CE LAWS PRELIMS TO FINALS PDF

The first refers to the state law while the second includes: Origin, Nature and 1. Law – any rule of action or any...

The first refers to the state law while the second includes: Origin, Nature and 1. Law – any rule of action or any 2. General divisions of law Divine law – law of religion and faith which system of uniformity. concerns itself with the concept of sin (as Development of Law – in general, it determines not a. Law which is promulgated contrasted with crime) and salvation. only the activities of men as and enforced by the state. b. Law which is not promulgated Natural law – the divine inspiration in man rational beings but also the and enforced by the state. of the sense of justice, fairness, movements or motions of all righteousness, not by divine revelation or Engr. Lito I. Mauro objects of creation, whether formal promulgation, but by internal animate or inanimate. dictates of reason alone. State law – law that is promulgated and Moral law – the totality of the norms enforced by the state. This law is also 4. What would life be without law? of good and right conduct growing 5. What does law do? called positive law, municipal law, Society comes into existence because its out of the collective sense of right and Law secures justice, resolves social and civil law or imperative law. members could not live without it. wrong of every community. conflict, orders society, protects 3. Characteristics of law Physical law – In the operation or The need for internal order is as constant interests, controls social relations. a. It is a rule of conduct. as the need for external defense. course of nature, there are uniformities Life without basic laws against theft, b. It is obligatory. No society can be stable in which either of actions and orders of sequence violence, and destruction would be c. It is promulgated by legitimate of these requirements fails to be which are the physical phenomena solitary, nasty, brutish and short. authority. provided for. that we sense and feel. d. It is common observance and benefit. Life without other laws such as those 6. Sources of law b. Legislation – It consists in the regulating traffic, sanitation, declaration of legal rules by a Administrative rules and regulations a. Constitution – the written instrument employment, business, redress of harm competent authority. are intended to clarify or explain by which the fundamental powers of or of broken agreements, etc. – would It is the preponderant (having superior the law and carry into effects its the government are established, limited be less orderly, less healthful, less power) source of law in the Philippines. general provisions. and defined, and by which these wholesome, etc. c. Administrative or executive orders, Administrative acts are valid only powers are distributed among the No society can last and continue without several departments for their safe and regulations, and rulings – They are when they are not contrary to the means of social control, without rules those issued by administrative laws and Constitution. useful exercise for the benefit of the of social order binding on its members. officials under legislative authority. people. 7. Organization of courts d. Custom – It consists of those habits e. Judicial decisions or jurisprudence – a. Regular courts – The Philippine judicial system and practices which through long The decisions of the courts, particularly consists of a hierarchy of courts resembling a the Supreme Court, applying or pyramid with the Supreme Court at the apex. The b. Special courts – There is a special and uninterrupted usage have interpreting the laws or the other courts are: Court of Appeals, Regional Trial become acknowledged and anti-graft court, the Sandiganbayan. Constitution form part of the legal Courts sitting in the different provinces and cities, approved by society as binding and Metropolitan Trial Courts in Metropolitan areas It forms part of the judicial hierarchy rules of conduct. system of the Philippines. together with the Court of Tax established by law; Municipal Trial Courts in cities It has the force of the law when f. Other sources – Others are principles not forming part of a metropolitan area, and Appeals, a special tax court created recognized and enforced by the of justice and equity, decisions of Municipal Circuit Trial Courts in areas defined as by law. state. foreign tribunals, opinions of text municipal circuits. The Supreme Court, the Court of writers, and religion. Appeals, and the Regional Trial Courts are considered courts of general or superior jurisdiction.  c. Quasi-judicial agencies – Adjective law or that portion of the body b. as to its subject matter Administrative bodies under the executive 8. Classifications of law of law prescribing the manner or Public law or the body of legal rules branch performing quasi-judicial a. as to its purpose procedure by which rights may be which regulates the rights and functions, like the NLRC, the SEC, Substantive law or that portion of enforced or their violations redressed. duties arising from the relationship LTFRB, Insurance Commission, etc., the body of law creating and Sometimes this is called remedial law or of the state to the people. and the independent Constitutional defining rights and duties which procedural law. Ex.: The provision of Ex: Criminal law – the law which defines Commissions (CSC, Comelec, and may be either public or private in law which says that actions for the crimes and provides for their punishment. CoA) do not form part of the integrated character. recovery of real property shall be filed International law or that law which judicial system. Ex.: law on obligations and contracts with the RTC of the region where the governs the relations among nations or property or any part therefore lies. states. Constitutional law or that which governs the Private law or the body of rules which relations between the state and its citizens; Law on obligations and contracts – regulates the relations of individuals it establishes