Different Kinds Of Obligation PDF

OBLIGATIONS & CONTRACTS DIFFERENT KINDS OF OBLIGATION BSBA FM 2A/2B/2C  The Classification of Obligations Section 1 - Pure & Conditional Obligations (Article 1179-1192) Section 2 - Obligations with a Period Section 3 - Alternative Obligations Section 4- Joint & Solidary Obligations...

OBLIGATIONS & CONTRACTS DIFFERENT KINDS OF OBLIGATION BSBA FM 2A/2B/2C  The Classification of Obligations Section 1 - Pure & Conditional Obligations (Article 1179-1192) Section 2 - Obligations with a Period Section 3 - Alternative Obligations Section 4- Joint & Solidary Obligations Section 5 - Divisible & Indivisible Obligations Section 6 - Obligations with a Penal Clause SECTION 1 Pure & Conditional Obligations Pure Obligation: one without a condition or a term. Conditional Obligation: when there's a condition. ARTICLE 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once. Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event. DEMANDABLE OBLIGATIONS In Article 1179 - Demandable Obligations 1. Pure Obligation 2. Obligation with a Resolutory Condition  1. PURE OBLIGATION An obligation that is demandable at once because it does not depend upon a future or uncertain event, nor on a past event unknown to the parties and is not an obligation with a resolutory obligation. An obligation with: NO condition / NO period or term Example of a Pure Obligation 1. Kimberly promised to give Aj a brand new car. 2. Adel obliges herself to pay P10,000 to Marie. 3. Ivana pledged to provide Moana AVON items. 2. Conditional Obligation A conditional obligation is one the fulfillment of which is subject to a certain condition which may be an event, which may o may not happen. Condition a future and uncertain event upon which the existence or extinguishment of an obligation is made to depend. 2. Conditional Obligation 1. Suspensive (condition precedent/antecedent) Its fulfillment gives rise to the obligation 2. Resolutory (condition subsequent) Its fulfillment extinguishes the obligation Example of a Conditional Obligation 1. Kimberly promised to give Aj a brand new car if he passes the BAR examination. 2. John agreed to give Mike P5,000 monthly allowance until Mike graduates from college. UNKNOWN PAST EVENT Example: Nessy is the owner of a parcel of land which is being claimed by Imee. Last week, the Supreme Court has rendered a final decision upholding the right of Nessy. However, Nessy has not yet received the notice that she had won the case. Now, Nessy obliged herself to sell the land to Mayet, should she win the case against Imee. Article 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be deemed to be one with a period, subject to the provisions of Article 1197. Duration of Period Depends on the Debtor Period A future and certain event upon the arrival of which the obligation subject to it either arises or is extinguished DEBTOR PROMISES TO PAY WHEN HIS MEANS PERMIT HIM TO DO Deemed to be an obligation with a period Example of a Duration of Period Depends on the Debtor I will pay you... 1. Little by little 2. As soon as possible 3. From time to time 4. At any time I have the money 5. In partial payments Duration of Period Depends on the Debtor THE COURT MAY FIX THE DURATION OF THE PERIOD (ARTICLE 1197) ART. 1197. IF THE OBLIGATION DOES NOT FIX A PERIOD, BUT FROM ITS NATURE AND THE CIRCUMSTANCES IT CAN BE INFERRED THAT A PERIOD WAS INTENDED, THE COURTS MAY FIX THE DURATION THEREOF. THE COURTS SHALL ALSO FIX THE DURATION OF THE PERIOD WHEN IT DEPENDS UPON THE WILL OF THE DEBTOR. Article 1181. IN CONDITIONAL OBLIGATIONS, THE ACQUISITION OF RIGHTS, AS WELL AS THE EXTINGUISHMENT OR LOSS OF THOSE ALREADY ACQUIRED, SHALL DEPEND UPON THE HAPPENING OF THE EVENT WHICH CONSTITUTES THE CONDITION. Effect of Happening of Condition Examples: 1. Acquisition of rights (suspensive condition) Takeshi, testator, in his last will and testament gave some property to his heir Shane provided Takeshi would die within two years. The surrender of the sweepstakes ticket is a condition precedent to the payment of the prize. Effect of Happening of Condition EXAMPLES: 1. Loss of rights already acquired (resolutory condition) Jerry binds himself to support James until James graduates from college. The right to receive support shall be extinguished once the condition is fulfilled. ARTICLE 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes. Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain. A day certain is understood to be that which must necessarily come, although it may not be known when. If the uncertainty consists in whether the day will come or not, the obligation is conditional and it shall be regulated by the rules of the preceding Section. OBLIGATION WITH A PERIOD One whose effects or consequences are subjected in one way or another to the expiration or arrival of the said period or term. PERIOD a future and certain event upon the arrival of which the obligation subject to it either arises or its terminated. period vs. condition IN TERMS OF FULFILLMENT a period is a future and certain event. a condition is an uncertain event. IN TERMS OF TIME a period refers only to the future. a condition may refer also to the past. period vs. condition IN TERMS OF INFLUENCE ON THE OBLIGATION a period fixes the time for the performance of an obligation. a condition causes the existence or the extinguishment of an obligation. BOTH A PERIOD AND CONDITION ARE REQUIRED TO BE LEGALLY ANG PHYSICALLY POSSIBLE TO BE VALID KINDS OF PERIOD ACCORDING TO THE EFFECT Suspensive Period (Ex Die) - the obligation begins only from a day certain upon arrival of the period. Resolutory Period (In Deim) - the obligation is valid up to a day certain and terminates upon the arrival of the period. KINDS OF PERIOD EXAMPLES: Suspensive Period (Ex Die) 1. Hannah promised to pay Rani P50, 000 at the end of the month. 