ECE00 Introduction to Laws, Obligations & Contracts PDF

SLSU College of Engineering electronics engineering department ECE00 ECE LAWS, CONTRACTS, STANDARDS, ETHICS AND SAFETY ENGR. ANTHONY L. RIEGO PRELIMINARY TERM Orientation Obligations Damages and Law Contracts Introduction to PRELIMINARY DIFFERENT KINDS Merchants GENERAL PROVISIONS EXAMINATIONS Laws, Obligations OF OBLIGATIONS Natures and Effects of STIPULATIONS IN THE and Contracts SOURCES OF Obligations CONTRACT OBLIGATIONS DETERMINATE AND MUTUALITY OF THE RESPONSIBILITIES INDETERMINATE THING CONTRACT EXTINGUISHMENT RIGHT OF CREDITOR TO PERFECTION OF THE OF OBLIGATIONS FRUITS CONTRACT PERFROMANCE OF A ESSENTIAL REQUISITES THIRD PARTY OF CONTRACTS DELAYS REFORMATION OF GROUNDS FOR LIABILITY INSTRUMENTS DAMAGES FOR BREACH DEFECTIVE CONTRACTS FRAUD AND NEGLIGENCE MIDTERM PROFESSIONAL ECE LAWS OTHER ECE RELATED ECE LAWS, CODES & MIDTERM ETHICS R.A. 5734 STATUTES STANDARDS EXAMINATIONS CODE OF ETHICS R.A. 9292 IECEP RA 8972 FOR ELECTRONICS ECE PLEDGE INTERNATIONAL RA3846 ENGINEERING CSC GUIDELINES PROFESSIONAL PRACTICE THE NATIONAL PRACTITIONERS THE BOARD ASEAN AND APEC REGISTRY TELECOMMUNICATIONS EXAMINATIONS ENGINEERING INSTITUTIONS COMMISSION ECE PROFESSION ECE LAWS, CODES & DICT AND RA 10844 REGULATION STANDARDS NATIONAL BUILDING CODE ECE PROFESSION TIA/EIA OF THE PHILS (PD1096) PRACTICE PCAB RA7925 IRR OF RA 9292 MUX STANDARDS OTHER ECE RELATED REGULATIONS FINAL TERM Safety Standards in Philippine Electronics Philippine Electronics FINAL TERM the Workplace Code Code EXAMINATIONS BASIC SAFETY Book 01: Book 03: Cable PROCEDURES Telecommunication Television System VALUE BASED Facilities & Distribution Book 04: Distributed SAFETY System Antenna System OFF THE JOB SAFETY Book 02: Fire Detection DISASTER and Alarm System PREVENTION AND MITIGATION INCIDENT INVESTIGATION AND REPORTING J. N. Nolledo, The Philippines Law on Obligations and Contracts Explained, National Bookstore: Manila, 1989 Republic Act No. 9292: Electronics Engineering Law of 2004, 3rd Regular Session, 12th Congress, Congress of the Philippines, Republic of the Philippines D. G. Johnson, Ethical Issues in Engineering, Prentice- Hall: New Jersey, 1991 IECEP, Philippine Electronics Code Book 01-04 Various: TIA/EIA, WARC, IEEE, ARL standards, Engineering Economy discussions on corporation and partnership practices, Draft IECEP Code of Ethics and similar items QUIZZES MAJOR EXAMINATIONS 20% 40% 15% PARTICIPATION COURSEWORKS AND ATTENDANCE 25% AND PROJECTS CASE STUDIES, PRESENTATION AND ANALYSIS CLASS DEBATES, ROLE PLAYING, INFOMERCIALS RESEARCH AND REACTION PAPERS SAFETY (BOSH) SEMINAR Understand and demonstrate the ability to explain the concepts of the law, contracts, and obligations as well as the Code of Ethics as they pertain to the practice of the ECE Profession. Know and understand the various laws and regulations pertaining to ECE, telecommunications, broadcast, radio operations, electronic transactions, ECE- related intellectual property and key ECE codes and standards. The Information in Criminal Case No. SB-16-CRM-0080 alleged that the accused former Makati City Mayor Jejomar Erwin S. Binay, Jr. and the other accused public officers of Makati City mentioned therein, in the performance of their official and/or administrative functions, conspired with petitioner, a private individual and the representative of Hilmarc's Construction Corporation (Hilmarc's), in giving unwarranted benefits, advantage, and preference to Hilmarc's, and causing undue injury to the Government by awarding Hilmarc's the contract for the Phase IV construction of the Makati City Hall Parking Building amounting to P649,275,681.73, through simulated public bidding Apple Inc. v. Samsung Electronics Co., Ltd. is the general title of a series of patent infringement lawsuits between Apple Inc. and Samsung Electronics in the United States Court system, regarding the design of smartphones and tablet computers. On 12 September 2014, the KOR, a "civic, patriotic, cultural, nonpartisan, non-sectarian and non-profit organization" 18 created under Republic Act No. 646, 19 filed a Petition for Injunction seeking a temporary restraining I order, and later a permanent injunction, against the construction of DMCIPDI's Torre de Manila condominium project. The KOR argues that the subject matter of the present suit is one of "transcendental importance, paramount public interest, of overarching significance to society, or with far-reaching implication" involving the desecration of the Rizal Monument. Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by petitioner Smart Communications, Inc., seeking the reversal of the Decision dated July 16, 2004 and Resolution dated December 9, 2004 of the Court of Appeals in CA-G.R. CV No. 71337. The appellate court (1) reversed and set aside the Order dated January 16, 2001 of the Regional Trial Court (RTC), Branch 23, of Roxas, Isabela, in Civil Case No. Br. 23-632-2000 dismissing the complaint for abatement of nuisance and injunction against petitioner, and (2) entered a new judgment declaring petitioner's cellular base station located in Barangay Vira, Municipality of Roxas, Province of Isabela, a nuisance and ordering petitioner to cease and desist from operating the said cellular base station From the news, the fire is caused by a welder who weld near flammable materials. What did he do before doing the welding works that could have prevented the fire. Is he a certified welder? Was he trained in fire safety? Does the factory has safety officer or even engineers with safety training who supervised the welder? Does the factory has a working fire detection, fire suppression and fire alarm system? What has the local government and the Bureau of Fire did that should have prevented this tragedy? Is the footwear factory implementing a safety program? Do they (management and workers) have the knowledge and the right attitude that will prevent fires? A rule of conduct, just, obligatory, laid down by legitimate authority for common observance and benefits A formalized code of conduct describing what society feels is the proper way to behave. It means any rule of action or any system of uniformity. It can be a civil law, criminal law or even a mathematical or physical law. Since we are engineers, we are very aware of what are the mathematical and physical laws. Word origin from the Old Norse “lagu” literally “something laid down that which is fixed or set” Are set of moral principles: a theory or system of moral values that governs a person or a group. Ethical standards are always applied in the engineer’s line of work to ensure that all actions are taken professionally and in a morally accepted norm of the society. rules of conduct or actions prescribed or formally recognized as binding or enforced by a controlling authority in the Electronics Engineering profession. rules of behavior based on ideas about what is morally good and bad which serves as a guiding principle of philosophy for Electronics Engineers The Code of Ethics for Electronics Engineering practitioners are stated in the manual of Professional Practice for Electronics Engineers. The LAW: regulates who are eligible to practice the profession defines the coverage of the practice set standards in doing a specific task, like making electronics design identifies who will enforce the regulations in the profession set the education's curriculum, and etc. The law set the rules and standards for the profession and its implications on the profession is not limited on the items listed above. the condition of being safe from undergoing or causing hurt, injury, or loss freedom from conditions that can cause death, injury, occupational illness, damage to or loss of equipment or