Introduction to Law
Law in general
-any rule of action or any system of uniformity
-determines not only the activities of men as rational
beings but also the movements of all objects of creation,
animate or inanimate
General divisions of Law
(1) In the strict legal system which is promulgated
and enforced by the state
(2) In the non-legal sense which is not
promulgated and enforced by the state
Subjects of Law
Divine Law- law of religion and faith which concerns
itself with the concept of sin and salvation
Source: promulgated by God through direct revelation
-embodied in the 10 commandments under old testament
-differs to what one what believes, such as the Muslim
Quoran
Sanction: lies in the assurance of certain rewards and
punishments in the present or upcoming life
Natural Law- divine inspiration in man of the sense of
justice, fairness, and righteousness by internal dictates of
reason alone
- the law of the man’s core of his higher self
Binding force: ever-present and binding on all men
everywhere at all times, as a man can recognize what is
simply good and bad or evil in the dictates of his moral
nature (inward instinct of his higher nature)
Place in state law: reasonable basis of state law
Moral Law- totality of the norms of good and right
conduct growing out of the collective sense of right and
wrong of every community
Determination of what is right and wrong: was not to
leave each member of the group. Ways of life evolved
which were always considered right and correct, and
obedience was demanded by the group
Sanction: no definite legal sanction for the purely moral
law. If a member disregards these moral norms, a
spontaneous social reaction is formed in public
displeasure, contempt, or even indignation. Vice versa if
there is conformity.
Binding force: not absolute as it varies with the
changing times, conditions, or convictions of the people
Place in state law: to a great extent, influences or shapes
state law
Physical Law- uniformities of actions and orders of
sequence which are the physical phenomena that we
sense and feel
Order or regularity in nature: nothing more than an order
or regularity in nature by which certain results follow
certain causes
Called law only by analogy: law only by analogy. Ex:
law of gravitation; law of chemical combination
State Law-promulgated and enforced by the state
Other terms used: also called positive law, municipal
law, civil law, or imperative law.
-Refers to when we speak of law in connection with the
entire government process itself.
Binding force: the only law enforced by state, with aid
of its physical force, if necessary
Concerns of state law: fields of state law are different
from the other law mentioned above. It does not concern
itself with violation of the latter rules of action unless
they also constitute violations of its commands.
Concepts of State Law
The term law may be understood in two concepts:
(1)in a general sense, the mass of obligatory rules
established for the purpose of governing the relations of
persons in society
(2)in its specific sense, a rule of conduct, just,
obligatory, promulgated by legitimate authority, and of
common observance and benefit. Refers to a particular
statute or legal rule. Ex: Law of ObliCon
Characteristics:
rule of conduct- tells us what shall and shall not be done.
It takes cognizance of external acts only
obligatory- positive command imposing a duty to obey
and involving a sanction which force obedience
promulgated by legitimate authority- in Philippines
(democratic), the legitimate or competent authority is the
legislature. Under the constitution, “statutes”/law are
enacted by Congress(the legislative branch of
government); local government units to enact ordinances
common observance and benefit- law is intended by man
to serve man and regulates the relations between to
maintain harmony, order, and co-existence possible. It
must be observed by all for the benefit of all.
Necessity and Functions of Law
What would life be without law? Society is needed as
members could not live without it but it also needs
internal order as needed for external defense.
What does the law do? It secures justice, resolves
social conflict, orders society, protects interests, and
controls social relations. Life without laws would be less
orderly and brutish.
What is our duty as members of society? Law is
referred as our legal system, every citizen should
understand it and observe for the common good.
Sources of Law
Constitution- the 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 departments for their safe
and useful exercise for the benefit of the people.
-the fundamental/supreme/highest law as it is
promulgated by the people themselves
-the law where all other laws enacted by the legislature
must conform, meaning that if there are law inconsistent
to it then it would be void.
Legislation- declaration of legal rules by a competent
authority. Also includes ordinances (local)
-the preponderant source of law in the Philippines
-enacted law/statute law- acts passed by the legislature
Administrative/executive orders, regulations, and
rulings- issued by administrative officials under the
legislative authority and intended to clarify or explain
the law and carry into effect general provisions should
be aligned with the Constitution
Judicial decisions or jurisprudence- decisions of the
(Supreme)courts, applying or interpreting the laws or the
Constitution form part of the legal system of the
Philippines
-doctrine of precedent/stare decisis- decisions of a
superior court on a point of law are binding on all
subordinate courts
Custom- consists of those habits and practices which
through long and uninterrupted usage have become
acknowledged and approved by society as binding rules
of conduct
-has the force of law when recognized and enforced by
the state
-must be proved as a fact according to the rules of
evidence
-may apply by the courts in the absence of law or statute
exactly applicable to the point in controversy but if
contrary to the law, public order are not countenanced.
Other sources- may be added principles and only
supplementary as they are resorted to in the absence of
all the other resources
Rule in Case in Doubt in Interpretation or
application of laws
Civil Code- no judge or court shall decline to render
judgment by reason of the silence, obscurity or
insufficiency of the laws (art.9). In case of doubt, it is
presumed that the lawmaking body intended right and
justice to prevail (art. 10)
- courts must resolve in favor of the law of justice,
Organs of Social Control
Law is viewed also as social control-the control of social
behavior that affects others
-there are churches, corporations, political parties, etc.
Such organizations control some of the behavior of their
members
Law compared with other means of social control
-laws are made and administered by the only institutions
in society authorized to act in behalf of the entire
citizenry.
-only legal institutions can make rules, regulations and
orders which the entire citizens should comply
-people associated with organization can ordinate or
terminate their relationship and free themselves from the
rules. Citizens of the state can’t do this unless they’ll
leave the geography
-sanctions or techniques through law are more varied
and complex than in organization. •Expulsion is the most
powerful technique in organizations to secure
compliance sa rules
•sanction is remedial- if the object is the indemnification
of the person, and penal- if the object is the punishment
of the violator
-before the law operates, the individual must be given a
trial (refers to due process of law)
-organs of social control- not required to comply with
such procedures in acting against individuals except
when their rules provide such
Organization of Courts
Under the Constitution, the Supreme court and in such
lower courts as may be established by law is vested to
decide actual cases and interpreting and applying laws.
The judiciary composes:
Regular courts- court of appeals, regional trial courts,
metropolitan trial courts, municipal trial courts,
municipal circuit trial courts. Circuit courts exercise
over two or more cities and/or municipalities
•courts of general or superior jurisdiction- supreme
court, court of appeals, and regional trial courts
Special courts- sandiganbayan (anti-graft court); court of
tax appeals (same level with court of appeals)
Quasi-judicial agencies-administrative bodies under the
executive branch performing quasi-judicial functions and
the independent constitutional commission that don't
form part of the integrated judicial system
•involve the settlement or adjudication of controversies
or disputes
Classifications of law.
As to its purpose
Substantive law - portion of the body of law creating,
defining, and regulating rights and duties which may be
either public or private in character. •Example: law on
obligations and contracts
Adjective law - portion of the body of law prescribing
the manner or procedure by which rights may be
enforced or their violations redressed. Also called:
remedial law/procedural law
As to its subject matter
Public law - or the body of legal rules which regulates
the rights and duties arising from the relationship of the
state to the people. Example:
criminal law - the law (which defines crimes and
provides for their punishment
international law – law that governs relations among
nations or states
Constitutional law - that which governs the relations
between state and its citizens
Administrative law – governs methods by which
functions of administrative authorities are to be
performed
Criminal Procedure – governs methods of trial and
punishment in criminal cases
Private Law - regulates the relations of individuals with
one another for purely private ends
-State is also involved in private law; it enforces private
law but simply as a law arbiter and not as a party.
-civil law; commercial or mercantile law, and civil
procedure ( provides for the nature means by which
private rights may be enforced.)
Law on Obligations and Contracts
-the body of rules which deals with the sources of
obligations and rights and duties arising from
agreements and the particular contracts
Civil Code of the Phil. (RA No. 386)
-Based mainly on the Civil Code of Spain which took
effect in the Phil. On December 7, 1889
- Approved on June 18, 1949, and Effective on August
30, 1950
Conclusive Presumption of Knowledge of Law
Ignorance of the law excuses no one from compliance
therewith (Art.3, Civil Code).
The reasons:
-If laws will not be binding then social life will be
impossible due to being unknown to many
-almost impossible to absolve those who do not know
the law
-our conscience carries norms of right and wrong and a
sense of duty
-administration of justice would be defeated if persons
could unsuccessfully plead ignorance of the law to
escape legal consequences
CHAPTER 1: GENERAL PROVISIONS
Article 1156. An obligation is a juridical necessity to
give, to do, or not to do.
Obligation- derived from the Latin Word obligatio,
which means tying or binding
-a judicial necessity (to give, to do, or not to do) because
failure or refusal to perform the obligation gives rise to a
right of action.
-obligations are under our civil code. The civil code is
the basis/make up of our civil law.
-Civil law is the greater umbrella, in that umbrella 80-90
composes the civil code.
The constitution is the higher one over the civil law
Why is it a juridical necessity?
In case of non-compliance, one of the parties can sue the
other in the courts of law.
Natural Obligation- Obligations that do not grant a
right of action to enforce their performance although
incase of voluntary fulfillment by the debtor, the latter
may not recover what has been delivered or rendered by
reason thereof.
-Civil obligation is not the same as Natural Obligation,
or Moral Obligation
• Natural obligations are formerly Civil Obligations
which due to prescription are no longer enforceable.
• Moral obligation are not enforceable from the very
beginning but because of human relationship and
consideration, they maybe complied.
Essential Requisites of an Obligation
Passive Subject (debtor or obligor)- has a duty
Active Subject (creditor or obligee) -has a right
Object or Prestation (subject matter of the obligation) without it, nothing to perform
Juridical or Legal Tie (Efficient Cause)- agreement or
contract
Obligation vs. Right vs. Wrong
Obligation is the act or performance that the law will
enforce.
Right is the power that a person has under the law, to
demand from another any prestation.
Wrong (cause of action) is an act or omission in
violation of the legal right or rights of another.
Kinds of Obligations
According to Subject Matter
•Real Obligation (obligation to give) – the subject matter
is a thing that the obligor must deliver to the obligee.
→Generic Real Obligation (GRO) – to give a generic or
indeterminate object.
→Specific Real Obligation (SRO) – to give a specific or
determinate object.
• Personal Obligation (obligation to do or not to do) –
the subject matter is an act to be done or not be done.
→Positive Personal Obligation – obligation to do or to
render service.
→Negative Personal Obligation – obligation not to do.
Art. 1157. Obligations arise from: law, contracts,
quasi-contracts, acts or omissions punished by law,
and quasi-delicts
Sources of Obligations
Law; - obligations imposed by law itself.
Example: Obligation to pay taxes
Contracts; - obligations arising from the stipulations of
the parties (Art. 1306)
Quasi-contracts; - obligations arising from lawful,
voluntary, and unilateral acts that are enforceable so that
no person shall be unjustly enriched or benefited at the
expense of another (Art. 2142)
(Crimes or) Acts or omissions punished by law;
– obligations arising from civil liability as a consequence
of a criminal offense (Art. 1161)
Quasi-delicts (or torts) – obligations arising from
damaged caused to another through an act or omission,
there being fault or negligence, but no contractual
relation exist between the parties (Art. 2176)
Art. 1158 - Obligations derived from law are not
presumed. Only those expressly determined in this
Code or in special laws are demandable.
Why is law a source of an obligation?
-Because it is the law, and what the law says must be
complied with by all the persons residing in the territory
or jurisdiction covered by the law
Obligations derived from Law are not presumed (even if
the law states that, there should be no presumption in
regards to that). Only those expressly stated therein can
be demandable.
Regards presumption:
premefatchi(?)/ disputable presumption - resumption that
is disputable but a person can adduce evidence to prove
otherwise
Conclusive presumption- true from the point of view of
the law and cant adduce evidence to prove otherwise
since it is what the law said so
The Philippine Tax Laws provide for the payment of
taxes for all Filipino Citizens. You are Filipino
citizens. Are you already obliged to pay your taxes?
• No, since you are not yet gainfully employed. The
provision of the law is targeted at those Filipinos who
are gainfully employed since obligations derived from
Law are not presumed and only those expressly stated
therein can be demandable.
Special laws are those not contained in the Civil Code.
-Examples: Revised Penal Code, National Internal
Revenue Code, Securities Regulation Code, Revised
Corporation Code, Negotiable Instruments Law,
Insurance Code, Labor Code
Art. 1159 - Obligations arising from contracts have
the force of law between the contracting parties and
should be complied with in good faith.
But a contract is not a law but a source of obligation
and enforceable?
•Because it has the force of law between the contracting
parties
Contractual Obligations
Contract – a meeting of minds between two persons
whereby one binds himself with respect to the other to
give something or to render some service (Art. 1305)
Binding force of a contract
-Obligations arising from contracts have the force of law
between the contracting parties and should be complied
with in good faith. As a source of enforceable obligation,
a contract must be valid and it cannot be valid if it is
against the law.
Compliance in Good Faith
-Compliance or performance of an obligation strictly in
accordance with the stipulations of terms or conditions
as provided in the contract or agreement.
Art. 1160. Obligations derived from quasi-contracts
shall be subject to the provisions of Chapter 1.
