land and B the
interest during the pendency of the condition.
 2. In unilateral obligations, the debtor keeps the fruits and interest received before the
fulfillment of the condition.
 Example: on May 1,2001, S promised to give B his land if B passed the Bar
Examination in February 2004. B has passed the Bar Examination as stipulated. It
was as if B was entitled to the land beginning on May 1, 2001. however S keep the
fruits on the land during the pendency of the condition.
Rights of the parties before the fulfillment of the condition
(Art1188)

 Creditor- he may bring the appropriate actions for

the preservation of his right, such as registering his
claim with the Register of Deeds, if appropriate, to
notify all the third persons.
 Debtor- he may recover what he has paid by mistake.
 Rules in case of loss of a determinate thing before
the fulfillment of the suspensive condition (Art1189)

 Concept of Loss- a thing is considered lost when it perishes or

goes out of commerce or disappears in such a way that its
existence is unknown or cannot be recovered.
 Loss of a thing:
 Without debtor’s fault- obligation extinguished.
 With debtor’s fault- debtor is obliged to pay damages.
 Example: D is obliged to give C a specific house if C passes the CPA
examination. If the house is destroyed in a fire without the fault of
D before C passes the CPA examination, D’s obligation is
extinguished even if C, thereafter, passes the CPA examination.
But if the house is destroyed through the fault of D such as when
he placed inside the house highly flammable chemicals which
caused the fire, then D shall be obliged to pay damages should C
pass the CPA Examination.
 Rules in case of deterioration of a determinate thing before
the fulfillment of the suspensive condition (Art1189)

 Deterioration of the thing

 Without debtor’s fault- impairment shall be borne by the creditor,
i.e., no liability on the part of the debtor to pay damages.
 With debtor’s fault- the creditor may choose between the following
remedies:
 Rescission, plus damages.
 Fulfillment, plus damages
 Example: D is obliged to give a specific car to C if C finishes his economics
degree. The deterioration of the car due to wear and tear before C finishes
economics degree will be borne by C when C later finishes the said degree.
However, if the car is damaged in an accident due D’s fault, C, when he
finishes economics degree may rescind the contract and ask for damages or
ask D to deliver the car in its deteriorated condition plus damages.
 Rules in case of improvement of a determinate thing before
the fulfillment of the suspensive condition (Art1189)

 Improvement of the thing

 By nature or by time- the improvement shall inure to the benefit of the creditor,
 Example: D is obliged to give his violin to C if C finishes his course in music. If the
quality produce by the violin had improved between the time that D’s obligation was
constituted and the completion of his course in music, then such improvement shall
inure the benefit of C.
 At the expense of the debtor-debtor will have the rights granted to a usufructuary, i.e., he
can have enjoyment of the use of the improved thing and its fruits. He may remove the
improvement if no damage is caused to the principal thing. If the improvement cannot be
removed without causing damage to the principal thing, the thing and the improvement
shall be delivered to the creditor without any right on the part of the debtor to indemnity.
He may, however, set off the improvement against any damage to the thing.
 Example: D is obliged to give his only car to C if C finishes his economics degree. Before
C finished the said degree, D had the car repainted. In this case, D can continue using
the car in its improved condition. Upon the completion by C of his economics degree, D
cannot remove the painting because it will cause damage to the car. However, if he had
caused a dent on the car due to his fault, he may set off the cost of repainting against the
cost of damage brought by such dent.
Rules in case the fulfillment of Resolutory condition
(Art.1190)

 Upon the fulfillment the resolutory condition, the

obligation is extinguished.
 The parties shall return to each other what they have
received.
 In case of loss, deterioration or improvement of the
thing, the provision in the above rule (Art1189),
which pertain to the debtor shall be applied to the
party who is bound to return.
 Obligation with a Period
AN OBLIGATION WITH A PERIOD IS ONE WHOSE
DEMANDABILITY OR EXTINGUISHMENT IS SUBJECTED TO THE
EXPIRATION OF THE TERM WHICH MUST NECESSARILY COME. IN
OTHER WORDS, THERE IS A DAY CERTAIN WHEN THE OBLIGATION
WILL ARISE OR CEASE.

