Obligations and Contracts-Jurado-Midterms
Obligations and Contracts-Jurado-Midterms
Obligations and Contracts-Jurado-Midterms
-principal and accessory have the force of law between the contracting
As to perfection and -Pure parties and should be complied with in good
extinguishment -conditional faith. (1091a)
-with term or period Contract-meeting of minds between two persons
whereby one binds himself, with respect to the
other, to give something or to render some service.
Art. 1157. Obligations arise from: Consensual contracts- contracts perfected by
law mere consent, and from that moment the parties
contracts are bound not only to the fulfillment of what has
quasi contracts been expressly stipulated but also to all of the
acts or omissions punished by law; and consequences which according to their nature may
quasi-delicts be in keeping with good faith, usage and law.
Real Contracts- perfected upon the delivery of
the obligation.
**The addition of lege has been criticized as
theoretically erroneous. Obligation arises from the moment of
perfection of the contract.
**The enumeration is exclusive. Reciprocal obligation- parties are mutually
Art. 1158. Obligations derived from law are not obliged to do or to give something.
presumed. Only those expressly determined Unilateral obligation- only one party (obligor) is
in this Code or in special laws are obliged to do or to give something.
demandable, and shall be regulated by the
precepts of the law which establishes them; **Obligations arising from contract are governed
and as to what has not been foreseen, by the primarily by the agreement of the contracting
provisions of this Book. (1090) parties.
**obligations derived from law cannot be
Compliance in good faith- performance in
presumed. (unlike other obligations)
accordance with the stipulations, clauses, terms
and conditions of the contract.
**requisites to determine whether an obligation
arises from law or from other sources.
Unjust enrichment
law that establishes or recognizes the obligation
act or condition upon which the obligation is **In default of agreement, the provisions of the
based. Civil Code regulating such obligations are
applicable.
** when the law merely recognizes the existence of
an obligation generated by an act which may General Rule: The contract is the law between the
constitute a contract, quasi-contract, criminal contracting parties.
offense, or quasi-delict an its only purpose is to Ex: Macasaet vs COA
regulate such obligation, then the ACT itself is the
source of the obligation and NOT the law. exception to general rule: Agcaoili vs GSIS
Pelayo vs Llauron-obligation of support between
spouses. Art. 1160. Obligations derived from quasi-
Art. 2014 obligation of the winner in a gambling to contracts shall be subject to the provisions of
return the money to the one who lost. Chapter 1, Title XVII, of this Book. (n)
Art. 1159. Obligations arising from contracts Quasi-contracts- juridical relations arising from
lawful, voluntary, and unilateral acts, by virtue
which the parties become bound to each other, 2. independent civil action
based on the principle that no one shall be unjustly 3. other civil actions arising from offense
enriched or benefited at the expense of others.
Effect of Acquittal
Case: Traders Union vs NLRC Ground for effect Evidence
acquittal needed
Negotiorum gestio Solutio indebiti
Guilt not Civil action to Preponderance
Arises whenever a Arises whenever a proven beyond recover of evidence
person voluntarily takes person unduly delivers reasonable damages
charge of the agency or a thing through mistake doubt based on the
management of the to another who has no same act or
business or property of right to demand it. omission MAY
another without still be
authority from the latter instituted
The gestor or officious The person to whom the Non-existence Civil action to
manager shall be delivery has been of facts for the recover
obliged to continue such unduly made shall commission of damages is no
agency or management return the property the offense longer possible.
until the termination of delivered or the money
the affair and its paid. Effect of Independent Civil Action
incidents General rule: The civil action to recover from the
person criminally liable is not independent from the
Presumptive consent- consent given by law if criminal action.
there is no express consent given by the other Separate civil action- the right to file a civil action
party shall depend upon the result of the criminal action.
--gives rise to multiple juridical relations resulting in
obligations for delivery of the thing or rendering of Commencing the civil action prior the criminal
service. action- once the criminal action is instituted, the
action to recover damages shall be suspended.
