Oblicon Reviewer for Final Examination PDF

**What is Law?** \- law means any rule of action or any system of uniformity **DIFFERENT KINDS OF LAW OR CLASSIFICATIONS OF LAW** **\[1\] DIVINE LAW** \- The law of religion, there is a religion that dictates the Divine law Example: going to church every Sunday, taking otcha **\[2\] NATURAL LA...

**What is Law?** \- law means any rule of action or any system of uniformity **DIFFERENT KINDS OF LAW OR CLASSIFICATIONS OF LAW** **\[1\] DIVINE LAW** \- The law of religion, there is a religion that dictates the Divine law Example: going to church every Sunday, taking otcha **\[2\] NATURAL LAW** \- it is the law which internally dictates our reason \- it\'s our conscience that dictate us even without religion involved. \- it is inherent upon every individual Example: Don\'t steal **\[3\] MORAL LAW** \- law based on custom and traditions \- customary in the area \- collective sense of right now wrong of every community \- When we talk of moral law, we are speaking of the totality of the norms of good and right conduct growing out of the collective sense of right and wrong of every community. Example: saying po and opo, pagmamano **\[4\] PHYSICAL LAW** -law based on nature or science \- there are uniformities of actions and orders of sequence which are the physical phenomena that we sense and feel. Example: gravity **\[5\] STATE LAW** \- promulgated and enforced by the state Example: jaywalking **SOURCES OF LAW** **\[1\] CONSTITUTION** \- fundamental (highest, supreme) law of the land \- written instrument by which the fundamental powers of the government are established, limited and defined and by which these powers are distributed among the several department for their safe and useful exercise for the benefit of the people. \- it is the fundamental law of the land because it is promulgated by the people themselves, binding on all individual citizens and all agencies of the government. \- here in the Philippines, we call it 1987 Philippine Constitution \- established on 1987 after the ouster of President Marcos \- we currently adapt this Constitution unless it has been changed. **\[2\] LEGISLATION** \- it means enacted law \- enacted means passed by the Philippine Congress and sign by the President or lapse into effectivity \- it consists in the declaration of legal rules by a competent authority \- enacted law is created by the Congress \- example : RESA LAW **SHALL REMEMBER!** Proposed law means **\"bill\"** **2 KINDS OF CONGRESS** - **House of Representatives** - **Senate** **3 BRANCHES OF GOVERNMENT** 1. **Executive** **-** enforce law \- headed by the president 2. **Legislative** **-** create laws **2 KINDS OF CONGRESS** - **House of Representatives** - **Senate** 3. **Judiciary** **-** interpret the law \- composed of the courts **ORGANIZATION/CLASSIFICATION OF COURTS** **\[1\] REGULAR COURT** \- Supreme Court, Court of Appeals, Regional Trial Court, Municipal Trial Court **\[2\] SPECIAL COURT** \- these created for specific cases \- Example: Sandigan Bayan (corruption, plunder, kaban ng bayan) **\[3\] QUASI JUDICIAL AGENCY** \- administrative bodies rendering judicial function \- part of executive department \- Example: **National Labor Relations Commission (NLRC)** **Security and Exchange Commission** **\[3\] ADMINISTRATIVE/EXECUTIVE ORDER** \- They are those issued by administrative officials under legislative authority. Administrative rules and regulations are intended to clarify or explain the law and carry into effect its general provisions. Administrative acts are valid only when they are not contrary to the laws and Constitution. **-** issued by executive department/regulation \- example: Martial law (executive order no.1081) **\[4\] JUDICIAL DECISION** \- decision of the court Example: Humanitarian reason (case of Juan Ponce Enrile, he is granted bail by Humanitarian reason) **\[5\] CUSTOM** \- traditions passed down from one generation to another and it becomes part of law of the land \- applicable to indigenous people Example: Manobo tribe, nakabahag, they posess deadly weapon **\[6\] OTHER SOURCES** **-** international law/ UN \- law of United Nation **- United Nation Convention on the law of the Sea** **RULE IN CASE OF INTERPRETATION OF THE LAW** \- According to **Article 9 of Civil Code**, No judge or court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. (walang korte o hukuman ang di magbibigay ng hatol ng dahil sa kakulangan ng batas) Where to base kapag walang basehan na batas sa isang case? \- The court will base on **Article 10 of Civil Cod**e, In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. **SHALL REMEMBER!!** In case of conflict between Constitution and Law, **the rule is Constitution will prevail.** What if there is no conflict? **Then apply both Constitution and Law** **CLASSIFICATION OF THE LAW** **\[1\] As to purpose** - **Substantive Law** \- body of law defining rights and duties - **Procedural Law** \- called remedial law \- procedures in the application of the law Example: The Congress passed the law of burning all plastics, for example that\'s Republic Act 123, this is substantive law, the procedure on how to burn the plastic is the procedural law. **\[2\] As to subject matter** - **Public Law** \- is the law that defines relationship between the state and the people Example: paying taxes - **Private law** \- the law that refers to relationship between an individual with one another **Ex. Obligation and Contract** **SHALL REMEMBER!** Obligation and contract is under private law only But Obligation and Contract are both substantive and procedural law **Civil Code of the Philippines** also known as **Republic act 386** it took effect on **August 30, 1950** it was patterned after civil code of Spain **The Conclusive Presumption of Law** According to **Article 3 of civil code**, ignorance of the law excuses no one from compliance therewith. -ignorance of the law is not an excuse because before a bill becomes law, there is need to be published it to general publication (example: newspaper) **What is Obligation?** (will be found the definition at **article 1156 of civil code of the Philippines**) is juridical necessity to give, to do or not to do. derived from the Latin word **\"obligatio\"** means tying or binding **What is juridical necessity?** it means that in case of non compliance, the court may be call upon by the agreed parties for its fulfillment \- there is **penalty** (\"**damages**\") if there is non compliance **ESSENTIAL REQUISITES OF AN OBLIGATION** \[1\] **Debtor (passive subject)** \- he is the one who has the duty \- the person who is bound to the fulfillment of the obligation \[2\] **Creditor (active subject)** \- he is the one who has the right \- the person who is entitled to demand fullfilment of the obligation \[3\] **Prestation (object)** \- subject matter of the obligation \- the conduct required to be observed by the debtor \- composed of to give, to do, or not to do \[4\] **Juridical tie/ legal tie/ efficient cause** \- it binds the parties \- source/basis of the obligation Example: Manny ask Villar to build him a house In this case: **Debtor** - is Villar because he has the duty to build house for Manny **Creditor** - is Manny because he is the one who has right and a receiver of the obligation **Subject matter** - is to do, to build house for Manny **Juridical tie/legal tie** - is the contract **SHALL REMEMBER!!** The moment the debtor fulfills his obligation, the debtor will become creditor and the Creditor will become debtor. The former creditor will now have an obligation to pay or to do something in return of the fulfillment of obligation of former debtor. **FORMS OF OBLIGATION** \[1\] Oral \[2\] Writing \[3\] Combination of oral and writing **KINDS OF OBLIGATIONS** \[1\] **Real Obligation** \- to give (example: give the wallet, etc.) \[2\] **Personal Obligation** \- obligation to do or not to do **Positive Obligation** - to do (example: to build,construct house etc.) **Negative Obligation** - not to do (example: will not construct the house of, etc) **SOURCES OF OBLIGATIONS** **SHALL MEMORIZE!!** Obligation arise from: (1) Law; (2) Contracts;(3) Quasi-contracts; (4) Crimes or Acts or omissions punished by law; and (5) Quasi-delicts. (will be found on **Article 1157 of Civil Code**) **\[1\] Law** \- imposed by the law itself (example: paying taxes; to do, jaywalking;not to do, etc.) **\[2\] Contract** **SHALL MEMORIZE!!** - A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. (Will be found on **Article 1305 of Civil Code**) **ARTICLE 1306** \- The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient provided they are not contrary to law, morals, good customs, public order, or public policy. \- As a **GENERAL RULE**, the parties are allowed to stipulate anything in the contract **- EXEMPTION** is for as long as it is not contrary in law, morals, good customs, public order, or public policy (article 1306) (Example no. 1: You and I have contract, I sell cellphone on you and then I ask you to wear yellow cap to be able to get it, in this case, it is allowed because it is not contrary to law, morals\.....) Example no. 2 : I asked you to sell drugs, in this case it is not allowed because it is contrary to law, morals\....) **\[3\] Quasi- contracts** \- QUASI means \"as if\" \- as if there is a contract exists (as if there is a contract na pinanggalingan) \- the basis of Quasi-contract is on the principle of **no unjustly enriched** \- no person shall be enriched or benefited at the expense of another **Article 1160** Obligation derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this book. **- Obligation arising from quasi contract** **TWO KINDS OF QUASI- CONTRACT** **Negotiorum Gestio** \- voluntary management of property \- Voluntary management of another person\'s property or possessions without consent (voluntary management or pag aasikaso ng mga property or mga gamit ng isang tao ng hindi pinahihintulutan) Example: You took your entire family on vacation without being aware that your home was on fire. Your neighbor is concerned about putting your belongings away in the house, picking up and feeding the dog, and other things. In this instance, the \"obligation\" arose as a result of your neighbor\'s voluntary management. He must be paid in the expenses he incurred while you and your family were away. **Solutio Indebiti** \- payment by mistakes Example: I owe you money, so you gave me your account number, but I entered the bank account number incorrectly, so it went to someone else. In this case I paid and I made a mistake. Now, I have an obligation to return the payment. **\[4\] Crimes or acts or omission punished by law ( delicts)** \- delicts means \"crime\" TWO KINDS OF LIABILITIES **Criminal Liability** \- imprisonment **Civil Liability** \- payment of damages **SHALL REMEMBER!!!