property, or damage to the environment. Safety management encompasses the systematic administration of health and safety risks using policies, practices, processes and technologies designed to effectively eliminate, prevent or control inherent workplace risks (Mearns et al., 2003) an act or course of action to which a person is morally or legally bound; a duty or commitment. an obligation is a juridical necessity to give, to do or not to do. (Book IV. Title 1. Chapter 1. Article 1156) “Naturally, obligations is not a physical object, it’s the construct of the mind so people will have very different perceptions of what it is. It may be voluntary or not. Obligation is the demands from so-called authority which you are not morally bound to fulfill although you may feel obliged to do so.” A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. (Book IV. Title 2. Chapter 1. Article 1305) a written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law. Contract is everywhere Alice Go will be taking her prelim exams at SCENARIO A Bamban University. However, because of financial incapacity due to the recent shutdown of her parent’s POGO business, she availed a promissory note to pay PHP 20M within the end of semester. You are riding a jeep going to Lucban, when SCENARIO B suddenly an old man insults one of the passengers because she is wearing a hijab. Hairy Roque was hired by the DDS Guns Company. SCENARIO C Upon hiring, it was stated in his contract that he is not allowed to share confidential company information. CIVIL CODE OF THE PHILIPPINES Republic Act No. 386 an act to ordain and institute the human relations in the Philippines. It is published in June 10, 1949, almost four years after the end of the World War II. It is divided into four books: Book I - Persons Book II - Property, Ownership, and its Modifications Book III - Different Modes of Acquiring and Ownership Book IV - Obligations and Contracts Title I of the Book IV covers the civil code for obligations. It consists of four chapters; namely: Chapter 1 - General Provisions Chapter 2 - Nature and Effect of Obligations Chapter 3 - Different Kinds of Obligations Chapter 4 - Extinguishment of Obligations ARTICLE 1156. An obligation is a juridical necessity to give, to do or not to do. CHAPTER 01 GENERAL PROVISIONS The term obligation is derived from the Latin word “obligatio” which means tying or binding (1) It is a tie of law or a juridical bond by virtue of which one is bound in favor of another to render something – and this may consist in giving a thing, doing a certain act, or not doing a certain act. (2)Manresa defines the term as a legal relation established between one party or another, whereby the latter is bound to the fulfillment of a prestation which the former may demand of him JURIDICAL NECESSITY in case of non-compliance, the courts of justice may be called upon to enforce its fulﬁllment or, in default thereof, the economic value that it represents the debtor may also be made liable for damages, which represent the sum of money given as a compensation for the injury or harm suffered by the creditor or obligee. the debtor must comply with his obligation whether he likes it or not; otherwise, his failure will be visited with some harmful or undesirable legal consequences. If obligations were not made enforceable, then people can disregard them with impunity. NATURE OF OBLIGATIONS UNDER THE CIVIL CODE Civil Obligations legally demandable and the courts of justice may compel their performance. Natural Obligations based on morality, natural law and conscience, they are not legally demandable. do not grant a right of action to enforce their performance although in case of voluntary fulfillment by debtor, the latter may not recover what has been delivered or rendered by reason thereof; precept based on “do good and avoid evil” REQUISITES OF OBLIGATIONS Juridical or legal tie (Efficient Cause) the vinculum or the link that binds the party Object or Prestation (Subject Matter) The conduct required to be observed by debtor; it may consist in giving, doing or not doing something Active subject person who can demand the performance of the obligation or known as the creditor or obligee Passive subject the person from whom prestation is demandable or known as the debtor or obligor Identify the elements of obligations present in the situation. ILLUSTRATION (A) Kathryn entered into a contract with Daniel whereby Kathryn agreed to deliver to Daniel 60 orders of Shawarma Shack on Monday. (B) Under a management contract, James bound himself to produce a recording album for Nadine at PHP 6.9M cost. FORMS OF OBLIGATIONS ORAL IN WRITING PARTLY ORAL AND PARTLY IN WRITING KINDS OF OBLIGATIONS According to viewpoint of sanction A. CIVIL OBLIGATION that defined in Art. 1156. The sanction is judicial process. B. NATURAL OBLIGATION the duty not to recover what has voluntarily been paid although payment was no longer required. The sanction is the law of course, but only because conscience had originally motivated the payment. C. MORAL OBLIGATION duty where the sanction here is conscience or morality, or the law of the church. Identify which of the following scenarios are civil, natural or moral obligation in nature. ILLUSTRATION (A) Enrique promises to pay Liza his debt of P1 million. (B) Enrique owes Liza P1 million. But the debt has already prescribed. If Enrique, knowing that it has prescribed, nevertheless still pays Liza, he cannot later on get back what he voluntarily paid. (C) A Catholic promise to hear mass for 10 consecutive Sundays in order to receive P1 million. According to viewpoint of subject matter A. REAL OBLIGATION - the obligation to give; the subject matter is a thing to which the obligor must deliver to the obligee B. PERSONAL OBLIGATION – the obligation to do or not to do; the subject matter is an act to be done or not to be done According affirmativeness and negativeness of the obligation A. POSITIVE OR AFFIRMATIVE OBLIGATION – the obligation to do or to render service B. NEGATIVE OBLIGATION - the obligation not to do (which naturally includes “not to give” Identify which of the following scenarios are real or personal obligation in nature. ILLUSTRATION (A) Naruto binds himself to deliver a bowl of ramen to Goku. (B) Bini Maloi binds herself to sew a dance outfit to Bini Colet. (C) Pablo obliges himself not to build a cellular tower on a certain portion of his lot in favor of Stell who is entitled to a right of way over the said lot. According to viewpoint of persons obliged A. UNILATERAL OBLIGATION – only one party is bound B. BILATERAL OBLIGATION – where both parties are bound BILATERAL OBLIGATIONS maybe: A. RECIPROCAL – a legal agreement that binds two parties equally, with each party having a duty to the other B. NONRECIPROCAL- where performance by one is independent upon performance by the other Identify which of the following scenarios are unilateral or bilateral obligation in nature. ILLUSTRATION (A) Sarah Shiminet owes Baby M a cash amounting to PHP11M. (B) In a contract of sale, Sarah Shiminet will pay PHP11M to Baby M, and Baby M in return will deliver a brand new car to Sarah Shiminet. (C) Sarah Shiminet borrowed Baby M a cash amounting to PHP11M. Baby M on the other hand, borrowed Sarah Shiminet’s car. ARTICLE 1157. Obligations arise from: (1) Law (2) Contracts (3) Quasi-contracts (4) Acts or omissions punished by law; and (5) Quasi-delicts. An obligation imposed on a person and the corresponding right granted to another must be rooted in at least any of the following sources (1) LAW (Obligation ex lege) when they are imposed by the law itself Example: obligation to pay taxes; obligation to support one’s family (2) CONTRACTS (Obligation ex contractu) when they