San Beda College of Law
85
MEMORY AID
IN
CIVIL LAW
OBLIGATIONS AND CONTRACTS
I. OBLIGATIONS
OBLIGATION
 A juridical necessity to give, to do, or
not to do (Article 1156), one
impressed with the character of
enforceability.
 Requisites:
a. juridical or legal tie or efficient
cause
b. active subject (obligee or
creditor)
c. passive subject (obligor or
debtor)
d. fact, prestation or service
constituting the object of the
obligation
 Requisites:
i) it must be licit
ii) it
must
be
possible,
physically & juridically
iii) it must be determinate or
determinable
iv) it must have a possible
equivalent in money

1.
2.
3.
4.
5.
Sources (Article 1157):
Law
Contracts
Quasi-contracts
Delicts
Quasi-delicts
QUASI-CONTRACTS
 Those juridical relations arising from
lawful, voluntary and unilateral acts,
by virtue of which the parties become
bound to each other, based on the
principle that no one shall be unjustly
enriched or benefited at the expense
of another.
Principal Kinds of Quasi-contracts:
1. Negotiorum gestio - arises whenever
a person voluntarily takes charge of
the agency or management of the
business or property of another
without any power or authority from
the latter.
2. Solutio indebiti - arises whenever a
person unduly delivers a thing
through mistake to another who has no
right to demand it.
QUASI-DELICTS
 An act or omission by a person
(tortfeasor) which causes damage to
another giving rise to an obligation to
pay for the damage done, there being
fault or negligence but there is no
pre-existing
contractual
relation
between the parties (Article 2176).

Requisites:
1. There must be an act or
omission;
2. There must be fault or
negligence;
3. There must be damage
caused to the plaintiff;
4. There must be a direct
relation of cause and effect
between the act or omission and
the damage; and
5. There is no pre-existing
contractual relation between the
parties.
NOTES:
 The same negligent act or omission
causing damage may produce civil
liability arising from crime under Art.
100 of the RPC or create an action for
quasi-delict under Article 2176.
 While it is true that in order that a
person may be liable for quasidelicts, there must be no pre-existing
contractual relationship between the
parties, yet, “the act that breaks
the contract may also be a tort.”
(Air France vs. Carrascoso, 18 SCRA
155).
Nature of Obligations
1. Personal Obligations - obligations
to do
a. Positive – obligation to do
b. Negative – obligation not to do
2. Real Obligations - obligations to give
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
86
a. Determinate or specific – object
is particularly designated or
physically segregated from all
other of the same class
b. Generic – object is designated
merely by its class or genus
c. Limited generic thing – when the
generic objects are confined to a
particular
class,
e.g.
an
obligation to deliver one of my
horses (Tolentino, Volume IV, p.
91).
PERSONAL vs. REAL RIGHT
Personal
Real
1. jus ad rem, a
right enforceable
only against a
definite person or
group of persons
2. right pertaining
to the person to
demand from
another, as a
definite passive
subject, the
fulfillment of a
prestation to give,
to do or not to do.
1. jus in re, a right
enforceable against
the whole world
2. right pertaining
to a person over a
specific thing,
without a passive
subject individually
determined against
whom such right
may be personally
enforced
RIGHTS OF A CREDITOR
Determinate
1. compel specific
performance
2. recover
damages in case of
breach of the
obligation,
exclusive or in
addition to specific
performance
3. entitlement to
fruits, interests
from the time the
obligation to
deliver arises.
Generic
1. ask for
performance of the
obligation
2. ask that the
obligation be
complied with at
the expense of the
debtor
3. recover damages
in case of breach of
the obligation
Principle of Balancing of Equities as
Applied in Actions for Specific
Performance
 In decreeing specific performance,
equity requires not only that the
contract be just and equitable in its
provisions, but that the consequences
of specific performance likewise be
equitable and just. The general rule
is that this equitable relief will not be
granted if, under the circumstances
of the case, the result of the specific
performance of the contract would
be harsh, inequitable, oppressive or
result in an unconscionable advantage
to the plaintiff. The courts may
adjust the rights of the parties in
accordance with the circumstances
obtaining at the time of rendition of
judgment,
when
these
are
significantly different from those
existing at the time of generation of
those rights. (Agcaoili vs. GSIS, G.R.
No. 30056, August 30, 1988)
OBLIGATIONS OF THE DEBTOR
Determinate
Generic
1. deliver the thing
which he has
obligated himself to
give
2. take care of the
thing with the
proper diligence of a
good father of a
family
3. deliver all
accessions and
accessories of the
thing even though
they may not have
been mentioned
4. pay damages in
case of breach of
the obligation by
reason of delay,
fraud, negligence or
contravention of the
tenor thereof
1. deliver the thing
which is neither of
superior nor inferior
quality
2. pay damages in
case of breach of the
obligation by reason
of delay, fraud,
negligence or
contravention of the
tenor thereof
EFFECTS OF BREACH
Positive Personal
Negative Personal
Obligations
Obligations
The creditor can:
1.
have
the
obligation performed
or executed at the
expense
of
the
obligor (except in
cases
where
the
personal
qualifications of the
debtor are taken into
account in which
case the only remedy
is an action for
damages)
2. ask that what has
been poorly done be
undone
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
If the obligor does
what has been
forbidden him, the
creditor can:
1. have it undone at
the expense of the
obligor; and
2. ask for damages
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
3. recover damages
because of breach of
the obligation
Cases where the remedy granted under
Article 1168 is not available:
1. Where the effects of the act which is
forbidden, are definite in character,
in which case, even if it is possible
for the obligee to ask that the act be
undone at the expense of the obligor,
consequences contrary to the object
of the obligation will have been
produced which are permanent in
character
2. Where it would be physically or
legally impossible to undo what has
been undone because of the very
nature of the act itself or because of
a provision of law, or because of
conflicting rights of 3rd persons
NOTE: In either case, the remedy is to
ask for damages.
BREACH OF OBLIGATIONS
1. Voluntary
debtor,
in
the
performance of the obligation, is
guilty of:
a. default (mora)
b. fraud (dolo)
c. negligence (culpa)
d. contravention of the tenor of the
obligation
NOTE: debtor is liable for damages
2.
Involuntary - debtor is unable to
comply with his obligation because of
fortuitous event
NOTE: debtor is not liable for
damages
DEFAULT or DELAY
 Non-fulfillment of the obligation with
respect to time
 Requisites:
1. Obligation is demandable and already
liquidated
2. The debtor delays performance
3. The creditor requires performance
judicially or extra-judicially
1.
2.
3.
IN
CIVIL LAW
Mora solvendi - delay of the debtor to
perform his obligation. It may be:
a.
Ex re – obligation is to
give
b.
Ex persona – obligation is
to do
Mora accipiendi - delay of the
creditor to accept the delivery of the
thing w/c is the object of the
obligation
Compensatio morae - delay of the
parties or obligors in reciprocal
obligation
 When incurred:
 General Rule: There must be a demand
(judicial or extra-judicial) before delay
may be incurred.
Exceptions:
1. obligation or law expressly so
declares
2. time is of the essence of the
contract
3. demand is useless as when obligor
has rendered beyond his power to
perform
4. there is acknowledgment of
default
NOTES:
 There can be delay only in positive
obligations (to give/to do). There can
be no delay in negative obligations
(not to give/not to do).
 In reciprocal obligations one party
incurs in delay from the moment the
other party fulfills his obligation,
while he himself does not comply or
is not ready to comply in a proper
manner with what is incumbent upon
him. The general rule is that
fulfillment by both parties should be
simultaneous except when different
dates for the performance of
obligation is fixed by the parties.
 Demand is still necessary if their
respective obligations are to be
performed on separate dates
FRAUD
 Deliberate and intentional evasion of
the fulfillment of an obligation
 3 Kinds:
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
88
Test of Negligence
NOTE: Future fraud cannot be waived
because it would result to illusory
obligation.
Incidental
Fraud/dolo
incidente
(Article 1170)
Causal Fraud/dolo
causante
(Article 1338)
1. Present during
the performance of
a pre-existing
obligation
1. Present during the
time of birth or
perfection of the
obligation
2. Purpose is to
evade the normal
fulfillment of the
obligation
2. Purpose is to
secure the consent of
the other to enter
into a contract
3. Results in the
non-fulfillment or
breach of the
obligation
3. Results in the
vitiation of consent
4. Gives rise to a
right of the creditor
to recover damages
from the debtor
4. Gives rise to a right
of an innocent party
to annul the contract
NEGLIGENCE
 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
NOTE: Negligence can be waived unless
the nature of the obligation or public
policy requires extraordinary diligence as
in common carrier.
Diligence Required
1. That agreed upon by the parties
2. In the absence of stipulation, that
required by law in the particular case
3. If both the contract and law are
silent, diligence of a good father of a
family
Concept of Diligence of Good Father of
a Family
 That reasonable diligence which an
ordinary prudent person would have
done under the same circumstances
 The test of negligence can be
determined by this standard: If the
defendant, in committing or causing
the negligent act, had used
reasonable care and vigilance which a
man of ordinary prudence would have
employed under the same situation,
he is not guilty of negligence.
Otherwise, he is guilty.
Doctrine of Res Ipsa Loquitur as Applied
in Negligence Cases
 The thing or transaction speaks for