Art. 1161. Civil obligations arising from
Examples of entirely separate and independent
criminal offenses shall be governed by the
civil action:
penal laws, subject to the provisions of article
• the civil action is based on an obligation
2177, and of the pertinent provisions of
not arising from the act complained of as
Chapter 2, Preliminary Title, on Human
offense or felony.
Relations, and of Title XVIII of this Book,
◦ Such action may proceed
regulating damages. (1092a)
independently of the criminal action
and regardless of the result of the
Art. 100, RPC latter.
except: treason, rebellion, illegal possession of ◦ Culpa contractual- Negligence in the
firearms and gambling. performance of a contract
◦ culpa aquiliana- Negligence as a
Enforcement of civil liability source of obligation (quasi-delict)
1. institution of criminal and civil actions- civil • Law grants to the injured party the right to
action impliedly instituted, except: institute a civil action separate and distinct
i. express waive of the civil action from the criminal action.
ii. reservation of right to institute it ◦ Interferences by public officers or
separately, or
employees or by private individuals
iii. institution of the civil action prior to the
with civil rights and liberties
criminal action.
Can be compromise Can never be be committed in view of the manner in which the
compromised compromised. contract is violated.
“Neglect or malfeasance of the
carrier's employees could give
Quasi-delict covers not only acts not punishable by
ground for an action for damages.
laws but it also includes acts which are criminal in
Damages here are proper because
character, whether intentional, voluntary or
the stress of respondent's action is
negligent. (Elcano vs Hill)
placed upon his wrongful
expulsion, which is a violation of a
Two distinct faults
public duty by petitioner- air carrier
(Padua vs Robles, Justice Barredo)
— a case of quasi-delict.” (Air
• culpa criminal- civil liability arising from
France vs Carrascoso, G.R. No. L-
crimes
21438. September 28, 1966.)
• culpa-aquiliana- liability arising from civil
negligence.
-recovery of damages twice for the same negligent Chapter 2
act is omission is precluded. NATURE AND EFFECTS OF OBLIGATION
-the extinction of the civil liability referred in Par (e) Art. 1163-1166 Obligation to Give
of Sec. 3, Rule 111 refers exclusively to liability
founded on Art. 100 of RPC, whereas the civil “diligence of a good father of a family”
liability for the same act considered as quasi delict - standard normal state of diligence
is not extinguished even by a declaration in the -ordinary diligence
criminal case that the criminal act charged has not -
happened or has not been committed by the obligations to give
accused.(Elcano vs Hill) • determinate- the object is particularly
designated or physically segregated from
all others of the same class (Art. 1163
Diligence of employers:
applies particularly to determinate object)
Quasi-delict Crimes • generic- the object is merely designated
Art. 2180 of CC Art. 103 of RPC by its class or genus without any particular
designation or physical segregation from all
Primary liability Subsidiary liability others of the same class. (e.g. money)
Employer can avoid Liability is absolute and
liability after proving that cannot be avoided by ***Art. 1163 is a guaranty that the debtor will
he exercised due proof of diligence. comply with the obligation.
diligence
Nature of right of the creditor
Applies to all employers Applies only to
--The obligee/creditor has the right to the
whether they are employers engaged in
thing which is the object of the obligation as
engaged in enterprise some kind of business
well as the fruits thereof from the time the
or not. or industry.
obligation to deliver it arises. (Art. 1164)
Rights of Creditor Obligations of Debtor Accessions- all of those things which are
produced by the object of the obligation as well as
determinate obligations all of those which are naturally or artificially
1. to compel specific 1. to perform the attached thereto.
performance obligation • Accession discreta- natural, industrial and
2. to recover damages specifically civil fruits
for breach of the 2. to take care of the • accession industrial – building, planting,
obligation. things with proper and sowing
3. Entitlement to fruits diligence of a good • accession natural- allusion, alvusion,
and interests of the father of a family. abandoned river beds, and islands formed
thing at the time 3. To deliver all in navigable rivers.
