JURIDICAL NECESSITY ‡Character of Enforceability

TO GIVE ‡Real obligation ‡Positive / Negative

TO DO or NOT TO DO ‡Personal obligation ‡ Positive / Negative

Object or Prestatio n

Efficient Cause or Juridical Tie

Active Subject

Passive Subject

Distinguish from
Natural Obligation

Moral Obligation

‡Good conscience ‡Feeling of satisfaction ‡Not enforceable

‡Goodness ‡Not enforceable

Examples of Natural Obligations
‡ Art. 1424 ± obligor voluntarily performs contract that prescribed; ‡ Art. 1425 ± third person pays prescribed debt without consent or against the will of debtor & the latter voluntarily reimburses him; ‡ Art. 1428 ± prevailing party in an action performs civil obligation subject matter of the case;

‡ Art. 1429 ± heirs voluntarily pay debt of decedent exceeding value of inheritance; ‡ Art. 1430 ± heirs voluntarily pay legacy although will was declared void;


Solutio indebiti . which has for its purpose payment of indemnity to the end that no one shall be unjustly enriched or benefited at the expense of another (2142) ‡ Kinds: a. & unilateral act. Negotiorum gestio b.Quasi-Contracts ‡ Juridical relation resulting from a lawful. voluntary.

2144-2153) ‡ Person (officious manager or ³gestor´) voluntarily takes charge of the agency or management of the business or property of another which was neglected or abandoned without power or authority of the latter. . ‡ Owner shall pay necessary & useful expenses of gestor & damages he suffered.Negotiorum Gestio (Arts. liable for fault or negligence. ‡ Gestor shall exercise diligence of a good father of a family.

& (b) it was unduly delivered through mistake. . the obligation to return it arises. ‡ Even mistake in the construction or application of a doubtful or difficult question of law. ‡ Recovery may be had even though payer doubted whether the debt was due.Solutio Indebiti ‡ Something is received (a) when there is no right to demand it.

2163 ± it is presumed that there was a mistake in the payment if something which had never been due or had already been paid was delivered. If he has alienated it.‡ Art. he shall return the price or assign the action to collect the sum. ‡ Art. but. 2160 ± he who in good faith accepts an undue payment of a thing certain & determinate shall only be responsible for the impairment or loss of the same or its accessories & accessions insofar as he has thereby been benefited. . he from whom the return is claimed may prove that the delivery was made out of liberality or for any other just cause.

Other Instances of Quasi-Contract ‡ Art. ‡ Art. 2166 ± third person supports orphan. 2165 ±without knowledge of relatives of deceased. ‡ Art. third person pays funeral expenses . . support is given by stranger not out of pity & without intention of being repaid. insane or indigent person when the one obliged unjustly refuses to give. 2164 ± without knowledge of person obliged.

storm or other calamities. unless rendered out of generosity. saved his property during fire. 2169 ± person responsible of nuisance is liable for expenses of government in its abatement. without his knowledge. he is liable for services rendered by physician or person who aided him. flood. 2167 ± injured or seriously ill person is treated while in a condition not able to give consent to a contract. ‡ Art. . ‡ Art. 2168 ± owner bound to compensate person who.‡ Art.

720 ± finder of lost thing is entitled to a reward (1/10 of value) from owner.‡ Art. 1236 ± third person who pays debt is entitled to beneficial reimbursement from debtor. ‡ Art. 2175 ± taxpayer to reimburse person constrained to pay tax. . ‡ Art.

Reparation of damage caused c.e. Indemnification of consequential damages (Art. RPC. i. 100.DELICTS ‡ Governed by penal laws. RPC). RPC) . Restitution b. ‡ Civil liability includes: a. 104. ‡ Every person criminally liable for a felony is also civilly liable (Art.

If an independent civil action is resorted to. If acquittal is on reasonable doubt. If acquittal is because accused could not have committed the act. accused may still be liable. 4. .Effects of Acquittal 1. no civil liability. accused may still be liable. 2. civil liability may be proven by preponderance of evidence. If acquittal is due to an exempting circumstance. 3.

