Obli Notes of Florida Endrino

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1Florida Endrino

Civil Law

LECTURE NO. 1

1. Diferentiate civil obligation rom natural obligation: In civil action, theobligation can be enforced by court action; natural obligations cannot beenforced by court action. Civil obligations are based on positive law and naturalobligations are based on equity. Example: Te !ebt i" 1#$% te value o tee"tate &$% te natural obligation i"' o pay !". Te ba"i" o ($' #nder

the law, the heir is liable to the e$tent of the value which they actually receivedfro% the decedent, therefore, if they received &", they will only be liable for &",the !" will be a natural obligation. Example: !ate! eb.1% 1))*% + promi"e topa, - te amount o 1$% "igne! b, . To ti" !a,% not a "ingle centavoa" been pai!. /at 0in! o obligation i" te promi""or, note' It %ay beconsidered as a civil obligation when ' de%anded in writing the pay%ent fro% (before the action prescribes because written de%and will toll the running of prescription of the obligation. )owever, if there was no de%and, since theobligation is a pure obligation, therefore, de%andable at once, the prescriptiveperiod begins to run on feb.*,+, 1- years has already lapsed, the action alreadyprescribed, the obligation beco%es a natural obligation. +" ti" promi""or,note a pure obligation' (es. hy/ 0ecause there is no period stated in the

pro%issory note. ecau"e no perio! i" "tate! in te promi""or, note% it i"a pure obligation' 0y e$press provision of the law, ust because the paritesfailed to state the period in the pro%issory note, does not necessarily %ean thatit pertains to a pure obligation, because fro% the circu%stances it can beinferred that the parties shall 2$ the period, if this is pro%issory note is acontract of loan it is possible that there is a period. /at po""ible contractma, te promi""or, note be tat in!ee! ti" ma, pertain to a pureobligation' 3 contract of sale. No2 aving "ai! tat% i ti" promi""or,note pertain" to an obligation 2it a perio!% tereore to!a, teobligation in ti" promi""or, note% i no !eman! 2a" ma!e% a naturalobligation' 4ot necessarily, the period of prescription shall be counted fro% thedue date where the obligation %ust be paid. 0ecause if this is with a period, and

the agree%ent is that the obligation should be paid after 2ve years, today this isstill a civil obligation, the pre"criptive perio! "all commence to run romte time te cau"e o action accrue". +N REL3T+ON TO T4E E-3$5LE O6T4E 4E+R /4O 53+D T4E DET O6 T4E 63T4ER: - !ie!% i" eir" are3C% 3C pai! to 1#$ 7ve !a," ater -8" !eat% ater 9 mont"tereater te eir" are tr,ing to recover claiming tat te e"tate i"onl, &$% can te eir" recover te value rom ' hey cannot recover if the pay%ent is voluntary. In natural obligation, if the payer voluntarily paid, thecreditor has the right to retain what has been paid. Te ue"tion ere i" tat2eter or not te pa,ment i" voluntar,' +nci!entall,% in naturalobligation i te pa,er pai! 2itout rau!% treat% or an, vitiation beingemplo,e! upon te eir"% te pa,ment i" voluntar, pa,ment% correct'4ot necessarily. /en 2ill tere be pa,ment 2itout vitiation% ,et tepa,ment i" not voluntar,' /at con"titute" voluntar, pa,ment innatural obligation' he payer 5new that he is not co%pelled to pay but thepayer paid, it is a voluntary pay%ent. Te more rea"onable ue"tion ere i"tat i" tere "uc a per"on 2o i" cra;, enoug to pa, even i e a"no obligation to pa,' (es, 2, 2oul! e !o tat' Conscience. 6reciselybecause the obligation is based on ustice 7but this is not possible here in the6hilippines8. he %ore reasonable answer is reputation. ut un!er te act"te pa,ment i" voluntar,' 4ot really, because when they paid it was only 9days after the death of ', by that ti%e nor%ally, they do not 5now the estate of the decedent.

<. Obligation i" !e7ne! un!er 3rt. 11=9 a" an obligation to give% to !o% ornot to !o. +" it correct to "a, tat te !e7nition i" not accurate> teremu"t be anoter pre"tation 2ic i" not to give' 4o, the prestation not togive is included in not to do. Obviou"l, in ti" !e7nition% tere are onl,tree obligation" a" to pre"tation"% 2ic are' 1. :bligation to give; *.:bligation to do; and &. :bligation not to do. rie?,% ti" !e7nition i"critici;e! becau"e it i" incomplete% 2, i" it incomplete' It pertains only



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to the part of the debtor. o the critics, obligation is a concept that would includeboth the debt side and the credit side. 3n! ,ou agree to tat' (es sir. Tecre!it "i!e an! te !ebt "i!e are t2o a"pect" o an obligation% !o ,ouagree to tat' (es. @o a cre!it i" an obligation' 4o, they are actuallyopposite of each other. he dierence is that a person who has a right canco%pel the other; he cannot be co%pelled to perfor% his right. hus, in6hilippine law, rights and obligations are dierent %atters. 3n obligation

tereore ma, not be 2aive! but a rigt ma, be exerci"e! or not.

&. /at are obligation" 2itout agreement% an! = "ituation" giving ri"e toti" obligation' hese are obligations arising fro% all other sources besidescontract. hus, in answering the second question, you %ust cite e$a%ples< 1.6ay%ent of da%ages to the person who was inured by negligence $$$. his isbecause agree%ent is required only in contracts, it is not required in all otherobligations, is only an essential ele%ent of a contract. Tereore con"i!ere!a" e""ential element" o obligation" are' 1. 3ctive subect 7creditor orobligee8; *. 6assive =ubect 7debtor or obligor8; &. >uridical tie; and . 6restation.Tereore% in a contract o lea"e% 2o i" active "ubAect an! 2o i" tepa""ive "ubAect' he obligation is a reciprocal contract, hence, the passive

subect is the lessor in the aspect of delivering the property leased to the lessor,and the active subect is the lessee in the aspect of de%anding for the deliveryof the thing leased. +n a contract o "ale% 2o i" te pa""ive "ubAect' Itdepends, the contract of sale is a bilateral contract, hence as to pay%ent thebuyer is the passive subect and the vendor is the active subect, while as to thedelivery of the thing sold, the buyer is the active subect while the vendor is thepassive subect. Contract re"ulting to a reciprocal obligation i" calle!' 3bilateral contract. Te ue"tion ere i"% o2 come te !ebtor i"con"i!ere! a" te pa""ive "ubAect' )e can be co%pelled to perfor% theobligation. 4e i" te one to be compelle! tereore pa""ive' #nder6hilippine law, the creditor is the active subect, because if the creditor does notde%and for the perfor%ance of the obligation there will be no co%pulsion

because if there is no de%and, there will be no delay. he debtor is actuallyfavored by law for instance< 1. In an obligation to pay a su% of %oney without astipulation as to the place of pay%ent, the place of pay%ent will be where/ heplace of do%icile of debtor.

*. $entione! a" one o te e""ential reui"ite" i" te pre"tation% al"o0no2n a" 2at' he obect. Tereore it pertain" to a ting' 4o.ecau"e' he obect pertains to conduct.

=. 3noter e""ential reui"ite i" te Auri!ical tie% al"o 0no2n a"% a!vinculum Auri" or legal tie or eBcient cau"e. /en 2oul! tere be a

Auri!ical tie% 2at i" it" purpo"e' It binds the party to the obligation; there isa uridical tie when one of the sources of obligation is present. hese sources of obligations, anyone of the% binds the parties. Li5e for instance, law, it is the lawthat will bind the parties. /at obligation a" no Auri!ical tie' "oralobligations.

9. @ource" o obligation": 119!< 3re tere oter "ource" o obligation"a"i!e rom to"e provi!e! b, la2' 4o. 3rt. 119! is e$clusive based on thecase of =agrada.

(. /o ma, be con"i!ere! priv, to te contract' )eirs, successors in interest.

. here are certain facts which need not be proven, there is no need to allege suchfacts because the law presu%es the e$istence of a right and presu%es thee$istence of a fact, hence, it is not always true that whoever alleges the fact%ust prove the e$istence of such fact.

). Contract": 4o2 2oul! ,ou 0no2 i tere are obligation" ari"ing rom acontract' 0y considering the ter%s and conditions of contract, by reading theter%s and conditions of the contract, you will deter%ine whether or not there is



&Florida Endrino

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an obligation arising fro% such contract. Incidentally, !oe" it mean tat terei" no "tipulation% tereore an agreement i" not part o te contract'4ot necessarily, an obligation %ay arise even without a stipulation li5e warrantyagainst eviction. 3 limitation provi!e! b, la2 a" to term" an! con!ition"'It %ust not be contrary to law, %orals, public policy. ut beore an obligationari"e"% 2at tran"pire"' 4egotiation. Negotiation i" initiate! b, 2at':er. During te negotiation% te oferor 2it!re2 te ofer% 2ill tere

be an obligation' (es. /at "ource' It depends if there is bad faith, if there isnegligence on the part of the oeror in not co%%unicating as soon as possiblethe sa%e is ua"i!elict. If bad faith, 3rt. 1+, *-, and *1 I which is la2% butte @C generall, 2oul! con"i!er te "ource o obligation a" tort.

1#. 5eople8" car Ca"e: +""ue: hether or not co%%ando is liable for the entirea%ount of da%ages instead of only 1,---.--

11. Te o2ner o te ou"e let te ou"e or a "ort vacation% te ver,nigt% te, let% teir ou"e 2a" burne!% te neigbor" "ave! "ome o teir appliance"% 2at i" te relation"ip' 4egotioru% gestio, !o ,ouagree' 4o, these appliances are not %anaged; this will fall under quasi?delict

because in negotioru% gestio there %ust be abandon%ent or neglect of theproperty. 3nother reason why this is not negotioru% gestio, this falls under theother quasi?contracts. 3n obligation ari"ing rom ua"icontract% even i te obligor 2a" not unAu"tl, enrice!% or i" it reuire! tat e mu"t beunAu"tl, enrice! i e 2ill not perorm an obligation un!er ua"icontract' @espite *1*, i" it po""ible tat in a ua"icontract tere 2illbe no unAu"t enricment' (es, read the provisions on negotioru% gestio,e$pressly provided by law, even if the owner is not enriched or unustly enriched,if he has an obligation. +t 2ill appear tereore tat te principle" bein!ua"icontract" are not reall, te principle o unAu"t enricment. Tu"%in oter countrie"% te principle bein! ti" obligation" i"% li0e in teU.@. la2 an! ua"icontract" are con"i!ere! to all un!er one "ource

onl, implie! contract"% rom tat alone te ba"i" i" con"ent given b,te obligor.

1<. 3 bougt a "ac0 o rice rom % 59<=% 3 gave 1 to % gave te"ac0 o rice to 3% gave *(= to 3% 2at relation"ip 2a" create!'=olutio indebiti. /at i" te obligation' o return the e$cess 61--.

1&. Te ua"icontract" are provi!e! or in article <19=<1(=% i" ti"exclu"ive' 4o. it is not e$clusive as provided for in article *1&.

1*. 3ct or omi""ion puni"able b, la2' hese are cri%es or delicts. 3" toti" "ource% once a per"on in criminall, liable% e i" al"o civill, liable'4ot necessarily, because are cri%es that does not %a5e the cri%inal civilly liablesuch as treason and rebellion. Te 0in!" o civil liabilit, ari"ing rom ti""ource' Aestitution, reparation, and inde%ni2cation. Ever, time tere i" ti"civil liabilit,% all o te"e are pre"ent' 4ot necessarily. Example: what willbe lac5ing/ Aestitution is lac5ing in rape. /en i" re"titution pre"ent' heft.ut even in mur!er or omici!e% re"titution i" not po""ible. + a per"oncommitte! an act puni"e! b, la2 an! tere i" "uBcient evi!ence toprove "uc act be,on! rea"onable !oubt% nonetele""% i" it po""ible orim not to be committe!' (es, if the law e$e%pts hi% fro% liability, whenthere is an e$e%pting circu%stance, such as %inority, so i tere i" exemptingcircum"tance tere i" civil liabilit,' (es. O to"e enumerate!% generall,%i" tere civil liabilit,' (es, 2en 2ill tere be no civil liabilit,% an! 2at2ill be te ba"i" tereo' Buasi?delict, 2, not !elict' 0ecause there is noconviction. If there is no conviction, there is no civil liability under delict. +n

Au"ti,ing circum"tance% can tere be civil liabilit,' 3s a rule no civilliability, e$cept paragraph .

1=. Tort"% culpa acuiliana% culpa extra contractual% ua"i !elict: Un!er<1(9 i" "impl,% 6ault or Negligence% i" tere a !iference' (es. Culpa



Florida Endrino

Civil Law

extra contractual i" a goo! name or ua"i !elict' his is outside of thecontract, if CEC, quasi delict/ his does not see% right, culpa e$tra contractual,outside of the contract, outside of the contract there are how %any sources of obligations, four, necessarily quasi delict/ No. Can there be negligence in theperfor%ance of an obligation arising fro% law, (es, can a gestor be negligent,

(es, but is that negligence quasi delict/ NO becau"e it 2ill all un!er ua"icontract. Te u"e o te 2or! tort" i" critici;e! becau"e' torts is not the

sa%e as quasi?delict, torts is a %uch broader ter% that quasi delict, becausetorts include intentional, %alicious, while quasi?delict includes negligence only,i" ti" correct' *1! 2rst article in quasi?delict, it provides for fault ornegligence, it did not %ention negligence only. he ne$t article *1!!, fro% thisarticle, %ay an act be the basis of liability under two sources of obligation, e".te onl, obligation provi!e! b, la2 i"' )e cannot recover twice. @o i 32a" able to recover rom one ca"e% e 2ill not ave te rigt to recoverin an, oter ca"e% correct' e" he =upre%e Court held that he can recoverthe dierence if the second award is greater for instance in case 1 1--D Case *19-D, he has the right to recover 9-D, but not <=#. Ultimatel,% the clai% of the author that quasi delict should be li%ited to negligent act, has not beensupported by the ustices of the =C, the =C would always clai%, that a single act

%ay be a basis of an action under delict, under quasi delict, %ay be even undercontract if there is a pre?e$isting contract, it is up to the aggrieved party tochoose his cause of action, however, if he chooses one cause of action, he %ustco%ply to the require%ents of the cause of action, for e$a%ple he chose delict,then he has to have the accused convicted. 0ut if contract, the law alreadypresu%es that there is negligence in case of non perfor%ance. Ti"recommen!ation tat ua"i !elict "oul! be limite! to negligent acta" no ba"i" un!er te la2% an! a" no application ere in our countr,%te be"t argument" to ti" i""ue i" ti"% i te act i" puni"e! b, la2%,ou "oul! ave te rigt to recover civil liabilit, onl, be en"uring tatte accu"e! 2ill be convicte!% oter2i"e% tat 2ill encourage tepeople to commit crime% people 2ill tin0 tat it i" o0a, to commit a

crime becau"e te, can pa, teir 2a, out o it% o2ever% in te"ituation 2ere te u"ban! i" 0ille! te moter i" te onl, one let2it 7ve 0i!"% 2ill ,ou ault tem b, accepting te !amage"' I thin5 not.

19. 3 man burie! a victim o prince"" o te "tar"% te relative o tevictim appeare! te man !eman!e! pa,ment% rom te relative 5&##%can e !eman! rom te relative pa,ment or bur,ing te victim' heobligation created here is quasi delict, however, the %an cannot de%andpay%ent fro% the relative because the persons who %ay be co%pelled is thepersons who is liable to give the victi% support.

