Obligations and Contracts Dean Del Castillo Notes

8/10/2019 Obligations and Contracts Dean Del Castillo Notes

1/57

CIV

IL

L W REVIEW 11-

Dean

Del

Castillo

OBLIGATIONS

Obligation-

juricilcal necessity to give,

to

do,

or

not

to

do

Obligation is broader than

contrac

ts

Contracts

is only

one

sou

rce of obligation

Five sources

of

Obligations:

a. Law

b. Contract

c. Quasi-Contr.tct

d Delict

e.

Quasi-Dehcts

LAW CONTRACTS

-

What do we refer

as

law?

- \XIhat makes Contract

Laws that cr\ ates

unique?

obligations and

Th

ere are

meeting of

contract.

Civil

Code

minds

between the

does not creare

parues.

(only in this

obligations and source

that

this is

c

ontract.

needed)

We

are

nor talking

about general law but

rather

specific laws (e.g

dury

to pay ra x;

duty to

support) where the law

provides

for your

obligation. General law

only provides

concepts

e.g.

.

requirements) but

does

not create obligaoons.

DELICTS

-

When

your obligation

comes

from

delict, what is

it?

The

ctv .lliability

arismg from the

cnme

l Y t l ' person

criminally hable

is

civilly liable

-

What

is it

compnsed

of?

Due to the offended

party. resritution, etc.

Nugwd

\'. N1cdao:

BP22 - the accu-;ed

e ltf4 was

eventually

d

acquitted,

but

the

offended

party

kept

on

msiscing

that th

e

accused

is still civilly

liable. Is s

he

still liable?

'

a. The

court

held that

you are only ctvil.ly

liable

(JI.

b.

The acquinal

is

'

based on

The Civil liability

docs not anse

l i

Page

Every good

and

perfect gift s from above, coming down from the Fatherof the heavenly lights, who

does nor change like shifting shadow

s.

Caroline Ton, Jessamyn

y

James L:gan


2/57

CIV

IL LA

W REVlEW

-

Dean Del Castillo

from the crJnunal

act

QUASI-CONTRACTS QU

AS

I-DELICTS

-

Not a

Lrue

contract

-

Act

or

omission is not

-

Meaning one

of

the punishable by law.

elements

of

a valid contract

-

Is reckless imprudence

ts

rrusstng, i.e., megting of

mcluded? No They arc

the minds.

'

delicts as being punished

by

-

We caU

it

q oJi because the

RPC

obligauon is sourced from a

-

Obligauon is you have to

natural obligaoon,

like

pay

negotorium gestio

-

This is unilarer:J, cre:ned

only by an act of one

person

Two

k i

nds

o quasi

c

ontract:

a

Negotoriwn

gestio

one

party undertakes to

admini .ter or rake care

of

proper)'

of

another. Your

unilateral

act

in

here

is

the

cakmg care

of

the property

It

came

rom

your own

volition This pertains to

emergency Situations. An

act of kindness

There

is no obligation for

you to do this but you did

it anyway. So where is the

oblJgation? Once he

decided to t:&e care

of

the

-

he

is

OBLIGED

to care

of t

until the

emergency ceases.

of

the owner

1

there

is

an obligaoon created. The

OBUGATION

IS

TO

COMPENSATE

b

Solution indebiti -

payment

by

mistake. You

thought you were obliged

to pay it

but in fact you are

not obliged:Or you have

2 P a g e

Every good ond perfect gift i5 from above, coming down from the Father of the heavenly lights, who

does

not

change like shifting shadows.

Caroline Ton Jessamyn

Uy

James Ligan


3/57

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CIVIL LAW REVJ

EW

II - Dea n Del Castillo

paid even 1f you

are not

yet

required to pay This is to

be differentiated with

natural wherein

you

do

not have any

obligation to

az

at

all

You

just

wanted

to pay. l f t is a

natural obligation,

whatever

you paid

voluntary, the

same cannot

be

recovered, unlike in S.I.,

the recipient is obliged to

return.

A

source

of

obligation is

an

exclusive list. l f

not

coming from this one then

you

do

not

have any

obligation.

Juridical Necessity

Meaning, it is mandatory.

Once

an obligation is created from these 5 sources, someone has

to

comply Ths is

complete

m itself

Three phrases to do

not to

do

and

co give are what we c:ill PRESTATIONS.

a Obhgaoon to give

\Vhat arc rou requLred to

do

m here?

To

deliver, real r personal

b Obligation to

do

or not

do

\\7hat

are

you reqwred to do?

Service, to

do or

to refrrun

Obligation

to give (real obllgations)

a Genetic

-

or

indeterminate

thing- one of

a class

b. Specific

set apart

from a class

l s this dassificacion applicable

to

real properties? O f course Personal and Real Propernes can t:Hher

be specific

or

real

For example a car:

It will be speci

fic

i fyou provided the plate number,

or

serial number

or

chassis number.

For

real property:

If

you

say deliver a piece of land, then it is generic. Even if you say a land from

Barrio

Bangkal in

Makati

it

is still generic.

Obligation

to do/not to do (personal obligations):

a. Legal.

b.

Moral

IPage

N ve

ry good

nd

perfect gift is from above, coming down from the Father of

the

heavenly lights, who

does not

change like shifting shadow s.

Caroline Ton, Jessamyn y James Ligon


4/57

CIVIL LAW REVlEWil - Dea n Del Castillo

c. Possible

Obli

gatio

n to deli

ver a s

pecific

prop

erty

Has

more

obligati

on

as compued i only

to

delnrer: a generic property

Added

obligations:

a. ake

caft

o t with

due diligen

ce o good

father

o

f mily

Illustration:

Perfection

Condition

Deli

I

very

Today

the

obligation is created.

Th

en there is gap where

the

property

is

exposed from periL

Then the day you have to deliver.

So

this obligation is accual.ly to take .into account this

interregnum.

This

is the guarantee that you will

be

able

to

deliver.

What

happens

when

your obligation is subject to a condition?

Your

obligacion starts only from

the

tir:::le

the

condition is fulfilled

Diligence required

o Diligence.of a good father

of

a

fatnily-

that which

is

reqnired by

the

nature

of the

ob

ligati

on

and corresponds with the circumstances of person, time, and place,

Exception:

when the

law o r cont ract provides for a different standard

of

care

(e.g.

common carrier-

requires extraordinary care)

b D

el

i ver fruits

The

fruits earned from

the

property from the perfection of the obligation?

If

the obligati

on

is

PURE - then

you are obliged to deliv

er

the fruits from the time you are

obliged to make delivery- all the fruits earned from the time you are supposed to deliver must

be delivered, he was

already

the

owner

om

the

time

the

co

ntract was perfe

cted

.

If

the

obligation is

CONDITIQNAL

(suspensive), refer

to

Article

1187.

,,

1

oc'(\s

If

the obligation

is

reciprocal - the fruits are murually

compensated

If the obliga

tion

is unilateral -

the debtor

shall appropriate the fruits:

debtor

does

not need

to

.

_;

de.liverr .: .

lf the obligation

is

with a

PERIOD

no equivalent of article 1187.

CRC: 2

views

1

a. One group: obligation

to

deliver arises

or ly

from

the

arrivel of ath term, then the

obligation starts only from the arrival of l period - therefore, to delivery all the fruits

b. Second g

roup

: obligation to deliver starts from day 1 (where the con

trac

t was

perf

ected)

CRC

:

in

both cases, you

cannot

apply article 1187. You still have to deliver fruits

lf

the

obligation is RESOLUT


5/57

CIVIL LAW REVIEW

Dean Del Castillo

constructively dehvered only ou

March

15,2011, B becomes

owner

of said fruits

and

land only from said

date.

Between March

3 and 15, B

had only

personal

right

(enforceable agains t A); after March

15,

he Pas a

real

right over the

properoes.

o Personal

Right- power

demandable

y one person

of

another

- to give,

to

do.

or

nor

to

do

.

o Real

Right- power

over

a specific thing (e.g. right

of

ownerslup or

posscss10n)

and is binding

on

the whole world.

o

In

the case above mentioned, before the land is del.tvered,

the

proper

remedy

ot the

buyer (since

he

ts

not

yet the owner) is to

compel

specific performance

and

debvery.

and

not

an accion reinvmdicatoria.

c. Deliver ccessions

Accessories-

those joined to

or

included w1tb the p1incipal for the latter s

better

use, perfection,

enjoyment

(e.g., the keys

to

a house, the dishes in a

restaurant

).

o They

are

attached to the property but this can be separated without any damage

Only for embellishment or ornamentation.

