Obligations and Contracts PDF

OBLIGATIONS AND CONTRACTS REVIEWER TITLE I – OBLIGATIONS...

OBLIGATIONS AND CONTRACTS REVIEWER TITLE I – OBLIGATIONS (c) NEGATIVE OBLIGATION – the obligation not to do (which naturally inludes not to give) CHAPTER 1 D. From the viewpoint of persons obliged - GENERAL PROVISIONS “sanction” - (a) UNILATERAL – where only one of the parties 1156. An obligation is a juridical necessity to give, to is bound (e.g. Plato owes Socrates P1,000. do, or not to do. Plato must pay Socrates.) (d) BILATERAL – where both parties are bound JURIDICAL NECESSITY – juridical tie; connotes that in case of (e.g. In a contract of sale, the buyer is noncompliance, there will be legal sanctions. obliged to deliver) - may be:  An obligation is nothing more than the duty of a (b.1) reciprocal person (obligor) to satisfy a specific demandable (b.2) non-reciprocal – where performance by one is non- claim of another person (obligee) which, if breached, dependent upon performance by the other is enforceable in court. ELEMENTS OF OBLIGATION  A contract necessarily gives rise to an obligation but a) ACTIVE SUBJECT – (Creditor / Obligee) the person who an obligation does not always need to have a is demanding the performance of the obligation; contract. b) PASSIVE SUBJECT – (Debtor / Obligor) the one bound to perform the prestation or to fulfill the obligation or duty; DAMAGES – sum of money given as a compensation for the c) PRESTATION – (to give, to do, or not to do) object; injury or harm suffered by the obligee for the violation of his subject matter of the obligation; conduct required to be right. observed by the debtor; d) EFFICIENT CAUSE – the JURIDICAL TIE which binds the KINDS OF OBLIGATION parties to the obligation; source of the obligation. A. From the viewpoint of “sanction” - e) CAUSA (causa debendi/causa obligationes) - why (a) CIVIL OBLIGATION – that defined in Article obligation exists 1156; an obligation, if not fulfilled when it becomes due and demandable, may be PRESTATION (Object) enforced in court through action; based on 1. TO GIVE – delivery of a thing to the creditor (in sale, law; the sanction is judicial due process deposit, pledge, donation); (b) NATURAL OBLIGATION – a special kind of 2. TO DO – covers all kinds of works or services obligation which cannot be enforced in court (contract for professional services); but which authorizes the retention of the 3. NOT TO DO – consists of refraining from doing some voluntary payment or performance made by acts (in following rules and regulations). the debtor; based on equity and natural law. (i.e. when there is prescription of duty to Requisites of Prestation / Object: pay, still, the obligor paid his dues to the 1) licit (if illicit, it is void) obligee – the obligor cannot recover his 2) possible (if impossible, it is void) payment even there is prescription) the 3) determinate or determinable (or else, void) sanction is the law, but only conscience had 4) pecuniary value originally motivated the payment. (c) MORAL OBLIGATION – the sanction is  INJURY – wrongful act or omission which causes loss conscience or morality, or the law of the or harm to another church. (Note: If a Catholic promises to hear  DAMAGE – result of injury (loss, hurt, harm) mass for 10 consecutive Sundays in order to receive P1,000, this obligation becomes a 1157. Obligation arises from – (1) law; (2) contracts; civil one.) (3) quasi-contracts; (4) acts or omissions punished by B. From the viewpoint of subject matter - law; (5) quasi-delicts. (a) REAL OBLIGATION – the obligation to give (b) PERSONAL OBLIGATION – the obligation to (1) LAW (Obligation ex lege) – imposed by law itself; must do or not to do (e.g. the duty to paint a be expressly or impliedly set forth and cannot be presumed house, or to refrain from committing a - [See Article 1158] nuisance) C. From the affirmativeness and negativeness of the (2) CONTRACTS (Obligation ex contractu) – arise from obligation - stipulations of the parties: meeting of the minds / formal (a) POSITIVE OR AFFIRMATIVE OBLIGATION – agreement the obligation to give or to do - must be complied with in good faith because it is the “law” page 1  OBLIGATIONS AND CONTRACTS REVIEWER between parties; neither party may unilaterally evade his Code itself. obligation in the contract, unless:  Special laws – refer to all other laws not contained in a) contract authorizes it the Civil Code. b) other party assents 1159. Obligations arising from contracts have the force Note: of law between the contracting parties and should be Parties may freely enter into any stipulations, provided they complied with in good faith. are not contrary to law, morals, good customs, public order or public policy CONTRACT – meeting of minds between two persons whereby - [See Article 1159] one binds himself, with respect to the other, to give, to do something or to render some service; governed primarily by (3) QUASI-CONTRACTS (Obligation ex quasi-contractu) – the agreement of the contracting parties. arise from lawful, voluntary and unilateral acts and which are enforceable to the end that no one shall be unjustly enriched VALID CONTRACT – it should not be against the law, contrary or benefited at the expense of another to morals, good customs, public order, and public policy. - 2 kinds: a. Negotiorum gestio - unauthorized management;  In the eyes of law, a void contract does not exist and This takes place when a person voluntarily takes no obligation will arise from it. charge of another’s abandoned business or property without the owner’s authority OBLIGATIONS ARISING FROM CONTRACTS – primarily b. Solutio indebiti - undue payment; This takes governed by the stipulations, clauses, terms and conditions of place when something is received when there is their agreements. no right to demand it, and it was unduly delivered thru mistake  If a contract’s prestation is unconscionable (unfair) - [See Article 1160] or unreasonable, even if it does not violate morals, law, etc., it may not be enforced totally. (4) DELICTS (Obligation ex maleficio or ex delicto) – arise from civil liability which is the consequence of a criminal  Interpretation of contract involves a question of law. offense - Governing rules: COMPLIANCE IN GOOD FAITH – compliance or performance in 1. Pertinent provisions of the RPC and other penal laws accordance with the stipulations or terms of the contract or subject to Art 2177 Civil Code agreement. [Art 100, RPC – Every person criminally liable for a felony is also civilly liable] FALSIFICATION OF A VALID CONTRACT – only the 2. Chapter 2, Preliminary title, on Human Relations ( unauthorized insertions will be disregarded; the original terms Civil Code ) and stipulations should be considered valid and subsisting for 3. Title 18 of Book IV of the Civil Code – on damages the partied to fulfill. - [See Article 1161] 1160. Obligations derived from quasi-contracts shall be (5) QUASI-DELICTS / TORTS (Obligation ex quasi-delicto subject to the provisions of chapter 1, title 17 of this or ex quasi-maleficio) – arise from damage caused to another book. through an act or omission, there being no fault or negligence, but no contractual relation exists between the QUASI-CONTRACT – juridical relation resulting from lawful, parties voluntary and unilateral acts by virtue of which, both parties - [See Article 1162] become bound to each other, to the end that no one will be unjustly enriched or benefited at the expense of the other. 