** Can someone be held responsible in both criminal and civil liability? The answer is YES! (pwede bang ipataw ang criminal and civil liability sa isang tao, yes!) **Article 1161** Civil obligations arising from criminal offenses shall be governed by penal laws, subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XVIII of the Book, regulating damages. **- Obligation arising from delicts** **SCOPES OF CIVIL LIABILITY** **Restitution** \- to give back or to return **Reparation for the damage caused** \- to fix the damage and to pay for the value **indemnification for consequential damages** \- payment for consequential damage \- to pay such other damages suffered by Y as a consequence of a crime. Example: You steal car, restitution is you will return the car to the owner, reperation you will fix the damage and pay in case you can\'t be able to return the car, indemnification is you will pay for the expenses of the owner in the period where he is commuting. **\[5\] Quasi- delicts (torts)** \- LEGAL TERM is \"torts\" \- as if there is a crime \- no existing contract but there is a negligence and this causes damages (there is someone who incur liability because of negligence) Example: You own a dog, and while you are walking it in a park with it, your dog accidentally escapes into your hands amd your dog bit someone. Although there is no contract in this instance, the dog owner\'s negligence results in damage, and as a result, he must pay for the harm that his dog\'s bite caused, such as paying for an injection or medication, among other expenses. **Article 1159** \- Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith **(good faith means the absence of bad intention)** **- Obligation arising from contracts** Example no. 1 We have a contract. In exchange for 100,000, I ask that you capture the stray dog on the street. In contract, I promise to provide you with equipment or protection but you still get bitten and get hurt. In this case, there is still a good fate in my part because I complied. Example no. 2 We have a contract, that you would paint my house with Boysen brand paint in exchange for 20,000, but you mixed Boysen brand paint with Rain or Shine brand. In this case, there is no good fate because you did not follow the stipulation of our contract. **- as a GENERAL RULE, the contract is the law between the parties but the EXEMPTION will be found on Article 1306 of civil code** **- the contract will be ineffective or void once it violates or in contrary in Article 1306** **Article 1318** \- states that there is no contract unless the following requisites concur: "consent of the contracting parties, object certain which is the subject matter of the contract, and cause of the obligation which is established. **ESSENTIAL REQUISITES OF A VALID CONTRACT** ** consent** ** object** ** cause** **BREACH OF CONTRACT** - if a party violates contract **Article 1162** Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special laws. **- Obligation derived from Quasi-delicts** \- Quasi-Delicts \- there is no existing contract \- there is negligence \- because of negligence, there is damage Example: You play baseball then you hit the mirror of the car, so you need to pay for it. **Article 1163** Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. **2 KINDS OF OBJECT OR THING** **Specific or determinate thing** \- designated/physically segregated from class Example: house and a lot with title number of 1234, Honda car with plate number of 1235 ** Generic or indeterminate thing** \- it is belong to a class and can\'t be pointed out with particularity Example: \- House and lot in ayala Alabang (so many houses in ayala Alabang) **Article 1163** **Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care.** **General rule**: the diligence required is a diligence of a good father of a family**. (Ordinary care)** Diligence means **\"care\"** **Exemption:** if the parties will agree on a different kind of care **(Special care)** **DUTIES OF DEBTOR** 1. Preserve the thing or object 2. Deliver the fruits of the object (Will be found in Article 1164) 3. To deliver the accession and accessory \- **accession** means necessary and vital to the object \- **accessory** means for beautification of object 4. To deliver the object itself 5. To pay for damages in case of breach \- breach means **violation** **Article 1164** **The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him.** (Duties of debtor) **3 KINDS OF FRUIT** 1. **Natural Fruit** - is the spontaneous product of the soil and product of animals Example: kusang tumutubo na halaman, puno, nanganak na aso 2. **Industrial Fruit** - are those produced by the land through cultivation or labor \- there is human intervention \- Example: a tree planted by certain person, he puts fertilizer to it to be able to grow 3. **Civil Fruit** - derived by virtue \- product of juridical relation \- Example: tinatanggap na upa, rent As a **general rule**: the obligation to deliver the thing and the fruit arises from the perfection of the contract **When is the contract perfected?** If there is already meeting of the minds between the parties **How do we know if there is a meeting of the minds?** Through consent **Exemption:** if the parties will stipulate otherwise Example 1: Juan will buy a bag from Pedro. There is a consent to give the bag immediately. Juan has already paid Pedro. But Juan changed his mind to just deliver the bag by Friday because his mom\'s birthday is on Friday and the bag will be given as a gift. In this case, there is already a consent when the payment was made but there was a sudden stipulation so the obligation arises, and that is Pedro has to deliver the bag by Friday. Example 2: I will buy a horse to Ms. Inamo. I gave her 15,000 pesos. We have an agreement to deliver it by December. I bought her the horse in April. But while in the possession of Ms. Inamo, the horse gave birth to a colt (baby horse). So in this case who has the right to the colt? The answer is me because as you will analyze, I already gave her the money, meaning to say the contract was perfected already.The horse is therefore already mine, including its fruit as of April even I will receive it in December. It will happen that Ms. Inamo has the right to the colt ,if it was born before April and if I\'m not yet paid. (See article 1164). **2 KINDS OF RIGHT** 1. **Personal Right** - it is all right over a definite passive subject \- rights against an individual Example: Abno will make a house for Norman, the agreement is between them only, and there are specific people involved , that\'s why it\'s personal. 2. **Real Right** - it is a right and forceable against the whole world \- ownership \- right against the whole world \- against the whole world ( **\"inrem\"** Latin word) Example: I have a house in Taguig, no one shall get that house, because I have a real right **Article 1166** **The obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned.** **Accession** - improvement upon a thing which is vital and necessary to the object Example: house and lot **Accessory**- are things attached to the object for embeddlishment, better use usually for breach Example: case of cellphone **SHALL REMEMBER!!!** Rule to accession and accessory is same with the rule on the fruits ( article 1164, if there is perfection of contract) **Article 1167** **If a person obliged to do something fails to do it, the same shall be executed at his cost.** **3 INSTANCES** 1. **If the debtor fails to perform his duty** Ex. John didn\'t paint the car 2. **If the debtor performs the duty but it\'s contrary to the terms** (Hindi ayon sa pinag usapan) Ex. John paint the car yellow but the contract is should be blue 3. **If the debtor performs the obligation but in a poor manner** Ex. John only paint the side mirror of the car or the paint was not that clear. **First instance: What happen if the debtor did not fulfill or fail the obligation?** If the debtor fails, the creditor has the right to have the obligation perform by himself or have another person to perform the obligation. Who will pay for the expense? The debtor. The debtor will pay the expense of creditor or pay the damages like the disturbance that the debtor made. It could be both if the creditor say so. But if the creditor do not want the Debtor to pay for the expense and damage, it is ok. **2nd instance: What happen if the debtor performs but contrary to the agreement?** Same with first instance. **3rd instance: What happen if the debtor performs the obligation but in a poor manner?** Same with first instance. **Article 1168** **When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be undone at his expense.** \- if the obligation is not to do and the party does the action \- example: the Obligation is to paint the car except the side mirror. This is obligation not to do but it happens that the debtor painted the whole car. In this case , there\'s breach (violation) of contract and the debtor will be liable. **What will happen?** The act can be undone at the expense of the debtor. Same rules applies at article 1167 that the creditor have the right to perform by himself such as removing the paint for example in the side mirror or have another person to remove it. The expenses here will be paid by the debtor or pay also for the damages. It could be both or either in the two payment. There is no problem if the creditor does not want the debtor to pay. **Article 1169** **Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.** \- talks about delay **2 KINDS OF DELAY** 1. **Ordinary Delay** - is the failure to perform an obligation on time 2. **Legal Delay (also called MORA)** - is the failure to perform an obligation on time which resulted to a breach (breach means violation) **3 KINDS OF LEGAL DELAY** 1. **Mora Solvendi -** delay on the part of the debtor Example: Juan told Pedro to build him a house in October 15. Both parties are agreed to this contract but when the date comes, still Pedro did not able to finish the house. In this case there is a delay on the part of Pedro , for which he is the debtor who has the obligation to build a house for Juan. 2. **Mora Accipiendi -** delay on the part of the creditor Example: Juan told Pedro to build him a house in October 15. Both parties are agreed to this contract. When the date comes that Pedro was done building the house. Juan was not around because he took vacation on U.S. In this instance, there is delay on the part of Juan, for which he is the creditor on this obligation because he\'s the one who command Pedro to build the house. But he was not around, at this time he supposed to pay Pedro. Therefore, there\'s a delay on the part of the creditor. 3. **Compensatio Morae -** delay on the part of the debtor and the creditor. The delay of the debtor cancels the delay of the creditor and vice versa. **WHAT IS THE EFFECT OF THIS THREE DELAY?** The person who has committed delay should be liable. In compensatio morae, the result is that there is no actionable default on the part of the both parties (walang mananagot, they just cancel each other) **UNDER WHAT PRINCIPLE?** Pari Delicto **CAN THERE BE DELAY ON NEGATIVE PERSONAL OBLIGATION?