Chapter 2
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Nature and Efects o Obligations
iligence which a reasona!l prudent person e,ercises over his own propert
Duties o debtor in obligation to give a determinate thing 1. To preserve preserve or tak take e care care of the thing thing due due (Art. 1163) 2. To deliver deliver the the fruits fruits of the the thing thing (Art. 1164) 3. To deliver deliver its accessio accessions ns and access accessories ories (Art. 1166) 4. To deliver deliver the thing thing itself itself
0,ception -
Duties o debtor in obligation to deliver a generic thing 1. To deliver deliver a thing thing which which is of the qualit qualit intended ! the parties taking into consideration consideration the purpose of the o!ligation and other circu"stances (Art.1246) 2. To !e lia!le lia!le for for da"ages da"ages in case of of fraud# negligence or dela and those who in an "anner contravene the tenor thereof (Art. 11$%)
Article 1163 &
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This This Art Artic icle le spe speak aks s of an an o!li o!liga gati tion on to to take care of a determinate thing which an o!ligor is supposed to deliver to another. ('ineda) !ligation to give (real o!ligations)# the o!ligor has the incidental dut to tae care of the thing due. (e *eon)
Reason for Provision &
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+nless +nless dilige diligence nce is e,er e,ercis cised# ed# there there is danger that the propert would !e lost or destroed Thus# rendering illusor! the o!ligations ('aras)
Diligence Required "
epends upon the nature of the o!ligation and corresponds with the circu"stances of the person# of the ti"e# and of the place ( Art# 11$3)
General Rule &
rdinar dil diligence o -nown as diligence of a good father of a fa"il/
Another standard of care light or e,traordinar diligence o o The law or stipulation of of the parties "ust prevail parties "a agree upon diligence which is "ore or less than of a good father of a fa"il it is contrar to pu!lic polic to stipulate for absolute e%emption fro" lia!ilit
Eect of Breach "
*ia!ilit for da"ages is i"posed upon the de!tor who fails to e,ercise the diligence of a good father of a fa"il (Tolentino) " The loss of things things while in the custod custod of the o!ligor !ut without negligence or fault on his part# !ut to fortuitous events# he is e,e"pted fro" responsi!ilit. (Tolentino)
Article 116&
i. Those which do not i"pose si"ultaneous and correlative perfor"ance on !oth parties. ii. The perfor"ance of one part is not dependent upon si"ultaneous perfor"ance ! the other
Article 11'1 " The general provision on rescission on of reciprocal obligations " peaks of the right of the aggrieved part to choose !etween two re"edies o An action for specic perfor"ance Breach of Obligation on the part of plainti An action for rescission o Kinds of Obligation according to the person obliged 1. +nilateral o hen onl one part is o!liged to co"pl with a prestation 2. 5ilateral hen !oth parties are "utuall o !ound to each other. o 5oth are de!tors and creditors to each other a# (eciprocal obligations i. Article 2%1% ii. Those which arise fro" the sa"e cause iii. The perfor"ance ! one part of his o!ligation is designed to !e the equivalent and the condition for the perfor"ance ! the other of his own o!ligation iv. eneral 7ule8 The are to !e perfor"ed si"ultaneousl such that each part "a treat the full"ent of what is incu"!ent upon the other as a suspensive condition to his o!ligation and its non&full"ent# as a tacit or i"plied resolutor! condition# giving hi" the right to de"and the rescission of the contract !. 9on&reciprocal o!ligations
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:s the failure without legal reason to co"pl without legal e,cuse# to perfor" an pro"ise which for"s the whole or part of the o!ligation o ;o""itted through fraud# negligence# dela and those who contravenes the tenor of the o!ligation (Art. 11$%)
Right to Rescind &
The power to rescind/ o 7ight to cancel the contract or reciprocal obligations in case of non&full"ent on the part of one
Rescission "
