Civil Law Obligations Quiz
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Questions and Answers

What is the definition of an obligation?

  • An agreement between two parties.
  • A legal requirement to pay debts.
  • A moral responsibility that cannot be enforced.
  • A juridical necessity to give, to do or not to do. (correct)
  • Which of the following types of obligations grants a right of action to compel performance?

  • Natural obligations
  • Quasi-contractual obligations
  • Moral obligations
  • Civil obligations (correct)
  • In which scenario does a natural obligation become enforceable?

  • When it is explicitly stated in a contract.
  • As soon as it is mentioned legally.
  • After voluntary fulfillment by the obligor. (correct)
  • When there is an express law governing it.
  • Which element is NOT an essential part of an obligation?

    <p>Source of funding</p> Signup and view all the answers

    What must obligations arising from contracts be complied with?

    <p>In good faith.</p> Signup and view all the answers

    When a debtor is not legally bound to pay a debt and a third party does so, what is the consequence?

    <p>The debtor cannot recover what he has paid once he voluntarily reimburses the third party.</p> Signup and view all the answers

    What is the consequence of acquittal due to reasonable doubt concerning civil liability?

    <p>Civil liability may still exist.</p> Signup and view all the answers

    Which of the following is NOT a source of obligations?

    <p>Personal beliefs</p> Signup and view all the answers

    Which of the following is not included in the civil liability according to the Revised Penal Code?

    <p>Punitive damages</p> Signup and view all the answers

    What defines a quasi-delict?

    <p>An act or omission causing damage without a pre-existing relationship.</p> Signup and view all the answers

    If an obligation is derived from law, it must be...

    <p>Explicitly expressed in legal documents.</p> Signup and view all the answers

    Which of the following is a requisite for establishing a quasi-delict?

    <p>There is an act or omission.</p> Signup and view all the answers

    Which type of obligation does not depend on a future or uncertain event?

    <p>Pure obligation</p> Signup and view all the answers

    Which of the following statements is true regarding obligations with a resolutory condition?

    <p>They are similar to conditional obligations.</p> Signup and view all the answers

    What is stated about double recovery regarding damages for the same act or omission?

    <p>Double recovery is wholly prohibited.</p> Signup and view all the answers

    Which obligation is immediately demandable according to the mentioned types of obligations?

    <p>Pure obligations</p> Signup and view all the answers

    What characterizes a quasi-contract?

    <p>It arises from voluntary, unilateral acts.</p> Signup and view all the answers

    In a situation of Negotiorum Gestio, which condition does NOT give rise to the juridical relation?

    <p>The owner is available.</p> Signup and view all the answers

    What must be true for Solutio Indebiti to apply?

    <p>The payment was made through essential mistake of fact.</p> Signup and view all the answers

    What is one possible outcome of a third party paying for funeral expenses?

    <p>The relatives are obligated to reimburse the third party.</p> Signup and view all the answers

    Why is a quasi-contract considered unjust if not acknowledged?

    <p>It enables unjust enrichment.</p> Signup and view all the answers

    Which scenario illustrates a permissible action under Negotiorum Gestio?

    <p>Taking charge with the owner's implicit approval.</p> Signup and view all the answers

    What is essential for a mistake in payment to be termed 'essential'?

    <p>It must concern a vital fact.</p> Signup and view all the answers

    What describes the nature of acts leading to quasi-contracts?

    <p>They are lawful, voluntary, and unilateral.</p> Signup and view all the answers

    What is the impact of a waiver of an action for future fraud according to Article 1171?

    <p>It becomes void.</p> Signup and view all the answers

    Under what condition can fraud make a contract voidable?

    <p>If it is serious and not employed by both parties.</p> Signup and view all the answers

    What defines negligence according to Article 1173?

    <p>Omission of required diligence based on circumstances.</p> Signup and view all the answers

    Which type of negligence implies a lack of good faith and may lead to moral damages?

    <p>Gross Negligence</p> Signup and view all the answers

    When does delay occur according to the content?

