KINDS OF OBLIGATION
Primary classifcation under the civil code 1. Pure ure obl oblig igat atio ion n 2. Cond Condit itio iona nall obli obliga gati tion on 3. Obli Obliga gati tion on wit with h a per perio iod d 4. Al Alte terrnati native ve obli obliga gati tion on . !acult acultat ativ ive e obli obliga gati tion on ". #oin #ointt obl oblig iga ati tion on $. %oli %olida dary ry obli obliga gati tion on &. 'ivi 'ivisi sibl ble e obli obliga gati tion on (. )ndi )ndivi visi sibl ble e obli obliga gati tion on 1*.Obligation with a penal clause
Pure ure and Conditional Obligations
PURE OBLIGATION OBLIGATION
One whose e+ectivity or e,tinguishment does not depend upon the -ulfllment or non -ulfllment o- a condition or upon the e,piration o- a term or period. it is demandable at once.
e,amples 1. ) promise to pay you P1 million. 2. )/ll pay you P1 million on demand.
CONDITIONAL OBLIGATION
One whose e+ectivity is subordinated to the -ulfllment or non-ulfllment o- a -uture and uncertain -act or event.
'efnition o- condition
)t is a -uture and uncertain event which wields an in0uence on legal relationship.
Kinds of conditions:
%uspensive and esolutory A.Suspensie -ulfllment o- the condition results in the acuisition orights arising out o- the obligation. B. Reso"uto#$
-ulfllment
o-
the
condition results in the e,tinguishments o- rights arising out o- the obligation
ature o- %uspensive Conditions the happening o- the event gives rise to an obligation.
5,amples o- %uspensive Conditions 1. ) promise to give you a car provided that you pass the CPA board e,am. 2. ) will give you P1 million i- President Auino will die o- lung cancer.
ature o- resolutory condition 6he happening o- the event e,tinguishes the obligation.
5,amples o- resolutory Condition 1. ) will give you my car now but should you marry 'aniel Padilla7 the donation will not be e+ective. 2. 8y house is yours provided that you shall not win in the presidential election.
potestative7 casual and mi,ed A. Potest%tie -ulfllment o- the condition depends upon the e,clusive will o- a party to the obligation. B. C%su%" -ulfllment o- the condition depends upon chance and9or upon the will o- a third person. C. &i'ed -ulfllment o- the condition depends partly upon chance and9or the will o- a third person.
Potestative Conditions 1.: potestative on the part o- the debtor; %( if %"so suspensie both the condition and the obligation are )OID7 -or the obligation is really illusory. 5,ample; 1. ) will give you P1 million ne,t month i- ) will graduate. 2. 'uterte is to give
*. if %"so #eso"uto#$ =alid e,ample. 'uterte is to allow the use o- his car by
2. potestative on the part o- the creditor. it is =A>)' whether the condition is suspensive or resolutory. e,ample; a. ) will give you my sign pen i- you desire to have it. b. Poe is to give o,as P*7***.** io,as goes to
Casual Condition e,ample; 1. 'uterte is to give
8i,ed Condition e,ample; 1. 'avid will give Angelo P1 million i- Angelo will marry ?na. 2. )/ll give you my car i- ) can sell my land.
Possible9>egal and )mpossible9)llegal A. Possi*"e one that is capable oreali@ation9-ulfllment according to nature7 law7 public policy or good customs <. I+possi*"e condition is not capable o- reali@ation9-ulfllment according to nature7 law7 public policy or good customs.
5+ects o- )mpossible9)llegal Condition 1. i- the condition is to do an impossible or illegal thing the obligation and the condition are =O)'. B because the debtor nows that no -ulfllment can be done and there-ore is not serious about being liable.
eample; 1. ) will sell you my land i- you can mae a dead man alive. 2. ) will give you my heart i- you can swim across the Pacifc Ocean. 3. ) will give you money i- you ill D.
2. i- the condition is negative7 that is not to do the impossible or illegal thing7 Eust disregard the condition7 but the obligation remains to be =A>)'. e,ample; a. ) will sell you my land i- you cannot mae a circle that is at the same time a suare. b. ) will give you my car i- you do not ill D.
Positive and egative A. Positie condition involves the per-ormance o- an act. B. Ne,%tie condition involves the omission o- an act.
e'%+p"e of positie conditions: 1. ) will give you my land i- you marry ?na this year. i- by the end o- the year7 ?na is alsready dead7 or you have not yet married her7 the obligation is e,tinguished.
E%'+p"es of ne,%tie o*"i,%tion: 1. ) will give you P1 million i- by #anuary 317 2*1" you have not yet married ?na. i- by said date7 you are not yet married7 or i- prior thereto7 ?na had died7 the obligation is e+ective.
>oss7 'eterioration7 and )mprovement 'uring the Pendency o- Condition
this would appy only i- the suspensive condition is fu"-""ed and the obEect is speci-c
Fhat are the three things that may happen to the obEect o- an obligation pending the -ulfllment o- a suspensive conditionG
the obEect;
1. may be lost 2. may deteriorate 3. may be improved
the obEect may be lost... a. without the -ault o- the debtor te o*"i,%tion s%"" *e e'tin,uised b. with -ault o- the debtor de*to# is o*"i,ed to p%$ d%+%,es c. partly with and partly without the -ault o- the debtor
the obEect may deteriorate... 1. without the -ault o- the debtor te i+p%i#+ent is to *e *o#ne *$ te c#edito# 2. with the -ault o- the debtor te c#edito# +%$ coose *et/een te #escission of te o*"i,%tion %nd its fu"-""+ent0 /it inde+nit$ fo# d%+%,es in *ot c%ses 3. partly with and partly without the -ault othe debtor
the obEect may improve... 1. by nature or by time te i+p#oe+ent s%"" inu#e to te *ene-t of te c#edito# 2. through the e,pense o- the debtor e s%"" %e no ote# #i,t t%n t%t ,#%nted to te usuf#uctu%#$. 3. partly through nature or time and partly by the debtor
'5!))6)O O! >O%%
it is understood that the thing is lost;
1. /en it pe#ises e.g. when a house is burnt to ashes.
2. /en it ,oes out of co++e#ce e.g. as when the obEect hereto-ore unprohibited becomes prohibited
3. /en it dis%ppe%#s in suc % /%$ t%t its e'istence is un4no/n e.g. when a particular car has been missing -or some time.
5. /en it dis%ppe%#s in suc % /%$ t%t it c%nnot *e #ecoe#ed e.g. when a particular diamond ring is dropped in the middle o- the pacifc ocean
)llustrative problems Ha: A promised to give < his car i- < passes the CPA board e,am. Pending the results o- the said e,ams7 the car was destroyed by a -ortuitous event7 without any -ault at all on the part othe debtor. Fhen < passes the board e,am7 does A have to give to < anythingG
Hb: A promised to give < P1 million i- < passes the CPA board e,ams. Pending the results o- the said e,ams7 A/s money is destroyed by fre7 not imputable to A. Fhen < passes the CPA board e,am7 does A still have to give him P1 millionG
Hc: On the frst problem Ha:. %uppose the loss occured through the -ault othe debtor7 is the debtor liableG
ans... ?es. )- the thing id lost through the -ault o- the debtor7 he shall be obliged to pay damages.
Hd: %uppose pending the -ulfllment othe suspensive condition7 the obEect7 say a particular car7 deteriorates without the -ault o- the debtor7 is the debtor bound to mae the up -or the depreciation7 or should the creditor bear the deterioration su+eredG
ans... in such case7 the creditor will hve to su+er -or the deterioration or impairment. 6he law say; Fhen the thing deteriorates without the -ault othe debtor7 the impairment is to be borne by the creditor.
He: %uppose a determinate thing deteriorates through the -ault o- the debtorG
ans... 6he creditor may choose between; a. rescission Hor cancellation o- the obligation:7 plus damages b. or -ulfllment o- the obligation Heven i- there has been deterioration: plus damages.
H-: %uppose the thing is improved by nature or by time7 who gets the beneft o- the improvementG
ans... the creditor gets the beneft. )- the thing is improved by its nature or by time7 the improvement shall inure to the beneft o- the creditor.
Hg: %uppose the thing has improved7 not through time or by its nature but through the epense o- the debtor7 what will be the rights o- said debtorG
ans... the debtor will have the rights granted to a usu-ructuary -or improvements on a thing held in usu-ruct. he is not entitled to reimbursement but he may emove the improvements provided he does not7 by doing so7 damage the property. he may however set o+ the improvements he may have made on the property against any damage to the same.
Hh: %uppose the improvement is due partly to the e,penses made by the debtor and partly due to its nature or by time7 who gets the beneftG
ans... the creditor gets the beneft o- the improvements o- the thing by its nature or by time7 but the debtor is entitled to the rights oa usu-ructuary over the use-ul improvements that may have been caused at his e,pense.
RECIPROCAL OBLIGATIONS
6hose which are created or established at the same time7 out o- the same cause7 and which result in mutual relationships o- creditor I debtor between the parties.
TACIT RESOLUTOR6 CONDITION
)- one o- the parties -ails to comply with what is incumbent upon him7 there is a right on the part o- the other to rescind the obligation.
RIG7T TO RESCIND
means the right to cancel or resolve the contract or reciprocal obligations in case onon-ulfllment on the part o- one.
6o rescind is to declare a contract void at its inception and to put an end to it as though it never was.