the fundamental powers of the body of rules which deals with with one another for purely private ends. the government. Civil procedure – that branch of the nature and sources of obligations The law on obligations and contracts comes and the rights and duties arising from Administrative law or that which governs private law which provides under this heading because it deals with the agreements and the particular the methods by which the functions of for the means by which private rights and obligations of the contracting contracts. administrative authorities are to be rights may be enforced. parties only. “Ignorance of law excuses no one from performed. Included in private law are civil law, Criminal procedure or that branch of private compliance therewith.” commercial law or mercantile law and civil law which governs the methods of trial “ Everyone, therefore, is conclusively procedure. presumed to know the law.” and punishment in criminal cases. Obligation Obligor – one who has the duty of giving, An obligation is a juridical necessity to doing or not doing. Obligations give, to do or not to do. The term obligation is derived from the Obligee – one who has the right to the performance of the obligation. Latin word obligatio which means Obligation is a juridical necessity because tying or binding. It is a tie or bond in case of non-compliance, the courts of recognized by law by virtue of which justice may be called upon by the one is bound in favor of another to aggrieved party to enforce its fulfillment Engr. Lito I. Mauro render something – and this may consist or, in default thereof, the economic in giving a thing, doing a certain act, value that it represents. or not doing a certain act. Civil obligations – obligations which give Four essential requisites of an obligation a. A passive subject (called debtor or d. A juridical or legal tie (also called to the creditor or obligee a right under c. Object or prestation (subject the law to enforce their performance in obligor) – the person who is bound to matter of the obligation) – the efficient cause) that which binds the fulfillment of the obligation; he or connects the parties to the courts of justice. conduct required to be observed who has the duty. obligation. Natural obligations – do not grant a by the debtor. It may consist in b. An active subject (called creditor or Obligation, right and wrong right of action to enforce their giving, doing, or not doing. performance although in case of obligee) – the person who is entitled to Without the prestation, there is distinguished demand the fulfillment of the obligation; a. Obligation is the act or voluntary fulfillment by the debtor, the nothing to perform. he who has a right. performance which the law will latter may not recover what has been enforce. delivered or rendered by reason thereof.  b. Right is the power which a person has The essential elements of a legal b. Personal obligation (obligation to do under the law, to demand from another Kinds of obligation according to wrong or injury are: or not to do) is that in which the any prestation. the subject matter a. a legal right in favor of a person subject matter is an act to be done or c. A wrong (cause of action), is an act or a. Real obligation (obligation to (creditor / plaintiff) not to be done. omission of one party in violation of the give) is that in which the subject b. correlative legal obligation on the - Positive personal obligation or legal right or rights (i.e., recognized by matter is a thing which the obligor part of another (debtor / defendant) obligation to do or to render service. law) of another. must deliver to the obligee. c. an act or omission by the latter in -Negative personal obligation is In law, the term injury is also used to violation of said right with resulting obligation not to do (which naturally refer to the wrongful violation of the damage to the former. includes obligations “not to give”). legal right of another. Sources of obligations Compliance in good faith – compliance or Kinds of delay or default a. Law – when they are imposed by law d. Crimes or acts or omissions punished performance in accordance with the a. Mora solvendi or the delay on the part of itself. by law – when they arise from civil stipulations or terms of the contract or the debtor to fulfill his obligation (to give b. Contracts – when they arise from the liability which is the consequence of a agreement. or to do). stipulation of the parties. criminal offense. Delay – as used in the law: b. Mora accipiendi or the delay on the part c. Quasi-contracts – when they arise e. Quasi-delicts or torts – when they arise a. Ordinary delay is merely the failure to of the creditor to accept the performance from lawful, voluntary and unilateral from damage caused to another through perform an obligation on time. of the obligation. acts which are enforceable to the end an act or omission, there being fault or b. Legal delay or default is the failure to c. Compensatio morae or the delay of the that no one shall be unjustly enriched negligence, but no contractual relation perform an obligation on time which obligors in reciprocal obligations (like in or benefited at the expense of another. exists between the parties. failure constitutes a breach of the sale) i.e., the delay of the obligor cancels obligation. the delay of the obligee, and vice versa. Requisites of delay by the debtor c. failure of the debtor to comply with such Conditions present before mora solvendi Effects of mora accipiendi demand e. The debtor may release himself from can exist: a. The creditor is guilty of breach of Effects of mora solvendi the obligation by the consignation or a. failure of the debtor to perform his obligation. a. The debtor is guilty of breach or violation deposit in court of the thing or sum due. obligation on the date agreed upon b. He is liable for damages suffered, if of the obligation. In compensatio morae, the delay of the b. demand (not reminder or notice) made by any, by the debtor. b. He is liable to the creditor for