itself
When the thing which caused injury,
without fault of the injured person, is
under the exclusive control of the
defendant and the injury is such as in
the ordinary course of things does not
occur if he having such control use
proper care, it affords reasonable
evidence, in the absence of
explanation from the defendant, that
the injury arose from defendant’s
want of care (Africa vs. Caltex, 16
SCRA 448 and Republic vs. Luzon
Stevedoring, 21 SCRA 279).
FORTUITOUS EVENT
 An event which could not be foreseen
or which though foreseen was
inevitable.
 Requisites:
1. cause is independent of the will of
the debtor
2. the event must be unforeseeable or
unavoidable
3. occurrence must be such as to render
it impossible for the debtor to fulfill
his obligation in a normal manner
4. debtor must be free from any
participation in
5. the aggravation of the injury resulting
to the creditor (Lasam vs. Smith, 45
Phil. 657)
NOTE: It must not only be the
proximate cause but it must be the
ONLY and SOLE CAUSE.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
 GENERAL RULE: No liability in case of
fortuitous event.
EXCEPTIONS:
1 When expressly declared by law
NOTE: e.g. Article 552(2),
1165(3), 1268, 1942, 2147, 2148
and 2159 of the Civil Code.
2 When expressly declared by
stipulation or contract
3 When the nature of the obligation
requires the assumption of risk
4 When the obligor is in default or
has promised to deliver the same
thing to 2 or more persons who
do not have the same interest
[Article 1165(3)].
EFFECT OF FORTUITOUS EVENT
Determinate
Generic Obligation
Obligation
obligation is
extinguished
obligation is not
extinguished based
on the rule that a
genus never perishes
(genus nunquam
peruit)
PRINCIPLE UNDER ARTICLE 1176
 Before the presumption that a prior
installment had been paid may arise,
the receipt must specify the
installment for which payment is
made.
 REMEDIES
OF
CREDITOR
TO
PROTECT CREDIT:
1. Exhaustion of debtor’s property
2. Accion subrogatoria
to
be
subrogated to all the rights and
actions of the debtor save those
which are inherent in his person.
3. Accion pauliana - impugn all the acts
w/c the debtor may have done to
defraud them.
NOTE: 2nd & 3rd remedies are subsidiary
to the first
GENERAL RULE: Rights acquired by
virtue of an obligation are transmissible
in character
IN
CIVIL LAW
1. When they are not transmissible
by their very nature e.g. purely
personal right
2. When there is a stipulation of the
parties that they are not
transmissible
3. Not transmissible by operation of
law
PURE OBLIGATION
 One
whose
effectivity
or
extinguishment does not depend upon
the fulfillment or non-fulfillment of a
condition or upon the expiration of a
term or period and is demandable at
once.
CONDITIONAL OBLIGATION
 One whose effectivity is subordinated
to the fulfillment or non-fulfillment
of a future AND uncertain fact or
event
Kinds of conditions:
1. Suspensive - fulfillment of the
condition results in the acquisition of
rights arising out of the obligation
2. Resolutory - fulfillment of the
condition
results
in
the
extinguishments of rights arising out
of the obligation
3. Potestative - fulfillment of the
condition depends upon the will of a
party to the obligation
4. Casual - fulfillment of the condition
depends upon chance and/or upon
the will of a third person
5. Mixed - fulfillment of the condition
depends partly upon chance and/or
the will of a third person
6. Possible - condition is capable of
realization according to nature, law,
public policy and good customs
7. Impossible - condition is not capable
of realization according to nature,
law, public policy and good customs
8. Positive - condition involves the
performance of an act
9. Negative - condition involves the
omission of an act
10. Divisible - condition is susceptible of
partial realization
11. Indivisible - condition is not
susceptible of partial realization
EXCEPTIONS:
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
90
2005 CENTRALIZED BAR OPERATIONS
12. Conjunctive - where there are several
conditions, all of which must be
realized
13. Alternative - where there are several
conditions but only one must be
realized
Rule in Potestative Conditions
a. If
the
fulfillment
of
the
potestative condition depends
upon the sole will of the debtor,
the condition as well as the
obligation itself is void. It renders
the obligation illusory. (Applicable
only to a suspensive condition and
to an obligation which depends for
its perfection upon the fulfillment
of the potestative condition and
not to a pre-existing obligation.)
b. If
the
fulfillment
depends
exclusively upon the will of the
creditor, both the condition and
obligation is valid.
NOTE: In case of simple potestative
condition, e.g. right of first refusal,
such condition is valid.
Rule in Impossible Conditions
 GENERAL RULE: They shall annul the
obligation which depends upon them.
EXCEPTIONS:
1. pre-existing obligation
2. if obligation is divisible
3. in simple or renumeratory donations
4. in testamentary dispositions
5. in case of conditions not to do an
impossible thing
Effects of Suspensive Condition
1. Before fulfillment of the condition,
the demandability as well as the
acquisition or effectivity of the rights
arising from the obligation is
suspended
2. After the fulfillment of the condition,
the obligation arises or becomes
effective
3. 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
4. When
the
obligation
imposes
reciprocal prestations upon the
parties, the fruits & interests shall be
deemed to have been mutually
compensated
5. If the obligation is unilateral, the
debtor shall appropriate the fruits &
interests received, unless from the
nature & circumstances it should be
inferred that the intention of the
persons constituting the same was
different
6. In obligations to do or not to do, the
court shall determine the retroactive
effect or the conditions that has been
complied with
Constructive fulfillment of Suspensive
Condition
 The condition shall be deemed
fulfilled when the obligor actually
prevented
the
obligee
from
complying with the condition and
such prevention must have been
voluntary and willful in character.
Effects of Resolutory Condition
1. Before the fulfillment of the
condition, the right which the
creditor has already acquired by
virtue of the obligation is subject to a
threat of extinction.
2. If condition is not fulfilled, rights are
consolidated; they become absolute.
3. Upon fulfillment of the condition, the
parties shall return to each other
what they received including the
fruits
SUMMARY:
SUSPENSIVE
CONDITION
RESOLUTORY
CONDITION
1. if fulfilled,
obligation arises
or becomes
effective
2. if not fulfilled, no
juridical relation
is created
3. rights are not yet
acquired, but
there is hope or
expectancy that
they will soon be
acquired
1. if fulfilled,
obligation is
extinguished
2. if not fulfilled,
juridical relation
is consolidated
3. rights are
already
acquired, but
subject to the
threat or danger
of extinction
Effects of Loss, Deterioration and
Improvement in real obligations (during
the pendency of the condition)
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
1. Loss
a. without
debtor’s
fault
obligation is extinguished
b. with debtor’s fault - debtor pays
damages
2. Deterioration
a. without
debtor’s
fault
impairment to be borne by the
creditor
b. with debtor’s fault - creditor may
choose between the rescission of
the obligation and its fulfillment
with indemnity for damages in
either case
3. Improvement
a. by the thing’s nature or by time improvement shall inure to the
benefit of the creditor
b. at the debtor’s expense - debtor
shall have no other right than
that granted to a usufructuary
NOTE: Applies only to determinate things
A Thing is Lost when it:
1. perishes
2. goes out of commerce
3. disappears in such a way that its
existence is unknown or it cannot be
recovered
RECIPROCAL OBLIGATIONS
 Those which are created or established
at the same time, out of the same cause,
and which result in mutual relationships
of creditor & debtor between the parties
TACIT RESOLUTORY CONDITION
If one of the parties fails to comply
with what is incumbent upon him, there
is a right on the part of the other to
rescind the obligation.
IN
CIVIL LAW
1. If there is an express stipulation
of automatic rescission
2. When the debtor voluntarily
returned the thing
NOTES:
 Article 1191 refers to judicial
rescission. It does not apply if there is
an express stipulation to rescind, in
which case such stipulation must
prevail. There is nothing in the law
which prohibits the parties from
entering into an agreement that
violation of the terms of the contract
would cause its cancellation without
court intervention. Said stipulation is
in the nature of facultative resolutory
condition (Angeles vs. Calasanz, 135
SCRA 323).
 Rescission will be ordered only where
the breach is substantial as to defeat
the object of the parties in entering
into the agreement.
 The injured party may choose
between fulfillment and rescission of
the obligations, with the payment of
damages in either case. These
remedies
are
alternative,
not
cumulative.
However,
should
fulfillment become impossible, the
injured party may also seek
rescission.
 The right to rescind belongs
exclusively to the injured party.
OBLIGATION WITH A PERIOD
 Those whose demandability or
extinguishment is subject to the
expiration of a term or period
 Requisites:
1.
future
2.
certain
3.
possible,
legally and physically
CLASSIFICATION OF TERM OR PERIOD
1. a. suspensive (ex die) – obligation
becomes demandable only upon
arrival of a day certain
RIGHT TO RESCIND (ART 1191)
 GENERAL RULE: The right to rescind
needs judicial approval.
EXCEPTIONS:
b. resolutory (in diem) – arrival of day
certain terminates the obligation
2. a. legal – granted by law
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
92
b.
conventional
stipulated by
parties
c. judicial – fixed by courts
3. a. definite – date/time is know
beforehand
b. indefinite – the date/time of day
certain is unknown
TERM
–
CONDITION
1. interval of time
w/c is future &
certain
2. interval of time
w/c must
necessarily come,
although it may not
be known when
3.exerts an
influence upon the
time of
demandability or
extinguishment of
an obligation
4. does not have
any retroactive
effect unless there
is an agreement to
the contrary
5. when it is left
exclusively to the
will of the debtor,
the existence of
the obligation is
not affected
1. fact or event w/c
is future and
uncertain
2. future and
uncertain fact or
event w/c may or
may not happen
3. exerts an influence
upon the very
existence of the
obligation itself
4. has retroactive
effect
5. when it is left
exclusively to the will
of the debtor, the
very existence of the
obligation is affected
 GENERAL RULE: When a period is
designated for the performance or
fulfillment of an obligation, it is
presumed to have been established for
the benefit of both creditor and debtor.
EXCEPTION: When it appears from the
tenor of the obligation or other
circumstances that the period has been
established in favor of one or of the
other.
When court may fix period:
1. if the obligation does not fix a period,
but from its nature and circumstances
it can be inferred that a period was
intended by the parties
2. if the duration of the period depends
upon the will of the debtor; and
3. If the debtor binds himself when his
means permit him to do so (Article
1180)
NOTE: The only action that can be
maintained is an action to ask the court
to fix the duration of the term or period.
The fulfillment of the obligation itself
cannot be demanded until after the court
has fixed the period for compliance
therewith, and such period has arrived.
However, such technicality need not be
adhered to when a prior and separate
action would be a mere formality and
would serve no other purpose than to
delay (Borromeo vs. CA, 47 SCRA 65).
Reason for Fixing the Period (ART 1197)
 There can be no possibility of any
breach of contract or failure to
perform the obligation unless the
period is fixed by courts.
When debtor loses right to make use of
period: (IGIVA)
1. when after the obligation has
been contracted, he becomes
insolvent, unless he gives guaranties
or securities for the debt
(the
insolvency need not be judicially
declared)
2. when he does not furnish to the
creditor the guaranties or securities
he promised
3. when by his own act he has
impaired
said
guaranties
or
securities after their establishment,
and when through fortuitous event
they disappear, unless he gives new
ones equally satisfactory when
debtor violates any undertaking, in
consideration of which the creditor
agreed to the period or
4. when debtor attempts to abscond
FACULTATIVE
Obligations
ALTERNATIVE
Obligations
1. comprehends
only one object or
prestation which is
due, but it may be
complied with by
the delivery of
another object or
performance of
another prestation
in substitution
1. comprehends
several objects or
prestations which are
due but may be
complied with by the
delivery or
performance of only
one of them
2. fortuitous loss
extinguishes the
2. fortuitous loss of
all prestations will
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
obligation
extinguish the
obligation
3. culpable loss
obliges the debtor
to deliver
substitute
prestation without
liability to debtor
3. culpable loss of any
object due will give
rise to liability to
debtor
4. choice pertains
only to debtor
4. choice may pertain
to creditor or even
third person
NOTES:
 In alternative obligations, choice