    <p>From the time the obligee demands fulfillment.</p> Signup and view all the answers

    What is 'Compensatio Morae' in the context of delay?

    <p>Delay on the part of both parties.</p> Signup and view all the answers

    Which of the following is an example of 'Culpa Criminal'?

    <p>Reckless driving leading to an accident.</p> Signup and view all the answers

    What is required of a diligent person under Article 1173 if a law or contract does not specify the diligence to be practiced?

    <p>Diligence expected from a good father of a family.</p> Signup and view all the answers

    What is the consequence of two or more heirs taking possession of the estate?

    <p>They share liability for losses or destruction of the estate.</p> Signup and view all the answers

    Under what condition is a principal solidarily liable with an agent?

    <p>When the agent exceeds their authority but the principal is aware.</p> Signup and view all the answers

    Which scenario results in solidary liability among bailees?

    <p>All bailees share responsibility for compensation.</p> Signup and view all the answers

    What triggers solidary responsibility among several payees?

    <p>Payment made on a debt that is not due.</p> Signup and view all the answers

    What happens when one solidary creditor executes a novation?

    <p>The obligation extinguishes entirely.</p> Signup and view all the answers

    What is true about the remission of a debt share by a creditor?

    <p>It affects only the debtor whose share was remitted.</p> Signup and view all the answers

    What legal defense can a solidary debtor use when challenged by a creditor?

    <p>Defenses that are derived from the nature of the obligation.</p> Signup and view all the answers

    Which of the following obligations require solidarity by nature?

    <p>An obligation involving a group of debtors with a common purpose.</p> Signup and view all the answers

    What happens if a third person makes a payment without the debtor's knowledge or consent?

    <p>The third party payor can demand reimbursement only to the extent beneficial to the debtor.</p> Signup and view all the answers

    Which statement is true regarding a payment made by a person who does not intend to be reimbursed?

    <p>It is treated as a donation and requires debtor's consent.</p> Signup and view all the answers

    In what situation is a payment to an incapacitated person considered valid?

    <p>If the incapacitated person has kept the thing delivered or benefited from the payment.</p> Signup and view all the answers

    What must occur for a payment to a third person to benefit the creditor without requiring proof?

    <p>The creditor's rights must be transferred to the third person.</p> Signup and view all the answers

    What is true regarding obligations to give in terms of payment?

    <p>The creditor cannot demand a different item of equal value.</p> Signup and view all the answers

    What does the term 'payment' encompass according to the definitions provided?

    <p>The completion of any obligation, including performance.</p> Signup and view all the answers

    What is the effect of payment made by someone lacking the capacity to alienate the thing due?

    <p>The payment is always invalid.</p> Signup and view all the answers

    Which scenario makes a payment made to a third party valid for the creditor?

    <p>The creditor's conduct leading the debtor to believe the third party has authority.</p> Signup and view all the answers

    Study Notes

    Obligations

    • An obligation is a juridical necessity to give, to do, or not to do. (Art. 1156)
    • Obligations can be civil or natural. Civil obligations allow action to compel performance, while natural obligations don't. Natural obligations are based on equity and natural law, not positive law. After voluntary fulfillment by the obligor, natural obligations authorize the retention of what has been delivered or rendered. (Art. 1423)

    Kinds of Obligations as to Enforceability

    • Examples of Natural Obligations:
      • When a third party pays a debt without the debtor's knowledge or against their will, and the debtor later voluntarily reimburses, the obligor cannot recover what has been paid. (Art. 1425)
      • When a defendant has a civil obligation, fails to succeed in a legal action, then voluntarily performs the obligation, the payer cannot recover the payment or value of the service. (Art. 1428)
      • When an heir voluntarily pays a debt exceeding the value of the inherited property, the payment is valid and cannot be rescinded. (Art. 1429)

    Essential Elements of an Obligation

    • Active Subject (Creditor) - Obligee
    • Passive Subject (Debtor) - Obligor
    • Prestation/Object - Subject matter of the obligation
    • Vinculum/Efficient Cause/Juridical Tie - Reason why the obligation exists, source of the obligation.