Example: 1. D is obliged to give his car to C on may 1, 2003, the

obligation becomes demandable by reason of the expiration of the term
or period. The period here is one with suspensive effect or ex die.
2. on January 1. 2003, D allowed C to use his car until May 1,’03. The
obligation is demandable on January31, 2003 but on May 1, ‘03, D’s
obligation to let C use his car is extinguished by reason of the
expiration of the term the period here is one with a resolutory effect
or in diem. C must therefore return the car.
 Concept of a period and day Certain

 Period is a space of time which determines the

effectivity or extinguishment of an obligation. Thus,
the space of time between January 1,2001 and
January 1, 2002 is a period the lapse of which will
cause an obligation to arise or cease.
 A day certain is that which must necessarily come
although it may not be known when. (Art.1193) An
example is the death of a person which necessarily
come. Thus, if the obligation of D is to give C
P10,000.00 when X dies, the obligation is one with
a period.
 Period distinguished from Condition

 As to fulfillment
 A condition is an event that may or may not happen, a period
is an event that must necessarily come, at a date known
beforehand or at a time that cannot be determined.
 As to time
 A condition may refer to the future or to a past event unknown
to the parties, a period always refers to the future.
 As to influence on the obligation
 A condition causes an obligation to arise or to cease, a period
merely fixes the time for the efficaciousness of an obligation.
 Kinds of Period

 Ex die- period with a suspensive effect. Here the obligation becomes

demandable upon lapse of the period.(Art1193)
 In diem- period with a resolutory effect. Here, the obligation is
demandable at once but is extinguished upon the lapse of the
period.(Art1193)
 Other kinds are:
 Legal- one that is fixed by law.

 Voluntary- this is fixed by the parties.

 Judicial- one that is fixed by the court.

 Problem: “I will pay you my debt when my means permit me to do so” is this
an obligation with a period or with a condition?
 Answer: This is an obligation with a period. Here the remedy of the creditor
is to ask the court to fix the period.(Art1180,1197) Once the court has fixed
the period, it may no longer change it as it becomes a part of the agreement
by the parties.
Presumption as to who has the benefit of the period

 Whenever a period is designated in an obligation, it shall be

presumed to have been established for the benefit of both the
creditor and debtor, unless from the tenor of the obligation or other
circumstances, it should appear that it has been established for the
benefit of only one of the parties. (Art1196)
 Therefore, the debtor cannot be compelled to perform and the
creditor cannot be compelled to accept performance, before the term
expires.
 Example: D borrowed P10,00 from c on January 1, 2004. The loan bears
interest at 10% per annum with both principal and interest being due on
December 31,2004. Before December 31,2004, C cannot compel D to pay
and deprive him the use of the money until the said date. Neither may D
compel C to accept payment before December 31,2004 and deprive C of
the interest for remaining term.
Period is for the benefit of one of the parties

 For the benefit of the debtor- He cannot be compelled to perform his

obligation before the expiration of the term, but he may choose to
perform before such expiration at his option.
 Example: D is obliged to pay C P10,000.00 on or before December
31,2oo4. D cannot be compelled to pay before December 31,2004.
However, he may choose to pay at any time before December
31,2004 or on December 31,2004 at his choice.
 For the benefit of the creditor- He cannot be compelled to accept
performance before expiration of the term, but he may choose to
demand performance before such expiration.
 Example: On November 1,2003, D borrowed from C P10,000.00
“collectible” on or before June 30,2004. C may demand payment
on June 30,2004 or at any time before the said date. However, D
cannot compel him to accept the payment at any time before June
30,2004.
 When debtor loses his right to make use of the period if it is for his
benefit; (Art1198), i.e.; the creditor may demand immediate payment

 When he becomes insolvent, unless he gives a guaranty or security for the debt.
 When he fails to furnish the guaranties or securities that he has promised.
 Example: D borrowed P20,00 from C promising to pledge his ring to C to secure the debt within one
month. C gave D one year to pay the loan. D, however, failed to pledge his ring within the period agreed
upon. In this case, C can demand immediate payment even before the agreed due date thereof.
 When he impairs the said guaranties or securities by his own acts or when through a
fortuitous event they disappear, unless he gives new ones equally satisfactory.
 Example: D obtained a loan from C, the same being secured by a chattel mortgage on D’s car. The loan
is payable within one year. On the seventh month, the car was razed by fire. C can demand immediate
payment unless D gives another security that is equally satisfactory. This is true even if the cause of the
loss or impairment was not due to the fault of D.
 When he violates any undertaking in consideration of which the creditor agreed to the period.
 Example: C granted a loan of P50,00.00 to D giving D one year provided D did not engage in any
gambling until he has paid the debt. If D enters a casino to play in the slot machine, say after one
month, C can already demand immediate payment.
 When he attempts o abscond.
 Example: Thus if the debtor has been disposing all his property with an attempt to leave his place of
business or residence to escape his creditors, such creditors can demand immediate payment of his
debts although their maturity date is not yet due.
 Alternative and Facultative
Obligations
•S I M P L E - W H E R E T H E R E I S O N L Y O N E P R E S T A T I O N