LECTURE NO. <

1. 3" to 2en te obligation 2ill ari"e' It will depend on the nature of theobligation. 4o2 2oul! ,ou0no2 2at 0in! o obligation' It depends on the stipulation of the party, if the source of obligation is the law then the law %ay provide how the obligation%ay be co%plied with. 4aving "ai! tat anoter important con"i!eration%2e "oul! go to te nature o te obligation a" to pre"tation 2eter iti" an obligation to give% to !o% or not to !o becau"e 2atever ma, bete cau"e o pre"tation tere 2ill be general rule" a" to o2 teobligation are to be complie! 2it.

<. @peci7call, xxx a vali! obligation% an obligation to give a generic ting2at 2oul! be te "ource o ti" obligation' /at contract' /oul! tatbe a vali! obligation a" to te "ale o te car' C3N T4ERE E 3 F3L+DOL+G3T+ON 3R+@+NG 6RO$ 3 CONTR3CT O6 @3LE +NFOLF+NG 3GENER+C T4+NG' No "peci7c ting a" been agree! b, a part,. /en2oul! tere be a vali! "ale o a car 2ic i" a generic car' hen a thing,though generic is capable of being deter%ined without a need of a newagree%ent. Tereore% a car per "e a" an obAect o a "ale cannot be a



9Florida Endrino

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vali! "ale. Tereore% ma, tere be a vali! obligation to !eliver ageneric ting a" generic a" a car or a con!o unit% i tere i" "ucobligation it 2ill ari"e rom 2at "ource' (es, it %ay arise fro% othersources li5e a legacy, in a will a car is given to an heir, %aybe a donationinvolving a car, no particular, the law does not require a speci2c thing in orderfor an obligation to arise.

&. 3""uming in te 2ill o - a car 2a" given% + ereb, give a car to m,avorite gran!cil! 3% no2 upon te !eat o -% te executor !elivere!to 3 a bran! ne2 To,ota ari"% 3 reu"e! to accept te car an!!eman!e! or a bran! ne2 $it"ubi"i lancer% 2o i" correct' In anobligation to deliver a generic thing and the features of the thing has not beendeter%ined, the law provides that the debtor cannot deliver an inferior 5indneither the creditor can de%and for a superior thing. Te problem in ti" rulei" tat o2 2oul! 2e 0no2 i te ting being ofere! i" Au"t teappropriate ting% 2at i" "uperior an! inerior i" ver, "ubAective' hepurpose of the testator. /at !o ,ou tin0 2oul! be te purpo"e o tete"tator tat te gran!cil! i" entitle! to a better car' hen for instancethe purpose of the testator is to give the grandchild a race car. 4aving "ai!

tat% tereore te cil! ma, be entitle! to a car better tan ari"' 4otnecessarily. @o 2at po""ible circum"tance" 2oul! afect te claim' If theestate cannot aord the car, the legiti%es %ight be aected. @o 2at i" te"olution' "ay be the e$ecutor %ay deliver a cheaper car li5e an altis not anevolution. 3gain "ec. 1<*9 i" ver, muc relevant rule a" regar!"obligation to !eliver a generic ting.

*. 3 oblige! im"el to !eliver a bran! ne2 $it"ubi"i lancer !lx <##blac0% !ue October &#% October <=% te cre!itor !eman!e! or te!eliver, o te car% 3 !i! not !eliver until Nov. 1% te car e inten!e! to!eliver to 2a" !e"tro,e! probabl, o eartua0e% can 3 be compelle!to !eliver te car' (es the debtor can be co%pelled to deliver the thing. +" 3

alrea!, in !eault' he de%and here is pre%ature; de%and should be %adewhen the obligation is already due for a person to incur in delay. 4aving "ai!tat can 3 be compelle! to perorm te obligation' (es because thereason here is the obect involved is a generic thing and when a generic thing islost because of fortuitous event, the obligation is not e$tinguished becausegeneric things do not perish. +n oter 2or!"% in obligation" to give a ver,important con"i!eration i" 2eter a ting to be !elivere! i" generic or!eterminate.

=. Obligation to !eliver a limite! generic ting% li0e one o te or"e" o 3% = o te or"e" o 3 !ie!% 2at i" te efect' It depends on the nu%berof horses that 3 has, because if 3 still has other horses then there are otherhorses that %ay be delivered, the obligation is not e$tinguished. 3n obligationto !eliver a limite! generic ting 2ill onl, be extingui"e! i all o teting belonging to tat group 2ill peri" !ue to ortuitou" event.

9. 3n obligation to !eliver a !eterminate ting% te principal obligation o te !ebtor ere i"' he very thing which he pro%ised to deliver in other wordsi 3 te !ebtor promi"e! to !eliver to i" To,ota ari"% but in"tea!% eofere! to !eliver bran! ne2 $ "port" car 2ort *$% 2ill te obligationbe extingui"e!' It %ay be e$tinguished; while the creditor %ay not beco%pelled to he %ay accept the delivery of another thing. No2 in ti""cenario% 2at i" te mo!e o extingui"ment' 4ovation, %ore speci2cally,dacion in pay%ent which shall be governed by law on sales.

(. /at are te acce""or, obligation" o an obligation to !eliver a genericting' 3n obligation to preserve and to ta5e good care of the thing with thediligence of a father of a good fa%ily. + te !ebtor xxx o2ever% te cre!itor2ante! to ol! te !ebtor liable or te lo""% but te cre!itor 2a" notable to prove tat te !ebtor aile! to exerci"e !ue care% can te !ebtorbe el! liable' (es, if there is another standard of care required, also 5nown as



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ut%ost diligence. Tereore% i tere i" no "tipulation a" to !egree o !iligence% tereore te !egree o !iligence i" !iligence o a goo! atero a amil,' 4ot necessarily, the law %ay provide for the degree of diligencenecessary, li5e what law, li5e the law on co%%on carrier.

. 3 oblige! im"el to !eliver an! to tran"er o2ner"ip to a emalepig% te agreement 2a" entere! Hanuar, 1% te !eliver, 2a" ma!e $a,

1% o2ever% 2en te pig 2a" !elivere! to % e !eman!e! or te!eliver, o piglet"% te piglet" 2a" born in 6ebruar, 1=% !oe" 3 avete rigt over te piglet' It will depend when the ti%e the obligation todeliver arises because the law provides that the creditor has the right to thefruits of the thing fro% the ti%e the obligation to deliver arises, however, he willonly have real rights over the fruits when the sa%e has been delivered. Ti"rea"onable becau"e or example 3 o2n" te pig% i e 2a" a2are tat ineb 1= te pig i" pregnant% tereore e 2oul! 2ant to !eliver te pigonl, ater * mont" 2en te pig a" alrea!, gave birt. Tereore teobligation a" to 2en to !eliver 2ill !epen! on' 6ir"t a" to te an"2ertat te obligation 2ill become !ue upon !eman! in 2at a"pect 2ill!eman! afect te time te obligation 2ill become !ue' Do ,ou agree

tat an obligation become" !eman!able upon !eman!' 3s I %entionedearlier, you cannot de%and if the obligation is not yet due, therefore de%andhas nothing to do with being due, because if it is not yet due you cannot de%andvalidly, therefore te efect o !eman! i" 2at' o suspend the running of the prescriptive period. Tereore an obligation become" !ue 2en' Itdepends on the obligation. /at 0in! o obligation' hether the obligation ispure, conditional, or with a ter%. Tu"% in 2ic obligation or obligation"2oul! te obligation be !ue an! !eman!able at once' 6ure obligation andconditional obligation when the condition is resolutory because upon thehappening of the resolutory condition it will e$tinguish the obligation.

). /en 2oul! tereore an obligation be con"i!ere! a pure obligation' 3

pure obligation is considered as such when it does not depend upon a future anduncertain event ti" i" apparentl, correct% !o ,ou agree 2it ti"' his iswrong, 2, 2rong' It should be future or uncertain event, 2, or 2ere lie"te !iference in or an! an!' if and it can pertain to only condition and youare not pertaining to ter%, while if you use or future will pertain to a ter%, thus,if or is used, both the ter% and condition is e$cluded.

1#. 3 promi""or, note i" 2at 0in! o obligation a" to perection an!extingui"ment' 3ccording to the =C in the case of 6ay v. 6alanca, it appearsto be an alternative obligation, it %ay be considered as a pure or conditionalobligation, because as worded there appears to be a condition but it alsoappears that it is de%andable at once. /at 2a" te pra"e in tatpromi""or, note 2ic i" te ba"i" tat te "ame i" 2it con!ition'#pon receipt of the share fro% the estate of @on 6alanca. On te oter an!%te pra"e U5ON DE$3ND is the basis why the 64 see%ed to be a pureobligation. Te trial court rule! tat te 5N 2a" a pure obligation% te

Au!ge ere a"0e! te plaintif% un!er 2at cau"e o action ave ,ou7le! ti" ca"e% upon receipt or upon !eman!' he plainti said uponde%and, the trial court here held that the action for co%pel perfor%ance hasalready prescribed. 3 5RO$+@@OR NOTE +@ CON@+DERED 3 5UREOL+G3T+ON% tereore it i" !eman!able at once% te pre"criptiveperio! begin" to run rom te time te cau"e o action accrue!% in ti"ca"e te perio! o pre"cription began to run at te time o execution.

11. 3R E-3$ IUE@T+ON: 3 gran!ater promi"e! te gran!cil! tate 2ill give te GC a bran! ne2 car i e pa""e! te bar examination%tereater te GC pa""e! te bar exam% te GC !eman!e! te G6 "ai!tat i" obligation i" voi! becau"e it !epen!" upon a pote"tativecon!ition% i" te G6 correct' In this case, the condition is passing the bare$a%, and therefore the answer is the obligation is valid because the condition isnot purely potestative, the condition does not purely depend on the will of the



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Civil Law

debtor. Te rule relative in ti" ca"e i" i te appening o te con!ition!epen!" upon te "ole 2ill o te !ebtor te obligation i" voi!. 4aving"ai! ti"% art. 11<% in a con!itional obligation 2en te con!ition!epen!" "olel, upon te 2ill o te !ebtor it i" al2a," voi! correct' 4otnecessarily. /en ma, it be a vali! obligation' hen the condition isresolutory. /at i" te rationale bein! ti"% 2, 2oul! te la2 con"i!eran obligation voi! 2en it !epen!" on a "u"pen"ive con!ition% te

appening o 2ic !epen!" "olel, on te 2ill o te !ebtor' 0ecausethen the debtor %ay %a5e sure that the obligation will not happen. /at i te!ebtor "ai!% + 2ill give ,ou m, car i + go to aguio% ti" i" voi!% but2at i e 2ent to aguio < !a," ater% can e be compelle! to !eliveri" car' he obligation is void; a supervening event that %a5es the obligationvalid will not %a5e the void obligation valid. 5a""ing te bar exam i" a mixe!obligation% C3@U3L% in oter 2or!" pa""ing te bar i" not !epen!entupon te 2ill o te examinee% 2,' 0ecause it will also depend upon the=C, or it depends upon the e$a%iner. Let8" a""ume tat pa""ing te bar i" apote"tative con!ition% tereore te G6 2a" correct tat i" obligationi" voi!' 4o, 2, not' 0ecause in order that the obligation to be void, thehappening of the event %ust depend solely on the will of the debtor, here, the

F will not ta5e the e$a%, the C, so the happning of the condition does notdepend on his own will.

1<. + te !ebtor promi"e! to pa, Ji i" "on !oe" not !ie o cancer2itin one ,earK 2at i" te "tatu" o te obligation' Tere are t2oimportant provi"ion" in relation to efect con!ition" to obligation" areart. 11< or te provi"ion about impo""ible obligation. /en tecon!ition i" an impo""ible con!ition% it 2ill annul te obligation%o2ever te @C 2ill not u"e te pra"e "all annul becau"e in act teobligation i" voi!% "all annul pre"uppo"e" vali! but it "all beannulle!% 2ic i" 2rong in te 7r"t place te obligation i" impo""ible%te obligation 2ill never ari"e. Te more accurate "tatement i" T4E

OL+G3T+ON +@ FO+D. +n ti" problem 2at 0in! o con!ition i" involve!'If the son does not die of cancer within 1 year. Ti" con!ition i"' =uspensive.5a""ing te bar exam% give me an example 2en it 2oul! be are"olutor, con!ition' I will give continuous support until you pass the bare$a%. +n te 7r"t problem% i i" "on !oe" not !ie% 2at 0in! o con!ition' 3side fro% suspensive, it is possible, it is negative, and %i$edcondition not only dependent on the will of the debtor but other factors as well.4aving "ai! ti"% i te obligation i" an impo""ible con!ition% tereorete obligation ma, not be a vali! obligation' It %ay, if the condition isnegative i%possible condition, because under the law, the law provides that thenegative i%possible condition is dee%ed not written, tereore te efect i"'

he obligation beco%es a pure obligation because no condition is attached tothe obligation. +n ti" !i"cu""ion tereore% te appening o tecon!ition !oe" not !epen! "olel, on te 2ill o te !ebtor% te con!itioni" al"o po""ible% "o 2en 2ill te obligation become !ue' If the son doesnot die of cancer after 1 year. Even beore te expiration o perio! ma, te"on be compelle! to pa,' (es when the son recovers fro% cancer or when theson dies of other causes not cancer.

1&. 3 agree! 2it % e promi"e! to give i" con!o unit to i 2ill notbecome a prie"t in 1# ,ear". < 2ee0" ater te agreement% entere!te "eminar,> tereore it i" alrea!, certain te obligation 2ill notari"e' he condition is suspensive; the condition %ay still be de%andable.0ecause when 0 entered the se%inary it does not necessarily con2r% that hewill beco%e a priest because he %ight still get out of the se%inary. Tecon!ition ere i" tat 2ill not become a prie"t% ti" i" a negativecon!ition% in a negative condition, ordinarily, an! 2en 2ill it be certaintat te con!ition 2ill not ari"e' If within the 1-th year he already beco%es apriest. Tereore% in relation to te obligation% i < 2ee0" ater teobligation entere! te "eminar,' 4ot necessarily.



+Florida Endrino

Civil Law

1). Te 0in!" o perio!" !i"cu""e! in te ca"e o Elei;egui: Legal,voluntary. Tere 2ill al2a," be a perio! in contract o "ale' 4o. 2en 2illtere be a perio! in a contract o "ale' 6eriod as to pay%ent of the pricewhich is 5nown as sale on credit, if it is install%ent sale on install%ent. his iscorrect because even on lease there is a period. Legal H a period 2$ed by law,E$a%ple< 6eriod provided by law li5e in contracts of lease if the parties failed toagree as to the period, depends on the %anner of pay%ent if annually 1 year

and if %onthly &- days. Hu!icial perio! 3rt. 11- if the obligor will pay if his%eans per%its hi% to do so.

<#. 3R E-3$ IUE@T+ON: 3 borro2e! mone, rom in Han 1 pa,able atte en! o te ,ear% te "ame 2a" "ecure! b, a real e"tate mortgage%te, agree! tat can occup, te ou"e an! lot !uring te perio!agree! upon% o2ever% b, Hune &# o tat ,ear% 3 ofere! to pa, teentire in!ebte!ne"" an! !eman!e! vacate te ou"e% can tecre!itor be compelle! to accept te pa,ment' Can te cre!itor becompelle! to vacate te ou"e' It depends whether the period is solely forthe bene2t of the debtor or both the debtor or the creditor. + te "ame i" orte bene7t o te !ebtor 2at i" te rigt' '$$

LECTURE NO. &

Ronillo v. C3

1. Example o a la2 2ic reuire" "oli!ar, liabilit,' 3rt. *1+, Co%%oncarrier, agency the agent and the principal %ay be held solidarily liable, legaciesand devisee who too5 possession of a property in favor of an heir and they lostthe sa%e.

