Professional Documents
Culture Documents
Art. 1156. OBLIGATION DEFINITION - An obligation is a juridical necessity to give, to do, or not to do.
Elements of an Obligation:
Active subject Obligee or Creditor Possessor of a right.
Passive subject Obligor or Debtor Has the duty of gicing, doing or not doing.
Object or Prestatation Object to give, act to do or not to do Subject matter of the prestation
Cause Vinculum or Juridical Tie The reason why the obligation exist.
Form Manner in the obligation.
Art. 1157. SOURCES OF OBLIGATION - The following are the different sources of obligation:
1. Law
2. Contracts
3. Quasi-Contracts
4. Acts or Ommissions Punishable by Law
5. Quasi-delicts
Art. 1158. LAW - Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable , and
shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book.
Art. 1159. CONTRACTS, EX-CONTRACTU, CULPA-CONTACTUAL - Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith.
Art. 1160. QUASI-CONTRACTS, DELICTS, QUASI EX-DELICTO - Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1,
Title XVII of this Book.
QUASI-CONTRACTS
- Juridical relation resulting from a lawful, voluntary, and unilateral act, and which has for its purpose the payment of indemnity to the end
that no one shall be unjustly enriched orr benefited at the expense of another.
Kinds of Quasi-Contracts:
1. Negotiorun gestio (Officious Management)
- A person voluntarily takes charge of another's abandoned business or property without the owner's authority.
2. Solutio Indebiti (Undue payment)
- Something is received when there is no right to demand it and it was unduly delivered thry mistake.
Art. 1161. CRIMES, ACTS OR OMISSIONS PUNISHABLE BY LAW, EX-DELICTU, EX, MALEFACIO, CULPA CRIMINAL - Civil onligations arising from the
criminal offenses shall be governed by the penal laws, subject to the provision of Article 2177, and of the pertinent provisi ons of Chapter 2, Preliminary
Title, on Human Relations, and of the title XVIII of this book, regulating damages.
Gen. Rule
- Civil liability is a necessary consequence of criminal liability (Art. 100, RPC)
Exceptions:
- Crimes without criminal liability:
1. Criminal Contempt
2. Gambling
3. Traffic violations
- Offended party reserves the right to institute it separately.
- The law so provides independent civil action:
1. Obligations arising acts or omissions claimed to be criminal;
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1. Obligations arising acts or omissions claimed to be criminal;
2. Violation of constitutional rights and liberties of individuals;
3. Defamation, fraud or physical injuries;
4. Refusal or failure of members of police force to render protection to life or property.
Art. 1162. QUASI-DELICTS, EX QUASI-MALEFACIO, CULPA AQUILIANA, TORTS - Obligations derived from quasi-delicts shall be governed by the
probisions of Chapter 2, Title XVII of this Book, and by special laws.
Elements of Negligence
1. Duty on the part of the defendant to protect the plaintiff from injury of which the latter complains
2. Failure to perform such duty
3. An injury to the plaintiff through such failure.
Kinds of Negligence
1. Culpa Aquiliana (a quasi-delict)
- Negligence as a source of obligation
2. Culpa Contractual
- Negligence in the performance of a contract
3. Culpa Criminal
- Criminal negligence
Art. 1163. OBLIGATION TO GIVE - Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of
a family, unless the law or the stipulation of the parties requires another standard of care.
Gen. Rule: Pending delivery, the debtor /passive subject has the obligation to take care of the object with the proper diligence of a good father of a
family.
Exception:
a. Required by Law
b. Stipulation of the parties requiring another standard of care.
notes Page 2
b. Stipulation of the parties requiring another standard of care.
Art . 1164. RIGHT TO FRUITS - The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acqu ire
no real right over it until the same has been delivered to him.
** Non nudis pactis , sed traditione domina rerum trasferentum - Ownership of things is transferred not only by mere agreements but ny delivery.
Art. 1165. DETERMINATE VS INDETERMINATE OBJECT - When what is to be delivered is a determinate thing, the creditor, in addition to the right
granted him by Article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same interest, he shall be responsible for
any fortuitous event until he has effected the delivery.
DETERMINATE OBJECT
- To compel specific performance
- To recover damages , in case of breach of obligation, exclusive or in addition to specific performance .