** \- negative personal obligation is not to do \- therefore, the answer is no. Common sense. The debtor is obliged not to do the obligation so how come there would be delay on the part of him? \- In an obligation not to do, non-fulfillment may take place but delay is impossible for the debtor fulfills by not doing what has been forbidden him. **REQUISITES OF DELAY BY THE DEBTOR (requirements in case of mora solvendi)** 1. **The debtor fails to perform his obligation on the date agreed upon.** 2. **There should be a demand** - there should be a demand or notice made by the creditor upon the debtor to comply his obligation. The demand may be either judicial (when a complaint is filed in the court) Or extrajudicial (when made outside of court, orally or in writing) 3. **Failure of the debtor to comply with such demand** Example: Roy is obliged to build to Juan a house on December 10. When the time comes, Roy is still not able to build the house. In this case, is there a legal delay? The answer is no , it\'s just an ordinary delay because of absence of any demand from Juan. If a demand is made upon and still fails to perform the Obligation on time. There is already a legal delay which is Mora solvendi (delay on the part of the debtor). **EFFECTS OF DELAY** 1. **MORA SOLVENDI** a. **The debtor is guilty of breach or violation of the obligation** - there\'s a breach b. **Payment of damages** - the debtor is liable to the creditor for interest c. **He is liable even for a fortuitous event** (natural disaster like earthquake etc) when the obligation to deliver a determinate thing (specific thing) -the debtor will still liable even for a fortuitous event most especially when the obligation to deliver is a determinate thing. Generic thing can be replaced by the same kind but specific can\'t. 2. **MORA ACCIPIENDI** a. **The creditor is guilty of breach of obligation** b. **He is also liable for damages** suffered by the debtor c. He bears the risk of loss of the thing due Where the obligation is to pay money, the debtor is not liable for interest from the time of creditor\'s delay d. **The debtor may release himself from the obligation** by the consignation or deposite in court of the thing or sum due. \- the debtor will be released from the obligation if there is still no demand on the date given. *\*Yung kulay blue,yon lang nabanggit ni sir nung nagdidiscuss sya, pero nasa libro lahat ng pinaglalagay ko dyan. Yung sa libro nalang para sureness ehe.\** 3. **COMPENSATIO MORAE** -The effect is **pari delicto** which means , the liability of the first infractor shall be equitably tempered or balanced by the courts. \- They will cancel out each other. **UNDER AR. 1169, THERE ARE INSTANCES WHERE DEMAND IS NOT NECESSARY TO PUT DEBTOR IN DELAY** As a **general rule,** delay by the debtor begins only from the moment of demand. The **exceptions** are mentioned below. 1. **When the obligation so provides** \- it is stipulated in the contract. Ex. In the contract, there is permission that the debtor can do the obligation without the need for demand (basis: is contract because parties are allowed to stipulate as long as it is not contrary to law, morals, good customs, public order or public policy. 2. **When the law provides** Ex. Taxes (regularly pay , there is no need for the creditor(government) to demand ) 3. **When time is of the essence** \- by the nature of the obligation \- the very nature of the obligation gives the reason why demand is no longer needed Ex. The delivery of balloons for a birthday on a particular date. In this case, the debtor should deliver the balloons on the same date. Common sense. 4. **If the demand would be useless** \- from the very nature of the Obligation, the demand will be futile (balewala) Ex. Sun is obliged to deliver a specific horse to Moon on September 5. Through Sun\'s negligence or deliberate act or by the reason of fortuitous event, the horse died on September 2. Under this situation, any demand for the delivery of the horse on September 5 would be useless as Sun has made it impossible for him to perform his obligation. 5. When there is performance by a party in reciprocal obligation (**in case of compensatio morae)** Ex. Sun agreed to sell to Moon his television for 10,000. The obligation of Sun is to deliver the television while that of Moon to pay 10,000. Since no date is set for performance of the respective obligations, it is understood that it must be simultaneous. Sun cannot demand payment if he himself cannot deliver the television. From the moment Sun delivers the television , Moon is in default if he does not pay Sun without the need of any demand. **SHALL MEMORIZE!!** **Article 1170**. **Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof, are liable for damages.** **GROUNDS FOR LIABILITY** **\[1\] Fraud (deceit or dolo)** \- fraud in general term, means to mislead or deceive another \- is the deliberate or intentional evasion of the normal fulfillment of an obligation. 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. Is there good faith in fraud? No, because fraud is synonymous to bad faith Ex: Juan obliged himself to deliver to Pedro 20 bottles of wine, of a particular brand. Subsequently, Juan delivered 20 battles knowing that they contain cheaper wine. Juan is quilty and is liable for damages to Pedro. **2 KINDS OF FRAUD (article 1170)** 1. **Dolo causante (causal fraud)** (Sir definition) - it is committed so that consent to the contract will be acquired (nangloko para pumayag na pumasok sa contract) (In a book)- fraud employed in the execution of a contract which vitiates consent Ex: Juan is searching for waterproof cellphone, now Juan recommend his cellphone. He tell Juan na waterproof ang kanyang cellphone,but nung ginamit na ni Juan, he just realized that it is not waterproof. In this case, it is causal fraud because if Juan knows immediately that it\'s not waterproof then there\'s no reason to buy it from Pedro. 2. **Dolo incidente (incidental fraud)** (In a book)- committed in the performance of an obligation already existing because of contract. (Sir definition) - there is already a contract but in the middle of the obligation, the party commits fraud. Ex: if Juan is searching for waterproof cellphone and then pedro recommends his cellphone. During the time na ginagamit na ni Pedro, it turns out that it is waterproof but there is damage on the cellphone. The speaker of the cellphone is not functioning. In this case, this is incidental fraud because during the moment of transaction Pedro was already committing fraud. He hides something to Juan so that he would buy it. **\[2\] Negligence (fault or culpa)** (In a book)- It is any voluntary act or omission, there being no bad faith or malice which prevents the normal fulfillment of an obligation (if fraud , there is a bad faith) Example: Juan is a passenger in a taxi. Here, there is considered a contract of carriage between Juan and the owner of the taxi company. In consideration of the fare to be paid by the owner of the taxi company, through the driver, agrees to safely bring Juan to his destination. If, through recklessness of the driver, like for example driving at an unjustified rate of speed or entering a one-way street, an accident occurs, as a result of which Juan is injured, there is negligence which would make the owner liable for damages. If the taxi defective parts, the failure to repair the same constitutes also negligence on the part of the owner. **3 KINDS OF NEGLIGENCE (CULPA) ACCORDING TO SOURCE OF OBLIGATION (will be found on Article 1173, 1174)** 1. **Culpa Contractual (contractual negligence)** (In a book) - negligence in contracts resulting in their breach (Sir definition) - there is existing contact between parties and there is negligence Example 1: Sun entered into a contract of sale with Moon to deliver a specific horse on a certain day and the horse died through the negligence of Sun before delivery, Sun is liable for damages to Moon for having failed to fulfill a pre existing obligation. Example 2: there is an agreement that Sun will order cake to Moon that will use on his b-day. But Moon didn\'t care about the cake so it happens that cake was not that presentable. In this case , there is negligence and there is contract, so it is culpa contractual. 2. **Culpa Aquiliana (Civil Negligence)** (In a book) - or negligence which by itself is the source of an obligation between the parties not so related before by any preexisting contract. It is also called quasi-delict or tort (Sir definition) - there is no pre-existing contract, but there is negligence Example 1: nakawala yung dog mo dahil sa negligence mo and may nakagat Yung dog mo, here there is no pre existing contract, but you will be liable to damages. 3. **Culpa Criminal (Criminal Negligence)** (In a book) - negligence resulting in the commission of a crime (Sir definition) - there could be Contract or none but the negligence resulted to a crime **\[3\] delay or Mora** - this has already been discussed under article 1169 **\[4\] Contraversion of the terms of the Obligation** \- this is the violation of the terms and condition stipulation in the obligation **Article 1171** **- responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.** \- hindi pwedeng tanggalin sa provision ang fraud in the future \*Waiver of action for future fraud is void \*Waiver of action for past fraud is valid **Article 1172** **Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances** **2 PRINCIPLE UNDER Article 2179** 1. **Proximate Cause** \- it is the negligence which is the primary reason to the damage Example: I drive a car in highway, then yung gulong ng kotse ko is kumalas, napahinto ako and bumangga sa unahan kong kotse and bumangga din yung ko sa unahan nyang kotse. 2. **The Contributory Negligence** -there is already proximate cause because of further languages the damages was increased. (Meron ng may kasalanan, may dagdag na kapabayaan, kaya tumaas ang damage.) Example: Kumalas ang gulong ng kotse dahil hindi ko inayos yung gulong. \* The one who causes proximate cause is liable \* The one who has contributory negligence will be mitigated/babawasan **WHAT IS NEGLIGENCE?** Lack of care, precaution **According to article 1173**, negligence is the failure to observe the degree of the care demanded by the situation which resulted to damages **WHAT IS THE OPPOSITE OF NEGLIGENCE?** Diligence **FACTORS TO BE CONSIDERED TO DETERMINE THE NEGLIGENCE OF A PERSON** 1. **Nature of the Obligation** Ex. Smoking while carrying materials known to be inflammable constitutes negligence 2. **Circumstance of the person** Ex. a guard, a man the prime of life, robust healthy, sleeping while on duty is guilty of negligence 3. **Circumstances of time** Ex. driving a car without headlights at night is gross negligence but it does not by itself constitute negligence when driving during the day. 4. **Circumstances of the place** Ex. driving at 100 kilometers per hour on the superhighway is permissible but driving at the same rate of speed in Ayala avenue, Makati is gross recklessness. **SHALL MEMORIZE!!** **ARTICLE 1174** **Except in cases expressly specified by law, or when it is otherwise declared by a stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be forseen, or which though foreseen, were inevitable.