1158. Obligations from law are not presumed. Only those (1) expressly determined in this code or (2) in  There is no consent - consent is PRESUMED. special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as (1) NEGOTIORUM GESTIO – juridical relation to what has not been foreseen, by the provisions of this which takes place when somebody code. voluntarily manages the property affairs of another without the knowledge or consent  Unless such obligations are EXPRESSLY provided by of the latter; owner shall reimburse the law, they are not demandable and enforceable, and gestor for necessary and useful expenses cannot be presumed to exist. incurred by the latter for the performance of  The Civil Code can be applicable suppletorily to his function as gestor. obligations arising from laws other than the Civil (2) SOLUTIO INDEBITI – something is received page 2  OBLIGATIONS AND CONTRACTS REVIEWER when there is no right to demand it and it obligation to pay for the damage done, there being fault or was unduly delivered through mistake; negligence but there is no pre-existing contractual relation obligation to return the thing arises on the between parties. part of the recipient. (e.g. If I let a storekeeper change my P500 bill and by REQUISITES: error he gives me P560, I have the duty to a. omission return the extra P60) b. negligence c. damage cause to the plaintiff 1161. Civil obligations arising from criminal offenses d. direct relation of omission, being the cause, and shall be governed by the penal laws, subject to the the damage, being the effect provisions of Article 2177, and of the pertinent e. no pre-existing contractual relations between provisions of Chapter 2, Preliminary in Human parties Relations, and of Title 18 of this book, regulating damages. Fault or Negligence – consists in the omission of that diligence which is required by the nature of the obligation and Governing rules: corresponds with the circumstances of the person, time, and 1. Pertinent provisions of the RPC and other penal laws of the place. subject to Art 2177 Civil Code [Art 100, RPC – Every person criminally liable for a felony is BASIS DELICTS QUASI-DELICTS also civilly liable] 1. INTENT Criminal / Negligence 2. Chapter 2, Preliminary title, on Human Relations ( malicious Civil Code ) 2. INTEREST Affects PUBLIC Affects PRIVATE 3. Title 18 of Book IV of the Civil Code – on damages interest interest 3. LIABILITY Criminal and Civil liability  Every person criminally liable for a felony is also civil liabilities criminally liable (art. 100, RPC) 4. PURPOSE Purpose – Indemnification punishment CRIMINAL LIABILITY INCLUDES: 5.COMPROMISE Cannot be Can be compromised (a) RESTITUTION – restoration of property compromised previously taken away; the thing itself shall 6. GUILT Proved beyond Preponderance of be restored, even though it be found in the reasonable evidence possession of a third person who has doubt acquired it by lawful means, saving to the latter his action against the proper person who may be liable to him. (b) REPARATION OF THE DAMAGE CAUSED – Note: court determines the amount of damage: The SC in Sagrada v. Naccoco implied that the sources of price of a thing, sentimental value, etc. obligation in Art 1162 is exclusive. Many commentators (c) INDEMNIFICATION FOR CONSEQUENTIAL believe, however that it should not be. At present, there is DAMAGES – includes damages suffered by one more possible source of obligations - PUBLIC OFFER the family of the injured party or by a third (Public Offer is in fact a source of obligation in person by reason of the crime. the German Civil Code) – Ateneo memory aid Effect of acquittal in criminal case: *** The enumeration in 1157 is not scientific because in a. when acquittal is due to reasonable doubt – no civil reality there are only 2 sources of obligations: law and liability contract (quasi-contract, delicts, and quasi-delicts are b. when acquittal is due to exempting circumstances – there imposed by law) [Leung Ben v. O'Brien, 38 Phil. 182] is civil liability c. when there is preponderance of evidence – there is civil CHAPTER 2 liability NATURE AND EFFECT OF OBLIGATIONS 1163. Every person obliged to give something is also 1162. Obligations derived from quasi-delicts shall be obliged to take care of it with the proper diligence of a governed by the provisions of chapter 2, title 17 of this good father of a family, unless the law or the book, and by special laws. stipulation of the parties requires another standard of care. QUASI-DELICT (culpa aquiliana) – an act or omission by a person which causes damage to another giving rise to an  Speaks of an obligation to care of a DETERMINATE page 3  OBLIGATIONS AND CONTRACTS REVIEWER thing (that is one which is specific; a thing identified yet the owner of the property before the delivery. by its individuality) which an obligor is supposed to deliver to another. ACTUAL DELIVERY – actual delivery of a thing from the  Reason: the obligor cannot take care of the whole hand of the grantor to the hand of the grantee (presonally), class/genus or manifested by certain possessory acts executed by the grantee with the consent of the grantor (realty). DUTIES OF DEBTOR: CONSTRUCTIVE TRADITION – representative of symbolical in essence and with intention to deliver the ownership.  Preserve or take care of the things due.  DILIGENCE OF A GOOD FATHER – a good father FRUITS: does not abandon his family, he is always ready 1. NATURAL – spontaneous products of the soil, the to provide and protect his family; ordinary care young and other products of animals; which an average and reasonably prudent man 2. INDUSTRIAL – produced by lands of any cultivation would do. or labor;  ANOTHER STANDARD OF CARE – extraordinary 3. CIVIL – those derived by virtue of juridical relation. diligence provided in the stipulation of parties.  FACTORS TO BE CONSIDERED – diligence 1165. When what is to be delivered is a determinate depends on the nature of obligation and thing, the creditor … may compel the debtor to make corresponds with the circumstances of the delivery. If the thing is indeterminate or generic, he person, time, and place. may ask that the obligation be complied with at the expense of the debtor. If the obligor delays or has ** Debtor is not liable if his failure to deliver the thing is due promised to deliver the same ting to two or more to fortuitous events or force majeure… without negligence or persons who do not have the same interest, he shall be fault in his part. responsible for any fortuitous event until he has effected the delivery.  Deliver the fruits of a thing  Deliver the accessions/accessories DETERMINATE THING  Deliver the thing itself  something which is susceptible of particular  Answer for damages in case of non-fulfillment or breach designation or specification;  obligation is extinguished if the thing is lost due to 1164. The creditor has a right to the fruits of the thing fortuitous events. from the time the obligation to deliver it arises. INDETERMINATE THING However, he shall acquire no real right over it until the  something that has reference only to a class or same has been delivered to him. genus;  obligation to deliver is not so extinguished by REAL RIGHT (jus in re) – right pertaining to person over a fortuitous events. specific thing, without a passive subject individually determined against whom such right may be personally REMEDIES FOR FAILURE OF DELIVERY (determinate thing) enforced. 1. Complaint for specific performance – an action to  a right enforceable against the whole world compel the fulfillment of the obligation. 2. Complaint for rescission of the obligation – action to PERSONAL RIGHT (jus ad rem) – a right pertaining to a rescind person to demand from another, as a definite passive subject, 3. Complaint for damages – action to claim for the fulfillment of a prestation to give, to do or not to do. compensation of damages suffered  a right enforceable only against a definite person or group of persons.  As a general rule, “no person shall be responsible for those events which could not be foreseen, or which,  Before the delivery, the creditor, in obligations to though foreseen, are inevitable, except: give, has merely a personal right against the debtor 1. in cases expressly specified by the law – a right to ask for delivery of the thing and the 2. when it is stipulated by the parties fruits thereof. 