2. Narda obliged herself to support Regina from the time Regina's father dies. 3. Brian promised to pay Jonas when his means permit him to do so. KINDS OF PERIOD EXAMPLES: Resolutory Period (In Diem) 1. Klay promised to provide Maria Clara P5,000 monthly allowance until the end of 2025. KINDS OF PERIOD ACCORDING TO SOURCE Legal Period - when it is provided for by laws Conventional or Voluntary Period - when it is agreed to by the parties. Judicial Period - when it is fixed by the court ACCORDING TO THE DEFINITENESS Definite - when it is fixed or its exact date or time is known Indefinite - when it is not fixed and its exact date or time is unknown. alternative obligation Article 1199. A person alternatively bound by different prestations shall completely perform one of them. The creditor cannot be compelled to receive part of one and part of the other undertaking. alternative obligation An alternative obligation is a kind of distributive obligation according to object in which various prestations are all due however, the performance of one is enough as determined by choice, which, as a general rule, belongs to the debtor ALTERNATIVE OBLIGATION Example: “A will give B this car or this ring or this fountain pen.” A does not have to give B all the three things enumerated. The giving of one is sufficient to satisfy the obligation. The right of choice may be transfer to the creditor by the debtor. The debtor cannot compel the creditor except by partial payment. When the party agreed on a specific manner in paying the obligation, the agreement must be followed. ALTERNATIVE OBLIGATION Query In the example given, may A compel B to accept half the car and half the ring (hence, establishing co-ownership between A and B)? ANS.: No, B cannot be forced to accept. The creditor cannot be compelled to receive part of one and part of the other undertaking. ALTERNATIVE OBLIGATION Example: D borrowed from C P10,000. It was agreed that D could comply with his obligation by giving C P10,000, or a color television set, or by painting the house of C. The delivery of the P10,000, or a color television set, or the painting of the house of C, is sufficient to comply with the obligation. Performance must be complete. C cannot be compelled to accept, for instance, P5,000 and half of the television, thereby establishing a co-ownership between them, or P5,000, and the painting of a part of his house. JOINT AND SOLIDARY OBLIGATION Art. 1207. The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity. Joint Distinguished from Solidary Obligations In a joint obligation “each obligor answers only for a part of the whole liability and to each obligee belongs only a part of the correlative rights.” Whereas, in “a solidary or joint and several obligation, the relationship between the active and the passive subjects is so close that each of the former or of the latter may demand the fulfi llment of or must comply with the whole obligation.” Joint Distinguished from Solidary Obligations (8 Manresa 194). Stated otherwise, the following are the maxims to remember: (a) Joint Obligations — “To each his own.’’ (b) Solidary Obligations — “One for all, all for one.” Joint Distinguished from Solidary Obligations (a) Joint Obligations — In a joint obligation, each debtor is liable only to a proportionate part of the debt, and each creditor is entitled only to a proportionate part of the credit. ex: Alex and Eduard are indebted to Therylou for P10,000. Alex is liable only for P5,000. Eduard is liable only for P5,000. Joint Distinguished from Solidary Obligations (a) Solidary Obligations — where each one of the debtors is bound render, and/or each creditor has the right to demand from any of the debtors, the entire compliance with the prestation. For Joint Obligations: Examples: (a) A and B are joint debtors of C to the amount of P1,000,000. C can demand only P500,000 from A, and only P500,000 from B. (b) A and B are joint debtors of C, D, E, and F, who are joint creditors to the amount of P1,000,000. C may demand only P125,000 from A, and P125,000 from B. D, E, and F, have the same rights as C. For Solidary Obligations: (a) A and B are solidary debtors of C to the amount of P1,000,000. C can demand the whole P1,000,000 from A. A in turn, after paying C, can ask reimbursement from B to the amount of P500,000. (b) A and B are solidary debtors of C, D, E, F, solidary creditors, to the amount of P1,000,000. Any creditor, like C, can demand from any debtor, like A, the whole P1,000,000. In turn, C has to give P250,000 each to D, E, and F. B has to reimburse A for P500,000 which is really B’s share of the obligation.  