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is a principal action which "eans resolution/ or cancellation of the contract referred in Article 11<1 is predicated on o the breach o aith ! the defendant which violates the reciprocit !etween the parties 1. "ust arises fro" identit of cause 2. presupposes that the 2 o!ligations are created at the sa"e ti"e o
in Article 13=% > 13=1 is !ased on in?ur to econo"ic interest on the part of the plainti@
Efect o (escission
1. ;ontract a!rogated fro" its inception o To annul the contract and to restore the parties to their original positions which the would have occupied as if no such contract had ever !een "ade 2. utual restitution of !enets received ! each part required o To !ring !ack the parties# as far as practica!le# to their original situation or position prior to the inception of the contract o ;an !e carried out onl when the one who de"ands rescission can return whatever he "a !e o!liged to restore
Article 116' Breach of Faith &
!reach conte"plated is the o!ligorBs failure to co"pl with an obligation alread! e%istent# not failure of a condition to render !inding that o!ligation
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the words in dela/ should !e translated to "ean deault ('aras)
)eaning o dela! 1. rdinar dela o erel the failure to perfor" an o!ligation on ti"e 2. *egal delaCdefaultC"ora The failure to perfor" an o o!ligation on ti"e which failure# constitute a !reach of o!ligation
**9o dela in an o!ligation not to do# nonfulll"ent "a take place !ut dela is i"possi!le for the de!tor fulls ! not doing what has !een for!idden hi" (e+uisites o dela! b! the debtor ,)ora solvendi1. The o!ligation pertains to the de!tor 2. The o!ligation has not !een perfor"ed on its "aturit date 3. e"and "ade ! the creditor upon the de!tor to full# perfor" or co"pl with his legal o!ligation which de"and "a !e either ?udicial or e,tra&?udicial 4. Dailure of the de!tor to co"pl with such de"and o The creditor has the !urden of proving that a previous de"and has !een "ade E. The o!ligation is alread due or de"anda!le and liquidated. o e!t is liquidated when the a"ount is F -nown
deter"ina!le ! inspection of the ter"s and conditions of relevant docu"ents
3. Ge !ears the risk of loss of the thing due 4. here the o!ligation is to pa "one# the de!tor is not lia!le for interest fro" the ti"e of the creditorBs dela E. The de!tor "a release hi"self fro" the o!ligation ! the consignation of the thing or su" due
.inds o Dela! 1# )ora solvendi a# ora solvendi e, re e!torBs default in real o!ligations b# ora solvendi e, persona e!torBs default in personal o!ligations " ela on the part of the de!tor to full his o!ligation & 5 reason of a cause i"puta!le to hi"
3# Compensatio morae " The dela of the o!ligors in reciprocal o!ligations 1# There is no actiona!le default on the part of !oth parties# such that as if neither one is guilt of dela 2# Article 11<2
Eects of Mora Solvendi 1. The de!tor is guilt of !reach of o!ligation 2. Ge is lia!le for interest in case of o!ligations to pa "one or for da"ages in other o!ligations o :n the a!sence of e,tra?udicial de"and# the interest shall co""ence fro" the ling of the co"plaint 3. Ge is lia!le even for fortuitous event when the o!ligation is to deliver a deter"inate thing. o (Art. 116E ie. if the obligor delays) although da"ages "a !e "itigated if he can prove that even if he had not !een in default# loss would have occurred ?ust the sa"e (Art. 221E) to deliver a generic thing o can still !e co"pelled to deliver a thing of the sa"e kind (Art. 1263)
2# )ora accipiendi & ela on the part of the creditor without ?ustia!le reason to accept the perfor"ance of the o!ligation
/hen demand not necessar! to put debtor in dela! 1. 2. 3. 4. E.
hen the o!ligation so provides hen the law so provides hen ti"e is of the essence hen de"and would !e useless hen there is perfor"ance ! a part in reciprocal o!ligations
Article 11$0 Fraud & & &
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:ntentional evasion of the nor"al full"ent of an o!ligation oing so"ething in !ad faith or with "alice in the full"ent of the o!ligation The fraud is co""itted ater the valid e,ecution of the contract (incidental fraud) The re"ed is a clai" for da"ages o :n Article 133=# ;asual fraud fraud is co""itted at the ti"e of the e,ecution of the contract where the consent of one part was o!tained due to the e"plo"ent of insidious words or "achinations.
