Philippine Obligations Reviewer PDF

TITLE I. OBLIGATION CHAPTER 1. GENERAL PROVISIONS ARTICLE 1156 An obligation is a juridical necessity to give, to do or not to do. Obligation- derived from the Latin word obligatio means tying or binding. It is a tie...

TITLE I. OBLIGATION CHAPTER 1. GENERAL PROVISIONS ARTICLE 1156 An obligation is a juridical necessity to give, to do or not to do. Obligation- derived from the Latin word obligatio means tying or binding. It is a tie or bond by virtue which one is bound in favor of another to render something (may consist in giving a thing, doing certain act, or not doing a certain act. ESSENTIAL REQUISITES OF AN OBLIGATION (1) Passive Subject (debtor or obligor) the person who is bound to the fulfillment. (Siya ang may duty sa fulfillment ng obligation) (2) Active Subject (creditor or obligor) person who is entitled to demand the fulfillment (Siya ang may right sa obligation) (3) Object or prestation (subject matter of the obligation) it may consists in giving, doing or not doing. Without the prestation, there is nothing to perform. (4) Juridical or legal tie (called as efficient cause) which binds or connects the parties to the obligation. EXAMPLE: Si A bound himself na gawin yung bahay ni B for 1M Pesos. Si A yung passive subject( obligor) ----- Si B yung active subject (obligee) ----- yung pag-build ng bahay yung object or prestation ---- tapos yung agreement nilang dalawa yung juridical tie. Suppose natapos na gawin ni A yung bahay ni B and nasa agreement nila na once matapos ni A yung bahay ni B ay magbabayad si B ng 1M kay A. So after niya matapos, si B na ang magiging passive subject (debtor) and si A naman ang active subject (creditor) The form of an obligation refers to the manner in which an obligation is manifested or incurred. It may be oral, in writing, or partly oral and partly in writing. ARTICLE 1157: Obligation arise from (1) Law- imposed by law itself EXAMPLE: Obligation to pay taxes (2) Contracts- arise from stipulation/condition of both parties EXAMPLE: Obligation na magbayad ng loan or utang by virtue of an agreement. (3) Quasi-Contracts- retroactive arrangement between two parties who have no previous obligations to one another. (No meeting of minds) EXAMPLE: Obligation na ibalik mo yung pera kapag nagkamaling naibigay or naibayad sa’yo or hindi pa naman due. (5) Quasi-delicts- there being fault or negligence, but no contractual relation exists between the parties. EXAMPLE: Naglalaro ka ng baseball sa isang field, tapos accidentally tumama yung bola sa window glass ng kalapit na bahay, you are liable for the damages. ARTICLE 1158 Obligations derived from law are not presumed. This provision refers to legal obligations arising from law. EXAMPLE: A private school has no legal obligation to provide clothing allowance to its teachers because there is no law which imposes this obligation upon schools. ARTICLE 1159 Obligations arising from contracts have the force of law between the parties and they should be complied with in good faith. CONTRACTUAL OBLIGATIONS: The above article speaks of CONTRACTUAL OBLIGATIONS or obligations arising from contracts or VOLUNTARY AGREEMENTS OF THE PARTIES. CONTRACT- is a meeting of minds between 2 persons wherein they bound himself for other to give something or render services. (1) Binding Force- Obligations arising from contracts have the force of law between the contracting parties. (2) Requirement of a valid contract- A contract is considered valid if it is not contrary to law, morals, good customs, public ordered or public policy. (3) Breach of contract- When one or all the parties fails or refuses to comply with his obligations, without legal reasons or justification. COMPLIANACE IN GOOD FAITH- Compliance or performance in accordance with the stipulations/conditions or terms of the contract or agreement. ARTICLE 1160 This provision talks about QUASI-CONTRACTS. “NO MEETING OF MINDS” A quasi-contract is that juridical relation resulting from lawful, voluntary and unilateral acts by virtue of which the parties become bound to each other to the end that no one will be unjustly enriched at the expense of another. KINDS OF QUASI-CONTRACT (1) Negotiorum Gestio- voluntary management of the property or affairs of another without the knowledge or consent of the latter. EXAMPLE: Si A nagpunta sa province without leaving somebody to look after his house sa Manila. While in prvince, biglang nagkaroon ng sunog na malapit sa bahay ni A. Through the effort of B (neighbor) the house of A was saved from being burned. However, si B may mga expenses from that. In this case, si A may obligation siya na i-reimburse lahat ng nagastos ni B kahit na wala siyang alam or walang consent from him, (on the principle of quasi-contract) (2) Solutio Indebiti- juridical relation which is cerated when something is received when there is no right to demand and was delivered only through mistake. (payment by mistake) a person obliged na to return something through error or mistake. EXAMPLE: Si A may utang kay B na 1k, ngayon si A binayaran niya si C sa pag-aakala na in- authorized ni B si C na tanggapin yung bayad ni A (Debtor) obligation ni C na ibalik yung binayad sakanya kasi nga payment by mistake ang nangyari. ARTICLE 1161: Civil obligations arising from criminal offenses shall be governed by the penal laws. SCOPE OF CIVIL LIABILITY: The extent of the civil liability for damages arising from crimes governed by the Revised Penal Code (1) Restitution- Pagbabayad (2) Reparation for the damages caused (3) Indemnification for consequential damages EXAMPLE: A stole the car of B. If si B ay na-convict, the curt will order either (1) return the car or to pay its value if it was lost or destroyed (2) pay for the damages (3) pay other damages suffered by the creditor. ARTICLE 1162: Obligations from quasi-delicts shall be governed by special law. Quasi-delicts- there being fault or negligence, but no contractual relation exists between the parties. REQUISITES OF QUASI-DELICTS (1) There must be an act or omission (2) There must be fault or negligence (3) There must be damaged caused (4) There must be direct relation or connection of cause and effect between the act or omission and the damage (5) There is no pre-existing contractual relation between the parties. DISTINCTION OF CRIME AND QUASI-DELICT (1) In crime, there is a criminal or malicious intent, while in quasi–delict, there is only negligence. (2) In crime, the purpose is punishment, while in Quasi-delict, indemnification of the offended party. (3) Crime affects public interest, Quasi-delict concerns private interest (4) In crime, there are generally 2 liabilities (criminal and civil), while in Quasi-delict, only civil liability. (5) Criminal liability cannot be compromised or settled by the parties, in Quasi-delict, it can be settled as any other civil liability. (6) In crime, the guilt of the accused must be proved beyond reasonable doubt, while in Quasi- delict, the fault or negligence need only by proved. CHAPTER 2. NATURE AND EFFECT OF OLIGATIONS ARTICLE 1163: Every person obliged to give something is also obliged to take care of it with proper diligence of a good father. This provision refers to an obligation specific or determinate thing. A thing is said to be determinate or specific when it is particularly or physically segregated others of the same class. A determinate thing is identified by its individuality. The debtor cannot substitute it with another although the latter’s is of the same kind and quality without the consent of the creditor. EXAMPLES: (1) The watch I am wearing (2) My dog name Cookie (3) This cavan of rice A thing is said to be generic or indeterminate when it refers only to a class or genus to which it pertains and cannot be pointed out with particularity. The debtor can give anything of the same class as long as it is of the same kind. EXAMPLES: (1) A cavan of rice (2) A police dog (3) A casio watch DUTIES OF DEBTOR IN OBLIGATION TO GIVE A DETERMINATE THING (1) Preserve the thing- In obligation to give, the obligor has the duty to take care of the thing due with the diligence of a good father. (a) Diligence of a good father of a family- equated with ordinary care. (b) Another standard of care (c) Factors to be considered (2) Deliver the fruits of the things (3) Deliver the accessions and accessories (4) Deliver the thing itself (5) Answer for damages in case of non-fulfillment or breach ARTICLE 1164: The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. DIFFERENT KINDS OF FRUITS (1) Natural Fruits- spontaneous products of the soil. EXAMPLE: Grass, all trees, and plants on lands produced without interference of human labor. (2) Industrial Fruits- Those produced by lands of any kind through labor. Products of lands brought about by reason of human labor. EXAMPLE: Sugar cane, vegetables, rice (3) Civil fruits- those derived by virtue of a juridical relation EXAMPLES: Rents of apartment, price of leases of lands and other properties RIGHTS OF CREDITOR TO THE FRUITS The creditor is entitled to the fruits of the thing to be delivered from the time the obligation arises or constituted, the reason for this is to protect the interest of the obligee whenever the obligor commit delay or default in fulfilling his obligation. PERSONAL RIGHT- power or right of a person to demand from another, as a definite passive subject, the fulfillment of latter’s obligation. REAL RIGHT- right or interest of a person over a specific thing. ARTICLE 1165: Remedies of Creditor in Real Obligation (1) Specific real obligation- (obligation to deliver a determinate thing) (a) Demand specific performance or fulfillment (if it is still possible) of the obligation with a right to indemnity for damages (b) Demand rescission or cancellation + a right to recover damages (C) Demand payment of damages only, where it is the only feasible remedy. EXAMPLE: A sells his phone to B for 20k. If si B refuses to comply in his obligation, B can bring an action for fulfillment in the above remedies (2) Generic real obligation- (obligation to deliver a generic thing) ARTICLE 1166: The obligation to give a determinate thing includes that of delivering of all its accessions and accessories. ACCESSIONS- fruits of a thing or additions to or improvements upon a principal thing. EXAMPLE: (1) AC in a car (2) trees on a land ACCESSORIES- things joined to or included with the principal thing for the latter’s embellishment (decorations) EXAMPLE: (1) Key of a house (2) frame of picture ARTICLE 1167: If the obligor fails to do his obligation, the same shall be executed at his cost. This provision refers to an obligation to do, to perform an act or render a service. (1) The debtor fails to perform an obligation to do (2) The debtor performs an obligation but contrary to terms/stipulation (3) The debtor perform an obligation but in poor manner. REMEDIS OF CREDITOR IN POSITIVE PERSONAL OBLIGATION (1) If the debtor fails to comply in his obligation to do, the creditor has the right: (a) To have the obligation performed by himself or by another, unless there is a personal consideration involved. At the debtor’s expenses. (b) Recover damages (2) In case the obligation is done in contravention/breach of the terms of the same or is poorly done, it may be ordered by the court that it can be undone if it still possible to undo what has done. PERFORMANCE BY A THIRD PERSON A personal obligation to do, like a real obligation to deliver a generic thing can be performed by a third person. EXAMPLE: (1) A binds himself to construct a house of B. There is a stipulation that the house shall have 4 bedrooms, kitchen shall be painted all gray. If A does not construct the house of B. B may ask D to construct the house at the expense of A (debtor) (2) Pero if ginawa naman ni A yung bahay pero hindi nasunod yung stipulations, B can ask to have it done according sa napag-usapan, if A refuses, the obligation may be performed by D at the expense of A (Debtor) (3) Now, if the kitchen was painted all gray but in a poor manner, B may ask A that it be undone, if A refuses, B may ask D to paint the kitchen at the expense of A (debtor) (BASTA IF EVER MAGKAROON NG NON-COMPLIANCE OR COMPLIED BUT IN A POOR MANNER, IF TUMANGGI ANG DEBTOR NA GAWIN YUNG OBLIGATION NIYA CONSIDERING ALL THE STIPULATIONS, PWEDENG IPAGAWA NI CREDITOR ‘YON KAY