arise from the stipulation of the parties (Art. 1306.) Example: the obligation to repay a loan by virtue of an agreement (3) QUASI-CONTRACTS (Obligation ex quasi-contractu) when they arise from lawful, voluntary and unilateral acts and which are enforceable to the end that no one shall be unjustly enriched or beneﬁted at the expense of another (Art. 2142.) Example: the obligation to return money paid by mistake or which is not due. (Art. 2154.) In a sense, these obligations may be considered as arising from law. (4) ACTS OR OMISSIONS PUNISHED BY LAW (Obligation ex maleficio or ex delicto) when they arise from civil liability which is the consequence of a criminal offense Example: Supposing A kills B. If the court finds that A is guilty, A will be sentenced either to imprisonment or death, depending on the gravity of the offense. (5) QUASI-DELICTS OR TORTS (Obligation ex quasi-delicto or ex quasi- maleficio) when they arise from damage caused to another through an act or omission, there being fault or negligence, but no contractual relation exists between the parties Example: the obligation of the head of a family that lives in a building or a part thereof to answer for damages caused by things thrown or falling from the same The law enumerates ﬁve (5) sources of obligations. They may be classiﬁed as follows: (1) Those emanating from law and; (2) Those emanating from private acts which may be further subdivided into: (a)those arising from licit acts, in the case of contracts and quasi-contracts; and (b)those arising from illicit acts, which may be either punishable by law in the case of delicts, or not punishable in the case of quasi-delicts. Actually, there are only two (2) sources: law and contracts, because obligations arising from quasi- contracts, crimes, and quasi-delicts are really imposed by law. Determine the following scenarios as to what source of obligation applies to each. Provide a 2-3 HOMEWORK sentence explanation for each answer. Marie Tess, through a social media post, meddled and discussed the Scenario A alleged affair of her neighbor with another woman. Though this may not constitute a criminal offense, Marie Tess might be liable for damages, prevention and other reliefs as a cause of action by her neighbor. Henry See owes Tuni Stark the sum of eight billion dollars due to the recent expansion of his mall XM. However, Henry See pays Tuni Stark the Scenario B amount of ten billion dollars by mistake. Tuni Stark must return to Henry See the excess two billion dollars because as to the excess, that is payment of something not owing. Supposing Cardio Dalisay, while watering a flower pot in his house, Scenario C negligently caused the same to fall, hitting Elias Guerrera who suffered injuries. Cardio Dalisay is then obliged to pay for the damage sustained by Elias Guerrera. ARTICLE 1158. Obligations from law are not presumed. Only those (1) expressly determined in this code or (2) in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this code. An employer has no obligation to furnish free legal ILLUSTRATION assistance to his employees because no law requires this, and, therefore, an employee may not recover from his employer the amount he may have paid a lawyer hired by him to recover damages caused to said employee by a stranger or strangers while in the performance of his duties. (De la Cruz vs. Northern Theatrical Enterprises, 95 Phil. 739.) ARTICLE 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. CONTRACT – meeting of minds between two persons whereby one binds himself, with respect to the other, to give, to do something or to render some service; governed primarily by the agreement of the contracting parties. VALID CONTRACT – it should not be against the law, contrary to morals, good customs, public order, and public policy. COMPLIANCE IN GOOD FAITH – compliance or performance in accordance with the stipulations or terms of the contract or agreement. ARTICLE 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title 17 of this book. QUASI-CONTRACT – juridical relation resulting from lawful, voluntary and unilateral acts by virtue of which, both parties become bound to each other, to the end that no one will be unjustly enriched or benefited at the expense of the other. NEGOTIORUM GESTIO – juridical relation which takes place when somebody voluntarily manages the property affairs of another without the knowledge or consent of the latter; owner shall reimburse the gestor for necessary and useful expenses incurred by the latter for the performance of his function as gestor SOLUTIO INDEBITI - there is no right to demand it and it was unduly delivered through mistake; obligation to return the thing arises on the part of the recipient.. ARTICLE 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary in Human Relations, and of Title 18 of this book, regulating damages. Every person criminally liable for a felony also has civil liability. (Art. 104 of RPC) (a) RESTITUTION – restoration of property previously taken away; the thing itself shall be restored, even though it be found in the possession of a third person who has 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 – court determines the amount of damage: price of a thing, sentimental value, etc. (c) INDEMNIFICATION FOR CONSEQUENTIAL DAMAGES – includes damages suffered by the family of the injured party or by a third person by reason of the crime ARTICLE 1162. Obligations derived from quasi-delicts shall be governed by the provisions of chapter 2, title 17 of this book, and by special laws. REQUISITES: QUASI-DELICT (culpa aquiliana) – an act or a. omission omission by a person which causes b. negligence damage to another giving rise to an c. damage cause to the obligation to pay for the damage done, plaintiff there being fault or negligence but there is d. direct relation of omission, no pre-existing contractual relation being the cause, and the between parties. damage, being the effect e. no pre-existing FAULT OR NEGLIGENCE – consists in the contractual relations between parties omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the person, time, and of the place. ARTICLE 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence CHAPTER 02 of a good father of a family, unless the law or the NATURE AND EFFECTS stipulation of the parties requires another OF OBLIGATIONS standard of care. DETERMINATE THING A thing is said to be specific or determinate The gold watch I am when it is particularly designated or physically wearing. segregated from all others of the same class. The car sold by Bhaby Bhoy. (Art. 1460) My dog named “Violence.” The house at the corner of A determinate thing is identified by its Diyan Lang and Dito Daw individuality. Streets. The debtor cannot substitute it with another The Toyota car with Plate although the latter is of the same kind and No. ALR 1026. quality without the consent of the creditor. (Art. 1244) ARTICLE 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence CHAPTER 02 of a good father of a family, unless the law or the NATURE AND EFFECTS stipulation of the parties requires another OF OBLIGATIONS standard of care. INDETERMINATE THING A thing is generic or indeterminate when it A GShock digital wrist watch refers only to a class or genus to which it A 2008 model American car. pertains and cannot be pointed out with A floating sea creature particularity. A generic thing is identified only by its specie. The debtor can give anything of the same class as long as it is of the same kind. ILLUSTRATION Scenario A If Mr. Jolly Beh is obligated to deliver to Ms. Chao King an iPhone 14 Pro Max, the one Mr. Beh is currently using, can Mr. Beh deliver an iPhone 15 Pro Max to Ms. King instead? DUTIES OF DEBTOR IN OBLIGATION TO GIVE A