1\ccessions - additions to

or

improvements

upon

a thing.

The

se Accessions

are attached, cannot

be

removed without

causing damage

to the

principal.

These become part

of

the

principal,

so

rhe

owne

r of the principal property

gets the

accessions.

o Example: obligation to deliver a car,

it ha4momo

steering wheel, 1pod dock etc.

Do you have to deliver these wtth the accessories?

GR: once you sajd you will deliver this ca.c,

you

have to deliver

everything. But of course, you can scipulate othetw1se.

f he object ts generic, then genus does

not

pensh. So you don t actually have these Lh.ree added

obligations.

Breach - failed to deliver

or

perform the prestacion

Remedies

of

the

CREDITOR

n case there is a Breach

of

Obligation:

To Give

To

Do

Not

to

Do

Specific Generic

Specific

performance

X

-

Right to compel the

(

no

prohibition

obligor to deliver or

provided

in

the

to perform his

law;

but

t

is not

obligation

:LI effccove

remedy)

Substitute

Performance

X

X

lu ..W-k

(except:

purdy

personal/

.

rohibited

by

the agyeement)

,.....II \

Damages

J

Page

Every good

and

perfect gift

is

from above, coming down from the Father of the heavenly lights, who

does

not


Caroline Tan Jessamyn Uy

&

James

Ligon


6/57


7/57

CIV IL lAW REVIEW D

ean

Del Casti

ll

o

These cases

of

Villanueva ancl Bernabe, these are K

of and

K to Sell. The

doctnne

now IS thar

it

is a K to sell, the remdy

of

rcsoluoon

of

cancellatiOn

is

NOT a remedy because

there

is nothtng to

cancel or

resolve.

This remedy presumes

that

there is

an

existing

obliM.Uon.

If t 1s

a

K

to sell,

th1

s

IS

an obligation subject to a suspensive condition, that is, the payment

of

the buyer,

so if

there has

been no payment, no obligation has perfected.

Ji is t a resolutory condition, such as the K

of

sale, then an obligation has already been perfected so

you can resolve or cancel the obligation

Racquel

and

Unlad: ; _not

int

e

rch

ange

resciSSIOn

Aroclc 1380 and Article 1191

The

latter should

bt

Ltrmed as

resolution/

cancellation

RESC ISSION {tNtlts.tJ. RESOLUTION

Obh

Article

1380- 1385

Article

1191

,

Basis:

Lesion or economic

prejudice; this is Breach

-you have

valid obligation

as

well

some

thing intrinsic in

the

obligation;

we

are not

talking

about

breach here;

these

are

actually

limited

to those

K

entered

between

specific

people like guardians

and

wards.

If you

l

ook

at

the

K l t

is valtd, but then there

is

somcthtng

wrong because someone

is preJudiced.

Subsidiary Remedy:

resorted

to only

when all

Pnne1pal remedy :

1t does

not

depend

on

o

ther

remedies

fail

anythmg

Since tlus IS b:tsed on economic prejudice. the

yo

u to avail

of

rhis

remedy

,

creditor

mav

be compelled to

accept settlement

mal:

no

lo

nger

revoke

it. The

OEooq t$

or

payment). Right

of

rescissiOn may

not

e,Ost.

TR.REVOCABLE

11us remed

y

IS not

totally vm:hin the

prerogative

of the credit

or.

Once there has

been

breached, then you can ntJ

longer VNBREACHED it

Mutual resotution applicable only

in

specific is always a

requiremen

t

of

mutual

instances:

re

su

rucion

a.

Those

entered into m :a fiduciary

re.lanons

hip

BREACH

What is breach?

Ther

e is breach i

you do not

co

mp l

y with tht: oblJ.gation exactly in the

manner

a

nd

Stipulati

ons

agreed

upon

4 Sources o f Breach

a Dolo

-

b. Culpa ..; f\/C

H7 't.c.

c.

Default

d. Contraventio

n

of

the

Terms

71 age

Every good and perfect gift is from above, coming down from the Father

of

he heavenly lights, who

does

not


Caroline

Ton

Jessamyn Uy James Ligon


8/57

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CIVIL

LAW REVIEW

II - Dean Del CastillQ

DOLO CRC: this is reaJly not FRAUD) CULPA negligence)

;

There

is

deliberate intention to cause a. ll1ere

is no

deliberate intention to cause

damage

or

prejudice damage

b.

Liabihty arising from dolo cannot be

b.

uability due co negligence

may

be

miciga red

or

reduced by the couns. reduced in certain cases

c. Waiver

of

an action to

Liability

c

Waiver

of

an

action

to enforce

liability

due co furore fr:1ud is void.

due

to furore culpa

may

in a certain

sense

be allowed.

DEFAULT CONTRAVENTION

OF

TER.l\ttS

a A brench

or

non-performance in point in a. You do nor comply with the terms and

orne

conditions

b. But look ar the reason why the debtor

failed to perform

If

Dolo/Culpa

-liable

If not e.g. fortuitous event) - not hable

mer

e are really just two cases

of

breach:

a. DOLO

b

CULPA

The

contravention and default is the EFFECT of breach

DOLO

CULPA Fortuitous

Event

Person most liable People who are in the No liabU Hy

lruddle

of

the road; they

are liable but nor so much

as compared to Dolo

asis

He

is liable

because >

he Person is

not

aware

but Two

kinds:

is AWARE that he has he is punished because he

a Could

not

have

an obligation and yet FAILED TO

lt J.

foreseen

deliberatelY fails to

EXERCISE

THE

1. 4/

b

Foreseen but

cX;mply

with

it

Dll.JGENC

E I

unavaoicl.ablc

REQUIRED

OF

HIM;

HE

COUlD/OUGHT

ro have foreseen

Extent

o

Liable for all the

Liable only for those that Not liable

Liabifjty

consequences of his could have been foreseen

actions, whether

foreseen

or

unforeseen

3

Kinds

of

CULPA

CULPA

CO 'rr

RAc ruAL CULPA AQUlLIANA

CuLPA

CRIMINAL

I Page

Every

good

and perfect gift is from above, coming down from the Father

of

the heavenly lights, who

does

not


Caroline

Ton

Jessamyn

Uy

James

Ligon


9/57

ClVIL

LAW REV

I

EW

- Dean Del Castillo

Basis: Contract N egligcm Act ivil uability aasing

cnme

As l0ng as it

IS

proved that

The

victim has

lO

eroYe the

Accused td P,tesumed innocent

there was a comract, and that

negligence of the defendant. until contrary is

proved,

so

was not carm:d_s>ut, it is Tills is because his action is

prosecution has

the burden

of

that

the

debtor

is at

based

on

alleged negligence

on

provmg

negligence

of

the

fawt, and it

1s

h1s duty to prove

the part of the defendant

accused.

that there

was

no negligence in

carrpng out the ttems of the

contr:tct

Defense

of good father

of

a

Defense of good father, etc. This IS not

a

proper defense.

famtl) thr.: selection and

S

proper

and

complete defense

Here,

the employee's guilt is

supervisJon of em ployees i@

(insofar as employers

or

automatically the employer's

a

proper defense.

guardians ar civll guil t, if the fom1er JS

insol

vent (SUBSIDIARY

LIABILITY).

USURY LAW

Usury - exaction of excessive interest.

Not abolished

but

merely suspended.

1he WHOLE INTEREST that is USURIOUS is voided, not only the excess interest

1

NST

ALLMENTS

Please see Art. 1176

:\n. 1176 is merely a rebut table

presumption not

a conclusive

presumption.

r:or

par

2,

Art

1176 to apply, 1t 1s n

ot

enough that the recei

pt

for the msralmenr paid be dated,

n must also specify that the receipt is for payment of a particular installement due.

RIGHTS OF CREDITORS (An.

1177

)

1 Exact Payment

2. Exhaust debtor 's property, generally by attachment (except properties exempted by law).

3. Accion subrogatoria (subrogatory action)

-I.e.,

exercise all rights

and

actions except those

inherit

in

the

person

(e.g. parental authority, right to revoke donations on ground of

ingratirude,

hold

office, carry

out

an agency). This is not a remedy of

subrogaoon

referred to

In the Chapter

on

Novation.

. ;\ccton pautiana- impugn or rescind acts or contracts

done

by the debtor to defraud the

credi tors.

General rule RJghts arc transmissible.

Exceptions:

1. If

the law.provides otherwise

2. If the contract provides

I Page

N very good ond

perfe t

gift

is

from above, coming down from

the

Father of

the


does

not change like shifting shadows.