Quasi-Contract - is that juridical relation resulting
from lawful, voluntary, and unilateral acts by virtue of
which the parties become bound to each other to the end
that no one will be unjustly enriched or benefit at the
suspense of another
-No agreement was made but the law is trying to avoid
in the unfairness of the situation
• In a quasi-contract, there is no consent between the
parties. How does it become an obligation in the absence
of such?
-Consent is actually supplied by the fiction of law so that
there will be fairness
Two kinds of quasi-contracts?
Negotiorum gesto - voluntary management without the
consent of the latter
-Ex: you left the dog during the vacation. The neighbor
fed it with his voluntarily. Through that, the owner was
obliged to pay back the expenses of feeding the dog.
Solutio idebiti - payment by mistake, where something is
received but there is no right to demand and it was
unduly delivered through mistake
-no one shall enrich himself unjustly at the expense of
another
Art. 1161. Obligations arising from criminal offenses
shall be governed by the penal laws, subject to the
provisions of Article 2177, and Chapter 2.
Delicts - crimes or offenses punishable by our penal
laws. Hence, it is with intention.
Kinds of liabilities associated with delicts: civil
liabilities and criminal liabilities
Hence a person charged with delicts has them both: civil
and criminal obligations
(Our group of laws punishing crimes and offenses is
called criminal law. Majority of criminal law is made up
of Revised Penal Code)
What are the kinds of civil liabilities associated with
delicts?
•Civil liability in addition to criminal liability
•Criminal liability without civil liability
•Civil liability without criminal liability
The rule is a person who is criminally liable is also
civilly liable.
Scope of Civil Liability arising from crime:
•Restitution
• Reparation for damaged caused
• Indemnification for the consequential damages
Example: A stole B’s cellphone. If A is convicted, his
civil liability will include:
•The obligation to return the phone or pay its value if it
was lost or destroyed;
• Pay for any damage caused to the phone; and
• Pay such other damages B may have suffered as a
consequence of A’s crime
Art. 1162- Obligations arising from quasi-delict shall
be governed by the provisions of Chap 2
Quasi-delict (tort) - is an act or omission by a person
which causes damage to another in his person, property,
or rights giving rise to an obligation to pay for the
damage done there being no pre-existing contractual
relation between the parties
-A person committing a tort is called a tortfeasor
-No intention but has an act in damaging other people
A person broke the car window of his neighbor. Is
that a delict or a quasi-delict?
-Depends. If there is an intention, a delict. If there is
none, a quasi-delict.
Situation: A person driving slowly on a lonely
provincial road, engrossed and mesmerized listening to a
Taylor Swift song, suddenly lost control of the wheel
and crashed his car into the fence of a resident. Since he
was driving slowly, he escaped relatively unharmed
from the incident, but there was a slight damage to his
car and substantial damage to the fence. Is he still liable
for anything considering that he acted properly and with
no malicious intent?
•Yes, since there was still negligence on his part which
he caused damage to the property of another. However,
there was no intention so this is an example of a quasi-
delict. Furthermore, the resident won't be held liable for
the damage to his car since it was his own fault.
Requisites of Quasi-delict:
• There must be an act or omission;
• There must be fault or negligence;
•.There must be damaged caused;
•There must be a direct relation or connection of cause
and effect between the act or omission and the damage;
and
•.There is no pre-existing contractual relation between
the parties.
CHAPTER 2: NATURAL AND EFFECT OF
OBLIGATIONS
Art. 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.
Meaning of specific or determinate thing
- refers to an obligation to give a specific or determinate
thing
- particularly designated or physically segregated from
all others of the same class. (Art. 1459.)
Examples: (1) a Bulova calendar watch. (2) a 2006
model Japanese car. (3) a police dog.
Meaning of generic or indeterminate things
- refers only to a class or genus to which it pertains and
cannot be pointed out with particularity. Examples: (1) a
Bulova calendar watch. (2) a 2006 model Japanese car.
(3) a police dog.
Specific thing and generic thing distinguished
Determinate thing is identified by its individuality. The
debtor cannot substitute it with another although the
latter is of the same kind and quality without the consent
of the creditor. (Art. 1244.)
Generic thing is identified only by its specie. The debtor
can give anything of the same class as long as it is of the
same kind.
Duties of debtor in obligation to give a determinate
thing
To preserve or take care of the thing due; Obligation to
take care of the thing due.
• Diligence of a good father of a family. The phrase has
been equated with ordinary care or that diligence which
an average (a reasonably prudent) person exercises over
his own property.
• Another standard of care. However, if the law or the
stipulation of the parties provides for another standard of
care (slight or extraordinary diligence), said law or
stipulation must prevail. (Art. 1163.)
• Factors to be considered. The diligence required
depends upon the nature of the obligation and
corresponds with the circumstances of the person, 'of the
time, and of the place. (Art. 1173.)
• Reason for debtor’s obligation. The debtor must
exercise diligence to insure that the thing to be delivered
would subsist in the same condition as it was when the
obligation was contracted.
To deliver the fruits of the thing (Art. 1164.);
To deliver its accessions and accessories (Art. 1166.);
To deliver the thing itself (Arts. 1163, 1233, 1244; as to
kinds of delivery, Arts. 1497 to 1501.);
To answer for damages in case of non-fulfillment or
breach (Art. 1170.)
Duties of debtor in obligation to deliver a generic
thing
•To deliver a thing which is of the quality intended by
the parties taking into consideration the purpose of the
obligation and other circumstances (Art. 1246.)
•To be liable for damages in case of fraud, negligence, or
delay, in the performance of his obligation, or
contravention of the tenor thereof. (Art. 1170.)
ART. 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. (1095)
Different kinds of fruits
Natural fruits - are the spontaneous products of the soil,
and the young and other products of animals (e.g., grass;
all trees and plants on lands produced without the
intervention of human labor.)
Industrial fruits - are those produced by lands of any
kind through cultivation or labor (e.g., sugar cane;
vegetables; rice; and all products of lands brought about
by reason of human labor.)
Civil fruits - are those derived by virtue of a juridical
relation (e.g., rents of buildings, price of leases of lands
and other property and the amount of perpetual or life
annuities or other similar income)
Right of creditor to the fruits
The creditor is entitled to the fruits of the thing to be
delivered from the time the obligation to make delivery
of the thing arises. The law protects the obligee if the
obligor delays, intentionally or not, in fulfilling his
obligation.
When obligation to deliver arises
•Generally, the obligation to deliver the thing due and,
consequently, the fruits thereof, if any, arises from the
time of the “perfection of the contract”. -Perfection
refers to the birth of the contract (Arts. 1305, 1315,
1319.)
•If the obligation is subject to a suspensive condition or
period (Arts. 1179, 1189, 1193), it arises upon
fulfillment of the condition or period arrival. The parties
can agree otherwise regarding the creditor's right to the
thing's fruits.
• In a sale contract, the obligation arises from the
contract's perfection, even if it's subject to a suspensive
condition or period.
•The time of performance for obligations arising from
law, quasi-contractual, delict, and quasi-delict
obligations is determined by the specific provisions of
law applicable.
Meaning of personal right and real right
Personal right - the right or power of a person (creditor)
to demand from another (debtor), as a passive subject,
the latter's obligation to give, do, or not do.
Real right - a person's right or interest over a specific
thing (like ownership, possession, mortgage, lease
record) without a passive subject against whom the right
can be personally enforced.
Personal right and real right distinguished
Ownership acquired by delivery
• Ownership and other real rights over property are
acquired and transmitted by law, by donation, by
testate and intestate succession, and in consequence of
certain contracts by tradition (Art. 712.) or delivery.
•“he shall acquire no real right over it until the same
has been delivered to him”
→the creditor does not become the owner until the
specific thing has been delivered to him. Hence, when
there has been no delivery yet, the proper court action
of the creditor is for specific performance or rescission
of the obligation
ART. 1165. When the thing to be delivered is
determinate, the creditor may compel the debtor to
deliver it. If the thing is indeterminate or generic, he
may ask that the obligation be complied with at the
expense of the debtor. If the obligor delays or
promises to deliver the same thing to two or more
people with different interests, he is responsible for
any fortuitous event until he delivers.(1096)
Remedies of creditor in real obligation
Specific real obligation (obligation to deliver a
determinate thing) - If the debtor fails to comply, the
creditor may exercise the following remedies or rights:
•demand specific performance with a right to indemnity
for damages
• demand rescission of the obligation with right to
recover damages (Art. 1170.)
•Demand payment of damages only as a last resort. In a
delivery determinate obligation, the exact thing must be
delivered.
Generic real obligation (obligation to deliver a generic
thing)
-can be performed by a third party because the object is
only expressed by its family or genus.
-The creditor need not compel the debtor to deliver, but
he may request performance of the obligation
Where debtor delays or has promised delivery to
separate creditors
-Paragraph 3 gives two examples where a fortuitous
event does not absolve the debtor from responsibility
-refers to a determinate thing. Indeterminate things can't
be destroyed by luck because genus nunquam perit
(genus never perishes).
1174, 1263
ART. 1166. The obligation to give a determinate
thing includes delivering all its accessions and
accessories, even though not mentioned.
Meaning of accessions and accessories
Accessions - fruits, additions, or improvements to a
thing (the principal), e.g., a house or trees on land;
Building rents, car air conditioners, stock dividends
Accessories - are things added to the principal item to
enhance, improve, or complete it, such as a house key,
picture frame, watch bracelet, factory machinery, or
violin bow.
Accessions are not necessary to the principal thing.
Accessory and principal must go together, but accessions
and accessories can exist only in relation to the principal.
Right of creditor to accessions and accessories
- The general rule is that all accessions and accessories
are considered included in the obligation to deliver a
determinate thing although they may not have been
mentioned.
- This rule is based on the principle of law that the
accessory follows the principal.
ARTICLE 1167. If a person fails his obligation to do
something, it is done at his expense. The same rule
applies, if he does it in contravention of the tenor of
the obligation. Furthermore, it may be decreed that
what has been poorly done be undone.
Situations contemplated in Article 1167
- refers to an obligation to do, i.e., to perform an act or
render a service. It contemplates three situations:
• The debtor fails to perform an obligation to do
• The debtor performs an obligation to do but contrary to
the terms thereof
• The debtor performs an obligation to do but in a poor
manner
Remedies of creditor in positive personal obligation
• If the debtor fails to comply with his obligation to do,
the creditor has the right:
→to have the obligation performed by himself, or by
another unless personal considerations are involved, at
the debtor’s expense
→to recover damages. (Art. 1170.)
• In case the obligation is done in contravention of the
terms of the same or is poorly done, it may be ordered
(by the court) that it be undone if it is still possible to
undo what was done.
Performance by a third person
- A third party can fulfill a personal obligation, like
delivering a generic item.
- While a debtor can be compelled to deliver a specific
thing (Art. 1165), a specific performance cannot be
ordered in a personal obligation to do because this may
amount to involuntary servitude, which our Constitution
prohibits. (Article III, Section 18[2])
- Where the debtor's personal qualifications are the
determining motive for the obligation (e.g., to sing in a
nightclub), the performance by another would be
impossible or so different that the obligation could not
be considered performed.
ART. 1168. When an obligation consists of not doing,
the obligor must pay to undo what he did if obligor
does what has been forbidden him.
Remedies of creditor in negative personal obligation
- In an obligation not to do, the duty of the obligor is to
abstain from an act.
- Here, there is no specific performance.
- The very obligation is fulfilled in not doing what is
forbidden. Hence, in this kind of obligation the debtor
cannot be guilty of delay. (Art. 1169.)
- As a rule, the remedy of the obligee is the undoing of
the forbidden thing plus damages. (Art. 1170.)
ART. 1169. Those obligated to deliver or do
something are late when the obligee demands it
judicially or extrajudicially from the fulfillment of
their obligation. However, creditor demand is not
necessary for the delay to exist:
(1) When the obligation or the law states so.
(2) When the nature and circumstances of the
obligation indicate that the time when the thing is to
be delivered or the service is to be rendered was a
controlling motive for establishing the contract.
(3) When demand would be useless, as when the
obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in
delay if the other does not comply or is not ready to
comply in a proper manner with what is incumbent
upon him. From the moment one of the parties fulfills
his obligation, delay by the other begins.
Meaning of delay
Delay - as used in the law, is not to be understood
according to its meaning in common parlance.
• Ordinary delay - is merely the failure to perform an
obligation on time.
• Legal delay or default or mora - is the failure to
perform an obligation on time which failure constitutes a
breach of the obligation.
Kinds of delay or default (mora)
Mora solvendi - the delay on the part of the debtor to
fulfill his obligation (to give or to do) by reason of a
cause imputable to him
Mora accipiendi - the delay on the part of the creditor
without justifiable reason to accept the performance of
the obligation
Compensatio morae - the delay of the obligors in
reciprocal obligations (like in sale) i.e., the delay of the
obligor cancels the delay of the obligee, and vice versa;
result is that there is no actionable default on the part of
both parties
No delay in negative personal obligation
-delay is impossible for the debtor fulfills by not doing
what has been forbidden him
Requisites of delay or default by the debtor
Conditions that must be present before mora solvendi
can exist:
•failure of debtor to perform his (positive) obligation on
the date agreed upon
• demand to debtor to comply with the obligation, may
be either judicial (filed in court) or extrajudicial (made
outside of court; orally or in writing)
•failure of the debtor to comply with such demand
The above presupposes that the obligation is already due
or demandable.