- Entitlement of fruits, interests from the time obligation to deliver arises.
GENERIC OBJECT/PRESTATION
- To ask for performance of obligation
- To ask that the obligation be omplied with at the expense of the debtor.
- To recover damages in case of breach of contract.
Art. 1166. RIGHT TO ACCESSORIES AND ACCESSIONS - The obligation to give a determinate thing includes that of delivering all its accessions and
accessories, even though they may not have been mentioned.
ACCESSORIES
- Those things which are used for the preservation of another thing or more important, have for their object the completion of the latter for
which they are indispensable or convenient.
ACCESSIONS
- Includes everything which is produced by a thing, or which is incorporated or attached thereto, either naturally or artificially .
NOTE: Provide examples.
Art. 1167. OBLIGATION TO DO - If a person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decree d that what has been poorly
done be undone.
1st Par Failure to do: May be executed by a 3rd person subject for reimbursement by the debtor.
2nd Par Contravention of the tenor of the obligation: action for damages
3rd Par Poorly Done: To undo what has been undone, action for damages???
Art. 1168. OBLIGATION NOT TO DO - When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be
undone at his expense.
Duties of Obligor:
1. Not to do what should be done.
2. To shoulder the cost to undo what should not have been undone.
3. To pay damages.
Art. 1169. CONCEPT OF DELAY/DEFAULT - Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:
notes Page 3
However, the demand by the creditor shall not be necessary in order that delay may exist:
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing i s to be delivered or the
service is to be rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper m anner with what is incumbent
upon him. From the moment one of the parties fulfills his obligation, delay by the other begins.
DELAY (MORA)
- Nonperformance of obligation as agreed to time.
Gen. Rule: Creditor should make demand before debtor incurs delay.
UNILATERAL OBLIGATION - there is no delay when there is no demand.
RECIPROCAL OBLIGATION -The performance of one demands/____ the performance of the other.
- When to determine the demand period for purposes of computing of payment of interests of charges):
a. If extrajudicial - date of demand
b. If uncertain - date of filing of complaint
- Demand may ba in any form provided it can be proved.
- Demand must refer to the prestation that is due and not another.
- Even if without demand, debtor incurs delay if he expressly acknowledges his delay.
** There can only be delay in POSITIVE Obligations and no delay in NEGATIVE and NATURAL OBLIGATIONS.
KINDS OF MORA
1. MORA SOLVENDI
- Delay on the part of the DEBTOR.
a) Determinate prestation - delay places the risk of the thing on the debtor
b) Damages
2. MORA ACCIPIENDE
- Delay on the part of the CREDITOR.
3. COMPENSATIO MORAE
- Parties to a bilateral contract can regulate the order in whch they shall comply with their reciprocal prestation.
notes Page 4
1. Renunciation by the creditor
a. Express renunciation
b. Implied renunciation
a) Creditor grants the extension of the time
b) Creditor agrees to a NOVATION of the obligation (replacement)
2. Prescription of action
Art. 1170. - INSTANCES IN LIABILITY FOR DAMAGES - Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and
those who in any manner contravene the tenor thereof, are liable for damages.
A. FRAUD (DOLO)
- Voluntary execution of the wrongful act, or a willfull ommission, knowing and intending the effects which naturally and necessarily arise from such
acts.
- Deliberate and intentional evasion of the normal fulfillment of obligations.
- Fraud in the performance of pre-existing obligation
- Cannot cover mistake and errors of judgement made in good faith, ergo synonymous to bad faith (dishonest purpose or some obliquity and
conscious doing of wrong)
Kinds of Fraud:
1. Fraud in the performance
2. Fraud in the execution/birth of the contract
a. Dolo causante
b. Dolo incidente
Art. 1171. DAMAGES ARISING FROM FRAUD - Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud
is void.
Art. 1172. NEGLIGENCE - Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may
be regulated by the courts, according to the circumstances.
Art. 1173. DEGREES OF CULPA - The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad fai th, the provisions of
Articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a g ood father of a family shall be
required.
notes Page 5
**When negligence in bad faith, fault will apply.
Gen. Rule:
1. Stipulated by the parties,
2. If without 1, that required by law.
3. If without 2, deligence of a good father of a family.
Art. 1174. FORTUITOUS EVENTS - Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of
the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen,
were inevitable.