Caroline Tan, Jessamyn

Uy &

James Ligon


10/57

CIVIL LAW REVIEW l

-

Dean Del Castillo

3. If the

obligation Is purely personal

DIFFERENT

KINDS

OF

OBLIGATIONS

PURE

OBLIGATIONS-

one without

a condition or a

term

(hence,

demandable

at

once)

How \\111 you be placeJ tn

default?

Demand IS

needed

CONDITIONAL

OBLIGATIONS- : \ND uncen:iln-

cannot

be

past and

uncertain

(du :i

period uf uncertainty- is a PERIOD)

a. Suspenstve-

the

happerung

of

the condition gives rise

to

the obligation

J

IW 1

h

fl v

/r

1

b

I FRUJTJ

I

Entry

Fulfllmen\

of

the Condmon Dehvery

o You

need

a

demand

o

When

does your obligaoon anse?

Upon

the rime the

condjtion

is fulfilled. But once it

is fulfilled, it retroacts from the ti.-ne you entered

into

the

K.

o

\ 'hat

is the

consequence of th1s? You

can sue only

upon happerung of

the condition

but what is the sigru6cance of this retroactivity? The cred.ttor can

sue

you wtthin

the

period

entering

until the happening

of

the

ccndiuon.

Resolutory- the happcrung of .he condition extinguishes

the

obl.igaoon

Remember

you

can always 1mpose any condiuon, except

It

s

hould

not

be ILLEGAL.

Il\Uv0R.\L,

and

tlvfPOSSlBLE

You

can mixed these

two

(suspensive/resolutory) with the followUlg:

a. Potescstive depends upon the will

of one of

the parties

a..

Potestative

on the part

of

the

DEBTOR

i. f also suspensive- BOTH the condirion

and

the obligauon are VOID

ii.

f

resolutory - Valid

b. Potestative on

the part of

the CREDITOR -VALID

b. Casu3/-

depends

on

chance

or the

will of

a third

person

c.

Mixed

depends

partly on

the Vv ill of

one

of

the parties

and partly on chance

or v..-ill

of

a

thud

person

FO

RT

U

ITOUS EVENT

Somethmg beyond

the debtor's vtll

It is

an act

of God that no

one

has control of

f u

ss

a

FE,

then your liability is 0. Because this is something which you have nor foreseen or

foreseen

but

unavoidable

Exceptions:

1. By sopuhtion or contract

10

Ira g

e

N very

good nd

perfecc

gift

is

from

above, coming down

from

the Father

of

the heavenly lights,

who

does noc change like shifting shadows.

Caroline Ton, Jessamyn Uy James Ligon


11/57

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CIVlL LAW REVIEW II - Dea n Del Casti l lo

2. Debtor assumes the risk (e.g. msurance contract)

3. If

the obligor

is

in default

4. If

the obligor is guilcy

of Bad

Fruth (for havmg promised

to

deliver the same

thmg

to

2/more persons who

do

not have the same Interest -

liable to

BOTI I

5. Provisions of aw

6.

Rule

on

concurrent

negligence

Example: civil liability arising from

criminal

offenses

Exception: When the creditor (offended party tn the crime ts in Mora

Accipiendi)

Illustration:

A commits a crime of theft and

JS

asked

to

return the srolen ro

ns

owner B. f A

had

previously asked

the

owner to

accept

the cor,

but

the

owner

without

JU

stifiable cause to

accept

the car,

and

later

on, the

car

was lost thru a FE. Is A still liable;;.:>

___

No longer liable because the c reditor is

7. Rule on commodatum

- bailor scill liable - del )

t

R

eq

uisites:

IFIN)

1

a.

Independent of

the will

of

the debtor- something he has not control of, an

act of god

or

nature,

it can involve acciden ts like ftre, catastrophy, war, rebellion, sedition

b.

Could not have been

Foreseen

or

foreseen

bur

ur.avoided

c. An

event which

render

you

IlvfPOSSIBLE

to

perform-

difficult-j ts

not

an excuse, it is

the

imposs1bilicy

of

perf01mance that excuses you from

performing your obugaoon-

1f it can

still be perform even tn the uunost difficulty, you a re

not

d.

No contributory NEGLIGENCE

Cases:

\Vhere parries have inststed that they were supposed

co

be excused from perfoarung theJr obugauon

because

of

martial law, the courts said that this

should not

be considered as a fortuitouse event

unless

of

course

this is very direct say for

example

you have to deliver a thing

to

a

compan

y which

was already escheated by Marcos.

The

fact that

you are

not is also

nor

a forruirous event

Example:

Contracts cove.red by a

period

;

I I 2 YRS FE I I

Delwer

i@ a r s

therl..lJ'ears in between a

6rc

has prevented you from detivenng

your

product,

the court said that one you have to the cause the So if the two-year perioj IS .

because

of

fortuitou5 eve

nt

, you do

not extend

your obligation for another

two yeru;

because in this

1 \No years you were excused from ji';'Qliry because again it is a fortuitous event

EFFECTS OF ILLEGAL,

IMMORAL,

OR IMPOSSIBLE

CONDITION

'

i

1

\1

l l i P ag

e

Every goo and perfect gift is

rom

above; coming down from the Father of the heavenly lights, who

does

not


Caroline Tan Jessamyn Uy James Ligan


12/57

.

L ..

CIVIL LAW

REVIEW

II-

Dean

Del

Castillo

J\

Positive

condition

r

you

must do)

G.R. both the condition

and

the

obl..tgation is v01d

E>:cept graruirous(donation

etc)-

conditions are not deemed written- the reason for this is that

you cannot be an Indian giver, you say you will give but because of the condition you

are

nor

bound to deliver. ( flr"& Jl l .vr.. /-..

1 ?/i

VJ\.

A

B.

Negative

condition

(if you

do

om

commit

an illegal act,

that

nothing must happen)-

the

condition will be

deemed as not having been agreed

upon by

the paroes. The condition

lS

treated as not written.

Why

Because

the condition is

superfluous. Everybody is expected

not to

do

immo:aJ things.

llus wJil be

as

if

you h3vc entered Into a PURE obligaoon.

On the assumption that your condition does not fall within the three aforementioned limitations,

then tbe

condinon

must be fulfilled.

Example: to pass the bar. But what if the person keeps on failing

the

bar, how long

should you

wait?

GR:

if

the

parries have nor agreed to

fix the date

as to when it should

be

fulfilled, then you have

to wait, subJeCt to

the

rules on prescription (well one may argue there is no runrung of

prescription yet because there is no obligation yet)

Exception: if t ts obvious that you will not be able to pass.

Now

we

JUSt

have 5 years to

do

HI

Article 1185

CRC: 1would reaUy

understMd

this provision to mean that

it

IS not that the condition is fulfilled

but the debtor is already released according to 1nrent:ion of

the

paroes and the narure of the

obugation.

t

is wrong to say

deemed

to be fulfilled because by thi > we

wtll

mean the.re

wac;

obligation. In other words, if

the

tnteotion of the paroes is not to walt fotever, then the court

sho

uld take this into considcnwon.

Period

or

Fullilmenr o .he Obligation

A.

Positive form

I

will

give

you

Php 1M if the

ticle will be issued before Dccembe:- 31,2011.

What happens if before the said date, condition is fulfilled? Obligation anses at the

wne

of

fulfilment, not

on

the agreed penod.

lf

the period arrives and the condition has not been fulfilled - debtor is released from the

obligation. Except: when

the

creditor prevents

the

fulfilment of the condition or it becomes

indubitable that the condition

will not happen

{ t hi

B. Negative

- which means that nothing should happen before the period

Effect

if

something happens, then the

debtor

is released

Effect if

nothing

happens,

then the

obligaoon is created

OBLIGATIONS

WITHA

PERIOD

12

I age

'Every

good

and perfect gift

is

from ubove, coming down from the Father

of


does

not


Caroline Ton, Jessamyn Uy

P t

James Ligon


13/57

CIVIL

LAW

REVIEW

II

- Dean Del Castillo

;\n

obhgation with a day ccwun

What

is

the meaning of a certain ?

a. Can be

a

fiXe date

b. Future andcertain event- must necessarily come, although it may not be

known

when.

c. Past event which is unknown to the parti s what is the period here?

Date

of

discovery or knowledge: of the party because it

is

SURE that it happened but there is

an uncertainty as to when

will

the knowledge be acquired

d. Pa able able t ime- this is a sure obligaoon. What IS the

penod

for payment here?

e period

is

fixed by the court.