•C O M P O U N D - W H E N T H E R E A R E S E V E R A L P R E S T A T I O N S A R E
DUE BUT ALL MUST BE PERFORMED
• Conjunctive: several prestations are due but all must be performed
• Example: D is to give C a specific ring, a specific watch and a specific bracelet to C. D
must deliver all the items to C.
• Distributive or disjunctive- this may either be alternative or facultative.
 Alternative Obligation

 An alternative obligation is one where several

prestations are due but the complete performance of
one of them is sufficient to extinguish the obligation.
(Art1199)
 Example: D is obliged to give a specific ring, a specific watch or
a specific bracelet to C. The delivery of any of the three articles
will extinguish the obligation .
Right to choose prestation:
The Right of choice belongs to the debtor unless it has been
expressly given to the creditor. (Art1199)
 Limitation on debtor’s right to choose

 The debtor must completely perform the prestation

chosen. He cannot compel the creditor to receive
part of one and part of another undertaking.
(Art.1199)
 He cannot choose those prestations which are
impossible, unlawful or which could not have been
the object of the obligation. (Art.1199)
 When obligation ceases to be alternative and
becomes simple obligation

 When the debtor has communicated his choice to the

creditor. (Art1201)
 When among the prestations whereby the debtor is
alternatively bound, only one is practicable.
(Art.1202)
 When the creditor has communicated his choice to
the debtor, if the creditor has been expressly given
the right of choice. (Art 1205)
 Rules in Case of loss of things or impossibility of services
which are alternatively the object of the obligation
1. When the right of choice is with the
debtor (Art.1204)
1. If only one or some are lost through the
debtor’s fault, the debtor may deliver
any of the remainder, or that which
remains if only one subsists
2. If all are lost through a fortuitous
event, the obligation is extinguished
(based on the rule that no person shall
be responsible for fortuitous event).
3. If all are lost through the debtors fault,
the debtor shall pay the value of the last
thing that was lost plus damages.
Examples: D is to give C a specific ring, a
specific bracelet or a specific
wristwatch. The obligation is silent as
to who will choose the item to be
delivered. Therefore, the right of choice
belongs to D.
a.) If the ring is lost through a fortuitous event. D may deliver
the bracelet or the wristwatch. The same rule applies if
the ring is lost through the fault of D. in the case of the
latter, D shall have no liability because he can perform his
obligation by choosing to deliver the bracelet or
wristwatch
b.) If the ring and the bracelet are lost through a fortuitous
event or through D’s fault, the obligation is converted into
a simple obligation to deliver the wristwatch. There is no
liability for damages on the part of D even if the loss is
due to his fault because he can still perform his
obligation. It was as if D chose to deliver the wristwatch.
c)If all the things are lost due to a fortuitous event D’s
Obligation is extinguished.
d.) If the ring and the bracelet are lost through a fortuitous
event, the obligation is becomes a simple obligation to
deliver the wristwatch. If the wristwatch is thereafter lost
due to the fault of D, D shall pay damages.
e.) if the ring, the bracelet and the wristwatch are lost one
after the other due to D’s faults, D shall pay the value of
the wristwatch, the last item that was lost, plus damages
f.) If the ring and the bracelet are lost through D’s fault, the
obligation becomes a simple obligation to deliver the
wristwatch. If the wristwatch is thereafter lost due
through a fortuitous event, D’s obligation is extinguished.
 Rules in Case of loss of things or impossibility of services
which are alternatively the object of the obligation
 2. When the right of choice is expressly
granted to the creditor (Art.1205)
1. If only one or some are lost through a
fortuitous event, the debtor shall deliver
that which the creditor should choose
among any the remainder, or that which
remains if only one subsists.
2. If all are lost through a fortuitous event,
the obligation is extinguished.
3. If only one or some are lost through the
debtor’s fault, the creditor may claim any
of those subsisting, or the price of those
which were lost through the debtor’s fault
plus damages.
4. If all are lost through the debtors fault,
the creditor may claim the price of any of
them plus damages.
Examples: D is to give C a specific ring, a
specific bracelet or a specific wristwatch.
The parties agreed that C shall have the
right of choice.
a.) If the ring is lost through a fortuitous event.
D shall deliver either the bracelet or the
wristwatch at the choice of C.
b)If all the things are lost due to a fortuitous
event D’s Obligation is extinguished.
c.) If the ring and the bracelet are lost through a
fortuitous event, D shall deliver the
wristwatch which is remaining item. The
obligation becomes a simple obligation to
deliver the wristwatch. If the wristwatch is
thereafter lost due o the fault of D, D shall pay
damages.
d.)If the ring and the bracelet are lost through
D’s fault, the obligation does not become a
simple obligation to deliver the wristwatch. C
can still choose from the payment of the price
of the ring or the bracelet with damages, or
the delivery of the wristwatch.
e. ) If all are lost due to D’s faults, C may claim
the price of any of them plus damages
 Facultative obligation