Effects of delay
Moral Solvendi
•debtor is guilty of breach of the obligation
•he is liable to the creditor for interest (if pay money) or
damages (in other obligations).
→in absence of extrajudicial demand, interest will be
from the filling of the complaint
•he is liable even for a fortuitous event when the
obligation is to determinate a thing
→ however, if he can prove that the loss would be the
same even if he had not been in default, court may
reduce equitably reduce the damages
In an obligation to deliver a generic thing, the debtor is
not relieved from liability for loss due to a fortuitous
event as he can still deliver same kind.
Mora accipiendi
•creditor is guilty of breach of obligation
•he is liable for damages suffered, if any, by the debtor
•he bears the risk of loss of the thing due
•if the obligation is to pay money, debtor is not liable for
interest from the time the creditor’s delay
•the debtor may release himself from the obligation by
the consignation or deposit in court of the thing or sum
due
Compensatio morae
-since delay of the obligor cancels the delay of the
obligee and vice-versa, there is no delay on both parties
-if the delay of one party is followed by that of the other,
the liability of the first infractor shall be equitably
tempered or balanced by the courts.
-If it can't be determined which is guilty of the delay,
contract is deemed extinguished and each bears their
own damages
When demand not necessary to put debtor in delay
-general rule: delay begins only from the moment the
creditor demands, judicially or extrajudicially, the
fulfillment of the obligation. Without such amount, the
effect of default will not arise.
-demand for performance marks the time when the
obligor incurs mora or delay and is deemed to have
violated his obligation
Exceptions:
•When the obligation so provides.
→The mere fixing of the period is not enough.
→ The arrival of the period merely makes the
obligation demandable.
→Before its arrival, the creditor cannot demand
performance.
→must be expressively declared that it is not necessary
•When the law so provides.
•When time is of the essence.
→ In all the foregoing cases, the debtor is fully aware
that the performance of the obligation after the
designated time would no longer benefit the creditor.
→ When the time of delivery is not fixed or is stated in
general and indefinite terms, time is not of the essence of
the contract; depends on a certain case
→not necessarily for the contract to categorically state
that time is of the essence; intent is sufficient
•When demand would be useless.
→when it is apparent that it would be unavailing
• When there is performance by a party in reciprocal
obligations.
→In case of reciprocal obligations (Art. 1191.), the
performance of one is conditioned upon the
simultaneous fulfillment on the part of the other.
→From the moment however a party fulfills or is
ready to fulfill his obligation, delay by the other
begins
ART. 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
- for all kinds of obligations regardless of their source,
mentioned in Article 1157, whether the obligations are
real or personal.
- the breach is voluntary; there is breach when a person
fails or refuses to perform his obligation without legal
justification
Fraud (deceit or dolo)
- it is the deliberate or intentional evasion of the normal
fulfillment of an obligation.
- it implies some kind of malice or dishonesty and it
cannot cover cases of mistakes and errors of judgment
made in good faith.
- It is synonymous to bad faith in that it involves a
design to mislead or deceive another.
•Incidental fraud (dolo incidente) - Committed in the
performance of an obligation already existing because of
contract
-contract is valid but action for damages is the proper
remedy
•Causal fraud (dolo causante) - fraud employed in the
execution of a contract under Article 1338, which
vitiates consent and makes the contract voidable
-contract is voidable requiring annulment of it
Negligence (fault or culpa)
- It is any voluntary act or omission, there being no
malice, which prevents the normal fulfillment of an
obligation. (Arts. 1173, 1174.)
-failure to exercise that degree of care required by the
circumstances
Delay (mora)
Contravention of the terms of the obligation
- violation of the terms and conditions stipulated in the
obligation. The contravention must not be due to a
fortuitous event or force majeure. (Art. 1174.)
Fraud and negligence distinguished
-both are voluntary
-negligence that is gross or shows bad faith is equivalent
to fraud
ART. 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of an
action for future fraud is void.
Responsibility arising from fraud demandable
- refers to incidental fraud
- arising from fraud can be demanded with respect to all
kinds of obligation and unlike in the case of
responsibility arising from negligence (Art. 1172.)
Waiver of action for future fraud void
- waiver of an action for future fraud is void (no effect,
as if there is no waiver) as being against the law and
public policy. (Art. 1409[1].)
Waiver of action for past fraud valid
-what the law prohibits is waiver anterior to the fraud
and to the knowledge thereof by the aggrieved party
- A past fraud can be the subject of a valid waiver
because the waiver can be considered as an act of
generosity and magnanimity on the part of the party who
is the victim of the fraud
-hence, what is renounced is the effect of the fraud
-the waiver must be expressed in clear language which
leaves no doubt as to the intention of the obligee to give
up his right against the obligor
ART. 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.
Responsibility arising from negligence demandable
Discretion of court to fix amount of damages
-The courts, however, are given wide discretion in fixing
the measure of damages, as negligence is a question
which must necessarily depend upon the circumstances
of each particular case
Damages where both parties mutually negligent
- the fault of one cancels the negligence of the other.
Thus, the rights and obligations of the parties may be
determined under the equitable principle that no one
shall enrich himself at the expense of another.
Validity of waiver of action arising from negligence
• An action for future negligence (not fraud) may be
renounced except where the nature of the obligation
requires the exercise of extraordinary diligence as in the
case of common carriers. (Art. 1733.)
• Where negligence is gross or shows bad faith, it is
considered equivalent to fraud. Any waiver of an action
for future negligence of this kind is, therefore, void.
Kinds of negligence according to source of obligation
Contractual negligence (culpa contractual)
- negligence in contracts resulting in their breach Article
1172 refers to “culpa contractual.”
- not a source of obligation. (Art. 1157.)
- merely makes the debtor liable for damages in view of
his negligence in the fulfillment of a pre-existing
obligation resulting in its breach or non-fulfillment.
(Arts. 1170-1174, 2201.)
- It is a kind of civil negligence if it does not amount to a
crime;
Civil negligence (culpa aquiliana)
- negligence which by itself is the source of an
obligation between the parties not formally bound before
by any preexisting contract.
- It is also called “tort” or “quasi-delict.”
Criminal negligence (culpa criminal)
- negligence resulting in the commission of a crime.
(Arts. 3, 365, Revised Penal Code.)
- The same negligent act causing damages may produce
civil liability arising from a crime under Article 100 of
the Revised Penal Code (supra.), or create an action for
quasi-delict under Article 2176, et seq., of the Civil
Code.
Effect of negligence on the part of the injured party
Suppose the creditor is also guilty of negligence, can he
recover damages?
•Article 2179 of the new Civil Code provides:
→when the plaintiff’s own negligence was the
immediate and proximate cause of his injury, he cannot
recover damages
→if negligence was only contributory, the cause of the
injury being the defendant’s lack of due care, plaintiff
may recover damages, but the courts shall mitigate the
damages to be awarded
→to be entitled to damages, it is not required that the
negligence of the defendant should be the sole cause of
the damage
ART. 1173. The fault or negligence of the obligor
consists in the omission of that diligence which is
required by the nature of the obligation and
corresponds with the circumstances of the persons, of
the time and of the place. When negligence shows bad
faith, the provisions of Articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the
diligence which is to be observed in the performance,
that which is expected of a good father of a family
shall be required.
Meaning of fault or negligence
-According to our Supreme Court “negligence is conduct
that creates undue risk or harm to another. It is the
failure to observe for the protection of the interests of
another person, that degree of care, precaution and
vigilance which the circumstances justly demand,
whereby such other person suffers injury.”
Factors to be considered
- Negligence is a question of fact, its existence being
dependent upon the particular circumstances of each
case.
- No hard and fast rule for measuring the degree of care,
it is graduated according to the danger or risk a person or
property may be subjected to.
• Nature of the obligation.
e.g., smoking while carrying materials known to be
inflammable constitutes negligence;
• Circumstances of the person.
e.g., a guard, a man in the prime of life, robust and
healthy, sleeping while on duty is guilty of negligence;
• Circumstances of time.
e.g., driving a car without headlights at night is gross
negligence but it does not by itself constitute negligence
when driving during the day; and
• Circumstances of the place.
e.g., driving at 60 kilometers per hour on the highway is
permissible but driving at the same rate of speed in
Quezon Boulevard, Manila, when traffic is always heavy
is gross recklessness.
Measure of liability for damages
Damages - signify the money compensation awarded to
a party for loss or injury resulting from breach of
contract or obligation by the other.
Article 2201 of the Civil Code states:
-In contracts and quasi-contracts, the damages for which the
obligor who acted in good faith is liable shall be those that are
the natural and probable consequences of the breach of the
obligation, and which the parties have (reasonably) foreseen at
the time the obligation was constituted.
-In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation.
Kinds of diligence required
Diligence- the attention and care required of a person in
a given situation and is the opposite of negligence
-whether or not the negligence is excusable will depend
on the degree of diligence required
• that agreed upon by the parties, orally or in writing
• in the absence of stipulation, that required by law in the
particular case (like the extraordinary diligence required
of common carriers)
• if both the contract and law are silent, then the
diligence expected of a good father of a family (par. 2.)
or ordinary diligence.
ART. 1174. Except in cases expressly specified by the
law, or when it is otherwise declared by 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 foreseen, or which
though foreseen, were inevitable
Meaning of fortuitous event
Fortuitous event
- is any extraordinary event which cannot be foreseen, or
which, though foreseen, is inevitable.
- its essence consists of being a happening independent
of the will of the debtor and which happening, makes the
normal fulfillment of the obligation impossible
Fortuitous event distinguished from force majeure
Acts of man
- an event independent of the will of the obligor but not
of other human wills e.g., war, fire, robbery
Acts of God (force majeure)
- totally independent of the will of every human being;
generally applies to a natural accident.
In our law, fortuitous event and force manjeure are
identical as they exempt an obligor from liability. Both
are interdependent of the will of the obligor.
Kinds of fortuitous events
• Ordinary fortuitous events - those events which are
common and which the contracting parties could
reasonably foresee (e.g., rain)
• Extraordinary fortuitous events - those events which
are uncommon and which the contracting parties could
not have reasonably foreseen (e.g., earthquake, fire, war,
pestilence, unusual flood).
Requisites of a fortuitous event
• must be independent of the human will or at least of the
debtor’s will
• could not be foreseen, or if it could be foreseen, is
inevitable
• must be of such a character as to render it impossible
for the obligor to comply with his obligation in a normal
manner
• The obligor must be free from any participation in the
injury to the creditor, that is, there is no concurrent
negligence on his part.
Rules as to liability in case of fortuitous event
- A person is not, as a rule, responsible for loss or
damage resulting from fortuitous events. In other words,
his obligation is extinguished.
Exceptions:
• When expressly specified by law
-in exceptions of the below (1-3), the special strictness
of the law is justified
→ The debtor is guilty of fraud, negligence, or delay,
or contravention of the tenor of the obligation. (par.
3, Art. 1170,1165)
→ The debtor has promised to deliver the same
(specific) thing to two or more persons who do not
have the same interest
-for it would be impossible for the debtor to comply with
his obligation to two or more creditors even without any
fortuitous event taking place.
→ the obligation to deliver a specific thing arises from
a crime
-unless the thing having been offered by the debtor to the
person who should receive it, the latter refused without
justification to accept it.
→ The thing to be delivered is generic (Art. 1263.)
• When declared by stipulation.
- The basis for this exception rests upon the freedom of
contract.
- usually intended to better protect the interest of the
creditor and procure greater diligence on debtor
-intention to make the debtor liable should be clearly
expressed
• When the nature of the obligation requires the
assumption of risk.
- Here, risk of loss or damage is an essential element in
the obligation.
ART. 1175. Usurious transactions shall be governed
by special laws.
Meaning of simple loan or mutuum
Simple loan or mutuum - is a contract whereby one of
the parties delivers to another money or other
consumable thing, upon the condition that the same
amount of the same kind and quality shall be paid.
- It may be gratuitous or with a stipulation to pay
interest.
Meaning of usury
Usury - is contracting for or receiving interest in excess
of the amount allowed by law for the loan or use of
money, goods, chattels, or credits.
Requisites for recovery of monetary interest
• The payment of interest must be expressly stipulated
(Art. 1956.)
• The agreement must be in writing
• The interest must be lawful. (Art. 1957.)
A stipulation for the payment of usurious interest is void,
that is as if there is no stipulation as to interest. The
lender may still recover the principal of the loan and
demand compliance with other terms of the contract
otherwise valid.
Notes: Central Bank Circular No. 905
-rate of interest and other charges on a loan shall not be
subject to any ceiling prescribed under the Usury Law. it
is now legally non-existent. Parties are now free to
stipulate any amount of interest. It does not, however,
give an absolute right to the creditor to charge the debtor
interest that is “iniquitous or unconscionable.”
ART. 1176. The receipt of the principal by the
creditor, without reservation with respect to the
interest, shall give rise to the presumption that said
interest has been paid.
The receipt of a later installment of a debt
without reservation as to prior installments, shall
likewise raise the presumption that such installments
have been paid.