3. when the nature of the obligation requires  Once the thing and the fruits are delivered, then he assumption of risk acquires a real right over them.  An indeterminate thing cannot be object of  Ownership is transferred by delivery which could be destruction by a fortuitous event because genus either actual or constructive. (Art. 1477) never perishes.  The remedy of the buyer when there is no delivery despite demand is to file a complaint for “SPECIFIC 1166. The obligation to give a determinate thing PERFORMANCE AND DELIVERY” because he is not includes that of delivering all its accessions and page 4  OBLIGATIONS AND CONTRACTS REVIEWER accessories, even though they may not have been mentioned. ORDINARY DELAY – mere failure to perform an obligation at ACCESSIONS – fruits of the thing or additions to or the appointed time. improvements upon the principal LEGAL DELAY (DEFAULT) – tantamount to non-fulfillment of  those which are naturally or artificially attached to the the obligation and arises after an extrajudicial or judicial thing demand was made upon the debtor. ACCESSORIES – things included with the principal for the KINDS OF DEFAULT: latter’s embellishment, better use, or completion a) MORA SOLVENDI – delay on the part of the debtor to fulfill his obligation; When does right to fruits arise? – from the time the obligation REQUISITES: to deliver arises 1. failure of the obligor to perform obligation on  Conditional – from the moment the condition the DATE agreed upon; happens 2. demand (j/ej) by the creditor;  With a term/period – upon the expiration of the 3. failure to comply with such demand term/period  Simple – from the perfection of the contract EFFECTS: 1) debtor – liable for damages and 1167. If a person obliged to do something fails to do it, interests the same shall be executed at his cost. This same rule 2) debtor – liable for the loss of a thing shall be observed if he does it in contravention of the due to a fortuitous event tenor of the obligation … it may be decreed that what has been poorly done be undone. KINDS: 1) mora solvendi ex re – default in real THREE SITUATIONS: obligations (to give) a) Debtor’s failure to perform an obligation 2) mora solvendi ex persona – default in  creditor may do the obligation, or by another, at personal obligations (to do) the expense of the debtor;  recover damages b) MORA ACCIPIENDI – delay on the b) Performance was contrary to the terms agreed part of the creditor to accept the upon performance of the obligation;  order of the court to undo the same at the Effects: expense of the debtor 1. creditor – liable for damages c) Performance in a poor manner 2. creditor – bears the risk of loss of the thing  order of the court to undo the same at the 3. debtor – not liable for interest from the time of expense of the debtor creditor’s delay 4. debtor – release himself from the obligation 1168. When the obligation consists in NOT DOING and the obligor does what has been forbidden him, it shall c) COMPENSATIO MORAE – delay of the also be undone at his expense. obligors in reciprocal obligation. Effect: the default of one compensates the default of 1169. Those obliged to deliver or to do something incur the other; their respective liabilities shall be offset in delay from the time the obligee judicially or equitable. extrajudicially demands from them the fulfillment of their obligation.  Default / Delay in negative obligation is not possible. However, the demand by the creditor shall not be (In negative obligation, only fulfillment and violation necessary in order that delay may exists: are possible)  When the law or obligation so expressly declares; 1170. Those who in the performance of their  When from the nature of the contract, time us the obligations are guilty of fraud, negligence, or delay, essence and motivating factor for its and those who in any manner contravene the tenor establishment; thereof, are liable for damages.  When demand would be useless (prestation is impossible); FRAUD (dolo) – deliberate intentional evasion of the faithful  In reciprocal obligations, from the moment one of fulfillment of an obligation; the parties fulfills his obligation; NEGLIGENCE (culpa or fault) – voluntary act or omission of  When the debtor admits he is in default diligence, there being no malice, which prevents the normal page 5  OBLIGATIONS AND CONTRACTS REVIEWER fulfillment of an obligation; NATURE OF Direct, Incidental to the DELAY (mora) – default or tardiness in the performance of an NEGLIGENCE substantive and performance of the obligation after it has been due and demandable; independent obligation. CONTRAVENTION OF TERMS OF OBLIGATION (violatio)– GOOD FATHER OF Complete and Not complete and violation of terms and conditions stipulated in the obligation; THE FAMILY proper defense proper defense in this must not be due to a fortuitous event. DEFENSE (parents, the selection of guardian, employees. employers) 1171. Responsibility arising from fraud is demandable PRESUMPTION OF No presumption There is presumption in all obligations. Any waiver of an action for future NEGLIGENCE – injured party – defendant must fraud is void. must prove prove that there was negligence of no negligence in the  To allow such waiver will necessarily render the the defendant. carrying out of the obligatory force of contracts illusory. terms of the  The law does not prohibit waiver of an action for contract. damages based on fraud already committed.  Any deliberate deviation from the normal way of 1173. The fault or negligence of the obligor consists in fulfilling the obligation may be a proper basis for the omission of that diligence which is required by the claim for damages against the guilty party. nature of the obligation and corresponds with the circumstances of the persons, of he time and of the INCIDENTAL FRAUD – committed in the performance of an place… If the law or contract does not state the obligation already existing because of a contract. diligence which is to be observed in the performance, CAUSAL FRAUD – employed in the execution of contract in that which is expected if a good father of a family shall order to secure consent; remedy is annulment bec of vitiation be required. of consent. FRAUD distinguished from NEGLIGENCE 1172. Responsibility arising from negligence in the performance of every kind of obligation is also FRAUD NEGLIGENCE demandable, but such liability may be regulated by the There is deliberate intention There is no deliberate courts, according to circumstances. to cause damage. intention to cause damage. Liability cannot be Liability may be mitigated. Court’s discretion because: mitigated. (a) negligence depends upon the Waiver for future fraud is Waiver for future negligence circumstances of a case – good or bad void. may be allowed in certain faith of the obligor may be considered cases: as well as the conduct or misconduct of 1. gross – can never be the obligee; excused in advance; (b) it is not as serious as fraud. against public policy 2. simple – may be Negligence – lack of foresight or knowledge excused in certain cases Imprudence – lack of skill or precaution DILIGENCE – the attention and care required of a person in a TEST OF NEGLIGENCE given situation and is opposite of negligence. Did the defendant, in doing the alleged negligent act, use the reasonable care and caution which an ordinary prudent man NEGLIGENCE – consists in the omission of that diligence would have used in the same situation? which is required by the nature of the particular obligation and corresponds with the circumstances of the persons, of the TWO TYPES OF NEGLIGENCE: time, and of the place. Basis 1. Culpa 2. Culpa KINDS of DILIGENCE: Aquiliana Contractual 1. DILIGENCE OF A GOOD FATHER – a good father (Quasi-delict) (Breach of does