<. +n "uret,"ip% ma, a "uretie" are el! "oli!aril, liable becau"e o tenature o teir obligation% 2at i" 2rong 2it tat' It is correct that the

surety is solidarily liable with the principal debtor but the obligation is notsolidary because of the nature of the obligation, a surety, a guarantor is called assuch only because of a stipulation or by agree%ent of a person. Te guarantorbin!" im"el b, agreement an! not b, te nature o te obligation.

&. Te provi"ion" on uman relation"% this would require solidarity, but the =Cin its %aority decision, would consider the act in violation of this provisions astortuous act, so this is solidarily obligation by law and not by the nature of theobligation.

*. $ala,an +n"urance: If the defendants are being held liable under dierentsources, there is no law which can be the basis of a conclusion that they shouldbe held solidarily liable.

=. 3% % an! C are te !ebtor" - an! are te cre!itor" te amountinvolve! i" &9#%###:

a. +n a Aoint obligation% o2 muc can - vali!l, !eman! rom 3.Mtere i" no agreement a" to re"pective "are"

b. 4aving pai! te amount 3 can be compelle! to pa, -% o2 muccan 3 recover rom a" reimbur"ement. MTere i" an agreement:3 1<% 1*% an! C 1* > - i" entitle! to 1&

c. 3n"2er:1. 3 cannot rei%burse fro% 0 %ore that what he has already paid

because he has a share in that obligation.<. Te i tere i" no "tipulation a" to te "are% te !ebt "oul!

be !ivi!e! euall, to te !ebtor"% "o it 2ill be 1<# eac% - canonl, compel 3 to pa, 9#% o2 muc can e recover rom '4one because he paid his share.

&. he second scenario< of &- is 1-, this 1J& of 1- is -, having paid- can 3 as5 for rei%burse%ent NO.

!. Iue"tion: @ame "cenario% but it i" a pa""ive "oli!ar, obligation:



1-Florida Endrino

Civil Law

e. 3n"2er:1. In passive solidarity, the solidarity shall pertain to the debtor therefore

the creditor is ointly bound, if they are ointly bound they can onlyde%and for their own share they cannot clai% for the shares of theirco?creditors, in the 2rst scenario, ' is only entitled to 1-D, the 1-D isfor the three debtors, it ust so happens that they are solidarily liableso ' can de%and the entire 1-D fro% any of the debtors either fro%

3,0, or C or co%bination. Can 3 recover fro% 0, (es, 3 can recover -D.*. =econd, since passive solidarity, ' can de%and fro% anyone the entire

1*-D, here 3 can de%and &-D fro% 3.&. +n a "oli!ar, obligation% any of the creditors can de%and the

ful2ll%ent of the entire obligation fro% any, all, or so%e of the debtors. herefore, without any agree%ent as to shares, - can !eman! rom3 &9#. 'Ks obligation is to give ( his share, however, with respect torei%burse%ent, you have to follow the agree%ent.

9. 3n action 2a" 7le! b, - again"t 3 i" !i"mi""e! b, pre"cription% ten al"o 7le! an action again"t 3% ma, te action pro"per' he action willprosper because the nature of their liability is oint, 2at !oe" tat ave to !o

2it te problem' If you loo5 at the facts, the action 2led by ( against 3 is2led long after the decision in the case beca%e 2nal and e$ecutory so if theaction was 2led, the action 2led by 3 has already prescribed, "oul! it betere i" more rea"on tat te action o "oul! be con"i!ere! a" toave pre"cribe!' + te action a" not pre"cribe!% o2 coul! tatappen% un!er 2at circum"tance"' 3rticle *1-, it %ay not haveprescribed as to ( because he %ay have de%anded 7in writing8. /ill te!eman! ma!e b, to 3 2oul! bene7t al"o - tereore te action o -"oul! ave al"o pro"per' 4o it will not bene2t ' because in oint obligation,the obligations are considered distinct fro% each other. No2% in ti"obligation% it 2a" a "oli!ar, obligation% i !eman! 2a" ma!e b, % 2oul!te action o - pro"per' he action of ' will prosper because in solidary

obligations the act of one solidary creditor will also bene2t the other creditors inthe sa%e %anner that the act of one creditor %ay preudice the other creditor, insolidary obligation, the creditors act as agent of one another. 3""umingneiter !eman!e!% te obligation i" Aoint% 2ill te action o pro"per'

he action will not prosper, the action of ( was 2led later than the action of ', sothere is %ore reason that the action of ( will not prosper, "o can it "tillpro"per' hen one of the obligation had not yet beco%e due because theobligation %ay be conditional.

(. 3R IUE@T+ON: +n a "oli!ar, obligation involving 3% % an! C in teamount o &## to -% - remitte! te "are o % tereater e!eman!e! pa,ment rom 3 2en C i" alrea!, in"olvent%

a. 4o2 muc can 3 be compelle! to pa, -'b. 4o2 muc can 3 recover rom '

3 co%%on answer to this question is that the entire obligation is e$tinguished )I= I= 4: A#E, in solidary obligation there is also partial re%ission orcondonation the creditor %ay choose to condone only a portion of the obligation,here again since there is no agree%ent as to the respective shares then eachone of the% is liable to pay 1--D, however, %inus the condonation of 1--D then*--D, 2, <## "ince un!er te act" C i" alrea!, in"olvent' 0ecause 3and 0 %ust shoulder the share of C, here, the proper word to use is equally,since equal shares, then they would also have to bear equally the share of theinsolvent creditor. he 1--D, 1--D, 1--D, one is condoned, why would 0 be liableif his debt is already condoned/ he condonation of 0 will not relieve hisobligation with his co?debtors, therefore, 3 having paid *--D he can recover 9-D fro% 0.

. + 3 a""uming 3 can be compelle! &##% an! 3 pai! - a ,ear ago% to!a,3 !eman!e! reimbur"ement rom % o2 muc can 3 reimbur"e rom '*--D, 2it intere"t' It depends on their stipulation; te !eect o ti"an"2er i" tat 2en tere i" no "tipulation' )ere there was no de%and on



11Florida Endrino

Civil Law

the part of 3, i" it not reuire! tat tere mu"t be !eman! to ma0e liable' 4o, this is one of the e$ceptions under the rule on delay that de%and isnecessary for other party to be considered to be in delay. @o 2en even i tere i" no !eman! te co!ebtor i" liable to pa, intere"t rom temoment te pa,ment 2a" ma!e.

). - 7le! an action again"t 3 2ic 2a" !i"mi""e! not on te groun! o

pre"cription% ten - 7le! an action again"t % 2ill te action pro"per'73ssu%ing this is a solidary obligation8 the obligation was e$tinguished forinstance by pay%ent, if the action of ' against 3 on the ground of pay%ent, willaction of ' prosper it being a solidary obligation/ @e2nitely not, in a =: ' canco%pel 3 to pay the entire a%ount, but if ' cannot de%and fro% 3 a singlecentavo that %eans the entire obligation was already paid, therefore what %orecan they recover fro% 0. +n a "oli!ar, obligation 2en 2ill te actionagain"t pro"per' If the reason for the dis%issal is a personal defense forinstance %inority, and therefore, neither ' nor ( can hold 3 liable, because hehas a personal defense. )owever, i ti" i" a HO% 2oul! te "ame !een"e"till be a proper Mminorit,% 2ill te action pro"per' 6ersonal defensecannot be used in oint obligation, in >: the obligation is distributed to the

debtors. +n Aoint obligation% te per"onal !een"e o 3 cannot be invo0e!b, . - 7le! an action again"t % and we said the action %ay prosper, a" too2 muc' *--D, why only *--D, in solidary obligation, in "oli!ar, obligationi" minorit, a total !een"e or partial !een"e' otal as to the %inor andpartial as to the group. +n Aoint obligation ti" i" not a !een"e a" to teoter !ebtor but it i" a total !een"e to te minor.

1#. /at i te groun! or te !i"mi""al o an action i" not per"onal!een"e% i an action i" 7le! again"t i" it po""ible tat te action 2illnot pro"per% an! !oe" it matter 2eter te obligation i" Aoint or"oli!ar,' If this is a oint obligation and ' condoned the entire obligation infavor of 3, can 0 be held liable/ Te an"2er i" in a Aoint obligation it i"

po""ible at lea"t a" to % te obligation o te"e !ebtor" 2ill not becon"i!ere! a" to ave been completel, extingui"e! becau"e - ave nobu"ine"" con!oning te entire obligation 2itout te con"ent o otercre!itor". hus, to the original question the action against 3 was dis%issed onthe ground that is not a personal defense to 3 but can also be invo5ed by 0,these are the defenses that goes into the nature of the obligation that is why theaction was dis%issed, the sa%e %ay be invo5ed by any of the debtors againstany of the creditors, e$a%ple< that the contract is void.

11. 3" to 2eter or not a" te cre!itor ma, recover rom anoter ,ouave to con"i!er te nature o te obligation% te !een"e" rai"e!%nature o te obligation% an! con"i!er te efect o te !een"e 2etertotal or partial.

1<. 3 an! oblige! tem"elve" to pa, : 3""ume - !eman!e! pa,mentor perormance o obligation rom 3% tereater al"o !eman!e!pa,ment rom 3% 3 opte! to pa, % can - ol! 3 liable' In disunctionobligation, the provisions on solidary obligation shall apply. )ere, if theprovisions on =: will be applied, the obligation is not e$tinguished, because for itto be e$tinguished, the creditor who %ade the 2rst de%and should be paid.#nder the fact, ' %ade the 2rst de%and so pay%ent should be %ade to '. /ati" te better an"2er' If there was an agree%ent as to who has the right tochoose to who% pay%ent to be %ade whether the debtor or the creditor.0ecause if the debtor has the right to choose, then the obligation ise$tinguished. /at i" te rationale 2, te provi"ion" o @O 2ill beapplie!' It will be bene2cial to the creditors because it will facilitate theful2ll%ent of the obligation. Do ,ou agree' 4o. If that is the only reason, thenwhy should they not %a5e all obligations solidary if it will facilitate the ful2ll%entof the obligation but obviously the law did not provide for such, to the contrarythe law provides that ust because there is a concurrence of debtors or creditorsthen that %eans any one of the debtors %ay be co%pelled to pay the obligation,



1*Florida Endrino

Civil Law

it is only under the three e$ceptions that an obligation %ay be considered assolidary obligation. Tu"% ti" !i"Aunctive% !oe" ti" all un!er one o tetree' 3pparently no, so why apply solidary obligation. Example: in thisobligation &--D it is possible that the parties %ay have $$$ under the &--D, 3Ksshare is *-D, 0 19D, C 9D, but since it is a solidary obligation can ' de%andfro% C the entire obligation/ e". hat is why the law would not presu%esolidarity.

1&. 3n obligation to !eliver 1## rice% !ivi"ible or in!ivi"ible' It dependson the intent of the parties. 4o2 2oul! ,ou 0no2 te intent o te part,'In other words when will the obligation be divisible or indivisible/ he debtor canvalidly deliver or perfor% the obligation partially whether the obligation of partialperfor%ance, then the creditor can be co%pelled to accept partial perfor%ancewould %a5e the obligation a divisible obligation.

1*. +n contract" o "ale a" to pa,ment o te price 2en 2ill tatobligation be !ivi"ible' If the pay%ent of the price is on install%ent basis.

1=. +" tere an obligation 2ic in it" nature an in!ivi"ible obligation'

E$a%ple< delivery of a dog. he obligation is indivisible because it is a delivery of a 2nite thing which is not capable of partial perfor%ance.

19. +n an obligation to !eliver% i" tere an obligation !eeme! b, la2 tobe !ivi"ible' @elivery of a building, it is i%possible to deliver an entire buildingfor a day.

1(. +n an obligation to !eliver 3% an! C% to - a !og M<= 2ort%!e"pite !eman! b, - upon 3% % an! C% te !og cannot be !elivere!% it!ie! !ue to te ault o 3% tu"% - 7le! an action again"t C% ma, teaction pro"per' he 2rst thing that you should consider is to deter%ine thenature of the proble%. his proble% pertains to a oint indivisible obligation. $a,

te action pro"per i te action i" or "peci7c perormance' It will notprosper because the obect is already dead, thus, the only recourse, in a ointsolidary obligation all the parties %ust be i%pleaded, having said this, therefore,since the action is not appropriate, will you agree that the action should bede%and of %oney/ If it will prosper up to how %uch/ 1J& of *9D. 4o2ever% inti" ca"e% 3 2ill onl, be liable or !amage" becau"e it 2a" 38" ault te!og !ie!. +n Aoint !ivi"ible obligation i tere i" a ailure to compl, inan, o te obligation te obligation i" converte! to monetar, obligationan! eac 2ill be liable or te !e"ignation o teir "are% i tere i" no!e"ignation euall,. Damage" "all be borne b, te part, at ault.

1. /at i" te nature o a penal clau"e' In an obligation with a penalclause, the penalty is accessory, a penalty by its very nature should result in agreater liability in case of breach, otherwise, it cannot be considered as penalclause.

1). +" it po""ible or te aggrieve! part, to recover an amount greatertan te penalt, agree! upon' (es when/ If any of the parties is guilty of fraud. If there is a stipulation that there should be an a%ount paid in addition tothe penalty.

<#. $a, a penalt, be re!uce!' hen the penalty is iniquitous.

<1. 3"i!e rom "tipulation% an, oter "cenario 2ere a per"on ma, beel! liable or an amount greater tan agree! upon' Aefusal to pay thepenalty.

<<. Tere i" an obligation to !eliver a or"e% i e ail"% e "all pa, 1$%in"tea! o !elivering te or"e can te !ebtor compel te cre!itor topa, 1$' (es the right to choose either to perfor% the obligation or pay thepenalty lies on the debtor. On te oter an!% on obligation 2it te penal



1&Florida Endrino

Civil Law

clau"e can te cre!itor !eman! perormance an! pa,ment o tepenalt,' #nder the law provides that such %ay happen if the right is clearlygranted to the creditor, e$a%ple< construction of proects, nor%ally there areperiods, and in those proects, it would be a co%%on stipulation that in casethere was delay, the contractor shall pay 1-D per day.

<&. + te penal clau"e i" voi! 2ill it afect te obligation' 4o, this is

accessory underta5ing, in the contract it is not a dierent contract, accessorycontract is a dierent contract.

<*. + te obligation i" voi! ma, te aggrieve! part, recover te penalt,agree! upon' 4o, however, if the legality of the obligation will give rise to thepenalty. he aggrieved party %ay have the contract annulled.

<=. Tere i" an agreement bet2een 3 an! % 3 oblige! im"el to !elivera con!o unit to i a 2ill marr, C 2itin 1 ,ear. +n t2o 2ee0"% ma, it bea"certaine! tat te con!ition 2ill not ari"e' he condition is a positivecondition shall %arry CM if 3 %arries another person not C.

<9. 3 oblige! im"el to !eliver an apartment to upon te con!itiontat pa""e" te bar% te apartment 2a" "ol! to C:

a. /o a" te better rigt' 0 because his right retroacts fro% the ti%eof the e$ecution of the contract.

b. /en 2ill C be not a bu,er or value' hen the agree%ent between3 and 0 has already been registered.

c. 3""uming i" entitle! to te apartment unit an! !eman!e! orte rent"% ma, e be entitle! to te rent"' he fruits will not accrueto the creditor since the obligation here is unilateral.