takes
effect
only
upon
communication of the choice to the
other party and from such time the
obligation ceases to be alternative.
The debtor cannot choose those
prestations or undertakings which are
impossible, unlawful or w/c could not
have been the object of the
obligation.
EFFECT OF LOSS OF OBJECT OF
OBLIGATION:
1. If right of choice belongs to debtor
a. If through a fortuitous event debtor cannot be held liable for
damages
b. If 1 or more but not all of the
things are lost or one or some
but not all of the prestations
cannot be performed due to the
fault of the debtor, creditor
cannot hold the debtor liable for
damages because the debtor can
still comply with his obligation.
2. If right of choice belongs to the
creditor
a. If 1 of the things is lost through a
fortuitous event, the debtor shall
perform the obligation by
delivering
that
which
the
creditor should choose from
among the remainder, or that
which remains if only 1 subsists
b. If the loss of 1 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
IN
CIVIL LAW
fault of the former, has
disappeared with a right to
damages
c. If all the things are lost through
the fault of the debtor, the
choice by the creditor shall fall
upon the price of any 1 of them,
also with indemnity for damages
JOINT AND SOLIDARY OBLIGATIONS
GENERAL RULE: Obligation is presumed
joint if there is concurrence of two or
more debtors and/or creditors.
EXCEPTIONS:
1.
when expressly stated
that there is solidarity
2.
when the law requires
solidarity
3.
when the nature of the
obligation requires solidarity
JOINT DIVISIBLE OBLIGATIONS
 Each creditor can demand for the
payment of his proportionate share of
the credit, while each debtor can be
held liable only for the payment of
his proportionate share of the debt.
 A joint creditor cannot act in
representation of the other creditors
while a joint debtor cannot be
compelled to answer for the acts or
liability of the other debtors.
JOINT INDIVISIBLE OBLIGATIONS
1. If there are 2 or more debtors,
the fulfillment of or compliance with
the
obligation
requires
the
concurrence of all the debtors,
although each for his own share.
Consequently, the obligation can be
enforced only by proceeding against
all of the debtors.
2. If there are 2 or more creditors,
the concurrence or collective act of
all the creditors, although each for
his own share, is also necessary for
the enforcement of the obligation.
Effect of breach – If one of the joint
debtors fails to comply with his
undertaking, the obligation can no longer
be fulfilled or performed. Consequently,
it is converted into one of indemnity for
damages. Innocent joint debtors shall not
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
94
contribute to the indemnity beyond their
corresponding share of the obligation.
Effect of insolvency of a debtor – If one
of the joint debtors should be insolvent,
the others shall not be liable for his
share.
INDIVISIBILITY
1. refers to the
prestation which
constitutes the
object of the
obligation
2. plurality of
subjects is not
required
3. in case of breach,
obligation is
converted into 1 of
indemnity for
damages because of
breach, indivisibility
of the obligation is
terminated
SOLIDARITY
1. refers to the legal
tie or vinculum juris
& consequently to
the subjects or
parties of the
obligation
2. plurality of
subjects is
indispensable
3. when there is
liability on the part
of the debtors
because of the
breach, the
solidarity among the
debtors remains
KINDS OF SOLIDARITY
1. Active solidarity
 solidarity of creditors
 each creditor is empowered to
exercise against the debtor not only
the rights which correspond to him,
but also all the rights which
correspond to the other creditors,
with the consequent obligation to
render an accounting of his acts to
such creditors
 creates a relationship of mutual
agency among solidary creditors
2. Passive solidarity
 solidarity of debtors
 liability of each debtor for the
payment of the entire obligation,
with the consequent right to demand
reimbursement from the others for
their corresponding shares once
payment has been made
3. Mixed solidarity
 solidarity among creditors and
debtors
Effect of Assignment by Solidary
Creditor Without Consent of Others
1. assignee is co-creditor – no violation
of Article 1213 because there can be
no invasion of the personal or
confidential relationship
2. assignee is third person – co-creditors
and debtors are not bound by the
assignment
Effect of Novation upon Solidary
Obligation
1. If the novation is prejudicial, the
solidary creditor who effected the
novation shall reimburse the others
for damages incurred by them
2. If it is beneficial and the creditor who
effected the novation is able to
secure performance of the obligation,
such creditor shall be liable to the
others
for
the
share
which
corresponds to them, not only in the
obligation, but also in the benefits
3. If the novation is effected by
substituting another person in place
of the debtor, the solidary creditor
who effected the novation is liable
for the acts of the new debtor in case
the is deficiency in performance or in
case damages are incurred by the
other solidary creditors as a result of
the substitution.
4. If the novation is effected by
subrogating a third person in the
rights of the solidary creditor
responsible for the novation, the
relation between the other creditors
not substituted and the debtor or
debtors is maintained.
Effect of Compensation and Confusion
upon Solidary Obligation
1. If the confusion or compensation is
partial,
the
rules
regarding
application of payment shall apply.
This is without prejudice to the right
of other creditors who have not
caused
the
confusion
or
compensation to be reimbursed to
the extent that their rights are
diminished or affected.
2. If the confusion or compensation is
total, the obligation is extinguished,
what is left is the ensuing liability for
reimbursement within each group:
a. The
creditor
causing
the
confusion or compensation is
obliged to reimburse the other
creditors
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
b. The debtors benefited by the
extinguishments of the obligation
are obliged to reimburse the
debtor who made the confusion
or compensation possible.
Effect of Remission upon Solidary
Obligation
1. If the remission covers the entire
obligation, the obligation is totally
extinguished and the entire juridical
relation among the debtors is
extinguished all together.
2. If the remission is for the benefit of
one of the debtors and it covers his
entire share in the obligation, he is
completely released from the
creditors but is still bound to his codebtors.
3. If the remission is for the benefit of
one of the debtors and it covers only
a part of his share in the obligation,
his character as a solidary debtor is
not affected.
Effect of Payment by Solidary Debtor
1. Whole or partial extinguishment of
debt
2. Right to recover against co-debtor
3. Right to recover interest from time
the obligation becomes due
Effect of Loss or Impossibility of
Performance
1. If it is not due to the fault of the
solidary debtors, the obligation is
extinguished.
2. If the loss or impossibility is due to
the fault of one of the solidary
debtors or due to a fortuitous event
after one of the solidary debtors had
already incurred in delay, the
obligation is converted into an
obligation of indemnity for damages
but the solidary character of the
obligation remains.
Defenses available to a Solidary Debtor
1. Defenses derived from the very
nature of the obligation
2. Defenses personal to him or
pertaining to his own share
3. Defenses personal to the others,
but only as regards that part of the
CIVIL LAW COMMITTEE
debt for w/c
responsible
IN
the
CIVIL LAW
latter
are
DIVISIBLE OBLIGATIONS
 Those which have as their object a
prestation which is susceptible of
partial performance without the
essence of obligation changed.
INDIVISIBLE OBLIGATIONS
 Prestation is not susceptible of partial
performance, otherwise, the essence
of the obligation will be changed
NOTES:
 Divisibility or indivisibility of the
obligation refers to the performance
of the prestation and not to the thing
which is the object thereof.
 Intention of parties should be taken
into account to determine whether
obligation is divisible or not.
 GENERAL RULE: The creditor cannot be
compelled partially to receive the
prestation in which the obligation
consists; neither may the debtor be
required to make partial payments.
EXCEPTIONS:
1. When the obligation expressly
stipulates the contrary;
2. When the different prestations
constituting the objects of the
obligation
are
subject
to
different terms and conditions;
and
3. When the obligation is in part
liquidated
and
in
part
unliquidated.
OBLIGATIONS WITH A PENAL CLAUSE
 One
to
which
an
accessory
undertaking is attached for the
purpose of insuring its performance
by virtue of which the obligor is
bound to pay a stipulated indemnity
or perform a stipulated prestation in
case of breach.
 Purpose of Penalty:
1. To insure the performance of the
obligation;
2. to liquidate the amount of
damages to be awarded to the
injured party in case of breach of
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
96
2005 CENTRALIZED BAR OPERATIONS
the
principal
obligation
(compensatory); and
3. in certain exceptional cases, to
punish the obligor in case of
breach of the principal obligation
(punitive).
 GENERAL RULE: The penalty fixed by
the parties is a compensation or
substitute for damages in case of breach.
 EXCEPTIONS:
1. when there is a stipulation to the
contrary;
2. when the debtor is sued for
refusal to pay the agreed
penalty; and
3. when debtor is guilty of fraud
NOTE: Article 1228 does not apply to
these exceptions; there must be
proof of actual damages.
NOTES:
 The debtor cannot exempt himself
from the performance of the principal
obligation by paying the stipulated
penalty unless when the right has
been expressly reserved for him.
 The creditor cannot demand the
fulfillment of the principal obligation
and the satisfaction of the stipulated
penalty at the same time unless the
right has been clearly granted him.
When penalty may be reduced
1. If the principal obligation has been
partly complied with;
2. If the principal obligation has been
irregularly complied with; and
3. If the penalty is iniquitous or
unconscionable even if there has been no
performance.
1.
2.
3.
4.
5.
6.
7.
8.
9.
MODES
OF
EXTINGUISHMENT
OF
OBLIGATIONS (LFC3NARP2)
loss of the thing due
fulfillment of resolutory condition
compensation
condonation or remission of the debt
confusion or merger of rights of the
creditor and debtor
novation
annulment
rescission
prescription
payment or performance
Payment or Performance
 Means not only the delivery of money
but also the performance, in any
other manner, of an obligation.
Integrity of Payment
GENERAL RULE:
A debt shall not
be understood to have been paid unless
the thing or service in which the
obligation consists has been completely
delivered or rendered, as the case may
be.
EXCEPTIONS:
1. When the obligation has been
substantially performed in good faith;
2. When
the
obligee
accepts
performance,
knowing
its
incompleteness or irregularity &
w/out expressing any protest or
objection;
3. When there is an express
stipulation; and
4. When the debt is in part
liquidated and in part unliquidated.
Identity of Payment
 requires that the very thing, service
or forbearance, as the object of the
prestation, must be performed or
observed
Persons who may pay the obligation:
1. the debtor himself or his legal
representative
2. any third person
GENERAL RULE: Creditor is not bound
to accept payment or performance by a
third person.
EXCEPTIONS:
1. when made by a third person who
has an interest in the fulfillment
of the obligation;
2. when there is a stipulation to the
contrary.
Rights of 3rd person who paid the
obligation:
1.
If payment was made with
knowledge and consent of the
debtor:
a. can
recover
entire
amount paid
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
IN
CIVIL LAW
b. can be subrogated to all
the rights of the creditor.
If payment was made without
knowledge or against the will of
the debtor, he can recover only
insofar as the payment has been
beneficial to the debtor.
considered payment; not considered
legal tender and may be refused by
the creditor. It shall only produce the
effect of payment:
a. when it has been cashed or
b. when it has been impaired
through the fault of the creditor.
To whom payment must be made:
1. The person in whose favor the
obligation has been constituted;
2. His successor in interest; or
3. Any person authorized to receive it.
LEGAL TENDER