GENERAL RULE:
6he right to rescind needs Eudicial approval
EXCEPTIONS:
)- there is an e,press stipulation o- automatic rescission –
Fhen the debtor voluntarily returned the thing –
NOTE: escission will be ordered only where the breach is substantial as to de-eat the obEect o- the parties in entering into the agreement. 6he remedy o- rescission and -ulfllment are alternative7 not cumulative.
OBLIGATION 8IT7 A PERIOD
6hose whose demandability or e,tinguishment is subEect to the e,piration o- a term or period which must necessary come.
Period distinguish -rom condition 1. as to -ulfllment A condition is an uncertain event but a period is an event which must happen sooner or later7 at a date noen be-rore hand7 or a time which cannot be determined.
2. Fhere re-erence to time A period always re-ers to the -uture a condition may7 under the law7 re-er even to past.
3. As to in0uence on obligation A condition causes an obligation to arise or to cease but a period merely f,es the time or the eJcaciousness o- an obligation.
Kinds o- Period 1. 5, 'ie 6his is a period with a suspensive e+ect. Lere7 the obligation becomed demandable upon the lapse o- the period.
2. )n 'iem 6his is a period with a resolutory e+ect. Lere the obligation is demandable at once but is e,tinguished upon the lapse operiod.
other inds are; 1. >egal A period that is f,ed by the law 2. =oluntary 6his is f,ed by the parties 3. #udicial One that is f,ed by the court
Problem M) will pay you my debt when my means permit me to do so.M )s this an obligation with a period or with a conditionG
ans... 6his is an obligation with a period. Lere the remedy o- the creditor is to as the court to f, the period. Once the court has f,ed the period7 it may no longer change it as it becomes a part o- the agreement by the parties.
GENERAL RULE:
Fhen a period is designated -or the per-ormance or -ulfllment oan obligation7 it is presumed to have been established -or the beneft o- both creditor and debtor.
EXCEPTION:
Fhen it appears -rom the tenor o- the period or other circumstances that it is established in -avor o- one or the other.
ota
6he debtor cannot be compelled to per-orm7 and the creditor cannot be compelled to accept per-ormance7 be-ore the term e,pires.
e,ample ' borrowed P1*7***.** -rom C on #anuary 17 2*1". 6he loan bears interest at 1* per annum with both principal and interest being due on 'ecember 317 2*1".
Period is -or the beneft o- one o- the parties
1. Fo# te *ene-t of te de*to# 9 Le cannot be compelled to per-orm his obligation be-ore the e,piration o- the term7 *ut e +%$ coose to pe#fo#+ *efo#e suc e'pi#%tion %t is option .
e,ample ' is obliged to pay C P1 million on or be-ore 'ecember 317 2*1". ' cannot be compelled to pay be-ore 'ecember 317 2*1". Lowever7 he may choose to pay at any time be-ore 'ecember 317 2*1" or on 'ecember 317 2*1" at his option.
2. Fo# te *ene-t of te c#edito# Le cannot be compelled to accept per-ormance be-ore e,piration o- the term7 *ut e +%$ coose to de+%nd pe#fo#+%nce *efo#e suc e'pi#%tion %t is option.
e,ample On #anuary 17 2*1"7 ' borrowed -rom C P1 million collectible on or be-ore #une 3*7 2*1". C may demand payment on #une 3*7 2*1" or at any time be-ore the said date. Lowever7 ' cannot compel him accept the payment at any time be-ore #une 3*7 2*1".
8en cou#t +%$ -' pe#iod:
A. i- the obligation does not f, a period7 but -rom its nature and circumstances it can be in-erred that a period was intended by the parties
e,ample 1. A contract to construct a house where the period was not stated. 2. A donation where land was given provided certain construction was to be made on it. Lere the time within which construction is to be made should be f,ed by the courts.
<. i- the duration o- the period depends upon the will o- the debtor and
e,ample 1. Fhen my means permit me to do so. 2. )/ll pay you little by little. 3. As soon as possible 4. As soon as ) have money.
8en de*to# "oses #i,t to +%4e use of pe#iod
1. when a-ter the obligation has been contracted7 he becomes insolvent7 unless he gives guaranties or securities -or the debt Hthe insolvency need not be Eudicially declared:
e,ample ' owes C P1 million demandable on 8ay 17 2*1". )n #anuary 317 2*1"7 ' become insolvent. 6he debt is immediately demandable in #anuary 317 2*1" unless ' can o+er security.
2. when he does not f urnish to the creditor the guaranties or securities he promised
e,ample ' borrowed P1 million -rom C promising to pledge his ring to C to secure the debt within one month. C gave ' one year to pay the loan. '7 however7 -ailed to pledge his ring within the period agreed upon. )n thia case7 C can demand immediate payment even be-ore the agreed due date thereo-.
3. when by his own act he has impaired said guaranties or securities a-ter their establishment7 and when through -ortuitous event they disappear7 unless he gives new ones eually satis-actory
e,ample ' obtained a loan -rom C7 the same being secured by a chattel mortgage on '/s car. 6he loan is payable within one year. On the seventh month7 the car was ra@ed by fre. C can demand immediate payment unless ' gives another security that is eually satis-actory. 6his is true even i- the cause o- the loss or impairment was not due to the -ault o- '
4. when debtor iolates any undertaing7 in consideration owhich the creditor agreed to the period
e,ample C granted a loan o- P1*7***.** to ' giving ' one year to pay provided ' did not engage in any gambling until he has paid the debt. )- ' enters a casino to play poer7 say a-ter one month7 C can already demand immediate payment.
. when debtor attempts to %bscond.
e,ample )the debtor has been disposing all his property with an attempt to leave his place obusiness or residence to escape his creditors7 such creditors can demand immediate payment ohis debts although their maturity date is not yet due.
pretest 1. ' is obliged to give C a specifc car i- C passes the CPA >icensure 5,am. 's obligation is an e,ample o-; a. A pure obligation b. An obligation with a suspensive condition c. An obligation with a resolutory condition d. An obligation with a period
2. One o- the -ollowing is a void obligation; a. ' is obliged to give C P7***.** i- C does not go to the moon b. ' is obliged to give C P7***.** i- ' goes to
3. Fhen the debtor binds himsel- to pay when his means permit him to do so7 the obligation is; a. An obligation with a resolutory condition b. A pure obligation c. An obligation with a suspensive condition d. An obligation with a suspensive period
4. 6he debtor shall lose the right to mae use o- the period in the -ollowing cases7 e,cept when he; a.
1*.: On !ebruary 17 2*1" ' obligated himsel- to give C P*7***.** i- C will marry D on or be-ore !ebruary 2(7 2*1". 6he condition o- the obligation is a; a.: Positive condition b.: egative condition c.: #oint condition d.: )mpossible condition
Alternative Obligations and !acultative Obligations
Kinds o- obligations according to the number o- prestations 1. %imple One when there is only one prestation
2. Compound One when there are several prestations. 6his may may be; a.: ConEunctive Lere7 several prestations are due but all must be per-ormed.
e,ample; ' is to give C a specifc ring7 a specifc watch and a specifc bracelet to C. ' must deliver all the items to C.
b.: 'istibutive or disEunctive this may either be alternative or -acultative.
Alternative Obligation )t is one where several prestations are due but the complete per-ormance o- one o- them is suJcient to e,tinguish the obligation.
e,ample ' is obliged to give a specifc ring7 a specifc watch7 or a specifc bracelet to C. 6he delivery o- any o- the three articles will e,tinguish the obligation
ight to choose prestation
6he right o- choice belongs to the creditor7 unless it has been e,pressly given to the creditor.
>imitations on 'ebtor/s ight to Choose 1. 6he debtor must completely per-orm the prestation chosen. Le cannot compel the creditor to receive part oone and part o- another undertaing.
2. Le cannot choose those prestations which are impossible7 unlaw-ul or which could not have been the obEect o- the obligation.
Fhen obligation ceases to be alternative and becomes a simple obligation
1. Fhen the debtor has communicated his choice to the creditor.
2. Fhen among the prestaions wherey the debtor is alternatively bound7 only one is practicable.
3. Fhen the creditor has communicated his choice to the debtor7 i- the creditor has been e,pressly e,pressly given the right o- choice.
ules in case o- >oss othings or impossiblity o- services which are alternatively the obEect o- the obligation.
1. Fhen the right o- Choice is with the debtor
a. )- only one or some are lost through a -ortuitous event or through the debtor/s -ault7 the debtor may deliver any o- the remainder7 or that which remains i- only only one subsists.
b. )- all are lost through a -ortuitous event7 the obligation is e,tinguished Hbased on the rule that no person shall be responsible -or -ortuitous event:
c. )- all are lost through the debtor/s -ault7 the debtor shall pay the value o- the last thing that was lost plus damages.