DETERMINATE THING CHAPTER 02 (1) To preserve or take care of the thing due; NATURE AND EFFECTS (2) To deliver the fruits of the thing (see Art. 1164.); OF OBLIGATIONS (3) To deliver its accessions and accessories (see Art. 1166.); (4) To deliver the thing itself (refer to Arts. 1163, 1233, 1244; as to kinds of delivery, Arts. 1497 to 1501.); and (5) To answer for damages in case of non- fulfillment or breach. DUTIES OF DEBTOR IN OBLIGATION TO GIVE A GENERIC THING CHAPTER 02 (1) To deliver a thing which is of the quality NATURE AND EFFECTS intended by the parties taking into OF OBLIGATIONS consideration the purpose of the obligation and other circumstances (see Art. 1246.); and (2) To be liable for damages in case of fraud, negligence, or delay, in the performance of his obligation, or contravention of the tenor thereof. (see Art. 1170.) RIGHT OF CREDITOR TO FRUITS By law, the creditor is entitled to the fruits of the CHAPTER 02 thing to be delivered from the time the NATURE AND EFFECTS obligation to make delivery of the thing arises. OF OBLIGATIONS The intention of the law is to protect the interest of the obligee should the obligor commit delay, purposely or otherwise, in the fulfillment of his obligation. In case of rescission, the parties are under “obligation to return the things which were the object of the contract, together with their fruits and the price with its interest.’’ (Art. 1385.) KINDS OF FRUITS NATURAL FRUITS are the spontaneous products of the soil, and CHAPTER 02 the young and other products of animals, e.g., NATURE AND EFFECTS grass; all trees and plants on lands produced OF OBLIGATIONS without the intervention of human labor. INDUSTRIAL FRUITS are those produced by lands of any kind through cultivation or labor, e.g., sugar cane; vegetables; rice; and all products of lands brought about by reason of human labor. CIVIL FRUITS are those derived by virtue of a juridical relation, e.g., rents of buildings, price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. (Art. 442.) ILLUSTRATION Scenario A Ms. Bell Gates sold her cow to Mr. Mark Suckerberj for P15,000.00. No date or condition was stipulated for the delivery of the cow. While still in the possession of Ms. Gates, the cow gave birth to a calf. Who has the right to the calf? PERFORMANCE OF A THIRD PARTY While the debtor can be compelled to make the delivery of a specific thing (Art. 1165.), a specific CHAPTER 02 performance cannot be ordered in a personal NATURE AND EFFECTS obligation to do because this may amount to OF OBLIGATIONS involuntary servitude which, as a rule, is prohibited under our Constitution. (Art. III, Sec. 18 thereof.) ILLUSTRATION Scenario A Aubrey delivered to Boyet, a printer technician, an HP Deskjet printer for routine cleaning and servicing. Boyet was not able to finish the job after some time despite repeated reminders made by Aubrey. Finally, Boyet returned the printer unrepaired, some of the parts missing. Aubrey had the printer repaired by G Gadgets, and the repair job costs her P58.75 for labor or service and P31.10 for the missing parts or a total of P89.85. The lower court rendered judgment ordering Boyet to pay only P31.10. Is Boyet liable also for P58.75, the cost of the service expended in the repair? DELAY The word delay, as used in the law, is not to be understood according to its meaning in common CHAPTER 02 parlance. A distinction, therefore, should be made NATURE AND EFFECTS between ordinary delay and legal delay (default or OF OBLIGATIONS mora) in the performance of an obligation. Ordinary delay is merely the failure to perform an obligation on time. Legal delay or default or mora is the failure to perform an obligation on time which failure, constitutes a breach of the obligation. KINDS OF DELAY (mora) Mora solvendi or the delay on the part of the CHAPTER 02 debtor to fulfill his obligation (to give or to do) NATURE AND EFFECTS by reason of a cause imputable to him; OF OBLIGATIONS Mora accipiendi or the delay on the part of the creditor without justifiable reason to accept the performance of the obligation; and Compensatio morae or the delay of the obligors in reciprocal obligations (like in sale), i.e., the delay of the obligor cancels the delay of the obligee, and vice versa. NO DELAY IN NEGATIVE PERSONAL OBLIGATION In an obligation not to do, non-fulfillment may take place, but delay is impossible for the debtor CHAPTER 02 fulfills by not doing what has been forbidden him. NATURE AND EFFECTS (see Art. 1168.) OF OBLIGATIONS REQUISITES OF DELAY OR DEFAULT BY THE DEBTOR There are three conditions that must be present before mora solvendi can exist or its effects arise: (1) failure of the debtor to perform his (positive) obligation on the date agreed upon; (2) demand (not mere reminder or notice) made by the creditor upon the debtor to fulfill, perform, or comply with his obligation which demand, may be either judicial (when a complaint is filed in court) or extra-judicial (when made outside of court, orally or in writing); and (3) failure of the debtor to comply with such demand. ILLUSTRATION Scenario A B obliged himself to pay S the balance of the purchase price of a subdivision lot within two years from completion by S of the roads in said subdivision. S brought action to foreclose the real estate mortgage executed by B to secure the payment of the unpaid price. B contends lack of previous notice of the completion of the roads and the absence of a demand for payment. Is this contention of B tenable? EFFECTS OF DELAY | Mora solvendi (a)The debtor is guilty of breach of the obligation; (b) He is liable for interest in case of obligations to pay money (Art. 2209.) or damages in other obligations. (Art. 1170.) In the absence of extrajudicial demand, the interest shall commence from the filing of the complaint; and (c) He is liable even for a fortuitous event when the obligation is to deliver a determinate thing. (Arts. 1165, 1170.) However, if the debtor can prove that the loss would have resulted just the same even if he had not been in default, the court may equitably mitigate the damages. (Art.2215.) (d In an obligation to deliver a generic thing, the debtor is not relieved from liability for loss due to a fortuitous event. He can still be compelled to deliver a thing of the same kind (see Art. 1263.) or held liable for damages. (Art. 1170; see Lee vs. De Guzman, Jr., 187 SCRA 276.) EFFECTS OF DELAY | Mora accipiendi (a) The creditor is guilty of breach of obligation; (b) He is liable for damages suffered, if any, by the debtor; (c) He bears the risk of loss of the thing due (see Art. 1162.); (d) Where the obligation is to pay money, the debtor is not liable for interest from the time of the creditor’s delay; and (e) The debtor may release himself from the obligation by the consignation of the thing or sum due. (see Art. 1256.) When is the demand not necessary to put debtor in delay? The general rule is that delay begins only from the moment the creditor demands, judicially or extrajudicially, the fulfillment of the obligation. The demand for performance marks the time when the obligor incurs mora or delay and is deemed to have violated his obligation. Without such demand, the effect of default will not arise unless any of the exceptions mentioned below is clearly proved. ILLUSTRATION Scenario A B (bank) started a contest of designs and plans for the construction of a building, announcing that the prizes would be awarded not later than November 30, 2022. C took part in the contest, performing work and incurring expenses for that purpose. B did not name judges and failed to award the prizes on the date specified. C contended that the said date was the principal inducement in the creation of the obligation, because the