THIRD PERSON PERO EXPENSE LAHAT NI DEBTOR) ARTICLE 1168: When the obligations consists in not doing, and the obligor does what has been disallowed him, it shall also be undone at his expense. REMEDIES OF CREDITOR IN NEGATIVE PERSONAL OBLIGATION In an obligation not to do, the duty of the obligor here is to refrain himself from an act. Therefore, there is no specific performance here. The very obligation is fulfilled in not doing what is disallowed to do. Therefore, the debtor cannot be guilty of delay. ARTICLE 1169 Magkakaroon lang ng delay if nag-demand na yung creditor sa debtor. If walang demand, delay will not exist. Pero may instances na hindi na kailangan magdemand ng creditor para masabi na nadelay yung debtor. (1) If nakasaad sa obligation nila (2) If yung time sa agreement nila is ang magdedecide kung kelan dapat talagang ifulfill yung obligation. (3) If hindi kayang iperform ng obligor yung demand. Sa reciprocal obligation naman, sinasabi na kapag sino man sa magkabilang party yung nagfulfill na ng obligation nila, dun na magstart yung delay sa party na di pa nakabayad. EXAMPLE: Si A may utang kay B tas si B may utang rin kay A. Ngayon nagbayad na si A kay B, pero si B hindi nagbayad. Delay na si B non kasi tapos na yung obligation ni A. 2 TYPES OF DELAY (1) Ordinary Delay – kapag hindi lang nafulfill yung obligation sa napagkasunduang time. (2) Legal Delay – hindi pagfulfill ng obligation sa oras and nag result sa breach ng kasunduan. KINDS OF DELAY (1) Mora solvendi – failure sa part ng debtor dahil hindi niya natupad yung obligation (2) Mora accipiendi – failure naman sa part ng creditor dahil hindi niya tinanggap yung performance of the obligation (3) Compensatio morae – kapag nagdelay yung obligor cancelled na yung delay ng obligee and vice versa. NO DELAY IN NEGATIVE PERSONAL OBLIGATION Kapag yung obligation is not to do, possible pa yung non-fulfillment pero yung delay is impossible kasi hindi niya naman pwedeng gawin yung what has forbidden him. REQUSITES OF DELAY OR DEFAULT BY THE DEBTOR Masasabi lang na nadelay yung isang debtor if: (1) Kapag hindi niya tinupad yung obligation niya sa napagkasunduang date. (2) Kapag nag-demand sa kanya yung creditor which is either judicial or extra judicial. (3) Kapag hindi niya na perform yung demand. EXAMPLE: Si A ay obliged himself na mag-deliver ng refrigerator kay B sa December 10. Ngayon hindi nadeliver ni A yon. Ordinary delay lang ‘to kasi hindi naman nag-demand si B. Kahit na may date of fulfillment ia-assume lang ng court na nagbigay ng extension si B para sa pagdedeliver. So in the end walang breach of obligation na ginawa si A. EFFECTS OF DELAY (1) Mora solvendi (A) Kapag guilty si debtor for breach of obligation (B) Kapag liable siya kay creditor ng interest (kapag money yung obligation) or (damages kapag ibang type ng obligation) (C) Kapag fortuitous event, liable pa rin siya provided na determinate thing yung obligation. Pero kung mapapatunayan ng debtor na ganon pa din mangyayari kahit di niya kasalanan, babawasan ng court yung damages. (2) Mora accipiendi (A) Kapag guilty rin si creditor for breach of obligation. (B) Liable si creditor for damages na nagawa ng debtor (C) Siya yung may fault in case na mawala yung bagay (D) Kapag money yung obligation hindi liable si debtor sa interest in case na ma-delay si creditor (E) Pwedeng alisin ni debtor yung sarili niya sa obligation kapag nadeposit na niya sa court yung thing due. (3) Compensatio morae Delay sa creditor cancels the delay of the debtor or vice-versa. Kapag naunang madelay yung isang party and sinundan nung kabila, yung unang nagdelay is mababalance ng court. Pero kung hindi malaman kung sino yung naunang ma-delay, tapos na yung obligation and sila yung magbebear ng mga kanya kanya nilang damages. WHEN DEMAND IS NOT NECESSARY TO PUT IN DELAY Mangyayari lang yung delay sa part ng debtor if nag-demand si creditor. Pero kung hindi, walang mangyayaring delay. EXCEPT: (1) When the obligations so provides EXAMPLE: May utang si A kay B na 10k to be paid on Dec 1 (without the need of demand). Once na hindi nagbayad si A sa Dec 1, automatic delay siya. (2) When the alw so provides EXAMPLE: Sinasabi sa law na yung taxes daw are to be paid on the exact date or before non dahil kapag hindi, may penalties na. (3) When time is of the essence EXAMPLE: Delivery of balloon in a birthday party: Making of a wedding dress for a wedding scheduled at a particular time. (4) When demand would e useless EXAMPLE: Magdedeliver ng horse si A kay B sa Sunday. Namatay yung horse due to a fortuitous event. Any demand would be pointless kasi patay na nga yung idedeliver. (5) When there is performance by a party in reciprocal obligations EXAMPLE: Si A magdedeliver ng tv kay B. Tapos si B dapat magbayad pagkadeliver. Since wala namang napagkasunduang date, mangyayari lang yung delay if hindi nagbayad si B pagkadeliver ni A. ARTICLE 1170: Those who are guilty of fraud, negligence or delay for the performance of their obligations are liable for damages. 4 GROUNDS FOR LIABILITY (1) Fraud (deceit or dolo) - 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. EXAMPLE: S obliged na mag-deliver kay T ng 20 cavans of rice of a particular name. If si S nag-deliver ng rice knowing that it is a cheaper rice at hindi kagaya ng napag-usapan, S is guilty of fraud and he is liable for damages of T. (2) Negligence (fault or culpa) any voluntary act or omission, no malice or bad faith, which prevents the normal fulfillment of an obligation. EXAMPLE: Si A pasahero ni B in a taxi. There is considered a contract of carriage between A and B. In consideration sa fair fare na binayad ni A, the driver (B) agreed to safely bring A sa pupuntahan niya. If dahil sa hindi pag-iingat ni B (driver) for example (mabilis siya masyado mag-dive, or dumaan siya sa one-way street lang) na nag-cause ng pagka-aksidente nila, and if si A (debtor) ay injured, si B (driver) yung liable for the damages. And if ever man na pati yung sasakyan niya ay nagkarooon ng damages, siya rin yung liable na mag-bear ng expenses doon. (3) Delay (Mora) - is the failure to perform an obligation on time which failure, constitutes a breach of the obligation. (4) Contravention of the terms of the obligation- Violation of the terms and conditions stipulated in the obligation. EXAMPLE: Si A tenant s apartment ni B for 5k a month na dapat bayaran every 1st week ng month. Yung obligation ni A ditto ay yung pagbabayad ayon sa napagkasunduan and yung obligation naman ni B dito ay to make sure na safe and peaceful yung apartment na ‘yon for A. If si A nag-violate sa obligation niya, B is entitled to eject him from the apartment and recover damages. If si B hindi niya ginawa yung obligation niya kay A, B may be held liable for the terms of his obligation. DISTINCTION OF FRAUD AND NEGLIGENCE (1) In fraud, there is deliberate intention, while in negligence, there is no intention. (2) Waiver of the liability for future fraud is void. While such waiver be allowed in negligence. (3) Fraud must be clearly roved, negligence is presumed from the violation of a contractual obligation (4) Liability for fraud cannot reduced by the courts, while liability for negligence may be reduced according to the circumstances. ARTICLE 1171: Responsibility arising from fraud is demandable in all obligations. Any waiver for future fraud is void. RESPONSIBILITY ARISING FROM FRAUD DEMANDABLE Responsibility arising from fraud can be demanded with respect to all kinds of obligation. The court is not given the power to reduce the corresponding damages. WAIVER OF AN ACTION FOR FUTURE VOID Any waiver for future fraud is void as being against the law and public policy. ANO YUNG REASON BAKIT VOID? --- Syempre if yung obligor alam niya na kahit gumawa siya ng fraud or mag-violate siya, hindi siya magiging liable for it. And if valid yung fraud, therefore magiging non sense na ang obligation kasi nga pwedeng hindi gawin. WAIVER OF ACTION FOR PAST FRAUD VALID Magiging valid ang past fraud if yung waiver na nangyari ay act of generosity on the part of the party who is the victim of the fraud (obligee) If yung aggrieved party ay hindi nag-file ng case against kay obligor, ibig sabihin yung past fraud na ‘yon ay valid. But para maging valid nga yon, it must be expressed in clear language which elaves no doubt as to the intention of the obligee to give up his rights against the obligor. EXAMPE: A obliged na mag-deliver ng 240 cavans or rice kay B of a particular brand and quality at the rate of 20 cavans kada month. If si A cannot make an agreement kay B, and si B ay hindi naman nag-file ng case against kay A. Considered ‘yon na past fraud and it is valid. But if ang nangyari ay si A ay magco-commit palang ng fraud, considered ‘yon na Future fraud and therefore void ‘yon and si B can still bring an action against A for damages arising from the fraud. ARTILCE 1172: Responsibility arising from negligence in the performance of every kind of obligation is also demandable. RESPONSIBILITY ARISING FROM NEGLIGENCE DEMANDABLE In the performance of every kind of obligation and according to general rule, yung debtor ay liable pa rin for all the damages resulting from his negligence. Yung court ay binibigyan siya ng rights or power in fixing the measure of damages. Since negligence nga lang ang nangyari and wala namang intention doon, ibig sabihin the court may increases or decerases the damages depending sa circumstances na nangyari. If ever man na both parties ay merong negligent sa isa’t-isa, naka-depende sakanila kung paano yung magiging kasunduan nila doon sa mga obligations nila sa isa’t-isa. It’s either i-cancel or maging neutral sila sa isa’t-isa. VALIDITY OF WAIVER OF ACTION ARISING FROM NEGLIGENCE (1) An action for future negligence may be renounced except where the nature of the obligation requires the exercise of extraordinary diligence as in the acse of common carriers. (2) If yung obligation na nagakroon ng negligence acted in bad faith, it is considered equivalent to fraud. ANY ACTION FOR FUTURE NEGLIGENCE NA NAG-ACT IN BAD FAITH AY CONSIDERED AS VOID!!! KINDS OF NEGLIGENCE ACCORDING TO SOURCE OF OBLIGATION (1) Contractual Negligence (culpa contractual) – negligence in contracts resulting in BREACH. The debtor is liable for damages in view of his negligence in the fulfillment of a PRE- EXISTING OBLIGATION. EXAMPLE: A entered into a contract of sale na mag-deliver ng specific horse kay B on a certain day, tapos namatay yung horse through the negligence ni A. A (obligor) is liable for the damages to B for having failed to fulfill a pre-existing obligation. (2) Civil Negligence (culpa aquiliana) – negligence by itself is the source of an obligation between the parties not so related before any pre-existing obligation. EXAMPLE: (Same example kanina) Yung negligence ni A na nag-caused ng pagkamatay ng horse is called CULPA AQUILIANA. In this case, walang pre-existing contractual relation between A and B. The negligence itself is the source of liability. (3) Criminal Negligence (culpa criminal) – negligence resulting in the commission of crime. ARTICLE 1173 Kapag nagkaroon ng negligence sa part ng debtor, liable siya for damages and nakaakibat sa circumstances of the person, the time and the place. Kapag yung negligence is acted in good faith, liable pa rin pero hindi gano'n kalaki, pero kapag bad faith liable doon sa pera na dapat kikitain ng obligee, tapos liable pa sa mga expenses niya sa hospital. FACTORS TO BE CONSIDERED (1) Nature of the obligation EXAMPLE: Flammable yung ide-deliver mo pero naninigarilyo ka pa rin. (2) Circumstances of the person EXAMPLE: Guard na healthy tapos nasa right age lang, natutulog on his time of duty is guilty of negligence. (3) Circumstances of the time EXAMPLE: Gabing-gabi pero nakaoff yung headlight ng sasakyan mo. (4) Circumstances of the place EXAMPLE: Okay lang na mag-drive ng 100 km sa highway pero it is irresponsible to do it in the city. MEASURE OF LIABILITY FOR DAMAGES Damages means yung money na ico-compensate mo for the failure of complying with the obligation. Awarding damages is naka-based kung good or bad faith yung negligence. EXAMPLE: Si A magdedeliver ng sugar worth 30k kay B. Tapos si B ibebenta niya yon kay C for 35k, and alam naman yon ni A. Pero si A hindi dineliver kaya napilitan si C na bumili sa iba. Dahil don nawalan ng 5k profit si B na ikinagalit niya and nagresult ‘yon ng heart attack sakanya. So na-hospital si B for a week. If good faith yung ginawa ni A, 5k lang yung babayaran niya. Pero kung bad faith, kailangan niyang bayaran yung 5k plus kasama pa yung hospital expenses ni B. KINDS OF DILIGENCE REQUIRED (1) Napagkasunduan ng both parties via oral or writing (2) Required by law (3) Kapag hindi napagkasunduan or hindi required by law, dapat yung diligence is expected of a good father of a family. ARTICLE 1174: A fortuitous event is any extra-ordinary event which cannot be foreseen, though foreseen but it is inevitable. In general rule, if there is fortuitous event, the obligor is not liable and obligation will be extinguished. It will exempt the obligor from the fulfillment of his obligation when there is fortuitous event. DISTINCTION OF FORTUITOUS EVENT AND FORCE MAJEURE FORTUITOUS EVENT (1) ACTS OF MAN- independent upon the will of the obligor but not of other human wills. EXAMPLE: War, Fire, Murder FORCE MAJEURE (2) ACTS OF GOD- Events which are totally independent will of every human being. EXAMPLE: Earthquake, Typhoon, Rain KINDS OF FORTUITOUS EVENT (1) Ordinary fortuitous event- events which are common and which the contracting parties could reasonably foresee. (RAIN) (2) Extra-Ordinary event- events which are uncommon and which the contracting parties could not have reasonably foresee. (EARTHQUAKE, FIRE, WAR) REQUISITES OF A FORTUITOUS EVENT 1. The event must be independent of the human will or at least of the debtor’s will. It has nothing to do with the obligor or any human being. 