5,ample; ' is to give C a specifc ring7 a specifc bracelet or a specifc wristwatch. 6he obligation is silent as to who will choose the item to be delivered. 6here-ore7 the right ochoice bleongs to '
a. )- the ring is lost through a -ortuitous event7 ' may deliver the bracelet or the wristwatch. 6he same rule applies i- the ring is lost through the -ault o- '. )n the case o- the latter7 ' shall have no liability -or damages because he can still per-orm his obligation by choosing to deliver the bracelet or the wristwatch.
b. )- the ring and the bracelet are lost through a -ortuitous event or through '/s -ault7 the obligation is converted into a simple obligation to deliver the wristwatch. 6here is no liability -or damages on the part o- ' even i- the loss is due to his -ault because he can still per-orm his obligation. )t was as i' chose to deliver the wristwatch.
c. )- all the things are lost due to a -ortuitous event7 '/s obligation is e,tinguished.
d. )- the ring and the bracelet are lost through a -ortuitous event7 the obligation becomes a simple obligation to deliver the wristwatch. )- the wristwatch is therea-ter lost due to the -ault o'7 ' shall pay damages.
e. )- the ring7 the bracelet and the wristwatch are lost one a-ter the other due to '/s -ault7 ' shall pay the value o- the wristwatch7 the last item that was lost7 plus damages.
-. )- the ring and the bracelet are lost through '/s -ault7 the obligation becomes a simple obligation to deliver the wristwatch. )- the wristwatch is therea-ter lost through a -ortuitous event7 '/s obligation is e,tinguished.
2. Fhen right o- choice is e,pressly granted to the creditor a.: )- only one or some sre lost through a -ortuitous event7 the debtor shall deliver that which the creditor should choose among the remainder7 or that which remains i- only one subsists.
b.: )- all are lost through a -ortuitous event7 the obligation shall be e,tinguished.
c.: )- only one or some are lost through the debtor/s -ault7 the creditor may claim any o- those subsisting7 or the price o- those which were lost through the debtor/s -ault plus damages.
d.: )- all are lost through the debtor/s -ault7 the creditor/s -ault7 the creditor may claim the price o- any o- them plus damages.
e,amples ' is to give C a specifc ring7 a specifc bracelet or a specifc wristwatch. 6he parties agreed that C shall have the right ochoice.
a.: )- the ring is lost through a -ortuitous event7 ' shall deliver either the bracelet or the wrist watch at the choice o- C.
b.: )- all are lost through a -ortuitous event7 '/s obligation is e,tinguished.
c.: )- the ring and the bracelet are lost through a -ortuitous event7 ' shall deliver the wristwatch which is the remaining item. 6he obligation becomes a simple obligation to deliver the wristwatch. )the wristwatch is therea-ter lost due to '/s -ault7 ' shall pay damages.
d.: )- the ring and the bracelet are lost due to '/s -ault7 the obligation does not become a simple obligation to deliver the wristwatch. C can still choose -rom the payment o- the price o- the ring or the baracelet with damages7 or the delivery o- the wristwatch.
e.: )- all are lost due to the -ault o'7 C may claim the price o- any o- them plus damages.
Pretest . ' is obliged to give C a specifc watch7 a specifc ring7 or a specifc bracelet. 6he parties agreed that C will have the right to choose the ring which will be given to him.
!ACQ>6A6)=5 O<>)RA6)O An obligation where only one prestation is due but the debtor may render another in substitution.
e,ample ' is obliged to give a specifc ring to C with the agreement that ' may deliver a specifc watch as a substitute.
ules is case o- loss o- principal thing and substitute 1.
2. A-ter substitution Ha: Principal thing 6he loss o- the principal thing whether through a -ortuitous event or through the debtor/s -ault imposes no additional obligation on the debtor because the thing due is already the substitute.
A-ter the substitution has been communicated7 the thing is due is the substitute. 6he obligation also ceases to be a -acultative obligation and becomes a simple obligation.
Hb: %ubstitute thing 1.: )- lost through -ortuitous event7 the obligation is e,tinguished. 2.: )- lost through the debtor/s -ault7 the debtor shall pay damages.
Alternative obligation and !acultative obligation7 distinguished
A>65A6)=5 !ACQ>6A6)=5 1. %everal 1. Only one prestaions are prestation7 the due7 but the principal per-ormance oobligation7 is one is suJcient due. to e,tinguish the debt.
2. )- there are 2. )void principal prestations7 obligation the others may void7 still be valid7 debtor is hence7 the reuired obligation give remains. substitute
the is the not to the
3. 6he right o- 3. 6he right ochoice is with choice belongs the debtor7 to the debtor unless only e,pressly given to the creditor
4. )all 4. )prestations are principal impossible obligation e,cept one7 impossible7 that which is debtor is possible must reuired still be given give substitute
the is the not to the
#oint and %olidary Obligation )n a Eoint or solidary obligation7 there is a concurrence o- two or more debtors and9or two or more creditors in one and the same obligation.
)n a Eoint obligation7 each debtor is liable only -or proportionate part o- the debt7 and each creditor is entitled only to a proportionate part o- the credit.
e,ample 1. A and < are indebted to D -or P1*7***.**. A is liable only -or P7***.** < is liable only -or P7***.**
2. A owes D and ? P&7***.**. D can collect only P47***.** ? can collect only P47***.**.
)n a solidary obligation7 each debtor is liable -or the whole obligation7 and each creditor is entitled to demand payment othe whole obligation.
Kinds o- %olidary Obligation 1. P%ssie So"id%#it$
6his is solidarity on the part o- the debtors
e,ample; A and <7 solidary debtors7 are indebted to D -or P1 million. D can demand payment o- P1 million -rom either A or <. )- A pays P1 million7 the obligation is e,tinguished. A can demand reimbursement oP**7***.** -rom < representing the latter/s share in the debt.
2. Actie Su*ect 6his is solidarity on the part o- the creditors.
e,ample; A owes D and ?7 solidary creditors7 P&7***.**. 5ither D or ? may demand payment o- P&7***.** -rom A. )- A pays D P&7***.**7 the obligation is e,tinguished. D must give P47***.** to ? representing the latter/s share in the credit.
3. &i'ed so"id%#it$
or solidarity on the part o- both the creditors and debtors.
e,ample; A and <7 soliary debtors7 owe D and ?7 solidary creditors7 P127***.**. D or ? may collect -rom A or < the total sum o- 127***.**. )- A pays D P127***.**7 the obligation is e,tinguished. < must reimburse A P"7***.**. On the other hand7 D must give P"7***.** to ?.
other terms -or solidary obligations 1. #oint and %everally 2. )ndividually and Collectively 3. )n %olidum 4. 8ancomunada %olidaria . #untos o separadamente
other term -or Eoint obligation 1. proportionately 2. pro rata 3. mancomunada 4. mancomunada simple
R55A> Q>5 6he obligation is presumed to be Eoint when there is a concurrence o- two or more debtors and9or two or more creditors in one and the same obligation.
5DC5P6)O% 1. Fhen the obligatio e,pressly so states
5DC5P6)O% 2. Fhen the law reuires solidarity
5DC5P6)O% Fhen the nature o- the obligation reuires solidarity
problems 1. A7 < and C are obliged to give D7 ? and S P2$7***.**. Low many distinct debts are there in the obligationG
answer... %ince the obligation is presumed to be Eoint7 there are ( distinct debts as -ollows.
H1: H1: H1: H1: H1: H1: H1: H1: H1:
A A A < < < C C C
owes owes owes owes owes owes owes owes owes
D P37***.** ? P37***.** S P37***.** D P37***.** ? P37***.** S P37***.** D P37***.** ? P37***.** S P37***.**
problems 2. A7 < and C7 Eoint debtors7 are obliged to give D7 ? and S7 solidary creditors7 P1&7***.**. Low much may D collect and -rom whomG
answer... D7 being a solidary creditor7 may collect the sum o- P1&7***.**. Lowever7 since the debtors are Eoint debtors7 he may collect only P"7***.** -rom each o- them. A-ter collecting the sum o- P1&7***.**7 D must give ? and S/s share oP"7***.** each.
problem 3. A7 < and C7 solidary debtors7 are obliged to give D7 ? and S7 Eoint creditors7 P1&7***.**. Low much may A be held liableG
answer... A7 being a solidary debtor7 may be held liable -or P1&7***.**. Lowever7 since the creditors are Eoint creditors7 each o- them may collect only P"7***.** -rom A. )- A pays the whole amount o- P1&7***.** to the creditors7 A can demand reimbursement oP"7***.** each -rom < and C.
problem 4. A7 < and C7 solidary debtors7 are obliged to give D7 ? and S7 solidary creditors7 P1&7***.**. Low much may S collect and !rom whomG
answer... S may collect P1&7***.** -rom any othe solidary debtors each o- whom may be held liable -or the entire obligation. )- S collectgs P1&7***.** -rom A7 S must give D and ? P"7***.** each. A7 on the other hand7 can demand reimbursement -rom < and C at P"7***.** each.
A and < are solidary debtors o- D and ?7 solidary creditors7 in the amount o- P2*7***.**.
1. )- D renounces or remits the whole obligation without the the consent o- ?7 will the obligation be e,tinguishedG
answer... ?es7 because the remission made by any solidary creditor e,tinguishes the whole obligation. Lowever7 D has to give ?/s share oP1*7***.** since solidary creditors may not do anything preEudicial to his cosolidary creditors.
A solidary creditor who has caused the e,tinguishment o- the obligation by remission7 novation7 compensation or con-usion7 or who has collected the debt7 shall be liable to the others -or the shares corresponding to them.
2. %uppose the remission othe whole obligation was obtained by A7 may A demand reimbursement -rom
answer... o7 because the remission o- the whole obligation obtained by one othe solidary debtors does not entitle him to reimbursement -rom his co debtors. emission being the gratuitous abandonement by the creditors o- their rights to the obligation.