Death after final judgment . Death before arraignment ± case dismissed without prejudice to any civil action against estate. 3.civil liability from delict extinguished. 4) 1. Death after arraignment & before final judgment .civil liability enforceable against estate. Sec.Effects of Death of Accused (Rule 111. . 2. but independent civil action or other action to enforce civil liability from other sources may continue against estate or heirs.

NATURE & EFFECT OF OBLIGATION In Real Obligation:  Duty of obligor to exercise diligence > every person obliged to give something (determinate) is obliged to care for it with the diligence of a good father of a family > other degree of diligence may be fixed by law or stipulation .

the thing to be delivered must be neither of superior or inferior quality .to compel debtor to make delivery * indeterminate thing ± to ask compliance of obligation at the expense of debtor. Right of creditor to demand delivery * determinate thing .

industrial) 1.Things to be delivered includes: a. Accessions & accessories b. Fruits (natural. civil. Due & demandable > creditor has personal right & entitled to its delivery 3. Delivered > creditor has real right . Before due & demandable > creditor has no right 2.

d. Actual 2. Constructive a. Traditio simbolica Traditio longa manu Traditio brevi manu Tradition constitutom possessorium Tradition by execution of legal forms or solemnities .Kinds of Delivery: 1. c. b. e.

from the moment term arrives or condition is fulfilled Remedies when no delivery is made: a.When delivery should be made: a. from perfection of contract. Damages . Specific performance with damages b. If no term or condition. b. Rescission or cancellation with damages c. If with term or condition.

same remedy as above .creditor may have obligation performed at debtor¶s expense. plus damages .In Personal Obligation  Debtor fails to do .specific performance cannot be availed of  Debtor performs in contravention of tenor of obligation .

 Debtor performs poorly . it shall be undone at his own expense. plus damages .it shall be undone *** Negative Personal Obligation > if debtor performs what is forbidden.

LIABILITY FOR DAMAGES IN THE PERFORMANCE OF OBLIGATIONS ‡ ‡ ‡ ‡ Fraud or Dolo Negligence or Culpa Delay. Default or Mora Contravention of tenor of obligation .

any waiver is void ‡ Liability cannot be mitigated or reduced by the court .Fraud or Dolo ‡ Conscious. deliberate or intentional evasion of fulfillment of obligation ‡ Different from fraud in the perfection of a contract ‡ Future fraud cannot be waived.

provided not gross. may be waived .Negligence or Culpa ‡ Omission of that diligence required by the nature of the obligation & corresponds with the attending circumstances ‡ Voluntary but not deliberate ‡ Liability may be regulated by the court depending on the circumstances ‡ Future culpa.

his omission or nonperformance will render him liable to whoever may be injured thereby. precaution & vigilance which the circumstances justly demand.R. No. .Garcia vs. 168512. Where the law imposes upon a person the duty to do something. Salvador G. whereby such other person suffers injury. 20 March 2007 ‡ Negligence is the failure to observe for the protection of the interest of another person that degree of care. ‡ Violation of a statutory duty is negligence.

or that he or she did something that a reasonably prudent health care provider would not have done. the test of the existence of negligence is: Did the health care provider either fail to so something which a reasonably prudent health care provider would have done. . then he or she is guilty of negligence. and that the failure or action caused injury to the patient? If yes.‡ For health care providers.

substantive performing contract & independent There¶s pre-existing No pre-existing obligation obligation Diligence of good Complete defense father not a defense of employers. substantive & independent No pre-existing obligation Not defense in subsidiary liability of employers Proof beyond reasonable doubt Negligence must be Negligence must be proven proven . guardians Preponderance of Preponderance of evidence evidence Negligence is presumed Direct.Kinds of Culpa Culpa Contractual Culpa Aquiliana Culpa Criminal (Quasi-delict) (Delict) Incidental in Direct.