 An obligation where only one prestation is due but

the debtor may render another substitution
 Example: D is obliged to give a specific ring to C with
the agreement that D may deliver a specific
wristwatch as a substitute.
Rules in case of loss of Principal thing and substitute.
(before substitution) (after substitution)

i.e: before the debtor has informed Principal thing

the creditor of the substitution
Principal thing
If lost due to fortuitous event, the
obligation is extinguished.
If lost due to debtor’s fault, debtor
shall pay damages
Substitute
The loss of the substitute whether
through a fortuitous event or
through the debtor’s fault
imposes no additional obligation
on the debtor because it is not yet
due. The debtor has still to
deliver the principal thing.
The loss of the principal thing whether
through a fortuitous event or through
the debtor’s fault imposes no
additional obligation on the debtor
because the thing due is already the
substitute. After the substitution has
been communicated, the thing due is
the substitute. The obligation also
ceases to be a facultative obligation
and becomes a simple obligation.
Substitute
If the lost through a fortuitous event,
the obligation is extinguished.
If the lost through the debtor’s fault,
the debtor shall pay damages.
 Alternative and facultative distingished
 Alternative obligation
 Several prestations are due but
the performance of one is
sufficient to extinguish the debt.
 If there are void prestations, the
others may still be valid, hence
the obligation remains.
 The right of choice is with the
debtor unless expressly given to
the creditor.
 If all the prestations are
impossible except one, that
which is possible must still be
given.
 Facultative obligation
 Only one prestation, the
principal obligation is due.
 If the principal obligation is
void, the debtor is not
required to give the
substitute.
 The right of choice belongs to
the debtor only
 If the principal obligation is
impossible, the debtor is not
required to give the
substitute.
 Joint and Solidary Obligations

•I N J O I N T A N D S O L I D D A R Y O B L I G A T I O N S , T H E R E I S A
CONCURRENCE OF TWO OR MORE DEBTORS AND/ OR TWO OR
MORE CREDITORS IN ONE AND THE SAME OBLIGATION
•I N A J O I N T O B L I G A T I O N E A C H D E B T O R I S L I A B L E O N L Y F O R A
PROPORTIONATE PART OF THE DEBT, AND EACH CREDITOR IS
ENTITLED ONLY TO PROPORTIONATE PART OF THE CREDIT.
• Examples: 1. A and B are indebted to X for P10,000.00. A is liable only
for P5,000.00; B is liable only for P5,00.00.
• 2. A owes X and Y P8,000.00. X can collect only P4,000.00; Y can
collect only P4,000.00.
•I N A S O L I D A R Y O B L I G A T I O N E A C H D E B T O R I S L I A B L E F O R
THE WHOLE OBLIGATION, AND EACH CREDITOR IS ENTITLED
TO DEMAND PAYMENT OF THE WHOLE OBLIGATION.
 Kinds of Solidary obligations