2. Event could not be foreseen, or if foreseen, is unavoidable. 3. The event must be such a character as to render it impossible for the obligor to comply with his obligations in normal manner 4. The debtor must be free from any participation in, or the aggravation of, the injury to the obligee. The absence of any of the above requisites would prevent the obligor from being exempt from liability. ARTICLE 1175: Usurious transactions shall be governed by special laws. (USURY ALW) USURY- It is the interest at unreasonably high rates being imposed from the loan or any use of money. Pagpapatubo ng sobrang taas. REQUISITES FOR RECOVERY OF INTEREST In order that interest may be recovered, (1) the payment of interest must be expressly stipulated, (2) it must be in writing; and (3) it must be lawful which means it is not unconscionable or iniquitous. ARTICLE 1176: This provision talks about PRESUMPTION PRESUMPTION- inference of a fact not actually known arising from its usual connection with another which is known or proved. (PAGPAPALAGAY) 1st PARAGRAPH- Kapag daw yung creditor tinanggap yung bayad for the principal without any questions or complaints kung nasaan yung payment for the interest, mape-presumed na bayad na yung interest. 2nd PARAGRAPH- If yung creditor is na-issue siya ng resibo ng utang without any complaints as to prior installments, mape-presumed din na bayad na ‘yon. But take note na PRESUMPTION lang ‘yon. Ibig sabihin it can be contradicted with sufficient evidences na magpapatunay na hindi pa talaga bayad. 2 KINDS OF PRESUMPTION (1) Conclusive Presumption- cannot be contradicted. (2) Disputable Presumption- rebuttable siya, ibig sabihin it can be contradicted by proving evidences or proof. ARTICLE 1177: Remedies available to creditors for the satisfaction of their claims EXAMPLE: Si A may utang kay B na 500k. If si A hindi siya makapag-comply sa obligation niya na magabyad kay B tapos si A ay meron car worth 300k and si D (third person) ay may utang sakanya na 50k pesos,before yung due date ng obligation niya, binenta ni A (debtor) yung land niya worth 100k pesos. In case na yung debtor ay mag-fail na gawin yung obligation niya, si creditor may avail himself of the following remedies. Under the circumstances, yung rights ay granted kay B (creditor) (A) Exact fulfillment with the right of damages. (He may bring an action for the collection of 500kpesos with a right to damages. (B) Pursue the leviable property of the debtor (Since nag-fail nga na magawa ni A yung obligation niya na magbayad kay B, si B (creditor) pwede niyang kuhanin yung car ni A tapos ibenta and yung mapagbebentahan no’n ay mapupunta sakanya. (C) After having pursued the property ni debtor, si Creditor can bring all the actions of the debtor (like the right to collect money doon sa may utang kay debtor0 except those inherent or personal rights na meron siya like (right to vote, to receive legal support, etc…) (Pwede niyang i-ask sa court na huwga bayaran ni D (third person) yung utang niya kay A kasi nga hindi pa nakakabayad si A sakanya. (D) ask the court to rescind or cancel acts or contracts whuch the debtor may have done to defraud him. ARTICLE 1178: All rights acquired in virtue of an obligation are transmittable. (IBIG SABIHIN NATA-TRANSFER) But considering the general rule, there are exceptions. (1) If the contract is prohibited by law, then there is no transmutability of rights. (A) By the contract of partnership- syempre halimbawa sa isang business, partnerhip kayo, tapos kunwari namatay yung isa sa mga tao doon, hindi niya pwedeng i-transfer yung rights niya sa business na ‘yon sa kahit na kkanino (kahit anak niya pa) kasi nga partnership ‘yon. Kahit na namatay siya, still meron pa ring tao na magma-manage nung business. (B) By the contract of agency (C) By the contract of commodatum (2) Prohibited by stipulation of the parties, because stipulation or the contract is the law between the parties. ARTICLE 1179: Pure Obligation is one which the performance doesn’t have conditions and terms or periods. There is no specific date for fulfillment, therefore, it is immediately demandable. Conditional obligation – Effectivity is subject to the fulfillment of a condition. A condition is a future, unforeseeable or uncertain event that will cause certain rights under a contract to be destroyed, created, or expanded upon. 2 PRINCIPA KINDS OF CONDITION (1) Suspensive Condition is a condition which suspends rights and obligations or the validity of the entire contract until a certain future event occurs. Which means, no fulfillment, no obligation. If the Suspensive condition’s fulfilled, the obligation arises. EXAMPLE: Bibigyan kita ng 10k if makapasa ka ng exam. Hangga’t hindi mo nagagawa yung condition ko sa’yo, (to pass the exam) wala akong obligation na bigyan ka ng 10k. (2) Resolutory Condition- once mangyari na ang condition, mawawala na ang obliation. If it is the Resolutory condition that fulfilled, the obligation will be extinguishes. EXAMPLE: Bibigyan kita ng monthly allowance na 5k hanggang sa maka-graduate ka ng College. Yung obligation ko sa’yo sa pagbibigay ng 5k every month is demandable ngayon, pero once na maka-graduate ka na, ibig sabihin wala na akong obligation sa’yo. ARTICLE 1180: When the debtor binds himself to pay when his means permit him to do so, the obligation is not conditional but with a period. A period is a future and certain event upon the arrival of which the obligation subject to it either arises or is extinguished. (1) The debtor promises to pay when his means permit him to do so. (2) As when the debtor binds himself to pay: (a) “little by little” (b) “as soon as possible” (c) “from time to time” If yung both parties ay hindi nagaksundo as to the specific time for payment, yung court yung magfi-fix no’n. ARTICLE 1181: It emphasizes and recreates the difference between Suspensive and Resolutory condition. The acquisition of rights under conditional obligation is a Suspensive Condition. While the extinguishment or loss is a Resolutory Condition ARTICLE 1182: Kapag daw yung fulfillment ng obligation ay naka-depende sa will ng debtor, yung conditional obligation ay considered as VOID. BAKIT? Syempre kung yung fulfillment ng obligation ay naka-depende lang sa debtor, may chance na hindi niya gawin or hindi siya mag-comply doon sa obligation niya. So if ever mangyari yon, matic void agad ‘yon. (1) Potestative Condition- depends upon the sole will of one of the contracting parties. (It’s either will ni debtor or will ni creditor) Under Suspensive Condition, if yung Potestative Condition depends solely upon the will ni obligor, the conditional obligation shall be void. Pero, if yung Potestative Condition is naka- depende naman kay obligee, the conditional obligation is valid. Under Resolutory Condition, if yung Potestative Condition depends upon the sole will of the obligor, the conditional obligation is valid. (2) Casual Condition is not within the control of either party to a contract. It is depend upon the chance of a third person. If the Suspensive condition lies in this condition, the conditional obligation is valid. (3) Mixed Condition is a will of the other contracting parties and other circumstances, including the will of a third person. If the Suspensive condition lies in this condition, the conditional obligation is valid. ARTICLE 1183: This provision talks about Impossible and Illegal Conditions Impossible Condition- are those contrary to good customs or public policy and those prohibited by law. 2 KINDS OF IMPOSSIBLE CONDITIONS: (1) Physically Impossible Condition- nature of things, cannot exist or cannot be done. (Yung mga bagay na physicaly imposibleng mangyari EXAMPLE: I will pay you 20k kung hindi uulan ng buong isang taon. (2) Legaly Impossible Condition- those contrary to law, morals, and good customs, public ordered, public policy. EXAMPLE: A will give B 500k if (1) Will kill C (contrary to law) (2) maging mistress ni T (Contrary to morals (3) will slap his mother (against good customs (4) Will publicly advocate the overthrow of the government (against public order) (5) Will not appear as a witness of a criminal case (against public policy) ARTICLE 1184: Positive Condition Yung condition that happen at a determinate/specific time shall extinguish the obligation as soon asmag-expired na yung time. Or kapag yung condition na ‘yon ay siguradong hindi na mangyari. The obligation is extinguished: (1) as soon as the time expres without the event taking place (2) as soon as it has become indubitable that the event will not take place although the time specified has not expired. EXAMPLE: Si A obliged himself na bigyan si B ng 20k if pakakasalan niya si C before B reaches the age 23. (a) Magiging liable si A if nagpakasal si B kay C before 23 years old. (b) Hindi na magiging liable si A if si B ay nagpakasal at the age o 23 or after niya mag-23. In this case, extinguished na ang obligation ni A kay B kasi nag-expired na ang time without the condition. (c) If si B ay namatay before siya mag-23, hindi na rin liable si A kasi nga very impossible to happen na mafu-fulfill niya pa yung obligation niya kasi nga patay na siya. ARTICLE 1185: This provision speaks of a negative condition that an event will not happen at a determinate time. Accordingly from the moment the time indicated has elapsed without the event taking place. When the fulfillment happened through the said period, then yung obligor is responsible or liable to render something or he is responsible of the obligation. (1) From the moment the time indicated has elapsed without the event taking place (2) From the moment it become evident, that the event cannot occur, or the time indicated has not yet elapsed, the obligor is still obliged of the obligation. EXAMPLE: A binds himself to give B 20k if si B ay hindi magpapakasal kay C on December 30 (a) Hindi liable si A kay B if si B ay nagpakasal kay C ng December 30. (b) Liable si A kay B if si B ay hindi nagpakasal kay C ng December 30 and nagpakasal lang siya after December 30 (c) If before December 30 ay namatay si B, ibig sabihin hindi na siya magkakaroon ng chance na magpakasal kay C. So ibig sabihin si A ay liable pa rin sa obligation niya. ARTICLE 1186: The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. REQUISITES FOR THE APPLICATION OF THIS ARTICLE: (1) The condition is Suspensive (2) The obligor actually prevents the fulfilment of the condition (3) He acts voluntarily ARTICLE 1187: Retroactive effects of fulfillment of suspensive condition (1) In obligation to give- Sa suspensive condition, demandable lang yung obligation once na- fulfill yung condition. Kapag na-fulfill na, yung epekto nito is magstart nung nacreate yung obligation. EXAMPLE: On January 1, 2020 sinabi ni A na ibebenta