Default or Mora ‡ In unilateral obligation. from the time of judicial or extrajudicial demand ‡ In reciprocal obligation: > neither party incurs in delay if the other does not comply or is not ready to comply > delay by one begins the moment the other fulfills his obligation *** unless a different period is stipulated upon by the parties .Delay.

From the moment one of the parties fulfills his obligation. . delay by the other party begins.‡ SJ Corp. wherein each party is a debtor & a creditor of the other. 545 S 300 > reciprocal obligations are those which arise from the same cause. such that the performance of one is conditioned upon the simultaneous fulfillment of the other. vs Evangelista.

Debtor express acknowledges his delay . Time is of the essence or the controlling factor of the obligation d.Kinds:  Mora Solvendi ± debtor¶s default *** Demand upon debtor not necessary: a. Law so provides b. Obligation so provides c. Demand is useless as obligor rendered it beyond his power e.

*** Effects of Debtor¶s Default: a. He is liable for interest or damages; b. He bears the risk of loss; c. He is liable even for fortuitous event 

Mora Accipiendi - creditor¶s default Compensatio Morae ± both parties in default in reciprocal obligation

Effects of Fortuitous Events on Liability 
General Rule: - no liability, provided
a. event is either unforeseeable or unavoidable; b. event is such as to render it impossible for debtor to fulfill his obligation in a normal manner; c. the debtor is free from any participation in or aggravation of the injury to the creditor

 Exceptions: 1. Law expressly provides 
Art. 1165 ± obligor delays, or promises to deliver same thing to two or more persons who do not have same interest.  Art. 1268 ± obligation to deliver a certain & determinate thing proceeds from a criminal offense; regardless of cause of loss.  Art. 552 ± possessor in bad faith liable for deterioration or loss in every case;

(2) delays return (3) thing delivered with appraisal of value. 1942 liability of bailee in commodatum in case of loss: (1) devotes thing to a different purpose. Art. unless otherwise stipulated (4) lends or leases thing to third person not member of his household (5) chooses to save his own property instead of thing borrowed .

1979 liability of depositary for loss: (1) so stipulated (2) uses thing without permission (3) delays return (4) allows others to use it . Art.

Arts. 2147 & 2148 liability of officious manager: (1) undertakes risky operations which the owner was not accustomed to embark (2) prefers own interest (3) fails to return property after demand (4) assumes management in bad faith (5) manifestly unfit (6) prevents a more competent person from taking the management .

When expressly declared by stipulation or contract 3. When obligation is generic . When nature of obligation requires assumption of risk (Doctrine of Created Risk) 4.2.

6.KINDS OF OBLIGATIONS 1. 2. 4. 3. Pure & Conditional Obligations with a period Alternative Joint & Solidary Divisible & Indivisible Obligations with a penal clause . 5.

thus demandable at once ‡ Conditional effectivity of obligation determined by a condition *** futurity & uncertainty Suspensive Resolutory Potestative Casual Mixed Positive Negative .Pure & Conditional Obligations ‡ Pure without condition or term.

the happening of which will give rise to the acquisition of a right  if the condition does not happen, the parties would stand as if the obligation had never existed

‡ Debtor prevents fulfillment of condition 
condition deemed fulfilled, unless done is the exercise of lawful right

‡ Right of creditor pending happening of condition 
may bring appropriate action for the preservation of his rights i.e. demand security if debtor is about to be insolvent; prevent debtor from alienating or concealing of property

‡ Right of debtor to recover what he paid by mistake pending suspensive condition 
payment may be recovered; solutio

indebiti  payment done NOT by mistake
‡ If condition is fulfilled, no recovery because of retroactivity ‡ If condition not fulfilled, there should be recovery

. Deterioration & Improvement of Thing to be Delivered Pending Suspensive Condition ‡ Rules apply if thing is determinate LOSS when thing perishes. or goes out of commerce.Loss. b. or disappears in such a way that its existence is unknown or cannot be recovered. he is liable for damages. with debtor·s fault. obligation is extinguished. without debtor·s fault. a.

b. creditor may choose between: .rescission plus damages. without debtor·s fault.fulfillment plus damages . with debtor·s fault. or .DETERIORATION a. impairment is borne by creditor.