DIVISIBLE AND INDIVISIBLE OBLIGATIONS Art. 1223. The divisibility or indivisibility of the thing that are the object of obligations in which there is only one debtor and only one creditor does not alter or modify the provisions of Chapter 2 of this Title.  DIVISIBLE AND INDIVISIBLE OBLIGATIONS Divisible and Indivisible Obligations Defined (a) Divisible obligation — one capable of partial performance. (Example: to deliver 200 kilos of sugar) Art. 1223 (b) Indivisible obligation — one not capable of partial performance. (Example: to deliver a specific car) ‘Indivisibility’ Distinguished from ‘Solidarity’  Classes or Kinds of Indivisibility (a) conventional indivisibility (by common agreement) (b) natural or absolute indivisibility (because of the nature of the object of undertaking — Example: to take a trip to Manila; or to give a particular ring) (c) legal indivisibility (if so provided for by law)  Kinds of Division (a) quantitative division (depends on quantity: Example — if 10 chairs are equally divided between two brothers.) (b) qualitative division (depends on quality, irrespective of quantity. Example: If one child inherits land, and another inherits cash.) (c) intellectual or moral division (one that exists merely in the mind, and not in physical reality. Example: My brother and I own in common a car. My one-half share is only in the mind.) OBLIGATIONS WITH A PENAL CLAUSE Art. 1226. In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of non-compliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfi llment of the obligation. The penalty may be enforced only when it is demandable in accordance with the provisions of this Code.  ‘Penal Clause’ Defined (a) It is a coercive means to obtain from the debtor compliance from the debtor. (b) A penal clause is an accessory undertaking to assume greater liability in case of breach. It is attached to obligations in order to insure their performance. (8 Manresa 245).  Kinds of Penal Clauses First classification: (a) legal penal clause — one that is imposed by the law (b) conventional penal clause — that which has been agreed upon by the parties Second classification: (a) subsidiary — when only the penalty may be asked (b) joint — when both the principal contract and the penal clause can be enforced. (8 Manresa 215).  Penal Clause Distinguished from a Condition “Between a condition and a penalty, there are notable differences: the latter constitutes an obligation although accessory; the former does not. Therefore, the latter may become demandable in default of the unperformed principal obligation, and sometimes jointly with it, while the former or the condition is never demandable.” (Manresa’s Commentaries on the Civil Code, Vol. 8, p. 244).  Principal Purpose of the Penal Clause Its principal purpose is to insure the performance of an obligation and also to substitute for damages and the payment of interest in case of non-compliance. (Art. 1224, 1st par., Civil Code).  Examples (a) A promised to construct the house of B within 80 days. In the contract, there is a provision to the effect that for every day’s delay after the stipulated 80 days, A would pay a fine or indemnity or penalty of P10,000. If the house is, therefore, constructed finally at the end of 85 days — 5 days more than the time stipulated — A would have to pay a penalty of P50,000, i.e., whatever sum B agreed to give A for the construction of the house will be given to A minus, of course, the P50,000 imposed as penalty. The first purpose of the penal clause is, therefore, clear. Its insertion was to give A a motive to finish the construction on time; otherwise, he would have to suffer the penalty. The second purpose is also clear, namely, that instead of computing the actual damages that may have been caused by the five days’ delay, and instead of computing the legal rate of interest as damages, the matter has become simplified by the insertion of said penal clause, which in this case now assumes the part of liquidated damages. The general rule is, therefore, this: The penalty takes the place of indemnity for damages and the payment of interest.  Examples (b) A stipulation in the contract providing for the compounding of interest in case of non-performance partakes of the nature of a penalty clause. If inequitous or unconscionable, the interest may be reduced. (Hodges vs. Javellana, L-17247, Apr. 28, 1962).  Examples (c) A stipulation in a contract for the sale of a residential lot that if within 2 years from the sale the buyer has not yet built 50% of his proposed residence, he would pay P11,123 to the seller — is an example of a penalty clause. (Makati Development Corporation v. Empire Insurance Co., L- 21780, Jun. 30, 1967).  May Any Penalty Be Demandable? ANS.: No. The penalty may be enforced only when it is demandable in accordance with the provisions of the Civil Code, one of which states that the penalty may be reduced if it is iniquitous or unconscionable. (Art. 1229, Civil Code). FOR LISTENING!