Exceptions:
1. Specified by law
2. Declaration/stipulation by the parties
3. Assumption of risk
Art. 1175. USURIOUS TRANSACTIONS - Usurious transactions shall be governed by special laws.
Rate of interest
Art. 1176. RESERVATION - The receipt of the principal by the creditor without reservation with respect to the interest, shall give rise to the presump tion
that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior installments, shall likewise raise the presumpti on that such installments have
been paid.
Gen Rule
- If the debt produces interests, payment of the principal shall not be deemed to have been made unless the interests have been covered.
- Presumptions are rebuttable.
Art. 1177. SUCCESSIVE RIGHTS OF THE CREDITOR - The creditors, after having pursued the property in possession of the debtor to satisfy their claims,
may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are inherent in hi s person; they may also impugn
the acts which the debtor may have done to defraud them.
ACCION SUBROGATORIA
- Action the creditor may exercise in place of the negligent debtor in order to preserve or recover for the patrimony of the debtor the product
of such action, and then obtain therefrom the satisfaction of his own credit.
ACCION PAULIANA
- Creditors have the rights to revoke acts which the debtor may have done to defraud them.
notes Page 6
Requisites of Accion Pauliana
1. Credit should be prior to the alienation
2. Debtor has a subsequent contract giving advantage to a third person
3. Fraudelent act
4. 3rd person who received is an accomplice
Art. 1178. TRANSMISSIBILITY OF RIGHTS - Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has been no
stipulation to the contrary.
Gen Rule
- All rights acquired by virture of an obligation are transmissible
Exception
1. Express stipulation
2. Nontransmissibility by their nature
3. Non transmissbility by law
Example:
A- debtor; B-creditor
If A dies, B can claim against the estate of A.
If B dies, B's right to claim is transmissible to his heirs.
PRIMARY Pure, with a term, alternative and facultative, joint and solidary, divisible and indisible, with a penal clause.
OBLIGATION
SECONDARY Unilateral and bilateral, real and personal, determinate & generic, positive and negative, legal, conventional and penal,
OBLIGATION individual and collective, accessory and principal, simple or multiple, possible and impossible.
Art. 1179. PURE VS CONDITIONAL OBLIGATION - Every obligation whose performance does not depend upon a future or uncertain event, or upon a past
event unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happ ening of the event.
PURE
- Performance does not depent on anything.
CONDITIONAL
- Aquisition of rights/extinguishment of right depends on the event which consitutes condition.
□ 2 KINDS OF CONDITION
a) Suspensive
- Obligation arises by the happening of the event
b) Resolutory
- Obligation is extinguished by the happening of the event
Gen. Rule
- PURE obligation is DEMANDABLE AT ONCE.
- Resolutory is DEMANDABLE AT ONCE.
Conditions:
1. Future and Uncertain event
2. Possible
3. Unknown past
4. Term - not certain but must necessarily happen.
Art. 1180. OBLIGATION DEPENDENT ON TIME - When the debtor binds himself to pay when his means permit him to do so, the obligation shall be
deemed to be one with a period, subject to the provisions of Article 1197.
notes Page 7
Art. 1181. CONDITIONAL OBLIGATION - In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event which constitutes the condition.
Art. 1182. KINDS OF CONDITION (cause or origin)- When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in c onformity with the provisions of
this Code.
** Always valid
3. MIXED
- Depends upon the will of the contracting parties and other circumstance.
Art. 1183. IMPOSSIBLE CONDITIONS - Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the
obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be
valid.
The condition not to do an impossible thing shall be considered as not having been agreed upon.
Art. 1184. POSITIVE OBLIGATIONS - The condition that some event happen at a determinate time shall extinguish the obligation as soon as the time
expires or if it has become indubitable that the event will not take place.
Art. 1185. NEGATIVE CONDITIONS - The condition that some event will not happen at a determinate time shall render the obligation effective from the
moment the time indicated has elapsed, or if it has become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been contemplated, beari ng in mind the nature of
the obligation.
2nd Par Taking into account the nature of the obligation, the time which the parties contemplated is controlling.