.not to alter form & substance .may exercise right of usufructuary to use & the fruits. inure to the benefit of creditor. b. at the expense of the debtor .IMPROVEMENT a.limited right of removal .he has no right to be reimbursed or indemnified. by nature or by time. .

RESOLUTORY CONDITION  obligation is demandable at once. the debtor being the party obliged to return . gathering & preservation ‡ Same rule as in suspensive condition in case of loss. but rights already acquired are lost when condition is fulfilled. deterioration or improvement. ‡ Mutual restitution ± Including fruits & interests after deducting expenses made for their production.

fulfillment of condition depends on sole will of one of the parties  potestative on the part of the debtor a. resolutory ² condition & obligation valid  potestative on the part of the creditor NOTE: if debtor binds himself to pay when his means permit him to do so .deemed obligation with a period . suspensive ² condition & obligation void b.Potestative Condition .

‡ Casual condition ± fulfillment of condition depends upon chance or upon the will of a third person ‡ Mixed condition ± Fulfillment of condition depends upon will of debtor & upon chance or will of a third person .

Positive Condition Condition that some event will happen at a determinate time Obligation extinguished if: a. Time expires & event did not take place . Time expires & condition did not happen b. It becomes indubitable that the event will not take place Negative Condition Condition that some event will not happen at a determinate time Obligation effective if: a. It becomes evident that the even cannot occur b.

Note: in simple & remunerative donation. ‡ if obligation is divisible. . both condition & obligation are valid. ‡ if condition is not to do an illegal thing. part not affected is valid.Impossible & Illegal Conditions ‡ if condition is to do an impossible or illegal thing or act. disregard condition & obligation remains. ‡ if condition is not to do an impossible. such condition considered as not imposed (727). both condition & obligation are void.

if fulfillment is chosen & becomes impossible. Demand fulfillment plus damages 2.Remedies of Injured Party in Case of Breach 1. rescission may be availed of . not conjunctive However. Rescission plus damages   Remedies are alternative.

the obligation or promise of each party is the cause or consideration for the obligation or promise of the other. waivable.Right to Rescind 1. 2. implied/presumed in reciprocal obligations & need not therefore be expressly provided  Reciprocal obligation ² parties are reciprocally obliged to do or give something. expressly or impliedly . cause must be identical & obligation must arise simultaneously.

willing & able to comply with his obligation. judicial action is necessary.3. can be demanded only by the party ready. no need if stipulated upon in case of nonfulfillment by the other . needs judicial approval in certain cases if there was delivery & not returned voluntarily. & the other is not 4.

b. trivial or slight causes not sufficient to cause rescission. court won·t decree rescission if it can fix period to comply. c. . no rescission if property is already in the possession of innocent third person.5. not absolute a.

Rule if Both Parties Commit Breach  liability of the first infractor shall be equitably tempered by the court  if it cannot be determined who first violated contract. the same shall be deemed extinguished & each shall bear his own damages. .

Obligations with a Period ‡ Period an event which necessarily or certainly will happen at a date known beforehand or at a time which cannot be determined. & the happening of which determines the effectivity or extinguishment of obligations  presumed fixed for the benefit of both parties. it appears that it was established in favor of one . unless from the tenor or other circumstances.

‡ Definite or Indefinite ‡ Suspensive (ex die) or Resolutory (ex diem) ‡ Legal or Conventional or Judicial .

Instances When Court Fixes Period a) Period depends upon the will of the debtor. pay you little by little or by installment. . i. my means permit. if I have money. it cannot be changed.e.. as soon as possible b) Obligation does not fix a period. but it can be inferred that a period was intended c) Court denies rescission as it finds it proper to fix a period NOTE: once period is fixed by court.

He becomes insolvent after obligation is contracted. unless he gives guaranty or security b. He does not furnish guaranties or securities he promised .When Debtor Losses Right to Make Use of Period a.