interest obligor cancels the delay of the obligee the creditor upon the debtor to comply c. He bears the risk of loss of the thing (obligations to pay money) or damages (in and vice versa. The net result is that with his obligation which demand may be due. other obligations) there is no default or delay on the part either judicial (when a complaint is filed d. Where the obligation is to pay money, c. He is liable even for a fortuitous event of both parties. in court) or extrajudicial (made outside of the debtor is not liable for interest (happening by chance) when the court) from the time of creditor’s delay. obligation is to deliver a determinate thing. Grounds for liability b. Negligence (fault or culpa) – It is any Four grounds for liability which may voluntary act or omission, there being Fraud and negligence distinguished a. In fraud, there is deliberate c. Fraud must be clearly proved, while entitle the injured party to damages. no malice, which prevents the normal negligence is presumed from the a. Fraud (deceit or dolo) – is the fulfillment of an obligation. intention to cause damage or injury, while in negligence, there violation of a contractual obligation. deliberate or intentional evasion of the c. Delay is no such intention. d. Liability for fraud cannot be normal fulfillment of an obligation. d. Contravention of the terms of the mitigated or reduced by the courts, It implies some kind of malice or obligation – This is the violation of the b. Waiver of the liability for future fraud is void while such waiver while liability for negligence may dishonesty and it cannot cover cases terms and conditions stipulated in the may, in a certain sense, be be reduced according to the of mistake and errors of judgment obligation. The contravention must not allowed in negligence. circumstances. made in good faith. It is synonymous be due to a fortuitous event or force to bad faith. majeure.  Fortuitous event distinguished b. Acts of God – They refer to what is Factors to be considered in negligence called force majeure or those events from force majeure a. Nature of the obligation d. Circumstances of the place a. Acts of man – Strictly speaking, which are totally independent of the Ex.: Smoking while carrying inflammable will of every human being. Ex.: Driving 80kph in Taft Ave. fortuitous event is an event materials Ex.: earthquake, flood, lightning Fortuitous event – any event independent of the will of the b. Circumstances of the person Kinds of fortuitous events which cannot be foreseen, or obligor but not of other human Ex.: A guard sleeping while on duty a. Ordinary fortuitous events – those which, though foreseen, is wills. c. Circumstances of time events which are common and which inevitable. Ex.: war, fire, robbery, murder, Ex.: Driving a car at night without the contracting parties could insurrection headlights reasonably foresee. Ex.: rain b. Extra- ordinary fortuitous events – events which are uncommon and which c. The event must be of such a character Condition the contracting parties could not have as to render it impossible for the A person is not, as a rule, responsible Condition – a term or requirement reasonably foreseen. debtor to comply with his obligation for loss or damage caused to stated in a contract, which must be Ex.: earthquake, fire, war, pestilence in a normal manner; another resulting from fortuitous met for the other party to have the Requisites of a fortuitous event d. The debtor must be free from any events. duty to fulfill his/her obligations. a. The event must be independent of the participation in, or the aggravation In other words, his obligation is – a future and uncertain event upon human will or at least of the debtor’s of, the injury of the creditor, that is, extinguished. the happening of which certain rights will; there is no concurrent negligence on or obligations will be either enlarged, b. The event could not be foreseen, or if his part. created, or destroyed. foreseen, is inevitable; b. An implied condition is presumed by law b. A condition precedent must occur before a A condition may be either express or right accrues. based upon the nature of a particular implied. In the law of contracts, as well as estates Ex.: A woman may convey her house to her a. An express condition is clearly transaction and what would be reasonable to do if a particular event occurred. and conveyancing, conditions son based on the condition that the son marry stated and embodied in specific, subsequent and precedent may exist. by the age of 25. If the son fails to marry by definite terms in a contract, lease, or Ex.: If a man leases a hall for a wedding on a certain date, her ability to use the hall is a. A condition subsequent means that that age, he has lost his right to the house. deed. a right may be taken away from Similarly, in contract law, if an agreement is Ex.: The provision in an installment based on its implied continued existence. If the hall burns down before that date, use someone upon the occurrence of a signed by one party and sent to a second party credit contract that, if the balance is specified event. with the intention that it will not become of the hall is impossible due to fire; paid before a certain date, the enforceable until the second party signs it, the debtor's interest will be reduced. therefore, the law would imply a condition excusing the lessor from liability. second party's signature would be a condition precedent to its effectiveness. Concurrent conditions are conditions Ex.: An owner of a property may An engagement ring is regarded as an inter in the law of contracts that each party convey land to a town on the vivos (between living persons) gift to Ex.: It is in fact by itself, in many to the contract must simultaneously condition that it be used only for which no conditions are attached. cases, an agreement; and a perform. sports purposes. If the land In some states, its ownership is considered sufficient foundation as an Condition, contracts, wills. conveyed is used to build a to be conditioned upon the subsequent agreement in writing, for a bill in A condition is a clause in a contract or shopping mall, then ownership marriage of the couple involved; equity, praying for a specific agreement which has for its object to would revert to the original owner. therefore, if a woman does not marry the performance. suspend, to rescind, or to modify the A condition subsequent may also man who gave her the engagement ring, principal obligation; or in case of a affect a transaction involving a gift. ownership reverts to him and she must will, to suspend, revoke, or modify the return it to him. devise or bequest (legacy).  