Meaning of presumption
Presumption - is meant the inference of a fact not
actually known arising from its usual connection with
another which is known or proved.
personal to the person of the latter (such as the right to
vote, to hold office, to receive legal support, to revoke a
donation on the ground of ingratitude, etc.)
• 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
Two kinds of presumption
Conclusive presumption - one which cannot be
contradicted like the presumption that everyone is
conclusively presumed to know the law
Disputable (or rebuttable) presumption - one which can
be contradicted or rebutted by presenting proof to the
contrary like the presumption established in Article
1176.
The debtor is liable with all his property, present, and
future, for the fulfillment of his obligation, subject to the
exemptions provided by law.
When presumptions in Article 1176 do not apply
With reservation as to interest.
- where there is a reservation as to interest or prior
installments, as the case may be.
- The reservation may be made in writing or verbally.
Receipt for a part of principal.
-The first paragraph of Article 1176 only applies to the
receipt of the last installment of the entire capital, not to
a mere fraction thereof. This is logical.
- such receipt, without mentioning the interest, implies
that the creditor waives his right to apply the payment
first to the interest and then to the principal, as permitted
by Article 1253.
Receipt without indication of particular installment paid.
- It has been held that the presumption in paragraph 2,
Article 1176 is not applicable if the receipt does not
recite that it was issued for a particular installment due
as when the receipt is only dated.
Payment of taxes.
- No presumption that previous taxes have been paid by
the payment of later ones. Taxes payable by the year are
not installments of the same obligation.
Non-payment proven.
- Of course, Article 1176 is not applicable where the
non-payment of the prior obligations has been proven. A
presumption cannot prevail over a proven fact.
ART. 1177. The creditors, after having pursued the
property in possession of the debtor 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.
Remedies available to creditors for the satisfaction of
their claims
In case the debtor does not comply with his obligation,
the creditor may avail himself of the following remedies
to satisfy his claim:
• exact fulfillment (specific performance) with the right
to damages
• pursue the leviable (not exempt from attachment under
the law) property of the debtor
• “after having 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
ART. 1178. Subject to the laws, all rights acquired in
virtue of an obligation are transmissible, if there has
been no stipulation to the contrary.
Transmissibility of rights
All rights acquired in virtue of an obligation are
generally transmissible.
Exceptions:
• Prohibited by law - When prohibited by law, like the
rights in partnership, agency, and commodatum which
are purely personal in character.
→ contract of partnership
- two or more persons bind themselves to contribute
money, property or industry to a common fund, with the
intention of dividing the profits among themselves.
→ contract of agency - a person binds himself to render
some service or to do something in representation or on
behalf of another, with the consent or authority of the
latter. (Art. 1868.)
→ contract of commodatum - one of the parties delivers
to another something not consumable so that the latter
may use the same for a certain time and return it.
Commodatum is essentially gratuitous. (Art. 1933.)
• Prohibited by stipulation of parties - When prohibited
by stipulation of the parties, like the stipulation that upon
the death of the creditor, the obligation shall be
extinguished or that the creditor cannot assign his credit
to another
-must be clearly proved, or, clearly implied from the
wordings or terms of the contract itself.
CHAPTER 3: DIFFERENT KINDS OF
OBLIGATIONS
Kinds of Obligations
Pure Obligations
-aren’t subject to condition or period
Conditional obligations as compared to obligations with
a period
-have either a condition or a period but not both
-looks forward to the future; condition is uncertain and
with a period is certian
Alternative obligations as compared to Facultative
obligations
-the prestations comprising the obligations are more than
one; in alternative, all have equal footing, anyone of
them can be complied and then the entire obligation is
extinguished; facultative there is only one prestation that
has to be complied with but another one in substitution
can be done by an obligee
Joint obligations as compared to Solidary obligations
-personalities of the obligation may be more than one
(creditor and debtor)
-joint have more than one personality in the point of
view of the law; solidary may have many personalities
but only one is considered in the point of view of the law
Divisible obligations as compared to indivisible
obligations
-can be divided into units (divisible)
-can’t be divided into units (indivisible)
Obligations with a penal cause
-carries within a penalty in case of non-performance
Section 1: Pure and Conditional Obligations
ART 1179. Every obligation whose performance does
not depend upon a future or uncertain event, or upon
a past event unknown to the parties, is demandable at
once.
Every obligation which contains a
resolutory condition shall also be demandable,
without prejudice to the effects of the happening of
the event.
Meaning of Pure Obligations
-not subject to any condition and no specific date is
mentioned and is immediately demandable
-does not depend on a future or past event
Meaning of Conditional Obligations
-whose consequences are subject in one way or another
to the fulfillment of a condition
-a future event that may or not happen or a past unknown
to the parties
Meaning of condition
-a future and uncertain event, the acquisition or
extinguishment of an obligation subject to it depends
Characteristics of a condition
Future and uncertain
-in order to constitute an event as a condition, it is not
enough that it be future, it must also be uncertain.
Past but unknown
-a condition may refer to a past event unknown to the
parties. If it refers to the future, its occurrence and its
time must be uncertain
A condition must not be impossible (ART. 1183)
Two principal kinds of condition
Suspensive condition (obligation but dapat)
-condition precedent/antecedent
-fulfillment of which will give rise to an obligation
-demandability of the obligation is suspended until the
happening of the uncertain event
Resolutory condition (obligation but hangtud)
-condition subsequent
-fulfillment of which will extinguish an obligation (or
right) already existing
-demandable at once
Distinction between suspensive and resolutory
conditions
-both influence on the existence of the obligation
When obligation is demandable at once
• when it is pure (para. 1, ART. 1179)
• when it is subject to resolutory condition
• when it is subject to a resolutory period
(par. 2, ART. 1193)
Past event unknown to the parties
A condition refers only to an uncertain and future event.
A past event cannot be said to be a condition since
demandability of an obligation depends upon whether
the event will happen or will not happen.
What really is contemplated by the law if the future of a
past event which at the moment is unknown to the
parties interested.
ART. 1180. When the debtor binds himself to pay
when his means permit him to do so, the obligation
shall be deemed to be one with a period, subject to
the provisions of Article 1197.
Where duration of period depends upon the will of
debtor
Period- future and certain event upon the arrival of
which the obligation is subject to it either arises or
extinguished.
• The debtor promises to pay when his means permit him
to do so
→ obligation shall be deemed to be one with a period.
What is left to the will of the debtor is the duration of
the period
→ if debtor and creditor can’t agree as to the specific
time for payment, the court shall fix the same
application of either party
• other cases- as when the debtor binds himself to pay
→ little by little; as soon as possible; from time to time;
at any time I have the money; in partial payments;
when I am in a position to pay
ART. 1181. In conditional obligations, the acquisition
of rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the
happening of the event which constitutes the
condition.
Effect of happening of condition
Acquisition of rights (suspensive condition)
-acquisition of rights depends upon the happening of the
event which constitutes the condition
- if such condition does not take place, it would be as of
the conditional obligation had never existed
- during pendency of the suspensive condition, creditor
has only a mere hope or expectancy of acquiring a right
Loss of rights already acquired (resolutory condition)
-the happening of the event which constitutes the
condition produces the extinguishment or loss of rights
already acquired
ART. 1182. When the fulfillment of the condition
depends upon the sole will of the debtor, the
conditional obligation shall be void. If it depends
upon chance or upon the will of a third person, the
obligation shall take effect in conformity with the
provisions of this Code (valid)
If the sole will of creditor- obligation is valid
Classification of conditions
As to effect
• Suspensive- happening that gives rise to obligations
• Resolutory- happening that extinguishes obligations
As to from
• Express- condition is clearly stated
• Implied condition is merely inferred
As to possibility
• Possible- capable of fulfillment, legally, and physically
• Impossible- not capable
As to cause or origin
• Potestative- condition depends upon the will of one of
the contracting parties
• Casual- condition depends upon chance or upon the
will of a third person
• Mixed- condition depends partly upon chance and
partly upon the will of a third person
As to mode
• Positive- consists in the performance of an act
• Negative- consists in the omission of an act
As to numbers
• Conjunctive- there are several conditions and all must
be fulfilled
• Disjunctive- there are several conditions and only one
or some of them must be fulfilled
As to divisibility
• Divisible- susceptible of partial performance
• Indivisible- not susceptible of partial performance
Postestative Condition
-suspensive in nature and which depends upon the sole
will of one of the contracting parties
Where Suspensive condition depends upon will of
debtor
Conditional obligation void
-where potestatiive condition depends upon the will of
the debtor, the conditional obligation should be void
because its validity and compliance is left to the will of
the debtor and can’t be easily demanded.
-to not be liable, the debtor will just not fulfill the
condition as there is no burden on debtor
Only the condition is void
-If obligation is a pre-existing one and does not depend
for its existence upon the fulfillment by the debtor, only
the condition is void leaving unaffected the obligation
itself
Where suspensive condition depends upon the will of
creditor
-the obligation is valid
Where resolutary condition depends upon the will of
debtor
-the obligation is valid although its fulfillment depends
upon the sole will of the debtor.
-The fulfillment of the condition merely causes the
extinguishment or loss of rights already acquired (ART
1181).
-The position of the debtor when condition is resolutory
is exactly the same as that of the creditor when the
condition is suspensive
Casual condition
-if the suspensive condition depends upon the change or
upon the will of a third person, the obligation subject to
it is valid.
Mixed condition
-obligation is valid if the suspensive condition depends
partly upon chance and partly upon the will of a third
person
Where suspensive condition depends partly upon will
of debtor
-Word “exclusive”(sole) makes it clear that conditional
obligation fulfillment depends partly on the will of
debtor and partly third person/chance, are perfectly valid
-if the compliance with the obligation still depends upon
that part of the condition where fulfillment depends on
the will of the debtor, it is void as it is within his power
to comply or not. (same situation of entirely depends on
the debtor)
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 divisible, that part thereof which is
not affected by the impossible or unlawful condition
shall be valid. The condition not to do an impossible
thing shall be considered as not having been agreed
upon.
When Article 1183 applies
-refers to suspensive condition
-applies only to cases where impossibility already
existed at the time it was constituted
-if impossibility arises after the creation of the
obligation, article 1266 governs
Two kinds of impossible conditions
Physically Impossible
– cannot exist or cannot be done in its nature
Legally Impossible
– contrary to law, good customs, or public policy
Effect of impossible conditions
Conditional obligation void
-impossible obligation annul the obligation which
depends upon them
-both obligation and condition is void because debtor
knows his obligation can’t be fulfilled and has not
intention to comply
Conditional obligation valid
-if the condition is negative, it is disregarded and the
obligation is rendered pure and valid. Conditions is
fulfilled not to do an impossible thing so is the same if
there were no condition
-the negative condition may not be to gice an impossible
thing
Only the affected obligation void
-if obligation is divisible, the part thereof not affected by
the impossible condition shall be valid
Only the condition void
-if obligation is a pre-existing obligation and does not
depend upon the fulfillment of the condition which is
impossible, only the condition is void
ART 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.
Positive condition
-Above refers to positive (suspensive) condition- the
happening of an event at a determinate time.
-obligation is extinguished
• as soon as time expires without the event taking place
• as soon as it has become indubitable that the event will
not take place although the time specified has not
expired
ART 1185. The condition that some event will not
happen at a determinate time shall render the
obligation effective from the moment the time
indicated has elapsed, or if it has become evident that
the event cannot occur.
If no time has been fixed, the condition shall
be deemed fulfilled at such time as may have
probably been contemplated, bearing in mind the
nature of the obligation
Negative condition
-above provision speaks of a negative condition-that an
event will not happen at a determinate time
-obligation shall become effective and binding:
• from the moment the time indicated has elapsed
without the event taking palace
• from the moment it has become evident that the event
cannot occur, although the time indicated has not yet
elapsed
If no time is fixed, shall be considered to arrive at the
intention of the parties. This rule may also be applied to
a positive condition
ART 1186. The condition shall be deemed fulfilled
when the obligor voluntarily prevents its fulfillment.
Condition fulfillment of suspensive condition
3 requisites for application of the article:
• the condition is suspensive
• obligor actually prevents the fulfillment of the
condition
• he acts voluntarily
Law does nor require that the obligor acts with malice or
fraud as long as his purpose is to prevent the fulfillment
of the condition. He should not be allowed to profit from
his own fault or bad faith to the prejudice of the obligee.
Constructive fulfillment of resolutory condition
-applies also to an obligation subject to a resolutory
condition with respect to the debtor who is bound to
return what he has received upon the fulfillment of the
condition
ART. 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.
Retroactive effects of fulfillment of suspensive
condition
In obligations to give
- 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.
- the rule on retroactivity has no application to real
contracts as they are perfected only by delivery of the
object of the obligation (art 1316)
In obligations to do or not to do
-no fixed rule is provided but does not mean that the
principle of retroactivity is not applicable.
-courts are empowered, to determine, in each case, the
retroactive effect of the suspensive condition that has
been complied with and includes the power to decide
that the fulfillment of the condition shall have (and its
date) or no retroactive effect
Retroactive effects as to fruits and interests in
obligations to give
In reciprocal obligations(prestations)(or bilateral)
-no retroactivity because the fruits and interests received
during the pendency of the condition are deemed to have
been mutually compensated
In unilateral obligations
-no retroactive effect because they are gratuitous, the
debtor shall appropriate the fruits and interest
-debtor receives nothing from the creditor, making fruits
and interest belong to the debtor unless from the nature
and other circumstances it should be inferred that the
intention of the person constituting the same was
different.