He violates any undertaking in consideration of which the creditor agreed to the period e. unless he immediately gives new ones equally satisfactory d.c. When guaranties or securities are impaired due to his own acts or they disappear due to fortuitous event. He attempts to abscond .

Effects of Payment/Delivery Before Period Arrives  Payment by mistake > recovery may be done. plus fruits & interests  No mistake > no recovery because period will definitely come & obligation will have to be fulfilled .

1189. deterioration or improvement before arrival of period. .NOTE: In case of loss. same rules as provided in Art.

but he cannot choose those which are impossible. or not object of the obligation . as a rule. belongs to the debtor. only one is due ‡ Creditor cannot be compelled to receive part of one & part of another undertaking ‡ Right of choice.Alternative Obligations ‡ An obligation where out of two or more prestations. or illegal.

‡ Choice has no effect except from time of notice to the creditor > obligation becomes simple once choice is made & communicated > notice is not to secure creditor·s consent but to inform him of choice .

obligation is extinguished .Effects of Loss of Objects or Impossibility of Alternative Obligations  Without fault of debtor & creditor:  Debtor to choose from remaining alternatives  If only one remains. debtor loses right of choice & obligation becomes simple  If all are lost.

creditor has right to indemnity for damages. Due to fault of debtor  Debtor to choose from remaining alternatives  If only one remains. the amount of which is to be fixed based on the value of the last thing which disappeared or of the service which last became impossible . debtor loses right of choice & obligation becomes simple  If all are lost.

or  Choose from remaining alternatives or fulfill that which remains *** If all are lost. obligation is extinguished . Due to fault of creditor > debtor my either:  Rescind obligation with damages.

obligation ceases to be alternative & becomes simple .When Right of Choice Belongs to Creditor > must be expressly stipulated > once creditor makes & communicates his choice.

creditor s choice shall be on the prices plus damages . or that which remains if only one  Loss due to debtor s fault > creditor may claim any of those subsisting. or the price of that lost plus damages > if all are lost.Effect of Loss Before Creditor Makes Choice:  Loss due to fortuitous event > debtor to deliver that chosen by creditor from among those remaining.

> in case of loss or deterioration of substitute due to debtor·s negligence or fault. but obligor may render another in substitution. he is »Not liable if no substitution made »Liable once substitution is made & communicated .‡ Facultative Obligation > only one prestation is involved.

JOINT & SOLIDARY OBLIGATIONS ‡ Two or more creditors or/and debtors concur in one & the same obligation ‡ General Rule: obligation is joint > each debtor answers only for a part of the whole obligation and to each creditor belongs only a part thereof .

even though only one of them should have been negligent. Nature of obligation requires it c. Law provides  Art.Obligation is solidary when: a. 927. Stipulated upon b. when two or more heirs take possession of the estate and there is loss or destruction of a thing devised or bequeathed. .

Liability of all partners with the partnership for everything chargeable to the partnership under Articles 1822 & 1823. Art. 1824. *** loss or injury due to wrongful act or omission of any partner in the ordinary course of business or with authority of copartners. *** misapplication by any partner of money or property received by partnership in the course of its business . *** misapplication by partner of money or property received by him while acting within scope of apparent authority.

For all consequences of the agency when two or more principals appoint an agent for a common transaction or undertaking. 1911. When agent exceeds his authority and principal allows him to act as though he had full powers. . Art. 1945.  Art.  Art. Liability of two or more bailees to whom a thing is loaned in the same contract. 1915.

 Art. unless management was assumed to save thing or business from imminent damage  Art. 110 (RPC). Liability of two or more officious managers. each within their respective class for their quotas . Liability of two or more payees in solutio indebiti.  Art. Art. Liability of two or more persons in quasi-delict. 2157. 2194. accomplices. Liability of principals. 2146. & accessories.

Vitiation of consent of one debtor does not affect others d. Shares are separate & distinct from each other c. Credit or debt presumed equally divided among creditors or debtors b. Insolvency of one debtor does not make others liable for his share .Consequences of Joint Obligation a.