3. %uppose that D renounces or remits A/s share amounting to P1*7***.**. Lowever7 it turned out that < had already paid P2*7***.** to ? two days be-ore. 8ay < still collect P1*7***.** -rom A representing A/s shareG
answer... ?es7 ?es7 < may still collect -rom A P1*7***.**. 6he remission made by the creditor o- the share which a+ects one o- the solidary debtors does not release the latter -rom responsibility to his codebtors7 in case the debt has been totally paid by anyone o- them be-ore the remission was a+ected. A/s remedy will be to go a-ter D or ? to collect the sum he paid to <.
A is indebted to D7 ? and S7 solidary creditors7 -or P247***.**. %uppose D maes a demand against A7 to whom shall A payG
answer... A must pay to D. )- A pays to another solidary creditor7 say ?7 the sum o- P247***.**7 the payment7 as a rule7 is valid only with respect to ?/s share o- P&7***.**. 6hus7 i- D and S do not receive their respective shares -rom ?7 A can still be held liable -or P1"7***.**
A7 < and C7 solidary debtors7 borrowed P3*7***.** -rom D. 6he obligation is evidenced by a promissory note signed by the debtors.
1. D demands payment -rom A. Lowever7 A pays only P127***.**. 8ay D still go a-ter < and9or CG
answer... ?es7 D may still go a-ter < or C or both o- them -or the balance o- P1&7***.**. 6he creditor may proceed against anyone o- the soliday debtors or some or all o-them simultaneously. 6he demand made against one o- them shall not be an obstacle to those which may subseuently de directed against the others7 so long as the debt has not been -ully collected.
2. )- A pays D P3*7***.**7 what are the rights o- AG
answer... A can demand reimbursement -rom < and C at P1*7***.** each together with interest -rom the date opayment. Lowever7 i- payment is made by A be-ore due date7 he cannot collect interest during the intervening period7 i.e.7 -rom date opayment to due date.
3. A pays D P3*7***.**. Lowever7 C has become insolvent. Low much may A demand -rom < as reimbursementG
answer... A may demand P17***.** -rom <. )an insolvent debtor cannot reimburse his share to the debtor who paid the obligation7 such share shall be borne by all his codebtors7 in proportion to the debt o- each. 6hus7 A and < shall bear C/s share at P7***.** each.
4. )- A pays D P3*7***.** more than 1* years a-ter the note had become due7 can he syill demand reimbursementG
answer... o7 he can no longer demand reimbursement. Payment by a solidary debtor a-ter the obligation has prescribed does not entitle him to reimbursement. 6he same rule applies i- payment is made a-ter the obligation has become illegal.
A7 <7 C and ' are solidarily liable to D -or the delivery o- a specifc ring valued at P2*7***.**. Fhat is the rule i- the ring is lost; 1. through a -ortuitous eventG 2. through the -ault o- 'G
answer... 1. 6he obligation shall be e,tinguished. 6his is according to the rule that no person shall be responsible -or -ortuitous events.
2. All the solidary debtors shall be liable -or the payment o- the price o- the ring plus damages and interest. Lowever7 the soliary debtor maing the payment can recover what he has paid -rom the guilty debtor. 6hus7 i- D goes a-ter A and A pays the price o- the ring7 and the damages and ineterest7 A can demand reimbursement oP2*7***.** plus damages and interest -rom '7 the guilty or negligent debtor.
5,istence o- solidarity despite di+erent periods and conditions
%olidarity e,ists although the creditors and the debtors may not be bound by the same periods and conditions
e,ample A7 < and C are solidarily liable to D -or P(7***.**. 6he parties stipulated that the share o- A is payable on demand the share o- < on Christmas ne,t year and the share o- C7 i- D passes the CPA board e,aminations.
D may demand payment o- the share o- A o- P37*** anytime -rom either A7 < or C. On Christmas day ne,t year7 D may demand payment o- the share o- < o- P37***.** -rom either A7 < or C. Fhen D passes the CPA board e,amination7 he may demand payment o- the share o- C oP37***.** -rom either A7 < or C.
5+ect o- Qnauthori@ed assignment ocreditor/s right 6he solidary creditors are bound by mutual trust and confdence. Lence7 a solidary creditor cannot assign his right to a third person without the consent o- the other solidary creditors because the assignee may not enEoy the trust and confdence othe nonassigning creditors.
)- the assiginment is without the consent o- the cocreditors7 the assignment is not valid as to them. Accordingly7 they can recover their respective shares -rom the assigning creditor in case the assignee who collected the debt -ails to give them their shares.
'e-ense Available to solidary debtors 1. 6hose derived -rom the nature o- the obligation Hsuch as prescription othe obligation7 illegality o- cause:
2. 6hose personal to the creditor being sued7 or those that pertain to his own share Hsuch as incapacity o- the debtor or non-ulfllment o- a suspensive condition as ti his share:
3. 6hose personal to the other debtors with respect to their own share Hsuch as incapacity o- another debtor or non -ulfllment o- a suspensive condition with respect to other debtors/ shares:
#oint indivisible obligation7 concept and characteristics
A Eoint indivisible obligation is an obligation where the debtors or creditors are Eointly bound but the prestation or obEect is indivisible. )t has the -ollowing characteristics;
1. 6he creditors must act collectively7 meaning7 all o- them must mae the demand unless one is specifcally authori@ed to act -or the others. A de+%nd +%de *$ one o# so+e *ut not %"" of te c#edito#s /i"" not *e e;ectie.
2. 6he demand must be made against all the debtors since compliance is possible only i- they act together.
3. 6he right o- the creditors may be preEudiced by their collective acts. 6hus7 a renunciation made by a Eoint creditor etinguishes only as to his own share. 6he obligation7 however7 is converted into an obligation to pay the value o- the thing. )- all Eoint creditors mae the renunciation7 the obligation is e,tinguished.
4. )- one o- the debtors does not comply with his undertaing7 the obligation is converted into a monetary obligation to pay damages. 6he debtors who may have been ready to comply shall not contribute to the indemnity beyond the corresponding price o- the thing or the value o- the service in which the obligation consists.
. )- one o- the debtors is insolvent7 the others shall not be liable -or his share.
illustration A7 < and C are Eointly indebted to deliver a specif car valued at P(**7***.** to D7 ? and S.
1. D7 ? and S must mae a demand against A7 < and C -or the delivery o- the car.
2. )- A is not ready to comply with his undertaing7 the obligation to deliver tha car is converted into an obligation to pay its value plus damages. < and C shall be obliged to pay P3**7***.** each. A7 the de-aulting debtor7 shall be liable -or P3**7***.** plus damages.
3. )- A is insolvent7 < and C shall be liable only -or their respective share oP3**7***.** each.
4. )- D renounces his right to the obligation without the consent o- ? and S7 then only hs proportionate share is e,tinguished. 6he obligation7 however7 is converted into a monetary obligation to pay P"**7***.** which must be given to ? at P3**7***.** and S at P3**7***.** by A7 < and C who will give P2**7***.** each.
)ndivisibility and %olidarity7 concept and distinctions 6he indivisibility o- an obligation re-ers to the subEect matter or obEect not being susceptible o- partial per-ormance. %olidarity7 on the other hand7 re-ers to tie between the parties. One there-ore7 does not imply7 or give rise7 to the other.
6hus7 there may be the -ollowing obligations; 1. #oint divisible obligation e,ample; A and < are Eointly obliged to C ro construct a pavement 2 meters wide and 1* meters long.
2. #oint indivisible obligation e,ample; A and < are Eointly obliged to give a specifc horse to C.
3. %olidary divisible obligation e,ample; A and < are solidary liable to pay C P1*7***.** in two eual installments.
4. %olidary indivisible obligation e,ample; A and < are solidarily liable to give a specifc horse to C.
A7 <7 C and ' are obliged to give =7 F7 D7 ? and S P2*7***.** Low many distinct debts are there in the obligationG
$. A7 <7 C and ' solidary debtors7 are obliged to give =7 F7 D7 ? and S Eoint creditors7 P2*7***.** a.: = may collect -rom C P2*7***.** b.: = may collect -rom C P47***.** c.: = may collect -rom C P7***.** d.: = may collect -rom C P17***.**
&. A7 2 yrs old7 <7 3 yrs old and C7 1$ yrs old7 are solidary debtors o- D in the amount o- P(7***.** a.: D may collect -rom A P(7***.** b.: D may collect -rom A P"7***.** c.: D may collect -rom A P17***.** d.: D may collect nothing because the obligation is voidable7 C being a minor.