Ex.: The condition sometimes rescinds In pleading, according to the course of Ex.: Conditions sometimes suspend the Events foreseen by conditions are (voids) the contract; as, when I sell the common law, the bond and its obligation; as, when it is to have of three kinds you my horse, on condition that he condition are to some intents and effect until they are fulfilled; as, if I a. Some depend on the acts of the shall be alive on the first day of purposes, regarded as distinct bind myself to pay you ₱10,000.00 persons who deal together January, and he dies before that time. things. on condition that my parents will Ex.: If the agreement should provide Ex.: A condition may modify the contract; – any portion or agreement which send me money; the contract is that a partner should not join as, if I sell you 200 sacks of rice, upon regulates what the parties have a suspended until the money is sent. another partnership. condition that my crop shall produce mind should be done, if a case they that much, and it produces only 150 foresee should come to pass. sacks. b. Others are independent of the will of the d. as to their nature, they are possible Conditions are of various kinds or impossible An expressed condition is one created parties a. as to their form, they are expressed e. as to their operation, they are positive by expressed words. Ex.: If I sell you 1000 bushels of corn, on or implied. This division is of or negative Ex.: A condition in a lease that if the condition that my crop shall not be tenant shall not pay the rent at the day, destroyed by a fortuitous event, or act of feudal origin. f. as to their divisibility, they are b. as to their object, they are lawful or copulative or disjunctive the lessor may reenter. God. unlawful g. as to their agreement with the An implied condition is one created c. Some depend in part on the contracting by law, and not by express words. parties and partly on the act of God c. as to the time when they are to contract, they are consistent or take effect, they are precedent or repugnant Ex.: At common law, the tenant for life Ex.: If it be provided that such merchandise holds upon the implied condition not shall arrive by a certain day. subsequent h. as to their effect, they are resolutory or suspensive. to commit waste. A lawful or legal condition is one made in An unlawful or illegal condition is one When the law prohibits, in express terms, the A condition precedent is one which must consonance with the law. This must be forbidden by law. transaction in respect to which the be performed before the estate will vest, understood of the law as existing at the condition is made, and declares it void, Unlawful conditions have for their or before the obligation is to be time of making the condition, for no such condition is then void; but when it is object: performed. change of the law can change the force prohibited, without being declared void, a. to do something malum in se (wrong Whether a condition shall be considered as of the condition. although unlawful, it is not void. Conditions or evil in itself), or malum prohibitum precedent or subsequent, depends not on Ex.: When the condition was imposed, 25 in restraint of marriage are odious, (hatred) (unlawful act ) the form or arrangement of the words, was the age of majority in the state; it and are therefore held to the utmost rigor b. to omit the performance of some duty but on the manifest intention of the was afterwards changed to 21. Under required by law and strictness. They are contrary to sound parties, on the fair construction of the these circumstances the condition was policy, and by the Roman law were all void. c. to encourage such act or omission contract. held to be binding. Ex.: A conveyance in fee, reserving a life estate in a part of the land, and made upon A possible condition is one which A positive condition requires that condition that the grantee shall pay certain may be performed, and there is the event contemplated shall A subsequent condition is one sums of money at diverse times to several nothing in the laws of nature to happen. which enlarges or defeats an persons, passes the fee upon condition prevent its performance. Ex.: If I marry. A negative condition estate or right, already created. subsequent. Sometimes it becomes of great An impossible condition is one requires that the event importance to ascertain whether the condition which cannot be accomplished contemplated shall not happen as is precedent or subsequent. When a precedent according to the laws of nature. if I do not marry. condition becomes impossible by the act of Ex.: To fly to the moon and back in God, no estate or right vests; but if the one day. Such a condition is void. condition is subsequent, the estate or right becomes absolute. A copulative condition is one of several A resolutory condition in the civil law is one distinct-matters, the whole of which are A consistent condition is one which A repugnant condition is one which which has for its object, when made precedent to the vesting of an agrees with other parts of the is contrary to the contract. accomplished the revocation of the estate or right. Ex.: If I grant to you a house and lot contract. principal obligation. This condition Ex.: In this case the entire condition must be A disjunctive condition is one which in fee, upon condition that you does not suspend either the existence performed, or the estate or