Such currency which may
be used for the payment of all debts,
whether private or public. The kind
of currency which a debtor can
legally compel a creditor to accept in
payment of a debt in money when
tendered by the debtor in the right
amount.

Legal tender of the
Philippines would be all notes and
coins issued by the Central Bank.

Section 52, R.A. No. 7653
1. 25c and above, legal tender up to
P50
2. 10c and below, legal tender up to
P20
2.
 GENERAL RULE: If payment is made to a
person other than those enumerated, it
shall not be valid.
EXCEPTIONS:
1. Payment made to a 3rd person,
provided that it has redounded to
the benefit of the creditor. Such
benefit to the creditor is
presumed in the following cases:
• If after the payment, the
third person acquires the
creditor’s rights;
• If the creditor ratifies the
payment to the third person;
• If by the creditor’s conduct,
the debtor has been led to
believe that the third person
had authority to receive the
payment.
2. Payment made to the possessor
of the credit, provided that it
was made in good faith.
Obligation to Deliver a Generic Thing

If
the
quality
and
circumstances have not been stated,
the creditor cannot demand a thing
of superior quality; neither can the
debtor deliver a thing of inferior
quality.
Rules in Monetary Obligations:
1. Payment in cash - must be made
in the currency stipulated; if it is not
possible to deliver such currency,
then in the currency which is legal
tender in the Philippines.
2. Payment in check or other
negotiable
instrument
not
Extraordinary inflation or deflation

unusual or beyond the
common fluctuation in the value of
currency, which the parties could not
have reasonably foreseen or which
was
manifestly
beyond
their
contemplation
at the time the
obligation was established.

Applies
only
to
contractual obligations

Requisites:
a. The decrease in the value of the
currency could not have been
reasonably foreseen by the
parties
or
beyond
their
contemplation at the time the
obligation was established ;
b. There must be a declaration of
such extraordinary inflation or
deflation by the Bangko Sentral.
Without such declaration, the
creditors cannot demand an
increase, and debtors a decrease,
of what is due to or from them.
(Ramos vs. CA, 275 SCRA 167 and
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
98
2005 CENTRALIZED BAR OPERATIONS
Mobil Oil Phils. vs. CA, 180 SCRA
651)
Place of payment
1.
Place stipulated by the
parties.
2.
No stipulation and the
obligation is to deliver a determinate
thing, payment shall be made at the
place where the thing might be at the
time the obligation was constituted.
3.
In any other case, the
payment shall be made at the
domicile of the debtor.
Special
a.
b.
c.
d.
Forms of Payment:
Application of payment
Dation in Payment
Payment by Cession
Tender
of
payment
Consignation
and
a. Application of Payment

Designation of the debt to
which the payment must be applied
when the debtor has several
obligations of the same kind in favor
of the same creditor.