<(. Obligation 2it a term: Obligation on in"tallment ba"i". hus, underthe law, a day certain %ay not necessarily be in the calendar. 0ut obviously,

certain periods are within 1 year etc. the case of EliNague provides for the 5indsof periods<

a. Conventional 3greed upon by the parties.b. Legal 2$ed by law this pertains to perfor%ance of obligation and not

right. E$a%ple inco%e ta$ %ust be paid every 3pril 19.c. Hu!icial perio! period 2$ed by the court but the court can 2$ the period

in certain circu%stances<i. /en te !etermination o te perio!" !epen!" "olel, on

te !ebtor% te reme!, o te cre!itor i" to go to court.ii. 3rt. 11)1% rigt to re"cin!% rigt to compel perormance. +n

ti" ca"e% te ver, 7r"t ting to !etermine i" 2eter terei" a perio! or none% i tere i" no perio!% i" tere anintention on te partie" to ave a perio!' + tere i"% a" teperio! expire!' + it a" not expire!% it i" onl, 2en tecourt 2ill 7x te perio!.

<. $illare ca"e: here %ust be a contract for court to 2$ the period, if there isno contract the court cannot 2$ the period.

<). 3 borro2e! mone, rom 2it te agreement tat 3 2ill !eliver acar to % te latter can u"e te "ame until pa,ment a" been ma!e. Can be compelle! to accept te pa,ment an! can e compel 3 to returnte car' his will depend on whether the period is 2$ed for the bene2t of thedebtor. If it is for the bene2t of the debtor, he cannot be co%pelled to pay but%ay co%pel the debtor to accept pay%ent before the arrival of the period. :nthe other hand, if it is for the bene2t of the creditor, 0 %ay co%pel 3 to pay thedebt, but he %ay not be co%pelled to accept. /a" te perio! or te bene7to te !ebtor or cre!itor alone' he period is for the bene2t of both. #nderthe facts the debtor has a period within which to pay, but the creditor is usingthe car for his own bene2t. )aving concluded that the bene2t is for both, the



1Florida Endrino

Civil Law

creditor cannot be co%pelled to accept before the period and the debtor cannotbe co%pelled to pay.

&#. 3 borro2e! mone, rom % pa,able at te en! o te ,ear% "ecure!b, a real e"tate mortgage% in marc te ou"e 2a" burne!% < 2ee0"ater te 7re% te cre!itor !eman!e! or te pa,ment o te !ebt% 2a"tat a vali! !eman!' #nder article 11+, the debtor loses a right to %a5e use

of the period and the obligation beco%es de%andable at once $$$ 2, 2oul!te !ebtor lo"e te rigt to u"e te perio! i it i" cau"e! b, ortuitou"event' 0ecause the creditor would not have loaned the %oney if it was notsecured, but it the debtor can provide a new security then he could %a5e use of the period. + te !ebtor i" in"olvent% ma, e "till be able to provi!e or"ecurit,' (es. his friends %ay help hi% provide for security.

&1. Obligation" involving multiple pre"tation":a. LO@@ or +$5O@@++L+T: 2at i" te efect o lo"" or impo""ibilit,

o one pre"tation": 7r"t con"i!er te nature o te obligation2eter it i" conAunctive% alternative% or acultative.

i. ConAunctive he obligation is not e$tinguished because to

e$tinguish the obligation, all has to be co%plied with, so even if onebeco%es incapable of being perfor%ed, the rest has to beperfor%ed. If the loss is caused by the debtor, he will be liable forthe da%ages.

ii. 3lternative @eter%ine if the choice has already beenco%%unicated. + te lo"" i" !ue to te !ebtor beore tecoice i" communicate! the obligation is not e$tinguishedbecause he has other prestations to choose fro%. + te cre!itorxxx

b. /en 2oul! te alternative obligation become "imple' If theperson who has the right to choose %ade his choice and hasco%%unicated his choice. +" con"ent o te oter part, reuire!' 4o.

/o a" te rigt to coo"e' 3s a rule, the debtor has the right tochoose, unless such right is e$pressly granted to the creditor.

c. /at i te pre"tation" become impo""ible to perorm !ue to teault o te !ebtor an! te coice i" 2it te !ebtor' he debtorshall be liable to the obligation which was last lost.

d. +n an alternative obligation% beore te communication o tecoice% < pre"tation" 2ere lo"t !ue to te !ebtor% an! te la"tpre"tation became impo""ible to perorm !ue to ortuitou" event%i" te !ebtor liable' 4o because the obligation is still alternative sincethe no choice has been co%%unicated yet.

e. /at i te !ebtor a" te rigt to coo"e% an! e reu"e!% cancre!itor coo"e or te !ebtor' 4o because it is a right granted bylaw, the creditorKs re%edy is to 2le an action, the court %ay co%pel thedebtor to choose.

f. 63CULT3T+FE: 2en te la2 "a," onl, 1 pre"tation a" beenagree! upon% !oe" it mean tat tere i" onl, one pre"tation' 4othis is the principal prestation others are prestations which the debtor hasthe right tot perfor%. 3s consequence if the debtor refuses to perfor% theprincipal prestation, can he be co%pelled to perfor% the substituteprestations/ 4o the re%edy is da%ages, the right to substitution is theright of the debtor only. If the debtor caused the loss of substituteprestation can he be held liable/ 4o because it is not the prestation due.

LECTURE NO. *LECTURE NO. =

1. @pecial orm" o pa,ment:a. Dationb. 3pplication 0efore the courts do not consider application as special

for% of pay%ent.



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c. Ten!er o pa,ment an! con"ignation ender of pay%ent is not afor% of pay%ent consignation is a special for% of pay%ent.

!. Ce""ion

<. Di"tingui" one rom te oter or te re"t:a. Con"ent: i" con"ent o bot partie" reuire! in ti" "pecial orm

o pa,ment' here is no question that as to debtors consent is obviously

there because he is the one oering to pay, so if he is the one oering topay then there %ust be consent, but as to creditor/

i. Dation in pa,ment the creditor has to accept the delivery of athing instead of the other prestation for the satisfaction of the debt,if there is no consent on the part of the creditor, there can be nodation in pay%ent. C3@E: 6ilinve"t v. 5il. 3cetel,n

ii. 3pplication o pa,ment 3s a rule the consent of the creditor isnot required, it is only under certain circu%stances that the consentof the creditor will be present.

iii. 5a,ment b, ce""ion @e2nitely the consent of the creditor isrequired, if the creditor would not agree that the debtor wouldabandon the properties for the creditors to sell, there can be no

pay%ent by cession.iv. Con"ignation he consent of the creditor is not required even if

the creditor refuses to accept the thing delivered by the debtor tothe court by way of consignation, the court %ay declare theconsignation to be valid.

b. 3" to te efect o te !eliver, o te ting rom te !ebtor to tecre!itor or rom te !ebtor to te court i" tere tran"er o o2ner"ip'

i. Dation in pa,ment yes there is transfer of ownership, becausethat thing is being delivered and the ownership thereof is beingtransferred in satisfaction of his debt.

ii. 3pplication o pa,ment (es there is transfer of ownership. If %oney is delivered by the debtor to the creditor ownership passesto the creditor. he only question here in this for% of pay%ent is towhich debt the pay%ent will apply/ his is the issue in this 5ind of pay%ent, but as to ownership it passes i%%ediately to the creditor.

iii. Ce""ion :wnership does not pass because the creditor upondelivery because the creditors ust accept the things or those thingsto be sold and the proceeds thereof to be applied to theindebtedness.

iv. Con"ignation #pon the delivery of the thing to the courtownership does not auto%atically pass to the creditors because theconsignation %ay be void, if it is void, then ownership does not passto the creditor. )owever, if the creditor will accept thereafter, %aybe %onths or years thereafter, or %aybe the court declares theconsignation valid, then the ownership passes, however, by la2te efect o acceptance or te !eclaration b, te court tatte con"ignation i" vali! retroact" to te time o te!eliver, o te court a" i te cre!itor i" alrea!, te o2nero te ting at te time o te !eliver,.

c. Extent o Extingui"ment: $a, tere be total extingui"ment o te !ebt'

i. 3pplication o pa,ment 4o, there can never be totale$tinguish%ent, precisely because there is a need to deter%ine towhich debt the pay%ent is to be applied. 0ecause the a%ount paidis not suOcient to cover all the debts, because you will no longerhave a proble% is the a%ount is suOcient to cover all the debts you

ust have to invo5e the rules on application on pay%ents.4ecessarily there is no total e$tinguish%ent of the debts under therules on application of pay%ent.



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ii. Ce""ion the e$tinguish%ent will only be to the e$tent of the netpro2ts of the sale, unless the parties agree that the abandon%entwill result to the e$tinguish%ent of the entire debt. =o here, the netproceeds is the basis of the e$tent of the e$tinguish%ent of thedebt.

iii. Con"ignation 0ecause this is a special for% of pay%ent it followsthe rule in pay%ent, thus as a rule partial perfor%ance is non

perfor%anceM therefore if the debtor delivers only a portion of hisdebt, then the consignation is null and void. Te exception 2illonl, be i te cre!itor 2oul! agree to te !eliver, o partialamount% ten to tat extent tere 2ill be partialextingui"ment.

iv. Dation in pa,ment here are authors who will ta5e the positionthat if there is @ation in pay%ent then the obligation is totallye$tinguished unless it is clear in the intention of the parties that itwill result only to partial e$tinguish%ent. 0ut is this the better rule/For e$a%ple if 3 is the debtor of 0 in the a%ount of 1" and 3delivered to 0 a car stating that it is to be applied to the a%ountthat 0 owes 3, the value of the car is 19-D, if the creditor accepted

the car, does that %ean that the entire obligation is e$tinguished/Ti" rule !oe" not "eem to be euitable% te ETTER RULE:3" a rule te extingui"ment i" onl, to te extent o tevalue o te ting !elivere! unle"" it i" clear rom teagreement o te partie" tat te !eliver, o a ting% nomatter te value% i" euivalent to te amount o teobligation.

&. @peci7c Rule":a. Dation in pa,ment 3gain in @ation a thing is delivered and ownership

thereof is delivered by the debtor to the creditor in satisfaction of his debt.@ation apparently will only apply to the delivery of the thing T4+@ +@ NOT

TRUE. Te @C a" rule! tat even rigt" can be te "ubAect o Dation or example: i ere!itar, rigt i" alrea!, ve"te! to te!ebtor% te !ebtor can !eliver i" rigt" to i" cre!itor or te"ati"action o i" !ebt. 3l"o% in one ca"e% a cre!it o2ing to te!ebtor ma, be !elivere! b, im to i" cre!itor or te "ati"actiono i" !ebt. 0ut ust li5e the other %odes of pay%ent, in order that therebe @ation there has to be an obligation to be e$tinguished 7C3=E< CitiNenKs=urety v. C3< 6ereN was clai%ing that with the e$ecution of deed of assign%ent that practically e$tinguishes his obligation under theinde%nity agree%ent by way of @ation, the scenario here was< a contractof sale was entered into, payable by install%ent, the buyer is 6ascualenterprises, to secure the ful2ll%ent of his obligation, a surety bond wase$ecuted in favor of the seller, not citiNenKs surety e$ecuted an inde%nityagree%ent ust in case it will be held liable under the bond, 6ascual 6ereNand his wife being the party thereto, CitiNenKs also had 6ereN e$ecute adeed of assign%ent over certain stoc5s. he surety obviously was heldliable under the bond, the surety went after 6ereN under the inde%nityagree%ent. 5ere; claime! tat te execution o !ee! o a""ignment 2a" a orm o Dation% but te act" "o2e! tat atte time te !ee! o a""ignment 2a" execute! tere 2a" noobligation un!er te in!emnit, agreement nor un!er te "uret,bon!. /,' ecau"e te contract 2ere all !ate! earlier tan tetime e 2a" ma!e liable% tereore tere 2a" no obligation ,et.@o 2at i" reall, te nature o !ee! o a""ignment' +t 2a" a ormo "ecurit, arrangement. Oter act" relie! upon b, te @C inruling tat te !ee! o a""ignment 2a" not Dation in pa,ment2a" tat ater te !ee! o a""ignment 2a" execute!% 5ere; al"oexecute! a real e"tate mortgage% "o 2, 2oul! e execute a reale"tate mortgage i i" obligation 2a" alrea!, extingui"e! b,Dation. 3l"o% in !ee! o a""ignment% tere 2ere partial pa,ment"



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ma!e% i tere 2a" Dation ten e 2oul! not ave ma!e tepa,ment".8

/at i" te la2 governing Dation' :thers would say that this isgoverned by the law of sales. If you will read 1*9, it would appear that@ation is governed by law of sales, but reading it %ore closely; the law onsales will only apply if the obligation is in %oney. For instance, 3 owes 0*-D, instead of paying cash, 3 oered his cell phone to 0 in satisfaction of

the obligation, there is here @ation and this will be governed by the law onsales as provided for in 1*9. Tolentino critici;e! ti" provi"ion%con"i!ering tat te tren! 2orl!2i!e i" to con"i!er ti" a" a ormo novation becau"e practicall, tere i" a cange in te obAect%rom mone, to a ting. RE$E$ERP 1<*= 2ill not appl, i te preexi"ting obligation i" not in mone,. For e$a%ple< 3 is obliged todeliver to 0 a horse, so instead of delivering a horse he delivered a car to0. 1*9 will not apply here because the pre?e$isting obligation is not in%oney, but it is to deliver a horse. =o in this case Novation "all appl,becau"e tere 2a" a cange! in te obAect o te obligation% romor"e to car. 3gain, going bac5 to olentinoKs criticis%, he said thatregardless of pre?e$isting obligation whether %oney or thing, still the law

that will apply is the law of novation. 3tt,. Uribe: I 2nd wisdo% in 1*9because, instead of paying in cash, 7refer to the cell phone e$a%ple8 thedebtor paid by giving his phone to the creditor, but is this not al%ostsi%ilar to the scenario where the debtor paid in cash and the creditor usedthe cash to buy the cell phone/ 3nd therefore the law on sales will govern.I thin5 1*9 will do.

b. 3pplication o pa,ment the only question relevant in this rule is to2ic !ebt 2ill te pa,ment be applie!'K the pre%ise of thisquestion is a debtor has two or %ore debts to one creditor but ma, terule" on application o pa,ment" be invo0e! i te !ebtor a" t2oor more cre!itor"' (es. 3" long a" a" to one cre!itor e a" t2o or

more !ebt". he law does not require that the debtor should only haveone creditor. For example: A’s creditors are XYZ, for the rules to beinvoked, he must have two debts to one creditor. et us sa! A owes X "##$, %#$, and &#$, now if A delivers to X '#$, the (uestion here is towhich debt will the pa!ment appl!) 1. 3@ 3 RULE: Te !ebt!e"ignate! b, te !ebtor% "o un!er te la2% te !ebtor a" terigt to !e"ignate to 2ic !ebt te pa,ment 2ill appl,. =o here, 3can designate the &-D to apply to 1--D or to 9-D or to *-D or &-D. 0uthaving said that, if A instructed the creditor to appl! the '#$ to %#$, canthe creditor be compelled to appl! the pa!ment to the %#$ debt ? 3@ 3RULE T4E 3N@/ER +@ NO because this is a special for% of pay%ent,the rules of pay%ent shall apply, the creditor cannot be compelled toaccept partial pa!ment, nor the debtor be compelled to perform partial

pa!ment. herefore, unless there is a stipulation giving the debtor a rightto designate to a debt that will constitute partial pay%ent, he cannotdesignate pay%ent to which the pay%ent should be applied. In the 2rstplace why would he designate it to the 9-D/ Te =# ma, be intere"tbearing. T4ERE6ORE% T4E R+G4T O6 T4E DETOR TO DE@+GN3TETO /4+C4 53$ENT @43LL 355L +@ NOT 3@OULTE% ONE O6 T4EE-CE5T+ON@ +@ 3@ TO 53RT+3L 53$ENT. =EC:4@ LI"I3I:4, 3delivered the &-D, he designated it for the pay%ent of the &-D debt,however, the &-D debt is interest bearing, can he co%pel the creditor toapply the pay%ent to the principal 2rst, then he will ust pay the interestlater/ NO E-5RE@@ 5ROF+@+ON O6 T4E L3/% 53$ENT @4OULD3L/3@ E 355L+ED TO +NTERE@T 6+R@T% +6 T4ERE 3RE E-CE@@T4EN T43T /+LL E T4E 3$OUNT 355L+ED TO T4E 5R+NC+53L.