Art. 1186. CONSTRUCTIVE OR PRESUMED FULFILLMENT - The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Constructive Fulfillment
- With intention of the obligor/creditor to prevent fulfillment of the condition with actual prevention of the compliance.
Reason: One must not be made to be excused by his own fault.
Art. 1187. RECIPROCAL OBLIGATIONS - The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of
the constitution of the obligation. Nevertheless, when the obligation imposes reciprocal prestations upon the parties, the fr uits and interests during the
pendency of the condition shall be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shal l appropriate the fruits
and interests received, unless from the nature and circumstances of the obligation it should be inferred that the intention o f the person constituting the
same was different.
In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition that ha s been complied with.
notes Page 8
PAR. 1
1. RECIPROCAL
Example: A will sell the car to B if A passes the Bar Exam
- Fruits and interests shall retain in each possession. (This will be deemed constituted.
2. UNILATERAL OBLIGATION:
Example: A will give B 100K if A passes the Bar Exam
- Fruits and interests should be with A.
Art. 1188. ACTION TO PRESERVE AND RECOVER - The creditor may, before the fulfillment of the condition, bring the appropriate actions for the
preservation of his right.
The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition.
1st Par Action to preserve creditors rights Ex. Ask for security if the debtor is about to be insolvent; ask the court to prevent alienation or
concealment pendente conditionae.
2nd Par Right to debtor to recover what was Note: if payment was not by mistake:
paid by mistake 1. If the condition is fulfilled, no recovery because of retroactivity
2. If the condition is not fulfilled, there should be a recovery unless a pure donation was
intended.
Art. 1189. EFFECT OF OBLIGATION - When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give, the
following rules shall be observed in case of the improvement, loss or deterioration of the thing during the pendency of the c ondition:
(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the thing is lost when it perishes, or goes
out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered;
(3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the obligation and its fulfillment, with indemnity
for damages in either case;
(5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary.
Gen Rule - where the improvement is not susceptible of being taken away, usufruct (together with accessories). There should be consent by both
parties.
Art. 1190. RESOLUTORY CONDITION - When the conditions have for their purpose the extinguishment of an obligation to give, the parties, upon the
fulfillment of said conditions, shall return to each other what they have received.
In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid do wn in the preceding article
shall be applied to the party who is bound to return.
As for the obligations to do and not to do, the provisions of the second paragraph of Article 1187 shall be observed as regar ds the effect of the
extinguishment of the obligation.
Art. 1191. RIGHT TO RESCIND - The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is
incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in eit her case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Art icles 1385 and 1388 and the
Mortgage Law.
RIGHT TO RESCIND
- Right to cancel or resolve the contract or reciprocal obligation in ase of non-fulfillment on the part of one.
Given to the injurred party who may choose to demand Fulfillment or Rescision.
notes Page 9
- Given to the injurred party who may choose to demand Fulfillment or Rescision.
Exceptions:
1. If the obligation has NOT BEEN PERFORMED yet, extrajudicial declaration of the party willing to perform would suffice, can refuse to perform
if the other party is not yet ready to comply.
2. If the INJURED PARTY has already PERFORMED, CANNOT extrajudicially rescind IF the other party OPPOSES the RESCISION. In this case, the
court may:
a. Fix a date for the debtor to perform
b. Rule for rescision.
Art. 1192. BREACH OF BOTH PARTIES - In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably
tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each
shall bear his own damages.
Art. 1193. OBLIGATIONS WITH A PERIOD - Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day
comes.
Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.
A day certain is understood to be that which must necessarily come, although it may not be known when.
If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding
Section.
Requisites of a Period:
1. Future
2. Certain
3. Possible
Kinds of Period:
1. Sources:
a. Legal
b. Conditional/Stipulated by the parties
c. Judicial - fixed by court
2. Effects: - same with conditional
a. Resolutory
b. Suspensive
3. Definiteness
a. Definite - fixed date or time
b. Indefinite
4. Expression
a. Express
b. Implied - when parties "intended to"
Art. 1194. LOSS, DETERIORATION, IMROVEMENT - In case of loss, deterioration or improvement of the thing before the arrival of the day certain, the
rules in Article 1189 shall be observed.