(.: )n an obligation with a penal clause7 the creditor as a general rule may recover -rom the debtor in case obreach the -ollowing; a.: 6he penalty as agreed upon7 plus damages and interest b.: 6he penalty and damages c.: 6he penalty and the interest d.: Only the penalty
'ivisible and )ndivisible Obligations
'ivisible Obligation A divisible obligaion is one capable o- partial per-ormance Hsuch as the obligation to deliver 1* sacs o- rice:. 6he -ollowing obligations are deemed divisible;
1. Fhen the obligation has -or its obEet the e,ecution o- a certain number o- days owor Hsuch as an obligation to wor -or 1 wee:
2. Fhen the obligation has -or its obEect the accomplishment o- wor by metrical units Hsuch as the obligation to construct a a pavement which is 1* meters long and 2 meters wide:
3. Analogous things which by their nature are susceptibleopartial per-ormance.
)ndivisible Obligation An indivisible obligation is one not capable opartial per-ormance Hsuch as the obligation to deliver a specifc:. 6he obligations are deemed indivisible;
1. Obligations to give defnite things Hsuch the obligation to give a specifc horse:
2. 6hose not susceptible opartial per-ormance Hsuch as the obligation o- a singer to sing one song in a program:
3. 6hose where the obEect or service is physically divisible but it is indivisible by provision o- law Hsuch as where the obligation is to pay a sum o- money but the law provides that the sum must be paid in -ull as in the case ocertain ta,es:
4. 6hose where the obEect or service is physically divisible but it is indivisible by the intention othe parties Hsuch as where the obligation is to pay a sum omoney but the parties agreed that the sum must be paid in -ull:
Obligations with a Penal Clause An obligation with a penal clause is one which provides -or a greater liability on the part othe debtor in case o- non Te %ccesso#$ compliance. unde#t%4in, on te p%#t of te de*to# is c%""ed te pen%" c"%use.
e,ample ' is obliged to construct a commercial building -or C within a period o- three months. 6he parties agreed that should ' -ail to fnish the construction o- the buliding within the said period. ' shall pay C P17***.** -or every day o- delay as penalty.
!unction o- Penal Clause A penal clause is attached to an obligation in order to insure per-ormance and has a double -unction;
1. 6o provide -or liuidated damages7 and 2. 6o strengthen the coercive -orce o- the obligation by a threat o- greater responsibility in the event o- breach.
Proo- reuired -or actual damages su+ered i- there is a penalty clause Proo- o- actual damages su+ered by the creditor is not necessary in order that the penalty may be determined. 6he obligor is bound to pay the stipulated indemnity without the necessity o- proo- o- the e,istence and the measure odamages caused by the breach
Kind o- penal clause 1. >egal and Conventional a.: >egal imposed by law b.: Conventional imposed by the agreement o- the parties
2. %ubsidiary and #oint a.: %ubsidiary when only the penalty may be en-orced b.: #oint when both the obligation and the penalty may be en-ored
ule in case obligation has a penal clause
Reneral ule; 6he penalty taes the place o- the damages and interest in case o- noncompliance.
5,ception; 1. Fhen there is a stipulation to that e+ect. 2. Fhen the debtor re-uses to pay the penalty 3. Fhen the debtor is guilty o- -raud in the per-ormance o- the obligation
problems ' is obliged to deliver 1* sacs o- rice to C on 8ay 1*. 6he parties agreed that i- ' -ails to deliver on due date7 he will pay a penalty o- P**.**.
1. %upposing that ' -ailed to deliver on due date7 may he Eust pay the penalty oP**.**G
answer... o7 because the debtor cannot e,empt himsel-rom the pre-ormance o- the obligation by Eust paying the penalty7 e,ept when this right has been epressly reserved -or him.
2. 8ay C demand the delivery o- 1* sacs o- rice and the payment o- the penalty at the same time upon de-ault o- 'G
answer... o. 6he creditor cannot demand -ulfllment o- the obligation and the payment o- the penalty at the same time e,cept when this has been clearly granted to him7 or i- a-ter reuiring -ulfllment o- the obligation7 the per-ormance thereo- becomes impossible without his -ault7 he may also en-orce the penalty.
Fhen the court may reduce the penalty 1. Fhen the obligation has been partly complied with by the debtor. 2. Fhen the obligation has been irregularly complied with by the debtor 3. Fhen the penalty is iniuitous or uncoscionable even i- there has been no per-ormance
5+ect o- nullity o- principal obligation7 penal clause
1. 6he nullity o- the principal obligation carries with it the nullity o- the penal clause. 6his is so because the penal clause7 being Eust an accessory undertaing7 cannot stand by itsel-.
2. 6he nullity o- the penal clause does not carry with it that othe principal obligation. 6his is so because the principal obligationcan stand by itsel-.
post test 1. One o- the -ollowing is not immediately demandable. a. Pure obligation b. Obligation with a resolutory condition c. Obligation with an in diem period d. Obligation with an e, die period
2. ' is obliged to give P1*7***.** i- D dies. 6his is an e,ample o-; a. An obligation with a suspensive condition b. An obligation with a resolutory condition c. An obligation with a period d. A pure obligation
3. Fhenever a period is designated in an obligation7 the said period shall be presumed to have been established -or the beneft o-; a. 6he debtor b. 6he creditor c.
4. An obligation ceases to be alternative and becomes a simple obligation in the -ollowing cases7 e,cept when; a. 6he debtor has communicated his choice to the creditor b. 6he right o- choice has been e,pressly granted to the creditor and his choice has been communicated to the debtor c. Among the several prestations that are due only one is practicable. d. 6hree prestations are due but one othem is unlaw-ul or impossible
. ' is obliged to give C a specifc ring. 6he parties agreed that ' may give a specifc bracelet as substitute. Fhich o- the -ollowing statements is trueG a. )- the ring is lost through a -ortuitous event be-ore substitution7 the obligation is e,tinguished. b. )- the bracelet is lost through a -ortuitous event be-ore substitution7 the obligation is e,tinguished. c. )- the ring is lost through a -ortuitous event a-ter substitution7 the obligation is e,tinguished d. )- the ring is lost through the debtors -ault a-ter substitution7 the debtor shall pay damages.
". A7 <7 C and '7 Eoint debtors7 are obliged to give =7 F7 D7 ? and S7 solidary creditors7 P2*7***.**. a. = may collect -rom < P2*7***.** b. = may collect -rom < P47***.** c. = may collect -rom < P7***.** d. = may collect -rom < P17***.**
$. A7 <7 C and '7 solidary debtors7 are obliged to give =7 F7 D7 ? and S7 solidary creditors7 P2*7***.**. a. = may collect -rom ' P2*7***.** b. = may collect -rom ' P47***.** c. = may collect -rom ' P7***.** d. = may collect -rom ' P17***.**
&. 6he -ollowing obligations are divisible7 e,cept an obligation; a. 6o give defnite things b. Fhich has -or its obEect the e,ecution o- a certain number o- days c. Fhich has -or its obEect the accomplishment o- wor by metrical units d. Fhich by its nature is susceptible o- partial per-ormance
(. Consider the -ollowing statements. ). 6he nullity o- the principal obligation carries with it the nullity o- the penal clause )). 6he nullity o- the principal obligation does not carry with it the nullity o- the penal clause ))). 6he nullity o- the penal clause carries with it the nullity o- the principal obligation )=. 6he nullity o- the penal clause does not carry with it the nullity o- the principal obligation. a. %tatements ) and ))) are true b. %tatements ) and )= are true c. %tatements )) and ))) are true d. %tatements )) and )= are true
1*. A7 <7 C and ' are obliged to give =7 F7 D7 ? and S P2*7***.** a. = may collect -rom A P2*7***.** b. = may collect -rom A P7***.** c. = may collect -rom A P17***.** d. = may collect -rom A P47***.**
5D6)RQ)%L856 O! O<>)RA6)O
Causes o- 5,tinguishment oObligations 1. Payment or pr-ormance 2. >oss o- the thing due 3. Condonation or remission o- debt 4. Con-usion or merger o- rights o- creditor and debtor . Compensation ". ovation $. Annulment &. ecission (. !ulfllment o- resolutory condition 1*. Prescription 11. Other causes
Payment or per-ormance Payment means not only delivery o- money but also the per-ormance7 in any other manner7 oan obligation.
6hus7 i- the obligation is to paint a portrait7 payment consists in the per-ormance othe service. Or ithe obligation is to deliver a certain ring7 payment consists in the delivery o- the thing.
Low must the payment e madeG 1. Te#e +ust *e de"ie#$ of te tin, o# #endition of te se#ices t%t /%s conte+p"%ted.
>imitations; a. 6he debtor o- a thing cannot compel the creditor to accept a di+erent one although the latter may be o- the same value as7 or more valuable than that which is due.
e,ample ' is obliged to give C a %eio wristwatch. ' cannot compel C to accept a ole, wristwatch even o- the latter is more valuable than %eio.
b. )n obligation to do or not to do7 an act or -orbearance cannot be substituted by another act or -orebearance against the obligee/s will.
e,ample 1. ' is obliged to paint C/s car. Le cannot substitute it with an obligation to paint C/s house. 2. ' borrowed P1*7***.** -rom C. C gave ' one year to pay provided ' must not enter a casino be-ore he has paid the debt. ' cannot as C that the obligation not to enter be substituted with not to drin and smoe during the term o- the loan.
c. )n obligation to give a generic thing whose uality and circumstances have not been stated7 the creditor cannot demand a thing o- superior uality. either can the debtor deliver the thing o- in-erior uality. 6he purpose o- the obligation and other circumstances shall be taen into consideration.
e,ample ' is obliged to give C * yards ote,tile. C cannot compel ' to deliver frst class wool te,tile. either ' deliver to C a te,tile that shrins substantially at frst. )- C happens to be engaged in the sale o- student7 then ' may give C the ind o- te,tile ft -or that purpose.
d. )- the obligation is a monetary obligation7 the payment must be in legal tender.
>egal tender is the money or currency which the debtor may compel his creditor t accept in payment o- his debt Hwhether public or private:
8edium o- Payment Payment o- debts in money must be made in the currency which is legal tender in the Philippines. Lowever7 the parties may stipulate that the payment may be made in the currency other than Philippine legal tender at the time o- payment.