The

court s obligation is to

try

the tntention of the

parties based

on

rhe of the obiJgation and the cucumstances of the parries

and

fix

the

penod. Is there :1ny

other

mstance the court fixes the period? Yes. article

1197

Requisites for

a Valid Pcn od

or Term

1.

It

must

refe to the

future

2.

t

must

be certain (sure to come)

but

can be extended

3. t

must

be physical

and

legally possible

Fixtng the period

a. Firs t step: is there an intent ion to

fix

a peood?

b. Second step: when the pertod has armed and the

debtor

has nor paid

so

you avail the

remedies provided in the Cl\ tl Code

The

coun sometimes consolidate like if tht debtor has

not

fulfllled after tlus penod. rhe c;.rediror

Js entitled

to

this 01: that remedy

When

the

Court

May

fix

a penod?

I

When

the duration depends

upon

the

\Vill of

tlte debtor

2.

\\ hen

although the obligation does

not

fix a

penod,

It can

be

Inferred that a

penod

was

intended

hen Court May Not Fix the Term (Paras)

1 \Vhen no tetm

was

speofied by the parties because no term was even intended, in wiuch

case the obligaoon is cP ally a

pure

ooe, and

dem:mdable at

once

2. Payable on demand

3. Specific periods are prov1ded for in

the

law

Suspensive Period (ex die)- the obligauon begins from a day cert:Url, In other words. upon the

arrival

of

the period.

Resolutory Period (in diem) - up to a tune certain, the obligation remams vahd,

but

upon the arrival

of said period,

the

obligation terminates.

Period

rom

a

ondition

l

Podod

ondition

1 31Page

Every good and perfect gift is from above, coming down from

the

Father of the heavenly lighcs, who

does

not change like shifting shadows .

Coraline Tan Jessamyn Uy James Ligon


14/57

CIVIL LAW REVIEW

J

- Dean

De

l Castillo

Event

which must happen soosH.:r or iaicr, 11

.l

Unc


15/57

,

-

, .

.

l .

L

;

fr

JJ ?

{ II

, ft

}7/c / fvt

ttcr

gt...fL

CJV

IL

LAWREVIEW

II-

D

ea

n

De

l Castillo

The

unpa.Lrment must be bec:J.me of

debtors

fault.

Make sure you can distioglllsh (b) and (c\

Jn

(c), you

can

replace the security

d . Violation of any condJoon

Remember

it

must be dear that the undercaiUng/ concliuoo JS the one that induced

rhe

creditor in

granting

the debtor

a

period

e.

Debtor

attemets to

abs

cond

Abscond

:

runmng

away from your obhgation,

in

most cases,

due

to flight

Take

no te, mere attempt

wiU

entitle the: creditor to accelerate

the

period because 1f you

still have to w:m, then you mjght be left \Vllh nothing

f Those instances where the snpulation of the parties for the acceleration of the parues

Re t

roact

ivity

Retroactive Effecr

C) delivery

\

J>

ab Condioon is fulfuled, effccti\,ty: nme condition

is

fulfilled but retroacts to

the

date

when

rht:

obligation is entered you have rights

but

accruing only

upon

the cond.ioon)

So

UJ

between

A

and B, vou mr y have these protecnve actJons:

Bond, escrow, etc

Sometlung the paraes

may agree

to.

not forced by law

c. f he debtor

dd ivers in (A),

what is the

effect?

Rec

over acrual payment and mtercsr thJs

is payment

by

mistake (soluoon indebiti gives

the

payor

the right

to recover with interest)

dus is of cou.rse jf he discovers the mistake be fore the happening of the condition.

But what

1f

he knew

of

the

mistake

after the

condition has already been fulfilled?

YOU

DO NOT

H A

VE THE RIGHT

TO

ASK

FOR

TI-lE

RETURN

OF

THE

PRINCrP \L, you can recover for

the

tncerest

for the

period

befor

e

tht>

happenmg o f

the

period.

If the debtor knew mat payment was

not

yet d

u e he

cannot recover what has been

paid.

Thi

s is true whether the creditor is in go od faith o r bad faith, since the

important thing

is

the knowledge of the debtor (Implied Waive r).

Example (From Tolentino s

Bo

ok)

X sells a piece of land, subject to a suspensive condioon, to A. Then, before the happemng

of

the condition, he .it unconditionally to

B.

There is neith

er

registrat.ion of the sale nor

delivery of possession etther to \ or B. Upon the happening of the condJuon, the sale to v.,ll

retroact to the date when it was made, he will haye a better

right

than B.

\Vhen there is no Retroactivity?

a. Fruits or interest

Art

.

1187

15

I

P

age

Every

good nd

perfect gift

is

from above, coming down from the

Fa

ther

of


does

not


Coraline Ton, Jessamyn Uy James Ligon


16/57

CIVIL LAW REVlEW II - Dean Del Castillo

[n un.i.iateral obi.Jgauons - debtor gets the fruits .tnd mterests, unless

there

ts contr

tn

lntenr

In

reciprocal obLg:mons - the fruits and Interests

dunng the pendency

of tht:

condition shall

be

deemed

to compensate

each

other.

b. Prescription

-you

start c-ounting from

the

time

the

condition wok effect

Is tlus the

same

rule .if we talk

about

those

Wth

a Period?

You already have

an

obligation from

DAY

1, that

is why

tough you may ask for

protective acts

but

tht:

debtor is already obligation Period

is

merely

a SUSPENSION of

the obligation

to fulG.I.

Hence, retroactivity is acmally

N

I

A

For

prescription though, same rule applies.

You count

only

upon

the

happerung of

the penod

(suspenstve)

For the

fruHS,

well since your oblJgatJon arises from

DAY

I

if t is

a period.

CRC: Caguioa group: since

we

do

not

have equiva.lent

of

Article

1187

for .geriods,

fruits

fwm day 1 up to

the date the

period anses

belong

to

the

creditor. ..

Paras

gro_ P:

since

you

cannot

rea.lly

bring

an

action before

the

amval

of

the

period:""then techrucally you do not

hav

e rights

OYet

the fruits

before

the arrival

of

the

penod

as

well.

LOSS, DETERIORATlON IMPROVEMENT i

.

Th is onlv appLes

to

those OBLIGATIONS

TO

GIVF

SPECIFIC

PROPERTIES Bt:cause it you

talk about

gcnenc

propertJes, res perit

domino

In those to Jo

or

not

ro

do, nothing

can be lust. Duh . Also for retroacovity, it is up

to

the court if

they will allow this

LOSS

DE

TERIORAT

E

IMPROVED

a. Total loss

-

Fault of

debtor:

-+

Caused by

-

Depends:

Creditor's option:

debtor:

Fault of debtor

a.

Specific

Usfrucuary

Debtor pay damages

perfoonance

+ rights- can he

No

specipc perfonnan

ce

damages

get payment

for

because

it

is one of a

b.

Resolution/cancell

the

kind. No subsrirute

at.ion

+

damages

tmprovemen

s?

performance

as

well.

Fault of creditor No.

He can

Resolution

I

cancellation?

- Debtor delivers

the

prope1('

remove if

it can

There is nothmg more

111

its status. Tapos { -

be

removed .

ro cancel.

( I >t f

Fortuitous

event

Caused by rhc

Fault of

Creditor

-

oebto

de s

pwpeny

creditor:

Debtor

is

released

U

its status

Tapos Credttor

-

Not

entitled

to

No obligaaon

suffers

imp

t.

any

expenses

for

created

in

the first

-

1mprovement.

16 I P

a

g l

Every good

and

perfect gift

s

from above, coming down from the Father

of


;Joes

not

chonge like shifting shadows.

/ -

Caroline Ton

Jessamyn Uy James

Ligan


17/57


18/57

,

-

\

.

t

I -

.

l -

CIVIL LAW R VI

W -

Dean Del Castillo

Muluplc

Obligaoons

a. Multiple parries -Joint

and

soildary obligations

b. Multiple prestat ions

Alternative is where out of rl-)e two or more prestations which may

be

given,

only one is

due

ConJunctive-

if all the conditions

must be performed

.

.

Facultative- only one prestation has been agreed

upon (prtnopal

prest.-uion) but the

obligor may

renderanother

m

substituoon

ALTERNATIVE OBLIGATIONS

How to determine

which one

is due?