not abandon his family, he is always ready contract) to provide and protect his family; ordinary care DEFINITION Negligence Negligence in the which an average and reasonably prudent man between parties performance of would do. not so related contractual 2. Diligence required by the law governing the by pre-existing obligation particular obligation contract 3. Diligence stipulated by the parties page 6  OBLIGATIONS AND CONTRACTS REVIEWER 1174. Except in cases expressly specified by the law, or USURY LAW – makes the usurers criminally liable if the when it is otherwise declared by stipulation, or when interest charged on loans are more that the limit prescribed the nature of the obligation requires the assumption of by law. risk, no person shall be responsible for those events  This law is repealed – Circular No. 905 of the Central which could not be foreseen, or which, though Bank has expressly removed the interest ceilings foreseen, were inevitable. prescribed by the USURY LAW. FORTUITOUS EVENT – an occurrence or happening which 1176. The receipt of the principal by the creditor could not be foreseen or even if foreseen, is inevitable; without reservation with respect to the interest, shall absolutely independent of human intervention; act of God. give rise to the presumption that said interest has been paid. FORCE MAJEURE - an event caused by the legitimate or The receipt of a later installment of a debt without illegitimate acts of persons other than the obligor; there is reservation as to prior installments, shall likewise raise human intervention. the presumption that such installments have been paid.  conditions which exempt obligor from liability:  These are mere presumptions. 1. event is independent of the will of obligor  To be sure – write the interest and the dates covered 2. it must either be unforeseeable or unavoidable by such payment in the receipt. 3. occurrence must render it impossible for the debtor to fulfill the obligation in a normal matter 1177. The creditors, after having pursued the property 4. the obligor is free of partiipation in injury to creditor. in possession of the debtor to satisfy their claims, may exercise all the rights and bring all the actions of the REQUISITES OF FORTUITOUS EVENT: latter for the same purpose, save those which are 1. Independent of the human will (or at least of the inherent in his person; they may also impugn the acts obligor’s) which the debtor may have done to defraud them. 2. Unforeseen or unavoidable 3. Of such character as to render it impossible for REMEDIES AVAILABLE TO CREDITORS FOR THE the obligor to comply with his obligation in a SATISFACTION OF THEIR CLAIMS: normal manner 1. Exact fulfillment with right to damages 4. Obligor – free from any 2. Exhaustion of the debtor’s properties still in his participation/aggravation of the injury to the possession – writ of attachment (before judgment) obligee (no negligence or imprudence) or writ of execution (for final judgment not yet executed) EXEPTIONS: 3. ACCION SUBROGATORIA – an action where the 1. When it is expressly stipulated that he shall be liable creditor whose claims had not been fully satisfied, even if non-performance of the obligation is due to may go after the debtors (3rd person) of the fortuitous events; defendant debtor. 2. When the nature of the obligation requires the 4. ACCION PAULIANA – an action where the creditor assumption of risk; files an action in court for the RESCISSION of acts or 3. When the obligor is in delay; contracts entered into by the debtor designed to 4. When the obligor has promised the same thing to defraud the former. two or more persons who do not have the same interest; 1178. Subject to the laws, all rights acquired in virtue 5. When the possessor is in bad faith and the thing lost of an obligation are transmissible, if there has been no or deteriorated due to fortuitous event; stipulation to the contrary. 6. When the obligor contributed to the loss of the thing. EXCEPTIONS: 1175. Usurious transactions shall be governed by a) Those not transmissible by their nature like special laws. purely personal rights; b) Those not transmissible by provision of law; USURY – contracting for or receiving interest in excess of the c) Those not transmissible by stipulation of parties. amount allowed by law for the loan or use of money, goods, etc. CHAPTER 3 DIFFERENT KINDS OF OBLIGATIONS SIMPLE LOAN – one of the parties delivers to another, money or other consumable thing upon the condition that the same Section 1 – Pure and Conditional Obligations amount of the same kind and quality shall be paid. page 7  OBLIGATIONS AND CONTRACTS REVIEWER 1179. Every obligation whose performance does not creditor depends upon the happening of the event which depend upon a future or uncertain event, or upon a constitutes the condition; if such condition does not take past event unknown to the parties, is demandable at place, it would be as of the conditional obligation had never once. existed. Every obligation which contains a resolutory condition (e.g. promise to give a car after graduating from law school shall also be demandable, without prejudice to the as cum laude) effects of the happening of the event. Resolutory Condition – the rights and obligations already CONDITION – an event which is both future and uncertain existing are under threat of extinction upon the happening or upon which the existence or extinguishment of an obligation fulfillment of such condition. is made to depend. (e.g. donation by reason of marriage – the celebration of marriage is a resolutory condition; if the marriage did not PURE OBLIGATION – an obligation which does not contain any push through, the donation may be revoked) condition or term upon which the fulfillment is made to depend; immediately demandable by the creditors and the 1182. When the fulfillment of the condition depends debtor cannot be excused from not complying with his upon the sole will of the debtor, the conditional prestation. obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take CONDITIONAL OBLIGATION – an obligation subject to a effect in conformity with the provisions of this Code. condition. a) Suspensive Obligation – its fulfillment gives rise  Applies only to suspensive conditions. to an obligation; the demandability of the obligation or the effectivity of the contract can take place only after the condition has been 3 KINDS OF CONDITIONS UNDER THIS ARTICLE: fulfilled. 1. POTESTATIVE – a suspensive condition b) Resolutory Obligation – its happening which depends upon the will of one of the extinguishes the obligation which is already contracting parties = if at the sole will of the existing; debtor, it is void; if at the creditor’s, still valid. this is to prevent the establishment of 1180. When the debtor binds himself to pay when his illusory obligations. means permit him to do so, the obligation shall be 2. CASUAL – the condition depends upon deemed to be one with a period, subject to the chance or the will of a third person;(i.e. provisions of Article 1197. cellphone warranty) 3. MIXED – the condition depends partly upon  Speaks of a period depending on the will of the the will of the parties and partly upon DEBTOR. If its purpose is to delay, immediate action chance or the will of a third person; is allowed. The court fixes the terms. (example ni Atty. De Chavez: passing the bar) PERIOD – a future and certain event upon the arrival of which, the obligation subject to it either arises or is 1183. Impossible conditions, those contrary to good extinguished. customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If INDICATIONS OF A TERM OR PERIOD: the obligation is divisible, that part thereof which is not When the debtor binds himself to pay – affected by the impossible or unlawful condition shall  when his means permit him to do so be valid.  