    Sources of Obligations

    • Obligations arise from:
      • Law
      • Contracts
      • Quasi-contracts
      • Acts or omissions punished by law
      • Quasi-delicts
    • Obligations derived from law are not presumed. Only those expressly determined in the current code or in special laws are demandable and regulated by their establishing law. Unforeseen circumstances are governed by the provisions of the civil code. (Art. 1158)
    • Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (Art. 1159)
    • Certain lawful, voluntary, and unilateral acts give rise to the juridical relation of quasi-contract to prevent unjust enrichment or benefit at the expense of another. (Art. 2142)
    • Examples of Quasi-Contracts:
      • Negotiorum Gestio - Whoever voluntarily takes charge of the agency or management of another's business/property, without power, is obliged to continue the management until the affair and its incidents are terminated or until the owner is able to take charge. This does not apply in situations where the owner has not neglected or abandoned the business. Nor when the manager has been authorized by the owner. (Art. 2144)
      • Solutio Indebiti - If something is received when it's not owed and it was unduly delivered through mistake, the obligation to return it arises. (Art. 2154) Requisites: Payment was not under obligation, and payment made by reason of essential mistake of fact. (Andres S. Mantrust)
      • When funeral expenses are borne by a third person without the knowledge of relatives who were obliged to give support to the deceased, said relatives shall reimburse the third person if they are asked. (Art. 2165)

    Sources of Obligations; Delict

    • Every person criminally liable for a felony is also civilly liable. (Art. 100, Revised Penal Code)
    • Civil liability includes restitution; reparation of the damage caused; and indemnification for consequential damages. (Art. 104, Revised Penal Code)
    • Acquittal of accused:
      • Acquittal because the accused did not commit the crime - no civil liability
      • Acquittal due to reasonable doubt - civil liability may still exist.
    • Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Pre-existing contractual relation results in a quasi-delict governed by the chapter. (Art. 2176)
    • Double recovery is not allowed. (Art. 2177)

    Kinds of Civil Obligations as to Perfection and Extinguishment

    • Pure Obligations: obligations whose performance is not dependent upon a future or uncertain event or a past event unknown to the parties. They are immediately demandable.
    • Conditional Obligations: acquisition or extinguishment of rights depend on the happening of an event constituting the condition.
    • Obligations with a term: obligations whose fulfillment/take effect immediately but end at a certain time that has been fixed. A day certain is one expected to come though its exact arrival may be unknown.

    Conditional Obligations

    • Kinds of Conditions:
      • Suspensive: obligation is performed when the condition happens.
      • Resolutory: obligation extinguishes when the condition happens.
      • Potestative: based on the will of one party
      • Casual: based on chance
      • Mixed: based partly on the will of one party and partly on chance

    Kinds of Conditions

    • Divisible: capable of partial performance
    • Indivisible: not capable of partial performance
    • Positive/Negative: expressed in acts/omissions
    • Express/Implied: stated explicitly or implied
    • Possible/Impossible: capable/incapable of fulfillment in law/fact

    Potestative Conditions

    • Suspensive conditions, where the happening depends on the debtor's will, render the obligation void.

    Constructive Fulfillment

    • A condition is deemed fulfilled when the obligor prevents its fulfillment voluntarily. (Art. 1186)

    Impossible Conditions

    • Render obligations void if positive. Negative impossible conditions are treated as always fulfilled.
      • Physical impossibility - conditions incapable of being fulfilled physically.
      • Legal impossibility - conditions contrary to law, good customs, public policy.

    Effect of Happening of the Condition

    • The effects of a conditional obligation to give, once fulfilled, retroact to the day of the obligation's constitution. (Art. 1187)
    • Retroactivity does not apply to fruits or periods of prescription
    • Obligation treated as a period: When the debtor binds himself to pay when his means permit, the obligation is one with a period. (Art. 1180)

    Conditions with a Deadline

    • The condition that an event happen at a determinate time, is extinguished at the end of the time or when the event will not take place. (Art. 1184)

    Rules as to Loss, Deterioration or Improvement

    • Loss: If without debtor's fault, obligation is extinguished. With fault, damages are owed.
    • Deterioration: With fault of debtor, creditor may choose exact fulfillment with damages or rescission with damages. Without fault, impairment is creditor's burden.
    • Improvement: Improvement benefits the creditor. He has no better right than that of a usufructuary.