 Passive solidarity- this is solidarity on the part of the debtors

 Example: A and B, solidary debtors, are indebted to X for P10,000.00. X can
demand payment of P10,000.00 from either A or B. If A pays X, 10,000.00.
A can demand reimbursement from B his share of P5,000.00.
 Active solidarity- this is solidarity on the part of the creditors
 Examples A owes X and Y, solidary creditors, P8,000.00. Either X or Y may
demand payment of P8,000.00 from A. If A pays X P8,000.00 the obligation
is extinguished. X must give Y his share amounting to P4,000.00.
 Mixed solidarity
 Example: A and B, solidary debtors, owes X and Y, solidary creditors,
P12,000.00. X or Y may collect from A or B the total sum of P12,000.00. if
A pays X P12,000.00, the obligation is extinguished. B must reimburse A
P6,000.00. On the other hand, X must give Y his share of P6,000.00.
 Other terms for Solidary obligations

 Jointly and severally

 Individually and collectively
 In solidum
 Mancomunada solidaria
 Juntos o separadamente
 General rule if there is a concurrence of two or more debtors
and/ or two or more creditors in one and the same obligation.

 The obligation is presumed to be joint when there is a concurrence of two or more

debtors and/ or two or more creditors in one and the same obligation. There is solidary
liability only in the following cases:
 1. When the obligation expressly so states.

 2. When the law requires solidarity.

 Examples: 1. when two or more persons have appointed an agent for a common transaction
or undertaking, they shall be solidarily liable for the consequences of the agency. (Art.1915)
 Where the instrument containing the words “ I promise to pay” is signed by two or more
persons, they are deemed to be jointly and severally liable thereon. (Sec.17, Negotiable
Instruments Law)
 3. when the nature of the obligation requires solidarity.
 Example: S a security guard of AB Partnership, died in line of duty. The heirs of S demanded
compensation under the Workmen’s Compensation Law (WCC) for the whole amount from
A, partner. A claimed that he should be liable only for one half thereof, the other half to be
shouldered by B, his partner, since their liability is joint. The court ruled that the partners’
liability is solidary since the nature of their obligation requires solidarity. The evident
intention of the WCC is to give full protection to workers. This purpose would be defeated if
the employer’s liability were only joint.
 Problems

 A,B and C are obliged to give  A, B and C, joint debtors, are

X,Y and Z P27,00.00. How obliged o give X,Y and Z,
many distinct debts are there in solidary creditors, P18,000.00.
the obligation? How much may X collect and
 Answer: since the obligation is from whom?
presumed to be joint, there are 9  Answer: X, being a solidary
distinct debt as follows:
creditor, may collect the sum of
 A owes X P3,000.00.
P18,000.00. However, since
 A owes Y P3,000.00.
the debtors are joint debtors,
 A owes Z P3,000.00.
he may collect only P6,000.00
 B owes X P3,000.00.
from each of them. After
 B owes Y P3,000.00.
collecting the sum of
 B owes Z P3,000.00.
P18,000.00, X must give Y and
 C owes X P3,000.00.
Z’s share of P6,000.00 each.
 C owes Y P3,000.00.

 C owes Z P3,000.00.
 Problems
 A,B and C, solidary debtors are
obliged to give X,Y and Z, joint
creditors, P18,000.00. How
much may A be held liable?
 Answer: A, being a solidary
debtor may be held liable for
P18,000.00. However, since
the creditors are joint creditors,
each of them may collect only
P6,000.00 from A. If A pays
the whole amount o the
creditors, A can demand
reimbursement of P6,ooo.oo
each from B and C.
 A,B and C, solidary debtors are
obliged to give X,Y and Z,
solidary creditors, P18,000.00.
how much may Z collect from
whom?
 Answer: Z may collect
P18,000.00 from any of the
solidary debtors each of whom
may be held liable for the entire
obligation. If Z collects
P18,000.00 from A, Z must
give X and Y P6,000.00 each.
A, on he other hand, can
demand reimbursement from B
and C at P6,000.00 each.
 Problems: A and B are solidary debtors of X and Y, solidary
creditors in the amount of P20,000.00.