Requisites:
a. there must be only 1 debtor &
only 1 creditor;
b. there must be 2 or more debts of
the same kind;
c. all of the debts must be due;
except: if there’s stipulation to
the contrary; or application of
payment is made by the party for
whose benefit the term has been
constituted; and
d. amount paid by the debtor must
not be sufficient to cover the
total amount of all the debts.
 GENERAL RULE: The right to designate
the debt to which the payment shall be
applied primarily belongs to the debtor.
EXCEPTION: If the debtor does not avail
of such right and he accepts from the
creditor a receipt in which the
application is made.
Legal Application of Payment (ART1254)
1. If neither the debtor nor the creditor
makes any application of payment, or
if it cannot be inferred from other
circumstances, the debt which is
most onerous to the debtor, among
those which are due, shall be deemed
to have been satisfied.
2. If the debts due are of the same
nature and burden, payment shall be
applied
to
all
of
them
proportionately.
b. Dation in Payment (DACION EN PAGO)
 Delivery
and
transmission
of
ownership of a thing by the debtor to
the creditor as an accepted
equivalent of the performance of the
obligation.
 Requisites:
a. existence of a money obligation
b. alienation to the creditor of a
property by the debtor with the
consent of the former
c. satisfaction
of the money
obligation of the debtor
c. Payment by Cession
 Debtor abandons all of his property
for the benefit of his creditors in
order that from the proceeds thereof,
the latter may obtain payment of
their credits.
 Requisites:
a. plurality of debts
b. partial or relative insolvency of
the debtor
c. acceptance of the cession by the
creditors
DATION IN
PAYMENT
PAYMENT BY
CESSION
1. one creditor
1.
plurality
creditors
2. not necessarily
in state of financial
difficulty
2. debtor must be
partially or relatively
insolvent
3. thing delivered is
considered
as
equivalent
of
performance
3. universality of
property of debtor is
what is ceded
4.
payment
extinguishes
obligation to the
extent of the value
of
the
thing
delivered as agreed
upon, proved or
implied from the
4. merely releases
debtor
for
net
proceeds of things
ceded or assigned,
unless
there
is
contrary intention
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
of
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
conduct
creditor
of
Consignation
 Deposit of the object of the
obligation in a competent court in
accordance with the rules prescribed
by law, after the tender of payment
has been refused or because of
circumstances which render direct
payment to the creditor impossible or
inadvisable.
 It is the principal act and judicial in
character.
 Special Requisites:
a. The debt sought to be paid must
be due;
b. There must be a valid and
unconditional tender of payment
or any of the causes stated by
law for effective consignation
without previous tender of
payment exists;
c. The consignation of the thing due
must first be announced to the
persons
interested
in
the
fulfillment of the obligation;
d. Consignation shall be made by
depositing the things due at the
disposal of judicial authority; and
e. The consignation having been
made, the interested parties shall
also be notified thereof.

Effects of consignation:
1.
If the creditor
accepts the thing or amount
deposited without contesting the
validity or efficacy of the
consignation, the obligation is
extinguished.
2.
If the creditor
contests the validity or efficacy
of the consignation or if the
creditor is not interested or
CIVIL LAW
unknown or is absent, the result
is a litigation. If the debtor
complied with all the requisites,
the obligation is extinguished.
the
d. Tender of Payment and Consignation
Tender of Payment
 Manifestation of he debtor to the
creditor of his decision to comply
immediately with his obligation.
 It is the preparatory act and
extrajudicial in character.
IN
GENERAL RULE: Consignation shall
produce effects of payment only if there
is a valid tender of payment.
EXCEPTIONS: (TIRAT or TRAIT)
1. creditor is absent or unknown, or
does not appear at the place of
payment
2. creditor incapacitated to receive
payment at the time it is due
3. when two or more persons claim the
right to collect
4. when the title of the obligation has
been lost
5. when without just cause creditor
refuses to give a receipt
NOTES:
 It


is the consignation which
constitutes a form of payment and
must follow, supplement or complete
the tender of payment in order to
discharge the obligation.
A valid tender of payment has the
effect of exempting the debtor from
payment of interest and/or damages.
If tender is made by means of a
check, such tender is valid because it
is an exercise of a right. Article 1249
is not applicable.
LOSS OF THE THING DUE
In Determinate Obligations to Give
GENERAL
RULE:
Obligation
is
extinguished.