Art. 1195. PAYMENT BEFORE MATURITY - Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or
believing that the obligation has become due and demandable, may be recovered, with the fruits and interests.
notes Page 10
- Apply the Doctrine of Estoppel
- With knowledge on the period.
When to recover:
- Before the debt matures (principal)
- After debt matures (interest) - if creditor is in bad faith. - right prescribes 5 years after premature payment.
Art. 1196. BENEFIT OF THE DESIGNATION OF THE PERIOD - Whenever in an obligation a period is designated, it is presumed to have been established
for the benefit of both the creditor and the debtor, unless from the tenor of the same or other circumstances it should appea r that the period has been
established in favor of one or of the other.
Gen Rule
- Benefit of both parties.
Exception
- Tenor of the obligation as to who will be favored.
** Note:
On or Before Debtor benefited
Upon demand Creditor benefited
Definite date Both
Art. 1197. INSTANCES WHERE THE COURT FIXES THE PERIOD - If the obligation does not fix a period, but from its nature and the circumstances it can be
inferred that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the p arties. Once fixed by
the courts, the period cannot be changed by them.
Art. 1198. INSTANCES WHERE THE DEBTOR LOSE THE RIGHT TO MAKE USE OF THE PERIOD - The debtor shall lose every right to make use of the period:
(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt;
(2) When he does not furnish to the creditor the guaranties or securities which he has promised;
(3) When by his own acts he has impaired said guaranties or securities after their establishment, and when through a fortuito us event they disappear,
unless he immediately gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period;
(5) When the debtor attempts to abscond.
Instances where the debtor loses the right to make use of the period:
1. Insolvency
- EXCEPTION: guarantee or security
2. Failure to furnish the guarantee or security
3. Impairment of guarantee by his own acts or by FE
- EXCEPTION: present a new one equally satisfactory.
4. Violation of any undertaking
5. Attempt to abscond.
Art. 1199. ALTERNATIVE OBLIGATIONS - A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
Gen Rule:
- Presumption is ALTERNATIVE.
DISJUNCTIVE
- 2 or more prestations the debtor may choose from among.
- Use of OR.
A. ALTERNATIVE
- Only one must be performed among the choices
B. FACULTATIVE
- One principal prestation but 2 or more substitute.
CONJUNCTIVE
2 or more prestations must be performed.
notes Page 11
- 2 or more prestations must be performed.
- Use of AND
Art. 1200. RIGHT OF CHOICE - The right of choice belongs to the debtor, unless it has been expressly granted to the creditor.
The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not have been the ob ject of the obligation.
Gen Rule
- Debtor has the right to choose
Exception
- Express stipulation
Art. 1201. CHOICE - The choice shall produce no effect except from the time it has been communicated.
For Plurality:
Joint all of them must guve their consent.
Solidary The choice of one is the choice of the rest.
Art. 1202. ALTERNATIVE - SIMPLE OBLIGATION. The debtor shall lose the right of choice when among the prestations whereby he is alternatively bound,
only one is practicable.
Art. 1203. CREDITOR IS AT FAULT - If through the creditor's acts the debtor cannot make a choice according to the terms of the obligation, the latter
may rescind the contract with damages.
Logic: Because the debtor has been deprived of the right to choose.
Art. 1204. RIGHT TO INDEMNITY FOR DAMAGES - The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the
things which are alternatively the object of the obligation have been lost, or the compliance of the obligation has become im possible.
The indemnity shall be fixed taking as a basis the value of the last thing which disappeared, or that of the service which la st became impossible.
Damages other than the value of the last thing or service may also be awarded.
** Apllies only to cases where the debtor has the right to choose.
** FE causes the loss of the thing communicated, obligation is extinguished.
Art. 1205. CREDITOR HAS THE RIGHT OF CHOICE - When the choice has been expressly given to the creditor, the obligation shall cease to be alternative
from the day when the selection has been communicated to the debtor.
Until then the responsibility of the debtor shall be governed by the following rules:
notes Page 12
Until then the responsibility of the debtor shall be governed by the following rules:
(1) If one of the things is lost through a fortuitous event, he shall perform the obligation by delivering that which the cre ditor should choose from among
the remainder, or that which remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of the debtor, the creditor may claim any of those subsisting, or the price of that which,
through the fault of the former, has disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor, the choice by the creditor shall fall upon the price of any o ne of them, also with indemnity for
damages.