right can gives the party to be affected by shall not alien (to transfer, as title or the execution of the obligation, it never arise or take place. If one becomes it, the right to perform one or the or property), the condition is merely obliges the creditor to return impossible by the act of God, the whole repugnant and void, as being other of two alternatives. It gives what he has received. will, in general, be excused. This rule, to the party the right to perform inconsistent with the estate granted. A suspensive condition is one which however, is not without exception. the one or the other. suspends the fulfillment of the obligation until it has been performed. Ex.: If a man binds himself to pay Condition, persons ₱100,000, upon condition that 50 sacks Conditions are further divided into b. A casual condition is one which depends It is a situation in civil society which creates of rice will be delivered to him. The potestative, casual and mixed. altogether upon chance, and not in the certain relations between the individual, obligation, in this case, is suspended a. A potestative condition is that which is power of the creditor. to whom it is applied, and one or more until the delivery of the rice, when the in the power of the person in whose Ex.: if I have children; if I have no children. others, from which mutual rights and condition having been performed, the favor it is contracted. obligations arise. Thus the situation c. A mixed condition is one which depends obligation becomes absolute, and it is Ex.: If I engage to give my neighbor a sum on the will of the creditor and of a third arising from marriage gives rise to the no longer conditional. A suspensive of money, in case he cuts down a tree person. conditions of husband and wife that of condition is in fact a condition which obstructs my prospect. paternity to the conditions of father and Ex.: if you marry my cousin. precedent. child. Conditional obligation – one whose In contracts every one is presumed to consequences are subject in one way or Principal kinds of condition know the condition of the person Pure and Conditional another to the fulfillment of a condition. a. Suspensive condition (condition with whom he deals. A man Obligations Characteristics of a condition precedent or condition antecedent) making a contract with an infant Pure obligation – one which is not a. Future and uncertain – In order to or one the fulfillment of which will cannot recover against him for a subject to any condition and no constitute an event as a condition, it is give rise to an obligation. breach of the contract, on the specific date is mentioned for its not enough that it be future, it must also Ex.: I will sell you the land if it is ground that he was not aware of fulfillment and is, therefore, be uncertain. adjudicated (to study and settle a his condition. immediately demandable. b. Past but unknown – A condition may dispute or conflict) to me in the division refer to a past event unknown to the of my deceased father’s estate. parties. When obligation is demandable at once b. Resolutory condition (condition a. when it is pure A. The debtor promises to pay when his Distinction between suspensive b. when it is subject to a resolutory means permit him to do so. subsequent) or one the fulfillment and resolutory conditions of which will extinguish an condition B. Other cases If the suspensive condition is c. when it is subject to a resolutory period a. little by little obligation already existing. fulfilled, the obligation arises, Ex.: B binds himself to give C ₱1,000 Where duration of period depends upon b. as soon as possible while it is resolutory condition the will of debtor c. from time to time monthly until C graduates from that is fulfilled, the obligation is college. Period – a future and certain event upon d. at any time I have money extinguished. the arrival of which the obligation subject e. in partial payments to it either arises or it is extinguished. f. when I am in the position to pay  Classification of conditions b. Casual – the condition depends upon F. as to numbers C. as to possibility A. as to effect chance or upon the will of a third a. Conjunctive – there are several a. Possible – the condition is capable a. Suspensive – the happening of of fulfillment, legally and physically. person. conditions and all must be fulfilled. which gives rise to the obligation. c. Mixed – the condition depends partly b. Disjunctive – there are several b. Impossible – the condition is not b. Resolutory – the happening of capable of fulfillment, legally and upon chance and partly upon the will conditions and only one or some of which extinguishes the obligation. of a third person. them must be fulfilled. physically. B. as to form E. as to made G. as to divisibility D. as to cause or origin a.Expressed – the condition is clearly a. Positive – the condition consists in the a. Divisible – the condition is susceptible of a. Potestative – the condition stated performance of an act. partial performance. depends upon the will of one of the b. Implied – the condition is merely b. Negative – the condition consists in b. Indivisible – the condition is not contracting parties. inferred. the omission of an act. susceptible of partial performance. Potestative condition –a condition suspensive Casual condition – If the suspensive in nature and which depends upon the sole Only the condition void – If the obligation condition depends upon chance or upon will of one of the contracting parties. is pre-existing one, only the condition the will of the third person, the Conditional obligation void – where the is void. If the condition depends exclusively obligation subject to it is valid. potestative condition depends solely upon Ex.: X borrowed 1M pesos from Y payable upon the will of the creditor, the Ex.: Where X, building contractor, obliges the will of the debtor. within 1 year. Subsequently, X promised obligation is valid. himself in favor of Y, owner, to repair at to pay Y “after X sells his 1hec lot” to Ex.: I will pay you my