I. Exercise Right of

Choice

\ V ho

has the Right of Choice?

o GR: the right belongs to the debtor

o Exception:

when

it is expressly gramed to the

or

there s a

granting

the

right of choice to 3 d party

Luni.tations:

No

right

to

choose

those prcstatioos which are:

a. Imposs1ble

b. Unlawful

c. Which

could

not have been the object of the obligation

If H is impossible to give all except one,

that

one must still be given

Jf one of the

prestarions is illegal,

Lhe

others may

be

v:ilid and

the

obligatl.on remams

2. Choice must be

communicated

lt 1s

a noofication process not a

conscnr

process

o

Debtor s choice - notify the creclitor

o Creditor s choice

-notify the debtor

o

3rd

Person s

chmcc-

noufy

BOTH

tht:

Jebwr and Lhe crednor

Choice can be commurucated orally or m

wnung,

e..xpressly or impliedly

o

Tacit

Choice-

person having

the

right

of

choice

performs

act

that

limits Ius

choice (e.g. destroys one of the prestations)

o Implied ChOice- when the debtor delivers to the creditor and the latter accepts H

Once

notice has been

made, the obligation becomes a simple obliga cion

An

elec:Oon once made is binding on the person

who

he will not be permitted

to

renounce

his choice an take an alternative which was first open to him (irrevocable)

Effect

o Loss

D b Ch.

i

. d

e

tors

o1ce - spec1

JC

property

smce

res

pem

orruno

One Some All

Debtors

Fault

a.

\Vhen hr destroys one

a.

Crednor to receive

of

the several

damages -

what

is the

prestations,

then

the value? Based

on

the

la

st

debtor i c;

just makmg

his

choice -

choose

one

18

I

Page

Every good and perfect gift is

from

above, comfng dawn from the Father of the heavenly lights, who

does

nat


aroline Ton Jessamyn

Uy

James

Ligan


19/57

CIVIL LAW

REVIEW IJ

- Dean Del

Castillo

from the remaming

Crcdiror

1

s Fault

2 Deliver any of the

:i Resoluoon Damages

remammg based

on

the cho1cc of

b. Resoluoon damages

the

debtor

FortuitOus

Event

a. Choose from remaining

a.

Obligation

s

extinguished

2. Poss1ble combinations

If you destroy everything then

the

last one

ts

lost due to FE, then rou

do

not have any

ob Jgation already. The debtcr has aheady chosen bv desrro',1ng other presratJons and cotwt:rrcd

H

mro a simple obugation

A - bst

due

ro FE

B - lose due ro credltor's fault (at thts

poim.

debtor can choose between the two opoons 'ls

menooned above)

C Qast item) - destroyed by the debtor Qost due to debtor's fault) tt means

that

the debtor has

chosen resoluoon/cancellation (not liable for the loss)

3 Creditor's Choice

One/Some

l l

Debtor's

F:wft a.

Choose

from the a.

Damages based on

remaining whatever his cho1ce IS

b

Damages- Value of

the thing destroyed by

the

debtor

Cred

u ors

iault

a Can choose from the a.

Obligation 1

remaining

extinguished

Fortuitous Event a

Choose from a. Obligaoon

i:

remrumng

exting01shd

i

FACULTAT VEOBUGAT/ON .

1l1c nulliry

of

the principal caroes

with

l t the nullity

of

the accessones or substitute

f t s impossible to give the the substitute

doe

s not have to be given;

if

it is

m1possible to give the substitute, lhe principal must still be given

1l1e right

of

choice is 0 12; to the

debtor

;

Effect o Loss

a. Loss

of

Substitute-

GR: Does

not

affect the principal prestation.

Debtor

cao still deliver prinopal prestation

Except: if

debtor

chooses substitute

and

communicates to creditor

and

the credttor does

some

thing

w/c results in loss

of

subst.

19 I Page

Every

good

and

perfect

gift is from above, coming down from the Fatherof

the


does

not


Cora/me

Ton

Jessamyn

Uy &

James Ligon


20/57

' .

CIVJL

LAW

REVIEW II - D

ea

n Dei

Castillo

-? credltor liable to debtor

b. Loss

of

Pnncipal-

Loss

due to FE obligation is exongwshed

Loss

thru

fault of

Debtor

o

convert

subsorute into tJne

of

pnnctpal obligations;

By

destropng pnnapaL it

is

:IS if

debwr

has chosen

Loss thru

fault

of

Creditor- obugaoon 1s exunguished

If it can t be determmed if the obligation ts /

Consider it as an al ternative obligation because it creates more :coproetry

of

rights

To

be facultaove intention must be cle by

prO\ision of l:lw

fOINT

SOLIDARY OBLIGATIONS

GR:

Joint Obligatton-

each obligor answers only for

a part

of the whole liability

and to

each obligee

belongs only a pan

of

the correlative rights

Dtfferent shares

of

the

debt

or

the credit are constdered from

one

another

Excepoon: Solidary Obl.igauons the active and passtve may demand the fulfilment

of

or

must

comp

ly '">ith the whole

When do you have solidary obligations?

E.xpresslv s

op

ulated

v law (e.g obligaoons arismg from bailees in commodarum)

stOf

words

such as JOint

and

severally

( the use

of

the word sever".J.ly in the Philipp1nes, tt mean:- ::.olidary)

lnwvtdually, collccrivc:fY. separately, disuncnvely, I \Vlth a lot of st&T: atures a

-

\7hen the nature of the obligation reqwres liability to be solidary

Different Kinds

of

Solidarity:

J _ Solidarity - on the part

of

the creditors

or

obligees

2 Solidanty on the

part

of the debtors

or

obligors

3. Mixed

solidarity-

on the

part of

the obhgors and obligees, or on the part

of

the debtors and

the crerutors

Solidanry despite Dtfferent Terms or Condmons

Creditor may recover that e..,art wruch is pure and unconditional, and should lea\e

in

suspense or

pentrg,

the righr to

demand the the

remainder

unnl

the expiration

o

rhe term

or

the ftlment of the condition.

The

whole

solidary obiJgations can be recovered from any

of

the solidary

d e b t o rs@ .

he

share of those with unmatu;-ed condit ions -

---------------------------

20

I

age

Every good

and

perfect gift is from above, coming dawn from the Father

of

ile heavenly lights. who

does

not


Caroline Ton Jessamyn

Uy

James

Ligan


21/57


22/57

CIV

IL LAW

REVIEW

J -

Dean Del Casti

ll

o

GR: liabiliry

depends

on agreement

o Exception: if there is

no

agreement, e.9.ual apportionn1ent of liability

QB:

solidary

do

anything prejudicial to

other

solidary creditors. Bur

he can

do

anything thar

o Excepti9ns J_ . L

1.

,..,}1

t'Ol

he has the obligation to reimburse the other creditors

Except If

condorung creditor has

consent of all other

creditors,

Condoning

creditor

has NO more duty to reimburse the

other

2. Assignment

of

- GR: consent

of all is

(can be given later)

- o

Exception:

assignment

of

shares to another solidacy p-editor

w/"o consent of others G%1iJ.e assjgnment (can be

ratifif'd)

E

ect of Form s of Extinoo uishnu:nt (Passive So/idadty)

.Wv

f :A

Obligation extinguished as between creditor

and

solida;y debwrs

However,

a new obligation is creared as among the

so

lidary debtors = o the paJing

=

payment; novation; compensation; confusion; remission

o Obligation among themselves

i ,_iol lt

Rule on exnngu.ished thru PAYMf:NT

GR: Obligation ro

Exception:

if payment is made after

ob l iwon-

Vrescribed

or

has become legally impossjble

o - Paying

debtor

shoulders whole gQl. gation lU.mself- he

can t

claim

reimbursement

from

other

solidary

debtor

o Remedy:

Recover from

the creditor: follow rules on natural obligation soJutio indebiti

- i f

he

KNOWS that debt

already presccibed - -

7 narural obligation-

N O

recovery

i f

he did not know debt prescribed

7 can recover from creditor

Rule on extinguished thru

NOVATION

Modificatory Novatioo- other solidary debtors must REIMBURSE paying debtor (with

respect to

the

lower

amount)

o e.g. one solidary debtor able to renegotiaLe lower

amt of

Extinctive Novation- NO obligatton to reimburse

o condonation

ofTOTAL

obligation

Rule

on

Extinguishme

nt thro

COMPENSATION, CONFUS

I

ON,

REMISSION

GR

There

right

of

l'dffil5Ursernent -

Exception: NO

reimbursement:

:J hi.. '

.

i ; t / JJJ 2 If age

''Every good

and

perfect gift is from above, coming down from the Father

of

t

he

heavenly

who

does

not


Caroline Tan, Jessamyn Uy James Ligan


23/57

'

.

i,

l -

CIVIL

LAW REVIEW - Dean Del Castillo

o Condonaoon

of

TOT:\L obllgation

o when debtor sued is guilty

of

loss of d mg due

Effect

o

Loss or Impossibility

1.