)IA@ LI"I3I:4< 3 designated the &-D for the pay%ent of the &-D debt,but the &-D debt is not yet due. T4E L3/ REIU+RE@ T43T T4E DET+@ 3LRE3D DUE +N ORDER T43T T4E DETOR /OULD 43FE T4ER+G4T TO DE@G+N3TE @UC4 53$ENT TO T4E DET. hat is the%eaning of due here) he period %ust be 2$ed for the bene2t of the



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creditor or for both of the%. If it is not yet due, but the period is 2$edsolely for the bene2t of the debtor it !oe" not matter te !ebtor can!e"ignate "uc !ebt becau"e te perio! i" or i" bene7t. ut al"oe cannot var, an agreement 2ic te, a! a" to 2ic !ebt tepa,ment to be applie!.

5ROLE$: hat if 3 entrusted ' to apply the &-D to &-D debt, but thedebt is secured by a %ortgage, as instructed ' applied the pay%ent, he

issued a receipt stating that the &-D is applied to the &-D debt, however,days thereafter, 3 as5ed ' to apply the a%ount to another debt, the 9-D,toug te cre!itor cannot be compelle! to accept% e ma, accepti e 2ant" to. @o% i - agree"% an! e applie! te pa,ment o te=# !ebt in"tea! o te &#% tereater 3 2a" not able to pa, -a" to te &# !ebt% can - oreclo"e te mortgage' NOT 3N$OREP3 alrea!, pai! te &#% altoug it 2a" revive! M2en e co"etat te pa,ment be applie! to =# in"tea! te mortgage 2a"not revive! Mmortgage i" not revive! 2itout te con"ent o temortgagor.

@ECOND RULE: hat if the debtor did not designate the debt to whichthe pay%ent shall apply/ Te !ebt !e"ignate! b, te cre!itor. )e

would have the right to designate to which debt the pay%ent shall apply.)owever, is the debtor’s consent required in the designation madeby the creditor? (esP 0y e$press provision of the law, if in the receiptthe debtor sees that the pay%ent was applied to a particular debt, an!te !ebtor !oe" not agree to "uc application% e ma, reu"e toaccept te application.

T4+RD RULE: 4either the debtor nor the creditor %ade thedesignation. =cenario< the debtor %ade pay%ent; the creditor acceptedand issued a receipt without designating the particular debt, so to 2ic!ebt te pa,ment "all appl,' +T /+LL DE5END ON /4ET4ER T4EDET O6 T4E @3$E N3TURE 3ND URDEN OR /4ET4ER T4E DET+@ $O@T ONEROU@ O6 T4E$ 3LL. + all te !ebt" are o te "ame

nature an! bur!en% te la2 reuire" proportional application. 3"regar!" to te mo"t onerou" !ebt% appl, te pa,ment to te mo"tonerou" obligation. T3E NOTEP hat you should only go into theserules if the law would not guide you as to which debt the pay%ent shouldbe applied, there are guides li5e partial pay%ent, interest bearing, and thecircu%stances which %ay show the intention of the parties, i te"egui!e" are not pre"ent% ten tat i" te time ,ou go into te rule"con"i!ering te nature an! bur!en o te !ebt". +N DETER$+N+NG/4+C4 DET +@ T4E $O@T ONEROU@: is there a particular rule/ 4one.

he =C held that there is no hard and fast ruleP his is because each debthas its own features, for e$a%ple, there are debts which consist of biggera%ount the other s%aller a%ount but interest bearing, the other onesecured. For e$a%ple one debt is secured by real estate %ortgage andanother debt is secured by pledge, what is %ore burdenso%e/ Te !ebt"ecure! b, a real e"tate mortgage. )owever, real estate %ortgage%ay be constituted by one real estate, so consider if the real estate%ortgage constitutes a s%all lot and the pledge constitutes ships, 2ici" more onerou"' :bviously the debt secured by pledge constitutingships. T3E NOTE T43T 3LL 63CTOR@ 3RE CON@+DERED +NDETER$+N+NG /4+C4 +@ $ORE ONEROU@. If for instance in one debtthe debtor is %erely the guarantor and other debt he is the principal,apparently the debt in which he is the principal debtor is %ore onerous,but the common reason *iven b! few authors is because in this debt where he is a *uarantor, his liabilit! is onl! subsidiar!, in fact inchoate, hema! or ma! not be held liable because the principal debtor should +rst beheld in default then his properties dissolved before the *uarantor ma! beheld liable, UT T4+@ +@ 3 /RONG RE3@ON /4' If the rules onapplications of pay%ent are to be invo5ed, it presupposes as to the twodebts he is already liable, his liability is not %erely inchoate, and even if itis only subsidiary, he is already liable, in other words in this scenario forthe rules to be applied, the principal debtor should have defaulted and his



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properties e$hausted that is why the guarantor is liable, if he is not yetliable there is no reason to apply the rules on application of pay%entbecause tere i" onl, one !ebt% 2ic i" te !ebt to 2ic e i"te principal !ebtor. 0ut even considering that in the contract of guaranty the guarantor is already liable, which is %ore onerous, 3tty.#ribe< the debt %ore onerous is the debt to which the debtor is a principal,because in guaranty the guarantor %ay be able to recover what he paid to

the creditor fro% the debtor, in the debt to which he is a principal, hecannot recover anything by way of rei%burse%ent. One autor 2oul!claim: bigger amount i" more onerou" tan "maller amount. Isthere any basis for this clai%/ 3tt,. Uribe: I beg to disagree to this clai%,2rst, if the debt is one peso or two pesos or even one thousand pesosbigger in a%ount, does that really %atter in this country/ 0ut if you go bythe rules, if you follow this clai%, then what will happen to the rule thatthere are debts of the sa%e nature and burden because if the debts wouldhave 1 peso dierence, then that debt is already %ore onerous, "ince tela2 provi!e" tat proportional application to !ebt"% pre"uppo"e"tat te !ebt" are o !iferent amount". :0GI:#=L( )I= I= A:4.Example ti" i" 1$ te oter !ebt i" 1#% ,ou tin0 1$ i" more

onerou"% not nece""aril,% letKs say the debt is only 1-D but it is interestbearing, what should I pay 2rst/ :f course the 1-D interest bearing. hocares about the 1", after * years it is still 1"P 3gain the a%ount isirrelevant. 3nother, OLDER DET +@ $ORE ONEROU@. here is no basisto this clai%. In fact, older debts %ay be less onerous why/ ecau"e it i"about to pre"cribe.

c. Ce""ion or a""ignment ere the debtor would abandon or assi*n allhis properties to the creditor which properties will have to be sold b! thecreditor the net proceeds shall be applied to the credit. 6+R@T +@@UE: 3llthe properties of the debtor shall be delivered/ No tere are propertie"2ic are exempt rom execution. 0ut can the debtor deliver to the

creditor properties which are e$e%pt fro% e$ecution/ e"P 0ecause thatis a right which the debtor can waive, though he cannot be co%pelled he%ay abandon those properties to the creditor. )owever, tere arecertain propertie" 2ic cannot be te "ubAect o te claim o tecre!itor even 2it te con"ent o te !ebtor L+E T4E 63$+L 4O$E% o cour"e tere are bene7ciarie" o te amil, ome 2ocan obAect to te "ale tereo.

/at i te !ebtor i" 2illing to aban!on all i" propertie" an!te cre!itor" 2oul! reu"e% 2at i" te reme!, o te !ebtor'3uthors would say that the best re%edy of the debtor is to 2le an actionfor insolvency. In a way insolvency proceeding has its advantages,however, here in the 6hilippines business%en are really not 5een on 2lingan insolvency proceedings.

/at i te cre!itor" !i! agree or ti" 0in! o pa,ment butte, aile! to agree a" to o2 te, 2ill partition!i"tribution teprocee!"' 3tty. #ribe agrees that the rules on concurrence andpreference of credits because in these rules there are preferred debts andthose debts which are not preferred they shall be paid proportionately.

3llege! reuirement o e2 autor" tat in ti" orm o pa,ment% te !ebtor i" in"olvent. +n oter 2or!"% tere can be noce""ion i te !ebtor i" not in"olvent. 3tty. #ribe C3NNOT 3GREETO T4+@ REIU+RE$ENT because if you read 1*9 there is norequire%ent that the debtor %ust be insolvent for pay%ent of cession tota5e place. 3nother i%portant reason is the fact that this is by agree%entof parties, there can only be pay%ent of cession because the creditoragreed, as long as the debtor is willing to abandon the properties and thecreditors agree and the proceeds shall be applied to the debt, there iscession. Oter autor" claim tat te !ebtor "oul! be partiall,in"olvent% i" tere an, ba"i" to ti"' 4:4EP :nce a debtor failed toco%ply with his obligations and $$$ is insolvent. Tere i" no "uc tinga" partial in"olvent. he state%ent of 5roe""or @ta. $aria i" a



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better "tatement -this mode of extin*uishin* obli*ation would normall! be resorted to b! debtors who are in a +nanciall! dicult position./

!. Ten!er o pa,ment an! con"ignation Fist, let us go to the clai% of 5ro. Hura!o% a" a rule ten!er o pa,ment i" nece""ar, orcon"ignation to be vali!% correct' Aeading 1*9, there are how %anygrounds or causes for consignation wherein the law e$pressly providesthat tender of pay%ent is not required. In 1*9 there are about 9 grounds,

where the law provides that in those grounds tender of pay%ent is notrequired, obvious because in those grounds the creditor is not present. =oin those causes, there is no tender of pay%ent but the consignation isvalid. /at are te groun!" or cau"e" or con"ignation 2ereten!er o pa,ment i" nece""ar, un!er te la2' here the creditorrefuses to accept without ust cause. Tereore going bac0 to te"tatement ten!er o pa,ment i" reuire! or con"ignation to bevali!% it "eem" 2rong. 3@ 3 RULE TENDER O6 53$ENT +@ NOTREIU+RED% T4E ONL E-CE5T+ON TO T43T RULE +@ /4EN T4EGROUND 6OR CON@+GN3T+ON +@ T43T T4E CRED+TOR RE6U@E@ TO3CCE5T /+T4OUT HU@T C3U@E.

:n the other hand, Hura!o i" ver, muc correct in i" "tatement

tat -tender of payment by its very nature is extrajudicial” as youhave read in the case of @oco v. $ilintante% tender of pay%ent is %adeduring the pendency of the action, that consignation is void. ender of pay%ent should be %ade prior to consignation not during the pendency of the action. @O +T +@ +T@ FER N3TURE E-TR3HUD+C+3L +NC43R3CTER.

4ow, i te groun! or con"ignation reuire" ten!er o pa,mentan! te !ebtor "ent probabl, tree letter" to te cre!itorinorming te cre!itor tat J+ am 2illing to pa, m, !ebt xxxK i"ti" a vali! ten!er o pa,ment' NOP In order for tender of pay%ent tobe a valid tender of pay%ent, you have to actually oer the a%ount to thecreditor; +T +@ T4E 3CT O6 O66ER+NG T4E 3$OUNT /4+C4

CON@T+TUTE@ 3 F3L+D TENDER O6 53$ENT.In to the requisites of a valid consignation<

i. Tere mu"t be a !ebt to be extingui"e! a su% of %oney isdelivered not to e$tinguish a debt but to e$ercise a right, li5e theright of rede%ption, if the other party refuses to accept the %oney,then the person who has the right is not required to deliver to thecourt the a%ount by way of consignation because he is notintending to e$tinguish an obligation. E$a%ple< 3 a! te rigt tore!eem% e ofere! to re!eem% te oter part, reu"e! toaccept% 2en te action 2a" 7le! te !een!ant claime!tat te action "oul! be !i"mi""e! becau"e tere!emptioner 2a" not "incere in re!eeming te propert,becau"e i te re!emptioner 2a" "incere% 2en + reu"e! toaccept te mone, e "oul! ave !eliver te mone, to tecourt b, 2a, o con"ignation. Te @C: te claim i"erroneou"% becau"e te re!emptioner i" exerci"ing a rigt%an! in te exerci"e tereo tere 2a" reu"al 2itout Au"tcau"e% tere i" no nee! or con"ignation. ut i te intentioni" to extingui" an obligation an! te mone, 2a" reu"e!%tat i" 2en te !ebtor a" to go to te court an! !eliverte mone, b, 2a, o con"ignation.

ii. Te con"ignation mu"t be ba"e! on a groun! provi!e! b,la2 Is the enu%eration under 1*9 an e$clusive enu%eration/3tty. #ribe agrees with the position that the enu%eration does nothave to be e$clusive because as long as it would be %oreburdenso%e to the debtor if he will not be allowed to deliver thething or the %oney to the court, consignation should be allowed.@ome o te groun!" are:

a. /en 2itout Au"t cau"e te cre!itor reu"e" to i""uea receipt is the issuance of the receipt the operative factwhich e$tinguishes the obligation/ NOP in our urisdiction



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63("E4 I= )E ":@E :F E'I4#I=)"E4, )E AECEI6 I="EAEL( 34 EGI@E4CE. 0ut if the creditor refuses to issue areceipt or does not want to issue a receipt, it is better thatthe debtor does not give the pay%ent to hi%, because hecan easily deny that the debtor did not pay. 3ctually, in other

urisdiction, it is the issuance of the receipt that e$tinguishesthe obligation, this rule see%s to have an advantage because

it would %ini%iNe the litigation involving issues as topay%ent.

b. /en t2o or more per"on" claim te "ame rigt tocollect 3 good e$a%ple is an obligation to deliver acarabao, in this obligations three creditors are clai%ing fro%the debtor, becau"e tree per"on" are claiming to tecarabao tat 2ill give te per"on a rigt to !eliver tecarabao to te court b, 2a, o con"ignation' 4otnecessarily. he =C held that the debtor should deter%ine forhi%self the person who has the right over the thing or the%oney.

iii. Notice" reuire! or con"ignation to be vali!: 3T LE3@T

T/O: /,' 0ecause if the obligation pertain to an obligation topay on a %onthly basis, li5e rental, the =C as rule in the case of =:C:, T4ERE $U@T E 3T LE3@T T/O NOT+CE@ 6OR E3C43$OUNT /4+C4 EC3$E DUE Mso every %onth that thepay%ent is not accepted sent notice prior the consignation8. 0ut if there is only one debt, there should be two notices required, is itrequired that both notices should co%e fro% the debtor/ NOP 0utthe 2rst notice should co%e fro% the debtor prior the consignationand the second notice %ay co%e into the for% of su%%ons. +"notice reall, an e""ential reui"ite or te vali!it,'