ART. 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.
Rights pending fulfillment of a suspensive condition
Rights of creditor
- 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.
-thus, he may go to court to prevent the alienation or
concealment of the property to have his right annotated
in the registry of the property
-applies to obligation subject to a resolutory condition i
Rights of debtor
- entitled to recover what he has paid by mistake prior to
the happening of the suspensive condition
-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
-a case of solutio indebiti
-note: must be by mistake, if not then debtor is deemed
to have impliedly waived the condition
-In any case, he cannot recover what he has prematurely
paid once the suspensive condition is fulfilled. But if the
condition was not fulfilled, the debtor should be allowed
to recover any payment made even if paid not by
mistake.
ART. 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 fulfi llment, 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 benefi t 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
LOSS
debtor without fault – obligation is extinguished
debtor with fault – obligation to pay damages
DETERIORATION
debtor without fault – impairment is to be borne by the
creditor
debtor with fault – creditor chooses: rescission of
obligation, fulfillment, indemnity
IMPROVEMENT
by nature or time – improvement: inure to the benefit of
the creditor
at the expense of the debtor – granted to the usufructuary
Requisites for application of Article 1189
• The obligation is a real obligation;
• The object is a specific or determinate thing;
• The obligation is subject to a suspensive condition;
• The condition is fulfilled;
• There is loss, deterioration, or improvement of the
thing during the pendency of the happening on one
condition.
Kinds of Loss (in civil law)
Physical loss — when a thing perishes as when a house
is burned and reduced to ashes;
Legal loss. — when a thing goes out of commerce or
heretofore legal becomes illegal
Civil loss — when a thing disappears in such a way that
its existence is unknown; or even if known, cannot be
recovered,whether as a matter of fact or of law (Art.
1262)
Rules in case of loss, etc. of thing during pendency of
suspensive condition
• loss of thing without debtor’s fault
→ the obligation is extinguished
• loss of thing through debtor’s fault
→ debtor is obliged to pay damages
• deterioration of thing without debtor’s fault
→ a thing deteriorates when its value is reduced or
impaired with or without the fault of the debtor
→ impairment to be shouldered as such by the creditor
• deterioration of thing through debtor’s fault.
→ creditor may choose between (a) rescission of the
obligation with indemnity for the damages caused (b)
fulfillment of the obligation with indemnity for the
damages
• Improvement of thing by nature or by time.
→ A thing is improved when its value is increased or
enhanced by nature or by time or at the expense of
the debtor or creditor. (see Art. 1187.)
→ improvement shall inure to the creditor
• Improvement of thing at expense of debtor.
→ the debtor shall only have the right to usufruct (use)
but before the delivery of the obligation
(usufructuary- someone who has the right to
usufructuary)
→ debtor may also remove the fruits he put into
ART. 1190. When the conditions have for their
purpose the extinguishment of an obligation to give,
the parties upon the fulfillment of said conditions,
shall return to each other what they have received.
In case of the loss, deterioration or improvement of
the thing, the provisions which, with respect to the
debtor, are laid down in the preceding article shall be
applied to the party who is bound to return.
As for obligations to do and not to do, the provisions
of the second paragraph of Article 1187 shall be
observed as regards the effect of the extinguishment
of the obligation.
- Refers to the fulfillment of a resolutory condition.
- The parties are bound to return or restore whatever they
have received from each other – “reciprocal restitution”
Effects of Fulfillment of resolutory condition
In obligations to give
-if fulfilled, the obligation is extinguished (Art. 1181.)
and the parties are obliged to return to each other what
they have received under the obligation.
• return to the status quo. In other words, the effect of the
fulfillment of the condition is retroactive.
• The obligation of mutual restitution is absolute. It
applies not only to the things received but also to the
fruits and interests.
• In case the thing to be returned “is legally in the
possession of a third person who did not act in bad faith”
(see Art. 1384, par. 2.), the remedy of the party entitled
to restitution is against the other.
• In obligations to give subject to a suspensive condition,
the retroactivity admits of exceptions according to
whether the obligation is bilateral or unilateral. (see Art.
1187.) Here, there are no exceptions, whether the
obligation is bilateral or unilateral.
→ reason: the fulfillment of the resolutory condition
produces the extinguishment of the obligation as
though it had never existed.. The only possible
exception is when the intention of the parties is
otherwise.
• If the condition is not fulfilled, the rights acquired by a
party become vested.
In obligations to do or not to do
-the courts shall determine the retroactive effect of the
fulfillment of the resolutory condition (par. 2.) as in the
case where the condition is suspensive. (Art. 1187, par.
2.) and may even disallow retroactivity taking into
account the circumstances of each case
Applicability of Article 1189 to party with obligation
to return
-the happening of a resolutory condition is same on the
creditor as the suspensive condition has, on the debtor —
an obligation arises.
-The fulfillment of the resolutory condition converts the
creditor into debtor, and the debtor into creditor. -Hence,
the applicability of the provisions of Article 1189; and
pending the fulfillment of the condition, the parties are
entitled to the rights granted by Article 1188.
ART. 1191. The power to rescind obligations is
implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages in either case. He may also
seek rescission, even after he has chosen fulfillment, if
the latter should become impossible.
The court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the
rights of third persons who have acquired the thing,
in accordance with Articles 1385 and 1388 and the
Mortgage Law.
Kinds of obligation according to the person obliged
Unilateral — when only one party is obliged to comply
with a prestation
Bilateral — when both parties are mutually bound to
each other. Where both are debtors and creditors of each
other.
• Reciprocal obligations
→ arise from the same cause and in which each party
is a debtor and creditor of the other, such that the
performance of one is designed to be the equivalent
and the condition for the performance of the other.
→ to be performed simultaneously or at the same time
• Non-reciprocal obligations
→ do not impose simultaneous and correlative
performance on both parties.
→ the performance of one party is not dependent
upon the simultaneous performance by the other
Remedies in reciprocal obligations
Choice of remedies
-in case one of the obligations does not comply with
what is incumbent upon him, the aggrieved party may
choose between two remedies:
-action for specific performance (fulfillment) of the
obligation with damages
-action for rescission of the obligation also with damages
Recission- the remedy available to an obligee when the
obligor fails to comply with his obligation, to abrogate
their contract as if it was never entered into, with the
right to recover damages
Remedy of rescission for non-compliance
-rescission for non-performance must be distinguished
from the subsidiary action for rescission by reason of
lesion or damage under Article 1381, anf from the
cancellation of a contract based
-non-compliance by one of the contracting parties in
case of reciprocal obligation
• remedy is granted for breach by the other contracting
party that violates the reciprocity
-when a party demands rescission in reciprocal
obligation, he treats the non-fulfillment by the other
party as a resolutory condition
Court may grant guilty party term for performance
-court shall order the rescission claimed unless there
should be just cause for granting the party in default a
term for the performance of his obligation. (par. 3.)
-this exception applies only where the guilty party is
willing to comply with his obligation but needs time to
do so and not where he refuses to perform
Remedies are alternative
-alternative and not cumulative, he is privileged to
choose only one of the remedies, and not both, subject
only to the exception in paragraph 2
- he may also seek rescission even after he has chosen
fulfillment if the latter should become impossible. But
after choosing, he cannot thereafter demand its
compliance, nor seek partial fulfillment under the guise
of recovering damages.
Limitations on right to demand rescission
- right to rescind by the injured party (the one who has
performed what is incumbent upon him) is not absolute.
Thus:
• Resort to the courts
→ The injured party has to resort to the courts to
assert his rights judicially
• Power of court to fix period
→ The court has discretionary power to allow a period
within which a person in default may be permitted to
perform his obligation if there is a just cause for
giving time to the debtor
• Waiver of right
→ The right to rescind may be waived, expressly or
impliedly.
Rescission without previous judicial decree
Where automatic rescission expressly stipulated.
— The parties, may validly enter into an agreement that
violation of the terms of the contract would cause
cancellation thereof even without judicial intervention or
permission or termination. This stipulation is in the
nature of a resolutory condition.
— the right to rescind is not “implied” but expressly
recognized
Where contract still executory
— when there is no performance yet by both parties, but
one is ready and willing to comply and the other is not,
the willing party may rescind the contract without
previous judicial decree of rescission. Such case is not
necessary that there be stipulation for automatic
rescission
— in any case, where the extrajudicial rescission is
contested by the other party, he is free to resort to
judicial action, only the final decision of the court can
settle if recission was proper or not
ART. 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.
Where both parties guilty of breach
First infractor known.
— the liability of the first infractor should be equitably
reduced
First infractor cannot be determined
— The rule is that the contract shall be deemed
extinguished and each shall bear his own damages
— the court shall not provide remedy to either of the
parties, who must suffer the damages allegedly sustained
by them
Section 2: Obligation with a Period
ART 1193. Obligations for whose fulfillment a day
certain has been fixed, shall be demandable only
when that day comes. Obligations with a resolutory
period take effect at once, but terminate upon arrival
of the day certain.
A day certain is understood to be that which
must necessarily come, although it may not be known
when. If the uncertainty consists in whether the day
will come or not, the obligation is conditional, and it
shall be regulated by the rules of the preceding
Section.
Obligation with a period
-one whose effects or consequences are subjected in one
way or another to the expiration or arrival of said period
or term
Period or term
-future and certain event upon the arrival which the
obligation subject to it either arises or terminated
-a day certain which must necessarily come, although
may not be known
Period and condition distinguished
-if both are impossible, obligation is void
Kinds of period or term
According to effect:
• Suspensive period (ex die).
→The obligation begins only from a day certain upon the
arrival of the period (Art. 1193, par. 1.);
• Resolutory period (in diem).
→The obligation is valid up to a day certain and
terminates upon the arrival of the period. (par. 2.)
According to source:
• Legal period.
→When it is provided for by law;
• Conventional or voluntary period.
→When it is agreed to by the parties (Art. 1196.);
• Judicial period.
→When it is fixed by the court. (Art. 1197.)
According to definiteness:
• Definite period.
→When it is fixed or it is known when it will come (Art.
1193, par. 3.);
• Indefinite period.
→When it is not fixed or it is not known when it will
come. Where the period is not fixed but a period is
intended, the courts are usually empowered by law to fix
the same. (see Art. 1197.)
ART. 1194. In case of loss, deterioration or
improvement of the thing before the arrival of the
day certain, the rules in Article 1189 shall be
observed.
See article 1189
ART. 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.
Payment before arrival of period
-applies only to obligations to give.
-allows the recovery of what has been paid by mistake
before the fulfillment of a suspensive condition.
-The creditor cannot unjustly enrich himself by retaining
the thing or money received before the arrival of the
period.
Debtor presumed aware of period.
-The presumption is that the debtor knew that the debt
was not yet due
-Where the duration of the period depends upon the will
of the debtor, payment by him amounts, in effect, to his
determination of the arrival of the period.
- The obligor may no longer recover the thing or money
once the period has arrived but he can recover the fruits
or interests thereof from the date of premature
performance to the date of maturity of the obligation
No recovery in personal obligations.
-no application to obligations to do or not to do because
as to the former, it is physically impossible to recover
the service rendered, and as to the latter, as the obligor
performs by not doing, he cannot, recover what he has
not done.
ART. 1196. Whenever in an obligation a period is
designated, it is presumed to have been established
for the benefit of both the creditor and the debtor,
unless from the tenor of the same or other
circumstances it should appear that the period has
been established in favor of one or of the other.
Presumption as to benefit of period.
-the period is presumed to have been established for the
benefit of both the creditor and the debtor.
-This means that before the expiration of the period, the
debtor may not fulfill the obligation and neither may the
creditor demand its fulfillment without the consent of the
other
-the presumption, ofc, is rebuttable
Exceptions to the general rule.
-The tenor of the obligation or the circumstances may,
however, show that it was the intention of the parties to
constitute the period for the benefit of either the debtor
or the creditor. The benefit of the period may be the
subject of express stipulation of the parties.
Term is for the benefit of the debtor alone.
→He cannot be compelled to pay prematurely, but he
can, if he desires, do so.
Term is for the benefit of the creditor.
→He may demand fulfillment even before the arrival of
the term but the debtor cannot require him to accept
payment before the expiration of the stipulated period.
Computation of term or period.
The Administrative Code of 1987 provides:
• Legal Periods
→“Year’’ =twelve calendar months
→ “month’’ = thirty days, unless it refers to a specific
calendar month and shall be computed according to the
number of days the specific month contains
→ “day,’’ = twenty-four hours
→ “night’’ = from sunset to sunrise
Calendar month
-a month designated in the calendar without regard to the
number of days it may contain.
-It is the “period of time running from the beginning of a
certain numbered day up to, but not including, the
corresponding numbered day of the next month
-if there is not a sufficient number of days in the next
month, then up to and including the last day of that
month.
Under the Administrative Code, a year is composed of
12 calendar months, the number of days being irrelevant,
Under the Civil Code a year is equivalent to 365 days,
whether it be a regular year or a leap year.
ART. 1197. If the obligation does not fix a period, but
from its nature and the circumstances it can be
inferred that a period was intended, the courts may
fix the duration thereof.
The courts shall also fix the duration of the
period when it depends upon the will of the debtor.
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.