Requisites:
1.
The
thing
which is lost is determinate;
2.
The thing is
lost without the fault of the
debtor; and
3.
The thing is
lost before the debtor has
incurred in delay.
EXCEPTIONS:
1. when by law, obligor is liable
even for fortuitous event;
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
100
2. when by stipulation, obligor is
liable even for fortuitous event;
3. when the nature of the obligation
requires the assumption of risk;
4. when the loss of the thing is due
partly to the fault of the debtor;
5. when the loss of the thing occurs
after the debtor incurred in
delay;
6. when the debtor promised to
deliver the same thing to two or
more persons who do not have
the same interest; and
7. when the debt of a certain and
determinate thing proceeds from
a criminal offense
In Generic Obligations to Give
 GENERAL RULE: Obligation is not
extinguished because the genus of a thing
cannot perish.
EXCEPTION: In case of generic
obligations whose object is a particular
class or group with specific or
determinate qualities (Limited Generic
Obligations)
In Obligations to Do
Obligation
is
extinguished
when
prestation becomes legally or physically
impossible.
Effect of Relative Impossibility or
Doctrine of Unforeseen Events (ART
1267)
 When the service has become
difficult as to be manifestly beyond
the contemplation of the parties, the
obligor may also be released
therefrom, in whole or in part.
 Requisites:
1.
The event or change in
circumstances could not have
been foreseen at the time of the
execution of the contract;
2.
It makes the performance
of
the
contract
extremely
difficult but not impossible;
3.
The event must not be
due to the act of any of the
parties; and
4.
The contract is for a
future prestation.
Principle of Subjective Impossibility
 When there is no physical or legal loss
but the thing object of the obligation
belongs to another, the performance
by the debtor of the obligation
undoubtedly becomes impossible.
Failure of performance is imputable
to the debtor. Thus, the debtor must
indemnify the creditor for the
damages suffered by the latter.
(Tolentino, Volume IV, p. 336)
Effect of Loss on Reciprocal Obligations
 First view (Tolentino, Volume IV, pp.
337-338) – If an obligation is
extinguished by the loss of the thing
or impossibility of performance
through fortuitous events, the
counter-prestation
is
also
extinguished. The debtor is released
from liability but he cannot demand
the prestation which has been
stipulated for his benefit. He who
gives nothing has no reason to
demand anything.
 Second View (JBL Reyes) – The loss or
impossibility of performance must be
due to the fault of the debtor. In this
case, the injured party may ask for
rescission under Article 1191 plus
damages. If the loss or impossibility
was due to a fortuitous event, the
other party is still obliged to give the
prestation due to the other.
CONDONATION OR REMISSION OF THE
DEBT
 An act of pure liberality by virtue of
which the obligee, without receiving
any price or equivalent, renounces
the enforcement of the obligation, as
a result of which it is extinguished in
its entirety or in that part or aspect
of the same to which the remission
refers.
 It is the gratuitous abandonment by
the creditor of his right.
 Requisites:
a. It must be gratuitous
b. It must be accepted by the
debtor
c. The
obligation
must
be
demandable
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
NOTE: Express condonation or remission
must comply with the formalities of
donation.
CONFUSION OR MERGER OF RIGHTS
 Merger of the characters of the
creditor and the debtor in one and
the same person by virtue of which
the obligation is extinguished.
 Requisites:
a. that the characters of creditor &
debtor must be in the same
person;
b. that it must take place in the
person of either the principal
creditor or the principal debtor;
and
c. it must be complete & definite
COMPENSATION
 Extinguishment in the concurrent
amount of the obligation of those
persons who are reciprocally debtors
and creditors of each other.
 Requisites:
a. there must be 2 parties, who, in
their own right, are principal
creditors & principal debtors of
each other (except in case of
guarantor, Article 1280);
b. both debts must consist in
money, or if the things due are
fungibles, they must be of the
same kind & quality;
c. both debts must be due;
d. both debts must be liquidated &
demandable;
e. there must be no retention or
controversy commenced by 3rd
persons over either of the debts
& communicated in due time to
the debtor; and
f. compensation must not be
prohibited by law.
Compensation
Confusion
1. two persons who
are mutual debtors
and creditors of
each other
2. there must be
at least two
obligations
1. one person where
qualities of debtor
and creditor are
merged
2. only one
obligation
Compensation
Payment
IN
CIVIL LAW
1. The requisites prescribe by law for
compensation are different from those
prescribed by law for payment.
2. Takes effect by
2. Takes effect by
operation of law
act of the parties
3. Capacity to give 3. Capacity to give
and to acquire is
and to acquire is
not necessary
essential
4. As a rule, it is
4. As a rule,
partial
complete and
indivisible
Compensation
Counterclaim
1. Requires 2
debts must consist
in money or if
fungibles, same
kind and quality
1. Not necessary
2. Both debts must
be liquidated
2. Does not require
that debts be
liquidated
3. Need not be
pleaded
3. Must be pleaded
to be effectual
Kinds of Compensation
1. Legal – takes effect by operation
of law
2. Voluntary – agreed upon by the
parties
3. Judicial – takes effect by judicial
decree
4. Facultative – when it can be
claimed by one of the parties
who, however, has the right to
object to it
Debts not subject to Compensation:
1. debts arising from contracts of
deposit
2. debts arising from contracts of
commodatum
3. claims for support due by
gratuitous title
4. obligations arising from criminal
offenses
5. certain obligations in favor of
government
NOTE: Taxes are not subject to set-off or
legal
compensation
because
the
government & taxpayers are not mutually
creditors & debtors of each other
(Francia vs. IAC, 162 SCRA 753).
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
102
Facultative Compensation
 This is compensation which can be set
up only at the option of a creditor,
when legal compensation cannot take
place because of want of some legal
requisites for the benefit of the
creditor. The latter can renounce his
right to oppose the compensation and
he himself can set it up. It differs
from
conventional
compensation
because it is unilateral while the
latter depends upon the agreement of
both parties. (Tolentino, Volume IV,
p. 367)
NOVATION
 Substitution or change of an
obligation by another, resulting in its
extinguishment
or
modification,
either by changing its object or
principal
conditions,
or
by
substituting another in place of the
debtor, or by subrogating a third
person in the rights of the creditor.
 Requisites:
a. a previous valid obligation;
b. agreement of the parties to the
new obligation;
c. extinguishment
of
the
old
obligation; and
d. validity of the new obligation.
Kinds:
As to its essence
a. Objective/Real - refers to the
change either in the cause,
object or principal conditions of
the obligations
b. Subjective/Personal - refers to
the substitution of the person of
the debtor or to the subrogation
of a 3rd person in the rights of
the creditor
c. Mixed
2. As to its form/constitution
a. Express - when it is declared in
unequivocal terms that the old
obligation is extinguished by a
new one w/c substitutes the
same.
b. Implied - when the old & new
obligation are incompatible w/
each other on every point.
1.
Test of Incompatibility
 Whether or not the old and new
obligations can stand together, each
having
its
own
independent
existence. If they can stand together,
there
is
no
incompatibility;
consequently, there is no novation. If
they cannot stand together, there is
incompatibility; consequently, there
is novation.
Forms of Substitution of Debtors:
Expromision - effected with the consent
of the creditor at the instance of the new
debtor even without the consent or even
against the will of the old debtor.
Requisites:
a. Initiative for substitution must
emanate from the new debtor
b. Consent of the creditor to the
substitution
Delegacion - effected with the consent of
the creditor at the instance of the old
debtor, with the concurrence of the new
debtor.
Requisites:
a. Initiative for substitution must
emanate from the old debtor
b. Consent of the new debtor
c. Acceptance by the creditor
Effect of insolvency of new debtor
Expromision – the new debtor’s
insolvency or nonfulfillment of the
obligation shall not revive the original
debtor’s liability to the creditor whether
the substitution is effected with or
without the knowledge or against the will
of the original debtor.
Delegacion – the creditor can sue the old
debtor only when the insolvency was prior
to the delegation and publicly known or
when the old debtor knew of such
insolvency at the time he delegated the
obligation.
NOTE: A change in the incidental
elements of, or an addition of such
elements to an obligation, unless
otherwise expressed by the parties, will
not result in its extinguishment.
CONVENTIONAL
SUBROGATION
ASSIGNMENT OF
RIGHTS
1. governed by Arts.
1300 to 1304
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
1. governed by Arts.
1624 to 1627
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
2. debtor’s consent
is required
2. debtor’s consent is
not required
3. extinguishes the
obligation and gives
rise to a new one
3. transmission of
right of the creditor
to third person
without modifying or
extinguishing the
obligation
4. defects and
vices in the old
obligation are cured
5. takes effect
upon moment of
novation or
subrogation
4. defects and vices
in the old obligation
are not cured
5. as far as the
debtor is concerned,
takes effect upon
notification
 Kinds of Subrogation
1. Conventional – takes place by
agreement of the parties; this kind of
subrogation requires the intervention
and consent of 3 persons: the original
creditor, the new creditor and the
debtor.
2. Legal
–
takes
place
without
agreement but by operation of law
because of certain acts (Article
1302).
GENERAL RULE: Legal subrogation
cannot be presumed.
EXCEPTIONS:
1. Creditor pays another creditor
who is preferred, without debtor’s
knowledge;
2. A third person not interested in
the obligation pays with the express
or tacit approval of the debtor; or
3. Even
without
debtor’s
knowledge, a person interested in the
fulfillment of the obligation pays
without prejudice to the effects of
confusion as to the latter’s share.
II. CONTRACTS
CONTRACT
 A contract is a meeting of minds
between two persons whereby one
binds himself, with respect to the
other, to give something or to render
some service (Article 1305).
 Elements
1.
2.
3.
IN
CIVIL LAW
Essential – those without which there
can be no contract.
a. Consent
b. Object or Subject Matter
c. Cause or Consideration
Natural – those derived from the
nature of the contract and ordinarily
accompany the same.
Accidental – those which exist only
when the parties expressly provide
for them for the purpose of limiting
or modifying the normal effects of
the contract.
Nominate contracts
 Those which have their own
distinctive individuality and are
regulated by special provisions of
law.
Innominate contracts
 Those which lack individuality and
are not regulated by special
provisions of law.
 Regulated by the stipulations of the
parties, by the general provisions of
the Civil Code on obligations and
contracts, by rule governing the most
analogous nominate contracts and by
the customs of the place.
 Kinds:
a. Do ut des - I give that you
give
b. Do ut facias - I give that you
do
c. Facio ut des - I do that you
give
d. Facio ut facias - I do that you
do
NOTE: According to some authorities.
do ut des in no longer an innominate
contract. It has already been given a
name of its own, i.e. barter or
exchange (Article 1638).
Characteristics of Contracts: (ROMA)
1. Relativity (ART 1311)
2. Obligatory Force and Consensuality
(ART 1315)
3. Mutuality (ART 1308)
4. Autonomy (ART 1306)
Relativity
GENERAL RULE: Contracts take effect
only between parties, their assigns and
heirs.
EXCEPTIONS:
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
104
1.
2005 CENTRALIZED BAR OPERATIONS
Stipulation pour atrui stipulation in favor of a third
person.
 Requisites:
a.
the stipulation
must be a part, not the
whole of the contract;
b.
the contracting
parties must have clearly
and
deliberately
conferred a favor upon a
third person, not a mere
incidental benefit or
interest;
c.
the
third
person
must
have
communicated
his
acceptance to the obligor
before its revocation;
d.
the favorable
stipulation should not be
conditioned
or
compensated by any kind
of obligation whatever;
and
e.
neither of the
contracting parties bears
the legal representative
or authorization of the
third person.
Test of Beneficial Stipulation – the
fairest test to determine whether the
interest of a 3rd person in a contract is a
stipulation pour atrui or merely an
incidental interest is to rely upon the
intention of the parties as disclosed by
their contract. Determine whether the
contracting parties desired to tender him
such an interest (Uy Tam vs. Leonard, 30
Phil. 471).
2. When a third person induces a
party
to
violate
contract
(ART1314)
 Requisites:
a. Existence of a valid contract;
b. knowledge of contract by
third person; and
c. interference by third person
without legal justification or
excuse.
3. Third persons who come into
possession of the object of the
contract creating real rights
4. Contracts entered into in fraud of
creditors
Mutuality
 The contract must bind both parties;
its validity or compliance must not be
left to the will of one of them. (ART
1308)
 The contract cannot have any
stipulation authorizing one of the
contracting parties (a) to determine
whether or not the contract shall be
valid, or (b) to determine whether or
not the contract shall be fulfilled.
Autonomy
 The parties are free to stipulate
anything they deem convenient
provided that they are not contrary
to law, morals, good customs, public
order and public policy. (ART 1306)
Consensuality
 Contracts are perfected by mere
consent and from that moment, the
parties are bound not only to the
fulfillment of what has been
expressly stipulated but also to all
consequences which, according to
their nature may be in keeping with
good faith, usage and law.
CONSENT
 Manifested by the concurrence of the
offer and acceptance upon the thing
and the cause which are to constitute
the contract.
 Requisites:
a.
Legal capacity of the
contracting parties
b.
Manifestation
of
the
conformity of the contracting
parties
c.
The parties’ conformity
to the object, cause, the terms
and conditions of the contract
must be intelligent, spontaneous
and free from all vices of consent
d.
The said conformity must
be real and not simulated or
fictitious
Offer
 A proposal made by one party to
another to enter into a contract.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
 It must be certain or
complete and intentional.
definite,
NOTE: Offer/proposal may be withdrawn
so long as the offeror has no knowledge
of acceptance by offeree.
Acceptance
 Manifestation by the offeree of his
assent to the terms of the offer.
 It must me absolute.
 A qualified acceptance constitutes
counter-offer.
NOTE: Acceptance may be revoked
before it comes to the knowledge of the
offeror.
Amplified Acceptance
 Under certain circumstances, a mere
amplification on the offer must be
understood as an acceptance of the
original offer, plus a new offer which
is contained in the amplification.
(Tolentino, Volume IV, p. 452)
Rule on Complex offers
1.
Offers are interrelated –
contract is perfected if all the offers
are accepted.
2.
Offers
are
not
interrelated – single acceptance of
each offer results in a perfected
contract unless the offeror has made
it clear that one is dependent upon
the other and acceptance of both is
necessary.
NOTES:
 Consensual contracts are perfected
from the moment there is a
manifestation
of
concurrence
between
the
offer
and
the
acceptance regarding the object and
the cause.
 Real contracts like deposit, pledge
and commodatum requires delivery of
object for perfection.
 Solemn contracts are those which
requires compliance with certain
formalities prescribed by law, such
prescribed form being an essential
element (i.e., donation of real
property).
 An offer made inter praesentes must
be accepted IMMEDIATELY. If the
parties intended that there should be
CIVIL LAW COMMITTEE
IN
CIVIL LAW
an express acceptance, the contract
will be perfected only upon
knowledge by the offeror of the
express acceptance by the offeree of
the offer. An acceptance which is
not made in the manner prescribed
by the offeror is NOT EFFECTIVE BUT
A COUNTER-OFFER which the offeror
may accept or reject. (Malbarosa vs.
CA, et al., G.R. # 125761, April 30,
2003)
 Contracts under the Civil Code
generally adhere to the Cognition
Theory (contract is perfected from
the moment the acceptance comes to
the knowledge of the offeror), while
transactions under the Code of
Commerce use the Manifestation
Theory (it is perfected from the
moment the acceptance is declared
or made).
PERSONS INCAPACITATED TO GIVE
CONSENT:
1. Minors
 EXCEPTIONS:
•
Contracts
where
the
minor is estopped to raise
minority as a defense through his
own misrepresentation
•
Contracts for necessaries
•
Contracts by guardians or
legal representatives
•
Voluntary fulfillment of a
natural obligation provided that
the minor is between 18-21 years
of age
•
Contracts of life, health
or accident insurance taken on
the life of the minor
2. Insane or demented persons, unless
the contract was entered into during
a lucid interval
3. Deaf-mutes who do not know how to
read and write
Effect of Misrepresentation of Age by
the Minor
 Misrepresentation by minors with
regard to their age when entering
into a contract shall bind them in the
sense that they are estopped
subsequently from impugning the
validity of the contract on the ground
of minority. It is necessary that the
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
106
2005 CENTRALIZED BAR OPERATIONS
misrepresentation must be active
(e.g. when minors specifically stated
in a contract that they were of age),
not merely constructive.
VICES OF CONSENT (VIMFU)
1. Violence - when in order to wrest
consent, serious or irresistible force
is employed.
2. Intimidation - when 1 of the
contracting parties is compelled by a
reasonable & well-grounded fear of
an imminent & grave evil upon his
person or property, or upon the
person or property of his spouse,
descendants or ascendants, to give
his consent.
3. Mistake - should refer to the
substance of the thing which is the
object of the contract, or to those
conditions which have principally
moved one or both parties to enter
into the contact.
 Must be mistake of fact and not of
law, except under Article 1334.