indebtedness Ex.: I will pay you if I want. X’s expense any damage that may be I will pay you after I receive a loan from which Y agreed. In this case, only the upon your demand. caused to the building by any earthquake the bank. condition is void but not the pre-existing occurring within 10 years from the date of I will pay you after I recover what X owes obligation of X to Y. the completion of its construction. me. Mixed condition – The obligation is valid if b. Legally impossible conditions – when Ex.: X will give Y ₱10t if Y – the suspensive condition depends Kinds of impossible conditions will slap his father (against good partly upon chance and partly upon the a. Physically impossible conditions – when they are contrary to law, morals, customs) will of a third person. they, in nature of things, cannot exist or good customs, public order, or public policy. will publicly advocate the overthrow Ex.: Where X, building contractor, obliges cannot be done. Ex.: X will give Y ₱10t if Y – of the government (against public himself in favor of Y, owners, to repair at Ex.: I will pay you ₱10t if it will not rain for order) X’s expense, any damage to the building one year in the Philippines. I will pay you will kill Z (against the law) will be the common-law wife of X will not appear as a witness against X taking place after an earthquake if found ₱10t if you can carry 20 sacks of rice in (against morals) in a criminal case (against public by a panel of arbitrators that construction your shoulder. policy) defects contributed in any way to the damage. Kinds of loss Kinds of obligation according to the a. Reciprocal obligations – those which a. Physical loss – when a thing perishes c. Civil loss – when a thing disappears person obliged arise from the same cause and in which as when a house is burned and in such a way that its existence is A. Unilateral – when only one party each party is a debtor and creditor of reduced to ashes. unknown. is obliged to comply with a the other, such that the performance of b. Legal loss – when a thing goes out of Ex.: a particular dog has been missing for prestation. one is designed to be the equivalent commerce or when a thing heretofore sometime – or if even known, it Ex.: Donation and the condition for the performance legal becomes illegal. cannot be recovered, whether as a B. Bilateral – when both parties are of the other. Ex.: During the Japanese occupation, matter of fact mutually bound to each other. Ex.: The seller is the creditor as to the American dollars had become Ex.: a ring is dropped from a ship at sea Both parties are debtors and price and debtor as to the thing, while impossible. creditors. the buyer is the creditor as to the thing and debtor as to the price.  Remedies in Reciprocal Obligations Period and condition distinguished In case one of the obligors does not comply a. As to fulfillment – A period is a certain b. Non-reciprocal obligations – those with what is incumbent upon him, the Obligations with a Period event which must happen sooner or which do not impose simultaneous aggrieved party may choose between Obligation with a period – one later at a date known beforehand, or at and correlative performance on two remedies: whose consequences are subjected a time which cannot be determined, both parties. a. Action for specific performance in one way or another to the while a condition is an uncertain event. Ex.: X borrowed from Y ₱10t. Y, on the (fulfillment) of the obligation with expiration of said period or term. b. As to time – A period refers only to other hand, borrowed X’s car. damages the future, while a condition may refer b. Action for rescission (annulment) of the also to a past event unknown to the obligation with damages parties. d. As to retroactivity of effects – Unless Kinds of period or term c. As to the effect, when left to A. According to effect b. Resolutory period there is an agreement to the debtor’s will a. Suspensive period The obligation is valid up to a day contrary, the arrival of a period does A period which depends upon the will The obligation begins only from a day certain and terminates upon the not have any retroactive effect, while of the debtor empowers the court certain upon the arrival of the period. arrival of the period. the happening of a condition has to fix the duration thereof, while a Ex.: I will pay you 30 days from today. Ex.: I will give you P1,000.00/m retroactive effect. condition which depends upon the I will support you from the time you until the end of the year. Like a condition, a period must be possible. sole will of the debtor invalidates finished your studies. I will support you until you If the period is impossible, the obligation is the obligation. I will pay you when my means permit find a job. void. me to do so. Presumption as to benefit of period C. According to definiteness B. According to source In an obligation subject to a period fixed by Ex.: On Jan. 1, A borrowed from B a. Definite period – when it is fixed a. Legal period – when it is provided the parties, the period is presumed to have ₱10,000 payable on June 30 at or it is known when it will come. for by laws. been established for the benefit of both the 10% interest. A cannot pay b. Indefinite period – when it is not b. Conventional or voluntary period creditor and the debtor. before June 30 without the fixed or it is not known when it will – when it is agreed to by the Before the expiration of the period, the debtor consent of B. Neither can B come. parties. may not fulfill the obligation and neither compel A to pay before the Computation of term or period c. Judicial period – when it is fixed may the creditor demand its fulfillment expiration of the term. In computing a period, the first day by the court. without the consent of the other especially shall be excluded, and the last day if the latter would be prejudiced or included. inconvenienced thereby. Purpose of penal clause – to ensure Kinds of penal clause Obligations with a Penal Clause their performance by creating an A. as to origin Prestation – A payment of money; a Penal clause – an accessory undertaking effective deterrent against breach to a. Legal penal clause – when it is toll or duty; also, the rendering of substitute a penalty for the indemnity attached to an obligation to assume provided for by law. a service. for damages and the payment of greater liability in case of breach, i.e., b. Conventional penal clause – when Money is divisible. interests in case of non-compliance; the obligation is not fulfilled, or is it is provided for by stipulation of partly or irregularly complied with. or to punish the debtor for the non- the parties. fulfillment or violation of his obligation  Penalty substitutes for damages and C. as to its demandability or effect B. as to its purpose interests. When creditor may recover damages a. Subsidiary or alternative penal a. Compensatory penal clause – In an obligation with a penal clause, the a. when so stipulated by the parties clause – when only the penalty can when the penalty takes the penalty takes the place of the indemnity b. when the obligor refuses to pay the be enforced. place of damages. for damages and the payment of interests penalty b. Joint or cumulative penal clause – b. Punitive penal damages – when in case of non-compliance. c. when the obligor is guilty of fraud when both the principal obligation the penalty is imposed merely Proof of actual damages suffered by the in the fulfillment of the obligation and the penal clause can be as punishment for breach. creditor is not necessary in order that the enforced. penalty may be enforced. Ex.: X promised to construct a house for Y. When penalty may be enforced The contract carried a penal clause that in The penalty may be enforced only when it is Penalty not substitute for performance. Penal clause presumed subsidiary case of non-compliance, X would have to demandable in accordance with the The debtor cannot just pay the penalty The creditor cannot demand the pay a penalty of ₱50,000. X did not provisions of the Civil Code. The penalty, instead of performing the obligation. fulfillment of the obligation and the construct the house and, as a consequence, as a stipulation in a contract, is demandable The object of the penalty is to secure satisfaction of the penalty at the same Y suffered damage in the amount of only if there is a breach of the obligation compliance with the obligation. time. ₱40,000. In this case, the penalty of ₱50,000 and it is not contrary to law, morals, good Ex.: A is required to deliver to B certain The primary purpose of penalty is to shall be paid. Y cannot recover more than customs, public order, or public policy. If products; otherwise, he shall pay a urge the debtor to the performance of ₱50,000, the penalty stipulated, even if he the obligation cannot be fulfilled due to a penalty in the amount of ₱10,000. the main obligation. proves that the damages suffered by him is fortuitous event, the penalty is not ₱60,000. demandable. Extinguishment of Obligations Obligations are extinguished Causes of extinguishments of Penalty demandable without proof a. by payment or performance obligations Payment or Performance of actual damages b. by the loss of the thing due a. Death of a party in case the obligation a. Payment may consist of not only In an obligation with a penal clause, c. by the condonation or remission is a personal one in the delivery of money but all that the creditor has to prove, of the debt b. Mutual desistance or withdrawal also the giving of a thing, the to enforce the penalty, is the d. by the confusion or merger of the c. Arrival of resolutory period doing of an act, or not doing of violation of the obligation by the rights of creditor and debtor d. Compromise an act. debtor. e. by compensation e. Impossibility of fulfillment f. by novation f. Happening of a fortuitous event b. Debt may refer to an obligation to Person to whom payment shall be made Payment by cession – special form of deliver money, to deliver a thing, to do a. the creditor or obligee Effect of payment to a third payment. It is the assignment or an act, or not to do an act. b. his successor in interest person abandonment of all the properties of the Ex.: X agreed to paint the house of Y for c. any person authorized to receive it Payment to a third person or wrong debtor for the benefit of his creditors in ₱20,000. X did not paint the kitchen Ex.: A owes B ₱10,000. In this case, A party is not valid except order that the latter may sell the same anymore and instead asked Y to pay him must pay B or any person authorized by insofar as it has redounded to and apply the proceeds thereof to the ₱20,000 less the cost of painting the B or in case of his death, his heirs or any the benefit of the creditor. satisfaction of their credits. kitchen. Y can refuse to pay X because person authorized by law. That A acted Cession – the formal giving up of rights, the debt of Y will arise only after the debt in good faith in paying to the wrong property, or territory by a state. of X is completely rendered. party is not an excuse.  Ex.: A is indebted to several creditors in the Requisites of payment by cession total amount of ₱2M. His assets are not Tender of payment – the act, on the a. There must be two or more sufficient to pay all his debts. With the part of the debtor, of offering to the Consignation – the act of depositing creditors consent of his creditors, A may assign creditor the thing or amount due. the thing or amount due with the b. The debtor must be insolvent his property to them to be sold, to satisfy The debtor must show that he has in proper court when the creditor does c. The cession must be accepted their credits. If the net proceeds of the his possession the thing or money to not desire or cannot receive it, after by the creditors sale amount only to ₱1.5M, A is still be delivered at the time of the offer. complying with the formalities liable for the balance of ₱500,000 unless required by law. there is a stipulation that the assignment shall be in full satisfaction of all his debts. Requisites of a