Court generally without power to fix a period
-refers to a judicial period as distinguished from the
period fixed by the parties in their contract which is
known as contractual period.
-if the obligation does not state a period and no period is
intended, the court is not authorized to fix a period. The
courts have no right to make contracts for the parties.
Exceptions to the general rule.
-When the court is authorized to f x the duration of the
period.
-Whenever the court fixes the term of an obligation, it
does not thereby amend or modify the same. It merely
enforces or carries out the intention of the parties
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
Duration of period depends upon the will of the debtor. under article 1180
-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 merely enforcing the
implied stipulation of the parties.
-in every case, the court shall determine such period as
may under the circumstances have been probably
contemplated by the parties
Legal effect where suspensive period/condition
depends upon will of debtor’
The existence of the obligation
-not affected although the period depends upon the sole
will of the debtor.
- performance with respect to time is only left to the will
of the debtor.
Validity of obligation
-If the obligation is subject to a condition which depends
upon the will of the debtor, the conditional obligation is
void (Art. 1182.) because in such case, it is actually the
fulfillment of the obligation that depends upon the will
of the debtor. (see Art. 1308.
Period fixed cannot be changed by the courts.
Period agreed upon by the parties
- it has already lapsed or expired, the court cannot fix
another period.
Period fixed by the courts
- From the very moment the parties give their consent to
the period fixed by the court, said period acquires the
nature of a covenant, because the effect of such
acceptance and consent by the parties is exactly the same
as if they had expressly agreed upon it,
-However, the parties may modify the term by a new
agreement.
ART. 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.
When obligation can be demanded before lapse of
period.
-the obligation is not demandable before the lapse of the
period. However, the debtor shall lose every right to
make use of the period, that is, the period is disregarded
and the obligation becomes pure and, therefore,
immediately demandable if:
• When debtor becomes insolvent.
• When debtor does not furnish guaranties or securities
promised.
Ex:D promised to mortgage his house to secure the debt.
If he fails to furnish said security as promised, he shall
lose his right to the period.
• When guaranties or securities given have been
impaired or have disappeared.
Ex: If the debt is secured by a mortgage on the house of
D, but the house was burned through his fault, the
obligation also becomes demandable unless D gives a
new security equally satisfactory.
In this case, the house need not be totally
destroyed as it is sufficient that the security be impaired
by the act of D. But in case of a fortuitous event, it is
required that the security must disappear. But if the
security given deteriorates in such a manner as to
become illusory, it must be deemed to have disappeared
or lost as contemplated in paragraph 3.
If the debt is secured by a bond, the failure of
D to renew the bond or replace it with an equivalent
guarantee upon its expiration will likewise give C the
right to demand immediate payment.
• When debtor violates an undertaking
Ex: Now, suppose that C in the example agreed to the
period in consideration of the promise of D to repair the
piano of C free of charge. The violation of this
undertaking by D gives C the right to demand immediate
payment of the loan.
• When debtor attempts to abscond.
-mere attempt or intent to abscond is sufficient
The exception are on the fact that the debtor might not
be able to comply with his obligation
Section 3: Alternative Obligations
ART 1199. A person alternatively bound by different
prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of
one and part of the other undertaking.
Kinds of obligation according to object.
(1) Simple obligation.
— one where there is only one prestation,
(2) Compound obligation.
— one where there are two or more prestations.
(a) Conjunctive obligation.
— one where there are several prestations and all of
them are due
(b) Distributive obligation.
— one where one of two or more of the prestations is
due.
Meaning of alternative obligation.
- wherein various prestations are due but the
performance of one of them is sufficient
Ex: Minnie obliges herself to deliver to Clarabelle a
daisy, a rose, or an orchid.
• What kinds of obligation(s) is(are)this(these)? Why?
→ the example exemplifies alternative obligations
because Minnie shall completely perform only one of
them
• Minnie chooses to deliver to Clarabelle a daisy, What
happened to the other obligations?
→ the other two obligations are extinguished upon the
complete performance of one of the obligations
• If it is two daisies, two roses, or two orchids. Minnie
then told Clarabelle that she, Minnie, chooses to deliver
a rose and a daisy. Can Clarabelle refuse to consent
thereto?
→ Yes, since the creditor cannot be compelled to
receive part of one and part of the other prestation.
ART. 1200. The right of choice belongs to the debtor,
unless it has been expressly granted to the creditor.
The debtor shall have no right to choose those
prestations which are impossible, unlawful or which
could not have been the object of the obligation.
Right of choice, as a rule, given to debtor.
-As a general rule, the right to choose the prestation
belongs to the debtor.
-By way of exception, it may be exercised by the
creditor but only when expressly granted to him (Art.
1205.), or by a third person when the right is given to
him by common agreement. (Art. 1306.)
Right of choice of debtor not absolute.
- subject to limitations. Thus:
• The debtor cannot choose those prestations which are:
(a) impossible, (b) unlawful, or (c) which could not have
been the object of the obligation, as they are void.
→ In other words, under Article 1200, the debtor’s right
of choice is not extinguished altogether but limited to the
remaining valid prestations.
• The debtor has no more right of choice, when among
the prestations whereby he is alternatively bound, only
one is practicable.
→ there is a loss of right of choice to the debtor
→ obligation becomes simple
→ right does not pass to the creditor, nor may it be
exercised by any one
• The debtor cannot choose part of one prestation and
part of another prestation. (Art. 1199, par. 2.)
Ex: Minnie obliges herself to deliver to Clarabelle two
daisies, two roses, or two orchids.
• Who has the right of choice?
→ Right of choice belongs to Minnie, unless it has
been expressively given to Clarabelle
• One day before the delivery, Minnie, happy to be
outside on a windy day, threw two daisies and two roses
up in the air, where such were blown and gone with the
wind. Can Clarabelle demand damages from Minnie?
→ No, since the two daises and two roses are
indeterminate, and Minnie can always deliver two
daisies or two roses. In addition to that, since Minnie
has the right of choice, she can just choose to deliver
the orchids.
• Have the alternative obligations been converted into a
simple one?
→ No since the prestations are indeterminate in nature
ART. 1201. The choice shall produce no effect except
from the time it has been communicated.
Communication of notice that choice has been made.
Effect of notice.
— Until the choice is made and communicated, the
obligation remains alternative
• Once the notice of the election has been given to the
creditor, the obligation ceases to be alternative and
becomes simple.
• Such choice once properly made and communicated is
irrevocable and cannot, therefore, be renounced.
Proof and form of notice
— may be made orally or in writing, expressly or
impliedly
ART. 1202. The debtor shall lose the right of choice
when among the prestations whereby he is
alternatively bound, only one is practicable.
Effect when only one prestation is practicable.
-If more than one is practicable, it is Article 1200 that
will apply.
-Under Article 1202, if only one is practicable (e.g., the
others have become impossible), the obligation is
converted into a simple one.
ART. 1203. If through the creditor’s acts the debtor
cannot make a choice according to the terms of the
obligation, the latter may rescind the contract with
damages
When debtor may rescind contract.
Rescission creates the obligation to return the things
which were the object of the contract together with their
fruits, and the price with its interest.
The right given the debtor to rescind the contract and
recover damages if, through the creditor’s fault, he
cannot make a choice according to the terms of the
obligation. The debtor, however, is not bound to rescind.
ART. 1204. The creditor shall have a right to
indemnity for damages when, through the fault of the
debtor, all the things which are alternatively the
object of the obligation have been lost, or the
compliance of the obligation has become impossible.
The indemnity shall be fxed taking as a
basis the value of the last thing which disappeared, or
that of the service which last became impossible.
Damages other than the value of the last
thing or service may also be awarded.
Effect of loss or becoming impossible of objects of
obligation.
Articles 1203 and 1204 apply when the right of choice
belongs to the debtor. Under Article 1205, the creditor
has the right to choose.
• Some of the objects.
— if lost or have become impossible even through the
fault of the debtor, the latter is not liable since he has the
right of choice and the obligation can still be performed.
— an exception to the general rule established in Article
1170 regarding liability for damages arising from
negligence.
• All of the objects.
— If all of them have been lost or have become
impossible through the debtor’s fault, the creditor shall
have a right to indemnity for damages
— if the cause of the loss is a fortuitous event, the
obligation is extinguished.
The phrase “or the compliance of the obligation has
become impossible” refers to obligations “to do.”
Basis of indemnity.
- indemnity shall be fixed taking as basis the value of the
last thing which disappeared (referring to obligations to
give) or that of the service which last became impossible
(referring to obligations to do).
- In case of disagreement, it is incumbent upon the
creditor to prove such value, or which thing last
disappeared or which service last became impossible.
-Other damages may also be awarded. (Art. 1204, pars. 2
and 3.)
Ex: Daisy obliges herself to deliver to Hilda her pair of
sunglasses, her pink notebook, or her yellow telescope.
• One day before the delivery, the sunglasses were struck
by lightning, destroying it completely (Daisy is safe and
sound). Daisy became angry and tore the notebook to
pieces. What can be said of the obligation(s)?
→ The obligation has been converted into a simple
one, that is, the delivery of the telescope
• Is daisy liable for the damages caused?
→ No, since she has the right of choice, and she can
always choose to deliver the yellow telescope
ART. 1205. When the choice has been expressly given
to the creditor, the obligation shall cease to be
alternative from the day when the selection has been
communicated to the debtor. Until then the
responsibility of the debtor shall be governed by the
following rules:
(1) If one of the things is lost through a fortuitous
event, he shall perform the obligation by delivering
that which the creditor should choose from among
the remainder, or that which remains if only one
subsists;
(2) If the loss of one of the things occurs through the
fault of the debtor, the creditor may claim any of
those subsisting, or the price of that which, through
the fault of the former, has disappeared, with a right
to damages;
(3) If all the things are lost through the fault of the
debtor, the choice by the creditor shall fall upon the
price of any one of them, also with indemnity for
damages. The same rules shall be applied to
obligations to do or not to do in case one, some or all
of the prestations should become impossible.
Where right of choice belongs to creditor.
-the debtor may expressly give the right of choice to the
creditor. (Art. 1200.)
-In such a case, the provisions which with respect to the
debtor are laid down in the preceding articles, shall be
applicable to the creditor when the right of choice is
given to him.
-Before the creditor makes the selection, the debtor
cannot incur in delay.
Rules in case of loss before creditor has made choice.
A. only one thing lost – fortuitous event – creditor
chooses from the remainder – debtor delivers the choice
to creditor;
B. only one remains – debtor delivers the same to the
creditor;
C. only one thing lost – fault of the debtor
1. creditor may choose any one of the remainders; 2.
creditor may choose the price or value of the one which
was lost;
3. may choose 1 or 2 plus damages
D.all things lost – fault of the debtor – creditor may
choose the price of ANYONE of the things, with
damages if warranted.
E. all things lost – fortuitous event - obligation
extinguished
Rules applicable to personal obligations.
- also applicable to personal obligations. (par. 2.)
-The responsibility of the debtor for damages depends
upon whether the cause which has rendered the
obligation impossible was due to his fault or not.
Ex: Daisy obliges herself to deliver to Hilda her pair of
sunglasses, her pink notebook, or her yellow telescope.
The right of choice has been expressively given to Hilda
• One day before the delivery, the sunglasses were struck
by lightning, destroying it completely (Daisy is safe and
sound). Daisy became angry and tore the notebook to
pieces. Can Hilda still demand fulfillment of the
obligation(s)?
→ Yes, Hilda can still demand for the delivery of the
yellow telescope or the price of the notebook, with a
right to indemnity for the damages caused
• Can Hilda demand the price of the sunglasses or seek
damages?
→ No, since the sunglasses were lost due to a
fortuitous event
• Can Hilda demand the price of the sunglasses or seek
damages if ever it was the fault of Daisy? -Yes
ART. 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.
If loss or deterioration happened before substitution is
made, obligor is not liable; after substitution is
communicated, he is liable for loss (through delay,
negligence or fraud)
Meaning of facultative obligation.
-where only one prestation has been agreed upon but the
obligor may render another in substitution.
Effect of loss.
• Before substitution.
— If the principal thing is lost through a fortuitous
event, the obligation is extinguished; otherwise, the
debtor is liable for damages.
— The loss of the thing intended as a substitute with or
without the fault of the debtor does not render him liable
due to substitute is not due. The effect of the loss is
merely to extinguish the facultative character of the
obligation.
• After substitution.
— If the principal thing is lost, the debtor is not liable
whatever may be the cause of the loss, because it is no
longer due.
— If the substitute is lost, the liability of the debtor
depends upon whether or not the loss is due through his
fault.
— Once the substitution is made, the obligation is
converted into a simple one to deliver or perform the
substituted thing or prestation. It becomes effective from
the time it has been communicated. (Art. 1201.)
Alternative and facultative obligations distinguished.
Ex: Coco Luca obliges herself to deliver to Minnie her
yellow pair of shoes, or in substitution, a pink basket.
• How would such obligation be classified?
→ The obligation is a facultative obligation, since
there is only one prestation but coco Luca may render
another prestation in substitution
• Coco Luca looked at a pink basket that she has bought
and decided to keep if herself. Can Minnie collect
damages from Coco Luca if Coco Luca went ahead and
keeps the basket for herself?
→ No, since a basket is an indeterminate thing and
besides, it is Coco Luca who has the right of choice.