Requisites under Article
1334:
a.
Mistake must be
with respect to the legal
effect of an agreement
b.
Mistake must be
mutual
c.
Real purpose of the
parties must have been
frustrated.
4. Fraud - when, through insidious
words or machinations of 1 of the
contracting parties, the other is
induced to enter into a contract
which, without them, he would not
have agreed to.
5. Undue influence - when a person
takes improper advantage of his
power over the will of another,
depriving the latter of a reasonable
freedom of choice.
Reluctant Consent
 A contract is valid even though one of
the parties entered into it against his
wishes and desires or even against his
better judgment. Contracts are also
valid even though they are entered
into by one of the parties without
hope of advantage or profit.
(Martinez vs. Hongkong and Shanghai
Bank, 15 Phil. 252)
Simulation of Contracts
1. Absolute – when the contracting
parties do not intend to be bound by
the contract at all. Thus, an
absolutely simulated contract is VOID.
2. Relative – when the contracting
parties conceal their true agreement.
A relatively simulate contract binds
the parties to their real agreement,
when it does not prejudice a 3rd
person and is not intended for any
purpose contrary to law, morals, good
customs, public order or public
policy.
OBJECT
 The thing, right or service which is
the subject matter of the obligation
arising from the contract.
 Requisites:
a. It must be w/in the commerce of
man
b. It must be licit or not contrary
law, morals, good customs, public
order or public policy
c. It must be possible
d. It must be determinate as to its
kind
Things which Cannot be the Object of
Contract
1.
Things which are outside
the commerce of men
2.
Intransmissible rights
3.
Future
inheritance,
except
in
cases
expressly
authorized by law
4.
Services
which
are
contrary to law, morals, good
customs, public order or public
policy
5.
Impossible
things
or
services
6.
Objects which are not
possible of determination as to
their kind
CAUSE

The immediate,
direct and most proximate reason
which explains and justifies the
creation of obligation.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID

Requisites
a. Cause should be in existence at
the time of the celebration of the
contract
b. Cause should be licit or lawful
c. Cause should be true
 Rules:
1. In onerous contracts, the cause is
understood
to
be,
for
each
contracting party, the prestation of
promise of a thing or service by the
other.
2. In remuneratory contracts, the
service
or
benefit
w/c
is
remunerated.
3. In contracts of pure beneficence,
the mere liberality of the donor or
benefactor.
4. In accessory contracts (mortgage or
pledge), the cause is identical with
the cause of the principal contract,
that is, the loan from which it derives
its life and existence.
CAUSE
1. Absence of cause
2. Failure of cause
3. Illegality of cause
4. Falsity of cause
5. Lesion
EFFECT
the contract confers
no right and produces
no legal effect
does not render the
contract void
the contract is null
and void
the contract is void,
unless the parties
show that there is
another cause which
is true and lawful
does not invalidate
the contract, unless
(a) there is fraud,
mistake or undue
influence; or (b) when
the parties intended a
donation or some
other contract
FORM OF CONTRACTS
GENERAL RULE: Contracts shall be
obligatory, in whatever form they may
have been entered into, provided all the
essential requisites for their validity are
present.
EXCEPTIONS:
1.
2.
IN
CIVIL LAW
When the law requires
contract be in some form
that it may be valid
When the law requires
contract be in some form
that it may be enforceable
that a
in order
that a
in order
NOTES:
 Parties may compel each other to

comply with the form required once
the contract has been perfected.
(Article 1357)
Contracts under Art 1358 which are
required to be in some specific form
is only for the convenience of parties
and does not affect its validity and
enforceability as between them.
RA 8792 (E- COMMERCE ACT) provides
that the formal requirements to make
contracts effective as against third
persons and to establish the existence of
a contract are deemed complied with
provided that the electronic document is
unaltered and can be authenticated as to
be usable for future reference.
REFORMATION OF INSTRUMENTS
 Requisites:
a. meeting of the minds to the
contract
b. true intention is not expressed in
the instrument by reason of
mistake,
accident,
relative
simulation, fraud, or inequitable
conduct
c. clear and convincing proof of
mistake,
accident,
relative
simulation, fraud, or inequitable
conduct
Instances when there can be no
reformation:
1. Simple unconditional donations
inter vivos;
2. Wills;
3. When the agreement is void;
When one of the parties has brought an
action to enforce the instrument, no
subsequent reformation can be asked.
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
108
COMPARATIVE TABLE OF DEFECTIVE CONTRACTS
VOID
VOIDABLE
RESCISSIBLE
UNENFORCEABLE
1. Defect is caused
by lack of essential
elements or illegality
Defect is caused by vice
of consent
Defect is caused by
injury/ damage either
to one of the parties of
to a 3rd person
Defect is caused by
lack
of
form,
authority, or capacity
of both parties not
cured by prescription
2. Do not, as a
general rule produce
any legal effect
Valid and enforceable
until they are annulled
by a competent court
Valid and enforceable
until they are rescinded
by a competent court
Cannot be enforced by
a proper action in
court
3. Action for the
declaration or nullity
or inexistence or
defense of nullity or
inexistence does not
prescribe
Action for annulment or
defense of annulability
may prescribe
Action for rescission
may prescribe
Corresponding action
for recovery, if there
was total or partial
performance of the
unenforceable
contract under No. 1
or 3 of Article 1403
may prescribe
4. Not cured
prescription
Cured by prescription
Cured by prescription
Not
cured
prescription
5. Cannot be ratified
Can be ratified
Need not be ratified
Can be ratified
6. Assailed not only
by
a
contracting
party but even by a
third person whose
interest is directly
affected
Assailed only by
contracting party
a
Assailed not only by a
contracting party but
even by a third person
who is prejudiced or
damaged
by
the
contract
Assailed only by
contracting party
a
7. Assailed directly or
collaterally
Assailed
directly
collaterally
or
Assailed directly only
Assailed directly
collaterally
or
by
RESCISSIBLE CONTRACTS
 Contracts validly agreed upon but, by
reason of lesion or economic
prejudice may be rescinded in cases
established by law.
What contracts are rescissible
1. those entered into by guardians
where the ward suffers lesion of more
than ¼ of the value of the things
which are objects thereof;
2. those agreed upon in representation
of absentees, if the latter suffer
lesion by more than ¼ of the value of
the things which are subject thereof;
by
3.
those undertaken in fraud of creditors
when the latter cannot in any manner
claim what are due them;
4.
those which refer to things under
litigation if they have been entered
into by the defendant without the
knowledge and approval of the
litigants and the court;
all
other
contracts
especially
declared by law to be subject to
rescission; and
payments made in a state of
insolvency on account of obligations
not yet enforceable
5.
6.
 Requisites:
a. the contract must be rescissible
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
b. the party asking for rescission
must have no other legal means
c. to obtain reparation for the
damages suffered by him
d. the person demanding rescission
must be able to return whatever
he may be obliged to restore if
rescission is granted
e. the things w/c are the object of
the contract must not have
passed legally to the possession
of a 3rd person acting in good
faith
f. the action for rescission must be
brought w/in the prescriptive
period of 4 years
BADGES OF FRAUD:
1. Consideration of the conveyance
is inadequate or fictitious;
2. Transfer was made by a debtor
after a suit has been begun and
while it is pending against him;
3. Sale upon credit by an insolvent
debtor;
4. Evidence of indebtedness or
complete insolvency
5. Transfer of all his property by a
debtor when he is financially
embarrassed or insolvent;
6. Transfer made between father &
son, where there is present any
of the above circumstances
7. Failure of the vendee to take
exclusive possession of all the
property
Rescission in
Article 1191
1. It is a principal
action retaliatory in
character.
2. The only ground is
non-performance of
one’s obligation/s or
what is incumbent
upon him.
3. It applies only to
reciprocal obligation
4. Only a party to the
contract may demand
fulfillment or seek
the rescission of the
contract.
Rescission Proper
in Article 1381
1. It is a subsidiary
remedy.
2. There are 5
grounds to rescind.
Non-performance by
the other party is not
important.
3. It applies to both
unilateral and
reciprocal obligations.
4. Even a 3rd person
who is prejudiced by
the contract may
demand the rescission
of the contract.
5. Court may fix a
period or grant
extension of time for
the fulfillment of the
obligation.
6. Its purpose is to
cancel the contract.
IN
CIVIL LAW
5. Court cannot grant
extension of time for
fulfillment of the
obligation.
6. Its purpose is to
seek reparation for
the damage or injury
caused, thus allowing
partial rescission of
the contract.
VOIDABLE CONTRACTS
 Those in which all of the essential
elements for validity are present,
although the element of consent is
vitiated either by lack of capacity of
one of the contracting parties or by
VIMFU.
What contracts are voidable
1. Those where one of the parties is
incapable of giving consent to a
contract
2. Those where the consent is vitiated
by mistake, violence, intimidation,
undue influence or fraud
Causes of extinction of action to annul:
1. PRESCRIPTION
 the action must be commenced
within 4 years from:
a. the time the incapacity ends;
b. the time the violence,
intimidation
or
undue
influence ends; or
c. the time the mistake or fraud
is discovered.
NOTE: Discovery of fraud must be
reckoned to have taken place from
the time the document was
registered in the office of the register
of deeds. Registration constitutes
constructive notice to the whole
world. (Carantes vs. CA, 76 SCRA
514)
2. RATIFICATION
 Requisites:
a. there must be knowledge of
the reason which renders the
contract voidable
b. such reason must have ceased
and
c. the injured party must have
executed an act which
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
110
2005 CENTRALIZED BAR OPERATIONS
expressly
or
impliedly
conveys an intention to waive
his right
3. By loss of the thing which is the
object of the contract through fraud
or fault of the person who is entitled
to annul the contract.
NOTE: If the object is lost through
fortuitous event, the contract can still be
annulled, but the person obliged to
return the same can be held liable only
for the value of the thing at the time of
the loss, but without interest thereon.
UNENFORCEABLE CONTRACTS
 Those which cannot be enforced by
proper action in court unless they are
ratified
What contracts are unenforceable
1.
those entered into
in the name of another by one
without or acting in excess of
authority;
2.
those where both
parties are incapable of giving
consent; and
3.
those which do not
comply with the Statute of Frauds
Agreements within the scope of the
Statute of Frauds (EXCLUSIVE LIST):
1. Agreements not to be performed
within one year from the making
thereof;
2. Special promise to answer for the
debt, default or miscarriage of
another;
NOTE: This does not refer to the original
or independent promise of the debtor
to his own creditor. It refers rather to
a collateral promise.
3. Agreement in consideration of
marriage other than a mutual promise
to marry;
4. Agreement for the sale of goods, etc.
at a price not less than P500.00;
5. Contracts of lease for a period longer
than one year;
6. Agreements for the sale of real
property or interest therein; and
7. Representation as to the credit of a
third person.
 The contracts/agreements under the