    Obligations with a Term/Period

    • A period is a certain length of time. It determines effectiveness or extinguishment of an obligation.

    Kinds of Periods

    • Definite: with a specific date or based on an event certain to occur although its time/period is unknown.
    • Indefinite: based on an event uncertain to happen/whose occurrence is uncertain.
    • Legal: imposed by law
    • Voluntary: agreed upon by the parties involved
    • Judicial: fixed by courts
    • Ex die: period effect begins in the future
    • In diem: period effect ends in the future

    When May Courts Fix the Period

    • The court might determine if there is a just reason to stipulate a period.
    • If a period is not fixed but can be inferred from the nature and circumstances, the court can determine an appropriate duration. (Art. 1197, par.1)
    • If duration of the period is based on the debtor's will, the court shall fix the duration. (Art. 1197, par. 2)

    Benefit of the Period

    • Generally, a period is for benefit of both creditor and debtor.
    • Exceptions can apply when the tenor of the obligation or other circumstances show it's for the benefit of one or the other. (Art. 1196)

    Debtor Loses Right to Make Use of Period

    • Debtors become insolvent after the contract
    • Fail to provide guaranties or securities
    • Impair securities after their establishment
    • Securities disappear/loss as a result of fortuitous event, unless new are given
    • Debtor violates undertaking for which the creditor agreed to the period. (Art 1198)
    • Attempts to abscond

    Kinds of Civil Obligations as to Plurality of Prestation

    • Conjunctive: all prestations must be fulfilled for extinguishment
    • Alternative: fulfillment of one prestation is sufficient.
    • Facultative: one prestation is due and primary while others are substitutes.

    Alternative Obligations

    • Where several objects are due, the performance of one is enough.
    • Right of Choice: generally, the debtor, unless it was expressly granted to the creditor or a third party.
    • Choice is limited to practicable, non-impossible/unlawful prestations.
    • Communication of choice is necessary.
    • Choice cannot be part of one and part of another
    • When only one option is possible, the debtor loses choice.
    • If due to debtor's fault, all become impossible, creditor can demand value of last thing lost w/ damages.
    • Creditor in choice, if one lost fortuitously can chose among the rest, or can seek value of lost one + damages, if all lost through debtor's fault, creditor can choose value of any one + damages.

    Facultative Obligations

    • If principal prestation lost before substitution, the obligation is not extinguished. Substitution is lost, obligation is extinguished.
    • If principal prestation is lost after substitution, obligation is extinguished.

    Kinds of Civil Obligations as to Obligations of Multiple Parties

    • Solidary: each debtor is liable for the whole obligation, each creditor can demand the whole
    • Joint: each debtor/creditor is liable only for their proportionate share
    • Disjunctive: several creditors or debtors, mutually exclusive.

    Solidary Obligations

    • Obligations are solidary, if so stipulated; otherwise, several obligations are created.
    • Two or more heirs, who possess an estate, are solidarily liable.
    • Even when an agent exceeds authority, the principal remains liable; if the former allowed the agent to act with full power.
    • Bailees are solidarily liable when a thing is loaned to two or more in the same contract.
    • The responsibility of multiple payees, if what was paid was not due, is also solidary
    • The responsibility of those liable from quasi-delicts (torts).
    • When the nature of the obligation requires solidarity.

    Rules on Enforcement of Solidary Obligations

    • Debtor can pay any of the solidary creditors.
    • Payment should be made to the creditor who has made a demand.
    • Novation, compensation, remission or confusion by any solidary creditor, extinguishes the obligation.
    • The creditor who makes such act is still liable.