The main thing is the yellow pair shoes.
→ A pink basket is a determinate and generic, Coco
Luca can just have another pink basket to substitute
and no right of choice was given to Minnie.
Section 4: Joint and Solidary Obligations
ART. 1207. The concurrence of two or more
creditors or of two or more debtors in one and the
same obligation does not imply that each one of the
former has a right to demand, or that each one of the
latter is bound to render, entire compliance with the
prestations. There is a solidary liability only when the
obligation expressly so states, or when the law or the
nature of the obligation requires solidarity.
ART. 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
equal 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.
Kinds of obligations according to the number of
parties.
Individual obligation - one debtor and one creditor
Collective obligation - two or more debtors and/or two
or more creditors. It may be joint of solidary
Joint and Solidary Obligations
Joint obligation - entire obligation is to be paid or
performed proportionately by the debtors and/or be
demanded proportionately by the creditors
Solidary obligation - each one of the debtors is bound to
render, and/or each one of the creditors hs a right to
demand from any of the debtors, entire complain with
the prestation
Collective obligation presumed to be joint
-If it was an individual obligation, there can be no
problem in determining:
• person liable to pay
• person entitled to demand payment
• extent of the liability of the debtors
• extent of the right of the creditor
-If it is a collective obligation, and the share of each in
the obligation is specific, the correlative right and
obligations of the parties are known
→ if the share is not specified, the presumption is that
the obligation is joint, as a consequence:
• there are as many debts as there are debtors
• there are as many credits as there are creditors
• the debts and/or credits are considere distinct and
separate from one another
• each debtor is liable only for a proportionate part of the
debt
• each creditors is entitle only to a proportionate part of
the credit
Presumption subject to rules on multiplicity of suits
In article 1208, “subject to the Rules of Court governing
the multiciplicity of suits.” Otherwise, situations may
arise where there are as many suits as there are debtors
and creditors
— rules on multiplicity of suits seek to prevent the
filling of two or more suits/complaints for a single cause
of action or the same violation of the legal right of the
plaintiff
Words used to indicate joint liability
- mancomunada, mancomunadamente, pro rata,
proportionately, “we promise to pa” signed by two or
more persons
When obligation solidary
In 1207, there is only solidary liability when:
• obligation expressly so states
• law requires solidarity
• nature of the obligation requires solidarity
• imposed against a final judgement against several
defendants
Words used to indicate solidary obligation
-not necessary for the agreement to employ precisely the
word “solidary” for the obligation to be considered.
-it is sufficient that the obligation declares
-jointly and/or severally, solidaria, in solidum, together
and/or separately, individually and/or collectively, juntos
o separadamente; “i promise to pay” signed by two or
more persons
Kinds of solidarity
According to the parties bound
• Passive solidarity
→ solidarity in the part of the debtors, where any one
of them can be made liable. It is in the nature of a
mutual guaranty
• Active solidarity
→ solidarity in the part of the creditors, where any
one of them can demand. Its essential feature is that of
mutual representation among the solidary creditors
with powers to exercise the rights of others in the
same mannes as their rights.
• Mixed solidarity
→ solidarity in the part of the debtors and creditors,
where each one of the debtors is liable to render, and
each one of the reditors has a right to demand
According to source
• Conventional solidarity
→ where solidarity is agreed upon by the parties. If
not mention in the contract, the obligation is only
joint.
• Legal solidarity
→ where solidarity is imposed by the law
• Real solidarity
→ where solidarity is imposed by the nature of the
obligation
→ the law does not indicate cases where it is solidarity
because of the nature of the obligation. Opinion is
offered in which intent or purpose of the law is to
have the obligation be satisfied in full but the law itself
does not require solidarity.
Solidarity not presumed
-solidary obligations are very burdensome for they create
unusual rights and liabilities. In between debtors, their
responsibilities increases. In between creditors, their
right increases. The law tends to favor the debtors in
presuming that they are bound jointly, not solidarily.
ART. 1209. If the division is impossible, the right of
the creditors may be prejudiced only by their
collective acts, and the debt can be enforced only by
proceeding against all the debtors. If one of the latter
should be insolvent, the others shall not be liable for
his share.
Joint indivisible obligation
— The obligation is joint because the parties are merely
proportionately liable. It is indivisible because the object
or subject matter is not physically divisible into different
parts. Hence, joint as to liabilities of the debtor and
rights of the creditors but indivisible as to compliance.
— Should anyone of the debtors be insolvent, the others
shall not be liable for their share. The creditors must wait
until the insolvent partner can pay.
Simply means that the liability in an indivisible
obligation may be either joint or solidarity. And in
solidarity obligation, the subject matter may be divisible
or indivisible.
1211. Solidarity may exist although the creditors and
the debtors may not be bound in the same manner
and by the same periods and conditions.
Kinds of obligations according to the legal tie.
Uniform
— when the parties are bound by the same stipulations
Non-uniform or varied
— when parties are not subject to the stipulations
Solidarity not affected by diverse stipulations
Essense of solidarity
— consists in the right of each creditor to enforce the
rights of all and the liability of each debtor to answer for
the liabilities of all.
Action against any of the solidary debtors
— the creditor may bring his action in toto against any
of the solidary debtors less the shares of the other
debtors with unexpired terms or unfulfilled conditions.
Upon the expiration of the term or the fulfillment of the
condition, the creditor will have the right to demand the
payment of the remainder.
Liability of any solidary debtors for entire obligation
— The parties may stipulate that any solidary debtor
already bound may be made liable for the entire
obligation.
ART. 1212. Each one of the solidary creditors may do
whatever may be useful to the others, but not
anything which may be prejudicial to the latter.
Ex: Batman and Robin jointly obliged themselves to
deliver a brand new Toyota Fortuner worth
P1,500,000.00 to Superman. The object, a vehicle, is
indivisible. They must deliver the thing jointly. In case
of breach, the obligation is converted into monetary
obligation for indemnity for damages. Batman and
Robin will be liable only for P 750,000.00 each.
Act of solidary creditor useful/prejudicial to others
— If he performs such act that may be prejudicial to
others and as a result the obligation is extinguished, he
shall be responsible to the others for the damages.
— The rule is based on the theory of mutual agency
among the solidary creditors.
1210. The indivisibility of an obligation does not
necessarily give rise to solidarity. Nor does solidarity
of itself imply indivisibility
1213. A solidary creditor cannot assign his rights
without the consent of the others
Indivisibility and solidarity distinguished.
Assignment by solidary creditor of his rights
— If no consent given by others, a solidary creditor can
‘t assign his righs to a third person, as the provisions
says that each creditor represents the others and the
assignee may not have the confidence of the original
solidary creditors, considering that he may not give the
shares of the others after receiving the payment.
— If the assignment is made to a co-creditor, the consent
of the other creditors is not necessary.
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.
Payment to any of the solidary creditors
The debtor can pay any one of the solidary creditors. To
avoid confusion on the payment of the obligation, the
debtor is required to pay only to the demanding creditor
and that payment is sufficient to effect the
extinguishment of the obligation except if the creditor,
the one who demands, does not give to the other
creditors their shares in the payments.
ART. 1215. Novation, compensation, confusion or
remission of the debt, made by any of the solidary
creditors or with any of the solidary debtors, shall
extinguish the obligation, without prejudice to the
provisions of Article 1219.
The creditor who may have executed any of
these acts, as well as he who collects the debt, shall be
liable to the others for the share in the obligation
corresponding to them.
Liability of solidary creditor in case of novation,
compensation, confusion, or remission.
Novation, compensation, confusion, and remission are
modes or causes of extinguishment of obligations. The
creditor who executed any of these acts should be liable
to the others for their corresponding shares considering
that such acts are prejudicial to them.
Effect of novation, etc. where obligation joint
In a joint obligation, novation, compensation, confusion,
remission, prescription, and any other cause of modifi
cation or extinction does not extinguish or modify the
obligation except with respect to the creditor or debtor
affected, without extending its operation to any other
part of the debt or of the credit.
ART. 1216. The creditor may proceed against any
one of the solidary debtors or some or all of them
simultaneously. The demand made against one of
them shall not be an obstacle to those which may
subsequently be directed against the others, ĺ long as
the debt has not been fully collected.
Right of creditor to proceed against any solidary
debtor
This is not applicable to a joint obligation. In a solidary
obligation (passive solidarity), any one or some or all of
the solidary debtors simultaneously, may be made to pay
the debt so long as it has not been fully collected. The
choice is left to the solidary creditor to iì1
ART. 1217. Payment made by one of the solidary
debtors extinguishes the obligation. If two or more
solidary debtors offer to pay, the creditor may choose
which offer to accept.
He who made the payment may claim from
his co-debtors only the share which corresponds to
each, with the interest for the payment already made.
If the payment is made before the debt is due, no
interest for the intervening period may be demanded.
When one of the solidary debtors cannot,
because of his insolvency, reimburse his share to the
debtor paying the obligation, such share shall be
borne by all his co-debtors, in proportion to the debt
of each.
Effects of payment by a solidary debtor
Between the solidary debtors and creditor(s)
— full payment made by one of the solidary debtors
extinguishes the obligation. However, the creditor may
choose which offer to accept if two or more solidary
debtors offer to pay.
Among the solidary debtors
— after payment of the debt, the paying solidary debtor
can demand reimbursement form his co-debtors for their
proportionate share with (legal) interest only from the
time of payment
— The other debtors do not become payment solidary
debtors of the debtor-payer. Their liability is not based
on the original obligation which has been extinguished,
but upon the payment made by the co-debtor which
creates a joint obligation of reimbursement on the part of
the others. However, in case of insolvency of any of the
solidary debtors, the others assume the share of the
insolvent one pro rata.
— If a solidary debtor pays the obligation in part, he can
recover reimbursement only if payment exceeded his
share in the obligation.
Among the solidary creditors.
— The receiving creditor is jointly liable to the others
for their corresponding shares.
ART. 1218. Payment by a solidary debtor shall not
entitle him to reimbursement from his co-debtors if
such payment is made after the obligation has
prescribed or become illegal.
recover from his codebtors their corresponding shares of
the obligation.
When the obligation has prescribed (e.g. creditor did not
make any demand for more than 10 years) or become
illegal, the obligation is extinguished.
ART. 1221. If the thing has been lost or if the
prestation has become impossible without the fault of
the solidary debtors, the obligation shall be
extinguished.
If there was fault on the part of any one of
them, all shall be responsible to the creditor, for the
price and the payment of damages and interest,
without prejudice to their action against the guilty or
negligent debtor.
If through a fortuitous event, the thing is
lost or the performance has become impossible after
one of the solidary debtors has incurred in delay
through the judicial or extra-judicial demand upon
him by the creditor, the provisions of the preceding
paragraph shall apply.
Prescriptive periods of actions
— “By prescription, one acquires ownership and other
rights through the lapse of time in the manner and under
the conditions laid down by law. In the same way, rights
and actions are lost by prescription.”
— “The following actions must be brought within ten
(10) years from the time the right of action accrues:
• Upon a written contract;
• Upon an obligation created by law;
• Upon a judgment.“ (Art. 1144.)
— “The following actions must be commenced within
six (6) years:
• Upon an oral contract;
• Upon a quasi-contract.“ (Art. 1145.)
— “The following actions must be instituted within four
(4) years:
• Upon an injury to the rights of the plaintiff;
• Upon a quasi-delict.’’ (Art. 1146.)
The statute of limitations, however, may be superseded
or modified by a contract between the parties.
ART. 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. Debt remission is the extinguishing of a
debtor's liability by operation of law or forgiveness by
the creditor
Effect of remission of share after payment
If payment is made first, the remission or waiver is of no
effect. If remission is made previous to the payment and
payment is made, solutio indebiti arises (iuli ang
payment back to debtor).
The purpose of the article is to forestall fraud whereby
the debt having been paid, the creditor, who does not
stand to suffer any loss or damage, remits the share of a
particular debtor. The article also secures equality and
justice to the paying debtor inasmuch as the payment
benefits his co-debtors
ART. 1220. The remission of the whole obligation,
obtained by one of the solidary debtors, does not
entitle him to reimbursement from his co-debtors
No right to reimbursement in case of remission.
In case of novation, compensation, or confusion (see Art.
1215.), the debtor with whom it is effected is entitled to
Rules in case thing has been lost or prestation has
become impossible.
Loss is without fault and before delay.
— obligation is extinguished
Loss is due to fault on the part of a solidary debtor.
— the fault or delay of one solidary debtor, shall be the
fault or delay of all the solidary debtors. The paying
debtors can recover payment and damages from the
debtor at fault. The debtor at fault can alse be made
liable to pay interest for the payment made.
Loss is without fault but after delay.
— all solidary debtors even for a fortuitous event, is
liable
Thing due was not lost, but there is merely a delay, fraud
or negligence on the part of a solidary debtor
— all debtors will share in the payment of the
PRINCIPAL prestation. The damages and interest
imposed will be borne by the guilty debtor.
Obligation to deliver is converted into an obligation to
pay indemnity when there is loss or impossibility of
performance
ART. 1222. A solidary debtor may, in actions filed by
the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of those
which are personal to him, or pertain to his own
share. With respect to those which personally belong
to the others, he may avail himself thereof only as
regards that part of the debt for which the latter are
responsible.