 If X renounces or remits the whole obligation without the consent of Y, will the obligation be
extinguished?
 Answer: Yes, because the remission made by any solidary creditor extinguishes the whole
obligation. (Art.1215). However , X has to give Y’s share of P10,000.00 since solidary creditor may
not do anything prejudicial to his co-solidary creditors. (Art.1212). A solidary creditor who has
caused the extinguishment of the obligation by remission, novation, compensation or confusion, or
who has collected the debt, shall be liable to the others for the shares corresponding to them.
(Art.1215).
 Suppose the remission of the whole obligation was obtained by A, may A demand reimbursement
from B?
 Answer: No, because the remission of the whole obligation obtained by one of the solidary debtor
does not entitle him to reimbursement from his co-debtors (Art.1220), remission being the
gratuitous abandonment by the creditors of their rights to the obligation
 Suppose that X renounces or remits A share amounting to P10,000. However, it turned out that B
had already paid P20,000.00 to Y two days before. May B still collect P10,000.00 from A
representing A’s share?
 Answer: Yes, B may still collect from A P10,000.00. the remission made by the creditor of the share
which affects one solidary debtor does not release the latter from responsibility to his co-debtors, in
case the debt has been totally paid by anyone of them before the remission was affected. (Art1219).
A’s remedy will be to go after X or Y to collect the sum he paid to B.
 Problems: A , B and C are solidary debtors, borrowed P30,000.00 from X.
The obligation is evidenced by a promissory note signed by the debtors.

 X demands payment from A. However, A pays only P12,000.oo. May X still go after B and/or C?
 Answer: Yes, X may still go after B or C or both of them for the balance of P18,000.00. The creditor
may proceed against any one of the solidary debtors or some or all of them simultaneously. The
demand made against one of them shall not be directed against the others, so long as the debt has
not been fully collected. (Art1216).
 If A pays X P30,000.00, what are the rights of A?
 Answer: A can demand from B and C at P10,000.00 each together with interest from the date of
payment. However, if payment is made by A before due date, he cannot collect interest during he
intervening period, i.e., from date of payment to due date. (Art.1217)
 A pays X P30,000.00. However, C has become insolvent. How much may A demand from B as
reimbursement?
 Answer: A may demand payment of P15,00.00 from B. If an insolvent debtor cannot reimburse his
share to the debtor paying the obligation, such share be borne by all his co-debtors in proportion to
the debt of each. (Art.1217). Thus, A and B shall bear C’s share at P5,000.00 each.
 If A pays X P30,0000.00 more than 10 years after the note had become due, can he still demand
reimbursement from B and C?
 Answer: No, he can no longer demand reimbursement . Payment by solidary debtor after the
obligation has prescribed does not entitle him to reimbursement. The same rule applies if payment
is made after the obligation has become illegal. (Art.1218.)
 Problems
 Problems: A ,B, C and D are solidary liable
to X for the delivery of a specific ring
valued at P20,000.00. what is the rule if
the ring is lost: 1. Through a fortuitous
event?; 2. Through the fault of D?
 Answers: 1. The obligation shall be
extinguished. This is according to the rule
that no person shall be responsible for
fortuitous events.
 2. All the solidary debtors shall be liable for
the payment of the price of the ring plus
damages and interest. However, the
solidary debtor making the payment can
recover whatever he has paid from the
guilty debtor. Thus if X goes after A and A
pays the price of ring and the damages and
interest. A can demand reimbursement of
P20,000.00 plus damages and interest
from D, the guilty negligent debtor.
(Art1221)
 A is indebted to X, Y, and Z,
solidary creditors for
P24,000.00. Suppose X makes
a demand against A, to whom
shall A pay?
 Answer; A must pay to X. if A
pays another solidary creditor,
say Y, the sum of P24,000.00,
the payment as a rule is valid
only with respect to Y’s share of
P8,000.00. Thus, if X and Z do
not receive their respective
share from Y, A can still be held
liable for P16,000.00 .
(Art.1214)
Existence of solidarity despite different periods and
conditions

 Solidarity exist although the creditors and debtors may not be bound by
the same periods and conditions (Art.1211)
 Example: A, B and C are solidarily liable to X for P9,000.00. The
parties stipulated that the share of A is payable on demand; the share of
B on Christmas day next year; and the share of C, if X passes the Bar
Examination.
 X may demand payment of the share of A of P3,000.00 anytime from
either A B or C. On Christmas day next year, X may demand payment of
the share of B of P3,000.oo from either A, B or C. When X passes the
Bar examination, he may demand payment of the share of C of
P3,000.00 from either A, B or C.
Effect of unauthorized assignment of creditor’s right

 The solidary creditors are bound by mutual trust and

confidence. Hence, a solidary creditor cannot assign his
right to a third person without the consent of the other
solidary creditors (Art.1213) because the assignee may not
enjoy the trust and confidence of the non-assigning
creditors.
 If the assignment is without the consent of the co-creditors,
the assignment is not valid as to them. Accordingly, they
can recover their respective shares from the assigning
creditor in case the assignee who collected the debt fails to
give them their shares.
 Defenses available to solidary debtors