valid consignation 2. A entered into a contract with B. A is a. existence of a valid debt which is due Ex.: 1. A owes B a sum of money. On given the right to cancel the contract Requirements for valid tender b. tender of payment by the debtor and the due date of the obligation, A upon payment of ₱10000 to B. In this of payment refusal without justifiable reason by offers to pay the obligation but B case, A has no existing debt to B. The a. Tender of payment must comply the creditor to accept it refuses to accept the payment amount of ₱10,000 is not owed by A, with the rules on payment. c. previous notice of consignation to without any justifiable reason. In being merely the consideration for the The tender, even if valid, does persons interested in the fulfillment of this case, A’s obligation will not exercise of his right to cancel the not by itself produce legal the obligation consignation of the be extinguished until he has made a contract. Tender of payment in good payment, unless it is completed thing or sum due subsequent notice of valid consignation. faith is sufficient to entitle A to by consignation. consignation made to the interested cancellation. parties. Creditor bears expenses of When a loss of thing will extinguish b. It must be unconditional an obligation to give consignation (entrusting) Effect of difficulty of performance and for the whole a. The obligation is to deliver a The consignation is made necessary The general rule is that impossibility amount. specific or determinate thing. because of the fault or unjust refusal of performance releases the c. It must be actually made. b. The loss of the thing occurs of the creditor to accept payment. obligor. The manifestation of a without the fault of the That being the case, it is but just that desire or intention to pay debtor. the expenses should be charged is enough. c. The debtor is not guilty of delay. against him. Ex.: A agreed to construct a road near a Requisites of condonation or mountain. A very strong typhoon CONDONATION OR REMISSION remission NOVATION caused an avalanche making the OF DEBT a. It must be gratuitous. Novation – the extinction of an construction of the road dangerous Condonation or remission – the b. It must be accepted by the obligation through the creation of to human lives which was not gratuitous abandonment by the obligor. a new one which substitutes it. foreseen or contemplated by the creditor of his right against the c. The parties must have capacity. – a contract containing two parties. In this case, A may be debtor. It is thus a form of a d. It must not be inofficious. stipulations: one to extinguish an released, in whole or in part, from donation. e. If made expressly, it must comply existing obligation, the other to his obligation to continue with the with the forms of donations. substitute a new one in its place. construction. Real or objective novation – when the object (or cause) or principal conditions Personal or subjective obligation – when the person of the debtor is substituted Mixed novation – When the object Ex.: If the agreement of the parties of the obligation are changed. and/or when a third person is subrogated and/or principal conditions of the is that D will deliver to C the 10 Ex.: A agreed to deliver to B a car. Later, in the rights of the creditor. obligation and the debtor or the air conditioners, instead of D they entered into another contract Ex. If after the constitution of the obligation, creditor, or both the parties, are delivering a car to B, then there is whereby, instead of A delivering a car, both parties agreed that A will substitute changed. It is a combination of real a mixed novation because the he would deliver 10 air conditioners. The for D or that C will be subrogated in the and personal novations. object of the obligation and the obligation to deliver the car is extinguished by the obligation to rights of B, there is a personal novation. person of the creditor are deliver the 10 air conditioners. In this case, A becomes the new debtor, or changed. C, the new creditor. Kinds of substitution Kinds of personal novation a. Expromission – that which takes Ex. 1. D (debtor) tells C (creditor) place when a third person of his own b. Delegacion – that which takes that A will pay D’s debt. C agrees. a. Substitution – when the person of initiative and without the knowledge place when the creditor accepts a It does not necessarily mean that the debtor is substituted. or against the will of the original third person to take place of the there is delegacion here. But if D b. Subrogation – when a third person debtor assumes the latter’s obligation debtor at the instance of the latter. tells C that T will pay his debt and is subrogated in the rights of the with the consent of the creditor. The creditor may withhold he asks C to release him from his creditor. It logically requires the consent of the approval. obligation, to which C agrees, third person and the creditor. delegacion results. 2. Suppose, in the same example, it is T Contracts Contract – meeting of minds between who approaches C and tells him two persons whereby one binds that T will pay the debt of D. C himself, with respect to the other, to agrees. There is no expromission in give something or to render some this case, unless there is an service. agreement that D shall be released from his obligation to C. Engr. Lito I. Mauro Contract and obligation distinguished Contract and agreement distinguished. Contract must not be contrary to Contract must not be contrary to morals. Contract is one of the sources of Contracts are agreements enforceable public order Morals deal with norms of good and right obligations. through legal proceedings. Public order refers principally to public conduct evolved in a community. On the other hand, obligation is the legal Agreements which cannot be enforced by safety although it has been considered These norms may differ at different times tie or relation itself that exists after a action in the courts of justice (like an to mean also the public weal.