:LE4I4: @:E= 4: 3AEE I) )I= GIE, he thin5s that evenwithout such notice the consignation %ay still be considered as

valid. 0ut it can be the basis of holding the debtor liable, this rule isbetter but T4+@ +@ NOT T4E RULE L3+D DO/N T4E@U5RE$E COURT. =EC:4@< if the pay%ent is %onthly and thecreditor already refused to accept the pay%ent in the 2rst %onththe defendant will question the necessity of second notices, sincethe creditor already 5nows that the debtor will again deliver to thecourt the pay%ent by way of consignation R3T+ON3LE: T4+@ +@TO G+FE T4E CRED+TOR T4E O55ORTUN+T TO C43NGE 4+@$+ND. /ic i" ver, true% te bigger te amount te more!iBcult to reu"e.

here are only two questions in consignation< 3ter te !eliver, o te mone, or te ting 2it te court% 2at i tereater temone, 2a" 2it!ra2n rom te court% tereater te !ebtoraile! to pa, te cre!itor% can te cre!itor "till go ater to"e 2oare "ub"i!iaril, liable or te !ebt Mli0e te mortgagor' 5RE$+@E4ERE +@: 3 i" in!ebte! to % 3 !elivere! a "um o mone, to tecourt b, 2a, o con"ignation o2ever% 3 2it!re2 te mone,%te !ebt i" "ecure! b, a mortgage% tereater 3 aile! to pa, tecre!itor% can te cre!itor oreclo"e te mortgage' It depend on the%anner how 3 was able to withdraw the %oney fro% the court. +6 3/+T4DRE/ T4E $ONE 3@ 3 $3TTER O6 R+G4T M2en even tecourt cannot reu"e te 2it!ra2al% an! ti" can appen i tecre!itor a" not ,et accepte! an! te court a" not ,et !eclare!te con"ignation to be vali!% in ti" "cenario% te !ebtor can "till2it!ra2 te mone, a" a matter o rigt at an,time% )#=, 4:@E0 )3= 0EE4 E'I4#I=)E@, 0EC3#=E I4 C:4=I43I:4 )E @E0ILL :4L( 0E E'I4#I=)E@ EI)EA 0EC3#=E )E CAE@I:A )3=3LAE3@( 3CCE6E@ :A )E C:#A )3= 3LAE3@( @ECL3AE@ )3 )EC:4=I43I:4 I= G3LI@, 30=E4CE :F )E : 4: :0LI3I:4 I=E'I4#I=)E@, )EAEF:AE 4: :0LI3I:4 I= AEGIGE@, )EAEF:AE IF

)E @E0:A I)@AE #4@EA )I= =CE43AI: 34@ F3ILE@ : 63(, )E



**Florida Endrino

Civil Law

CAE@I:A "3( =ILL F:AECL:=E )E ":A3E, 0EC3#=E )E:0LI3I:4 3= 4EGEA E'I4#I=)E@. 4O/EFER% +6 T4E/+T4DR3/3L +@ NOT 3@ 3 $3TTER O6 R+G4T% T4ERE6ORE 4E/3@ ONL 3LE TO /+T4DR3/ /+T4 T4E CON@ENT O6 T4ECRED+TOR 7ti" ma, appen eiter 2en te 2it!ra2al 2a"ma!e ater te acceptance or te 2it!ra2al 2a" ma!e ater te!eclaration b, te court tat te con"ignation 2a" vali!. I4 )I=

C3=E, )E CAE@I:A C:4=E4E@ : )E I)@A33L. )3 )366E4= : )E :0LI3I:4, #6:4 )E 3CCE634CE 0( )E CAE@I:A :A@ECL3A3I:4 0( )E C:#A )3 )E C:4=I43I:4 I= G3LI@, )E:0LI3I:4 I= E'I4#I=)E@, 34@ )EAEF:AE, )E4 )E 3":#43= I)@AE 0( )E @E0:A )E :0LI3I:4 3= AEGIGE@, #6:4AEGIG3L )E @E0:A F3ILE@ : 63(, )E CAE@I:A C34 4: L:4EAF:AECL:=E )E ":A3E, /+T4 T4E E-T+NGU+@4$ENT O65R+NC+53L OL+G3+TON T4E 3CCE@@OR CONTR3CT@ 3RE 3L@OE-T+NGU+@4ED.

Liabilit, to pa, intere"t: Let us assu%e that the obligationbeca%e due on 1. >an. 1, *--*, *. tender of pay%ent was %ade >an. 1,*--& which is the due date, and &. consignation was %ade >anuary *,

*-- three years after the tender. . hereafter the courtKs decision wasreleased >anuary *, *--, IUE@T+ON: can te !ebtor be el! liablerom perio! & to perio! *' If the court declared the consignation to beFO+D there is no question that the debtor is liable to pay interests, on thepre%ise that there was de%and and that de%and was necessary for thedebtor to incur in delay. 4o2ever% 2at i te court !eclare! tecon"ignation to be vali!' +" e liable or intere"t' +" e liablerom perio! < to *' :bviously he is liable because he %ade the tenderof pay%ent only period nu%ber two, but fro% the ti%e of consignation tothe ti%e the declaration of decision of the court is he liable for interest/NOP because the eect of the declaration retroact to the ti%e of thedelivery of the a%ount to the court as if the obligation was e$tinguished

at the ti%e the consignation was %ade, therefore there will be noobligation to pay the interest. Te problem i" in perio! o ten!er o pa,ment to te con"ignation% can e be ma!e liable or pa,mento intere"t' >uridically spea5ing, there is basis to the =C ruling that thedebtor is still liable because the eect of consignation will only be fro%the ti%e the thing is delivered to the court, so until the obligation ise$tinguished the debtor should still be held liable for interest. 4o2ever%in te recent ca"e" o te @C% it 2a" el! tat rom te timeten!er o pa,ment 2a" ma!e te !ebtor i" no longer reuire! topa, intere"t% ere% te la2 reuire" tat i te cre!itor reu"e"acceptance% te !ebtor "oul! imme!iatel, go to court%oter2i"e te !ebtor 2ill ave no rea"on to go to te courtbecau"e e no longer a" liabilit, or intere"t. 4o2ever% in terecent ruling o te @C% it el! tat RE3@ON O6 HU@T+CE 3NDEIU+T% 2,' ecau"e ere a" te con"ignation i" vali! it mean"tat te cre!itor reu"e! to accept 2itout Au"t cau"e% i tecre!itor accepte! it 2oul! tere be liabilit, on te part o te!ebtor to pa, intere"t' NoneP @o% un!er te principle o Au"ticean! euit, te !ebtor "oul! no longer be el! liable to pa,intere"t rom te time ten!er o pa,ment 2a" ma!e up to tetime o con"ignation even i te con"ignation 2a" ma!e ,ear"ater. 3(. #AI0E< his is quite inconsistent with consignation, there is a%uch better basis than ustice and equity, i ,ou remember our!i"cu""ion in perio!% in perio!" t2o to tree te !ebtor i" liableor intere"t% but 2en te cre!itor reu"e! to accept 2itout Au"tcau"e% i" it not tat e i" al"o in !ela, 2ic i" 0no2n a" moraxxx "o i bot partie" are alrea!, in !ela,% ollo2ing te ruling o te @C in 3gcaoili v. G@+@% in contemplation o la2% no one i" in!ela, an! i no one i" in !ela, coul! tere be liabilit, to pa,intere"t' None. /itout invo0ing Au"tice an! euit,% ti" !eci"ion"eem" to be more correct.



*&Florida Endrino

Civil Law

*. LO@@ O6 3 T4+NG DUE Can this %ode of e$tinguish%ent be invo5ed in all5inds of obligations %eaning obligations to do/ It does not see% li5e it because itsays loss of the thing. If you will read the provisions under this %ode, loss of thething due, there are provisions pertaining to obligation to do, thus, authors wouldconsider a better na%e for this %ode, instead of loss of the thing due a betterna%e would be I%possibility of 6erfor%ance. In i%possibility of perfor%ance it

would already include even obligations to give or to deliver, in case of obligations to give it will be i%possible to perfor% because the thing to bedelivered is lost.

a. $a, ti" mo!e appl, to obligation" to !eliver generic ting' [email protected] you re%e%ber the doctrine *enus non (uam peruit this applies to ascenario where the loss or destruction of anything of the sa%e 5ind doesnot e$tinguish the obligation. E-3$5LE: tere i" an obligation to!eliver a bran! ne2 <##) To,ota camr,% Au"t becau"e te bran!ne2 To,ota camr, 2a" lo"t !oe" not mean tat te obligation i"extingui"e! un!er ti" !octrine. GO+NG 3C TO T4E OR+G+N3LIUE@T+ON: "ay an obligation to deliver a generic thing be e$tinguished

because the obligation beca%e i%possible to perfor%/ E@P 3s the lawwould de2ne loss it is a scenario where the thing goes out of co%%erce,so if the thing went out of co%%erce there is nothing to deliver. 3notherscenario, is when it beca%e legally i%possible to perfor%, i%possibility of perfor%ance %ay either be physical i%possibility or legal i%possibility.5e"igan v. 3ngele" @elivery of carabao fro% one province to another,along the way the carabaos were con2scated because a law beca%eeective during the pendency of the obligation, therefore the obligationwas considered legally i%possible to perfor%. T3E NOTE T43T 2ente la2 became efective% tere mu"t alrea!, be an obligation2ic 2ill become impo""ible to perorm becau"e i te la2became efective beore te obligation 2a" in"titute! in te 7r"t

place te obligation i" voi! an! tere i" noting to beextingui"e!.

b. :bligations to deliver a deter%inate thing< if the thing to be delivered waslost or destroyed, is the obligation e$tinguished/ If you will read 1**literally, it will depend on the cause of the loss. If the cause of the loss wasdue to the fault of the debtor then the obligation is not e$tinguished 1*&provides that if the thing is lost or destroyed without the fault of thedebtor, the obligation is e$tinguished, therefore, if the loss is caused bythe debtor the obligations is not e$tinguished. 4o2ever% 5ro. Tolentinoopine" even i te lo"" i" !ue to te ault o te !ebtor% 2at 2illbe !elivere!' None% "o ere% tere i" p,"ical impo""ibilit,% an!tereore te obligation "oul! be !eeme! to be extingui"e!2itout preAu!ice to i" liabilit, to pa, !amage" becau"e te lo""i" !ue to i" ault. Nonetele"" if you want stic5 with the opinion of

olentino you can always cite 1** a" te ba"i" but ti" !oe" not"eem to be correct. UT ULT+$3TEL +N C3@E@ DEC+DED T4E@U5RE$E COURT: 3" to te ting to be !elivere! i" lo"t or!e"tro,e!% 2at i" te i""ue tat i" al2a," mentione! in te ca"e%i" it J2on te obligation 2a" extingui"e!'K No% te +@@UE +@/4E4TER T4E DETOR C3N E 4ELD 6OR D3$3GE@ in other wordsit does not %atter whether the obligation was e$tinguished or not, what%atters is is the debtor liable for the da%ages caused by the loss of thething. + te lo"" 2a" !ue to i" ault e i" liable or !amage"%oter2i"e e cannot be el! liable or !amage". In fact =ta. "ariaalso ta5e this position, =ta. "aria will not state whether the obligation ise$tinguished or not, the issue that will be posted is that 2eter or notte obligation to !eliver a ting i" converte! to an obligation topa, a "um o mone,. )owever, if this is your position, you actually ta5ethe position that there was e$tinguish%ent. If you re%e%ber inprescription, prescription is a %ode of e$tinguishing an obligation because



*Florida Endrino

Civil Law

it converts the civil obligation to natural obligation, there is a change inthe obligation therefore there is e$tinguish%ent, in the sa%e %anner if the obligation to deliver is converted to a %onetary obligation then thereis an e$tinguish%ent of an obligation.

/o a" te bur!en o proving a" to te cau"e o te lo""' he creditor or the one clai%ing that it was the debtorKs fault who causedthe loss. Aeasonable, because this follows the rule that whoever alleges

the fact %ust prove the fact. )owever, in certain circu%stances, thecreditor or the plainti %ay not have the burden, because the lawprovides for a presu%ption that the cause of the loss was due to thedebtor, when will this happen/ + at te time o te lo"" te ting i" inte po""e""ion o te !ebtor. ut ta0e note tat te pre"umptioni" not an ab"olute pre"umption becau"e te !ebtor can al2a,"po"t a !een"e tat even i te ting 2a" in i" po""e""ion telo"" 2a" !ue to te ault o "omebo!, el"e. )owever, even if a thingis lost while in his possession is it possible that there is no presu%ptionthat it was due to his fault/ e" i te lo"" appene! !uring acalamit, or on te occa"ion o a calamit,. ecau"e even i teting 2a" lo"t even i in te po""e""ion o te !ebtor but it 2a"

!uring a calamit,% more oten tan not% te calamit, i" te cau"eo te lo"" an! not te ault o te !ebtor% tereore te bur!enagain 2ill be "ite! to te cre!itor or plaintif i e 2oul! claimtat te lo"" 2a" cau"e! b, te !ebtor.

e have already discussed that even if the loss was causedduring fortuitous event that will not necessarily e$e%pt the debtor fro%liability. hat %ay be the general rule under 11! but there areE'CE6I:4= 366LIC30LE : :0LI3I:4= : @ELIGEA 3 @EEA"I43E

)I4< "tipulation o te part, tat te !ebtor 2ill be liable2atever ma, be te cau"e o te lo""% or ma, be te la2provi!e" or liabilit, even i te lo"" 2a" cau"e! b, a ortuitou"event.

Occenia v. Hob"on when the perfor%ance has beco%e so diOcultas to be %anifestly beyond the conte%plation of the parties, the obligor%ay also be released in whole or in part. T4E L3/ GR3NT@ T4E COURTT4E 5O/ER TO RELE3@E T4E DETOR +N /4OLE OR +N 53RT UT+T D+D NOT FE@T T4E COURT T4E 5O/ER TO C43NGE T4E TER$@3ND COND+T+ON@ 3GREED U5ON T4E 53RT+E@. Aequire%ents<

i. Te perormance o te obligation a" become "o !iBcult. his should not be confused with i%possible; if the obligation hasbeco%e i%possible to perfor% then 1*! will not apply in fact as arule the obligation will be considered e$tinguished.

ii. Te !iBcult, to perorm mu"t be !ue to a ortuitou" eventor be,on! te contemplation o te partie".

Efect o partial lo"". 3 scenario could be an obligation todeliver a cell phone with housing, what if the cell phone was lost but thehousing is still available, is the obligation totally e$tinguished, can thedebtor still be co%pelled to deliver the housing/ Te an"2er !epen!"on te intention o te partie" a" to reall, 2at 2a" te principalmotivation in entering te tran"action. ut i" it po""ible tat teou"ing i" more valuable tan te cell pone' (es it is possible forinstance it has dia%onds. =o if the delivery of the housing was theintention, apparently the buyer cannot be co%pelled to accept the cellphone.

=. Con!onation or Remi""ion o te !ebt or a.0.a !onation o cre!it 3s tothe 5inds of condonation<

a. Extent o extingui"ment 2eter total or partial: Condonation %aybe partial. 63AI3L< the principal a%ount %ay not even be reduced andthe creditor will only condone the interest or the principal a%ount nor theinterest will not be condoned but the accessory obligations will becondoned and therefore it will result to partial condonation.