** **MEANING OF FORTUITOUS EVENT** \- is any event which cannot be foreseen, or which, though foreseen, is inevitable. Ex. War (can\'t be predicted) Typhoon, earthquake ( can be predicted but inevitable) **TWO KINDS OF FORTUITOUS EVENT** 1. **Acts of man** - strictly speaking , fortuitous event is an event independent of the will of the obligor but not of other human wills. Example: war, fire, robbery, murder, insurrection 2. **Acts of God -** they refer to the what is called majeure or those events which are totally independent will of every human being. Example: earthquake, flood, rain, shipwreck, lightning ,eruption of volcano **REQUISITES OF A FORTUITOUS EVENT** 1. **That event must be independent of the human will or at least of the debtor\'s will** 2. **The event could not be foreseen, or if foreseen, is inevitable** 3. **That event must be of such a character as to render it impossible for the debtor to comply with his obligation in normal manner** Ex. I bought a car to Carl. He should deliver it on October 15th but there is a sudden earthquake on oct 15th so it makes it impossible for carl to deliver the car. 4. **The debtor my speed must be free from any participation in, or the aggravation of, the injury to the creditor, that is, there is no concurrent negligence on his part** **THE RULE ON FORTUITOUS EVENT** \- as a **general rule**, if there is fortuitous event the obligation is extinguished.. Ex : I buy watch to Jose. It turns out he commits fraud, there is negligence, there is fortuitous event like earthquake and the watch has damaged. Jose will still be liable for damages. **Exemption:** **\[1\] when expressly specified by law** 1. **if the debtor is still guilty of fraud , negligence, delay of the contraversionl of an agreement** Example: I promise to sell you a specific horse and deliver it on specific date but the horse died due to lightning. I will not be liable to any damages if there\'s no demand coming from you. My Obligation is extinguished. If there\'s demand, I will be liable to damages but it is now converted to monetary obligation to pay damages. If the horse died due to any fortuitous event, I will be liable to any damages even theres no demand. 2. **if the debtor promise to deliver the specific thing to two or more persons who do not have the same interest.** Example: I promise to sell you a specific watch and deliver in on specific date but it happens that I sought it also to someone else. Therefore, I will be liable for damages because this is impossible Obligation. 3. **The Obligation to deliver a specific thing arises from a crime** Example: you steal someone car and it happens that it burns out for some reason is allowed to say na hindi na ibabalik yung car? The answer is no. You have committed a crime and therefore,you will be liable to any such damages. 4. **The thing to deliver is generic** -there still Obligation to deliver -generic object can be replaced but specific can\'t Example: I promise to sell you a specific watch but nasira nung araw na idedeliver ko na. Here i will not be liable(If there\'s no demand) because I can\'t no longer produce the same kind of watch. But if it is generic object, I can still comply with my obligation by delivering another thing of the same kind. **\[2\] When declared by stipulation** - the basis of exception rests upon the freedom of contract. \- even if there\'s a fortuitous event, if the parties agreed, theres a liability **\[3\] When the nature of the obligation requires the assumption of risk** Example: you insured your house against fire to insurance company. In this case ,will have an obligation to pay even if the cause of loss is a fortuitous event because there\'s a contract of insurance. **Article 1175** **Usurious transactions shall be governed by special laws.** \***Usury** means receiving of interest in excess to the amount allowed by law **SHALL REMEMBER!!** Usury law before was suspended But now,as long as the parties agreed, it is allowed , except if the interest is inequitious or unconciouable (the interest is too high) **Article 1176** **The receipt of the principal by the creditor, without preservation with respect to the interest, shall give rise to the presumption that said interest has been paid.** **The receipt of later installment of a debt without reservation as to prior installments,shall likewise raise the presumption that such installment have been paid.** (Pinag aakala ng batas na ang pagtanggap ng bayad ay kasama na ang tubo. It is called presumption.) **\*Presumption**-it\'s meant the inference of a fact not actually known arising from its usual connection with another which is known or proved. Example: Jose borrowed 1,000 from Ana. Later, Jose shows a receipt signed by Ana. The fact not actually known is the payment of Jose. The fact known is the possession of Jose of a receipt signed by Ana. The presumption is that the obligation has been paid unless proved otherwise by Ana,as for example, that Jose force Ana to sign the receipt. **Under 1176, There is 2 KINDS OF PRESUMPTION** 1. **Conclusive Presumption** - one which can be contradicted like the presumption that everyone is conclusively presumed to know the law Example: Jose owes Ana the amount of 10,000 with the interest at 15% a year Anna issued a receipt or the principal. The interest was not referred to in the payment whether or not it has been paid. It is special that the interest has been previously made by Jose because normally the payment of interests precedes of the principal. This however is only a disputable presumption and may be overcome by sufficient evidence that such interest had not really been paid. 2. **Disputable (or rebuttable) presumption-** one which cannot be contradicted or rebutted by presenting proof to the contrary, like the presumption established in Article 1176. Example: Jose is a lessee in the apartment of Ana, paying 5,000 rental a month. Jose failed to pay the rent for the months of February and March. In a April, Jose paid 5,000 and Anna issued a receipt that the payment is for the month April. The presumption is that the rents for demands of February and March had already been paid. this is also an accordance with the usual business practice whereby prior installments are first liquidated before payments are applied to the later installments. Again, this presumption is merely disputable. **Article 1177** **The creditors, after having pursued the property in possession of the debtors to satisfy their claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are inherent in his person; they may also impugn the acts which the debtor may have done to defraud them.** (Remedy, solution of the creditor pag tinakbuhan sya ng debtor or if the debtor fails to comply) **REMEDIES AVAILABLE TO CREDITORS FOR THE SATISFACTION OF THEIR CLAIMS** 1. Exact fulfillment **(specific performance)** with the right to damages; 2. Pursue the leviable (not exempt from attachment under the law) **property of the debtor** 3. After being pursued the property in possession of the debtor, exercise all the rights (like the right to redeem) and bring all the actions of the debtor (like the right to collect from the debtor of his debtor) except those inherent in or personal to the person of the latter (such as the right to vote, to hold office, to receive legal support, to revoke donation on the ground of ingratitude) 4. Ask the court to **rescind** or impugn acts or contracts which the debtor may have done to defraud him when he cannot in any other manner recover his claim **Article 1179** **Every obligation whose performance does not depend upon the future or uncertain event, or upon a past event unknown to the parties, is demandable at once.** **Every obligation whiich contain a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event.** **PURE OBLIGATION** \- is one with is not subject to any condition and no specific date is mentioned for its fulfillment and is, therefore, immediately demandable. (If the Obligation, has no condition or walang specific date) Example: Jose obliges himself to pay Anna 1,000. The obligation is immediately because there is no condition and no date is mentioned for its fulfillment. Of course if the loan has just been contracted by Jose, a period must have been intended by the parties for performance but the duration thereof will depend upon the nature of the obligation and the circumstances. **CONDITIONAL OBLIGATION** -is one whose consequences are subject in one way or another to the fulfillment of a condition. **Characteristics of condition:** 1. It is a future and uncertain event 2. Past event but unknown to the parties **TWO PRINCIPAL KINDS OF CONDITION** 1. **Suspensive Condition** - one the fulfillment of which will give rise to an obligation Example: I will sell you the land if it is adjudicated to me in the division of my deceased father\'s estate. My obligation is demandable only after the condition is fulfilled -my becoming the owner of the land. In the meantime, I am not liable to you. 2. **Resolutory Condition-** one the fulfillment of which will extinguish an obligation already ition-existing. Example: Jose, in payment of his debt to Ana, binds himself to give Ana 3,000 monthly allowance until Ana graduates from college. Jose\'s obligation is demandable now but it shall be extinguished or terminated upon the happening of the resolutory condition- Ana\'s graduating from college. **Article 1182** **When the fulfillment of the condition depends upon the sole will of the debtor, The conditional obligation shall be void. If it is depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this code.** ( Pag binigay na ang desisyon ,kung kailan nagstart ang obligation, it is called Potestative condition) **POTESTATIVE CONDITION** \- a condition suspensive in nature and which depends upon the sole will of one of the contracting parties is known as potestative condition. Is this allowed? Yes, provided that one to decide is creditor Example: I owe you money and I tell you , I will pay my debt on the date that you want. **CASUAL CONDITION** If the suspensive condition depends upon chance or upon the will of a third person, the obligation subject to it is valid (Hindi base sa will ng creditor and debtor , kundi base sa will ng third person) Examples: (1)Where Juan, building contractor, obliges himself in favor of Ana, owner, repair at Juan\'s expense any damage that may be caused to the building by any earthquake occurring within 10 years from the date of the completion of its construction (2)where Pedro binds himself to sell his land to Rey if he wins a case which is pending before the supreme Court. (3)I borrowed you a watch and we have an agreement to give it back because your father would be angry. Your papa is 3rd person. This is valid **Article 1183** **Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul The obligation which depends upon them If the obligation is the divisible, the part thereof which is not affected by the impossible or unlawful conditions shall be valid.** **The condition not to do an impossible thing shall be considered as not having been agreed upon.