niya yung lupa niya kay B for 50k if matatalo si B sa korte involving another piece of a land. Nung April 1 binenta ni A yung lupa kay C. Tapos nung June 4 natalo sa korte si B. Before matalo si B, wala siyang karapatang magdemand kay A na bibilhin na niya yung lupa. Pero nung nafulfill yung condition nung June 4. May karapatan na si B sa lupa simula pa nung June 1. So mas may karapatan si B kay C dun sa lupa. (2) In obligation to do or not to do –There is no fixed rule. Pero it doesn’t mean na retroactivity is not applicable, the courts are empowered to mind the intent of the parties. EXAMPLE: Si A ay nagsabi kay B (lawyer niya), na kakalimutan na yung utang if nadefend ni B yung case ni A sa supreme court. May retroactivity dito kasi pag na-fulfill ni B yung condition, bayad na siya since nung time na sinabi ni A yon. What if yung kasunduan is ipagtatayo ni A si B ng bahay if nafulfill yung condition? There is no retroactivity here kasi yung nature ng obligation is hindi pwedeng mangyari sa date kung kelan nangyari yung kasunduan. Retroactive effects as to fruits and interest in obligations to give. In reciprocal obligation – there is no retroactivity kasi yung fruits and interests na naggrow during ng time ng obligation is compensated already. EXAMPLE: On January 1, 2020 sinabi ni A na ibebenta niya yung lupa niya kay B for 50k if matatalo si B sa korte involving another piece of a land. Nung June 4 natalo si B sa court. Hindi responsible si A na ibigay yung fruits sa lupa before the fulfillment of the condition, and hindi rin responsible si B na bayaran yung interest in the price kasi yung fruits and interests are deemed mutually compensated. In unilateral obligation– There is also no Retroactive effect kasi kadalasan gratuitous ‘to. Walang matatanggap si debtor na kahit ano from creditor kaya yung fruits and interest ay kay debtor mapupunta. EXAMPLE: Si A ay magdo-donate ng lupa kay B. Kapag nadonate na niya, fulfilled na yung obligation pero may rights siya para i-acquire yung fruits and interest ng lupa. ARTICLE 1188: The creditor may, before the fulfillment of the condition, bring the appropriate actions for the preservation of his rights. The debtor may recover what during the same time he has paid by mistake in case of Suspensive condition. (1) RIGHTS OF CREDITOR- He may take or bring actions for the preservation of his rights, as the debtor may render nugatory the obligation upon the happening of the condition. WHY? Syempre para kumbaga ma-secured yung rights niya if ever na hindi mag-comply si debtor sa obligation niya. (2) RIGHTS OF DEBTOR- He is entitled to recover what he has paid by mistake prior to the happening of the Suspensive condition. Yung rights ay granted kay debtor because the creditor may or may not be able to fulfill the condition imposed and because of that, possible na hindi mangyari yung obligation. This is of SOLUTIO INDEBITI which based on the principle that no one shall enrich himself at the expense of another. ARTICLE 1189 (1) Loss of thing without debtor’s fault Kunwari si A nag- promise kay B na ibibigay niya yung only car niya (specific thing) if mapapasa ni A yung bar exam. Pending the result of the exam, nasira yung car dahil lumindol (which is a fortuitous event, which means without the fault of the debtor) since wala naman siya kasalanan, the thing is loss without his fault so the obligation extinguished. (Pero kapag pera naman ang pinromise niya tapos same scenario yung pera ay nasunog dahil lumindol at nagkarooon ng sunog (again fortuitous event ulit) nang walang fault ni debtor, still liable pa rin si A kay B kasi 'money is generic' sabi nga "genus never perishes" (2) Loss of thing through debtor’s fault Supposed the fault occurred due to the fault ni A, according to this article, the thing is loss due to the fault of the debtor, he shall pay damages. So yung car ay nawala dahil may fault or negligence sa part niya kailangan niya mag-pay ng damages kay B. (3) Deterioration of thing without debtor’s fault Pending sa result ng exam ni B, yung car ni A ay nag-deteriorate (without the fault of A) since it's not the fault of the debtor, yung creditor yung magsu-suffer ng deterioration or impairment (4) Deterioration of thing through debtor’s fault Kapag na-deteriorate yung car dahil fault ni A, at hindi siya nag-exercise ng diligence of a good father of a family, at hinayaan niya lang yung car, si creditor pwede mamili either (1) Rescission (cancellation ng agreement) + damages (2) Fulfillment of the obligation + damages IMPROVEMENT Kapag naman nag-improve yung car at Hindi naman nag- deteriorate. Yung makakakuha ng benefit ay naka-dwpende if the thing is improved by its nature or by time, si creditor pa rin yung magbe-benefit. This is to compensate the creditor kasi kapag nag-deteriorate siya yung magsu-suffer so dapat kapag nag-improve siya rin yung magbe- benefit. (5) Improvement of thing by nature or by time Kapag yung value ng bagay ay nag-appreciate or tumaas, yung magbe-benefit din doon ay si Creditor. (6) Improvement of thing at expense of debtor Kapag naman yung improvement ay dahil sa expense ni debtor, (no other right than that granted for the usufructuary (enjoyment) for example nagpakabit siya ng ac sa car, after makapasa ni B sa exam, may right si A na alisin yung ac provided that it will not cause destruction or injury to the car. Otherwise kung makaka-cause to ng damages sa car, si A ay obliged to deliver the car with the improvement because his rights is only that usufructuary. ARTICLE 1190: talks about Resolutory condition lang din. Kunwari si A ay binigyan niya ng parcel of land si B on condition na si B ay makakapasa sa CPA exam sa Dec, tapos hindi nakapasa si B, matic yung obligation ni A kay B ay mawawala na and therefore B will have to return both the land and the fruits he had received from A the moment A has given him the land. EFFECTS OF FULFILLMENT OF RESOLUTORY CONDITION (1) In obligation to give- When the resolutory condition in an obligation to give is fulfilled, the obligation is extinguished. And yung both parties ay obliged na ibalik lahat ng na-received nila under the obligation. (a) There is return to the status quo. Ibig sabihin yung effect ng fulfillment ng condition ay RETROACTIVE. (b) In case yung thing na ibabalik ay nasa possession ng third person who acted in good faith, the remedy of the party entitled to restitution is against the other. (c) The obligation of mutual restitution is absolute. It applies not only the thing received pati na rin yung fruits and interests. (d) In obligations to give subject to a Suspensive condition, the retroactivity admits exceptions according as the obligation is bilateral or unilateral. ARTICLE 1191: talks about the right na ipawalang bisa ang agreement in case na may isang party na hindi mag-fulfilled sa condition. Kinds of obligation according to the person obliged 1. Unilateral - one party is obliged to comply. Allow one person to make a promise to another. EXAMPLE: Nawala yung aso mo, tapos sinabi mo na kung sino man yung makakahanap ay bibigyan mo ng reward, by offering a reward, you are offering a unilateral contract. Nag-promise ka na magbabayad ka sa kung sino man ang makakakita, so ikaw lang din yung may responsibility na mag take action doon sa contract na yon. 2. Bilateral- both parties are mutually bound sa isa't-isa. Pareho kayong debtors and creditors of each other. EXAMPLE: Sa checkup, naka-receive ka ng treatment from doctor, in this case, yung doctor yung obligor and ikaw naman yung obligee. Sa kabilang banda naman, ikaw yung debtor (in terms sa pagbabayad ng doctor’s fee at yung doctor naman yung obligee (makakatanggap) (a) Reciprocal obligation - They are bound to each other. Reciprocal- debtor and creditor sila ng isa't-isa. EXAMPLE: Contract of sale. In terms sa price, si seller yung creditor kasi siya makakatanggap ng pera tapos si buyer ang debtor dahil siya ang magbabayad. In terms naman sa mismong bagay or thing na pinag-uusapan, si buyer naman ang creditor (dahil siya ang makakatanggap) and si seller naman ang debtor (dahil siya ang magbibigay) Ibig sabihin pareho silang bound to each other. Reciprocal ang obligation nila sa isa't-isa (b) Non-reciprocal obligation- Yung performance ng isang party is not dependent upon the other party. EXAMPLE: Si A nangutang kay B ng 10k, Tapos si B naman hiniram yung car ni A. Hindi pwedeng gawin ni B na kabayaran yung paghiram niya kay A ng car kasi magkaiba 'yon. REMEDIES IN RECIPROCAL OBLIGATION (1) Choice of remedies –In case na may isang obligor na hindi mag-comply sa kung ano man yung tungkulin/pananagutan niya, pwedeng mamili yung naagrabyado na party kung (a) Gagawin pa rin ng obligor yung obligation niya + magbabayad siya ng damages (b) Pwedeng ipawalang-bisa yung obligation + magbabayad pa rin siya ng damages. ARTICLE 1192: In case both aprties yung nag-comit ng breach or nag-violate, yung liability nung naunang nag-violate shall be equitably tempered by the courts. If hind ma-determined kung sino sakanila yung naunang nag-violate, the same shall be extinguished and each shall bear his own damages. Usually kasi kapag contract both parties ay merong obligation sa bawat isa. And hindi impossible na sa isang contract ay may lumabag na party. EXAMPLE: Contract of sale, meron buyer and seller 1st paragraph- Kapag unang lumabag or nag-violate si seller, syempre meron siyang liability, meron siya babayaran na damages under the contract of sale, (pero if nagloko rin si buyer) ang mangyayari is, ang ide-determined na magbabayad ng damages ay si Seller pa rin kasi siya yung unang nagloko, tapos babawasan nalang siya based sa ginawang pag-violate ni buyer. 2nd paragraph- Kapag naman hindi ma-determine kung sino unang nagloko, yung obligation ay mae-extinguished and yung obligation is bahala na sakanilang dalawa.  SECTION 2. – Obligations with a Period ARTICLE 1193 1st Yung obligation na naka-fixed or meron specific date, magiging demandable lang yung obligation na ‘yon if dumating na yung certain date na ‘yon. 2nd Obligations with a Resolutory Condition take effect at once, but will be extinguish upon arrival of the day certain. 3rd A day certain is understood to be that which must necessarily come, although it may not be known when. 4th If yung obligation ay hindi sigurado if mangayyari ab or hindi, therefore it is considered as conditional obligation. An obligation with a period is one whose effects or consequences are subjected in one way or another to the expiration or arrival of said period or term. A period is a future and certain event upon the arrival of which the obligation will either arises or terminated. KIND OF PERIOD OR TERM (A) Suspensive Period- period that makes the obligation demandable. (B) Resolutory Period- period that terminates an obligation. ARTICLE 1194 SAME SA ARTICLE 1189 ARTICLE 1195: If the obligor being unaware of the time or date believing that the obligation ay due na, tapos nagbayad siya before tha maturity date, pwede niyang ma-recover yung binayad niya na ‘yon including the fruits and interest. Pero once na dumating na yung maturity date or lumagpas na, hindi na pwedeng i-recover ni debtor yung binayad niya na ‘yon. EXAMPLE: Si A may utang kay B na 10k to be paid on January 2021, due to his mistake, binayaran niya ‘yon sa pag-aakala na due na, hangga’t hindi pa duarating yung maturity date, pwede niya pang ma-recover yung binayad niya including the fruits and interests. ARTICLE 1196: Whenever in an obligation a period is designated, it is presumed to have been established for the benefit of both debtor and creditor. Yung general rule is that everytime na merong period yung obligation, benefit ‘yon kay debtor and creditor. TERM IS FOR THE BENEFIT OF THE DEBTOR Si debtor hindi siya pwedeng pilitin na magbayad na bago dumating yung date na napagkasunduan nila. (BAKIT MAGBE-BENEFIT SA PART NI DEBTOR) – Magbe-benefit sakanya kasi syempre hangga’t hindi ap dumarating yung time ng pagabbayad niya or yung maturity date, pwede niya pang magamit sa ibang purposes yung pera na ipambabayad niya. TERM IS FOR THE BENFIT OF THE CREDITOR Si creditor pwede siyang mag-demand ng performance any time. (BAKIT MAGBE-BENEFIT KAY CREDITOR?) – Magbe-benefit sakanya kasi syempre habang tumatagal yung utang nagkakaroon ‘yon ng interest. ARTICLE 1197 1ST PARAGRAPH- If the obligation does not