Statute of Frauds require that the
same be evidenced by some note,
memorandum or writing, subscribed
by the party charged or by his agent,
otherwise, the said contracts shall be
unenforceable.
The statute of frauds applies only to
executory contracts, not to those
that are partially or completely
fulfilled.
Ratification of contracts in violation of
the Statute of Frauds
1. Failure to object to the presentation
of oral evidence to prove such
contracts
2. Acceptance of benefits under these
contracts
VOID CONTRACTS
 Those where all of the requisites of a
contract are present but the cause,
object or purpose is contrary to law,
morals, good customs, public order or
public policy, or contract itself is
prohibited or declared void by law.
What contracts are void
1. Those whose cause, object or purpose
is contrary to law, morals good
customs, public order or public
policy;
2. Those whose object is outside the
commerce of men;
3. Those
which
contemplate
an
impossible service;
4. Those where the intention of the
parties relative to the principal
object of the contract cannot be
ascertained; and
5. Those
expressly
prohibited
or
declared void by law.
INEXISTENT CONTRACTS
 Those where one or some or all of the
requisites essential for the validity of
a contract are absolutely lacking.
What contracts are inexistent
1.
Those
which are absolutely simulated or
fictitious; and
NOTES:
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
San Beda College of Law
85
MEMORY AID
2.
Those
whose cause or object did not exist at
the time of the transaction.
NOTE: The principle of In Pari Delicto is
applicable only to void contracts and not
as to inexistent contracts.
Principle of In Pari Delicto
 GENERAL RULE: When the defect of a
void contract consists in the illegality of
the cause or object of the contract and
both of the parties are at fault or in pari
delicto, the law refuses them every
remedy and leaves them where they are.
EXCEPTIONS:
1. Payment of usurious interest
2. Payment of money or delivery of
property for an illegal purpose,
where the party who paid or
delivered repudiates the contract
before the purpose has been
accomplished, or before any
damage has been caused to a 3rd
person.
3. Payment of money or delivery of
property
made
by
an
incapacitated person
4. Agreement or contract which is
not illegal per se & the
prohibition is designed for the
protection of the plaintiff
5. Payment of any amount in excess
of the maximum price of any
article or commodity fixed by law
or regulation by competent
authority.
6. Contract whereby a laborer
undertakes to work longer than
the maximum # of hours fixed by
law.
7. Contract whereby a laborer
accepts a wage lower than the
minimum wage fixed by law.
8. One who lost in gambling because
of fraudulent schemes practiced
on him is allowed to recover his
losses [(Art. 315, 3 (b), RPC] even
if gambling is a prohibited one.
Rules when only one of the parties is at
fault:
1. Executed Contracts:
a. Guilty party is barred from
recovering what he has given to
the other party is barred from
2.
IN
CIVIL LAW
recovering what he has given to
the other party by reason of the
contract.
b. Innocent party may demand for
the return for the return of what
he has given.
Executory Contracts - Neither of the
contracting parties can demand for
the fulfillment of any obligation from
the contract nor may be compelled
to comply with such obligation
NATURAL OBLIGATIONS
 They are real obligations to which the
law denies an action, but which the
debtor may perform voluntarily.
 It is patrimonial, and presupposes a
prestation.
 The binding tie of these obligations is
in the conscience of man, for under
the law, they do not have the
necessary efficacy to give rise to an
action.
Examples
of
natural
obligations
enumerated under the Civil Code:
1. Performance after the civil obligation
has prescribed;
2. Reimbursement of a third person for
a debt that has prescribed;
3. Restitution by minor after annulment
of contract;
4. Delivery by minor of money or
fungible thing in fulfillment of
obligation;
5. Performance after action to enforce
civil obligation has failed;
6. Payment by heir of debt exceeding
value of property inherited; and
7. Payment of legacy after will have been
declared void.
ESTOPPEL
 A condition or state by virtue of
which an admission or representation
is rendered conclusive upon the
person making it and cannot be
denied or disproved as against the
person relying thereon.
 Kinds:
1. Estoppel in Pais (by conduct)
a. Estoppel by silence
b. Estoppel by acceptance of
benefits
2. Technical Estoppel
CIVIL LAW COMMITTEE
 CHAIRPERSON: Romuald Padilla  ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad  EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
2005 CENTRALIZED BAR OPERATIONS
112
a.
b.
c.
d.
Estoppel by deed
Estoppel by record
Estoppel by judgment
Estoppel by laches
LACHES or “STALE DEMANDS”
 Failure
or
neglect,
for
an
unreasonable and unexplained length
of time, to do that which, by
exercising due diligence, could or
should have been done earlier; it is
negligence or omission to assert a
right
within
reasonable
time,
warranting a presumption that the
party entitled to assert it either has
abandoned it or declined to assert it.
 Elements:
a. Conduct
on
part
of
the
defendant, or of one under whom
he claims, giving rise to the
situation of which complaint is
made and for which the
complaint seeks a remedy
b. Delay
in
asserting
the
complainant’s
rights,
the
complainant having knowledge or
notice, of the defendant’s
conduct
and
having
been
afforded the opportunity to
institute a suit
c. Lack of knowledge or notice on
the part of the defendant that
the complainant would assert the
right on which he bases his suit
d. Injury to the defendant in the
event relief is accorded tot the
complainant, or the suit in not
held to be barred
LACHES
1. concerned
effect of delay
PRESCRIPTION
with
1. concerned
fact of delay
with
2.
question of
inequity
of
permitting the claim
to be enforced
2. question or matter
of time
3. not statutory
3. statutory
4. applies in equity
4. applies at law
5. not based on a
fixed time
5. based on a fixed
time
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE
AND
SUBJECT CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda
Tolentino(VC-Acads), Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VCEDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine
Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann
Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)