    Rules on Enforcement of Solidary Obligations

    • Remission from a creditor doesn't release the debtor from their liability.
    • Remission of the whole debt by one doesn't entitle them to reimbursement.

    Rules on Enforcement of Solidary Obligations

    • Solidary debtor can avail himself of all defenses that pertain to the nature of the obligation or are personal to him.
    • Payment by one debtor, extinguishes the obligation.
    • The payer can collect from other debtors their proportionate shares.

    Rules on Enforcement of Solidary Obligations

    • The person who made the payment has claim to his co-debtors
    • If payment is made before due date, there is no interest, there is no right to claim interest.
    • Co-debtors compensate for any insolvent co-debtor's share

    Rules on Enforcement of Solidary Obligations

    • Creditor proceeds against any or a group of solidary debtors and demand simultaneously.
    • Does not stop collection against other debtors.

    Joint Obligations

    • Debts/credits are independent
    • Personal defect of one doesn't affect others' rights
    • Demand by one creditor only affects debtor on whom demand was made
    • Interruption of prescription by a creditor doesn't affect others' prescription
    • Insolvency of one co-debtor doesn't increase co-debtor's responsibility

    Kinds of Civil Obligations as to Performance of prestation

    • Divisible: capable of partial performance
    • Indivisible: not capable of partial performance.
    • Indivisibility in joint indivisible obligations, the right of the creditors can only be prejudiced by their collective actions; the debt can only be enforced by proceeding against all the debtors; if one debtor is insolvent others are not responsible.

    Obligations With A Penal Clause

    • General Rule: Penalty substitutes damages and interest.
    • Exceptions: stipulation to contrary, debtor refuses to pay penalty, fraud in fulfillment.

    Obligations To Give

    • Obligor obliged to take care of the thing
    • Creditor has right to fruits from the obligation to deliver
    • Remedies for non-performance
      • Specific Thing - Specific Performance
      • Generic Thing – Substitute Performance
    • If obligor delays/promises two persons who are not interested and one party refuses to accept until later - responsible for any fortuitous events until delivery.
    • Obligation to give a specific thing – includes accessions and accessories. -If debtor wants to give something different, the creditor cannot accept. -Cannot demand superior quality in generic things. -Cannot compel creditor to accept inferior quality

    Obligations To Do

    • Performing the obligation can be done by the creditor at the expense of the debtor if poorly done or not complied with or seek damages
    • Specific performance is generally not available in obligations to do, as this violates the constitutional prohibition on involuntary servitude.

    Obligations Not To Do

    • Creditor can undo the act at the expense of the debtor
    • For non-compliance of obligation not to do something

    Rescission as a Remedy

    • Two kinds:
      • Resolution (Art. 1191) in reciprocal obligations—one party's failure to perform. Resolves or undoes contract.
      • Rescissible contracts (Art. 1301/1303)—Ward or absentee suffers from lesion.

    Damages

    • Kinds of damages
      • Moral: for mental and physical anguish
      • Exemplary: corrective, setting an example
      • Nominal: vindicate a right where no other damages are recoverable
      • Temperate: when the exact amount of damages cannot be determined
      • Actual: documented losses
      • Liquidated: determined payment amount ahead of time (predetermined)

    Specific Circumstances Affecting Obligations

    • Fraud (dolo):
      • Dolo causante: fraud in obtaining consent, makes the contract voidable
      • Dolo incidente: fraud in performance, doesn't void the contract but makes the party liable for damages
    • Negligence (culpa):
      • Simple: failure to use reasonable care, results in breach of contract if it's in performance.
      • Gross: amounts to bad faith, and may be the source of moral damages.
    • Delay (mora):
      • Mora solvendi: debtor's delay – in real obligations or personal ones.
      • Mora accipiendi: creditor's delay.
      • Compensatio morae: both parties’ delay

    Fortuitous Events

    • Extraordinary events, not foreseeable or avoidable, freeing parties from obligations.
    • Exceptions:
      • Explicitly stipulated by the parties.
      • Nature of obligation requires risk assumption.
      • Cases specified by law.
      • Negligence, delay, or fraud concur with fortuitous event