Demand upon a debtor is not demand upon the others f. Judicial action against a debtor is not action against all g.e. Defenses of one debtor are not necessarily available to the others .

Each may do whatever is useful to the others.Solidarity on the Part of the Creditors 1. No one can assign his rights without the consent of the others. but not anything prejudicial to them. without prejudice to his liability for the shares of the others. . payment should be made to him. 3. 2. 4. Payment may be delivered to any of them. confusion or remission made by any of them shall extinguish obligation. Novation. compensation. but if demand is made by one.

plus interest. no right of reimbursement 3. The one who pays has the right to claim shares of other debtors. Remission of obligation > other creditors to proceed against creditor who made the remission > no effect if made after obligation was paid > debtor who obtains the remission not entitled to reimbursement from others. > if one cannot reimburse. Any of them may be made to pay the whole obligation. . others shall proportionately bear his share > if paid after obligation has prescribed or become illegal. 2.Solidarity on the Part of the Debtors 1.

all are responsible . or any one of them.Effects of Loss or Impossibility (a) Without debtors· fault. if there was delay on the part of any one of them. obligation extinguished. all are responsible (c) Even is due to fortuitous event. (b) Due to debtors· fault.

or performed by metrical units. by law or stipulation. ‡ Divisible if capable of partial performance. . or performed for a certain number of days.DIVISIBLE & INDIVISIBLE OBLIGATIONS ‡ Divisibility or indivisibility refers to the object of the contract if it is capable or incapable of partial performance. or even if physically divisible. ‡ Indivisible if not susceptible of partial performance by nature.

for compliance of the obligation. and a debtor cannot be compelled to answer for the acts or liability of other debtors.  If one debtor is unable. for enforcement of the obligation. > if inability is due to insolvency. obligation converted into actual damages & he shall be liable for additional damages. although each for his own share.  All creditors must concur and demand.  All debtors must concur. demand must be made upon all debtors. although each for his own share. .Joint Indivisible Obligations  A creditor cannot act in representation of other creditors. other debtors not liable for his share.

(a) if penal clause is invalid. and (b) if principal obligation is invalid. principal obligation remains.OBLIGATIONS WITH PENAL CLAUSE ‡ Penalty partakes of an accessory obligation and thus. ‡ To insure performance of principal obligation ‡ Substitute indemnity for damages & interest in case of non-compliance (compensatory) ‡ To punish the obligor in case of breach (punitive) . penal clause is also void.

‡ But damages may still be awarded: (a) by stipulation (b) obligor refuses to pay penalty (c) obligor guilty of fraud ‡ Court may reduce penalty: (a) partial fulfillment (b) irregular fulfillment (c) iniquitous or unconscionable .

‡ Debtor cannot choose to pay penalty instead of performing principal obligation. ‡ Creditor cannot demand fulfillment of obligation and satisfaction of penalty at the same time. ‡ If creditor chooses fulfillment but becomes impossible without his fault. > obligation is monetary with penalty. penalty may be enforced . unless such right is expressly reserved to him. unless > such right is clearly granted to him.

but also the performance of an obligations in any manner. ‡ the thing or service in which the obligation consists must be completely delivered or rendered. .EXTINGUISHMENT OF OBLIGATIONS I. PAYMENT OR PERFORMANCE ‡ means not only delivery of money.

without prejudice to the damages that the creditor may have suffered.‡ substantial performance in good faith is considered as strict & complete fulfillment. ‡ obligation deemed fully complied with if creditor accepts performance without protest or objection despite knowing its incompleteness or irregularity .