Eects of Mora accipiendi 1. The creditor is guilt of !reach of o!ligation 2. Ge is lia!le for da"ages su@ered ! the de!tor
7e"ed is annul"ent of the contract !eing voida!le
.inds o damages under the Code 1. Actual or ;o"pensator da"ages o the adequate co"pensation for the pecuniar loss su@ered ! the aggrieved part unrealiHed prots 2. oral da"ages o :nclude phsical su@ering# "ental anguish# fright# serious an,iet# !es"irched reputation# wounded feelings# "oral shock# social hu"iliation and si"ilar in?ur o a !e recovered if the are the pro,i"ate result of the defendantBs wrongful act or o"ission 3. 9o"inal da"ages o 9ot i"posed for the purpose of inde"nifing the plainti@ for the loss he su@ered o 5ut to stress the vindication of his rights which had !een violated ! the defendant 4. Te"perate or oderate da"ages o a"ages which are "ore than no"inal !ut less than co"pensator da"ages o :"posed when the plainti@ is found to have su@ered pecuniar loss !ut its a"ount cannot ! the nature of the case !e proved with certaint E. *iquidated da"ages o a"ages agreed upon ! the contracting parties to !e paid ! the" in case of !reach 6. 0,e"plar da"ages o ;orrective da"ages i"posed in addition to co"pensator# "oral# te"perate or liquidated da"ages o Dor the purpose of setting an e,a"ple or correction for the pu!lic good
istinction culpa&aquiliana and culpa contractualI 11$4. *ost of the thing due. hat is a fortuitous eventI Js. force "a?eureI :s an act of the state a force "a?eureI
11$3. 9egligence. ;ulpa aquilianaI hat kind of negligenceI
11$E. 6K... circular issued ! the 5' +sur is onl suspended. As of Lul 2%13. *oan or for!earance. 6K per annu". 5 "eans of default. :nterest. 11$6. e"oriHe. hat are the re!utta!le presu"ptionI Gow do appl theseI 11$$.. Gow "a the creditor e,ercise this rightI uccessivel. i@ kinds of o!ligationI hat is conditionI hat are the requisite for there to !e an o!ligation su!?ect to conditionI hat are di@ kinds of conditionI 0@ectsI hen is the condition voidI As to nullication fro" o!ligation which depends upon itI 11$$.. !a!alikan daw as to retroactive e@ect ng full"ent of the condition. 1164Min relation..
3. eek rescission of the contracts e,ecuted ! the de!tor in fraud of their rights (accion pauliana)
iabilit! o the Debtors ropert! &
The de!torBs propert o u!?ect to lia!ilit for his o!ligations o As provided in Article 2236 The de!tor is lia!le with all his propert# present and future# for the full"ent of his o!ligations# su!?ect to the e,e"ptions provided ! law/ This lia!ilit of the propert o :s the legal guarant in favour of the creditor The de!tor cannot "aliciousl o reduce such guarant
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Accion subrogatoria "
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Article 11$$ (ights o the Creditor &
:n order to satisf the creditorBs clai"s against the de!tor# creditors have the following successive rights8 NAnchor avings 5ank vs. DurigaO 1. 0,haust the properties of the de!tor through leving ! attach"ent and e,ecution upon all the propert of the de!tor# e,cept such as are e,e"pt ! law fro" e,ecution 'resupposes that the de!tor could not pa his o!ligations to the creditor 0@ected ! a writ of attach"ent !efore ?udge"ent or ! a writ of e,ecution if there is alread a nal and e,ecutor ?udge"ent 2. 0,ercise all the rights and actions of the de!tor# save those personal to hi" (accion su!rogatoria)
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An action where the creditor whose clai"s had not !een full satised# "a go after the de!tors of the defendant& de!tor The creditor "erel steps into the position of the defendant&de!tor to collect the valid and de"anda!le credit of the latter which a third person owe hi" and which have not !een paid Then o!tain therefro" the satisfaction of the creditorBs own credit :n not pursuing the collection of his credit# the de!tor will pre?udice his creditors. Gence# creditors are authoriHed to pursue su!rogator actions on !ehalf of their de!tors :n order to e,ercise# a previous approval of the court is not necessar The creditor is entitled onl to so "uch as is needed to satisf his credit i@erent and distinct fro" active su!?ective su!rogation/ governed ! Art. 13%% to 13%4 o There is change of creditors
E%ercise o Debtors (ights &
The creditor in order to e,ercise the rights and actions of the de!tor# the following requisites can !e said to !e essential8
1. The creditor has an interest in the right or action not onl !ecause of his credit !ut !ecause of the insolvenc of the de!tor 2. alicious or negligent inaction of the de!tor in the e,ercise of his right or action of such seriousness as to endanger the clai" of the creditor 3. The creditor of the de!tor against a third person is certain# de"anda!le and liquidated 4. The de!torBs right against the third person "ust !e patri"onial or suscepti!le of !eing transfor"ed to patri"onial value for the !enet of the creditor.