    Modes of Extinguishment of Obligations

    • Payment/Performance
    • Loss of the thing due
    • Condonation/Remission of debt
    • Confusion/Merger of rights
    • Compensation
    • Novation

    Payment or Performance

    • Debt is not paid unless thing or service is completely delivered/rendered
    • Monetary debt: through delivery of money.
    • Debt of goods: through delivery.
    • Obligation to do something: through performance
    • Obligation to not do something: by abstaining

    Payment by the Payor

    • Payment made by a third party with interest can be compelled by creditor/reimbursement.
    • Payment made by third party without interest-only repayment to extent beneficial to debtor
    • Payment made without intention of reimbursement, considered a gift.

    Payment as to the Payee

    • Made to the person designated in the obligation
    • If payer to an incapacitated person, valid if beneficial
    • Valid if to third party and advantageous to creditor.
    • Valid if creditor ratifies.
    • Valid if conduct of creditor lead debtor to have valid reason to make payment to the third party

    Payment or Performance (as to the Thing)

    • Applies to deliver of money/goods.
    • Different thing, cannot be exchanged unless stipulations
    • Doing/non-doing of something cannot be replaced without agreement

    Place, Date and Time of Payment

    • Payment in agreed place.
    • If no place, where the object was at the time of the creation of the obligation.
    • Debtor's domicile, if no agreement on place
    • Additional expense caused by debtor's relocation in bad faith or if delayed is debtor's burden.

    Dation in Payment

    • Alienation of property to satisfy a debt in money is governed by sales law.
    • Valid with delivery, acceptance, and ownership transfer.
    • Extent of extinguishment: value agreed upon or proven equivalent

    Application of Payments

    • Designation of a debt to which a payment is applied.
    • One debtor, multiple debt of same kind, one creditor applies for payment.
    • General Rule: All debts due are subject to payment
    • Exceptions:
      • Agreement/consent of party for whom the period is for

    Application of Payments (limitations)

    • Creditor can't be compelled for partial payment
    • Debtor can't apply to pay Principal if interest is not paid.
    • Debts must be liquidated unless agreement
    • Cannot be made if period hasn't arrived before/without consent.
    • Explicit agreement of which debt is paid first.

    Application of Payments (if no explicit agreement)

    • If debts are different natures, most burdensome debt is paid first
    • If same nature/burden, proportionately
    • If neither debtor nor creditor designates, the most onerous is chosen.

    Payment by Cession

    • Debtor assigns property to creditors
    • Releases debtor, only for the net proceeds of the assignment
    • Voluntary cession and judicial (insolvency) cession extinguish all debts

    Tender of Payment and Consignation

    • Tender of payment: manifestation of desire to comply with the obligation, with offer to perform.
    • Consignation: deposit to court in cases where tender refused or direct payment is impossible. Extinguishes the obligation.
    • Exceptions: creditor absent/unknown/incapacitated to receive payment. Refusal without valid reason. Multiple claimants.

    Withdrawal of Consignment

    • Before acceptance/judicial declaration, the debtor may withdraw their deposit with no impact on their obligation
    • If creditor accepts, co-debtors/guarantors released.

    Loss

    • Loss means thing goes out of commerce/perishes/unknown existence/unrecoverable.
    • General Rule: Loss extinguishes the obligation
    • exceptions:
      • Debtor is already in delay,
      • Stipulation to liability even for fortuitous event
      • Law provides liability

    Loss (Generic Things)

    • Loss of generic does not extinguish obligations
    • EXCEPT: thing goes out of commerce or by legal impossibility, or the loss was to a particular group and not only the thing.

    Loss (Partial)

    • Courts determine if partial loss of the object so big it warrants extinguishment of the obligation

    Loss (Presumptions of Fault)

    • Presumption of fault in loss if debtor possesses item, unless proof contrary (not applicable to natural calamities - e.g., earthquakes, floods)

    Impossibility of Performance

    • To extinguish the obligation, the impossibility should have taken place during the existence of the obligation. If it happened before, then the obligation was invalid/void.