*9Florida Endrino

Civil Law

b. /eter Con!onation i" expre"" or implie!: i te con!onation i"E-5RE@@ ,ou "oul! con"i!er te rule" a" to ormalitie" o !onation. 3R IUE@T+ON: he son is indebted to his father 9--D, theson paid &--D through a chec5, thereafter the father died, the e$ecutorde%anded for the pay%ent of the balance *--D, the son clai%ed that the*--D was condoned by his father as can be seen fro% the writing at thebac5 of the chec5 stating that the chec5 is for the full pay%ent of the

debt, was there e$tinguish%ent by condonation/ U.5. L3/ CENTER: theeect of the writing on the chec5 will depend on who wrote the sa%e, if the son is the one who wrote the writing the obligation was not totallye$tinguished, if the father was the one who wrote was there a validcondonation/ (es because this is a for% of i%plied condonation andtherefore the law does not require a particular for% nor acceptance isrequired, Do ,ou agree to ti"' 3TT UR+E: I do not agree to thisanswer, I agree %ore to the alternative answer that as can be seen fro%the facts, what could be %ore e$press than that/ )ow e$press can thisbe/ 3nd therefore if this is an e$press condonation this has to co%ply tothe for%alities of law as to donation, this is a donation of credit andtherefore under the law, if the credit is %ore than 9D, the condonation

%ust be in writing and that there %ust be acceptance in writing, so therewas a condonation in writing, but there was no acceptance in writing,hence, there was no valid condonation. +$5L+ED CONDON3T+ON% /4EN/+LL T4+@ 4355EN' + te !ebt i" evi!ence! b, a promi""or, note%an! te promi""or, note ater aving been !elivere! to tecre!itor 2a" oun! in te po""e""ion o te !ebtor 2a" teobligation extingui"e!' 3t be"t tere 2a" onl, a pre"umption% apre"umption tat te promi""or, note 2a" voluntaril, returne! tote !ebtor. + it i" voluntaril, returne! te efect i" tat teobligation i" extingui"e!. Ten 2en 2oul! te pre"umptionari"e tat te !eliver, 2a" a voluntar, !eliver,' It will only arise if the docu%ent is a private docu%ent, but if it is a public instru%ent, there

is no such presu%ption because a public docu%ent has several copies incustody of several people. 3t any rate, the presu%ption here is onl, a!i"putable pre"umption. ut ultimatel, i it 2a" voluntaril,returne! to te !ebtor% o2 2a" te obligation extingui"e!' DELEON: Not b, con!onation but b, pa,ment. Tu"% it 2a"voluntaril, returne! becau"e tere 2a" pa,ment% o2ever% i te!ebtor cannot prove tat pa,ment% li0e or in"tance e !oe" notave a receipt% ma,be e can invo0e te pre"umption o te la2tat tere 2a" a con!onation% but again% te pre"umption i"!i"putable. L3= A#LE< 3 !ebtor o % a ring 2a" !elivere! to a"a "ecurit,% or!inaril, ti" 2ill be a ple!ge% no2% ater teperection o te ple!ge% te ting again 2a" oun! in tepo""e""ion o 3 te !ebtor% i" te obligation o 3 to extingui"e!' NOP Is there a presu%ption that this obligation ise$tinguished if there is a presu%ption under the law it will pertain to thepledge. If the thing to be delivered by way of pledge is thereafter found inthe possession of the debtor there %ay arise a presu%ption that it wasvoluntarily delivered and therefore the pledge was e$tinguished.J5RE@U$5T+ON $3 3R+@EK because the presu%ption %ay not arise,why/ Te la2 reuire" tat ater te perection o te ple!ge% teting mu"t be oun! in te po""e""ion o te o2ner o te tingple!ge!. +" te !ebtor nece""aril, te o2ner o te tingple!ge!' 4o because pledge %ay be constituted by a third person, so if it was found in the possession of the debtor, then no presu%ption willarise, the presu%ption of voluntarily returned i tereater it i" oun! inte po""e""ion o te o2ner o te ting ple!ge!. 3gain, thispresu%ption is disputable presu%ption, because there are hundred andone reasons why the debtor would return the thing to the owner, one of the reasons %ay be for safe 5eeping. @o again it i" a D+@5UT3LE5RE@U$5T+ON.



*Florida Endrino

Civil Law

9. CON6U@+ON OR $ERGER O6 R+G4T@ this %ode can easily be understood by ust i%agining the %erger of ban5s in the past few years. 4ow, it is co%%on thatbefore the %erger, one of the ban5s is indebted to the other ban5s and thereforeinstead of $$$ the creditor %ay agree to ust buy the debtor ban5. :bviouslyti" i" b, agreement o te partie". Can tere be conu"ion b,operation o la2' e" i te cre!itor or example !ie! an! te onl, eiri" te !ebtor% o cour"e te eir 2ill inerit te cre!it% te eir no2 2o

i" te !ebtor 2ill no2 become te cre!itor% tereore tere 2ill be ameeting in one per"on o te caracter o te !ebtor an! cre!itor an!tereore te obligation 2ill be extingui"e!. hat if the decedent is thedebtor and the heir is the creditor, 2ill te obligation be extingui"e!' Itsee%s li5e it will not be e$tinguished because the heir will not accept theobligation. =o the creditor will nor%ally de%and fro% the e$ecutor pay%ent.Can a guarantor invo0e a merger or conu"ion' E@P 0ut he %ay invo5e%erger and confusion as to the character of debtor and creditor because if theprincipal obligation is e$tinguished then the guaranty will also be e$tinguished,the guarantors will bene2t with the confusion of the character of the principaldebtor and the creditor, but if the confusion was between the guarantor and thedebtor will the principal obligation be e$tinguished/ NOP /at 2ill appen

ere i" tat tere 2ill no longer be "ecurit, becau"e te !ebtor an! teguarantor 2ill be one. C3N T4ERE E 3 53RT+3L E-T+NGU+@4$ENT +NCON6U@+ON OR $ERGER' E@P , expre"" provi"ion o la2% in Aointobligation" an! tere 2a" a conu"ion pertaining to one o te Aoint!ebtor" in te per"on o te cre!itor% te extingui"ment 2ill onl, be tote extent o te !ebt o te Aoint !ebtor. Ti" i" !iferent o cour"e i te obligation i" "oli!ar,% i tere i" conu"ion bet2een te cre!itor an!one o te "oli!ar, cre!itor te obligation i" totall, extingui"e!.5ROLE$: T4E OL+G3T+ON EC3$E OFERDUE +N 1))<% T4EOL+G3T+ON +@ 1$ 5E@O@ 3ND T4ERE /3@ $EREGER +N 1))) ET/EENT4E DETOR 3ND T4E CRED+TOR% UT HU@T L+E 3N OT4ER3GREE$ENT T4E 3GREE$ENT $3 E RE@C+NDED% 3ND 3@@U$+NG T43T

T4E CONTR3CT /3@ RE@C+NDED +N <##(% <## 6+LED 3N 3CT+ON3G3+N@T 3 TO RECOFER T4E 1$% /4' In rescission the eect is restitution,the parties will be reverted bac5 to their status prior to the %erger, so as if 3owes 0 1", so 0 2les an action today against 3 to recover the 1", ma, teaction pro"per' It see%s that not any%ore the action already prescribed, theobligation was due in 1++* and the action was 2led only in *--, 1 years after.UT T4E @C 4ELD T43T +T E@ +T /+LL 5RO@5ER% T4E T+$E O6 T4E$ERGER TO T4E T+$E O6 RE@C+@@+ON @4OULD NOT E +NCLUDED +N T4ECO$5UT3T+ON O6 T4E 5RE@CR+5T+FE 5ER+OD. Ti" a ver, goo! !eci"ionbecau"e cre!itor an! te !ebtor are one at tat time. herefore only years has lapsed so the action has not yet prescribed.

(. CO$5EN@3T+ON 0y e$press provision of law, compen"ation ma, be totalor partial. /it partial compen"ation ma, tere be t2o or ten !ebt"extingui"e! a" partial compen"ation' (es, there can be two or 1-- debtse$tinguished by co%pensation but it is still partial co%pensation 2,' 3s longas the debts of one are not equal to the debts of the other the co%pensation willonly be to the concurrent a%ount and there will be no total e$tinguish%ent.Total extingui"ment 2ill onl, ta0e place 2en te !ebt" are totall,eual or in"tance i te !ebt i" 1$ an! te oter i" 1$. @cenario: 3owes 0 1--D, but 0 has several debts to 3 *D, 1D, 9D, *-D but if you add it all upit is only -D, with co%pensation, all the debts will be totally e$tinguished,because the e$tinguish%ent is for the concurrent a%ount, the -D will be totallye$tinguished, but 3 would still owe 0 *-D, 2, i" ti" "o important' his isi%portant as to the liability to pay interest or as to whether or not there can bevalid foreclosure etc. E-3$5LE: 3 obligation to 0, 0 has obligation to 3, 3Ksobligation is interest bearing, ater compen"ation can "till collect intere"tcan 3 be el! liable or intere"t' It will depend on the a%ount involved, if 0Ksdebt is s%aller %ay be 9-D, 3Ks debt is 1--D, can be collect interest/ 4otany%ore because the debt will be totally e$tinguished, the 1--D will be reducedby 9-D to the concurrent a%ount. On te oter an! 2at i te 1## i"



*!Florida Endrino

Civil Law

"ecure! b, a mortgage ater compen"ation ma, 3 oreclo"e temortgage' (esP because there will still be a balance of 9-D, a %ortgage is anindivisible contract, until the obligation is not e$tinguished the %ortgage willre%ain in force. 3nd therefore if 0 failed to pay 3 the 2fty thousand 3 can stillforeclose the %ortgage. 3R E-3$ IUE@T+ON: 3 opened a savings accountwith ( ban5 in the a%ount of 1", thereafter 3 borrowed %oney fro% the sa%eban5 --D, thereafter 3 wanted to withdraw the 1", the ban5 said no you

cannot withdraw the 1" because your obligation to pay the --D is already duewe are invo5ing co%pensation, you can only withdraw *--D less the charges, 3clai%ed you cannot do that because under 1*! there can be no co%pensationwhen one of the debts arises fro% a deposit. /4O +@ CORRECT' he ban5 wascorrect because a savings account deposit is not a deposit it is a contract of loan, that is why 1*! 7co%pensation will not be proper if one of the obligationsarises fro% depositu%8 will not apply. =o if both are si%ple loan there can beco%pensation. 1*! provides that there can be no co%pensation when 1 of theobligations is arises fro% a deposit, this is 5nown as, as so%e authors wouldna%e it, a acultative obligation. )owever, other authors does not see this asindependent obligation, this is ust treated as a %odi2cation of the other 5inds of co%pensation recogniNed by law which is a acultative or conventional

compen"ation te tir! one i" Au!icial compen"ation te 7r"t obviou"l,i" legal compen"ation. Legal compen"ation i" con"i!ere! a" te xxx i te examiner !oe" not mention an, 0in! o compen"ation e i"reerring to LEG3L CO$5EN@3T+ON. Foluntar, compen"ation: theconsent of both parties is required. +n acultative: it is only the consent of oneof the parties which is required. Hu!icial: this would nor%ally happen when acase is 2led for a su% of %oney but what would nor%ally happen in cases, thedefendant will have counterclai%, usually the counterclai% is bigger, so in theend the plainti beco%es liable on the pre%ise that the clai% of plainti is validand was granted and the court also granted the counterclai% it is co%pensatedup to the concurrent a%ount. he obligations which are not yet liquidated at theti%e of the 2ling of the action, they can be liquidated during the proceedings. +n

compen"ation it i" al"o calle! a" "et of or counterclaim but it "eem"tat ti" 2or! i" proper in Au!icial compen"ation becau"e counterclaimi" u"uall, u"e! in te court.

a. FOLUNT3R CO$5EN@3T+ON this is by agree%ent of the parties, evenif not all of the require%ents for legal co%pensation are present it doesnot %atter the obligations will be e$tinguished by agree%ent of theparties. 6or example: the debts are not yet due and they want toco%pensate, what can we do/ he parties already agreed. 3lso, probablyone of the debts pertain to a carabao and the other to a car, we cannot doanything about it. In fact in lay %anKs ter% we call this quitsM.

b. 63CULT3T+FE CO$5EN@3T+ON it occur" in !epo"itum%commo!atum% gratuitou" "upport% an! civil liabilit, ari"ing romcrime this will arise if one of the debts arises fro% a depositu%, in adepositu% a thing is delivered to the depositary for safe5eeping, this canhappen even also with a ban5. If a person for e$a%ple would deliver 1"pesos to the ban5 only for safe5eeping, this will be a DE5O@+TU$ hat if 3 deposited 1" not as a savings account but in the safety deposit bo$,and 3 borrowed --D, now if 3 would want to withdraw the 1" fro% thesafety deposit bo$ can te ban0 invo0e compen"ation' Te!epo"itar, cannot invo0e compen"ation but te DE5O@+TOR C3NP3side fro% depositu%, %entioned CO$$OD3TU$ when one of thedebts arises fro% co%%odatu% $$$ in this obligation the thing has to bereturned upon de%and however here, te bailor can invo0econ"ignation but not te bailee. @U55ORT should be gratuitoussupport and not contractual support why/ if this is legal support, a personneeds this to survive thus, it cannot be subect to co%pensation. 0ut if itis support in arrears co%pensation %ay ta5e place. C+F+L L+3+L+T 3R+@+NG 6RO$ CR+$E probably the scenario here is 3 is indebted to 01--D when 0 tried to collect 3 cannot be so he stabbed 3, so 0 was heldcri%inally liable, then there was a %onetary award, what if the award to 3is 1*-D, if 3 de%ands for 1--D fro% 0 can 0 invo5e co%pensation/ 4:P



*Florida Endrino

Civil Law

he convict cannot invo5e co%pensation but te aggrieve! part, caninvo0e compen"ation.

c. LEG3L CO$5EN@3T+ON% T4+@ +@ O5ER3T+ON L3/ Fro% the%o%ent all the essential requisites are present co%pensation ta5es placeeven without the 5nowledge of the parties, even before they invo5eco%pensation . @CEN3R+O: 3 owes 0 due 1++*, 0 owes 3 due in 1+++,possible that itKs both 1" based on dierent transaction, 3 2led an action

against 0 the defense of 0 is co%pensation, however, 3 %ay clai% that noyou cannot invo5e co%pensation because you credit has alreadyprescribed since %y debt has beco%e due in 1++* i" 3 correct' 4:PPP in1+++ even without their 5nowledge when the debts beco%e due andde%andable co%pensation too5 place. AEB#IAE"E4= :F LE3LC:"6E4=3I:4<

i. T4E $U@T E $UTU3L CRED+TOR@ 3ND DETOR@ but if you have read one case and a few authors would consider thisinstead of %utual they would use reciprocal creditors 3TT. UR+E:+ 2oul! not encourage ,ou to u"e reciprocal cre!itor"% if reciprocal debtors and creditors it will i%ply reciprocal obligations, if it is reciprocal obligations then this obligations arose fro% the sa%e

transactions if this is the case one of the requisites for legalco%pensation to ta5e place will never be co%plied with. C3@E:6rancia v". +3C was there legal co%pensation/ 4:4E because inthe case Francia was indebted to the city govern%ent of pasaybecause of $$$ however, Francia was invo5ing legal co%pensationbecause he was the creditor of an e$propriation proceedings, it ustso happen that the city govern%ent did not e$propriate his propertythe national govern%ent did since the require%ent no. 1 is notpresent there is no legal co%pensation. C3@E: 5N v. 3CERO:640 was debtor of Isabela, this is si%ple loan, so 640 owed Isabela,however 3CEA: was the udg%ent debtor of isabela who wants tohave the savings of Isabela garnished, however 640 clai%ed that

they invo5ed co%pensation because Isabela was also their debtor,2o i" correct' 4o clai% is correct, although 640 is the debtor of Isabela, there was no proof that Isabela is the debtor of 640.