the obligation to accessions and • Accession with respect to movable
deliver it arises. accessories of the property.
things even though
they may not have Accessories- all of the things which have for their
been mentioned. object the establishment, use or preservation of
4. To be liable for another thing which is more important and to which
damages in case of they are not incorporated or attached.
breach of obligation – embellishments
creditor to accept the delivery of the object Fraud (dolo)- consist in the conscious and
of the obligation intentional proposition to evade the normal
• compensatio morae- default of both parties fulfillment of an obligation
in reciprocal obligations -present at the time of birth of an
obligations
Requisites to declare in default
◦ that the obligation be demandable and kinds of fraud
already liquidated • criminal fraud
◦ that the debtor delays performance • civil fraud
◦ that the creditor requires the Fraud in the vs Fraud in the
performance judicially or extra judicially performance of constitution or
an obligation establishment of
**In positive obligation, default arises from the an obligation
moment the creditor demands the performance of
During the When At the time of the
the obligation.
performance of an present birth of an
• Judicially- through a complaint
existing obligation obligation.
• extra-judicially- oral or written demand
Evading normal purpose Securing the
When demand not necessary fulfillment of an consent of the
• when there is an express stipulation to that obligation other party to
effect enter into the
• where the law so provides contract
• when the period is the controlling motive or Non-fulfillment or result Vitiation of the
the principal inducement for the creation of breach of the consent of the
the obligation (when time is of the essence) obligation other party
• where demand would be useless
Recover damages Remedy Causal fraud-
from the for the Annulment of the
**Negative obligations are not subject to delay. debtor/obligor innocent contract.
party Incidental fraud-
Reciprocal obligation-created or established at recover damages
the same time, out of the same cause and which
results in the mutual relationship of creditor and
debtor between the parties. ***Malice or dishonesty is implied as a ground for
-obligations which are conditioned upon damages.
each other
-conditional obligation ***Fraud or dolo is synonymous with bad faith.
**In case of delay, the liability of the obligor subsist ***Waiver or renunciation of liability made in
even if the thing which constitutes the object of anticipation of the fraud is VOID. (Art. 1171)
obligation may have been destroyed or lost
through fortuitous events. ***Waiver or renunciation of liability made after the
fraud has already been committed is VALID.
The moment the other party has complied with his
obligation, delay on the other begins. ***What is renounced is the effect of fraud or the
Exception: If there are different dates for the right of the party to indemnity.
performance of the obligation, apply the general
rule in 1169 (demand is needed). Extent of recoverable damages:
• all damages which may be attributable to
(Art. 1170-1173) the breach or non-fulfillment of the
obligation, regardless of whether such
consequences are natural or unnatural,
Negligence (culpa)- omission of that diligence Art. 1173 (if the Governing rule Art. 1173, par.1
which is required by the nature of the obligation negligence
and corresponds with the circumstances of the shows bad faith)
person, the time, and of the place. Valid (unless the Waiver of Void
-absence of due care required by the nature of the action (future)
nature of the obligation waiver is against
public policy)
***Diligence of good father of a family (pater
familias) is the standard diligence required if the
contract does not state the diligence which is to be
observed in the performance of the obligation. proximate cause- cause which is a natural and
logical consequence uninterrupted by an
Kinds of negligence intervening cause, without which the damage will
Culpa vs Culpa not have happened.
contractual aquiliana
Negligence in definition Negligence as a Negligence
the performance source of Bad faith Good faith
of a contract obligation.