    Kinds of Impossibility

    • Objective: Impossibility of the act or service itself regardless of person of debtor
    • Subjective: Impossibility of the act/service due to the specific debtor

    Difficulty of Performance

    • When the obligation to perform is impossibly difficult beyond contemplation, the obligor may be released in part/whole

    Impossibility of Performance (Effect on Third Parties)

    • When obligation extinguished by the loss, creditor has all rights against the third person involved as a result.

    Condonation or Remission of Debt

    • Act of liberality where creditor renounces enforcement—obligation extinguished without compensation
    • Essentially gratuitous—invalid if any consideration is received other than liberality.

    Kinds of Condonation or Remission as to Form

    • Express: formal requisites of a donation—acceptance required.
      • Movable property: simultaneous delivery/document.
      • Immovable property: requires public document.
    • Implied: Inferred from the acts

    Kinds of Condonation or Remission as to Extent

    • Total: whole obligation extinguished.
    • Partial: partial extinguishment (amount, accessories, portion) as to debtor shares.

    Kinds of Condonation or Remission as to Manner/Effectivity

    • Inter vivos: during lifetime of creditor
    • Mortis causa: after death, required to be done through will.

    Private Documents/Pledge

    • Delivery of private document evidencing a credit to the debtor implies creditor's renunciation of action.
    • Possession of document by debtor presumed voluntarily delivered by creditor.
    • Renunciation of principal debt extinguishes accessory obligations, but not vice versa.

    Confusion/Merger of Rights

    • Meeting of qualities of creditor and debtor in one person.
    • Occurs between principal creditor and debtor
    • Must involve the same obligation and total extinguishment
    • Merger in the person of any of the guarantors does not extinguish the obligation.

    Compensation

    • Mode of extinguishment of concurrent debts.
    • Persons are reciprocally creditors and debtors of each other.

    Kinds of Compensation as to Extent

    • Total: concurrent debts equal.
    • Partial: debts are not equal

    Kinds of Compensation

    • Legal (takes effect by operation of law—all conditions met).
    • Facultative (can be unilaterally claimed).
    • Conventional (parties agree to compensate).
    • Judicial (court decrees in case of counterclaim).
    • Principal debt/obligation—same kind and quality—both sides
    • Both debts are due.
    • Debts must be liquidated/demanding
    • No controversies or retention on either

    Other Rules as to Compensation

    • Guarantor can compensate what the creditor owes the principle debtor
    • Compensating rescissible or voidable debts permissible beforehand.
    • Assignment of rights made without notifying debtor is not subject to compensation

    Compensation (when it's not proper)

    • Deposit, bailment, support debts, or civil liability.

    Novation

    • Changing the nature of an obligation through agreement or law.

    Kinds of Novation as to Nature

    • Objective: Changing the object/conditions of obligation
    • Passive Subjective: substituting debtor
    • Active Subjective: subrogation of a third party

    Active Novation; Subrogation

    • By agreement/express consent
    • By law/implied
      • Creditor pays another creditor, even without debtor's knowledge.
      • Third party pays without debtor's knowledge but with their consent.
      • Third party pays even without knowledge.

    Effect of Active Subjective Novation; Subrogation

    • Subrogation transfers credit to the party along with the rights that go with it. Includes guarantors and mortgage holders.

    Passive Novation; Substitution

    • Expromision: substitution of debtor without consent, reimbursement only to the extent debtor was benefitted
    • Delegation: debtor chooses new debtor with prior consent; full obligation paid

    Novation Rules

    • Void if original obligation is void, unless ratification is valid.
    • If the new obligation is void, the original obligation is preserved.
    • If principal is extinguished through novation, accessory obligations may survive if they benefit third parties.
    • Suspensive/resolutory conditions in original obligation are transferred to the new one by express consent or by the law

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    Test your understanding of civil law obligations with this quiz. Explore definitions, types, and essential elements of obligations as outlined in legal frameworks. Perfect for students or anyone interested in civil liability and contract law.

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