current cost of concrete buildings at that time was fixed. Was B in default in not awarding the prizes on November 30, 2022? GROUNDS FOR LIABILITY Article 1170 gives the four grounds for liability which may entitle the injured party to damages (see Art. 2197.) for all kinds of obligations regardless of their source, mentioned in Article 1157, whether the obligations are real or personal (supra). It contemplates that the obligation was eventually performed but the obligor is guilty of breach thereof. Here, the breach of the obligation is voluntary; in Article 1174, it is involuntary GROUNDS FOR LIABILITY Fraud (deceit or dolo) Article 1170 gives the four grounds for liability Negligence (fault or culpa) which may entitle the injured party to Delay (mora) damages (see Art. 2197.) for all kinds of Contravention of the terms obligations regardless of their source, of the obligation mentioned in Article 1157, whether the obligations are real or personal (supra). It contemplates that the obligation was eventually performed but the obligor is guilty of breach thereof. Here, the breach of the obligation is voluntary; in Article 1174, it is involuntary GROUNDS FOR LIABILITY Fraud (deceit or dolo) it is the deliberate or intentional evasion of the normal fulfillment of an obligation. (a) As a ground for damages, it implies some kind of malice or dishonesty, and it cannot cover cases of mistake and errors of judgment made in good faith. It is synonymous to bad faith in that it involves a design to mislead or deceive another. Moral damages may be recovered in addition to other damages. (see Art. 2220; Far East Bank & Trust Co. vs. Court of Appeals, 241 SCRA 671.) GROUNDS FOR LIABILITY Fraud (deceit or dolo) (b) Article 1170 refers to incidental fraud (dolo incidente) committed in the performance of an obligation already existing because of contract. It is to be differentiated from causal fraud (dolo causante) or fraud employed in the execution of a contract under Article 1338, which vitiates consent and makes the contract voidable and to incidental fraud under Article 1344 also employed for the purpose of securing the consent of the other party to enter into the contract but such fraud was not the principal inducement to the making of the contract. GROUNDS FOR LIABILITY Fraud (deceit or dolo) (c) Under Article 1170, the fraud is employed for the purpose of evading the normal fulfillment of an obligation and its existence merely results in breach thereof giving rise to a right by the innocent party to recover damages. The Civil Code refers to civil fraud. Criminal fraud gives rise to criminal liability. ILLUSTRATION Scenario A Mr. Halo Blok, contractor, brought action to recover the actual costs of the construction of the building of Ms. Hana Bishi, plus 12-1/2% for and on account of his services and superintendence of the building, as per contract. Ms. Hana alleged that through Mr. Blok’s negligence in the construction of the building and the purchase of materials, she suffered damages. Ms. Hana’s counterclaims are founded upon Mr. Blok’s mistakes and errors of judgment in the employment of labor and the purchase of materials. Assuming that there were such mistakes or errors of judgment, would Mr. Blok be liable for them under the contract? GROUNDS FOR LIABILITY Negligence (fault or It is any voluntary act or omission, there culpa) being no malice, which prevents the normal fulfillment of an obligation. (see Arts. 1173, 1174.) Delay (mora) the failure to perform an obligation on time which failure, constitutes a breach of the obligation Contravention of the This is the violation of the terms and terms of the obligation conditions stipulated in the obligation. The contravention must not be due to a fortuitous event or force majeure. RECOVERY OF DAMAGES FOR BREACH OF CONTRACT OR OBLIGATION MEASURE OF RECOVERABLE DAMAGES BREACH OF CONTRACT The provisions under Title XVIII on is the failure without “Damages’’ of the Civil Code govern in justifiable excuse to comply determining the measure of recoverable with the terms of a contract. damages. The breach may be willful or Fundamental in the law on damages is done unintentionally. that one injured by a breach of a contract, It has been defined as the or by a wrongful or negligent act or failure, without legal excuse, omission shall have a fair and just to perform any promise which compensation commensurate to the loss forms the whole or part of the sustained as a consequence of the contract. defendant’s act. RECOVERY OF DAMAGES FOR BREACH OF CONTRACT OR OBLIGATION CONTRACTUAL INTERESTS OF OBLIGEE OR PROMISEE remedy serves to preserve. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promisee that may include: a. Expectation interest, which is his interest in having the benefit of his bargain by being put in as good a position as he would have been had the contract been performed; or b. Reliance interest, which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been had the contract not been made; or c. Restitution interest, which is his interest in having restored to him any benefit that he has conferred on the other party. FRAUD AND NEGLIGENCE FRAUD MAY BE DISTINGUISHED FROM NEGLIGENCE AS FOLLOWS: (1) In fraud, there is deliberate intention to cause damage or injury, while in negligence, there is no such intention; (2) Waiver of the liability for future fraud is void (Art. 1171.), while such waiver may, in a certain sense, be allowed in negligence; (3) Fraud must be clearly proved, mere preponderance of evidence not being sufficient, while negligence is presumed from the breach of a contractual obligation; (4) Liability for fraud cannot be mitigated by the courts, while liability for negligence may be reduced according to the circumstances. (Art. 1173.) FRAUD AND NEGLIGENCE WHEN NEGLIGENCE IS EQUIVALENT TO FRAUD: GROSS NEGLIGENCE Where the negligence shows bad faith or is so negligence characterized gross that it amounts to malice or wanton by want or absence of or attitude on the part of the defendant, the rules failure to exercise even on fraud shall apply. (see Art. 1173.). slight care or diligence, or In such case, no more distinction exists the entire absence of care, between the two at least as to effects. acting or omitting to act on a situation where there is a duty to act, not inadvertently but willfully and intentionally. KINDS OF NEGLIGENCE Culpa or negligence may be understood in FRAUD AND NEGLIGENCE three different senses. (1) Contractual negligence (culpa contractual) or negligence in contracts resulting in their breach Article 1172 refers to “culpa contractual.” This kind of negligence is not a source of obligation. (Art. 1157.) It merely makes the debtor liable for damages in view of his negligence in the fulfillment of a preexisting obligation resulting in its breach or nonfulfillment. (Arts. 1170-1174, 2201.) It is a kind of civil negligence if it does not amount to a crime. FRAUD AND NEGLIGENCE KINDS OF NEGLIGENCE Culpa or negligence may be understood in three different senses. (2) Civil negligence (culpa aquiliana) or negligence which by itself is the source of an obligation between the parties not formally bound before by any pre-existing contract. It is also called “tort” or “quasi-delict.” (Art. 2176.10); (3) Criminal negligence (culpa criminal) or negligence resulting in the commission of a crime (Arts. 3, 365, Revised Penal Code.) The same negligent act causing damages may produce civil liability arising from a crime under Article 100 of the Revised Penal Code (supra) or create an action for quasi-delict under Article 2176, et seq., of the Civil Code. ILLUSTRATION Scenario A S discharged a large shipment of potatoes belonging to B into a lorcha which was then left for two days in