ii. OT4 DET@ $U@T E +N @U$@ O6 $ONE OR +6 T4E 5ERT3+N TO GOOD@ T4E $U@T E O6 T4E @3$E +ND 3NDIU3L+T in other words %ay the obligations be both in su%s of %oney if they are reciprocal obligations/ It cannot happen. +nreciprocal obligation" tere are !iferent pre"tation" one i"!eliver, an! te oter monetar,% it can never be bot "um"o mone,. Aeading several cases it %ight appear that thisco%pensation %ay occur only when the obligation arise fro%contracts, i" ti" correct% 2ill tere be legal compen"ationonl, i te !ebt in mone, aro"e rom contract' NOT TRUEPEven if the obligation arose fro% other sources there can beco%pensation. In fact if you read the C3=E=< $in!anao 5ortlan!xxx in these two cases the a%ounts which are the subect of co%pensation were attorneyKs fees, these fees did not arise fro%contract. $in!anao 5ortlan! is unli5ely, co%pany 3 2led a caseagainst co%pany 0, one of the% won and the court awardedattorneyKs fees, in another case the other co%pany won andattorneyKs fees were also awarded, "o te a2ar! i" o te "ameamount% te obligation i" o te "ame nature%CO$5EN@3T+ON TOO 5L3CE. #lti%ately the IUE@T+ON 4ERE+@: Doe" it mean tat all monetar, obligation" ma, be te"ubAect o legal compen"ation' NoP If you have read the case of Francia v. I3C certain %onetary obligations cannot be subect of legal co%pensation li5e pay%ent of ta$es, custo%s duties, tari etc.

iii. OT4 53RT+E@ $U@T E 5R+NC+53LL OUND 6rincipallybound because in a scenario where 3 is indebted to 0 and thisobligation is secured by a guarantor on the other hand 0 is the



*+Florida Endrino

Civil Law

debtor of in this obligation, if de%ands pay%ent fro% Can eclaim tat G i" al"o in!ebte! to im becau"e e i" aguarantor in 8" obligation to 3' +n it" ace NO% becau"e teguarantor i" not principall, boun! but ta0e note temoment 3 !eault" an! i" propertie" are alrea!,exau"te!% te GU3R3NTOR /+LL NO/ E L+3LE TO 3ND6RO$ T4EN ON CO$5EN@3T+ON /+LL T3E 5L3CE.

iv. T4E $U@T E CRED+TOR@ 3ND DETOR@ O6 E3C4 OT4ER+N T4E+R O/N R+G4T: @C+5 v. C3: the owner of the shares of stoc5s authoriNed LapuN to sell the shares of stoc5, lapuN on thenauthoriNed =ycip to sell the shares of stoc5, the latter was able tosell the shares of stoc5 79D8, however, despite the de%and to =ycipto re%it the proceeds of the sale he refused to do so. 3 co%plaintfor estafa was 2led against =ycip, he was convicted in the lowercourt, on appeal =ycip clai%ed that LapuN owed hi% 79D8 soco%pensation too5 place, therefore he cannot be liable for estafa, is@,cip8" contention correct' NO% even a""uming tat Lapu; i"in!ebte! to @,cip% te latter i" reall, not in!ebte! to Lapu;in i" o2n rigt. Te real cre!itor o Lapu; i" te bu,er o

te "are".v. OT4 DET@ $U@T 3LRE3D E DUE 3ND DE$3ND3LE

he ":= C:"":4 "I=3DE )E4 3=DE@ )( I= )EAE 4:LE3L C:"6E4=3I:4 I= 0EC3#=E )E :0LI3I:4 )3= 4: (E0EC:"E @#E 3 )E =3"E I"E. RE$E$ER: te reuiremento te la2 i" tat bot !ebt" are !ue an! it i" not reuire!tat te !ebt" are !ue at te "ame time. 0ut if one debtbeca%e due & years ago and the other debt beca%e due today,co%pensation will only ta5e place today, but there can beco%pensation. 34:)EA C:"":4 "I=3DE< E'3"6LE< 3borro2e! mone,% te oter one bougt on cre!it% "o te,are !ebtor" an! cre!itor" o eac oter% o2ever% te, "a,

tat tere can be no legal compen"ation becau"e teobligation" !o not pertain to "um" o mone,% one i" mone,te oter one car. 4ERE T4E OL+G3T+ON O6 T4E UER +@TO 53 T4E 5R+CE @O +T +@ 3L@O $ONET3R LEG3LCO$5EN@3T+ON /+LL T3E 5L3CE.

vi. T4E DET@ $U@T E L+IU+D3TED 3ND DE$3ND3LE Inother words there should be no clai% by a third person over thisright or credit, because if the clai% is subect of legal proceeding,there can be no legal co%pensation. E$a%ple< +nternationalCorporate an0 v. +3C: Faardo borrowed %oney fro% IC0 9-"the ban5 released only *-" to secure this obligation, Faardo%ortgaged properties a%ounting to 11-", thereafter she alsodelivered 1" to the ban5 for %oney %ar5et invest%ent, so ust li5eany other invest%ents it %atured, so she de%anded for the returnof the 1", the ban5 clai%ed that she has nothing to recover fro%the ban5 because as to her loan which she failed to pay, when theforeclosed the %ortgage she still has de2ciency of ", soco%pensation too5 place, however Faardo questioned the%ortgage te @C 4ELD: tere can be no legal compen"ationbecau"e one o te claim" i" "till being litigate!.

vii. ONE O6 T4E DET@ $U@T NOT 3R+@E 6RO$ 1<( 3ND 1<0ecause in such cases legal co%pensation will not ta5e place sincein depositu% the depositor or the bailor %ust invo5e legalco%pensation.

!. EFFECT F !""#$%&E%T F ! C'E(#T !" T T)E '#$)T T#%*+E C&,E%"!T#% @cenario: 3 was indebted to 0 9-D, &-D,and *-D, 0 on the other hand is indebted to 3 1--D, 3 assigned his creditto ', ' de%anded pay%ent fro% 0, how %uch can ' de%and fro% 0/Iue"tion" on a""ignment te 7r"t ting to loo0 at i" te D3TE O63@@+GN$ENTP + te !ate o a""ignment too0 place long ater te



&-Florida Endrino

Civil Law

!ee! o a""ignment too0 place% 6or example: =# Hune 1=% <##<%&# Oct. 1=% <##<% <# Dec. 1= <##<% te 1## !ue November 1=%<##<% i te a""ignment 2a" ma!e% Han. 1=% <##&% o2 muc can -!eman! rom ' 1-,--- 6esos only as of @ec. 19, *--*, co%pensationtoo5 place as to the e$tent of +-D pesos. 5ROLE$: Let us assu%e the1--D obligation beca%e due on 4ove%ber 19, *--*, this obligation %aybe assigned even in "arch of the sa%e year, so it was assigned in "arch

*--*, i te !eman! 2a" ma!e Oct. 1% <##<% o2 muc can -!eman! rom ' NONEPPP ecau"e te obligation i" not ,et !ueP5ROLE$: @ue date, 4ove%ber 19, *--*, assign%ent >uly *--*, as of 4ove%ber 19, the ' de%anded fro% 0, how %uch can 0 be co%pelled topay/ Te 7r"t actor ,ou ave to con"i!er: /4ET4ER T4E3@@+GN$ENT /3@ /+T4 T4E NO/LEDGE O6 OR /+T4OUTNO/LEDGE: +6 /+T4 NO/LEDGE% OU 43FE TO DETER$+NE/4ET4ER OR NOT T4ERE /3@ CON@ENT TO T4E 3@@+G$ENT ORNONE: +6 CON@ENT +@ G+FEN% OU 43FE TO DETER$+NE /4ET4EROR NOT 4E $3DE 3 RE@ERF3T+ON OR NO RE@ERF3T+ON: 7so thescenario here is 3 and ' advised 0 that 3 is assigning the credit to ', 0consented but he reserved his right to invo5e co%pensation8 +6

RE@ERFED% 4O/ $UC4 C3N - COLLECT 6RO$ ' :4L( 9-D 0EC3#=E 3= :F )E @3E :F )E 3==I4"E4 )IC) 3= I) )ED4:LE@E :F 0, )E @E0 I4 >#4E 19 I= 3LAE3@( @#E, 3= : @E0=:I4 : 0 )IC) 3AE 3LAE3@( @#E )E C34 I4G:DE C:"6E4=3I:4:A 3 LE3= AE=EAGE C:"6E4=3I:4 0EC3#=E C:"6E4=3I:4 ILL

3DE 6L3CE :4L( 4:G. 19, =: 3= : &-D 34@ 1-D 0 C344: I4G:DEC:"6E4=3I:4, 3 )E I"E :F 3==I4"E4 >#L( 19, )E CAE@I= 3AE4: (E @#E : )I". NO RE@ERF3T+ON 4O/ $UC4 C3N - DE$3ND6RO$ ' 1--D 0EC3#=E 0( 3AEEI4 I):# AE=EAG3I:4 )E3IGE@ )I= AI) : C:"6E4=3I:4, 0K= AE"E@( )EAE I= : @E"34@

)E 63("E4 :F )E @E0= FA:" 3. /+T4OUT NO/LEDGE: 'de%anded fro% 0 in @ece%ber, how %uch can 0 be co%pelled to pay/

1-D he can invo5e co%pensation to those debts which beca%e due if theassign%ent is without his 5nowledge.

IU+QQE@:1. 5re"cription o perio! or an action ba"e! on pure obligation

commence" rom te execution o te obligation' A#E. 0ecause pureobligations are de%andable at once.

*. + tere i" an acuittal% te accu"e! ma, not be el! civill, liable' False. here is a dierence in the quantu% of evidence in civil liability and cri%inalliability.

&. + a per"on oblige! to !o "ometing reu"e" to !o te "ame% te reme!,i" to ave te obligation execute! b, tir! per"on at te expen"e o te!ebtor.

. 3n obligation i" pa,able upon te !eat o $r. - rom execution i"con!itional' rue. Five years fro% the death is the condition.

9. 3C borro2e! &9 rom - an! . Te tree !ebtor" "igne! tepromi""or, note% o2 muc can - collect rom C' D

. On Hanuar, 1% 3 "ign" a 5N an! bin!" im"el to pa, 1## plu" 1=intere"t per annum% Hune &#% 1)))% becau"e te perio! i" or te bene7to te !ebtor an! cre!itor% - can reu"e ten!ere! pa,ment. rue. here isa presu%ption that if a contract is stipulated by both parties, the sa%e is for thebene2t of both creditor and debtor.

!. 3 o2e" - = pa,able on or beore Hune &#% 1))). @ 2o i" not a part,an! 2itout con"ent an! 0no2le!ge o 3% pai! - =#0 on 3pril 1% 2ente prevailing rate o intere"t 2a" 1<. Can @ a"0 or reimbur"ement'

(es n the a%ount of 9-D without interest because the pay%ent was %ade beforethe sa%e beca%e due.

. Dacion en pago pro!uce" te efect o pa,ment. +. It is a concept that derives fro% the principle that since %utual agree%ent can

create a contract, mutual !i"agreement by the parties can cause itse$tinguish%ent.



&1Florida Endrino

Civil Law

1-./ere an application or a loan o mone, 2a" approve!% tere ari"e" aperecte! contract even beore te !eliver, o te obAect o tecontract. rue, the contract is a perfected consensual contract of loan.

11.+ te obligation a" been "ub"tantiall, perorme!% te obligor "allrecover a" toug tere a" been a "trict an! complete ul7llment.False, the obligation %ust be perfor%ed in good faith, and the recovery is lessthe da%age suered by the obligee.

1*./en te obligee accept" te perormance% 0no2ing it" incompletene""or irregularit,% te obligation i" !eeme! ull, complie! 2it. False, it isdee%ed fully co%plied with when no obection has been %ade by the creditor.

1&.5a,ment b, Au!gment !ebtor to te 2rong part, !oe" not extingui"te Au!gment !ebt. False. his is only a general rule; there are e$ceptions,e$a%ple, rati2cation.

1.Obligation" reuiring pa,ment in oreign currenc, mu"t be !i"carge!in 5ilippine currenc, a" provi!e! b, R3 1&. False, as long as there is astipulation that it %ay be discharged in foreign currency.

19.3n agreement to pa, promi""or, note in !ollar" 2ile null an! voi!un!er R3=<) !oe" not !eeat cre!itor8" claim. rue.

1.3 CERT+6+C3T+ON i%plies that the chec5 is drawn upon suOcient funds in the

hands of the drawee, that they have been set apart for its satisfaction, and thatthey shall be so applied whenever the chec5 is presented for pay%ent.

1!.Te !eliver, o 5N pa,able to te or!er% or bill" o excange or otermercantile !ocument" pro!uce" efect o pa,ment. False. For instance,chec5 has to be encashed 2rst before it can be considered as pay%ent.

1.Te cre!itor cannot be compelle! to receive te pre"tation" in 2icte obligation con"i"t". Neiter ma, te !ebtor be reuire! to ma0epartial pa,ment". False. he debtor, if stipulated %ay pay in install%ents.

1+.Te act tat te !ebtor a" "uBcient available un!" on or beore tegrace perio! or te pa,ment o it" obligation !oe" not con"titute proo o ten!er o pa,ment. rue.

*-.3 certi7e! per"onal cec0 in not a legal ten!er nor te currenc,

"tipulate! an! tereore cannot con"titute ten!er o pa,ment. rue.*1.Te rule tat in ca"e o extraor!inar, in?ation or !e?ation o te

currenc, "tipulate! "oul! "upervene% te value o te currenc, at tetime o te e"tabli"ment o te obligation "all be te ba"i" o pa,ment i" inapplicable to obligation" ari"ing rom tort. rue. Fro% theword itself, stipulation, obligations fro% torts are not stipulated.

**.Un!er te principle o !ation in pa,ment% te mere !eliver, o temortgage! motor veicle b, te mortgagor re"ult" in te tran"er o o2ner"ip to te mortgagee even 2itout te con"ent o te latter.False. @ation requires the consent of the creditor.

*&.Tere can be no con"ignation 2en tere i" no obligation to beextingui"e!. rue.

*.CON@+GN3T+ON is the act of depositing the thing due with the court or udicialauthorities whenever the creditor cannot accept or refuses to accept pay%ent.

*9.Ten!er o pa,ment ma, be extraAu!icial. False. =oco v. "ilitante.*.Con"ignation o te amount reuire! i" not nece""ar, to pre"erve te

rigt to re!eem. rue. Consignation is necessary when there is an obligationand not a right.

*!.DiBcult, o "ervice autori;e" te relea"e o obligor but !oe" notautori;e te court to mo!i, or revi"e te contract bet2een tepartie". rue. :sena case.

*.5erormance i" not excu"e! b, te act tat te contract turn" out tobe a! an! improvi!ent% unpro7table or unexpecte!l, bur!en"ome.

rue.

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