Due

w FE

BEFORE

demand was

made-

obligation is exungwshed

AFTER demand was made -debtor still liable

Convened

to liability for damage

2. due w

fault

of one of

the solidary debtors - debtor liable

Kinds o

Defences

1

Complete

Defense-

denved from the narure

of

the obligation: you don t need to

pay

anything

Examples:

lack of

consideration; absolute simulation; illegal consideration;

extinguishment of the obligation; non-fulfilment of the suspensive condition; statute

of

frauds

2. Personal Defense to the

Debtor Sued-

Complete

deft>nse

(generally)

Vitiated Consent -Complete Defense

Incapacity to give

consent-

Complete Defense

Non-fulfilment of condition imposed regarding Ius share- Partial Defense

Non-arrival

of

the

rc.rm

regarding his share- Partial Defense

3. Personal to

Othe

rs

-Partial

Defense regarding share others involved

f one of

debtors

IS

uwoki.ng a personal defense (personal to hunself) you

CANNOT

be made to

pay. Example you are saymg your signarure s forged. Unbke when

It

is invoked bv another debtor,

be

may be liable to pay less the debtor s share that has

a

personal dt:fense.

Subrogaoon - the debtor who paid DOES

NOT

STEP INTO THE SHOES

O THE

CREDITOR

Rule on Insolvency of a Solidary Debtor

Insolvency s

NEVER a

defense

Insolvency of one

is

shared proportionately by the others

A solidary debtor who

pays

can later

on

recover from the insolvent

debtor

Upon payment by

tht:

other solidary debtors, the obligation of nsolvent debtor nor yet

extinguished UNLESS the insolvent debtor has been declared insolvem

on

erences between a so id d b

ary

e

tor and a suret :

Solid uy Debtor

Surety

principal party in me contract not a pnncipal party

cnn be made to pay the whole amount of the can bind himself for less

obligatJon (can

you

bind _yourself less?

No)

collects from othec debtors and cmoot collect

collects the entire

amount

agreed upon

the full amount (ofcourse minus his share)

Extension

of

time will

not

release the solidary

An extension of time to the pnnCipal debtor

3 I

P

NEvery goo ond perfect gift is from above, coming down from the Father of che heavenly lights, wf

does noc change fike

shifting

shadows.

Caroline Ton , Jessamyn Uy James Ligon

> a;.;

.;. JJJ., t,..fl .,.

1

,

' ltl ;. k t

I


24/57

I

, .

' .

'

.

..

L

CIVIL LAW REVIF W II - Dean Del Castill o

deb1or

TO N

T

INDIVISI

BLE OBLIG

ATION

S

Solidarity

Refers to rhe oe between the parties

wjrhout the surety's consent will release the

surety from the

contract

Indivisibility

Refers to

natUJ::e of

obligaoon

.

Need at

least

2

debtors

or

creditors May exist even

if

there

IS

only

one debtor and

only

one

creditor

The

fault

of one is

the fault

of

the others

The

fault

of one

is

not

the fault

of

the others

;jl

The

liability

of the

parties

is reaUy but

we objec1 that is indivJSJble

Obligations deemed INDIVISIBLE: '

1

/C.INJ

o Obligations

to

give definit s (e.g.

to

a

car ' H I I

o Those

which

are


25/57

CIVlL LAW REVIEW Dea n Del Castillo

Whc::r:

penalty

may be reduced by

court.

'

I

,.

The

obbgacion has been

pardy complied

with. by

the debtor

Penalty

is

Penal Clause CANNOT be enforced tf:

1. The

breach is

due

to the

fault

of

the creditor

2 Fortuitous s:yeot unless the debtor expressly agreed

3.

Debtor is

I'JOTyet

in

DEF ULT

Two provisions thar are confusing:

' 'cannot

collect penalty & principal"

and

' 'collect on ly penalty in

lieu of principal"

onetary

Obli

gation

(payment of

a

sum

o f

money)-

can collect

BOTH

the

printipal and

penalty

If

NOT a

monetary

obl.tg-ation (e.g. fat.lure to deliver the thing) must

pay

the penalry

Problem:

Facts: Credit: Pl

000;

Penalty- P200, interest-

12%;

payable in

3

years

1 y ru

Interest-

120

2


26/57

CIVIL LAW

REVIE

W

II

- D

ea

n Del Castillo

:\n

12.3i is

NOT

an ext.iusive there are

other modes of exonguishmcnr (e.g.

tlt:arh-

tn case

of

personal obl.igauon;

compromlsc; fonwtous

even; fulfilment of resolutmy term:

prescription)

PAYM

EN

T

Payment-

is

the

mode of

extinguishlng obligations whl ch consists

of.

a.

The

delivery of money: or

b.

The

performance in an} other manner of an obligation

Three Principl

es

in Paym ent

Integrity

'

You can subsume mdivjsibiliry here

If your obligation is to pay Php1M, then you want ro pay PhpSOOK

only, then tius

vwlares

the

rule on integriry

Performance or payment must be made m :1ccordance with

the

terms and condioons agreed

upon

Exceptions:

'(ff

a

Substantial

performance

(Article 1234

and

1235J

performance accorJmg to

the

f.ur

tntent of the

contrnct ....vah an attempt

LO

perform

b. Waiver

if

you

read Article 1234 ,

it

IS a bit

confus1ng. It the ob

Jg

or

rna\ rel: OVt"r

le

s.s

the darnzges - what is the mea:Ung

of recover? Doe

s this

mean rhar

the

obligor

can take back his money:>

No. otherwise

the

obligation v ril l still eXJst. Th js only means th:\t the

debtor

can be considered as hanng ful.filled hls obhgaoon and can

enforce

fulfilment

of

his obligation,

but he

is still liable

to make good as

to

what has not

be

n performed (balance)

-

Example: the obligation is at Php 100.00 bu t

the debtor

only patd

1'hp90.00,

the

debtor will

be deem

ed to have been fulfilled his obhgacion

but he stiJJ has

to

pay the remaining).

If

this is the

case, is

1234 and 1235 the same?

Nol In Article 1234, there is

the

phrase less the.: damages obt:uncd

by

the ctetlitor-

tllis means

that the debtor is

not vet off

the hook,

the

effect of

rhis

is

the

crc

dttor cannot

cancel the obljgau

on. Th1s

ts

an

cxcepoon

because

the at

this n.me

cannot

snll av:ul o f

rem

edies

such as resolution

but at

the

;ame time

the

debtor cannot be considered

as

fuUy

patd

becau

se

he

still to pay.

6 Page

Every

good and

perfect gift s from above, coming down from the Father of the heavenly lights, who

does

not


Caroline Tan , Jessamyn Uy James Ligan


27/57


28/57

CIVILLAW REVIEW II- Dean

Del

Castillo

P c

1

_wnetJt y

Jd Person

The

creditor can refuse payment by srranger .3rd person), except:

a.

There

ts a

all

owing this

b. 3rd person has an inte:-e5t in the fulfilmem of the ob Jgation (e.g. co-debtor,

guarantor)

3'J

perso

n is

NOT

interested

f

creditor does not accept

payment-

c:an't bt. considered

in

default

I f

he accepts payment, obligation is created between the

debtor

and payor

Debtor

3"'

Person

with interest

3rt person without interest

The 3 d person

ma

y pay:

,

..

Can Creditor

to

accept?

I

I

If

creditor refuses to accept,

can

he

be considered tn default;l

With

knowledge

AND consent

gf

the debtor-

pavor

is

en titled

to

Re.unbursemenr

AND

Subrogation

o Subrogation -putting somebody imo the :;hoes of the creditor, bencc, enabling the

'I\ fom1er to exercise all the nghts and actions that could have been e:


29/57

CIVIL LAW REVlEW II - Dean

Del

Castillo

o Can be ranfied

Creditor cannot

be

compelled

to

accept I t

Remedy of consignation would not

be

proper (Paras)

Exception: Art

1427 CC

- "\'\ hen a

nunor

between 18 a.f Jd 21 years of age, who has

enrered

Into a contract without the consent of the parents or guardian voluntarily pays a

sum

of money

or

delivers a fungible thing

in

fulfilment

of the

obligation, there shall

be

no nghr

to

r

ecO\ Cr

the

me

from the obligee

who

has

spent 0 1

conswned it m

good

fmth.