The same rules shall be applied to obligations to do or not to do in case one, some or all of the prestations should become i mpossible.
Pending selection by creditor, the object is still at the possession of the debtor, the debtor MUST preserve all prestations. IF:
1. One is lost due to FE, obligation still subsists, the creditor may choose on the remaining 2;
2. If loss is due to FAULT of the debtor, creditor may:
a. Choose from among the remaining + damages
b. Value of the object lost + damages
3. If ALL are lost through the fault of the debtor, the creditor may choose for the value of any object + damages.
Art. 1206. FACULTATIVE - When only one prestation has been agreed upon, but the obligor may render another in substitution, the obligation is called
facultative.
The loss or deterioration of the thing intended as a substitute, through the negligence of the obligor, does not render him l iable. But once the
substitution has been made, the obligor is liable for the loss of the substitute on account of his delay, negligence or fraud .
Gen Rule:
- If the inteded substitute is lost, it doesn't matter
Exception:
- If the debtor chose to deliver the substitute which was subsequently lost, debtor is still liable.
- If loss is due to FE, extinguished.
Creditor can choose from the remainder Obligation is extinguished. Creditor can't demand substitute.
Choice Debtor, BUT may be given to the creditor Only the DEBTOR
Effect of loss Extinguishment: Impossibility of ALL Extinguishment: Impossibility of the PRINCIPAL, and when the
(fortuitous events) substitution has been made and the substitute object was lost.
Effect of loss (fault Debtor is not liable if there are still available Debtor is liable for loss of PRINCIPAL.
of debtor)
If choice belongs to creditor, loss of one alternative gives
rise to liability.
Art. 1207. SOLIDARY OBLIGATION - The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply
that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a
solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires sol idarity.
Gen Rule:
- JOINT
□ Concurrence of several debtors/creditors does not necessarily assume that all of them an demand to fulfill.
Exceptions:
1. Law
2. Stipulated by the parties
3. Nature of the obligation
4. Charge of condition is imposed upon heirs
5. Imputed by final judgement upon several litigants
SOLIDARY
- Compliance of the obligation an be done in its entirety. (right to reimbursement)
JOINT
- Compliance is in parts, proportionate.
Art. 1208. JOINT OBLIGATION - If from the law, or the nature or the wording of the obligations to which the preceding article refers the contrary does
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not appear, the credit or debt shall be presumed to be divided into as many shares as there are creditors or debtors, the cre dits or debts being
considered distinct from one another, subject to the Rules of Court governing the multiplicity of suits.
**Refer above
Words used to indicate JOINT Obligations
1. Mancomunada solidaria
2. Joint and several
3. In solidum
4. "I promise to pay" ... Followed by the signature of two or more persons.
5. Individually and collectively
Art. 1209. INDIVISIBLE JOINT OBLIGATION - If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the
debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the others shall n ot be liable for his share.
Art. 1210. INDIVISIBLIT - SOLIDARITY - The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity of itself imply
indivisibility.
May be:
1. Joint Divisible
2. Joint Indivisible
3. Solidary Divisible
4. Solidary Indivisible
Art. 1211. SOLIDARY DESPITE DIFFERENT TERMS AND CONDITIONS - Solidarity may exist although the creditors and the debtors may not be bound in
the same manner and by the same periods and conditions.
Example:
A- Pay P5,000 on Dec 21, 2010 B- Pay P5,000 on Dec 21, 2011 C- Pay P10,000 on Dec 21, 2012
If X demands on Jan. 1, 2011, A will only If X demands on Jan 1, 2012, A and B must pay If X demands on Jan 1, 2013, A, B, or C must pay
pay P5,000 + damages for the delay. P10,000 plus damages for the delay. P20,000 + damages for the delay.
If A is insolvent, B/C may pay, subject of A/B may pay the whole P10,000 subject for A/B/C may pay the whole P20,000 subject for
reimbursement by A. reimbursement of the other co-debtor who did reimbursement of the other co-debtor who did not
not pay pay.
Art. 1212. SOLIDARY CREDITORS - Each one of the solidary creditors may do whatever may be useful to the others, but not anything which may be
prejudicial to the latter.