fixed a period, but from its nature and circumstances ay meron siyang period, yung court yung magfi-fix no’n. 2ND PARAGRAPH- The court shall also fix the duration if it is the will of the obligor 3RD PARAGRAPH- Once ma-fixed nan g court yung duration, hindi na ‘yon pwedeng baguhin pa. Yung tawag diyan ay, JUDICIAL PERIOD. Pero may EXCEPTIONS ‘yan, May instances na walang rights or power yung court na mag- fixed ng duration kapag yung period fixed ay dahil sa contract ng both parties which is called as CONTRACTUAL PERIOD. Hindi pwedeng i-set or i-fix ng court yung period kasi yung nangyari ay CONTRACTUAL PERIOD, ibig sabihin law between the parties ‘yan and it cannot changed by the court. ARTICLE 1198: The debtor shall lose his right to make use of the period: (1) When after the obligation has been contracted or constituted, he becomes insolvent. (2) When he does not clearly express to the creditor the guaranties or securities which he has promised. (3) When by his own acts he has impaired said guaranties or securities after the establishment of the obligation and when fortuitous event happened, he disappeared instead na ayusin yung obligation niya. (4) When the debtor violates any undertaking (5) When the debtor attempts to abscond (tumakas) Yung GENERAL RULE is that hindi pa demandable ang obligation if hindi pa dumarating or hindi pa natatapos yung period pero may exceptions din ‘yon, if isa sa 5 na ‘yan yung ginawa ni debtor, matic mawawalan siya ng rights to make the use of the period. SECTION 3. – ALTERNATIVE OBLIGATION ARTICLE 1199: A person alternatively bound by different prestations shall completely perform one of them. The creditor cannot compelled na tumanggap ng part of the other undertaing lang. KINDS OF OBLIGATION ACCORDING TO OBJECT (1) SIMPLE OBLIGATION- There is only 1 prestation. EXAMPLES: A obliged to deliver B a phone. (2) COMPOUND OBLIGATION- there are 2 or more prestations. (a) Conjuctive Obligation- there are several prestations and lahat ‘yon ay due. (b) Distributive Obligation- two or more of the prestations are due. It may be: (1) Alternative Obligation- several prestations yung due pero kahit isa lang doon yung ma- perform. EXAMPLE: A promise to give B a house, or his ring, or his car. Kahit isa lang diyan yung ibigay nid ebtor ay pwede na. (2) Facultative Obligation- only one prestation lang yung due and yung debtor may substitute another. EXAMPLE: A promised na mag-deliver ng Vivo Phone kay B. Si A pwede siyang mag-deliver ng ibang brand na phone as a substitute. An ALTERNATIVE OBLIGATION is one wherein various prestations are due but the performance of any one of those prestation is enough or sufficient. EXAMPLE: Si A humiram kay B ng 10k. Napagkasunduan nila na si A kailangan niya mag- comply sa obligation niya by paying 10k, or giving a karaoke set, or by painting the house ni B. Yung performance ng sia sa mga prestation na ‘yon ay sufficient na apra ma-fulfill yung obligation. NOTE: PERFORMANCE MUST BE COMPLETE. MEANING, THE CREDITOR CANNOT COMPELLED TO RECEIVE ONLY A PART. ARTICLE 1200: This provision answers the question “WHO HAS THE RIGHT OF CHOICE?” The rights of choice belongs to the debtor, unless it has been granted to creditor. But the debtor shall have no rights to choose those prestations which are impossible, unlawful or could not have been the object of the obligation. RIGHT OF CHOICE OD DEBTOR NOT ABSOLUTE (1) The debtor cannot choose those prestations which are impossible, unlawful or could not have been the object of the obligation because obviously, these prestations are void. (2) The debtor has no ore right of choice when among those prestations whereby he is alternatively bound, only 1 is practicable. EXAMPLE: May utang si A kay B ng 20k, meron silang napagkasunduan na if ever hindi makapagbayad si A kay B, magde-deliver siya ng CAR NIYA, drugs, soil from Jupiter or specific horse na equivalent sa value ng utang niya. Obviously hindi wpedeng piliin ni debtor yung soil from Jupiter kasi IMPOSSIBLE ‘yon. Hindi niya rin pwedeng piliin yung delivery of drugs kasi UNLAWFUL ‘yon. Hindi niya rin pwedeng i-deliver yung horse na hindi naman equivalent nung utang niya kasi COULD NOT HAVE BEEN THE OBJECT OF THE OBLIGATION. So ibig sabihin yung pag-deliver ng car niya yung pwede niya nalang gawin kasi ayon anlang yung PRACTICABLE. ARTICLE 1201: The choice shall product no effect except from the time it has been communicated. Ibig sabihin, hangga’t hindi napapaalam ng debtor sa kabilang aprty yung choice na napili niya, walang effect ‘yon. NOTICE BY THE OTHER APRTY IS ESSENTIAL! (1) EFFECT OF NOTICE- Hangga’t hindi mo pa napapaalam sa kabilang party yung choice mo, yung obligation remains alternative. (a) Once maipalam na sa kabilang party yung choice, the alternative obligation becomes simple obligation. (b) Once properly made and communicated na yung choice na ‘yon sa kabilang party, hindi na ‘yon pwedeng baguhin pa without the consent of the other. (2) PROOD AND FORM OF NOTICE- The burden of proving that such communication ay kailangan gawin ng kung sino man yung gumawa ng choice na ‘yon. EXAMPLE: A obliged himself to deliver B his car, or his race horse, if ang napili ni A ay yung car, kailangan niya ‘yon ipaalam sa kabilang party. Therefore nagging simple obligation na ‘yon. ARTICLE 1202: This provision answers the question “WHEN THE DEBTOR LSOE HIS CHOICE?” Mawawala yung right of choice ni debtor id among those prestations whereby he is alternatively bound, isa lang yung practicable. EFFECT WHEN ONLY ONE PRESTATION IS PRACTICABLE If more than one yung practicable, ibig sabihin maco-considered na alternative obligation pa rin ‘yon. Pero if only 1 pretsation alng talaga yung practicable, ibig sabihin the obligation is converted into simple obligation. EXAMPLE: May utang si A kay B ng 20k, meron silang napagkasunduan na if ever hindi makapagbayad si A kay B, magde-deliver siya ng CAR NIYA, drugs, soil from Jupiter or specific horse na equivalent sa value ng utang niya. Obviously, yung prestation alng na practicable diyan ay yung pag-deliver ng car and the rest ay void na kasi impossible, unlawful and could not be the object of the obligation. ARTICLE 1203: If through the fault of the creditor the chosen prestation was destroyed, may rights si debtor na i0cancel yung contract. EXAMPLE: Si A may utang kay B na 20k, napagkasunduan nila na instead paying 10k, magde- deliver nalang si A ng phone, or ipad, or laptop kay B. If through the fault of the creditor, nasira yung item na napili, si debtor pwede niyang i-cancel yung contract if he wants. In case of rescission, si debtor kailangan niyang ibalik kay creditor yung inutang niya na 20k and si creditor naman, kailangan niyang bayaran yung equivalent amount na nasira + payment for damages. ARTICLE 1204: The creditor shall have the right to indemnity for damages when through the fault of the debtor, all the object of the obligation have been lost, or the compliance or fulfillment of the obligation has become impossible. ARTICLE 1205: May choices lang ulit na pipiliin yung creditor based sa communication with the debtor Rules in case of loss before creditor has made choice (1) When a thing is lost through a fortuitous event- Pipili na lang sa natitirang choices yung creditor EXAMPLE: Obligado si A na magdeliver kay B ng item one, item two, item three and item four. Kapag nawala yung isa sa mga item because of a fortuitous event, pipili si creditor sa remaining 3 choices. Pero kung 3 yung nawala, kung ano yung natira ayon na ang kukunin ni creditor. (2) When a thing is lost through the fault of the debtor- Pipili pa rin sa natitirang choices si creditor or pwede ding yung price mismo nung nasira with rights to damages. EXAMPLE: If sa above example ay nawala yung item one dahil sa fault ni A. Pipili si B sa item two, item three and item four plus right to damages. Or pede din yung price mismo nung item one with right to damages rin. (3) When all the things are lost through debtor’s fault- Ipapalit ng debtor is yung price ng kahit ano sa choices with rights to damages rin. EXAMPLE: If sa above ay nawala lahat ng item dahil kay debtor. Magde-demand si creditor ng payment sa kahit ano sa mga items, plus right to damages rin. (4) When all the things are lost through a fortuitous event- Mae-extinguish na yung obligation dahil nga fortuitous event yung nangyari EXAMPLE: If sa above ay nawala lahat ng items through fortuitous event, extinguished na yung obligation ni debtor kay creditor. ARTICLE 1206: Kapag isang prestation yung napag usapan, si obligor ay pwedeng magbigay ng ibang bagay as substitute doon sa napag-usapan. Yung tawag is facultative or left to one person’s choice If yung bagay na ipangsasubstitute is nawala or nasira dahil sa kapabayaam ng obligor, hindi pa siya liable until mapag usapan na yung magiging substitute and don pa lang siya magiging liable. EFFECT OF LOSS (1) Before substitution- kung yung prestation dapat na ibibigay ng obligor sa obligee ay nawala dahil sa fortuitous event, extinguished na yung obligation. If hindi naman, magiging liable si debtor. (2) After substitution- kung yung principal thing (yung naunang pinag-uusapan) yung nawala, Hindi magiging liable si debtor kahit ano pa mang cause yung pagkawala no'n kasi nga After substitution na yung usapan. If yung substitute na bagay yung nawala, yung liability ni debtor ay depende kung may kasalanan ba siya or wala. ARTICLE 1207: Sinasabi lang sa provision na to na hindi porket may 2 or more creditors pwede na magdemand yung bawat isa sa kanila, kapag meron ding 2 or more debtors hindi rin required na mag-comply yung bawat isa. Nangyayari lang yung solidary liability kapag yung nature ng obligation ay nagre-require ng solidarity (example: money) ARTICLE 1208: This provision talks about joint and solidary obligation KINDS OF OBLIGTAIONS ACCORDING TO THE NUMBER OF PARTIES (1) Single or individual obligation- isa lang ang debtor or obligor and isa lang din si creditor. (2) Collective Obligation- 2 or more debtor and creditor Joint- each debtor answers only for the part of whole liability and each obligee part of the correlative right. (1) Joint Obligation (To each his own) (Liable lang sila sa mga part nila) EXAMPLE: Si A and B ay joint debtors kay C ng 10k, si C pwede lang mag-demand kay A ng 5k at 5k din kay B. It can be, Si A and B ay joint debtors ng joint creditors nila C, D, E, F sa amount na 1k, so si C ay pwede lang mag-demand ng 125 kay A and B and gano'n din lahat ng mga kasamahan nila. (2) Solidary Obligation- one for all, all for one (yung creditors may right to demand any of the creditors and debtors) EXAMPLE: Si A and B ay solidary debtors ni C sa amount na 1k, si C pwede mag-demand kahit kanino sakanika na kuhanin yung 1k. Kunwari kinuha niya kay B. Ngayon si B pwede mag- demand kay A ng reimburse na 500 (which is yung share ni A) Si A and B solidary debtors ni C, D, E, F ng 1k, kahit kahit sinong creditor owede mag-demand ng payment either kay A or B. (Basta palaging may reimbursement/payment) KINDS OF SOLIDARITY (1) According to the parties bound (a) Passive Solidarity (part of the debtors) kahit sino sakanika ay liable for the fulfillment ng obligation. (b) Active Solidarity (part ng creditor) Anyone sa mga creditors ay pwedeng mag-demand para sa fulfillment ng obligation. (c) Mixed solidarity (part of debtors or creditors Each of of the debtor is liable and each one of the creditor ay pwedeng mag-demand for the fulfillment of the obligation. (2) According to source (a) Conventional Solidarity- where solidarity ay agreed upon by the parties. (b) Legal solidarity- solidarity ay imposed by the law. (c) Real solidarity- imposed by nature of the obligation ARTICLE 1209: This provision talks about Joint indivisible obligation Yung obligation is joint dahil yung parties ay parehong liable sa obligation nila (same sila ng liability) and indivisible naman kasi yung subject or object matter ay hindi physically divisible into different parts. Sa madaling salita, it is joint only sa liabilities nila pero indivisible sila sa compliance (Pag- comply) EXAMPLE: Si A, B, C jointly liable to give D a car valued at 240,000, kung si A at B ay willing mag-deliver at si C naman ay Hindi. Si creditor (D) has no cause of action against kay C kasi since joint debtor nga siya, liable lang siya doon sa proportionate na part niya