** **Two kinds of impossible conditions:** 1. **Physically Impossible Conditions -** when they, in nature of things, cannot exist or cannot be done Example: I will pay you 10,000 if it will not rain for 1 year in the Philippines I will pay you \$10,000 if you can carry 20 cavans of palay on your shoulder 2. **Legally impossible conditions**- when they are contrary to law, morals, good customs, public order, or public policy Example: I will give you \$10,000 if you will kill the kabit of my asawa HAHAHA. I will give you 10,000, if you will slap his father I will give you \$10,000 if you will not appear as a witness against me in a criminal case **What if:** Example: I will give you 1,000 if you can run to Pcc to Jollibee, this is allowed **What if mixed?** Example: I will give you 1,000 if you can wear black T-shirt and kill her. In this instance, remove the impossible to continue the condition. **\* By way of review, law on obligation and contract is covered by civil law , civil code of the Philippines \*** **Article 1184.** **The condition that some event happen at a determinate time shall extinguish the obligation as soon as the time expires or if it has become indubitable that the event will not take place** The above article refers to positive (suspensive) condition the happening of an event at a determinate - time. **Suspensive condition** - the happening of the condition will give rise to the obligation Example: ibebenta ko sayo itong bahay ko kapag pinamana sakin ng nanay ko. In this case, magkakaroon lang ng obligation na ibenta or ideliver ang isang bagay kapag nangyari ang condition , which is ang condition na nasa example ay kapag ipinamana na sa akin ng nanay ko. The time period na hindi pa ipinamamana, wala akong obligation sayo. **Resolutory condition -** There is already existing obligation. The happening of the condition will terminate the condition. Example \#1: May anak ako sa labas , and then susuportahan ko sya until he reached 18. In this case , may obligation na nangyayari, at yon ay susuportahan ko sya until 18. Pag dumating na sya sa 18, wala na akong obligation sa kanya. Example \#2 : I am your father and I give you weekly allowance until you graduate. Kapag gumraduate ka na, my obligation to give you allowance is wala na. **Shall remember!!!** The obligation will no longer be valid if the event will not happen. Example \#1 : I will give you 20,000 kapag pinakasalan mo si James Reid. This is suspensive condition. But this is really impossible. In this case, there is no obligation because it will not certainly happen. Example \#2 : I will give you 10,000 if you will be able to watch the concert of Michael Jackson. He was dead so it is very impossible that this event will happen. In this case, the obligation is not valid. **Article 1186** **The condition shall be deemed fulfilled when obligor voluntarily prevents its fulfillment.** Ang kondisyon ay masasabing natupad na kung ang may obligasyon mismo ang boluntaryong pumigil sa pagtupad nito. \- the obligor / condition actually prevents its fulfillment. \- applicable to suspensive condition **There are three (3) requisites for the application of this article:** **(1) The condition is suspensive;** **(2) The obligor actually prevents the fulfillment of the condition; and** **(3) He acts voluntarily.** Example: Ibebenta ko sayo Yung kotse ko kapag binigay na sakin ng father ko. Suspensive condition✓. But it turns out, sabi ng tatay ko sa kapatid ko daw ibibigay yon at hindi sakin. In this case, the obligor whose the one prevent the obligation. **Article 1187** **The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of the constitution of the obligation. Nevertheless, when the obligation imposes reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless from the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the same was different.** **In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition that has been complied with.** \- talks about retroactive effects of fulfillment of suspensive condition. (Wala pang obligation) **SHALL REMEMBER!!!** Retroactive effects and to revert or to back 1. **In obligations to give** - an obligation to give subject to a suspensive condition becomes demandable only upon the fulfillment of the condition. However, once the condition is fulfilled, its effects shall retroact to the day when the obligation was constituted. Example: Sabi ko sayo nung Nov. 18, kapag binigay sakin yung pamana ng lolo ko, bibigyan kita ng puno ng saging. It turns out na binigay sakin 2025, and yung puno ay may bunga na. In this case, may obligation ako na ibigay sayo ang puno kasama ang bunga. In this case, the obligation reverts back sa time na nangako ako, in that time, wala naman tayo napag usapan na exact date, kaya whatever happens sa bagay na yon will be yours. 2. **In obligations to do or not to do** - with respect to the retroactive effect of the fulfillment of a suspensive con- dition, in obligations to do or not to do, no fixed rule is vided. (This is relative, case to case basis, relevant, pwedeng magrevert back or hindi na) **Basis to determine if you will apply retroactivity:** -Fairness/just (Tama/karapat dapat) Example \#1 : Si Pedro nanliligaw Kay Marie. Sabi ni Pedro, kapag sinagot daw sya ni Marie. Lilinisin nya daw kotse nya. This is \"to do\" obligation. It turns out yumaman si Marie at nagkaroon sya ng 20 kotse. The question is magreretroactive pa ba? The answer is NO because it is not fair. Example\#2: Kung sinabi ni Pedro na tatakbo sya ng 1 kilometer pag sinagot sya ni Marie. Magreretro ba? YES. Because 1 km. is just and fair naman. Have to check lang kung fair ba ang condition sa sitwasyon. Kaya this is relative, and it means, nakadepende ito sa pananaw ng tao sa pagiging fair and just. **SHALL REMEMBER!!!** Relative means dependency on the opinion of people **Article 1188** **The creditor may, before the fulfillment of the condition, bring the appropriate actions for the preservation of his right. The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition. (Debtor and creditor have rights on the condition)** **Right pending fulfillment of suspensive condition** **(1) Rights of creditor**. - He may take or bring appropriate actions for the preservation of his right, as the debtor may render nugatory the obligation upon the happening of the condition. (The creditor may bring an action, kahit di pa nangyayari for the preservation of his right) Example: May utang ka sakin na 1million. May property ka and sabi mo mababayaran mo lang yung utang mo sa akin kapag nabenta na yung property mo. Here in this case ,nagpa annotate and nag advance move ako para maprotektahan yung rights ko. **(2)Rights of debtor**. - He is entitled to recover what he has paid by mistake prior to the happening of the suspensive condition. This right is granted to the debtor because the creditor may or may not be able to fulfill the condition imposed and hence, it is not certain that the obligation will arise. This is a case of solutio indebiti which is based on the principle that no one shall enrich himself at the expense of another. **Article 1189.** **When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration of the thing during the pendency of the condition:** **(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;** **(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered;** **(3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor;** **(4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the obligation and its fulfillment, with indemnity for damages in either case;** **(5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor;** **(6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary.** \- this article talks about lost **KINDS OF LOSS:** Loss in civil law may be: 1. **Physical loss.** - when a thing perishes as when a house is burned and reduced to ashes; (Example: house, cars, books, nasunog. These things perish.) 2. **Legal loss,** when a thing goes out of commerce (e.g., when it is expropriated) or when a thing heretofore legal becomes illegal (e.g., during the Japanese occupation, American dollars had become impossible since their use was forbidden by the belligerent occupant); or (Hindi nawala, ipinagbabawal lang, for example , pet shop na may endangered na species. In this case, hindi na pwedeng ibenta dahil nakalagay ito sa batas) 3. **Civil loss. -** when a thing disappears in such a way that its existence is unknown (e.g., a particular dog has been missing for sometime); or even if known, it cannot be recovered (Art. 1189\[2\].), whether as a matter of fact (e.g., a particular ring is dropped from a ship at sea) or of law (e.g., a property is lost through prescription). (Example: Yung cellphone ko nasa lamesa, lumabas ako at bumalik, wala na sa lamesa) **Article 1192.** **In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages.** \- This article is applicable if both parties have committed a breach. (Breach means violated the contract) **The above article contemplates two (2) situations:** **(1) First infractor known**- One party violated his obligation; subsequently, the other also violated his part of the obligation. In this case, the liability of the first infractor should be equitably reduced. **(2) First infractor cannot be determined -** one party violated his obligation followed by the other, but it cannot be determined which of them was the first infractor. The rule is that the contract shall be deemed extinguished and each shall bear his own damages. **SHALL REMEMBER!!!** Kapag may nagviolate ng contract and hindi malaman kung sino yung naunang magviolate, the same sha be EXTINGUISHED. Meaning mababalewala and shall bare his own damage. **PARI DELICTO -** both parties are at fault. Both ay may pananagutan. EXAMPLE: S sold his television set to B. The agreement is that the set shall be delivered on October 1 at the house of B and payment shall be made by B upon delivery. S did not deliver the set on October 1 in spite of a demand made by B. Five (5) days later, S delivered the set but B incurred in delay in paying the purchase price. In a suit between S and B, the liability of S for damages should be equitably tempered by the court, taking into consideration the breach also of the obligation on the part of B. If both alleged that the other was the first infractor and the court cannot determine who of the two is telling the truth, the contract shall be deemed extinguished and each shall bear his own damages. This means that the contract shall not be enforced. **Article 1193.** **Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes. Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain. day certain is understood to be that which must necessarily come, although it may not be known when. If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section.** **Meaning of obligation with a period.** 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. **Meaning of period or term.** A period is a future and certain event upon the arrival of which the obligation (or right) subject to it either arises or is terminated. It is a day certain which must necessarily come (like the year 2010; next Christmas), although it may not be known when, like the death of a person. **SHALL REMEMBER!!!