.A.Monetary Obligation  delivery of amount in full  currency stipulated upon. 8183 (11 June 1996) ² all monetary obligations shall be settled in the Philippine currency which is the legal tender in the Philippines. the parties may agree that the obligation or transaction shall be settled in any other currency at the time of payment. in Philippine legal tender (1249) ** R. However. and if not possible.

inflation is the sharp increase of money or credit or both without a corresponding increase in business transaction resulting in substantial & continuing rise in the general price level. in case of extraordinary inflation or deflation . unless there is contrary agreement (1250) .basis of payment shall be the value of the currency at the time the obligation was established. . .effects of extraordinary inflation are applicable only when there is an official declaration by competent authorities.

involves an inverse situation. on the other hand. . Extraordinary deflation. 541 S 223 Extraordinary inflation exists when there is an unusual decrease in the purchasing power of currency (that is.‡ Equitable PCI Bank v Ng Sheung Ngor. beyond the common fluctuation in the value of currency) & such decrease could not be reasonably foreseen or was manifestly beyond contemplation of the parties at the time of the obligation.

parties expressly agreed to consider the effects of the extraordinary inflation or deflation *** Respondents made to pay their dollardenominated loans at the exchange rate fixed by the BSP on the date of maturity (time of payment) . official declaration from the BSP 2. obligation was contractual in nature 3.Requisites for an extraordinary inflation or deflation to affect an obligation: 1.

datio in solutum. acceptance / consent of all creditors .‡ Dation in payment. more than one creditor b. complete or partial insolvency c. or adjudicacion en pago > payment of monetary debt through property > governed by law on sales ‡ Payment by cession > debtor transfers all his property not subject of execution to creditors > property to be sold and proceeds use to pay obligation > Requisites: a.

> creditor cannot demand thing of superior quality > debtor cannot deliver thing of inferior quality . even if of same value or more valuable  if object is generic > the purpose & other circumstances of the obligation shall be taken into consideration.Real Obligation  delivery of thing/s contemplated  debtor cannot compel creditor to receive different one.

Personal Obligation  doing or performing service or undertaking contemplated.  another act or service cannot be performed as substitute against the will of the creditor Negative Obligation  by refraining from doing the action contemplated .

work is to be done in parts . partial compensation f.When partial payment may be allowed: a. payment by joint debtor e. by stipulation b. debt is in part liquidated and in part unliquidated d. different prestations are subject to different conditions or terms c.

unless otherwise stipulated. no subrogation to creditor·s rights .Payment by Third Person  Creditor not bound to accept payment from third person who has no interest in the fulfillment of the obligation.  Without knowledge & consent or against the will of the debtor: a. beneficial reimbursement b.

 With knowledge/consent of debtor a. full reimbursement b. subrogation to all rights of creditor  Third person does not intend to be reimbursed > deemed donation & thus. requires debtor·s consent > payment in any case is valid as to the creditor who accepts .

if after payment. third person acquires creditor s rights (subrogation) b. creditor ratifies payment b. creditor is guilty of estoppel . Payment to an unauthorized person  valid insofar as it benefited the creditor  proof that creditor benefited not needed: a.Payment to an incapacitated person  valid if incapacitated person kept the thing delivered & insofar as payment benefited him.

‡ Debtor is released if payment done in good faith to person in possession of credit ‡ Payment after debtor was judicially ordered to retain debt is not valid .

all debts due d.‡ Application of Payment > designation of the debt to which should be applied a payment made by the debtor who owes several debts of the same kind in favor of the same creditor a. payment not enough to extinguish all debts . two or more debts of same kind b. same creditor c.

‡ Limitation of right a. ‡ If no application of payment ± apply to most onerous ± same nature & burden. cannot choose principal ahead of interest ‡ If debtor does not specify & creditor issues receipt in which application of payment is made. the former cannot complain unless there is cause for invalidating the contract. apply proportionately . contrary stipulation b.

Tender of Payment & Consignation  Tender of payment  monetary legal tender  real obligation subject matter  complete Tender not necessary: a. creditor is incapacitated to receive c. title of the obligation is lost . creditor is absent/unknown or failed to appear at place of payment b. two or more persons claim same right to collect e. creditor refuses to issue receipt without just cause d.

 Consignation (judicial deposit) a. notice of consignation to creditor  May debtor withdraw thing consigned? > before creditor accepts > before court approves > if creditor gives authority. refusal of creditor to accept without valid cause c. notice to consign d. consignation e. he loses preference over the thing > obligation not extinguished . valid tender of payment b.