which is 80,000. Since yung cars is indivisible, hindi magiging possible yung compliance nung mga debtor unless they act together. ARTCLE 1210: This provision talks about indivisibility distinguished to solidarity. Difference between solidary and indivisibility. Indivisibility of obligation ay hindi agad nangangahulugan na solidarity. At porke indivisible ang object, solidarity na. These 2 are not the same Indivisibility-refers to the subject matter or object ng obligation Solidarity- tie or unity between parties DIFFERENCE BETWEEN SOLIDARITY AND INDIVISIBILITY (1) Indivisibility ay tumutuloy doon sa prestation, while yung solidarity is yung juridical and legal tie na nagba-bind sa obligation. (2) Sa indivisible obligations, yung debtor lang na hindi sumunod sa obligation yung guilty. Sa solidary obligation naman, lahat ng debtor ay magiging liable sa pagkakamali ng isang debtor. (3) Indivisibility is only applicable kapag may isang debtor and isang creditor, yung solidary obligation naman dapat may at least 2 creditors or 2 debtors. (4) Sa indivisible obligation, kapag naging insolvent yung isang debtor hindi magiging liable yung iba, sa solidary obligation naman, kapag naging insolvent yung isa proportionately liable na rin lahat ng debtors. ARTICLE 1211: Sinasabi rito na nangyayari pa rin yung solidarity kahit na yung creditors and yung debtors ay hindi naka-bind with the same manner of condition or period ng pagbabayad. EXAMPLE: Si A, B, C and D ay solidary obliged na magbigay ng 20k kay E. Si A ay magbabayad ng 1k per month starting July. Si B naman sa September, Si C sa December tapos si D naman ay magbibigay kapag nakapasa si E sa CPA exam. (a) Sa July kay A lang pede mag demand si E ng 1k or pede ding magdemand siya kay B, C or D ng share nila kay A. Pero hindi siya pwede mag-demand kay B, C and D sa mga obligation nila dahil hindi pa naman due or demandable (b) Sa September pwede ng maningil si E sa kahit sinong debtor based sa share nila kay B which is 5k dahil ¼ yon ng 20k. Pede ding singilin ni E si A ng 1k or 3k kung hindi pa to nagbigay ng installments. Pero hindi niya pa din pedeng singilin si C and D sa mga obligation nila (c) Sa December pwede na singilin ni E yung lahat ng creditors, yung share nila kay C sa 5k plus yung mga original share ni A and B. Yung kay D naman magmamature lang kapag nakapasa na si E sa CPA examination. (d) If nakapasa na si E, maga-arise na rin yung 5k na obligation ni D. Pwede ‘yon i-demand ni E sa kahit sino sa debtors. And again pwede niya pa ring singilin yung mga share na hindi pa nabigay ni A, B and C (e) If ang napagusapan is pwedeng idemand ni E yung entire obligation kay B sa September, kay C sa December or kay D kapag nakapasa siya sa exam, * Then magiging liable si B kay E ng 20k sa September minus ng amount na nabayaran na ni A and D, kung meron man. * Magiging liable si C sa December ng 20k minus the amount na nabayad ni A, B and D, kung meron man. * And liable si D kay E kapag nakapasa to sa examination minus ng amount na nabayaran ni A, B and C, kung meron man din. ARTICLE 1212: Yung solidary creditor may make a move na makakapagbenefit sa other solidary creditor, or sa kanila as a whole. Pero kung prejudicial yung ginawa ng isang solidary debtor (like pagrenounce ng utang) siya yung magbebear ng damages. EXAMPLE: Si A may utang kay B and C na 15k. So if nag-due na yung utang, pwede na ngayong mag demand si B kay A dahil makaka-benefit sa kanila ni C yung interest na madadagdag. Pero kung sinabi ni B kay A na huwag na niyang bayaran, Prejudicial yon kase solidary creditors sila ni C so dapat pareho silang papayag na huwag na bayaran. So in this case si A ay kay C na lang magbabayad. ARTICLE 1213: Sinasabi lang dito na hindi pwedeng i-assign ng isang solidary creditor yung rights niya sa isang third person without the consent of his other co-creditors. The reason is nire-represent ng isang creditor yung lahat ng creditors so may chance yung third person na inassign niya ay hindi ibigay yung shares ng co-creditor upon payment. ARTICLE 1214: Pwedeng magbayad yung debtor sa kahit sino sa mg solidary creditors, pero kung may mag-demand sa kanya sa mga creditors, yung debtor ay magbabayad dapat sa creditor na nagdemand. EXAMPLE: Si A ay liable kay B and C ng 10k. Pede magbayad si A sa kahit sino sa kanila, pero kung magdemand si B sa kanya, kay B niya dapat ibigay yung payment. ARTICLE 1215: Kapag nagkaroon ng NOVATION, COMPENSATION, CONFUSION AND REMISSION automatic, mae-extunguished na yung obligation.Tapos yung creditor na gumawa ng extinguishment ng obligation na ‘yan, siya yung magiging liable sa mga co-debtors niya. EXAMPLE: Si A may utang kay B,C and D ng 60k. Ngayon si B sinabi kay A na huwag nang bayaran yung 40k na utang niya, so from that na-extinguished na yung obligation pero si B (creditor) magiging liable siya sa mga co-debtors niya. In a joint obligation consisting NOVATION, COMPENSATION, CONFUSION AND REMISSION, hindi mae-extinguished yung obligation ng buo. Mae-extinguished lang doon sa creditor na nag take action ng mga ‘yan. EXAMPLE: Si A may utang kay B C and D ng 60 k. Tapos nagcondone na naman si B, 20K lang maeextinguish kasi ayun lang share ni B. Tapos si A indebted pa rin kay C and D ng tig 20k. ARTICLE 1216: Rights ng creditor na maningil sa kahit na isa, some or sa lahat ng solidary debtors niya as long as hindi pa totally na fu-fully collected or singil yung utang. EXAMPLE: Si A at B ay solidary debtor ni C sa amount na 1M, so pwedeng singilin ni C either si A or B or pwede rin naman na singilin niya si A ng 500k (which is yung part niya) and another 500k si B. Pwede siya mamili against all of them for the balance as long as hindi niya pa nasisingil lahat or yung utang has not been entirely satisfied. ARTICLE 1217: It gives right to the effect of solidary debtors. 1. Payment made by one of the debtor, matic mae-extinguished na ang obligation. Kung sino man sa mga solidary debtors yung nag-insist or offer na magbayad, si creditor yung may right of choice kung kaninong bayad yung ia-accept niya. 2. Kung sino man sa isa sa kanila yung nagbayad, yung nagbayad na 'yon is may right na i- claim niya sa co-debtors niya yung mga part nila (payment) kasama na doon yung interest sa payment na 'yon if nagbayad sila after maturity date. Pero kung nakapagbayad naman sila before pa man mag-due, walang interest 'yon. 3. Kung yung isa sa mga debtor ay wala nang kakayahan na magbayad because of insolvency (kawalan ng ibabayad) EXAMPLE: Si A, B, C, ay solidary debtors ni E. Si A binayaran niya si E ng full amount of 1M pesos, so yung pagbabayad ni A kay E ay pwede siyang humingi ng reimbursement kay B, and C, each with interest with the date of the payment, pero kung nagbayad naman si A before maturity date, meaning walang interest 'yon. So maga-arise lang yung pagbabayad nila ng interest if lagpas na sa date yung payment nila. So after kunwari ng payment, kung si B ay naging insolvent or wala na siyang kakayahan na magbayad, si A and C is sila na yung magsho-shoulder doon sa amount na dapat babayaran ni B tapos pwede nalang nilang ma-recover yon if maging financially stable na ulit si B. (Yung sa effects of payment pareho lang ng explanation sa 3 paragraph sa mismong provision except sa number 3.) 3. Among the solidary creditors- after ma-receive ng one of the creditors yung utang sakanila, yung one of the creditor is kailangan niya rin ibigay syempre yung part nung co-creditor niya. ARTICLE 1218: Yung sabi kasi sa rule and previous provision, kapag yung isa sa mga solidary debtor yung nagbayad sa utang nila, may right siya na mag-demand ng reimbursement from his/her co-debtors, pero may instances na kapag one of those debtor ay naging illegal yung obligation and already prescribed, hindi siya makakapag-reimburse from his/her co-debtors. EXAMPLE: Si A and B ay solidary debtor indebted kay C na mag-deliver ng drugs worth 500K, law was passed prohibiting the transaction of drugs kasi nga prohibited siya by law, kung si A ay nag-deliver pa rin ng drugs knowing na illegal 'yon and prohibited by law, hindi siya pwedeng mag-reimbursed sa co-debtor kasi yung payment was made after the obligation had become illegal. ARTICLE 1219: Effect of remission of share after payment Naunang nagbayad/ginawa muna yung pagbabayad bago magkaroon ng remission or waiver. Waiver is no effect kasi nga bayad na. (Kasi yung pagka-extinguished ng obligation ay dahil nga sa bayad na) If yung remission is made previous to the payment, and payment is paid, ang tawag doon ay solutio indebiti. This article is designed to prevent fraud and give justice to the paying debtor. EXAMPLE: A and B are solidarily bound themselves to give C 100k, then binayaran ni A yung buong 100k. After ng payment si, C ay nag-waive kay B at sinabi na huwag nang bayaran yung part niya. So dito, since nauna nga yung payment kesa sa remission, A can still recover the reimbursement from B. Si B ay may obligation pa rin na mag-reimburse or magbayad kay A under the principle of solutio indebiti. (Unjust enrichment) ARTICLE 1220: Yung remission of the whole obligation na na-obtained by one solitary debtor ay hindi siya pwede mag-demand ng reimbursement from his/her co-debtors. Yung reason dito ay dahil yung debtor WHO obtained remission ay wala namang binayaran sa creditor. (So ibig sabihin, wala rin siyang rights na mag-demand or humingi ng reimbursement sa kapwa debtor niya) Yung remission doon ay walang batayan. EXAMPLE: Si A and B ay executed jointly and severally a promissory note for 2k in favor of C. Si C, remitted the obligation out of regard of A. Dito, Si A ay walang rights na mag-demand ng reimbursement kay B since wala namang binayaran si A kay C. Pero kung 1,300 pesos lang yung remitted ni creditor, still, magiging liable pa rin si B na magbayad kay C ng 700 pesos. Pero wala siyang obligation na mag-reimburse kay A sa natitirang balance which is (300 pesos) kasi nga wala namang payment na ginawa si A kay C. ARTICLE 1221: Effects of lost or impossibility 1. Kapag yung lost or impossibility without the fault ng mga solidary debtors, mae-extinguished ang obligation. 2. Kapag naman yung lost and impossibility ay due to the fault of those solidary debtors or one of them, magiging liable sila sa creditor. For the price + yung payment of damages. 3. Kapag naman yung lost or impossibility ay dahil sa fortuitous event, magkakaroon ng liability because the default or delay happened bago pa man mangyari yung fortuitous event. EXAMPLE: Si A and B obliged na mag-deliver ng car kay C, tapos yung car ay nawala dahil sa fortuitous event (without any fault of debtors) – Article 1221 first paragraph will apply (which means, mae-extinguished ang liability) Supposed yung kotse ay nawala dahil sa fault ni A, and si C (creditor) ay nag-demand kay B, even hindi naman si B ang may kasalanan, still liable pa rin siya dahil nga solidary debtors sila. (Magiging liable siya for the price, damages and also sa interest that are expressly stipulated by law) pero pwede niya naman ma-recover or singilin lahat ng mga nagastos niya kay A (co- debtor niya) Supposed solidary debtors nga si A and B sa pagdeliver ng car kay C, and before pa yung time ng delivery is nakapag-demand na si C (creditor), kapag nawala yung car because of fortuitous event, still liable pa rin sila and hindi mae-extinguished yung obligation kasi nga nauna nang makapag-demand si C (creditor) bago pa man mawala yung car. And kagaya rin ng kanina, kung sino man yung nagbayad sa isa mga debtors, pwede niya pa rin marecover yung mga ginastos niya doon sa co-debtor niya. NOTE: kahit isa lang sa mga debtors yung may kasalanan, still liable pa rin silang lahat dahil nga solidary debtors sila meaning, mutual agency. Yung fault ng isa sa mga debtor shall be the fault of all the solidary debtors. (Yung rules in case thing has been lost... ay same lang din sa explanation ng mismomg provision.) ARTICLE 1222: Defenses available to solidary debtor A complete defense will resolve an entire case in favor of the defendant because of the interrelated nature of all claims. 