Example:
D1 and D2 are debtors of C1, C2 and C3 who are solidary creditors (P30,000)
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Prejudicial Act
- Prohibited.
- Valid as to the debtor but bot with respect to the co-creditors whose rights subsists and can be enforced against the creditor who performed
prejudicial acts
- Example:
- Remission, novation, compensation, merger/confusion
Art. 1213. ASSIGNMENT OF RIGHT - A solidary creditor cannot assign his rights without the consent of the others.
Gen. Rule
- Solidary creditor cannot assign his rights.
Exceptions
- If with CONSENT of the other co-creditors, he can assign his rights to a Third Party
- Assignee is the co-creditor
Example:
- C1 assigned his right to X (TP).
- Assignment should be with the consent of C2, C3 and C4 for it to be valid.
Art. 1214. DEMAND OF CREDITOR - The debtor may pay any one of the solidary creditors; but if any demand, judicial or extrajudicial, has been made by
one of them, payment should be made to him.
Gen rule
- The debtor may pay any one of the solidary creditors.
Exception
- If there is demand, payment must be made to solidary creditor who made the demand (judicial or extrajudicial).
**payment to any other will not extinguish the obligation except insofar as the payee's share is concerned.
Art. 1215. EXTINGUISHMENT - Novation, compensation, confusion or remission of the debt, made by any of the solidary creditors or with any of the
solidary debtors, shall extinguish the obligation, without prejudice to the provisions of Article 1219.
The creditor who may have executed any of these acts, as well as he who collects the debt, shall be liable to the others for the share in the obligation
corresponding to them.
Art. 1216. CREDITOR TO DEBTOR - 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 an obstacle to those which may subsequently be directed against the others, so long as the debt has not been
fully collected.
Art. 1217. EFFECTS OF PAYMENT - Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to
pay, the creditor may choose which offer to accept.
He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If
the payment is made before the debt is due, no interest for the intervening period may be demanded.
When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne
by all his co-debtors, in proportion to the debt of each.
1st Par Anyone of the solidary debtor can pay; extinguishment of the obligation
2nd Par Reimbursement by the other co-debtors; share + interest from the time of maturity of obligation)
3rd Par By insolvency of one debtor he can not reimburse his share, converted into joint obligation as to co-debtors.
Art. 1218. PRESCRIPTIVE PERIOD - Payment by a solidary debtor shall not entitle him to reimbursement from his co -debtors if such payment is made
after the obligation has prescribed or become illegal.
Art. 1219. REMISSION OR CONDONATION - The remission made by the creditor of the share which affects one of the solidary debtors does not release
the latter from his responsibility towards the co-debtors, in case the debt had been totally paid by anyone of them before the remission was effected.
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- If D3 is insolvent, D1 will bear half the share of D3, thus D1 must pay P500.
Art. 1220. EFFECT OF REMISSION - The remission of the whole obligation, obtained by one of the solidary debtors, does not entitle him to
reimbursement from his co-debtors.
Art. 1221. EFFECT OF LOSS OR IMPOSSIBLITY - If the thing has been lost or if the prestation has become impossible without the fault of the solidary
debtors, the obligation shall be extinguished.
If there was fault on the part of any one of them, all shall be responsible to the creditor, for the price and the payment of damages and interest, without
prejudice to their action against the guilty or negligent debtor.
If through a fortuitous event, the thing is lost or the performance has become impossible after one of the solidary debtors h as incurred in delay through
the judicial or extrajudicial demand upon him by the creditor, the provisions of the preceding paragraph shall apply. (1147a)
Art. 1222. DEFENSES AVAILABLE TO SOLIDARY DEBTORS - A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With respect t o those which personally
belong to the others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible . (1148a)
Art. 1223. DIVISIBLE/INDIVISIBLE OBLIGATION - The divisibility or indivisibility of the things that are the object of obligations in which there is only one
debtor and only one creditor does not alter or modify the provisions of Chapter 2 of this Title.
Divisible
- One capable of partial performance
Indivisible
- Deliver in its entirety
Kinds of Indivisibility
1. Conventional
- Common agreement
Example: Payment of P10,000 in a lumpsum basis
- Becomes indivisible
2. Natural or absolute
- Nature of the object
Example: car
3. Legal
- Law so provides
** A debt shall not be be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered
or rendered as the case may be.