** We have conditional obligation. Suspensive and resolutory condition. Obligation with a period simply means that the obligation is futuristic and certain. \(a) Suspensive period (ex die). The obligation begins only from a day certain upon the arrival of period \(b) Resolutory period (in diem). - The obligation is valid up to a day certain and terminates upon arrival of the period. **Article 1195.** **Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or believing that the obligation has become due and demandable, may be recovered, with the fruits and interests.** *(There is a good faith)* *Akala ni debtor, demandable na ang obligation, believing in good faith, pero hindi pa pala demandable. What will happen is that, the debtor may recover the fruits and interest. Mabawi ang naibigay or nabayad. Why? Under what principle? No person shall be benefited at the expense of another.* EXAMPLE: Rea owes Angge P10,000 which was supposed to be paid on December 31 this year. By mistake, Rea paid her obligation on December 31 last year. Assuming that today is June 30, Rea can recover the P10,000 plus P600 which is the interest for one half year at the legal rate of 12% or a total of P10,600. **Article 1197.** **If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall also fix the duration of the period when it depends upon the will of the debtor. In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.** ***General rule** : whatever is agreed by the parties for as long as it is not contrary to law, morals, good customs, public policy, or public order (ar.1159), it shall be valid and will be applied.* **Exceptions to the general rule:** **Under Article 1197, there are two (2) cases when the court is authorized to fix the duration of the period.** 1. **No period is fixed but a period was intended.** - The obligation does not fix a period but it can be inferred from its nature and the circumstances that a period was intended. EXAMPLES: Markie agreee to construct the house of Jovelyn. The parties failed to fix the period within which the construction is to be made. Here, the court can fix the term for it is evident that the parties intended that Markie should construct the house within a certain period. (In a book ) **(2) Duration of the period depends upon the will of the debtor.** - For examples, see comments under Article 1180. In these two (2) cases, the court must fix the duration of the period to forestall the possibility that the obligation may never be fulfilled. In fixing the term, the court is merelyenforcing the implied stipulation of the parties. (According to sir) **(2) based on the nature of the obligation** - there will be a period based on the nature of the obligation. **Article 1198.** **The debtor shall lose every right to make use of the period:** **(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt;** **(2) When he does not furnish 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 their establishment, and when through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;** **(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period;** **(5) When the debtor attempts to abscond.** *The **general rule** is that the obligation is not demandable fore the lapse of the period.* *The **exceptions** are based on the fact that the debtor might not be able to comply with his obligation.* (Sabi natin Kung anong mapag usapan ng parties, Yun Ang masusunod, kahit na obligation with a period , mawawala ito kapag nangyari ang instances 1-5 na nasa baba) **(1) When debtor becomes insolvent.** (Walang kakayahan na magbayad, incapacitated to pay for the debts or do the obligation, here in this case, the obligation wil automatically be due) Example: May utang si DJ kay Jobs, napag usapan nila na next Christmas babayaran ang utang. Is this obligation with a period? Yes, because it is futuristic and certain. But it turns out na si DJ ay nagung insolvent as early of Dec. 20. In this case, need pa bang antayin ni Jovs si Dj? The answer is no need na. Ang Sabi sa article na ito, kapag naging insolvent na, hindi na kailangan antayin ang period. **(2) When debtor does no furnish guaranties or securities promised** \- it may be personal or real property that will cover or shoulder the debt. Example: Nangutang si Lynna sakin at ang Sabi nya ibibigay nya bukas cellphone nya while hindi nya ba nababayaran yung utang but it turns out , kinabukasan, di nya naibigay yung cellphone. Here in this case, lynna is the debtor and the cellphone is supposed to serve as security. She promised to give security pero hindi naibigay, according to law, mawawala ang obligation with a period. What will happen is the obligation to pay will automatically be demandle. 3. **When guaranties or securities given have been impaired or have disappeared.** \- if that person , specifically impaired (pigilan) such guarantee. The debtor impaira the security. 4. **When the debtor violates any undertaking or consideration** \- if there is a breach of contract , automatically the debtor loses the right over the period. 5. **When the debtor absconds.** **Absond** means to flee from the obligation (tinakbujan or sinukuan ang obligation) **SHALL REMEMBER!!** Kapag nangyari ang Isa sa mga Yan automatically, the debtor loses the right to the period. The obligation becomes due and demandable. Meaning to say, kahit di pa nangyayari ang napag usapan, pwede na singilin at gawin na agad ang obligation. **ARTICLE 1199 and Article 1206** **ARTICLE 1199.** **A person alternatively bound by different prestations shall completely perform one of them.** **Article 1206.** **When only one prestation has been agreed upon, but the obligor may render another in substitution, the obligation is called facultative. The loss or deterioration of the thing intended as a substitute, through the negligence of the obligor, does not render him liable. But once the substitution has been made, the obligor is liable for the loss of the substitute on account of his delay, negligence or fraud.** *- these articles talks about alternative obligation* **MEANING OF ALTERNATIVE OBLIGATION** An **alternative obligation** is one wherein various prestations are due but the performance of one of them is sufficient as determined by the choice which**, as a general rule**,belongs to the debtor. **Alternative obligation** - one where several prestations are due but the performance of one is sufficient *(There are various prestation (object para gawin), kahit isang prestation Lang will be sufficient to extinguish the obligation.)* Example : Nangutang si Marvin Kay Jessa, sinabi ni Marvin (debtor) na pagdating ng due date, it\'s either cash basis, kapag wala cash, cellphone na lang or di naman kaya kung Wala sa dalawa ay relo nalang. Here, there are different option or prestations,and according to law, any sa prestations will be sufficient na to extinguish the obligation. This scenario is referred to as \"alternative obligation\" **SHALL REMEMBER!!!** As a **general rule**, the right to choose the first prestation belongs to the debtor By way of **exception**, it may be exercised by the creditor but only when expressly granted to him **Meaning of facultative obligation.** A **facultative obligation** is one where only one prestation has been agreed upon but the obligor may render another in substitution. *(One prestation and it may be substituted)* EXAMPLES: \(1) \"I will give you my piano but I may give my LCD television set as a substitute.\"In this obligation, only the piano is due. Hence, its loss through my fault will make me liable. \(2) \"I will mortgage my land to secure my debt which shall be payable within 90 days upon my failure to pay my debt within 30 days.\"Here, I may mortgage my land in substitution of the obligation to make payment within 30 days. **Joint and Solidary Obligations ( ar 1207 and ar. 1208)** **Article 1207.** **The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity.** **Article 1208.** **If from the law, or the nature or the wording of the obligations to which the preceding article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many shares as there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court governing the multiplicity of suits.** **Meaning of joint and solidary obligations.** **Joint obligation** or one where the whole obligation is to be or fulfilled proportionately by the different debtors and/or is to be demanded proportionately by the different creditors. ***Joint obligation can be classified:*** 1. **Joint debtor - shall pay proportionately** Example : A, B ,C, loans 9k to Manny, they will pay proportionately. A will pay 3k, B, will pay 3k and C will pay 3k 2. **Joint creditor - shall receive proportionately** Example : Manny has debt to A, B ,C, they will receive proportionately. A will receive 3k ,B will receive 3k and C will receive 3k 3. **Joint Debtor and Creditor - shall pay proportionately and receive proportionately** Example: A, B, C owes money to 1,2,3 a Php3,000. A will pay 1, 1000. B will pay 2, 1000 and C will pay 3, 1000. **Solidary obligation** or one where each one of the debtors is bound to render, and/or each one of the creditors has a right to demand from any of the debtors, entire compliance with the prestation. (Whole obligation) ***Solidary Obligation can be classified into:*** 1. **Solidary Debtor - one who pays the whole amount** Example: The debt of A, B, C to Manny of 10k.Manny can sue A or B or C the whole 10k, but he will only get one receive. The one who pays the whole amount can sue the other for their share of debt ( Isa Kay a, b, c is pwedeng magbayad ng buo Kay Manny. What will happen Kung Sino man ang magbabayad ng buo is bahala ng maningil ng share sa dalawa. ) 2. **Solidary creditor = there is reimbursement to the one who receive the whole payment** Example : Pedro can pay the whole 10k to A/B/C, the one who received the 10k will reimbursed the shares of other.( SI pedro , for example,nagbayad Kay C ng whole amount,what will happen is si C na bahala magbigay or magreinverse ng share ni A and B) 3. **Solidary debtor and solidary creditor** Example: A, B, C, D owe money to 1,2,3,4. Kahit sino ang magbayad at tumanggap. Dapar may reinversement or dapat ibigay ang shares. SHALL REMEMBER!!! As a General rule, if the obligation is silent, whether it is joint/ solidary. It is presumed to be **JOINT OBLIGATION**. **Article 1213** **A solidary creditor cannot assign his right without the consent of other creditor.** *(if there is no approval of the other solidary creditor, then it is not allowed. Need may consent ng kapwa solidary creditor kung kanino mapupunta ang whole amount)* **Article 1214.** **The debtor may pay any one of the solidary creditors; but if any demand, judicial or extrajudicial, has been made by one of them, payment should be made to him.** **SHALL REMEMBER!!!** The rule is that the debtor may pay any one of the solidary creditors. But when a demand, has been made by one of them, dun dapat ibigay ng debtor ang bayad. Pero kapag walang nagdemand, kahit kanino sa creditor pwede tumanggap. **Article 1219.