1. Defenses derived from the nature of the obligation is a COMPLETE DEFENSE dahil nagpapawalang-bisa siya ng obligation. EXAMPLE: Fraud, prescription, remission, etc… 2. Defenses personal to, or which pertain to share of, debtor sued Personal to debtor like incapacity, mistake, minor, violence EXAMPLE: (a) If the action by C is against B, and that time si B ay insane or wala sa maayos na pag-iisip nung time na yung obligation was contracted, si B pwede niyang gamitin yung defense na ‘yon with respect to the entire obligation. This defense is personal to B alone. (b) So since hindi pa nakapag-fulfill ng payment si B, let’s assume na yung obligation niya is subject to a Suspensive condition, kasi nga yung condition ay hindi pa naman nangyayari. In this case, yung non-fulfillment ng condition ni B ay tinatawag na PARTIAL DEFENSE (is a defense that does not completely absolve the defendant of guilt.) as it can be set up by B only para sa kabayaran nung part niya. C (as a creditor) can demand kay B the portion of the obligation niya pertaining kay A kasi nga solidary liable silang dalawa. 3. Defenses personal to other solidary debtors EXAMPLE: Si A and B ay solidarily indebted kay C for 200K, But A’s consent was obtain through force and pananakot lang, therefore si A, ay walang babayaran dahil he has a complete defense which is pwede niyang gamitin ‘yon as pananakot lang. Now, kung si C naman ay kay B nag-file and action against kay B, si B ay liable pa rin na magbayad ng 100K as his part. ARTICLE 1223: Obligations may be DIVISIBLE or INDIVISIBLE 1. DIVISIBLE OBLIGATION- capable of partial fulfillment. Obligation kung saan yung prestation ay pwedeng partial. EXAMPLE: Si C ay umutang kay D ng 50k pesos at nangako na babayaran niya ito ng 10K pesos monthly. (Divisible siya kasi nga pwedeng partial, since money ang pinag-uusapan) 2. INDIVISIBLE OBLIGATION- Incapable of partial fulfillment. Obligation kung saan yung prestation niya ay hind pwedeng partial. EXAMPLE: Si C ay nag-promised to deliver a motor kay B. (Since motor ‘yon, syempre hindi naman pwedeng partial ang pag-deliver) May mga instances naman na; EXAMPLE: (1) Si C ay pumayag na magbabayad kay D ng 100K in four equal monthly installments. Yung obligation ni C ay divisible kasi nga capable of partial performance. Pero kung ang agreement ay si C ay magbabayad kay D on a certain date the FULL AMOUNT OF 10K, yung obligation ay magiging indivisible na (although money is divisible) still hindi niya pwedeng partial lang yung ibigay kasi nga may kasunduan sila na dapat mabayaran niya sa nasabing date. (2) Si S obliged himself na mag-deliver ng car kay T on November 15. Yung obligation na ito ay INDIVISIBLE kasi hindi siya capable sa partial performance. The car must be delivered at one time and as a whole dahil definite thing ang car at hindi ito pwedeng hati-hatiin or paghiwa- hiwalayin yung mga parts niya. KINDS OF DIVISION (1) QUALITATIVE DIVISION- nagba-based sa quality hindi sa quantity EXAMPLE: (Inheritance – real & personal property) Si D and E ay tagapagmana ni F, napagkasunduan nilang 2 na hatiin yung mga namana nila; Kay A- bahay, lot, and home appliances, kay B- palayan, car and 20K (2) QUANTITATIVE DIVISION- Nagba-based sa quantity hindi sa quality EXAMPLE: 1000 hectares of land can divided into many parts. A and B divided 300 cavans of rice (3) IDEAL OR INTELLECTUAL DIVISION- non-material divisibility; only mental & intellectual. Nage-exist lang sa minds ng both parties. EXAMPLE: Suppose yung kotse at palayan were inherited by both A and B, as co-owners their one-half share sa kotse ay hindi separable in a material but in minds. Gano’n din sa palayan, neither one of them ay pwede magsabi na sila yung absolute-owner no’n. KINDS OF INDIVISIBILITY (1) LEGAL INDIVISIBILITY- being declared by the law (2) CONVENTIONAL INDIVISIBILITY- kasunduan ng both parties (3) NATURAL INDIVISIBILITY- nature of the object or prestation ay hindi pwedeng magkaroon ng division or hindi sila divisible. EXAMPLE: pag-deliver ng car, pagkanta ARTICLE 1224: Ang joint indivisible obligation ay maaaring magbigay ng kaukulang bayad pinsala or yung indemnity for damages from the time na yung nangutang ay hindi niya kayang mag-comply doon sa utang niya. Pero yung nangutang na may kakayahan nang magbayad ay hindi na magbibigay ng kontribusyon para sa bayad doon sa kung ano ang halaga ng isang bagay o halaga ng serbisyo sa obligation nila. EXAMPLE: Si Phengs at Rovic promised jointly to give a specific car worth P2,400,000 kay Hans. In the meantime, yung kotse ay nasa Honda Motors Co.pa. Yung share ni Phengs ay 1.2M. Kung si Phengs ay nawalan ng pera dahil sa gambling kunwari pero si Rovic naman ay merong hawak na pera na 1.2M, it is clear na hindi nila makukuha yung kotse sa Honda Motors Co. kasi ng kulang yung pera nila. And because of that, hindi rin sila makakapag-compy sa obligation nila in delivering a car to Hans. Dito, yung obligation to give the car is converted to a monetary obligation to give 2.4M si Hans. Since hindi naman kasalanan ni Rovic na mawalan ng pera si Phengs, hindi siya responsible for the insolvency ni Phengs, so magiging liable lang siya for her part na magbigay ng 1.2M, and si Phengs ay may utang kay Hans ng 1.2M for her share. NOTE: Kung isa man sa mga debtors yung hindi nag-comply in a joint indivisible obligation, yung obligation nila is magiging converted to a monetary obligation (to pay money). And yung creditor ay hindi siya pwede mag-ask or demand ng ibang specific performance bilang kapalit doon sa obligation nila na napagkasunduan. ARTICLE 1225: Obligations to give definite things and those which are not susceptible of partial performance shall be deemed to be INDIVISIBLE. OBLIGATIONS DEEMED INDIVISIBLE (1) Obligations to give definite thing EXAMPLE: A obliged himself na mag-deliver ng particular electric fan. (2) Obligations which are not susceptible of partial performance EXAMPLE: To sing a song, to dance (3) Obligations provided by law to be indivisible even if thing or service is physically divisible. EXAMPLE: Yung pagbabayad ng tax, even if yung money is generic, kapag in-imposed ng batas na kailangan bayran ‘yon ng one time only, magiging indivisible na yung obligation na ‘yan. (4) Obligations intended by the aprties to be indivisible even if the thing or service is physically divisible. EXAMPLE: A obliged na mag-deliver ng 100 copies of book kay B na kailangan ma-fulfilled within 4 months. So nag-decide si A na ide-deliver niya ‘yon 25 per month. If nagkaroon sila ng agreement na kailangan ma-deliver ni debtor yung 100 copies of book na ‘yon on a certain date, magiging indivisible na yung obligation na ‘yon. OBLIGATIONS DEEMED DIVISIBLE (1) Obligations which have for their object the execution of a certain number of days of work. EXAMPLE: Obligation of A na pinturahan yung bahay ni B within 10 days. (2) Obligations which have for their object the accomplishment of work by metrical units. EXAMPLE: The obligation of A to B to make a table with metrical units. (3) Obligations which by their nature are susceptible of partial performance EXAMPLE: The obligation of A na bayaran yung utang niya na 12k, 1k per month. SECTION 6. – OBIGATIONS WITH A PENAL CLAUSE ARTICLE 1226: PENAL CLAUSE- It is an accessory obligation attached to the principal obligation to assure greater responsibility in case of breach. Yung obligation na may penal clasue, in case of non-compliance the penalty shall substitute sa pagbabayad ng damages + interest, kung walang stipulation or condition. GENERAL RULE: Yung Penalty ay nagse-serve as substitution to damages and interest PRINCIPAL OBLIGATION- Mismong prestation ng obligation ACCESSORY OBLIGATION- one which is attached to the principal obligation KINDS OF PENAL CLAUSE (1) AS TO ITS ORIGIN (A) Legal Penal Clause- provided by law (B) Conventional Penal Clause- stipulation of both parties. (2) AS TO ITS PURPOSE (A) Compensatory Penal Clause- penalty for damages (B) Punitive Penal Clause- penalty na ini-imposed dahil sa breach or paglabag (3) AS TO ITS DEMANDABILITY OR EFFECT (A) Subsidiary or Alternative Penal Clause- only the penalty will be compelled (B) Joint or Cumulative Penal Clause- both the principal obligation and penalty clause can be enforced. ARTICLE 1227: Ang debtor ay hindi mae-exempt yung sarili niya sa performance sa obligation niya sa pamamagitan ng pagbabayad ng penalty, depende nalang kung yung rights ay granted sakanya. Kahit yung mismong creditor ay hindi rin siya pwede mag-demand sa fulfillment ng obligation and satisfaction ng penalty at the same time, maliban nalang kung yung right ay granted sakanya. After the creditor has decided sa fulfillment ng obligation, the performance became impossible without his fault, pwedeng magkaroon ng penalty ‘yon. RIGHT OF THE DEBTOR The general rule is that, the debtor cannot substitute by paying the penalty and not fulfilling the obligation, unless it is expressly granted to him. RIGHT OF THE CREDITOR As a general rule, the creditor cannot demand the penalty and the fulfillment of the obligation at the same time, unless it is expressly granted to him. ARTICLE 1228: Proof of actual damages suffered by the creditor is not necessary to demand for the penalty. EXAMPLE: Si G entered into a contract with building contractor R para gumawa ng resort-type residential community sa hacienda niya. Under their deal, Si R ay kailangan niya ma-complete yung project in 12 months, kung hindi man ma-complete within 12 months, si R ay magbabayad kay G ng penalty of 1M for each month of delay in the project. Tapos si R ay nag-failed na magawa yung project within sa napag-usapang time, and yung naging result nito kay G ay hindi niya nagawa na maibenta yung properties niya doon sa residential community nila. In this case, hindi na kailangan ni G na ma-prove pa sa court yung actual damages na nangyari sa paglabag ni R sa kasunduan nila and ang kailangan niya lang gawin is mapatunayan na si R ay nag-failed na magawa yung project within 12 months bilang kasunduan sa kontrata nila so that he can obtain 1M per month of penalty kay R. ARTICLE 1229: Kung meron namang nagawa ng konti yung debtor or may nabayad siya kahit partial lang, pwedeng i-reduced or babaan ng judge yung penalty niya. Same as the usurious interest, pwede rin babaan ng court ‘yon. EXAMPLE is yung sa mga lending; Diba usually sa mga sanlaan grabe magpatubo. Kapag masyadong mataas yung interest nila or hindi na fair, pwedeng babaan yon ng court. Dapat meron lang maximum rate yung interest nila. WHEN PENALTY MAY BE REDUCED BY THE COURTS? (1) When there is partial or irregular performance- Gaya ng explanation sa provision na ‘to, kahit partial palang yung binayad mo, pwedeng ma-reduced yung interest na ibabayad mo. EXAMPLE: Si A agreed to construct the house of B within 3 months for 1M pesos, yung contract na ‘to ay may kasunduan sila na within 3 months nga lang dapat and in case of non- compliance, si A ay magbabayad ng 100k for penalty. Even hindi niya nagawa na matapos yung bahay within 3 months, still meron pa rin naman siyang mga natapos. (partial performance) So since B has been benefited by the partial performance ni A, yung court ay pwede niyang i- reduce yung penalty and pwede niyang pagaanin ‘to, for paying 20K nalang. Irregular performance to kasi natapos man ni A yung pag-construct ng bahay, pero hindi niya naman nagawa according sa napag-usapan nila. (2) When the penalty agreed upon is iniquitous or unconscionable- katulad lang din ng explanation, kahit na hindi mo pa bayad, pwedeng babaan ng court yung interest kung excessive masyado yung interest. EXAMPLE: Same example lang. Suppose yung value lang naman ng bahay ay 1M lang, pwedeng i-reduced ng court yung interest na binigay ni B kay A kasi excessive na masyado yon. ARTICLE 1230: The nullity (pagkawalang bisa) ng penal clause ay hindi nakaka-apekto sa principal obligation. EFFECT OF NULLITY OF THE PENAL CLAUSE Kung yung penal clause lang naman yung void, the prinicipal obligation ay valid and demandable pa rin. EXAMPLE: Si A agreed na magbenta ng sasakyan kay B, provided sa agreement nila na in case hindi magawa ni A yung obligation niya na ‘yon, A will deliver drugs as a penalty. Yung principal obligation dito ay ang pag-benta ng sasakyan, Penal Clause naman ay ang delivery of drugs. Dito, yung pag-benta ng sasakyan ay valid pero yung penalty na mag-deliver ng drugs ay void dahil prohibited by law. EFFECT OF NULLITY OF THE PRINCIPAL OLIGATION Kapag yung principal obligation ay void, yung penal clause ay also void dahil the clause cannot stand alone without the principal obligation. Pero kung yung nullity ng principal obligation ay dahil sa fault ni debtor, who acted in bad faith, na nag-caused ng suffered of damages sa creditor, the penalty may be enforced. EXAMPLE: A agreed na mag-deliver ng drugs kay B, meron silang kontrata or napagkasunduan na in case hindi magawa ni A ‘yon, kailngan magbayad ni A ng 10K as penalty. Yung penal clause rito na pagbabayad ng 10k is valid on its own, however this penalty clause ay naka-based sa principal obligation (which is yung pag-deliver nga ng drugs) ay invalid (Contrary to morals and prohibited by law) So kahit na valid pa yung penal clause, magiging invalid siya dahil nga invalid yung pinaka- principal obligation. CHAPTER 4 EXTINGUISHMENT OF OBLIGATIONS ARTICLE 1231 Under this provision, Obligations are extinguished by the following: (1) By payment or performance; (2) By the loss of the thing due; (3) By the condonation or remission of the debt; (4) By the confusing or merger of the rights of creditor and debtor; (5) By compensation; (6) By novation Annulment, rescission. Fulfillment of a Resolutory condition, and prescription are the other causes of extinguishment of obligations governed under the civil code (1156) (7) Death of a party in case of an obligation) (8) Mutual Desistance or withdrawal) (9) Arrival of Resolutory period (10) Compromise (11) Impossibility of fulfillment (12) Happening of a fortuitous event, are the other causes of extinguishment of obligations. SECTION 1. PAYMENT OR PERFORMANCE ARTICLE 1232: Payment means not only in terms of paying money but also the performance of an obligation. ARTICLE 1233: A debt can’t considered paid unless the thing or the service subject to the obligation has been completely delivered or rendered. 