little by little The condition not to do an impossible thing shall be  as soon as possible considered as not having been agreed upon.  from time to time  as soon as I have the money POSSIBLE CONDITION – if it is capable of realization or  in partial payment actualization according to nature, law, public policy or good  when in the position to pay customs. 1181. In conditional obligations, the acquisition of 2 KINDS OF IMPOSSIBLE CONDITIONS: rights, as well as the extinguishment or loss of those 1. Physically Impossible – cannot exist or cannot be done in already acquired, shall depend upon the happening of its nature; the event which constitutes the condition. 2. Legally Impossible – contrary to law, good customs, or public policy. Suspensive Condition – the acquisition of rights by the page 8  OBLIGATIONS AND CONTRACTS REVIEWER When a conditional obligation is VOID – impossible conditions annul the obligation which depends upon them; the obligor 1184 1185 knows his obligation cannot be fulfilled, he has no intention to (POSITIVE SUSPENSIVE) (NEGATIVE SUSPENSIVE) comply with his obligation. Jose obliges himself to give Jose obliges himself to give the the pregnant woman Maria pregnant woman Maria P5000 if When a conditional obligation is VALID – if the condition is P5000 if she would give birth she would NOT give birth on negative (not to do an impossible thing), it is disregarded and on or before December 30. December 30. the obligation is rendered pure and valid. a. Jose is LIABLE if Maria a. Jose is NOT LIABLE if Maria gives birth on or before gives birth on December 30. Only the affected obligation is void, if the obligation is December 30. divisible, and the part thereof not affected by the impossible b. Jose is NOT LIABLE if b. Jose is LIABLE if Maria DID condition is valid. Maria gives birth after NOT give birth on December 30 December 30. – if Maria gives birth BEFORE or Only the condition is void if there is already a pre-existing AFTER December 30. obligation and it does not depend upon the fulfillment of the c. If Maria would have a c. If Maria would have a condition which is impossible. miscarriage before December miscarriage before December 30, the obligation is 30, the obligation is deemed 1184. The condition that some event happen at a EXTINGUISHED. FULFILLED. determinate time shall extinguish the obligation as soon as the time expires or if it has become indubitable that the event will not take place. 1186. The condition shall be deemed fulfilled when the Positive condition – refers to the fulfillment of an event or obligor voluntarily prevents its fulfillment. performance of an act  This provision speaks of the DOCTRINE OF CONSTRUCTIVE FULFILLMENT Negative condition – refers to the non-fulfillment or non- performance of an act. - REQUISITES: 1. The condition is SUSPENSIVE; POSITIVE SUSPENSIVE CONDITION 2. The obligor ACTUALLY PREVENTS the fulfillment of The obligation is extinguished: the condition; 1. As soon as the TIME EXPIRES without the event 3. He acts VOLUNTARILY. taking place; 2. As soon as it has become certain that the EVENT  Malice or fraud is not required, as long as his WILL NOT TAKE PLACE although the time specified purpose is to prevent the fulfillment of the condition. has not yet expired.  No person shall profit by his own wrong. ** TIME is the condition – should happen for the obligation to 1187. The effects of a conditional obligation to give, extinguish. once the condition has been fulfilled, shall retroact to the day of the constitution of the obligation. 1185. The condition that some event will not happen at Nevertheless, when the obligation imposes reciprocal a determinate time shall render the obligation effective prestations upon the parties, the fruits and interests from the moment the time indicated has elapsed, or if it during the pendency of the condition shall be deemed has become evident that the event cannot occur. to have been mutually compensated. If the obligation is If no time has been fixed, the condition shall be unilateral, the debtor shall appropriate the fruits and deemed fulfilled at such time as may have probably interests received, unless from the nature and been contemplated, bearing in mind the nature of the circumstances of the obligation it should be inferred obligation. that the intention of the person constituting the same was different. ** This is a condition of non-happening of a future event. In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the The obligation shall become effective and binding: condition that has been complied with. a) From the moment the time indicated has elapsed without the event taking place;  Applies only to fulfilled suspensive conditions. b) From the moment it has become evident that the  Retroactive statute event cannot occur, although the time indicated has  The effects of the obligation is deemed to commence not yet elapsed. not from the fulfillment of the obligation but from the day of its constitution (similar to the legitimation of a 1184 -vs- 1185 natural child) page 9  OBLIGATIONS AND CONTRACTS REVIEWER  The article does not require the delivery of fruits or 1190. When the conditions have for their purpose the payment of interests accruing (accumulating) before extinguishment of an obligation to give, the parties, the fulfillment of the suspensive condition. upon the fulfillment of said conditions, shall return to each other what they have received.  Obligations to do or not to do – the retroactive effect In case of the loss, deterioration or improvement of the shall be determined by the court using its sound thing, the provisions which, with respect to the debtor, discretion without disregarding the intentions of the are laid down in the preceding article shall be applied parties. to the party who is bound to return. As for the obligations to do and not to do, the 1188. The creditor may, before the fulfillment of the provisions of the second paragraph of Article 1187 shall condition, bring the appropriate actions for the be observed as regards the effect of the preservation of his right. extinguishment of the obligation. The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition.  Refers to the fulfillment of a resolutory condition.  When the resolutory condition happened, the Preservation of the rights of CREDITOR – the debtor may obligation is considered as if it did not exist. render nugatory (not serious, ignore) the obligation upon the  The parties are bound to return or restore whatever happening of the obligation. they have received from each other – “reciprocal  Action for prohibition restraining the alienation of the restitution” thing pending the happening of the suspensive  Donation by reason of marriage – if the marriage condition; does not happen, such donation should be returned  Action to demand security if the debtor has become to the donor. insolvent;  Loss, deterioration and improvement – governed by  Action to set aside alienations made by the debtor in 1189. fraud of creditors;  In obligations to do and not to do, the courts shall  Actions against adverse possessors to interrupt the determine, in each case, the retroactive effect of the running prescriptive period. condition that has been complied with.  To have his rights annotated in the registry. 1191. The power to rescind obligations is implied in Rights of the DEBTOR – entitled to recover what has been reciprocal ones, in case one of the obligors should not paid by mistake prior to the happening of the suspensive comply with what is incumbent upon him. condition. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment 1189. When the conditions have been imposed with the of damages in either case. He may also seek rescission, intention of suspending the efficacy of an obligation to even after he has chosen fulfillment, if the latter should give, the following rules shall be observed in case of become impossible. the improvement, loss or deterioration of the thing The court shall decree the rescission claimed, unless during the pendency of the condition: there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights LOSS of third persons who have acquired the thing, in (1) debtor without fault – obligation is accordance with Articles 1385 and 1388 and the extinguished Mortgage Law. (2) debtor with fault – obligation to pay damages RECIPROCAL – arise from same causse; each is a debtor and creditor of the other DETERIORATION 1. debtor without fault – impairment is to RESCISSION – resolution or cancellation of the contract be borne by the creditor  Applies only to reciprocal obligations where two 2. debtor with fault – creditor chooses: parties are mutually debtor and creditor of each rescission of obligation, fulfillment, other in the same transaction. The cause must be indemnity identical ad the obligations must arise simultaneously. IMPROVEMENT  The party who can demand rescission should be the 1. by nature or time – improvement: inure to the party who is ready, willing, and able to comply with benefit of the creditor his own obligations while the other is not capable to 2. at the expense of the debtor – granted to the perform his own. usufructuary page 10  OBLIGATIONS AND CONTRACTS REVIEWER REMEDIES: 1. Specific performance or fulfillment of Term – length of time sure to come obligation with damages; Condition – fact or event uncertain to come 2. Rescission of contract with damages. Basis Period/Term Condition Effect of rescission: the parties must surrender whatever they 1. TIME Always refers to Can refer to past have received from the other, and the obligation to pay is FUTURE events unknown to extinguished. the parties 2. FULFILLMENT Sure to happen at May or may not If there is an express stipulation of automatic rescission an exact date or happen. between parties – such resolution shall take place only after indefinite time but the creditor has notified the debtor of his choice of rescission sure to come. subject to judicial scrutiny. 3. INFLUENCE Merely fixes the May cause the arising time for the or cessation of the 1192. In case both parties have committed a breach of demandability or obligation. the obligation, the liability of the first infractor shall be performance of equitably tempered by the courts. If it cannot be obligation. determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages. REQUISITES: 3. Future FIRST INFRACTOR KNOWN 4. Certain, sure to come The liability of the first infractor should be equitably reduced. 5. Physically or legally possible – equitably offset each other’s damages. 1194. In case of loss, deterioration or improvement of FIRST INFRACTOR CANNOT BE DETERMINED the thing before the arrival of the day certain, the rules The court shall declare the extinguishment of the obligation in Article 1189 shall be observed. and each shall bear his own damages. 1195. Anything paid or delivered before the arrival of Section 2 – Obligations with a Period the period, the obligor being unaware of the period or believing that the obligation has become due and 1193. Obligations for whose fulfillment a day certain demandable, may be recovered, with the fruits and has been fixed, shall be demandable only when that interests. day comes. Obligations with a resolutory period take effect at once,  The payment or delivery is done before the arrival of but terminate upon arrival of the day certain. the period. A day certain is understood to be that which must necessarily come, although it may not be known when. CONSEQUENCES: If the uncertainty consists in whether the day will come 1. If he was not aware of the period or he or not, the obligation is conditional, and it shall be believes that the obligation has become due regulated by the rules of the preceding Section. and demandable – he can recover what he paid or delivered including fruits and PERIOD / TERM – consists in a space or length of time upon interests; the arrival of which, the demandability or the extinguishment 2. If he was aware and he paid voluntarily – of an obligation is determined; it may be definite (exact date he cannot recover the delivery made; it is or time is known) or indefinite (arrival of date is unknown but deemed a waiver of the benefit of the term sure to come). and the obligation is considered already - Future + Certain event matured. GENERAL CLASSIFICATIONS:  The presumption is that the debtor knew that the a) EX DIE / SUSPENSIVE PERIOD – from a day debt was not yet due. He has the burden of proving certain give rise to the obligation; suspensive that he was unaware of the period. effect. b) IN DIEM / RESOLUTORY PERIOD – arrival of a 1196. Whenever in an obligation a period is designated, term certain terminated the obligation; it is presumed to have been established for the benefit resolutory effect. of both the creditor and the debtor, unless from the tenor of the same or other circumstances it should appear that the period has been established in favor of page 11  OBLIGATIONS AND CONTRACTS REVIEWER one or of the other. debtor.  PRESUMPTION: Obligation with a period is for the  If the obligation does not state and intend a period, benefit of both the creditor and debtor. the court is not authorized to fix a period.  EXCEPTION: when it appears that the period is for  The court must fix the duration of the period to the benefit of one or the other prevent the possibility that the obligation may never be fulfilled or to cure a defect in a contract whereby  This cannot apply when the court was authorized by it is made to depend solely upon the will of one of the parties to fix a reasonable term. the parties.  The benefit of the term may be the subject of Court cannot fix the period: stipulation of the parties. 1. If there is a period agreed upon by the 1. Term is for the benefit of the debtor alone – parties and it has already lapsed or expired. he cannot be compelled to pay prematurely, 2. From the very moment the parties give but he can if he desires to do so. their acceptance and consent to the period - Example: A obliges himself to pay B within 5 years. A fixed by the court, it becomes a law cannot be compelled to pay prematurely, but he can pay governing their contract. anytime within 5 years (A will benefit because he can pay anytime he wants as long as it is within 5 years; B will not 1198. The debtor shall lose every right to make use of benefit from the interests if A decides to pay early). the period: 2. Term is for the benefit of the creditor – He (1) When after the obligation has been contracted, he may demand fulfillment even before the becomes insolvent, unless he gives a guaranty or arrival of the term but the debtor cannot security for the debt; require him to accept payment before the (2) When he does not furnish to the creditor the expiration of the stipulated period. guaranties or securities which he has promised; - Example: A borrows money from B and is obliged to make (3) When by his own acts he has impaired said the payment on December 5. B may compel A to make the guaranties or securities after their establishment, and payment before December 5, but A may not compel B to when through a fortuitous event they disappear, unless receive the payment before December 5 (B will benefit from he immediately gives new ones equally satisfactory; the interests that will accrue before December 5). (4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the  The creditor may have reasons other than the period; maturity of interest, that’s why, unless the creditor (5) When the debtor attempts to abscond. consents, the debtor has no right to accelerate the time of payment even if the premature tender The period is disregarded and the obligation becomes pure includes an offer to pay the principal and interest in and immediately demandable: [IGIVA] full.  [I] When debtor becomes insolvent; 1197. If the obligation does not fix a period, but from  The insolvency need not be judicially its nature and the circumstances it can be inferred that declared. It is sufficient that debtor could a period was intended, the courts may fix the duration not pay his debts due to lack of money or thereof. funds. The courts shall also fix the duration of the period  [G] When the debtor does not furnish guaranties or when it depends upon the will of the debtor. securities; In every case, the courts shall determine such period  [I] When guaranties or securities given have been as may under the circumstances have been probably impaired or have disappeared; contemplated by the parties. Once fixed by the courts,  If security was lost through debtor’s fault - the period cannot be changed by them. impairment  If security was lost through fortuitous event - JUDICIAL PERIOD – period designated by the court. disappearance CONTRACTUAL PERIOD – period fixed by the parties in their  [V] When debtor violates an undertaking; contract. If such undertaking is the reason for the creditor to agree with such period. Court will fix a period:  [A] When debtor attempts to abscond (escape). 1. When no period is mentioned, but it is inferable from Mere attempt to abscond is sufficient. It is an indication of the nature and circumstances of the obligation that a bad faith. period was intended by the parties. 2. When the period is dependent upon the will of the Section 3 – Alternative Obligations page 12  OBLIGATIONS AND CONTRACTS REVIEWER 1199. A person alternatively bound by different  There being but one prestation available, this prestations shall completely perform one of them. prestation becomes a simple obligation. The creditor cannot be compelled to receive part of one and part of the other undertaking. 1203. If through the creditor's acts the debtor cannot make a choice according to the terms of the obligation, OBLIGATIONS WITH PLURAL PRESTATIONS: the latter may rescind the contract with damages. 1. CONJUNCTIVE/COMPOUND OBLIGATION - an obligation where the debtor has to perform ALL the (1) If the debtor could not make a choice due to several prestations in the contract to extinguish the the creditor’s act of making the prestations obligation. impossible, debtor may RESCIND the 2. ALTERNATIVE OBLIGATION – an obligation where contract with damages - rescission takes the debtor is required to fulfill ONLY ONE of the place at the initiative of the debtor. several prestations to extinguish the obligation. (2) If the debtor is being prevented to choose 3. FACULTATIVE OBLIGATION – an obligation where the only a particular prestation, and there are debtor is bound to perform ONLY ONE prestation, others available, he is free to choose from with a reserved right to choose another prestation as them, after notifying the creditor of his SUBSTITUTE for the principal. decision. 1200. The right of choice belongs to the debtor, unless 1204. The creditor shall have a right to indemnity for it has been expressly granted to the creditor. damages when, through the fault of the debtor, all the The debtor shall have no right to choose those things which are alternatively the object of the prestations which are impossible, unlawful or which obligation have been lost, or the compliance of the could not have been the object of the obligation. obligation has become impossible. The indemnity shall be fixed taking as a basis the value Implied grant to the creditor is not allowed. If it does not of the last thing which disappeared, or that of the appear on the agreement as to whom among them has the service which last became impossible. right to choose, it is the debtor who can choose. Damages other than the value of the last thing or service may also be awarded. 1201. The choice shall produce no effect except from the time it has been communicated.  If the impossibility of all the objects of the alternative obligation is caused by the debtor, the 1. The choice shall not produce any legal effect creditor is entitled to damages. until it has been duly communicated to the other  If such impossibility is caused by a fortuitous event, party. the obligation is extinguished and the debtor is 2. It can be done in writing, verbally, impliedly, or released from responsibility, unless the contrary is any unequivocal means. stipulated by the parties. 3. Once the choice has been communicated to the  The creditor cannot claim for damages if the debtor other party: can still perform the remaining prestations. 1. The obligation is now LIMITED only to the  The damages that may be recovered is based on the PRESTATION CHOSEN, with all the natural last thing which disappeared or the service which consequences flowing therefrom; became impossible. This last one is converted into a 2. The choice is IRREVOCABLE. simple obligation. a. The performance of prestation without announcing the choice to the creditor is NOT BINDING. 1205. When the choice has been expressly given to the b. The consent of the other party is NOT REQUIRED in creditor, the obligation shall cease to be alternative making the choice – that will in effect frustrate the from the day when the selection has been clear intention of the law and the nature of the communicated to the debtor. alternative obligation. Until then the responsibility of the debtor shall be c. If there is delay in the making of choice – punish the governed by the following rules: one who is supposed to exercise the right of choice for the delay he caused – court may order the debtor A. only one thing lost – fortuitous event – creditor to make a choice, or creditor to make the choice chooses from the remainder – debtor delivers the within certain period, or court makes the choice. choice to creditor; B. only one remains – debtor delivers the same to the 1202. The debtor shall lose the right of choice when creditor; among the prestations whereby he is alternatively C. only one thing lost – fault of the debtor bound, only one is practicable. 1. creditor may choose any one of the page 13  OBLIGATIONS AND CONTRACTS REVIEWER remainders;  When the obligation is ambiguous, it must be 2. creditor may choose the price or value of considered as joint obligation. the one which was lost; 3. may choose 1 or 2 plus damages CONSEQUENCES OF SOLIDARITY: D. all things lost – fault of the debtor – creditor may 1. Passive Solidarity – full payment made by anyone of choose the price of ANYONE of the things, with the solidary debtors extinguishes the obligation. The damages if warranted. one who paid can claim reimbursement from his co- debtors as regards their corresponding shares in the The same rules shall be applied to obligations to do or obligation. not to do in case one, some or all of the prestations A, B, & C are solidary debtors of D in the sum of P900. should become impossible. D can demand payment of the entire obligation when it becomes due, from any one of the debtors or from all of them  This article applies only when the right of choice has at the same time. been expressly granted to the creditor. If C paid the whole P900 to D, he may claim reimbursement from A and B. 1206. When only one prestation has been agreed upon, but the obligor may render another in substitution, the 2. Active Solidarity – full payment to any of the obligation is called facultative. creditors extinguishes the obligation. The creditor The loss or deterioration of the thing intended as a who received the entire amount will be liable to pay substitute, through the negligence of the obligor, does the corresponding shares of his co-creditors in not render him liable. But once the substitution has accordance with their internal agreement. been made, the obligor is liable for the loss of the Garfield owes the sum of P40,000 to Mickey, Minnie, Donald, substitute on account of his delay, negligence or fraud. and Pluto, who are solidary creditors. Garfield