Accion auliana &
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An action where the creditor les an action in court for the rescission of acts or contracts entered into ! the de!tor designed to defraud the for"er ;reditors "a rescind fraudulent reductions of the properties of the de!tor which constitute the guarant for his de!ts ;ounterpart in the 7evised 'enal ;ode Draudulent insolvenc (Art. 314# o 7';) All acts of the de!tor which reduce his patri"on in fraud of his creditors# whether ! gratuitous or onerous title can !e revoked ! this action 9ew de!ts contracted ! the insolvent de!tor are not included# although the "ake the position of e,isting creditors worse# o nl acts which i"pair the assets of the de!tor are covered ! the provision o 9ot those which "erel increases his lia!ilities
Requisites that Must be lleged in the !o"plaint in ccion #auliana 1. That the plainti@ asking for rescission# has credit prior to the alienation# although de"anda!le later
2. That the de!tor has "ade a su!sequent contract conveing a patri"onial !enet to a third person 3. That the creditor has no other legal re"ed to satisf his clai"# !ut would !enet ! rescission of the conveance to the third person 4. That act !eing i"pugned is fraudulent E. That the third person who received the propert conveed# if ! onerous title# has !een an acco"plice in the fraud.
Article 11$4 5ransmissibilit! o (ights eneral 7ule& 7ights are trans"issi!le 0,ceptions8 1. :f the law provides otherwise 2. :f the contract provides otherwise 3. :f the o!ligation is purel personal 0,. A lease his house to 5 and gave the option to hi" to !u the house after 2 ears. 5 assigned his right to ; who co""unicated to A his desire to e,ercise the option to A. ; "a e,ercise the option to !u the house.
Chapter 3 Diferent .inds o Obligations Classications o Obligations 1# rimar! Classication a. 'ure and conditional o!ligations !. !ligations with a period c. Alternative and facultative o!ligations d. Loint and solidar o!ligations e. ivisi!le and indivisi!le o!ligations f. !ligations with a penal clause
2# 7econdar! Classication a. +nilateral and !ilateral o!ligations !. 7eal and 'ersonal o!ligations c. eter"inate and generic o!ligations d. ;ivil and natural o!ligations e. *egal# conventional and penal o!ligations 3# Classication according to 7anche8 (oman
a. 5 their ?uridical qualit and ePcaciousness i. 9atural F according to natural law ii. ;ivil F according to civil law iii. i,ed F according to !oth natural and civil law !. 5 the parties or su!?ect i. +nilateral or !ilateral ii. :ndividual or collective iii. Loint or solidar c. 5 the o!?ect of the o!ligation or prestation i. pecic or generic ii. 'ositive or negative iii. 7eal or personal iv. 'ossi!le or i"possi!le v. ivisi!le or indivisi!le vi. 'rincipal or accessor vii. i"ple or co"pound 1. :f co"pound a. ;on?uctive F de"anda!le at the sa"e ti"e !. istri!utive F 0ither alternative or facultative d. 5 their ?uridical perfection and e,tinguish"ent i. 'ure or conditional ii. ith a period
ure and Conditional Obligations Article 11$' ure obligation "
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:s one which is not su!?ect to an condition and no specic date is "entioned for its full"ent and is i""ediatel de"anda!le :""ediate de"anda!ilit does not "ean instantaneous co"pliance
Condition &
:t is a future and uncertain event upon which an o!ligation or provision is "ade to depend
5erm or eriod
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That which "ust necessaril co"e whether the parties know when it will happen or not
Conditional obligation " "
-ind of o!ligation which is su!?ect to a condition hose e@ectivit is su!ordinated to the full"ent or non&full"ent of a future and uncertain event
Characteristic o a condition 1# Duture and uncertain 2# :"posed ! the will of a part and "ust not !e a necessar legal requisite of the act 3# Although uncertain# "ust !e possi!le (Art. 11=3) 'ast !ut unknown o The 'ast event is to !e designated as a !asis of the contract (Tolentino) o hat can !e a condition is the uture no9ledge or proo of a past event unknown to the parties# !ut not the event itself 59o principal inds o condition 1# 7uspensive condition o the de"anda!ilit of the o!ligation is suspended until the happening of a future and uncertain event which constitutes the condition the happening of the condition o gives rise to an o!ligation o if the suspensive condition does not happen# the o!ligation does not co"e into e,istence o acquisition of right 2# (esolutor! condition o The fulll"ent of the resolutor condition will e,tinguish an o!ligation or right alread e,isting Gappening of the condition o e,tinguishes the o!ligation o hen rights "ust e,ist !efore a condition can !e perfor"ed *oss of right alread acquired o
Article 1141
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7eiterates the distinction !etween a suspensive and 7esolutor condition
Article 1146 (e+uisites to appl! this Article 1. The condition is suspensive
2. The o!ligor actuall prevents the fulll"ent of the condition 3. Ge acts voluntaril or intentionall