2. 6he per-ormance complete.
payment must
or be
e,ceptions; a. )the obligation has been substantially per-ormed in good -aith7 the obligor may recover as though there had been strict and complete -ulfllment7 less damages su+ered by the obligee.
e,ample; % agreed to deliver 2* fre e,tinguishers to <. A-ter % has delivered 1& fre e,tinguishers to <7 there are no more fre e,tinguishers available. Le wants to complete the delivery but there is no more stoc available. % can recover the cost o2* fre e,tinguishers less damages su+ered by <.
b. Fhen the obligee accepts the per-ormance nowing its incompleteness or irregularity7 and without e,pressing any protest or obEection7 the obligation is deemed -ully complied with.
e,ample ' agreed to repair the car o- C and to paint it red. ' repaired the car but painted it maroon. C accepted the car without any obEection. '/s obligation is -ully complied with notwithstanding the irregularity othe per-ormance.
Fho must mae the paymentG Payment must be made by the debtor.
)s payment made by third person allowedG
6he creditor is O6 bound to accept payment or per-ormance by a third person.
e,ceptions; 1. Fhen there is stipulation to that e+ect.
2. Fhen the third person has an interest in the -ulfllment o- the obligation suach as a guarantor or a codebtor.
e,ample... ' borrowed P2*7***.** -rom C with R as guarantor. R as a person who has an interest in the -ulfllment othe obligation7 may compel C to accept the payment -rom him.
ights o- a third person who maes the payment
%.( P%$+ent /it 4no/"ed,e %nd consent of te de*to#. 1. Le can recover what he has paid. 2. Le is entitles to be subrogated in the rights o- the creditor such as those arising -rom mortgage7 guaranty or penalty.
e,ample... ' owes C P1*7***.**. 6he obligation is secured by a mortgage o- '/s lot. 67 a third person7 pays C the amount oP1*7***.** with the consent o- '. 6 can recover the amount o- P1*7***.** -rom '. )- ' cannot pay 67 having subrogated in the rights o- C7 can -oreclose the mortgage.
*.( P%$+ent /itout te 4no/"ed,e o# %,%inst te /i"" of te de*to#. Le can recover only inso-ar as the payment has been benefcial to the debtor. Le is not entitled to subrogation.
e,ample... ' borrowed P2*7***.** -rom C with R as guarantor. ' pays C P27***.**. 67 a third person7 pays C P2*7***.** believing that ' still owed C P2*7***.**. 6he payment is without the consent o- '.
answer... 6 can only recover P1&7***.** -rom '7 the amount that was benefcial to '. )- ' cannot pay7 6 cannot go a-ter R because he is not entitled to be subrogated in the rights o- C.
Payment by a third person who does not want to be reimbursed. a. 6he payment shall be deemed to be a donation which reuires the debtor/s consent. b. )- the debtor does not consent7 the payment shall nevertheless be valid to the creditor who has accepted it. )n such case7 the third person can only recover inso-ar as the payment has been benefcial to the debtor he is also not entitled to subrogation.
6o whom shall payment be madeG 1. 6o the creditor 2. 6o the creditor/s successor/s in interest7 such as heirs or assigns 3. 6o any person received payment
authori@ed
to
Payment to an incapacitated creditor 6he creditor must be capacitated to receive the payment. Payment to an incapacitated creditor is not valid e,cept in the -ollowing cases;
a. )- has ept the thing delivered. e,ample... ' borrowed P1*7***.** -rom C. On due date7 ' paid the debt to C who had become insane. )- C ept only P47***.** and threw away P"7***.**7 then payment will be valid only up to P47***.**
b. )nso-ar as the payment has been benefcial to him. e,ample... )n the above e,ample7 i- C used P37***.** to buy his -oods7 and lost the balance7 payment will be valid only up P37***.**7 the amount benefcial to him.
Payment to an unauthori@ed third person As a general rule7 payment to an unautthori@ed third person is not valid.
e,ceptions; 1. If p%$+ent %s #edound to te *ene-t of te c#edito# 7 which beneft need not be proved in the -ollowing cases; a. )- a-ter the payment7 the third person acuires the creditor/s right Hsuch as when the third person becomes the assignee o- the instrument evidencing the credit.
b. )- the creditor ratifes the payment to the third person.
c. )- by the creditor/s conduct7 the debtor has been led to believe that the third person had the authority to receive payment. H%uch as when a water service company gives a collector/s uni-orm to a third person who is not its employee and the debtor gives his paymnet to such third person believing that he is the authori@ed collector.:
2. If te p%$+ent is +%de in ,ood f%it to % ti#d pe#son in possession of te c#edit )n this case7 the third person should be both in possession o- the instrument and the credit.
e,ample; 8 maes a note payable to bearer and delivers it to P. 6he note7 however7 is lost by P and is piced up by A. A goes to 8 to collect on the note. 8 pays A believing in good -aith that A is the intended bearer. 8 is released -rom liability.
Fhere payment must be madeG 1. )- there is a stipulatio then the place designated.
2. )- there is no stipulation a. )- the obligation is to give a determinate thing7 wherever the thing might be at the time o- the obligation was constituted. b. )- the obligation is to give a generic thing or an obligation to do7 then at the domicile o- the debtor.
%pecial %pecial !orms !orms o- Payment ayment 1. Application o- payment 2. 'ation in Payment 3. Payment by Cession 4. 6ender opayment Consignation
and
Application o- Payment )t is designation o- the debt to which the payment must be applied when the debtor has several obligations o- the same ind in -avor o- the same creditor.
euisites; 1. there must be only 1 debtor I only 1 creditor 2. there must be 2 or more debts othe same ind 3. all o- the debts must be due 4. amount paid by the debtor must not be suJcient to cover the total amount o- all the debts
R55A> R55A> Q>5; Q>5; 6he right to designate designate thedebt to which the payment shall be applied primarily belongs to the debtor
5DC5P6)O; )- the debtor does not avail o-such right and he accepts -rom the creditor a receipt in which the application is made.
)- the above rule is not applicable 1. 6he debt most onerous to the debtor shall be deemed satisfed. 2. )- the debts due are o- the same nature and burden7 payment shall be applied to all all proportionat proportionately ely..
)llustrations 1 ' owes the -ollowing distinct debts; P17***.** due on 8ay 1 P17***.** due on 8ay P17***.** due on 8ay 1* P17***.** due on 8ay 1 and P17***.** due on 8ay 2*.
a. )- today is 8ay 1"7 and ' has only P17***.** but wants to pay C7 ' may apply the payment to any o- the debts due on 8ay 17 8ay 7 8ay 1* or 8ay 1. Le cannot apply the payment to the debt due on 8ay 2* beause it is not yet due unless he is allowed by stipulation with C or the beneft o- the period was given to him.
b. )- ' does not apply the payment7 the right to apply it is shi-ted to C. C may apply the payment to any o- the debts due on 8ay 17 8ay 7 8ay 1* or 8ay 1. Le cannot apply the payment to the debt due on 8ay 2* because it is not yet due unless he is allowed by stipulation with ' or the beneft o- the period was given to him.
c. )- neither ' nor C applies the payment7 payment shall be applied proportionately to the debts due on 8ay 17 8ay 7 8ay 1* or 8ay 1 at P2*.** each. )n case the debts due on 8ay is secured by a pledge7 then payment shall be applied to such debts because it is more onerous to '.
)llustration 2 ' owes C P$7***.** due on 8ay 1 sacs o- rice worth P7***.** on 8ay and P7***.** due on 8ay &. )- none o- the debts have been paid as o- 8ay & and ' has P7***.**7 ' cannot apply the payment to the debt consisting o- sacs o- rice becuase it is not payable in money7 it is o- di+erent ind.
' may not apply the payment due o- the debt due on 8ay 1 because the payment would not be complete unless C consents. ' may7 however7 apply the payment to the debt due on 8ay &.
'ation in Payment H'AC)O 5 PARO: )t is the transmission o- ownership o- a thing by the debtor to the creditor as an accepted euivalent othe per-ormance o- the obligation.
euisites; 1. e,istence o- a money obligation 2. alienation to the creditor o- a property by the debtor with the consent o- the -ormer 3. satis-action o- the money obligation o- the debtor
Payment by Cession 6he debtor abandons all o- his property -or the beneft o- his creditors in order that -rom the proceeds thereo-7 the latter may obtain payment o- their credits.
euisites; 1. plurality o- debts 2. partial or relative insolvency othe debtor 3. the debtor abandones all his properties e,cept those which are e,empt -rom e,ecution 4. acceptance o- the cession by the creditors
)llustration ' owes D7 P*7***.** ?7 P2*7***.** and S7 P3*7***.**. All the obligations are due but ' has assets worth P&*7***.** only. ' o+ers to assign his assets to D7 ? and S so that they may sell them and apply the proceeds to their respective claims. D7 ? and S accepted the o+er.
)- the assets are sold -or P$*7***.**7 then ' will be released -rom his obligations only up to that amount7 unless the creditors agreed to release him completely o- his debts.