can pay anyone of them. If Mickey received the P40,000, he is liable to pay  If loss or deterioration happened before substitution the corresponding shares of his co-creditors. is made, obligor is not liable; after substitution is communicated, he is liable for loss (through delay, negligence or fraud) MIXED SOLIDARITY Section 4 – Joint and Solidary Obligations a. Solidary Debtors, Joint Creditors  P9,000.00 – total debt 1207. The concurrence of two or more creditors or of Debtors (Solidary) Creditors (Joint) two or more debtors in one and the same obligation Aida pays P4,500.00 John = P 4,500.00 does not imply that each one of the former has a right Lorna pays P4,500.00 Marsha P 4,500.00 to demand, or that each one of the latter is bound to Fe render, entire compliance with the prestation. There is a solidary liability only when the obligation expressly b. Joint Debtors, Solidary Creditors so states, or when the law or the nature of the  P 9,000.00 – total debt obligation requires solidarity. Debtors (Joint) Creditors (Solidary) Aida (P 3,000.00) John (can claim from debtors) INDIVIDUAL OBLIGATION – one debtor and one creditor Lorna (P 3,000.00) Marsha (-same-) Fe (P 3,000.00) COLLECTIVE OBLIGATION – two or more debtors and two or more creditors 1208. If from the law, or the nature or the wording of 1. JOINT – entire obligation is to be paid or the obligations to which the preceding article refers the performed proportionately by the debtors; contrary does not appear, the credit or debt shall be 2. SOLIDARY – each one of the debtors are presumed to be divided into as many shares as there obliged to pay the entire obligation, each are creditors or debtors, the credits or debts being one of the creditors has the right to demand considered distinct from one another, subject to the from any of the debtors, the fulfillment of Rules of Court governing the multiplicity of suits. the entire obligation; A. Passive Solidarity – solidarity on the part of  This provision speaks of JOINT DIVISIBLE the DEBTORS OBLIGATION. B. Active Solidarity – solidarity on the part of the CREDITORS.  When there is a concurrence of several creditors or  SOLIDARITY SHOULD BE EXPRESSED – law, of several debtors in one and in the same obligation, stipulation, nature of obligation. there is a presumption that the obligation is joint. page 14  OBLIGATIONS AND CONTRACTS REVIEWER  Each of the creditors shall be entitled to demand only converted into monetary obligation for indemnity for the payment of his proportionate share of the credit. damages. Batman and Robin will be liable only for P  Each of the debtors may be compelled to pay only 750,000.00 each. his proportionate share of the debt.  The credits or debts shall be considered distinct from  The act of one is not binding (others must concur) one another. 1210. The indivisibility of an obligation does not CONSEQUENCES OF JOINT OBLIGATION: necessarily give rise to solidarity. Nor does solidarity of 1. Each debtor – liable for a proportionate part of the itself imply indivisibility. entire debt; Thales, Socrates, Plato, & Aristotle owe P100 to Bruce Lee  Solidarity is expressed in the stipulations of the = 4 debts and 1 credit party, law governing the obligation, or the nature of Each of them owes Bruce Lee P25 the obligation. Bruce Lee cannot collect the entire P100 from any one of them. INDIVISIBLE OBLIGATION – an obligation where the 2. Each creditor – entitled to a proportionate part of the prestation or object to be delivered cannot be performed by credit; parts without altering its essence or substance. Piggy owes P100 to Froggy and Fishy = 1 debt and 2 credits Basis Indivisibility Solidarity Froggy can only collect 50 from Piggy, 1. Nature Refers to the Refers to the tie Same with Fishy prestation of the existing between 3. Demand made by one creditor upon one debtor contract parties of the produces the effects of default only as between obligation (who is them, but not with respect to the others; liable) Bubbles demanded payment from Buttercup; Buttercup was 2. Number of Does not require Requires plurality of in default. This does not mean that the others are in default subjects / parties plurality of parties parties too because Bubbles did not demand from them. 3. Effect of breach Obligation is The liability, even if 4. The interruption of prescription caused by the of obligation converted into converted into demand made by one creditor upon one debtor will monetary indemnity for not benefit the co-creditors; obligation for damages, remains indemnity for solidary. Wittgenstein extended the period in which Tarski should have damages – each paid his debt to him. This does not mean that the same debtor is liable extension applies to Tarski's debt to Davidson. only for his part in 5. The insolvency of one debtor will not increase the the indemnity. liability of his co-debtors, nor will it allow a creditor to demand anything from the co-creditors. 1211. Solidarity may exist although the creditors and If Husserl and Merleau-Ponty are debtors of Sartre for the debtors may not be bound in the same manner and P1,000,000.00 and Husserl becomes insolvent, the liability of by the same periods and conditions. Merleau-Ponty will only be P500,000.00 representing his proportional share of ½ in the whole obligation.  The solidarity of the debtors is not affected even if different terms and conditions are made applicable to 1209. If the division is impossible, the right of the them. creditors may be prejudiced only by their collective  Enforcement of the terms and conditions may be acts, and the debt can be enforced only by proceeding made at different times. The obligations which have against all the debtors. If one of the latter should be matured can be enforced while those still undue will insolvent, the others shall not be liable for his share. have to be awaited. Enforcement can be made against any one of the solidary debtors although it JOINT INDIVISIBLE OBLIGATION – an obligation where can happen that a particular obligation chargeable to solidarity is not provided and the prestation or object is not a particular debtor is not yet due. He will be susceptible of division; its fulfillment requires the concurrence answerable for all the prestations which fall due of all debtors, while doing each one’s parts. although chargeable to the other co-debtors. Batman and Robin jointly obliged themselves to deliver a Sad Face, Happy, and Fanny got a loan of P150 from Smiley. brand new Toyota Fortuner worth P1,500,000.00 to They signed a promissory note solidarily binding themselves Superman. The object, a vehicle, is indivisible. They must to pay Smiley under the following terms: deliver the thing jointly. In case of breach, the obligation is Sad Face will pay P50 with 3% on December 30, page 15  OBLIGATIONS AND CONTRACTS REVIEWER 2006 Happy will pay P50 with 4% on December 30, 2007 1215. Novation, compensation, confusion or remission Fanny will pay P50 with 5% on December 30, 2008 of the debt, made by any of the solidary creditors or On December 31, 2006, Smiley can collect his P50 with 3% with any of the solidary debtors, shall extinguish the from any one of the debtors, but not the whole P150 because obligation, without prejudice to the provisions of it is not yet entirely due. The maturity of the other amounts Article 1219. should still be awaited. If maturity comes, Smiley can collect The creditor who may have executed any of these acts, from any of the debtors, because they are expressly solidary as well as he who collects the debt, shall be liable to in liabilities, and not affected by the secondary stipulations. the others for the share in the obligation corresponding to them. 1212. Each one of the solidary creditors may do whatever may be useful to the others, but not anything NOVATION – obligations are modified by: which may be prejudicial to the latter.