 Those derived from the nature of the obligation (such as

prescription of the obligation, illegality of cause).
 Those personal to the debtor being sued, or those that
pertain to his own share( such as incapacity of the debtor or
non-fulfillment of a suspensive condition as to his share).
 Those personal to the other debtors with respect to their
own share(such as incapacity of another debtor or non-
fulfillment of a suspensive condition with respect to the
other debtors’ shares).
 Joint indivisible obligation, concept and
characteristics

 A joint obligation is an obligation where the debtors or creditors are jointly bound but
the prestation or object is indivisible. It has the following characteristics:
 The creditors must act collectively meaning all of them must make the demand unless
one is specifically unauthorized to act for the other. (Art1209). A demand made by one
or some but not all of the creditors will not be effective.
 The demand must be made against all the debtors since compliance is possible only if
they act together. (Art1209)
 The right of the creditors may be prejudices only by their collective acts. Thus, a
renunciation made by a joint creditor extinguishes only his own share. The obligation,
however, is converted into an obligation to pay the value of the thing. If all join
creditors make the renunciation, the obligation is extinguished. (Art.1209)
 If one of the debtors does not comply with his undertaking the obligation is converted
into a monetary obligation to pay damages. The debtors who may have been ready to
comply shall not contribute to the indemnity beyond the corresponding price of the
thing or the value of the services in which the obligation consists. (Art.1224).
 If one of the debtors is insolvent, the others shall not be liable for his share. (Art.1209)
 Illustration: A, B, and C are jointly indebted to deliver a
specific car valued at P900,000.00 to X, Y and Z.

 1. X, Y and Z must make a demand against A, B and C for the delivery of

the car.
 2. If A is not ready to comply with his undertaking, the obligation to
deliver the car is converted into an obligation to pay its value plus
damages. B and C shall be obliged to pay P300,000.00 each. A, the
defaulting debtor, shall be liable for P300,000.00 plus damages.
 3. If A is insolvent, B and C shall be liable only for their respective share
of P300,000.00 each.
 4. If X renounces his right to the obligation without the consent of Y
and Z, then only his proportionate share is extinguished. The
obligation, however, is converted into a monetary obligation to pay
P600,000.00 which must be given to Y at P300,00.00 and Z at
P300,000.00 by A, B and C who will give P200,00.00 each.
Indivisibility and solidarity, concept and distinctions

 The indivisibility of an obligation refers to the subject matter or object

no being susceptible of partial performance. Solidarity on the other
hand, refers o tie between the parties. One therefore, does not imply, or
give rise to the other. (Art1210) Thus, there may be the following
obligations:
 Joint divisible obligation- Example: A and B are jointly obliged to C to
construct a pavement 2m wide and 10m long.
 Joint indivisible obligation- Example: A and B are jointly obliged o give
a specific horse to C.
 Solidary divisible obligation: Example: A and B are solidarily liable to
pay C P10,000.00 in two equal installments.
 Solidary indivisible obligation: Example: A and B are solidarily liable o
give a specific horse to C.
 Divisible Obligations
•I S O N E C A P A B L E O F P A R T I A L P E R F O R M A N C E ( S U C H A S T H E
OBLIGATION TO DELIVER 10 SACKS OF RICE). THE FF.
OBLIGATIONS ARE DEEMED DIVISIBLE (ART1225):
•1 . W H E N T H E O B L I G A T I O N H A S F O R I T S O B J E C T T H E
EXECUTION OF A CERTAIN NUMBER OF DAYS OF WORK (SUCH
AS AN OBLIGATION TO WORK FOR 1 WEEK.)
•2 . W H E N T H E O B L I G A T I O N H A S F O R I T S O B J E C T T H E
ACCOMPLISHMENT OF WORK BY METRICAL UNITS(SUCH AS
OBLIGATION TO CONSTRUCT A PAVEMENT WHICH IS 10M
LONG AND 2M WIDE.)
•3 . A N A L O G O U S T H I N G S W H I C H B Y T H E I R N A T U R E A R E
SUSCEPTIBLE TO PARTIAL PERFORMANCE.
 Indivisible Obligations
•I S O N E N O T C A P A B L E O F P A R T I A L P E R F O R M A N C E ( S U C H A S T H E
OBLIGATION TO DELIVER A SPECIFIC CAR). THE FF. OBLIGATIONS
ARE DEEMED INDIVISIBLE (ART1225):
•1 . O B L I G A T I O N T O G I V E D E F I N I T E T H I N G S ( S U C H A S T O G I V E A
SPECIFIC HORSE.)
•2 . T H O S E N O T S U S C E P T I B L E T O P A R T I A L P E R F O R M A N C E ( S U C H A S
THE OBLIGATION OF A SINGER TO SING 1 SONG IN A PROGRAM).
•3 . T H O S E W H E R E T H E O B J E C T O R S E R V I C E I S P H Y S I C A L L Y
DIVISIBLE BUT IT IS INDIVISIBLE BY PROVISION OF LAW(SUCH AS
WHERE THE OBLIGATION IS TO PAY A SUM OF MONEY BUT THE LAW
PROVIDES THAT THE SUM MUST BE PAID IN FULL).
•4 . T H O S E W H E R E T H E O B J E C T O R S E R V I C E I S P H Y S I C A L L Y
DIVISIBLE BUT IT IS INDIVISIBLE BY THE INTENTION OF THE
PARTIES.(SUCH AS WHERE THE OBLIGATION IS TO PAY A SUM OF
MONEY BUT THE PARTIES AGREED THAT THE SUM MUST BE PAID IN
FULL).
 Obligation with a Penal Clause