C5%%)O 'istinguished -rom 'AC)O 5 PARO DACION EN PAGO CESSION 1. does not a+ect 1. in general7 A>> the a+ects A>> the properties properties o- the debtor 2.does not reuire 2. reuires more plurality othan one creditors creditor
3. only the specifc 3. reuires the or concerned consent o- all creditors consent the creditors is reuired 4. may tae place 4. reuires -ull or during the partial solvency o- the insolvency debtor
. trans-ers . does ownership upon trans-er delivery ownership
not
". this is really an ". not an act oact o- novation novation
$. the creditor $. 6he creditors are becomes the authori@ed to sell owner othe only the debtor/s properties given properties. as payment &. 6he debtor is not &. the debtor is released as a rule released as a rule
6ender o- Payment and Consignation 6ender o- Payment 6he act o- o+ering the creditor what is due him together with a demand that the creditor accept the same.
Consignation 6he act o- depositing the thing due with the court or Eudicial authorities whenever the creditor cannot accept or re-uses to accept payment. )t generally reuires a prior tender opayment.
)llustration 1. ' borrowed P*7***.** C. On due date7 ' tendered payment in P2*.** bills totalling P*7***.** to C. C re-used to accept the payment demanding that he may be paid in higher denominatios. %ince the payment tendered by ' was legal tender7 C was not Eustifed in re-using to accept it. ' may thus consign the payment in court.
2. A owes < a sum o- money. A gives < the money but < re-uses without Eust reason to accept it. Fhat should A now doG
answer... A must deposit the money in court7 since his tender opayment was re-used without Eust reason. Lis deposit in court is called consignation.
%pecial euisites; Ha: e,istence o- a valid debt Hb: valid prior tender7 unless tender is e,cused Hc: prior notice o- consignation Hbe-ore deposit: Hd: actual consignation Hdeposit: He: subseuent notice o- consignation
Ha: e,istence o- a valid debt
Hb: valid prior tender7 unless tender is e,cused
6hus7 the payment being tendered must be the thing contemplated7 in legal tender7 complete7 amont other reuisites -or a valid payment.
Hc: prior notice o- consignation Hbe-ore deposit:
6he law says the consignation Tmust frst be announced to the persons interested in the -ulf llment o- the obligation.U
Fithout such notice7 the consignation as a payment is =O)'. 6he reason is because7 had notice been made7 the creditor would have had opportunity to withdraw the money consigned and thus mae use o- it.
Pu#pose of te notice: 6o enable the creditor and other parties interested Hsuch as the mortgagees7 pledgees7 guarantors7 solidary cocreditors7 and solidary codebtors: to reconsider the previous re-usal7 and thus7 avoid litigation by the simple e,pedient o- accepting payment.
Hd: actual consignation Hdeposit: )t is understood that be-ore a deposit is made7 a complaint against the creditor to compel him to accept has to be frst fled in court.
6he consignation must be made V 1. by depositing the very obEect that is due Hand not another: 2: with the proper Eudicial authority which7 in certain case7 may include the sheri+ 3: accompanied by proo- that tender had been duly made7 unless tender is e,cused and that frst notice o- the consignation had already been sent
He: subseuent notice oconsignation 6his is reuired by the law which says; T6he consignation having been made7 the interested parties shall be notifed thereo-.U
6his is mandatory there-ore7 without subseuent notice7 consignation is =O)'.
and7 such the
5+ects i- Consignation Las
)-
the consignation is 'Q>? Hproperly: made; Ha: 6he debtor may as the Eudge to order the cancellation o- the obligation. Hb: 6he running o- interest is suspended.
ota ? 8A'57 the obligation 58A)%.
is o- >oss )- the consignation is Eudicially approved O i- all the essential reuisites are present O i- the creditor has signifed his acceptance7 the creditor bears the loss otherwise7 it is the debtor who bears the burden.
Fhen 'ebtor 8ay Fithdraw the 6hing or %um Consigned As a matter o- right; 1.: be-ore the creditor has accepted the consignation 2.: or be-ore there is a Eudicial declaration that the consignation has been properly made.
As a matter o- privilege; Fhen a-ter consignation had been properly made Hthe creditor having accepted or the court having declared it proper:7 the creditor authori@es the debtor to withdraw the thing.
Fhen Consignation )s %uJ cient 5ven Fithout a Prior 6ender
1. Fhen the creditor is ABSENT or UNKNO8N or DOES NOT APPEAR at the place opayment. H6he creditor need not be Eudicially declared absent.:
2. Fhen the creditor is )NCAPACITATED to receive payment at the time it is due. H6he rule does not apply i- the creditor has a legal representative and this -act is nown to the debtor.:
3. Fhen7 without Eust cause7 the creditor 5!Q%5% to give a receipt.
4. Fhen two or more persons claim the same right to collect. HAn action in )65P>5A'5 would be proper here.:
. Fhen the title Hwritten document: o- the obligation has been >O%6.
". Fhen the debtor had previously been notifed by the creditor that the latter would not accept any payment.
>O%% O! 6L5 6L)R 'Q5 Fhat T>ossU )ncludes T>ossU includes Timpossibility oper-ormance.U
8en Is Te#e % Loss 9 Ha: when the obEect perishes Hphysically7 it is destroyed: Hb: when it goes out o- commerce Hc: when it disappears in such a way that 1: its e,istence is unnown 2: or it cannot be recovered.
6wo Kinds o- Obligations T6o RiveU An obligation to give may consist o- an obligation; Ha: to give a generic thing Hb: or to give a specif c thing.
NOTE: 6he f rst is O6 e,tinguished by loss or by a -ortuitous event because Tgenus never perishes.U
5+ect o- >oss on an Obligation to 'eliver a %pecifc 6hing Reneral rule V the obligation is e,tinguished.
5,ceptions 1. when by law7 obligor is liable even -or -ortuitous event 2. when by stipulation7 obligor is liable even -or -ortuitous event 3. when the nature o- the obligation reuires the assumption o- ris
4. when the loss o- the thing is due partly to the -ault o- the debtor . when the loss o- the thing occurs a-ter the debtor incurred in delay
". when the debtor promised to deliver the same thing to two or more persons who do not have the same interest and $. when the debt o- a certain and determinate thing proceeds -rom a criminal o+ense.
5+ect o- >oss on Obligation to 'eliver a Reneric 6hing
6he obligation continues to e,ist because a generic thing does not really perish Hgenus nunuam perit V Tgenus never perishesU:.
5,ception )- the generic thing is de"i+ited Hlie T* ilos o- sugar -rom my 1((( harvestU when such harvest is completely destroyed: <=de"i+ited ,ene#ic tin,>:.
5+ect o- Partial >oss 6he courts shall determine whether under the circumstances7 the partial loss othe obEect o- the obligation is so important as to e,tinguish the obligation.
>oss in Personal Obligations e-ers to a case when compliance o- a personal obligation becomes7 without the debtors -ault V Ha: a legal impossibility Hb: or a physical impossibility.
5,amples o- )mpossibility Ha: >egal impossibility 1. 6he -urnishing o- wor on %undays when the same is prohibited by law 2. re-usal o- the government to issue a building permit
Hb: Physical impossibility 6o install a motor in a ship that was lost a-ter the per-ection o- the contract but prior to such installation.
ota
CO'OA6)O O 58)%%)O O! 6L5 '5<6
)t is Tthe gratuitous abandonment by the creditor o- his right.U 6his re-ers to the -orgiveness oan indebtedness. 6o e,tinguish the obligation7 it reuires the debtor/s consent.
5,ample Rloria owes 5dgardo P.**. Fhen the debt matured 5dgardo told Rloria that she need not pay the debt since he was condoning it. Rloria7 in turn7 e,pressed her gratitude. Lere7 the debt has been e,tinguished by remission.
Classes o- emission Ha: As regards its e+ect or e,tent; 1: total 2: partial Honly a portion is remitted or the remission may re-er only to the accessory obligations:
Hb: As regards e+ectivity;
its
date
1: inter vivos Hduring li-e: 2: mortis causa Ha-ter death:
o-
Hc: As regards its -orm; 1: implied or tacit %uch as when the creditor voluntarily delivers the private document evidencing the credit to the debtor. 2: e,press or -ormal Hthis reuires the -ormalities o- a donation i- inter vivos o- a will or codicil i- mortis causa:
5+ect o- 'elivery o- Private 'ocument 5videncing the Credit
Fith the delivery o- the private instrument7 a remission or renunciation is presumed.
5,ample %teJ made a promissory note in -avor o- Agassi in the amount oP1** million. A-ter some time7 Agassi voluntarily delivered the promissory note to %teJ without collecting the P1** million. %teJ is now in possession o- said note.
6here is a disputable presumption that there has been a remission. 6he presumption is merely disputable and not conclusive because it may be that the instrument was delivered only -or e,amination by %teJ or -or collection.
ota
5,ample A remission o- the penalty does not remit the principal obligation7 but i- the principal debt is condoned7 the penalty is also condoned.
ota
Re+ission of P"ed,e 9 1. ote here that only the accessory obligation o- pledge is presumed remitted. 6he principal obligation Hthe loan: remains in -orce.
2. 6he presumption is only disputable7 -or the debtor or the third person may be in possession o- the property by the-t or because it had been sent -or repairs7 or -or similar causes.
CO!Q%)O O 85R5 O! )RL6% )t is the meeting in one person o- the ualities o- creditor and debtor with respect to the same obligation.
5,ample 1. 8 maes a promisory note payable to P or order. P indorses the note to A A to < < to C and bac to 8. 6he obligation here is e,tinguished because 8 is now the creditor o- himsel-.