:;,ubJeCt to the mJe

on

natural obligauons

To whom payment must be made

a. Creditor

b Heirs

c. assigns

Assignment of credit does NOT

reqwre

consent of

debtor;

mere nouce is enough

d

Person

authorized to

recei

ve

I t 11 '}ti

p 'Jt-l A

(f.,

;v

Excepgons: (payment

made

to the

above mentioned

not vahd [void])

There is judicial order for retention of debts (e.g. garnishment)

Wm of injunction that prohibits payment to creditor

lnsolvcnt creditors

Pa_

vmenr

to Unauchon

zed Pe

rson

'D1c payment is Vaud nm only

w the

extent of

beneti

t to the creditor

Burden of

Proof

that

the benefit redounded to the credJtor

DE TOR

'J(

tt ? 1

ft

A rl

,1-

t

..A.

. klh

Excepuons:

'' '1

obl-t ll vJ;l

.1

1

after

payment

the tlurd persor;

acquJreu

the creditor's rtghts W

b. If the creditor ratifies the payment to the third person ft) ),. __ J

c

If

by the creditor's

conduct,

the

debtor

has been

lt:cl to make

the payment (estop

pel

)

t/P nv

Payment to Person in Possession o he Credit

Requisites (to consider as valid payment and release

the

debtor):

a.

Payment

must

be made in good faith

b. The

payee must

be

in

possession

of

the

m il

itself (nor merely the

document)

When one possesses the c

redit-

there

IS

color

of

title

to

it

Payment

to Incapacitat

ed Person

Valid only:

I f

the

incapacitated person has kept the thmg dcl veud; or

/ Insofar as

the

payment ha s been beneficial to hin1 vp tv k ri

/

Rules

on

Monetary

Ob

ligations

-"

QJ

kr-A

&

rrlft:.hr,.:

a. It

must be

io legal tender- it is tl1at whsch a debtor compel a

creditor to

accept in pa)mCn(

of

the debt.

29 I

P il

g e

Every

good

and

perfect

gift

is

from above, coming

down from

the Father of the heavenly lights,

who

does

not

like shifting shadows .

V .

). M .

.

I

Coroltne Tan, Jessamyn Uy & James Ligan rvr

v -

. v J n, .. tl

I.

A

(WI If rh l Vf/111'

(';\,- r


30/57

.

I

:

L -

CIVIL LAW REVIEW II - Dea n Del

C

as

tillo

iJ

Can vou pay in dollars?

Viii f r tJ,

h 72

o No The only currency that

is

a legal tender

n

the Philipptnes

ts

the Philippine

Peso.

o

But

you can agree to pay in o ther currenoes other than Philippine Peso.

b. 1t is subJect to rule on inflation

These are only applicable

if

payable m money.

l t

refers

to

the value

of

our money; as

to

its purchasing power

of

the Php

How

do we detennine the lncreast:

or

decrease

In

the value

of

the money?

o Based on the purchasing power

of

your money

o If there has been a decrease

tn

the

v:\lue of

money-

then

it

is inflation

o

There is

a consumer pnce index as ;:elcased in the Central Bank

of

the

Pru.hppines

Does

tlus affecl your obligation?

I

v

o Generally

no

but

it

begms to take effect when there

is ll'TRAORDINARl.

INFLATION

or

DEFLATION

--;--p;xtraordinary - when there 1s a sharp increase/ decrease

on

the

purchasing power

but

generally the determination is a judicial matter.

But

we

have the Ramos Case that has been decided

in

the 1980's where

the

court

has said thar

it is

the BSP that has the right.

CRC: BSP merely says the

RATE oflNFLATION

In

2007, Cicibank v. Sabin.iano talked about compensation

of

your

debt

from

one

branch to another. The Court said

thllt

it

is

the person who

alleges thaT there 1:> an extraordinary inflation who has the burden of

provmg. this. the courr wiU no[ declare if there 15 an extraordinary

in

flacon.

only reconahaoon we can make

ts

that JS soli a JUdicial

deterrruoation bul in

pro\,ng

such, vou can use BSP figures. Th ese

fJ.gUres from the BSP are

mcrdy

eVJdence. These are not conclusive

evidence.

This has nothmg to

do

with the exchange rale

o In the past, the value

of

the Php v. kepl on increasing, of course

ow

lftlporred

components have been increasing as

well. But

there is no relation as

to

yow:

purchasing power as

ro

the exchange

of

rate. These cases therefore are correct m

saying that exchange rnte has nothing

to

do

with

your purchasing power

On

the assumption that we have a finding that we have an extraordinary mfiaoon, what

is the effect? }

o Again,

if no

extraordinary inflation, then

Jf

your

debt is

PhplOO.O

O

you

still pay

Php100.00 today

o

f

there

IS

a finding, then:

o Example:

2010 2011

Php 100

Php?

Determine the inflation rate (max a[

100%)-

how much will you pay? Php200.00 tf

Lhe in

flacion is at 100

30 I P a g

Every good and perfect

gift

Is from above, coming down from the Father of the heavenly fights, who

does

not


n

Caroline

Ton

Jessamyn Uy

&

james Ligon


31/57

CIVIL LAW REV iEW ll - Dean De l Castillo

c.

Payment

using coins

a. These are legal tender but 1fyou use

n

coins:

o

Cent:tvos

()-only

up to

PhplOO.OO.

o Pesos -only

up

to

Php1,000.00

d. Mercantile documen rs

I pt11

pJf

Pll.oO

1/v t,tJIJ(;. Gb

Take

note:

new

rule:

ll

kinds

of

checks

are

NOT

LEGAL

TENDER

You have

to

in cash

if

the creditor refuses

to

receive rhe checks

Creditor can refuse

to

accept personal check unless

t

has been scipuJated

However, the moment the Creditor accepts the check

-cAnnot put

up the uefense that

the

check is not

a legal tender

J

Problem

February

11 :

check 1s tendered

February

15: encashment/

clearance

February

14: Due date

o Are you already m default because your obligation was due on February 1-P

-

No.

As long as the

check

has

been

cleared, you'll be credited

on

the 11 to

(retroactive effect)

Place

o

Payment

1

w hJ

Sopulation

of

the contract

;,

If rhere is

no

stipulation

-l dJfh.

Obligation ro deliver Detertnlnate

or

Spec1fic properuel'

-where

t

is

located

/4

Indeterrrunate properoes- dorrucile of

debtor

(CRC: H

sh ouJd

be

RESIDENCE

becau

se=

1f t

as dom1c1ie, you have to guess your debtor s tntcnoon)

o What i[ your debtor has changed b1s residence?

r depends whether good f:urh

or

bad

faarh.

If it is n

bad

fauh however, rhen

you can charge extra expenses (transporracion expense)

you

have incurr.ed m

collecong what is due to you.

/v

f

bf=

1

(lftJ

PECIAL FORMS

OFPAYMENT

A. Application

o Payme

nt

s

Definition: it is the destgnation of the debr to which

should

be

apphed

a

payment

made by a

debtor who owes several debts in favor of the

same

creditor.

Remember the requisites of valid payment (identity, integnry, indiVlsibility)- mu st sull be

complied

REQUISITES:

a. There must be

two or

more debts (severality of debts)

b. The

debts must be

of

the same kind

c

Owed

by the

same debtor

in favor

of

the

same

(thus, there must

be

only one

debtor and

onJy

one

creditor)

d. All the debts

must

be due

Exceptions:

'f'ttt ttl I

{JA /

/Mi

.:

,

M

Every good and perfect gift

is

from above, coming down from the Father of the heavenly ltgh ts, who

does

not change like shifting shadows.

n

Caroline Tan, Jessamyfl Uy lomes Ligon V _,

fzu

(.r-f/Pr;

( ,.

ti

;; J


32/57

CIV

IL

LAW REVIEW ll - D

ea

n

De

l Castillo

0 Jf mere IS a

o When it is made

by

the party for whose benefit the terrn

is

constituted i

e. Paymem s nor enough ro exnngwsh all the debts

- -

How Appltcauon is Made?

a.

PREfEREN

TIA

L

RI

GH

T

OF

DEBTOR

.

Debtor is given by the law the right of the debts he is paying.