Defenses available to a solidary debtor.
Defenses derived from the nature of the obligation.
— a complete defense, as it renders it ineffective. Such
cases are fraud, prescription, remission, illegality or
absence of consideration, res judicata, non-performance
of a suspensive condition, etc
Defenses personal to, or which pertain to share of, debtor
sued.
— such as insanity, incapacity, mistake, violence,
minority, etc., this is a complete defense
— A solidary debtor, by his own act or inaction, such as
by failing to appeal, may lose the benefit of the
provisions of Article 1222.
— non-fulfillment of the suspensive condition to a
solidary debtor is a partial defense since creditor can
demand portion of obligation from other debtors as the
solidary debtor is solidarily liable
Defenses personal to other solidary debtors.
— if one solidary debtor is protected in a defense, the
other solidary debtors has partial defense, where they are
only liable of their own share sa obligation.
Section 5: Divisible and Indivisible Obligations
ART. 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
Divisible obligation- an object, in its delivery or
performance, capable of partial fulfillment (e.g.
obligation to deliver 100 sacks of rice)
Indivisible obligation- an object, in its delivery or
performance, is not capable of partial fulfillment (e.g.
obligation to deliver a particular computer set, as whole)
Test for the distinction
— Even though the object or service may be physically
divisible, an obligation is indivisible if so provided by
law or intended by the parties.
— However, if the object is not physically divisible or
the service is not susceptible of partial performance, the
obligation is always indivisible
— An obligation is presumed indivisible where there is
only one creditor and only one debtor.
— the divisibility of an obligation shall not be confused
with the divisibility of the thing
— a thing is indivisible if it cold be divided into parts
anf its value is impaired disproportionately
Applicability of Article 1223
— while it appears to be limited to real obligations
because it speaks of “things,” the word is used in its
broad sense as referring to the object or prestation of the
obligation, which may be to deliver a thing or to render
some service.
Kinds of division
Qualitative division or one based on quality, not on
number or quantity of the things that are the object of the
obligation (e.g. A- house and lot. B- rice field and car)
Quantitative division or one based on quantity rather
than on quality (e.g. A&B- 100 meters each in rice field)
Ideal or intellectual division or one which exists only in
the minds of the parties (e.g. A&B, as co-owners, their
one-half shares in the car are not separable in a material
way but only mentally)
Kinds of indivisibility
Legal indivisibility- where law declares it indivisible
when the obligation by nature is divisible
Conventional indivisibility- where the will of the parties
makes it indivisible when the obligation by nature is
divisible
Natural indivisibility- where tha nature of the object is
not divisible (e.g. to give a particular car, to sing a song)
Where there is only one creditor and one debtor
— The provisions of chapter are also applicable to
divisible and indivisible obligations, as they contemplate
obligations involving only one creditor and only one
debtor.
— Since divisibility or indivisibility refers to the
prestation, it does not alter or modify said provisions.
When there is only one creditor and one debtor, the latter
has to perform the obligation in its totality, whether or
not the prestation is divisible. Unless there is an express
stipulation to that effect, says Article 1248 (par. 1.), the
creditor cannot be compelled partially to receive the
prestations in which the obligation consists; and in
accordance with Article 1232, an obligation is not
deemed paid unless the thing or service in which the
obligation consists has been completely delivered or
rendered, as the case may be.
ART. 1224. A joint indivisible obligation gives rise to
indemnity for damages from the time anyone of the
debtors does not comply with his undertaking. The
debtors who may have been ready to fulfill their
promises shall not contribute to the indemnity
beyond the corresponding portion of the price of the
thing or of the value of the service in which the
obligation consists.
Effect of non-compliance by a debtor in a joint
indivisible obligation.
— If any one of the debtors does not comply with his
undertaking, the obligation is transformed into one for
damages, i.e., to pay money. The creditor cannot ask for
specific performance or rescission.
— In a solidary obligation, the breach by a co-debtor
makes all debtors liable for damages. The obligation
remains solidary.(Art. 1221, par. 2.)
— In a joint indivisible obligation, the effect of noncompliance by a debtor is to make all the debtors liable
for damages but the innocent debtors shall not contribute
beyond their respective shares of the obligation. The
obligation becomes a divisible one. This has already
been explained under Article 1209.
ART. 1225. For the purposes of the preceding
articles, obligations to give definite things and those
which are not susceptible of partial performance
shall be deemed to be indivisible.
When the obligation has for its object the
execution of a certain number of days of work, the
accomplishment of work by metrical units, or
analogous things which by their nature are
susceptible of partial performance, it shall be
divisible.
However, even though the object or service
may be physically divisible, an obligation is
indivisible if so provided by law or intended by the
parties.
In obligations not to do, divisibility or
indivisibility shall be determined by the character of
the prestation in each particular case.
Obligations deemed indivisible
— the purpose of the obligation is the controlling
circumstance. This rule applies not only to obligations to
give but also to those of doing or not doing.
Obligations to give definite things
— to deliver a specific car, to give a particular electric
fan. The obligation is indivisible because of the nature of
the subject matter
Obligations which are not susceptible of partial
performance
— to sing a song, to dance a tinikling- obligation is
indivisible since it requires the performance of all the
parts. If there are more many participants, then it is
divisible kay capable of partial performance
Obligations provided by law to be indivisible even if
thing or service is physically divisible
— under law, taxes are to be paid within a definite
period. Although money is physically divisible, tax must
be delivered in toto
Obligations intended by the parties to be indivisible
even if thing or service is physically divisible
— obligation to give 1k on a certain date. Money is
physically divisible but the intention is to deliver one
time and as a whole, making it indivisible
— If two debtors, on their part, obligation becomes
divisible since each will contribute 500. But on the
creditor’s part, obligation remains indivisible because
the performance can’t be done on parts
Obligations deemed divisible.
Obligations which have for their object the execution of
a certain number of days of work
— to paint the house and be finished in 10 days. Here,
the obligation need not be fulfilled at one time.
Obligations which have for their object the
accomplishment of work by metrical units
— to make a table, 3 feet wide and 5 feet long; the
obligation of X and Y to deliver 20 cubic meters of sand.
But the obligation of X alone is indivisible
Obligations which by their nature are susceptible of
partial performance
— to teach “Obligations and Contracts” for one year in a
university; to render 3 song numbers in a program; to
pay a debt of P12,000.00 in 12 monthly installments of
P1,000.00 but each prestation to pay P1,000.00 is
indivisible as it is to be delivered at one time and in its
totality
Divisibility or indivisibility in obligations not to do.
— depends on the character of the prestation in each
particular case
Indivisible obligation
— X obliged himself to Y not to sell cigarettes in his
store for one year. Here, the obligation should be
fulfilled continuously during a certain period
Divisible obligation
— If the obligation of X is not to sell cigarettes in his
stores only during Sundays and holidays, the obligation
is divisible because the forbearance is not continuous
Obligations “to do” and “not to do” are generally
indivisible. Obligations “to do” stated in paragraph 2 of
Article 1225 are divisible.
Section 6: Obligations with a Penal Cause
ART. 1226. In obligations with a penal clause, the
penalty shall substitute the indemnity for damages
and the payment of interests in case of
noncompliance, if there is no stipulation to the
contrary. Nevertheless, damages shall be paid if the
obligor refuses to pay the penalty or is guilty of fraud
in the fulfillment of the obligation.
The penalty may be enforced only when it is
demandable in accordance with the provisions of this
Code.
Principal obligation
— can stand by itself and does not depend for its validity
and existence upon another obligation.
Accessory obligation
— attached to a principal obligation and, therefore,
cannot stand alone.
Obligation with a penal clause
— contains an accessory undertaking to pay a previously
stipulated indemnity in case of breach of the principal
prestation intended primarily to induce its fulfi llment.
Penal clause
— an accessory undertaking attached to an obligation to
assume greater liability on the part of the obligor in case
of breach of the obligation
Purposes of penal clause
• general purpose: to insure their performance by
creating an effective deterrent against breach, making
the consequences of such breach as onerous as it may be
possible
• to substitute a penalty for the indemnity for damages
and the payment of interests in case of non-compliance
• to punish the debtor for the non-fulfi llment or
violation of his obligation
The obligor would then be bound to pay the stipulated
indemnity without the necessity of proof on the
existence and on the measure of damages caused by the
breach.
Penal clause and condition distinguished
Kinds of penal clause.
As to its origin:
• Legal penal clause. — when it is provided for by law;
• Conventional penal clause.
— when it is provided for by stipulation of the parties.
As to its purpose:
• Compensatory penal clause.
— when the penalty takes the place of damages;
• Punitive penal clause. — when the penalty is imposed
merely as punishment for breach.
As to its dependability or effect:
• Subsidiary or alternative penal clause.
— when only the penalty can be enforced;
• Joint or cumulative penal clause.
— when both the principal obligation and the penal
clause can be enforced.
When creditor may recover damages
• when so stipulated by the parties
• when the obligor refuses to pay the penalty, in which
case the creditor may recover legal interest thereon
• when the obligor is guilty of fraud in the fulfillment of
the obligation, in which case the creditor may recover
damages caused by such fraud
When penalty may be enforced
— when it is demandable in accordance with the
provisions of the Civil Code.
— the penalty, as a stipulation in a contract, is
demandable only if there is a breach of the obligation
and it is not contrary to law, morals, good customs,
public order, or public policy.
— If the obligation cannot be fulfilled due to a fortuitous
event, the penalty is not demandable. Under Article
1229, the penalty may be reduced if it is iniquitous or
unconscionable or in case there is partial or irregular
fulfillment.
ART. 1227. The debtor cannot exempt himself from
the performance of the obligation by paying the
penalty, save in the case where this right has been
expressly reserved for him. Neither can the creditor
demand the fulfillment of the obligation and the
satisfaction of the penalty at the same time, unless
this right has been clearly granted him. However, if
after the creditor has decided to require the
fulfillment of the obligation, the performance thereof
should become impossible without his fault, the
penalty may be enforced.
Penalty not substitute for performance.
— Debtor cannot just pay the penalty instead of
performing the obligation. Precisely, the object of the
penalty is to secure compliance with the obligation.
— If the debtor is allowed to just pay the penalty, this
would in effect make the obligation an alternative one.
(Art. 1199.) The debtor can exempt himself from the
non-fulfillment of the obligation only when “this right
has been expressly reserved for him.”
Penal clause presumed subsidiary.
Where there is performance.
— Once the obligation is fulfilled, this purpose is
attained and, therefore, there is no need for demanding
the penalty. The exception arises when “this right has
been clearly granted” the creditor. Under Article 1227,
therefore, the general rule is that a penal clause is
subsidiary and not joint.
Where there is no performance.
— the creditor may ask for the penalty or require
specific performance. The remedies are alternative and
not cumulative nor successive subject to the exception
that the penalty may be enforced, if after the creditor has
decided to require fulfillment, the same should become
impossible without his fault. (see Art. 1191, par. 2.)
— If there was fraud on the part of the debtor, the
creditor may recover the penalty as well as damages for
non-fulfillment. (Art. 1226.)
When penal clause joint.
• The debtor can pay the penalty instead of performance
only when this right has been expressly reserved for him.
• The debtor can’t claim that he is no longer liable to pay
his loan after paying the penalty. The creditor has right
to demand performance and payment of penalty jointly
when this right has been clearly granted him.
ART. 1228. Proof of actual damages suffered by the
creditor is not necessary in order that the penalty
may be demanded.
Penalty demandable without proof of actual
damages.
— All that the creditor has to prove, to enforce the
penalty, is the violation of the obligation by the debtor.
The creditor may enforce the penalty whether he
suffered damages or not. But he cannot recover more
than the stipulated penalty even if he proves that the
amount of his damages exceeds the penalty.
Damages recoverable in addition to penalty must be
proved.
In any of the three exceptions when damages may be
recovered in addition to the penalty (Art. 1227.), the
creditor must prove the amount of such damages which
he actually suffered resulting from the breach of the
principal obligation.
ART. 1229. The judge shall equitably reduce the
penalty when the principal obligation has been partly
or irregularly complied with by the debtor. Even if
there has been no performance, the penalty may also
be reduced by the courts if it is iniquitous or
unconscionable.
When penalty may be reduced by the courts.
When there is partial or irregular performance.
— The first refers to partly complied with by the debtor,
the latter, to complied not in accordance with the tenor
of the agreement. The penalty should be more or less
proportionate with the extent of the breach of the
contract or of the damage suffered.
When the penalty agreed upon is iniquitous or
unconscionable.
— even if there is no performance at all. Penalty is not
void, but subject merely to equitable reduction.Whether
the penalty iniquitous or reasonable, depends on the
circumstances
ART. 1230. The nullity of the penal clause does not
carry with it that of the principal obligation.
The nullity of the principal obligation
carries with it that of the penal clause.
Effect of nullity of the penal clause
— If only the penal clause is void, the principal
obligation remains valid and demandable. The injured
party may recover indemnity for damages in case of nonperformance of the obligation as if no penalty had been
stipulated. (see Art. 1170.)
Effect of nullity of the principal obligation.
— If the principal obligation is void, the penal clause is
likewise void. But if the nullity of the principal
obligation is due to the fault of the debtor who acted in
bad faith, by reason of which the creditor suffered
damages on equitable grounds, the penalty may be
enforced.