(quasi-delict) If present, the Liability will only be on
provisions of Art. 1173 natural and probable
Incident of the characteristi Substantive and and Art 2201, par.2 will consequences of the
performance of c independent apply. breach of obligation
an obligation
***Damages resulting from negligence is reduced
Pre-existing Party There may or or mitigated if there was contributory negligence of
contractual relationship may not be a the obligee.
relation pre-existing Other circumstances that can mitigate the
contractual damages:
relationship • when the plaintiff himself contravenes the
Breach of Source of Defendant's terms of the contract;
contract obligation negligent act or • where the plaintiff has derived some benefit
omission as a result of the contract;
• in cases where exemplary damages are to
Existence of the What needs Negligence of
be awarded, where the defendant acted
contract and its to be proven the defendant
upon advice of counsel;
breach
• where the loss would have resulted in any
Proof of Availability Prof of diligence event;
diligence is not of diligence is a valid • where upon filing of the action, the
a defense defense defendant has done his best to lessen the
plaintiff's loss or injury.
Negligence vs Fraud ***If the negligent act of the obligee is the
Negligence vs Fraud proximate cause of the event which led to the
damage or injury complained of, he cannot
Culpa Dolo recover.
Voluntary act or characteristic Conscious and
omission intentional ***The phrase “in any manner that contravenes
proposition to the tenor” of the obligation includes not only any
illicit act which impairs the strict fulfillment of the 3. that the event must be of such a character
obligation but also every kind of defective as to render it impossible for the obligor to
performance. fulfill his obligation in a normal manner;
4. that the obligor must be free from any
Test of negligence: participation in the aggravation of the injury
Use the reasonable care and caution which an to the obligee.
ordinary prudent person would have used in the
same situation. ***expiration of agreement:
(Art. 1174) The case of Bacolod-Murcia vs CA compared
Fortuitous event (caso fortuito)- event which and contrasted with PhilComSat vs Globe.
could have not been foreseen, or though foreseen,
were inevitable. ***Southeastern College vs CA- typhoon is a caso
Act of God Force majeure fortuito
Independent of human events that arise from ***Co vs CA- carnapping of a vehicle is not
intervention legitimate or illegitimate considered a caso fortuito.
acts of persons other
than the obligor. ***Tanguilig vs CA – windmill case
As to foreseeability
(Art. 1175)
Ordinary extraordinary Usury- contracting for or receiving something in
excess of the amount allowed by law for the loan
General rule: If the reason for the non-compliance or forbearance of money, goods or chattels.
in the obligation is a fortuitous event, the obligor is -taking of more interest for the use of money,
exempted from liability whatsoever. goods, or chattels or credits than the law allows.
EXCEPT:
1. where such liability is expressly specified Usury Law (Act No. 2655) and other laws
by law; amending it- special law referred to in Art. 1175.
2. where it is declared by stipulation of the
parties; Central Bank Circular No. 224 (Dec. 1, 1982)- no
3. where the nature of the obligation requires more ceiling in interest rates on loans.
the assumption of risk.
-(volenti non fit injuria) no wrong is ***Loan or forebearance of money-12% interest in
done to one who consents the default of interest stipulated by law or the
parties, 6% interest for obligation not involving
***Art. 1174 applies only to determinate obligations forebearance or loan.
and not to generic ones.
***res ipsa loquitur ***12% interest per annum from the time the
judgment has become final if t.
***The caso fortuito must me the SOLE and
proximate cause of the incident, to avail of it as a (Art. 1176)
defense. ***There is a presumption that the interests has
been paid if on the face of the receipt that the
***Co-mingling negligence on the part of the creditor issued to the obligor that the principal has
obligor forfeits the defense of caso fortuito. been paid without reservation with respect to the
interest. (in accordance with Art. 1253)
Essential conditions for Art. 1174 to apply:
1. that the event must be independent of the ***If the debtor is issued a receipt by the creditor
will of the obligor; acknowledging payment of a latter installment
2. that the event must be either foreseeable without reservation to prior installments, there is
or inevitable;
also a presumption that such prior installments 2. where there are stipulations by the parties
have already been paid. that they are not transmissible;
3. where they are not transmissible by
***For the presumption to arise, the receipt should operation of law.
clearly state that the payment is for the installment
for a latter installment or as payment for the CHAPTER THREE
interest. (Manila Trading vs Medina) DIFFERENT KINDS OF OBLIGATIONS
obligee in the obligee in the Simple potestative - valid; presupposes not just
constitution of the constitution of the the manifestation of the will but also the realization
obligation is only mere obligation are rights that of an external act.