2. A maes a chec payable to bearer7 and hands the chec to C7 who hands it to ' who fnally hands it to A. Lere A owes himsel-. 6his is a clear case omerger7 and hence the obligation o- A is e,tinguished.
5+ect i- 8ortgagee
)- the mortgagee becomes the owner o- the property that had been mortgaged to him7 the mortgage is naturally e,tinguished7 but the principal obligation may remain.
5,ample; ) borrowed P17***7*** -rom my brother7 and as security7 ) mortgaged my land in his -avor. >ater ) sold the land to him. 6he mortgage is e,tinguished but ) still owe him P17***7***.
5+ect o- 8erger on Ruarantors A. 8erger which taes place in the principal debtor or creditor benefts the guarantors.
5,amples; 1. A owes < P$**7***7 guaranteed by C. < assigns his credit to D. D assigns the credit to ?. ? assigns the credit to A. As obligation is e,tinguished and C is released -rom his obligation as guarantor.
2. 8 owes P P1*7***.**. 6he debt which is evidence by a promisory note7 is guaranteed by R. P assigns the note to A A to < < to C and C bac to 8. 8/s debt is e,tinguished. R/s guaranty is liewise e,tinguished since the principal obligation it secures has been e,tinguished.
<. 8erger which taes place in the person o- the guarantor does not e,tinguish the obligation. Lere7 only the guaranty is e,tinguished.
5,ample; )- in the immediately preceding e,ample7 C assigns the note to R instead o- 87 R/s guaranty is e,tinguished because the ualities odebtor and creditor are merged in his person. Lowever7 8/s obligation is not e,tinguished. R7 as the new creditor7 may still go a-ter him.
8erger in #oint Obligations Con-usion does not e,tinguish a Eoint obligation e,cept as regards the share corresponding to the creditor or debtor in whom the two characters concur.
e,ample... A and < Eointly owe C P17***7***. )- C assigns the entire credit to A7 As share is e,tinguished7 but <s share remains. )n other words7 < would still owe A the sum oP**7***. )n a Eoint obligation7 the debts are distinct and separate -rom each other.
8erger in a %olidary Obligation 8erger in one o- the solidary debtors or solidary creditors e,tinguishes the whole obligation. 6he solidary debtor in whom the characters o- debtor and creditor concur can demand reimbursement -rom his codebtors. )n case o- the solidary creditor7 he shall be liable to his cocreditors -or the share corresponding to each o- them.
e,ample... A7 < and C are solidary debtors o- D -or P(7***.**. 6he promisory note evidencing the debt is assigned by D to ?7 ? to S and S to A. 6he whole obligation is e,tinguished by con-usion with all the debtors now being the creditors. A may demand reimbursement -rom < and C at P37***.** each.
CO8P5%A6)O )t is a mode o- e,tinguishing an obligation when when two persons7 in their own right7 are creditors and debtors o- each other.
e,ample ' owes C P7***.**. C owes ' P7***.**. 6he parties do not need to pay each other as their obligattions are e,tinguished by compensation.
Kinds or Classes oCompensation Ha: According to its e+ect or e,tent; H1: 6otal V i- both obligations are completely e,tinguished because they are o- the same or eual amounts. H2: Partial V when a balance remains Hhence7 there is a partial compensation in the larger o- the two debts:.
Hb: According to its origin or cause; 1: >egal V this taes place by operation olaw7 and need not be pleaded. 2: =oluntary or conventional V this is due to the agreement o- the parties.
5,ample o- voluntary compensation ' owes C P7***.** due on %eptember 2*7 2*1"7 while owes ' P7***.** due on %eptember 3*7 2*1". On %eptember 17 2*1"7 -or instance7 ' and C may agree that their debts be compensated.
3: #udicial Halso termed Tseto+U: V this must be pleaded it can be made e+ective only by an order -rom the court.
5,ample o- Eudicial Compensation 67 a travel agent7 sued P -or collection oP1*7***.** representing the balance o- P -or a guided tour in
4: !acultative V here7 one o- the parties has the choice oclaiming the compensation or oopposing it Hperhaps because not all the reuisites o- legal compensation are present:.
5,ample o- !acultative Compensation A owes < P1 million demandable and due on #an. 127 2**4. < owes A P1 million demandable and due on or be-ore #an. 317 2**4. On #an. 127 2**4 <7 who was given the benef t o- the term7 may claim compensation because he could then choose to pay his debt on said date7 which is Ton or be-ore #an. 317 2**4.U )-7 upon the other hand A claims compensation7 < can properly oppose it because < could not be made to pay until #an. 317 2**4.
euisiteso- Compensation 1. there must be two H2: parties7 who7 in their own right7 are principal creditors I principal debtors o- each other
2. both debts must consist in money7 or i- the things due are -ungibles7 they must be o- the same ind I uality
e,ample... ' is obliged to give C a sign pen and C is obliged to give ' a sign pen.
problem... ' is obliged to give C a specifc Pilot ballpen and C is obliged to give ' a specifc Panda ballpen. Can there be a legal compensationG
3. both debts must be due
4. both debts must be liuidated I demandable
>iuidated means the amount o- the debts has already been determined or is easily determined. 'emandable means both debts must be en-orceable.
. there must be no retention or controversy commenced by 3rd persons over either o- the debts I communicated in due time to the debtor compensation must not be prohibited by law
e,ample... ' owes C P1*7***.**. C owes ' P1*7***.**. C also owes D P1*7***.**. D sues C and ass the court to order ' not to pay C so that in the event the court renders Eudgment in -avor o- D7 ' will have to pay D. 6he court issues the order to '. 6here can be no legal compensation between ' and C because there is an order o- retention to ' with respect to his debt to C.
Compensation in %olidary Obligation A is indebted to D7 ?7 and S7 solidary creditors7 -or P3*7***.** due on !ebruary 17 2*1". D in turn owes A P3*7***.** due on !ebruary 17 2*1".
ovation
e,amples ' owes C P1*7***.**. H1: )- the parties later agree that ' should give instead a ring to C7 there is novation by changing the obEect or prestation.
H2: )- the parties agree the 6 shall tae place o- ' as the new debtor7 there is novation by substituting the person o- the debtor.
H3: )- the parties later agree that D shall tae the place o- C as the new creditor7 there is novation by subrogating a third person in the rights o- the creditor.
euisites 1. a previous previous valid obligation 2. agreement o- the parties to the new obligation 3. e,tinguishment o- the old obligation 4. validity o- the new obligation
Kinds o- ovation Ha: As to its essence 1. ObEective9eal re-ers to the change either in the cause7 obEect or principal conditions o- the obligations
2. %ubEective9Personal re-ers to the substitution o- the person o- the debtor or to the subrogation o- a 3rd person in the rights o- the creditor
1. %ubstituting the person o- the debtor Halways with creditor/s consent: a. 5,promission Lere7 a third person initiates the substitution even without the nowledge or against the will o- the debtor.
5+ect i- new debtor is insolvent or does not -ulfll obligation 6he new debtor/s insolvency or non -ulfllment o- the obligation shall not give rise to any laibility on the part othe original debtor. 6his is true whether the substitution was without the nowledge o- the debtor or against his will or it was consented by him.
b. 'elegacion here7 it is the debtor who initiates the substitution7 which reuires the consent o- all the parties Horiginal debtor7 creditor7 new debtor:
ights o- the new debtor i- he maes payment Le can recover what he has paid and is entitled to subrogation.
5+ect i- new debtor is insolvent 6he creditor/s right to proceed against the original debtor is not revived7 e,cept; 1. Fhen the insolvency o- the new debtor was already e,isting and opublic nowledge when the original debtor delegated his debt.
2. Fhen the insolvency o- the new debtor was already e,isting and nown to the original debtor at the time he delegated his debt.
H2: As to its -orm9constitution a. 5,press when it is declared in uneuivocal terms that the old obligation is e,tinguished by a new one w9c substitutes the same
e,ample... ' and C entered into a ontract owhereby ' would construct a 3storey building -or C on a certain lot. >ater7 however7 ' and C entered into a contract whereby they e,pressly agreed that ' would not be constructin anymore a 3storey building on the lot but a bungalow.
b. )mplied when the old I new obligation are incompatible w9 each other on every point
e,ample... )n the same e,ample7i- ' and C entered into the second contract whereby ' agreeed to construct a bungalow on the lot but without the parties e,pressly stipulating that ' would no longer construct a 3storey building7 then the parties are deemed to have impliedly novated the frst contract because construction o- the two structures on the same lot would not be possible.
%ubrogating a third person in the rights o- the creditor R55A> Q>5; %ubrogation cannot bepresumed.
5DC5P6)O%; 1. Creditor pays another creditor who is pre-erred7 without debtors nowledge
e,ample... ' owes C P*7***.**. 6he debt is seured by a real estate mortgage. ' also owes D P4*7***.** which is unseured. )- D pays '/s to C7 D is subrogated in the rights o- C. Lence7 i- ' cannot pay the debt o- P*7***7 D can -oreclose the mortgage.
2. A third person not interested in the obligation pays with the e,press or tacit approval o- the debtor or
3. 5ven without debtors nowledge7 a person interested in the -ulfllment othe obligation pays without preEudice to the e+ects o- con-usion as to the latters share.
e,ample... ' owes C P1*7***.** with R as guarantor. )- R pays C7 R is subrogated in the rights o- C. Lowever7 R/s guaranty is e,tinguished because the ualities odebtor and creditor are merged in his person.