** **The remission made by the creditor of the share which affects one of the solidary debtors does not release the latter from his responsibility towards the co-debtors, in case the debt had been totally paid by anyone of them before the remission was effected.** *(Talks about remission of share)* **SHALL REMEMBER!!! Remission of share** means the release of liability (pinapatawad na wag na bayaran, not no longer demand for payment) **Example: Tony** and Jessa have debt total of 2k to Vijhay. (solidary debtor), If Vijhay stipulates to not pay for liability due to certain reason, then the there is a release of liability. **What if the payment comes first before remission? Meaning nakapagbayad na pala si Tony ng di alam na di na pala nagpapabayad si Vijhay. Here,** the obligation is extinguished. Ang mangyayari, sisingilin nalang ni Tony si Jessa. **What if remission comes first before the payment,** then the one who paid cannot be able to sue the other solidary debtor. **Divisible and Indivisible Obligations** **Article 1223.** **The divisibility or indivisibility of the things that are the object of obligations in which there is only one debtor and only one creditor does not alter or modify the provisions of Chapter 2 of this Title** **Meaning of divisible and indivisible obligations.** 1. **Divisible obligation** is one the object of which, in its delivery or performance, is capable of partial fulfillment. *(Partial fulfillment of the obligation, pwede hatiin ang fulfillment)* Example: I will give Arlene 500k in breakdown as it follows. I will give 250k at 2022. I will give the balance in the ff year. 2. **Indivisible obligation** is one the object of which, in its delivery or performance, is not capable of partial fulfillment. *(Hindi pwedeng hati hati ang fulfillment ng obligation)* Example: I will give car to Ann Rea. Here in this case, I can\'t divide the car to give you for the following dates. It should be given whole. Hindi pwedeng gulong muna, side mirror muna or whatever. **Kinds of division.** They are: **(1) Qualitative division** or one based on quality, not on number or quantity of the things which are the object of the obligation *(based on quality)* Example: I will give a house and lot to Markie **(2)Quantitative division** or one based on quantityrather than on quality *(based on quantity)* Example: I will give Mr. Espiritu 10M in break down as follows **(3)Ideal or intellectual division** or one which exists only in the minds of the parties. **Kinds of indivisibility.** They are. **(1) Legal indivisibility.** where a specific provision of law declares as indivisible, obligations which, by their nature, are divisible (indivisible because of law) **(2) Conventional indivisibility.** - where the will of the parties makes as indivisible, obligations which, by their nature, are divisible (indivisible because of the agreement of the parties) **(3) Natural indivisibility** - where the nature of the object or prestation does not admit of division, eg. to give a particular car to sing a song, etc. (Indivisible from the very nature of the obligation) **OBLIGATIONS DEEMED INDIVISIBLE.** **(1) Obligations to give definite things.** EXAMPLES: To give a particular electric fan; to deliver a specific house. Here, the obligation is indivisible because of the nature of the nature of the subject matter. **(2) Obligations which are not susceptible of partial performance.** (Not susceptible of partial performance like pagkanta, Hindi pwedeng hati hati Yung kanta, pagbigay ng kotse, electric fan, Hindi pwedeng hati hati) **(3) Obligations provided by law to be indivisible even if thing or service is physically divisible** (example: taxes, hindi pwedeng hati hati ang bayad. It should be paid within a definite period.) **(4) Obligations intended by the parties to be indivisible even if thing or service is physically divisible.** (EXAMPLE: The obligation of D to give P1.000 to C on a cer- tain date. Money is physically divisible but the clear inten- tion here is for D to deliver P1,000 at one time and as a whole) **OBLIGATION WHICH ARE DIVISIBLE IN NATURE** \- those metrical unit \- susceptible in partial performance **Meaning of principal and accessory obligations.** 1. **Principal obligation** is one which can stand by itself and does not depend for its validity and existence upon another obligation. (*Does not depend on any other obligation)* Example: contract of loan 2. **Accessory obligation** is one which is attached to a principal obligation and, therefore, cannot stand alone. Example: Pag di ako makabayad ng utang, bahay ko nalang, real estate mortgage. **Meaning of obligation with a penal clause.** An **obligation with a penal clause** is one which contains an accessory undertaking to pay a previously stipulated indemnity in case of breach of the principal prestation, intended primarily to induce its fulfillment*. ([NAKAINDICATE SA OBLIGATION ANG LIABILITY, INCASE OF BREACH)]{.smallcaps}* Example: Elcid said to paint his car to Mr. Vergara. It stated to the contract that if Mr. Vergara wasn't fulfilled the obligation on dec 25, he will pay 250k to Elcid. **Meaning of penal clause.** A **penal clause** is an accessory undertaking attached to an obligation to assume greater liability in case of breach. ie. the obligation is not fulfilled, or is partly or irregularly complied with **Article 1228.** **Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded**. (*hindi kailangan ang actual proof of damages para makuha ang actual amount)* Example : Debtor was informed to pay on dec 25, if not being paid he will punish to pay more 25% interest. The proof of damages that the creditor had suffered was such, the fare of riding a vehicle is NO LONGER NEEDED. IT WILL BASED ON PENAL CLAUSE. 10% - obligation with a penal clause **Article 1231.** **Obligations are extinguished:** **(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 confusion or merger of the rights of creditor and debtor;** **(5) By compensation;** **(6) By novation.** **Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a resolutory condition, and prescription, are governed elsewhere in this Code.** ( *Talks about EXTINGUISHMENT OF OBLIGATION)* **SHALL REMEMBER!** Kapag nangyari yung isa sa mga instances ng ar. 1231, wala ng obligation. **Other causes of extinguishment:** is death of a party requiring personal service para maextinguish **Article 1232** **Payment means not only the delivery of money but also the performance, in any other manner, of an obligation.** **Meaning of payment** **Payment** refers only to the delivery of money. **Payment** may consist of not only in the delivery of money but also the giving of a thing (other than money), the doing of an act, or not doing of an act When a debtor pays damages or penalty in lieu of the fulfillment of an obligation. Example: may utang ako sayo, I will give you 10k or will notarized na lang yung papers mofor free. This is alternative obligation. In this case, service which is notarize is considered as payment. A debt has shall been delivered or rendered. **SHALL REMEMBER!!!** Hindi kinakailangan na mangako para bayaran. There should be an actual delivery of service. **Article 1235.** **When the obligee accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with.** Example: Dane has an obligation to paint the car of Rhea. Ayon sa contract, Dane should paint it blue. But it turns out she paint it green. Pag tinanggap parin ni Rhea yung nangyari or Kung Hindi sya nag protest. According to this article, the obligation is deemed fulfilled. Di na pwedeng habulin ni Rhea si Dane. **Article 1236.** **The creditor is not bound to accept payment or performance by a third person who has no interest in the fulfillment of the obligation, unless there is a stipulation to the contrary. Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor.** **Persons from whom the creditor must accept payment:** The creditor is bound to accept payment or performance from the following: \(1) The debtor \(2) Any person who has an interest in the obligation (like a guarantor); or \(3) A third person who has no interest in the obligation when there is stipulation that he make payment. **Instance of effect of payment by a third person** Example: May utang si marvin kay elcid, pero naawa si Lynna kay marvin. If alam ni marvin na babayaran ni Lynna, there can be reimbursement or subrogation, pwedeng singilin ni Lynna si marvin. What if di alam ni marvin (debtor)? The payer can only recover what has been beneficial or recover only up to the amount beneficial to the debtor. **SHALL REMEMBER!!!** Subrogation- putting the shoes of another Reimbursement- the 3^rd^ person is entitled by a reason of payment, refund. **Article 1239.** **In obligations to give, payment made by one who does not have the free disposal of the thing due and capacity to alienate it shall not be valid, without prejudice to the provisions of article 1427 under the Title on \"Natural Obligations.\"** *(PRINCIPLE STATES YOU CANT GIVE WHAT YOU DO NOT OWN.)* Example: may utang si elcid kay jov na 10k, sinabi ni elcid na ibabayad nya yung kotse na nakapark sa gilid pero di naman sa kanya yun. This is not allowed **Article 1240.** **Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it.** **Person to whom payment shall be made.** Payment shall be made to: \(1) the creditor or obligee (person in whose favor obligation has been constituted); \(2) his successor in interest (like an heir or assignee);or \(3) any person authorized to receive it. **SHALL REMEMBER!!!** No recovery to the payment to whom is not included in 1240 **Article 1242.** **Payment made in good faith to any person in possession of the credit shall release the debtor** (*maling pagbayad ng creditor, the effect is that there will be an extinguishment of obligation as long as the debtor has good faith and the there is a proof of possession of the credit)* Example : May utang si Rhea Kay Kenneth, 1 million. This is contract of loan. Lumapit best friend ni Kenneth, si Pedro na sya na lang daw tatanggap ng bayad. This is SPA. It turns out na fake SPA Yung pinresent ni Pedro. What\'s the effect? The obligation will extinguish. There is good faith sa part ni Rhea because she didn\'t know the SPA was fake. What will happen is hahabulin ni Kenneth si Pedro. **Dasion of payment** \- conveyance of ownership of those performance \- payment in time \- not in money or service , object binayad **SHALL REMEMBER!!!** The debtor cant decide to pay with other payment, the creditor must accept the offer) Exception: the alternative and facultative obligation **Article 1249.** **The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines.The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired.In the meantime, the action derived from the original obligation shall be held in the abeyance.** **Meaning of legal tender.** **Legal tender** is that currency which if offered by the debtor in the right amount, the creditor must accept in payment of a debt in money.(the currency stated in the contract as default(PH peso) **SHALL REMEMBER!!