hope and expectancy, are subject to threat or
protected by law. danger of extinction. pure potestative – void; envisioned by Art. 1182
3. Possible vs Impossible
2. Potestative, casual, and mixed
(Art. 1183)
(cause upon which the fulfillment depends)
(Art. 1182) Possible Impossible
Potestative casual mixed when the condition is when the condition is
capable of realization not capable of
fulfillment of fulfillment of the fulfillment of the
according to nature, realization according to
the obligation condition obligation
law, public policy, or nature, law, public
depends upon depends upon depends upon
good customs. policy, or good customs.
the will of a chance/or upon the will of a
(contrary to good
party to the the will of a party to the
customs or public policy,
obligations third person obligation and
illicit, illegal)
partly upon
chance and/or Effects
will of a third
The obligation and the Annulment of the
person.
condition is valid and obligation that are
Effects enforceable. dependent of such
impossible condition
dependent on The obligation The obligation
**but is there is a pre-
the creditor- and the and the
existing obligation,
condition and condition shall condition shall
therefore not dependent
obligation, take effect. take effect.
upon the fulfillment of
VALID (valid and (valid and
the obligation for its
enforceable) enforceable)
perfection, only the
dependent on
CONDITION is void, not
the debtor-
the obligation.
condition and
obligation,
VOID ***If the impossible condition is attached to an
obligation, the obligation itself is Void.
***The precept in the first sentence of Art. 182 is
***If the impossible condition is attached to a
applicable only to a suspensive condition. Hence,
simple donation or testamentary disposition, the
Resolutory + Potestative = VALID obligation and
condition is not imposed, although the donation
condition (explanation at pp.114, Jurado)
or testamentary disposition itself is valid.
***to avoid illusory obligation- Reason for the
***Total Absence of seriousness- reason why the
invalidity of potestative condition dependent on the
law invalidate the impossible condition & the
debtor.
dependent obligation.
EXCEPTION: gratuitous disposition/donation;
***Payment for previous indebtedness/pre-existing
because the moving force here is the generosity of
obligation although the condition is purely
the donor.
potestative, affects the validity of the condition but
keeps the validity of the obligation because the
***The impossibility of the condition should be
obligation is not dependent upon the condition.
determined at the time the obligation is made or
constituted.
4. Positive vs Negative
Art. 1188, par. 1- Protection for the creditor Effect of Loss, Deterioration, or Improvement
– file an injunction to stop the debtor (Art. 1189)
1. If the thing is lost without the fault of the ***The debtor cannot ask for reimbursement for
debtor, the obligation shall be expenses incurred for useful improvements or
extinguished; improvements for pleasure.
2. If the thing is lost through the fault of the
debtor, he shall be obliged to pay ***the debtor may have the right to remove such
damages; it is understood that the thing is improvements provided it is possible to do so
lost when it perishes, or goes out of without damage to the thing or property.
commerce, or disappears in such a way
that its existence is unknown or it cannot Effect of Resolutory Condition:
be recovered; Before Fulfillment After Fulfillment
3. When the thing deteriorates without the
fault of the debtor, the impairment is to be The obligation is subject The rights vested in the
borne by the creditor; to the threat of obligation is
4. If it deteriorates through the fault of the extinction. extinguished.
debtor, the creditor may choose between Placed in the same Whatever is paid or
the rescission of the obligation and its position with creditor in delivered to any of the
fulfillment, with indemnity for damages obligation with parties should be
in either case; suspensive condition. returned (return to
5. If the thing is improved by its nature, or by status quo)
time, the improvement shall inure to the
benefit of the creditor; ***There are no exceptions in the retroactive effect
6. If it is improved at the expense of the of resolutory condition; what was delivered need to
debtor, he shall have no other right than be returned.
that granted to the usufructuary.