the sun tightly closed and without ventilation. As a result, the potatoes rotted and became useless. Is S liable for the loss? Scenario B R employed a young ignorant boy to do ordinary chores in the performance of which he did not come in contact with machinery. Without giving any previous warning, and over the objections of the boy, the latter was ordered to assist in the cleaning of a dangerous machine. His fingers were cut in the machine. Is R liable for damages? CLASSIFICATIONS OF OBLIGATIONS PRIMARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (a) Pure and conditional obligations (Arts. 1179-1192); OBLIGATIONS (b) Obligations with a period (Arts. 1193-1198); (c) Alternative (Arts. 1199-1205.) and facultative obligations (Art. 1206) (d) Joint and solidary obligations (Arts. 1207-1222) (e) Divisible and indivisible obligations (Arts. 1223-1225) (f) Obligations with a penal clause. (Arts. 1226-1230) CLASSIFICATIONS OF OBLIGATIONS PRIMARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (a) Pure and conditional obligations (Arts. 1179-1192) OBLIGATIONS Pure Obligations – one which is not subject to conditions nor does it mention a specific date for its fulfillment. Conditional Obligations – is one which is subject to a condition Two Kinds of Conditions Suspensive Condition – a condition which CONDITION suspends the demandability of the obligation an event which is both future until the fulfilment of the condition. and uncertain upon which Resolutory Condition – produces the the existence or extinguishment of an already existing extinguishment of an obligation upon the happening of the event. obligation is made to depend. Determine the following scenarios as to what primary classification of obligation applies to ILLUSTRATION each. Scenario A Cinderella obliged herself to deliver a glass shoe and a basket of apples to Ariel. Scenario B Barbie will receive a brand new IPhone 99 Ultra Pro Super Max from Ken only if Barbie passes the ECE Board Examinations. Scenario C Rody Dudirty will allow Hairy Roque to use his jetski until Hairy Roque finishes his term as his official spokesperson. Scenario D R donated to T (Province of Tarlac) a parcel of land subject to the condition that it was to be used for the erection of a central school anda public park, the work to commence within the period of six (6) months from the date of the ratiﬁcation by the parties of the deed of donation. The donation was accepted by T and title to the property was transferred to it. Subsequently, R sold the land to C. C claimed that since the condition imposed was not complied with, there was no donation. Is the condition suspensive or subsequent? CLASSIFICATIONS OF OBLIGATIONS PRIMARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (b) Obligations with a period (Arts. 1193-1198) OBLIGATIONS those whose consequences are subjected in one way or the other to the expiration of said term Kinds of Period Ex die – a period with suspensive effect In diem – a period with a resolutory effect and the validity of obligation is up to a certain date PERIOD Other Kinds: a future and certain event Legal period – period established by law upon the arrival of which, Voluntary period – period agreed to by the the obligation subject to it parties either arises or is Judicial period – period authorized by the court extinguished Determine the following scenarios as to what primary classification of obligation applies to ILLUSTRATION each. Scenario A Chandler promises to support Joey from the death of Joey’s father. Scenario B Chandler promises to support Joey until Joey reaches his majority age. CLASSIFICATIONS OF OBLIGATIONS PRIMARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (c) Alternative (Arts. 1199-1205.) and facultative OBLIGATIONS obligations (Art. 1206) Alternative Obligations – one wherein various prestations are due but the performance of one of them is sufﬁciently determined by the choice which, as a general rule, belongs to the debtor. Facultative Obligations –one where only one prestation has been agreed upon but the obligor may render another in substitution Determine the following scenarios as to what primary classification of obligation applies to ILLUSTRATION each. Scenario A Marc Bilyar owed Cynthia one million pesos. It was agreed that Marc could comply with his obligation by giving Cynthia one million pesos, or a fully-furnished house, or a parcel of land. Scenario B I will give you my Iphone 15 Pro Max but I may give my new IPad as a substitute. CLASSIFICATIONS OF OBLIGATIONS PRIMARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (d) Joint and solidary obligations (Arts. 1207-1222) OBLIGATIONS Joint Obligations – one which each of the debtors is answerable only for a proportionate Kinds of Solidarity part of the debt and each one of the creditors is entitled to a proportionate part of the credit. Active Solidarity – when the solidarity exists among the Solidary Obligations – is one which each of the creditors only. debtors is liable for the whole obligation and each of the creditors may demand compliance of Passive Solidarity – when the entire obligation. the solidarity takes place among the debtors only. Mixed Solidarity – when the solidarity exists both among the creditors and the debtors at the same time. Determine the following scenarios as to what primary classification of obligation applies to ILLUSTRATION each. Scenario A Juan and Pedro are indebted to Jose the amount of P100.00. As such, Juan is liable to Jose for the amount of P50.00 only, while Pedro is also liable to Jose for the same amount of P50.00. Jose, the creditor, is entitled to demand from Juan and Pedro P50.00 each. Scenario B Juan and Pedro are the debtors of Jose for the amount of P100.00. Hence either of them may be compelled by Jose to pay the whole amount of P100.00. So Jose can demand from Juan the amount of P100.00. Jose can also demand from Pedro the amount of P100.00. However, if Juan pays P100.00, then the obligation is extinguished and the paying debtor (Juan) is entitled to be reimbursed by his co-debtor (Pedro) for his part of the debt, which is P50.00. CLASSIFICATIONS OF OBLIGATIONS PRIMARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (e) Divisible and indivisible obligations (Arts. 1223- OBLIGATIONS 1225) Divisible Obligations – the object of which, in its delivery or performance, is capable of partial fulﬁllment. Indivisible Obligations – the object of which, in its delivery or performance, is capable of partial fulﬁllment. Determine the following scenarios as to what primary classification of obligation applies to ILLUSTRATION each. Scenario A D agreed to pay C P2,000.00 in four equal monthly installments. Scenario B D will pay C on February 29 th the full amount of P2,000.00. Scenario C Your ex-boyfriend obliged himself to deliver to you a brand new e-bike on September 28. Scenario D Suppose an agreement is that S will deliver one-half of a Toyota Fortuner on November 15 and the other half on November 30. CLASSIFICATIONS OF OBLIGATIONS PRIMARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (f) Obligations with a penal clause. (Arts. 1226-1230) OBLIGATIONS Classifications of Penal Clause Subsidiary – when only the penalty can be demanded. Joint – when both the principal contract and the penal clause can be enforced Penal Clause an accessory undertaking to assume greater liability in case of a breach. Determine the following scenarios as to what primary classification of obligation applies to ILLUSTRATION each. Scenario A A binds himself to deliver to B a Honda Civic car at the end of the current year. They agree in writing that should A fail to deliver the car on a specified date, A shall pay B as penalty P10,000.00. A fails to make the delivery. B