Exception: Contrary agreement

Lunitadons:

o

Debtor cannot choose to pay

part

of the principal ahead of the interest, unless

creditor consents

o

Rule on

incliv1sibiliry

(partial payment)

:\pplicatioo must be made

at

the time when payment

by

debtor

is

made

o If

debtor fails to make applicaoon - creclitor has the right to make proposal or

recornmcndacion

o

If

debtor agrees- apply creditor 's rccorn.mcndauon

o

If

debtor disagrees-

be makes the application

b. Creditor makes the Jes1gnaoon, :JS agreed upon by the parties

UNLESS there is cuuse for invalidating the

contract-

refers to invalidity of payme111

o If obligation itself is VOID- application

of

payment lS also void

o Payment

V01d

(e.g. payment to incapacituted

person -

application of payment is

invalidated BUT obltgauon still remains

f he crechcor makes the application \vithout the knowledge and consent

of

the debtor,

the application

is

not valld (Paras).

c.

lf

neither the debtor nor rhe debtr has made the appllcatio ' or

if

the appllcation is not

valid, then application IS

rrutCe by optrafiOII oj tiR

Apply I t to the most onerous

[ f the debts are

of

the same nature and burden, application shall be made to

aU

proportionately

Once applicaoon of payment

is

made,

Jt

cannot be revoked

c. Exception: BO

TH

parties agree

d. Exception to the exception: not allowed

tf

3rd persons would

be

prejudiced

B . Dacion en Pa

go

- Definicion: Mode of extinguishing an bligauon where the debtor alienates in favor of the

creditor, property for the saosfacuon of monetary debt.

- Governed by the Law of Sales

e. Partakes the nature

of

sale -i.e. the creditor is buying some property of the debtor,

payment for which S co be charged against the debtor's debt.

f.

So, warranties

in

Sales applies

in

this case

Effect of Breach of warranty: No payment

Does it

extinguish the

ob

ligation in

ful

l?

32

I

P

g

e

Every good and perfe tgift

is

from above, coming down from the

Father

of the heavenly llgh rs who

does not change

like

shifting shadows.

Caroline

Ton,

Jessamyn Uy

&

James Ligan


33/57

CIV

JL LAW

REVIEW

l l-

De

an Del Castillo

g.

Not ncce5:;aq, here can be nc::gou:u:ion m the pncc of the property and 1f l l

lower than the debt balance

Requires consent of the creditor

C. Cession Assignmen t

in

Favor ofCcewtors)

tt

swh

1

/..; v

,

ml

11 lh

- Definioon:

it is a

process by whtch

a debtor

cransfers all the propernes not subject to execution

in favor of his creditors so

Ll)ar

the latter may se

ll

them, and thus apply the proceeds to their

credits.

- Kmds

ol

Assignment

f f

h. Lega governed

br

the Insolvency Law; maJOrtcy of creditors muse agree

1. \ oluntary - this what ts referred to in An. 1255 CC;

ALL

the creditors

mnst

agree

- Requisites.

j.

More than ooe debt

k. More than

one

creditor

1.

Complete or partial insolvencv of

debtor

(does nor have

co

be declared .insolvent)

m. Abandonment of all debtor s co not exempt from execution in favor of creditors

n. cceptance or

consent

on

the

parr

of

the

C

j.

e.ditors

- Effects:

o. The

ctedllors

do not

become

the owner:>; they are

merdy

ass1gnees with sell

p.

ne

balance remams collectible

q. Creditors will collect ere ts in the ord

er

of preference agreed upon,

or

in default of

agreement. in the order established by law

- Cession Distin 'shed from Daoon en Pa o Jt tr

\AV.

t

uires

the

consent of all

the

creditors

Requires

full

or partial inso lvenqr

Transfers owne

r

sh

i

Docs

not

transfer

own


34/57

.

L

CML LAW

REV IEW

II

- Dean De l Castillo

u. Requ1Sl. . d:.

a. Exmence of a vaLd debt

In case

of

an

option

this

s a

privilege, not

an

obugaaon or debt.

Debt must

also

be

due

b. Valid prior tender

Exceptions:

o

Creditor

is ab >ent or

unknown or does

not

appear at the place

of

payment

o Crediwr is incapacitated at the rime it

s

due AND does nor have a legal

representative

o Without just cause, the creditor refuses to gtve a recepr

o

Two or more persons claim the same nght to collect (an action

m

interpleader would be proper here)

o Title (written document) of the obligation has been lost

o Debtor previously been notified by the creditor that the latter would not

accept ny payment

c. Prior nooce of consignation (before deposit) to

all

persons Interested

Exception: uotice would be useless

Persons mtercsred - e.g. solidary creditors;

as1de

from

the creditor

why?

o Tender =nooce to crednor-

(so,

there s alreadv

in

compliance with

this requjsite)

d. Actual (deposit)

Effect: Property

is

in 'custodia

legis'

e. Subsequent notice

of

cgnsignarioa tg all persons

Again, creditor is not included in the term persons 1.meresred - why?

o Notice accomplished by = service of surrunons

Tender of payment WITHOUT consignation docs NOT extmgwsh the debt; consignaoon must

follow

When Consignation produces the effect

of payment

when the court approves the consign

auon

\ND

orders the cancellation of obligaoon

v. Prior w the obligation RE:MAINS

Creditor generally bears the expenses

of

consignation; it includes expenses for the preservation

of the goods

Effects

of

Valid Tender WITHOUT Consignation:

,

1 .

w. Stops the running of prescriptive pt:riod '

x. Stops the running of llllercst

Effects of Improper Consignation:

y.

TI1e

ob l.Jgaoon REi\1AINS

z. Debtor s considered in defauh

aa Interest conunues to run from

the

time it is due

bb. Prescriptive period continues to run

Withdrawal of the Thing Consigned

(by

the

Debt.Q. ,).

cc.

As

a manet of right:

BEFORE the creditor accepted the consignation; or

34 I

age

Every good

nd

perfect gift is from above, coming down from the Fatherof the heavenly lights, who

does

not


Caroline Ton Jessamyn Uy &James Ligon


35/57

C

IVI

LLAW RE VI

EW lJ

D

ea

n Del Castillo

BErORE there is a

jud IClal

declu:mon rhat rhc consignauon has been properly

made

dd. As a marter of erivtl sge

AFTER consignauon had been properly made,

the

Crednor authonzu the Debror

to

withdraw

the

thing

o Effects:

1.

The obligation rernall1s

2

The

creditor loses an} preference over

the thing

3. The

guaramors and succoes (accessory obl.tgacions) are

RELEASED (unless they consented)

Ri:;k of Loss during constgnat:ion)

ee.

GR:

borne

bv

the CredJtor

ff

1 ts

due to:

Fortuitous event- ob Jgatioo extingUished

Crednor's

Fault-

obligation extinguis,

hed

Deb

tor's Fault- obligation remains (llable for damages)

Fault of court/sheriff-

Creditor

assumes the acoon of the former; borne by

the

Creditor J

LOSS OF TH TH

I

NG

D

U

obttJ

S

oss- refers ro obligaoons to

give '

lmposstbllny -refers to ob Jgation to

do

or

not

to do

- Must be FTER the constituoon of rhe obligauon

If the performance was t.mposstble at the START-

VOID

Kin

ds

o mpossibility:

L

Legal Impossibility

Example: when prohibited by law

2

Phyucal Impossibility

3 Moral Impossibility (Impracticability) - see notes in rebus sic stantibus

The

obligation become

so

difficult that

it

was manifestly

beyond

the

contemplanon

of

Both Parries

f fccr

o

Loss

Spectfic Thmg- Obi.Jgaoon

1s

cxtingmsh :d

o Exceptions

Debtor

is at faulr

Debtor

is made Jable for a forrwtous event

o Satd obligation is

ronVtrttJ

into a Monetary Obligation for

Damages

Generic 1biog- obligation continues to eXIst because it does

not

perish

o

35

I Page

Every

good

and

perfect

gift

is

from above, coming down from the Father of the heavenly lights, who

does not change like shifting shadow

s. '

Caroline

7

an, Jessamyn

U} &

James Ligan


36/57

vrJ,I/,.,

.

f.t

}.Wiitr

CIVlL

l.A

W REVIEW

II

- D

ea

n

Del

Castillo

i

1

IS

deluruted (e.

g.

SO

kilos

of

sugar from .my 201U harvest)

Has alre:1dy been segregated or set aside ,(becomes spec1fic)

If

cause

of

loss

is NOT

known,

PRESUMP110N- debtor

's fault

IF rhc dung lost

is

tn lus

possesSJon

Exception;

1f it is lo;;s is caused hy narural calamity

I

floss is due

co 3m Person

Obligaoon IS extinguished

WITHOUT

prejudice to the

Obligations and Contracts Dean Del Castillo Notes

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Transcript of Obligations and Contracts Dean Del Castillo Notes