•A N O B L I G A T I O N W I T H A P E N A L C L A U S E I S O N E W H I C H
PROVIDES FOR A GREATER LIABILITY ON THE PART OF THE
DEBTOR IN CASE OF NONCOMPLIANCE. THE ACCESSORY
UNDERTAKING ON THE PART OF THE DEBTOR IS CALLED THE
PENAL CLAUSE.
•E X A M P L E : D I S O B L I G E D T O C O N S T R U C T A C O M M E R C I A L
BUILDING FOR C WITHIN A PERIOD OF THREE MONTHS. THE
PARTIES AGREED THAT SHOULD D FAIL TO FINISH THE
CONSTRUCTION OF THE BUILDING WITHIN THE SAID
PERIOD, D SHALL PAY C P1,000.00 FOR EVERY DAY OF DELAY
AS PENALTY.
 Kinds of Penal Clause

Legal and conventional

 Legal- imposed by law
 conventional- imposed by the agreement of the parties
Subsidiary and joint
 Subsidiary- -when only the penalty may be enforced.
 Joint- when both the obligation and the penalty may be
enforced.

Proof is not required for actual damages suffered if there is a penalty:

Proof of actual damages suffered by the creditor is not necessary in
order that the penalty may be demanded. (Art.1228)
 Rules in case obligation has a penal clause

 General rule: The penalty takes the place of the

damages and interest in case of noncompliance.
 Exceptions: i.e.; aside from the penalty, damages and
interest may also be demanded:
 1.) When there is stipulation to that effect.
 2.) When the debtor refuses to pay the penalty.
 3.) When the debtor is guilty of fraud in the
performance of the obligation.(Art1226) This is so
because there is no waiver of an action for future
fraud. (Art.1171)
Problem: D is obliged to deliver 10 sacks of rice to C on May 10. The
parties agreed that if D fails to deliver on due date, he will pay a
penalty of P500.00.

Supposing d failed to deliver on due date, may he just pay penalty of

P500.00?
 Answer: No, because the debtor cannot exempt himself from the
performance of the obligation by just paying the penalty, except when
this right has been expressly reserved for him(Art.1227)
May C demand the delivery of 10 sacks of rice and the payment of the
penalty the same time upon the default of D?
 Answer: No. The creditor cannot demand fulfillment of the obligation
and the payment of the penalty at the same time except when this right
has been clearly granted to him, or if after requiring fulfillment of the
obligation, the performance thereof becomes impossible without his
fault, he may also enforce the penalty. (Art 1227)
 When the court may  Effect of nullity of principal
reduce penalty: obligation, penal clause

1. When the obligation has 1. The nullity of the principal

been partly complied by obligation carries it with
the debtor. nullity of the penal clause.
This is so because the penal
2. When the obligation has
clause, being just an
been irregularly
accessory undertaking,
complied with by the cannot stand by itself.
debtor.
2. The nullity of the penal
3. When the penalty is clause does not carry with it
iniquitous or that of the principal
unconscionable even obligation. This is so because
there has been no the principal obligation can
performance (Art.1229) stand by itself.