** Cheque is not a legal tender As a **general rule**, what payment stated on the contract must prevail. If there no stated in the contract, it will be based on legal tender, Philippine peso **Article 1250.** **In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the time of the establishment of the obligation shall be the basis of payment, unless there is an agreement to the contrary.** **Meaning of inflation and deflation.** \(1) **Inflation** is a sharp sudden increase of money or credit or both without a corresponding increase in business transactions. (Webster\'s Dictionary.) Inflation causes a drop in the value of money, resulting in the rise of the general price level. *(sudden increase of money)* \(2) **Deflation** is the reduction in volume and circulation of the available money or credit, resulting in a decline of the general price level; it is the opposite of inflation. *( sudden reduction of volume)* **Article 1251.** **Payment shall be made in the place designated in the obligation.There being no express stipulation and if the undertaking is to deliver a determinate thing, the payment shall be made wherever the thing might be at the moment the obligation was constituted.In any other case the place of payment shall be the domicile of the debtor.If the debtor changes his domicile in bad faith or after he has incurred in delay, the additional expenses shall be borne by him. provisions are without prejudice to venue under the Rules of Court.** *(Payment shall be made in the place designated in the obligation.)* **Place where obligation shall be paid.** Article 1251 gives the rules regarding the place for the payment of an obligation without prejudice to venue under the Rules of Court. \(1) If there is a stipulation, the payment shall be made in the place designated. \(2) If there is a stipulation and the thing to be delivered is specific, the payment shall be made at the place where the thing was, at the perfection of the contract. \(3) If there is no stipulation and the thing to be delivered is generic, the place of payment shall be the domicile of the debtor. In this case, the creditor bears the expenses in going to the debtor\'s place to accept payment **Article 1252.** **He who has various debts of the same kind in favor of one and the same creditor, may declare at the time of making the payment, to which of them the same must be applied. Unless the parties so stipulate, or when the application of payment is made by the party for whose benefit the term has been constituted, application shall not be made as to debts which are not yet due.If the debtor accepts from the creditor a receipt in which an application of the payment is made, the former cannot complain of the same, unless there is a cause for invalidating the contract.** *(Talks about application of payment)* **Meaning of application of payments.** **Application of payments** is the designation of the debt to which should be applied the payment made by a debtor who has various debts of the same kind in favor of one (1) and the same creditor. **SHALL REMEMBER!!!**As a general rule, payment should be applied to that which is stipulated. Example : Arlene has debts to Markie,10 million shall be paid on Christmas and 100 million be paid. Arlene made payment 1million to markie. Here in this case, saan ito ibabawas? As a general rule, depende sa stipulation ng parties. What if there is no stipulation of payment? the payment should be made to the most onerous or burdensome. (kung anong mabigat na utang or mas malaking utang, don ibabawas yung payment) (see ar. 1254) **Article 1254.** **When the payment cannot be applied in accordance with the preceding rules, or if application can not be inferred from other circumstances, the debt which is most onerous to the debtor, among those due, shall be deemed to have been satisfied. If the debts due are of the same nature and burden, the payment shall be applied to all of them proportionately** **Article 1255.** **The debtor may cede or assign his property to his creditors in payment of his debts. This cession, unless there is stipulation to the contrary, shall only release the debtor from responsibility for the net proceeds of the thing assigned. The agreements which, on the effect of the cession, are made between the debtor and his creditors shall be governed by special laws.** **Payment by Cession** \- is the assignment of abandonment of all the properties of the debtor. for the benefit of his creditors in order that the latter may sell the same and apply the. proceeds thereof to the satisfaction of their credits. **Requirements:** \(1) Two or more creditors; (2) the debtor must be partially insolvent; (3) Assignment must involve all the properties of the debtor; (4) Must be accepted by the creditors. Example : May utang ako 5M kay Ellen, 5M din Kay Janet, 5M din kay Berna. 2 or more persons?✓. Wala akong perang pambayad kase nabaon sa utang. Partially insolvent?✓ pero meron akong isang kotse at bahay. Now, inassign ko sa kanila na sila na bahala magbenta ng mga personal at real property ko (car, bahay). Here in this case, pwede bang bahay lang? No because all properties of the debtor should be involve. What if may sobra sa naging benta? The excess should be returned. What if kulang? I will be liable. **SHALL REMEMBER!!!** The debtor must pay **all** the property to the debt. If there is an excess to the payment, it must be return and if the payment is insufficient , then the debtor will be liable. **Article 1256.** **If the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor shall be released from responsibility by the consignation of the thing or sum due.** **Consignation alone shall produce the same effect in the following cases:** \(1) When the creditor is absent or unknown, or does not appear at the place of payment; \(2) When he is incapacitated to receive the payment at the time it is due; \(3) When, without just cause, he refuses to give a receipt; \(4) When two or more persons claim the same right to collect; \(5) When the title of the obligation has been lost. **Meaning of \"tender of payment\" and \"consignation.\"** \(1) **Tender of payment** is the act, on the part of the debtor, of offering to the creditor the thing or amount due. The debtor must show that he has in his possession the thing or money to be delivered at the time of the offer. \(2) **Consignation** is the act of depositing the thing or amount due with the proper court when the creditor does not desire or cannot receive it, after complying with the formalities required by law. Consignation is applicable when there is a debt or an obligation to pay. It is always judicial and it generally requires a prior tender of payment which is, by its very nature, extrajudicial. *(Deposited to the proper court)* Example : Si babelyn and Jovs nag aaway dahil kay Paulo. Sabi ni Babelyn, sa kanya daw may utang si Paulo, same din Kay Jovs. In this case, the consignation will be applied by the court, kung sino ang dapat makinabang ng payment. **Loss of the Thing Due** **Article 1262.** **An obligation which consists in the delivery of a determinate thing shall be extinguished if it should be lost or destroyed without the fault of the debtor, and before he has incurred in delay. When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the thing does not extinguish the obligation, and he shall be responsible for damages. The same rule applies when the nature of the obligation requires the assumption of risk***. ( For the obligation to be extinguished in case of loss)* **When loss of thing will extinguish an obligation to give.** In order that an obligation may be extinguished by the loss of the thing, the following requisites must be present: \(1) The obligation is to deliver a specific or determi nate thing \(2) The loss of the thing occurs without the fault of the debtor; and \(3) The debtor is not guilty of delay. **When loss of thing will not extinguish liability.** There are cases, however, when the loss of the specific thing even in the absence of fault and delay will not exempt the debtor from liability. They are: \(1) when the law so provides \(2) when the stipulation so provides; \(3) when the nature of the obligation requires the assumption of risk \(4) when the obligation to deliver a specific thing arises from a crime. **Condonation or Remission of the Debt** **Article 1270.** **Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly.One and the other kind shall be subject to the rules which govern inofficious donations. Express condonation shall, furthermore, comply with the forms of donation.** **Meaning of condonation or remission.** **Condonation or remission** is the gratuitous abandonment by the creditor of his right against the debtor. It is thus a form of donation. (Can be partial or total (pwedeng kalahati or buohan) Example : Elcid executes the condonation to be freely release hilig from her debt. This is condonation pero kapag sinabi ni elcid na kumanta nalang si hilig sa bday nya to pay her debt. NOT **CONDONATION because there is condition and not freely given.** **Kinds of remission.** They are: \(1) As to its extent: \(a) Complete. when it covers the entire obligation; or \(b) Partial. obligation. - when it does not cover the entire \(2) As to its form: \(a) Express. - when it is made either verbally or in writing; or \(b) Implied.-when it can only be inferred from conduct. \(3) As to its date of effectivity: \(a) Inter vivos. when it will take effect during the lifetime of the donor; or \(b) Mortis causa. - when it will become effective upon the death of the donor. It must comply with the formalities of a will. **Article 1273.** **The renunciation of the principal debt shall extinguish the accessory obligations; but the waiver of the latter shall leave the former in force.** *( if there is condonation on accessor obligation, it will be condoned)* **SHALL REMEMBER!!!** the condonation is accessory, di kasama principal **Confusion or Merger of Rights** **Article 1275.** **The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person.** **Confusion oR MERGER** -Is the meeting in one (1) person of the qualities of creditor and debtor with respect to the same obligation. *(Involves several persons)* Example : merong utang si elcid to dj, then dj merong utang kay angge, then si angge may utang kay elcid. Umikot ang obligation, confusion of merger. Kasi nga quits na nga. IT SHOULD INVOLVE THE SAME OBJECT **COMPENSATION** \- 2 persons are involved. Can be partial or total. **Article 1279. In order that compensation may be proper, it is necessary:** **(1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other;** **(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated;** **(3) That the two debts be due;** **(4) That they be liquidated and demandable;** **(5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor.** **Requisites of legal compensation.** Article 1270 enumerates the requirements or requisites for legal compensation. \(1) The parties are principal creditors and principal debtors of each other. \(2) Both debts consist in a sum of money, or of consumable things of the same kind and quality. \(3) The two debts are due or demandabl