    LOSS OF THE THING DUE Determinate thing Generic thing Partial loss Creditor has right of action against whoever causes the loss .II.

CONDONATION OR REMISSION > act of liberality by virtue of which the creditor.III.     Obligation due & demandable Gratuitous Acceptance by debtor Not inofficious . without receiving any price or equivalent. renounces the enforcement of the obligation.

debtor may prove that delivery was made in virtue of payment. it is presumed to have been delivered voluntarily by creditor.  When debtor is in possession of private document of debt.‡ Express must comply with forms of donation ‡ Implied .voluntary delivery by creditor of document evidencing credit  If heirs of creditor claim that it should be nullified for being inofficious.  When debtor is in possession of thing pledged. the accessory obligation of pledge is presumed condoned. .

CONFUSION OR MERGER > characters of creditor and debtor are merged in the same person > meeting in one person of the qualities of creditor & debtor with respect to the same obligation  Should take place between the principal creditor & debtor  Clear & definite  Obligation involved is one & same obligation .IV.

COMPENSATION > two persons are mutually & reciprocally creditors & debtors to each other. effective only by court order  Legal .V.  Total or partial  Voluntary even when debts are not due  Judicial must be pleaded.

Debts are due 4. Parties are bound principally as creditors & debtors of each other. Debts are liquidated & demandable 5. . None of the debts is subject of retention or controversy commenced by third person & communicated in due time to the debtor. they are fungible & of same kind & quality 3.‡ Requisites for legal compensation 1. 2. legal compensation shall take place even though parties are not aware of it. or if things. NOTE: when all requisites are present. Both debts are monetary.

fees.e.‡ a. c. b. taxes. d. duties . e. Legal compensation not proper when one debt arises from: depositum obligations of a bailee in commodatum claims for support civil liability in crimes obligations in favor of the government. i.

he can set up compensation prior to assignment. b. If without debtor¶s consent or against his will (although informed). he can set up compensation available before knowledge of assignment. he cannot set up compensation against the assignee. unless there was reservation communicated to the creditor. . If debtor consents.‡ Effects when debts are assigned: a. c. If without debtor¶s knowledge.

or by substituting another in place of the debtor. either by changing its object or principal conditions (real or objective).VI. NOVATION > substitution or change of an obligation by another. must be clearly so declared or that the old and new obligations are incompatible on every point (they cannot stand together) . or by subrogating another in the rights of the creditor (personal or subjective) > cannot be presumed.

‡ Requisites: a. previous valid obligation b. can be novated Old obligation extinguished. extinguishment of the old obligation d.     . nothing to novate Old obligation subject to suspensive or resolutory condition. cannot be novated Old obligation voidable. new obligation also subject unless otherwise stipulated  New obligation void. validity of the new obligation Old obligation void. agreement of parties to the new obligation c. old obligation subsists unless parties intended it to be extinguished in any event.

creditor¶s consent necessary .debtor¶s consent not necessary .‡ Substitution of Debtor Expromision .initiative of third person as new debtor .

new debtor pays. Substitution is with debtor·s consent . old debtor·s obligation not revived . old debtor·s obligation revived  Substitution without debtor·s consent . entitled to beneficial reimbursement . .new debtor pays. full reimbursement with subrogation in all of creditor·s rights.new debtor fails to pay.new debtor fails to pay.

new debtor¶s insolvency was already existing & of public knowledge or is known to the old debtor at the time of delegacion .Delegacion . old debtor·s obligation not revived. full reimbursement with subrogation in all of creditor·s rights.with creditor¶s consent & acceptance  New debtor pays.  New debtor fails to pay. unless .with new debtor¶s consent .initiative of old debtor .

even without debtor¶s knowledge.‡ Subrogation in Rights of Creditor Conventional . payment. not interested in the obligation.upon agreement of all parties Legal a. pays with debtor¶s approval c. creditor pays another creditor who is preferred even without debtor¶s consent b. by a person interested in the fulfillment of the obligation . third person.

Sign up to vote on this title
UsefulNot useful