could demand the payment of P10,000.00 against A. B, however could not compel A to deliver the car and pay the penalty at the same time. The payment of the penalty takes the place of the principal obligation. Scenario B A borrowed from B the amount of P100.00 payable on October 10, 2007. They agreed further that should A fail to pay the amount on the said date, A shall pay B the amount of P10.00 as penalty. On October 10, 2007, A failed to pay B. In such case, B could go to the court and demand payment of the principal amount of P100.00 and also the penalty of P10.00. However, if the penalty is iniquitous, merciless and shocking to conscience, it shall not be enforced. Instead it may be reduced by the court. CLASSIFICATIONS OF OBLIGATIONS SECONDARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (a) Unilateral and bilateral obligations (Arts. 1169-1191) OBLIGATIONS (b) Real and personal obligations (Arts. 1163-1168) (c) Determinate and generic obligations (Art. 1165) (d) Civil and natural obligations (Art. 1423) (e) Legal, conventional, and penal obligations. (Arts. 1157,1159, 1161) CLASSIFICATIONS OF OBLIGATIONS SECONDARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (c) Determinate and generic obligations (Art. 1165) OBLIGATIONS Determinate Obligations –A real obligation is determinate if the obligor is bound to deliver a specific/determinate thing. Generic Obligations – A real obligation is generic if the obligor is bound to deliver a generic thing. DETERMINATE THING A thing is determinate when it is particularly designated or physically segregated from all CHAPTER 03 others of the same class. DIFFERENT KINDS OF A thing is also determinate if at the time the OBLIGATIONS contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties Examples: the watch I am wearing this bottle of wine I am carrying the dog of Johnny Depp named Pistol the car with plate number ABC 123 the house at the corner of Shaw Blvd. and Jaime Cardinal Sin St. in Mandaluyong City GENERIC THING A thing is generic or indeterminate when it refers only to a class or genus to which it CHAPTER 03 pertains and cannot be pointed out with DIFFERENT KINDS OF particularity OBLIGATIONS Examples: a watch a bottle of red wine that is 100 years old a dog a car a two-storey, three-bedroom house painted green and with a swimming Determine the following examples as to what thing of obligation applies to each. ILLUSTRATION A) A 2-year old dog of German shepherd breed B) Leni’s pink handkerchief given by her supporters C) a black Toyota Innova car D) the restaurant that serves thin-crust pizza E) Jolen Magdangal’s collection of Diary ng Panget movie posters CLASSIFICATIONS OF OBLIGATIONS SECONDARY CLASSIFICATION OF OBLIGATIONS CHAPTER 03 UNDER THE CIVIL CODE: DIFFERENT KINDS OF (e) Legal, conventional, and penal obligations. (Arts. OBLIGATIONS 1157,1159, 1161) Legal Obligations – obligations determined by law Conventional Obligations – obligations determined by contracts Penal Obligations – the penalties that arise from a breach of obligation. CLASSIFICATIONS OF OBLIGATIONS CLASSIFICATION OF OBLIGATIONS CHAPTER 03 ACCORDING TO SANCHEZ ROMAN: DIFFERENT KINDS OF (a) By their juridical quality and efﬁcaciousness: OBLIGATIONS 1) Natural. — according to natural law; 2) Civil. — according to civil law; and 3) Mixed. — according to both natural and civil law. (b) By the parties or subject: 1) unilateral or bilateral; 2) individual or collective (see Arts. 1207, 1208.); and 3) joint or solidary CLASSIFICATIONS OF OBLIGATIONS CLASSIFICATION OF OBLIGATIONS CHAPTER 03 ACCORDING TO SANCHEZ ROMAN: DIFFERENT KINDS OF (c) By the object of the obligation or prestation: OBLIGATIONS 1) speciﬁc or generic; 2) positive or negative (see Art. 1168.); 3) real or personal; 4) possible or impossible (see Arts. 1183, 1306.); 5) divisible or indivisible; 6) principal or accessory (see Art. 1226.); and 7) simple or compound (see Art. 1199.); if compound, it may be: a) conjunctive. — demandable at the same time; b) distributive. — either alternative or facultative. CLASSIFICATIONS OF OBLIGATIONS CLASSIFICATION OF OBLIGATIONS CHAPTER 03 ACCORDING TO SANCHEZ ROMAN: DIFFERENT KINDS OF OBLIGATIONS d) By their juridical perfection and extinguishment: 1) Pure or conditional; and 2) With a period. (Vol. 8, pp. 20-24.) ARTICLE 1231. Obligations are extinguished: a. by payment or performance CHAPTER 04 b. by loss of the thing due EXTINGUISHMENT c. by condonation or remission OF OBLIGATIONS d. by confusion or merger of the rights of creditor and debtor e. by compensation f. by novation Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a resolutory condition, and prescription, are governed elsewhere in this Code. ARTICLE 1232. Payment means not only the delivery of money but also the performance, in any other manner of an obligation. It is the fulfillment of the prestation due that extinguishes the obligation by the realization of the purposes for which it was constituted. PAYMENT refers only to the delivery of It is a juridical act which is voluntary, licit and money made with the intent to extinguish an obligation. may consist of not only in the delivery of money but also the giving of a thing (other than money), the doing of an act, or not doing of an act. REQUISITES: 1. person who pays 2. the person to whom payment is made 3. the thing to be paid 4. the manner, time and place of payment, etc. The paying as well as the one receiving should have the requisite capacity KINDS: 1. NORMAL - when the debtor voluntarily performs the prestation stipulated 2. ABNORMAL – when he is forced by means of a judicial proceeding either to comply with prestation or to pay indemnity ARTICLE 1262. An obligation which consists in the delivery of a determinate thing shall be extinguished if it should be lost or destroyed without the fault of the debtor, and before he has incurred in delay. REQUISITES WHEN LOSS OF THING WILL EXTINGUISH AN OBLIGATION: WHEN A THING CONSIDERED (1) The obligation is to deliver a speciﬁc or LOST determinate thing; It is understood that the thing is lost when it perishes, or goes (2)The loss of the thing occurs without the fault of out of commerce or the debtor; and disappears in such a way that its existence is unknown or it (3)The debtor is not guilty of delay. cannot be recovered. ARTICLE 1262. An obligation which consists in the delivery of a determinate thing shall be extinguished if it should be lost or destroyed without the fault of the debtor, and before he has incurred in delay. WHEN LOSS OF THING WILL NOT EXTINGUISH AN OBLIGATION: (1) when the law so provides (2) when the stipulation so provides; (3) when the nature of the obligation requires the assumption of risk, and (4) when the obligation to deliver a speciﬁc thing arises from a crime. ILLUSTRATION Scenario A S promised to deliver 100 cavans of rice to B. The 100 cavans of rice which S intended to deliver were lost in a ﬂood. Is S still liable to B? Suppose the obligation of S is to deliver 100 cavans of rice from the Scenario B harvest made by him and such harvest is completely lost or destroyed, is the obligation extinguished? ARTICLE 1270. Condonation or remission is essentially gra- tuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly. REQUISITES OF A CONDONATION: CONDONATION OR (1) It must be gratuitous; REMISSION (2) It must be accepted by the obligor the gratuitous renunciation by the creditor of his right (3) The parties must have capacity against the debtor resulting in (4) It must not be inofﬁcious; and the extinguishment of the latter’s obligation in its (5) If made expressly, it must comply with the entirely or in that part of the forms of donation same to which the renunciation refers. It is thus a It is also clear that