2 requirements for Payment: (1) Integrity of prestation- The prestation must be fulfilled and complete. (2) Identity of the prestation- The very prestation due must be delivered or performed. It must be delivered and released. ARTICLE 1234: If the obligation has been substantially performed and acted in good faith, the obligor may recover as though there had been a strict complete fulfillment, less damages suffered by the obligee. Substantial Performance happened when the essential part of the contract has been accomplished and only a bit therefore has not been fulfilled. REQUISITES FOR THE APLICATION OF ARTICLLE 1234 (1) There must be Substantial Performance (2) The obligor must be in good faith EXAMPLE: A obliged an mag-deliver ng 200 hollow blocks kay B for a certain price. However dahil sa shortage ng hollow blocks, 100 lang yung made-deliver ni A kay B. Si A (obligor gusto niyang ma-fulfill yung obligation niya na makapag-deliver ng 200 hollow blocks pero for some reason beyond his control ay hindi niya ‘yon magawa. Kahit na hindi totally fulfilled yung obligation niya, as long as nag-act siya in good faith, pwede niya ma-recover yung equivalent amount na bayad doon san a-deliver niya. ARTICLE 1235: If yung obligee tinanggap niya yung performance ni obligor kahit na alam niyang incomplete ‘yon without any objections or complaints, therefore the obligation is considered fully satisfied with. Recoveries allowed to creditor in order for him to recover when the performance is incomplete. (1) If the payment is incomplete, the creditor may properly reject it. (2) In case of acceptance of the performance, the law considers that he renounced his right, the whole obligation is extinguished. REQUISITES FOR THE APPLICATION (1) The obligee knows that the performance is incomplete or irregular. (2) He accepts the performance without any objections. EXAMPLE: A agreed na pinturahan yung bahay ni B. According to their stipulation, kailangan gumamit na A ng particular brand ng pintura. If si A gumamit ng ibang brand na alam ni obligee at hindi siya nag-express ng objections about that, therefore the obligation is deemed fully complied with. ARTICLE 1236: Yung creditor is not guaranteed na mag-accept ng payment by a third person who has nothing to do with the fulfillment of the obligation, except merong napagkasunduan. Kung sino man yung angbayad, yung nagbayad na ‘yon is entitled siya na magakroon ng reimbursement for the full amount he paid. Pero if yung payment na nangyari was made without the knowledge ni debtor, yung mare-reimburse lang nung nagbayad is up to extent amount by which the debtor was benefited. The creditor must accept the payment from: (1) The Debtor (2) Any person who has an interest to the obligation (3) Third person who has no interest in the obligation ARTICLE 1237: If yung third person is binayaran niya yung utang ni debtor without the consent and knowledge ni debtor, hindi siya entitled na i-subrogate yung lahat ng rights an meron yung creditor. RIGHT OF THIRD EPRSON TO SUBROGATION (1) If the payment is with the consent of the latter, he is entitled to subrogation. (2) If the payment is without the knowledge of the latter, he cannot compel the creditor to subrogate him. DISTINCTION OF SUBROGATION AND REIMBURSEMENT (1) In subrogation, the payer or third person acquires the right to be reimbursed for he has paid and also have the rights which the creditor could have. The third person is put into the shoes of the creditor. (2) In reimbursement, the third person entitled only to reimburse for the amount he has paid. ARTICLE 1238: Payment made by a third person who does not intend to have a reimbursement by the debtor is considered to be a donation which requires the debtor’s consent. ARTICLE 1239: Payment by an incapacitated person. If payment is made by a person who does not have any capacity to give (either because he has no right or because he still has no legal capacity to dispose of such thing, it will considered to be invalid. EXAMPLE: Si A agree an ibebenta niya yung karaoke set kay B. If yung karaoke set nan a- delivered na ‘yon ay pagmamay-ari pala ni C, pwedeng ma-recover ni C ‘yon kasi hindi naman valid ‘yon. Ibig sabihin walang kakayahan yung debtor na ibigay or agwin yung obligation na ‘yon kasi hindi naman sakanya ‘yon. ARTICLE 1240: Yung payment na ibabayad ay dapat ibayad sa kung kanino man dapat ibayad. If ever na may mangyaring masama kay creditor yung payment from the debtor is pwede niyang ibigay ‘yon sa mga tao na in-authorized ni creditor. Payment shall be made to: (1) The creditor or the obligee (2) His successor in interest (3) Any person authorized to receive it ARTICLE 1241: Effect of payment to an incapacitated person Kapag yung tumanggap ng payment mo is incapacitated, hindi ito magiging valid unless yung person na ‘yon ay nag-benefit dun sa binayad mo or kung naitago niya yung payment mo. EXAMPLE: Nagbayad si A nagbayad kay B ng 5k. That time depress na depress si B. Tapos may nangholdup sa kanya at kinuha yumg 5k. Hindi valid yung payment. Pero kung ginastos ni B yon para sa sarili niya or naitago niya naman yung pera, macoconsider yung payment ni A as valid. Effect of payment to a third person Hindi to magiging valid EXCEPT if the creditor will benefit from it. Pano magbebenefit yung creditor? EXAMPLE: May utang si D kay C, tapos nung nagmature na yung obligation kay T niya ibininayad. Liable pa rin si D kay C, pero kung binayad naman yon ni T kay C. Magiging valid yung payment ni D. Pero dapat may proof na ipapakita si D kay C, na kay T nga niya ibinayad. When benefit to creditor need not be proved by the debtor? If na-acquire na nung 3rd person yung rights ng creditor sa debtor EXAMPLE: Na-acquire ni T yung rights ni C sa above example kaya hindi na kailangan iprove ni D. If may consent or ratification na yung creditor sa payment nung 3rd person EXAMPLE: Nagbigay na ng consent si C sa pagbabayad ni T sa above example kaya di na rin need na iprove ni B. Pinaniwala ng creditor yung debtor niya na may authority nga yung 3rd person na yon para tanggapin yung bayad niya kahit naman wala talaga. ARTICLE 1242: Sinasabi rito na kapag yung debtor ay nagbayad in good faith sa third person na may hawak nung credit, mare-release na siya sa obligation. EXAMPLE: May utang si D kay C na 1k na yung evidence is nakalagay through promissory note na pinirmahan ni D para maging in favor kay C. Ngayon nawala ni C yung note and napulot yon or nakuha ni T (third person), kaya ngayon nagdemand si T ng payment kay D. Hindi valid yung payment kay T, kasi hindi naman talaga siya yung nagpautang, siya lang yung may hawak nung note na nagsasabing may utang si D. Pero kung yung note is payable sa may hawak, then mae-extinguish yung obligation if nagbayad si D in good faith. If yung note naman ay nilipat ni C kay T and may agreement sila na hindi pwedeng singilin ni T si D, tapos nagbayad pa rin si D kay T in good faith, extinguished pa rin yung obligation. ARTICLE 1243: Payment to be paid to the creditor by the debtor shall be invalid if the latter has been judicially commanded to detain the debt. Yung creditor pwede niyang i-ask yung court na itigil yung transaction ng pagbabayad ng utang ni third person kay debtor. Pwede niyang ipatigil ‘yon hangga’t sa ma-resolved na ni debtor yung obligation niya sakanya. EXAMPLE: Si may utang kay B na 1k, tapos si C (third person) may utang din kay A na 1k. Ngayon si B (creditor ni A) pwede siya mag-ask sa court to retain the debt ni C kay A hangga’t hindi pa siya nababayaran neto. Any payment na ibabayad ni C kay A is considered invalid kasi nga it’ violation of the judicial order. ARTICLE 1244: A thing different from what has been stated cannot be offered or demanded against the will of the creditor unless agreed upon or if the creditor consents. The creditor shall be paid only what has been stipulated upon because the contract between the contracting parties is the law between them. The act to be performed or the act prohibited cannot substitute against the obligee’s will. ARTICLE 1245: There is dation in payment when property is convey to the creditor in satisfaction of a debt in money. Whatever thing the debtor will pay to his creditor as a satisfaction of a debt in money should be with the same value as the first thing agreed upon. A debt in terms of money is satisfied not only by payment of money but also by the detachment of the property. ARTICLE 1246: The debtor who is obliged to deliver a generic thing cannot be compelled to deliver other thing. If the obligation consists in the delivery of specific or determinate thing, the said thing due must be the one delivered. ARTICLE 1247: If the parties have made a stipulation as to who will bear the expenses, then their stipulation shall be followed. Debtor pays generally for extrajudicial expenses. Because the payment is his duty and it inures to his benefit that he is released from the burden of the obligation. Kung merong napag-usapan kung sino yung sasagot ng extrajudicial expenses, kailangan sundin 'yon. Pero kapag walang agreement or stipulation na nangyari sa pagitan ng both parties, yung extrajudicial expenses matic yung debtor yung sasagot no'n. BAKIT? Kasi diba sa isang obligation, kapag nakabayad na yung debtor matic mae- extinguished na yung obligation niya, so siya yung magbe-benefit doon kasi wala na siyang utang or obligation na kailangan ma-fulfill. Kaya kung may extra judicial expenses debtor dapat sasagot kasi magiging unfair naman sa part ng creditor kung siya na nga yung parang na- agrabyado, siya pa yung sasagot. EXAMPLE: Si A yung may ari ng apartment, tapos nangupahan sakanya si B for the amount of 3k na kailangan bayaran every 15th day of the month, tapos si B nag-failed siya na mabayaran yon in 2 months, so yung may ari ng apartment ay nag-send ng letter na kailangan niya na umalis doon plus kailangan bayaran yung hindi niya nabayaran na rental fee, tapos si A nag-ask siya sa Atty. for that problem, syempre may fee yung Atty. diba. So from that yung magiging expenses na babayaran ni B ay yung hindj niya nabayaran na rental fee + yung fee nung Atty. na hinire for legal service. ARTICLE 1248: Since the creditor is not compelled to accept partial performance of an obligation, they cannot be considered to incur delay if he refuses to accept partial prestation. In order that payment may extinguish the obligation, it is necessary that there be complete performance of the prestation. Partial performance is allowed when: (1) When there is an express stipulation (2) When the debt is in part liquidated and in part of unliquidated (3) When the different prestations in which the