Exceptions:
a. Obligation has been substantially performed in good faith (Art. 1234)
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Exceptions:
a. Obligation has been substantially performed in good faith (Art. 1234)
b. When the creditor accepts performance, knowing its completeness, and without protest, the obligation is deemed fully performed.
(Art.1234)
Art. 1224. INDIVISIBLE JOINT OBLIGATION - A joint indivisible obligation gives rise to indemnity for damages from the time anyone of the debtors does
not comply with his undertaking. The debtors who may have been ready to fulfill their promises shall not contribute to the in demnity beyond the
corresponding portion of the price of the thing or of the value of the service in which the obligation consists.
Art. 1225. PRESUMPTIONS OF INDIVISIBLE OBLIGATIONS - For the purposes of the preceding articles, obligations to give definite things and those which
are not susceptible of partial performance shall be deemed to be indivisible.
When the obligation has for its object the execution of a certain number of days of work, the accomplishment of work by metri cal units, or analogous
things which by their nature are susceptible of partial performance, it shall be divisible.
However, even though the object or service may be physically divisible, an obligation is indivisible if so provided by law or intended by the parties.
In obligations not to do, divisibility or indivisibility shall be determined by the character of the prestation in each parti cular case. (1151a)
1st Par Indivisible Definite and not susceptible to partial performance Ex. Singing
2nd Par Divisible 1. Execute work for a # of days Ex.
2. Accomplishment by metrical units
3. Purpose is to pay a certain amount
3rd Par From Divisible - Indivisible IF: provided by law or stipulated by the parties Ex. P5000 to be paid in lumpsum basis
4th Par To do and not to do Determined by the character of the prestation Ex.
Art. 1226. PENAL OBLIGATIONS - In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests
in case of noncompliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refu ses to pay the penalty or is
guilty of fraud in the fulfillment of the obligation.
The penalty may be enforced only when it is demandable in accordance with the provisions of this Code. (1152a)
PENAL CLAUSE
- Is an accessory undertaking to assume greater responsibility in case of breach.
- Mere non-performance of the principal obligation gives rise to damages.
Gen Rule:
- Penalty takes the palce of indemnity for damages and payment of interest
Exceptions:
1. Express stipulation despite the presence of the penalty clause.
2. Debtor refuses to pay the penalty imposed.
3. Debtor is guilty of fraus in the fulfillment of the obligation.
Kinds of Penalty
1. First Classification:
a. Legal Penal Clause
- Imposed by law
b. Conventional Penal Clause
- Agreed by the parties
2. Second Classification
a. Subsidiary
- Only the penalty may be asked.
b. Joint
- When both the principal contract and the penal clause may be enforced in non-performance.
Art. 1227. RULE ON PENALTY AND PRINCIPAL - The debtor cannot exempt himself from the performance of the obligation by paying the penalty, save in
the case where this right has been expressly reserved for him. Neither can the creditor demand the fulfillment of the obligat ion and the satisfaction of
the penalty at the same time, unless this right has been clearly granted him. However, if after the creditor has decided to r equire the fulfillment of the
obligation, the performance thereof should become impossible without his fault, the penalty may be enforced.
Gen. Rule:
- The debtore can not exempt himself from performance
Exceptions:
Express stipulation by the parties. (Fulfillment becomes Alternative)
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Exceptions:
- Express stipulation by the parties. (Fulfillment becomes Alternative)
Gen Rule:
- Creditor cannot demand both fulfillment and the penalty.
Exception:
- Express grant of such right.
Art. 1228. PROVING ACTUAL DAMAGES NOT NEEDED - Proof of actual damages suffered by the creditor is not necessary in order that the penalty may
be demanded.
Art. 1229. REDUCTION OF THE PENALTY BY THE COURTS - The judge shall equitably reduce the penalty when the principal obligation has been partly or
irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or
unconscionable.
Art. 1230. NULLITY OF PENAL CLAUSE - The nullity of the penal clause does not carry with it that of the principal obligation.
The nullity of the principal obligation carries with it that of the penal clause.
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