remission, properly speaking, form of donation. presupposes that the obligation is and continues to be, demandable at the time of the remission. ARTICLE 1270. Condonation or remission is essentially gra- tuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly. KINDS OF REMISSION: (1) As to its extent: (a) Complete — when it covers the entire obligation (b) Partial — when it does not cover the entire obligation. (2) As to its form: (a) Express — when it is made either verbally or in writing; (b) Implied — when it can only be inferred from conduct. (3) As to its date of effectivity: (a) Inter vivos — when it will take effect during the lifetime of the donor (b) Mortis causa — when it will become effective upon the death of the donor. It must comply with the formalities of a will ARTICLE 1275. The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person. CONFUSION OR MERGER REASON FOR CONFUSION the meeting in one person of (1) The law treats confusion or merger as a mode the qualities of creditor and of extinguishing obligations because if a debtor debtor with respect to the is his own creditor, enforcement of the same obligation obligation becomes absurd since a person cannot claim payment from himself. REQUISITES OF CONFUSION OR MERGER (2) Furthermore, when there is a confusion of It must take place between rights, the purposes for which the obligation the principal debtor and may have been created are deemed realized. creditor; and It must be complete and deﬁnite ILLUSTRATION Scenario A D owes C P1,000.00 for which D executed a negotiable promissory note in favor of C. C endorsed the note to X who, in turn, endorsed it to Y. Now, Y bought goods from the store of D. Instead of paying cash, Y just endorsed the promissory note to D. Question: Does D owe himself? Is D’s obligations already extinguished? Why or why not? W (wife) has a claim against H (husband) for the support of their children Scenario B C, etc. Subsequently, W died. H also died later. Question: Can C sue H for the obligations presented? Why or why not? ARTICLE 1278. Compensation shall take place when two per- sons, in their own right, are creditors and debtors COMPENSATION of each other. KINDS OF COMPENSATION is the extinguishment to (1) By its effect or extent: the concurrent amount of (a) Total — when both obligations are of the the debts of two persons same amount and are entirely extinguished; or who, in their own right, are (b) Partial — when the two obligations are of reciprocally principal different amounts and a balance remains. debtors and creditors of (2) By its cause or origin: each other. (a) Legal —when it takes place by operation of It involves the simultaneo law when all the requisites are present even without us balancing of two obliga the knowledge of the parties tions in order to totally (b) Conventional or voluntary —when it takes extinguish them if they are place by agreement of the parties of the same amount or to (c) Judicial — when it takes place by order from the extent in which the a court in a litigation. or amount of one is covered (d) Facultative —when it can be set up only by by that of the other, if of one of the parties. different amounts. CONFUSION COMPENSATION PAYMENT only one person who is a there are two persons creditor and debtor of involved, each of whom is himself a debtor and a creditor of the other there is but one obligation there are two obligations there is impossibility of there is indirect payment payment takes effect by operation takes effect by act of the of law parties it is not required that the the parties must have the parties have the capacity free disposal of the thing to give or to receive due and capacity to alienate it and to receive it the law permits partial payment, it is necessary extinguishment of the that it be complete and obligation indivisible REQUISITES OF LEGAL COMPENSATION (1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other; (2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; (3) That the two debts be due; (4) That they be liquidated and demandable; (5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. ILLUSTRATION Scenario A A owes B P10,000.00 with C as guarantor. B owes C P10,000.00 Question: Can B demand C for compensation? Can C demand B for compensation? Why or why not? Scenario B A obliged himself to deliver to B 10 sacks of rice while B obliged himself to deliver to A 10 sacks of corn. Question: Can A demand B for compensation? Can B demand A for compensation? Why or why not? ARTICLE 1291. Obligations may be modiﬁed by: (1) Changing their object or principal conditions; (2) NOVATION Substituting the person of the debtor; (3) is the total or partial Subrogating a third person in the rights of the extinction of an obligation creditor through the creation of a new one which substitutes KINDS OF NOVATION: it. (1) According to Origin: (a) Legal — that which takes place by operation It is the substitution or of law change of an obligation (b) Conventional — that which takes place by by another, which agreement of the parties. extinguishes or modiﬁes the ﬁrst, either by (2) According to how it is constituted: changing its object or (a) Express — when it is so declared in principal conditions, by or unequivocal terms substituting another in (b) Implied — when the old and the new place of the debtor, or by obligations are essentially incompatible with each subrogating a third other. person in the rights of the creditor. KINDS OF NOVATION (3) According to extent or effect: (a) Total or extinctive — when the old obligation is completely extinguished (b) Partial or modiﬁcatory — when the old obligation is merely modiﬁed ,i.e., the change is merely incidental to the main obligation (4) According to the subject: (a) Real or objective — when the object (or cause) or principal conditions of the obligation are changed (b) Personal or subjective — when the person of the debtor is substituted and/or when a third person is subrogated in the rights of the creditor (c) Mixed — when the object or principal condition of the obligation and the debtor or the creditor or both the parties, are changed. It is a combination of real and personal novations REQUISITES OF NOVATION (1) The existence of a previous valid obligation (2) The intention or agreement and capacity of the parties to extinguish or modify the obligation (3) The extinguishment or modiﬁcation of the obligation; and (4) The creation or birth of a valid new obligation. Determine the following scenarios as to what kind of novation according to subject. ILLUSTRATION Scenario A A obliged himself to deliver to B a car. Subsequently, they entered into another contract whereby instead of A delivering a car, A would deliver a truck. Scenario B A is indebted to B in the amount of P100.00. A now requests B to accept C as debtor in his (A’s) place. Scenario C A obliged himself to deliver to B a carabao. Subsequently A proposed that C would take his place but instead of delivering a carabao he would deliver a horse. Using your knowledge acquired from extinguishment of obligations, research a case HOMEWORK study on two of the following topics below, using the following format. EXTINGUISHMENT OF OBLIGATIONS: CASE STUDY FORMAT: a. by payment or performance Facts of the Case b. by loss of the thing due Issue of the Case c. by condonation or remission Arguments on the Issue d. by confusion or merger of the rights References of creditor and debtor e. by compensation f. by novation SAMPLE CASE STUDY HOMEWORK FACTS CASE STUDY FORMAT: Facts of the Case Issue of the Case Arguments on the ISSUE Issue References ARGUMENTS REFERENCES

ECE00 Introduction to Laws, Obligations & Contracts PDF

Document Details

Tags

Related

Summary

Full Transcript

Upgrade to continue