***The fulfillment of a resolutory condition signifies
***Rule in Art. 1189 are natural consequences of the nonexistence of the obligation, what is
the principle of retroactivity. nonexistent must no give rise to any effect
whatsoever.
***Predicated on the fulfillment of the condition.
******There is no provision of mutual compensation
***Refer only to conditional obligations to give a of fruits and interests but in connection with the
determinate thing concept of justice, restitution in Art. 1190 carries
with it the consequence of reimbursement for all
usufruct- right or enjoyment of a thing, the the expenses incurred for the production,
property of which is vested in another and to draw gathering, and preservation of the fruits.
from the same all the profit, utilities, and advantage
it may produce without altering the form/substance ***Mutual restitution is absolute in resolutory
of the thing. conditions because the obligation is extinguished,
and it ceases to have effect thus does not carry
Loss with it fruits and interests.
a thing is considered lost when it:
1. perishes; ***In obligations to do or not to do, the retroactive
2. goes out of commerce – impossible to effects shall depend upon the discretion of the
legally transfer or re-acquire courts.
3. disappears in such a way that its existence
is unknown or it cannot be recovered ***Art. 1189 is also applicable with regard the
effects of loss, deterioration, and improvements of
Improvements things during the pendency of resolutory condition.
natural accessions: alluvion, avulsion,
abandoned river beds, island formed ***In Resolutory condition the “debtor” is the
person obliged to return while the “creditor” is the
Right of rescission- belongs to the injured party ***The injured party can still seek the rescission or
alone. resolution of the obligation even if he has opted to
-must be invoked judicially by filing the choose the fulfillment of such obligation if
proper action of rescission. fulfillment should become impossible.
– not absolute; the court is given the Case: Ayson-Simon vs Adamos
discretionary power to fix a period
within which the obligor in default may
be permitted to comply with what is
incumbent upon him. ***In awarding damages...
– implied in reciprocal obligations(Art. In case or only those elements of
1191, par. 1) rescission damages can be admitted that
are compatible with the idea of
***If the contract contains a resolutory provision by rescission.
virtue of which the obligation may be canceled or
In case of specific Only the elements of damages
extinguished by the injured party in case of breach
performance can be admitted which are
of obligation, judicial permission to cancel or
compatible with the idea of
rescind the contract is no longer necessary. But the
specific performance.
Court may confirm such extra judicial rescission.
b) conventional- stipulated by the parties of both the creditor and the debtor.
c) judicial- fixed by the courts Case: de Leon vs Syjuco
3. definite or indefinite
a) definite- the date or time is known ***If the tenor of the obligation or from other
beforehand circumstances that the term or period has been
b) indefinite- can only be determined by established in favor of the creditor or of the debtor,
an even which must necessarily come the general rule will not apply.
to pass, although it may not be known
when Judicial term or period
(Art. 1197)
effects of term or period:
suspensive the demandability of the obligation Judicial term or period- when fixed by a
term or period is extinguished, not the acquisition competent court, the period can no longer be
of right or the effectivity of the judicially changed (Art. 1197, par. 3).
obligation. -becomes a law governing the contract
between the party
Resulotory The fulfillment or performance of
term or period the obligation is demandable at Cases when court can fix term:
once, but it is extinguished or • if the obligation does not fox a period, but it
terminated upon the arrival of the can be inferred that a period was intended
day certain or the expiration of the by the parties
term. ◦ cannot be applied to contract for
Case: PNB vs Lopez Vito services in which no period was fixed
by the parties. In such contracts the
***Acceleration clause is a clause where upon period of employment is understood to
default of the debtor with one or more payment will be implicitly fixed, in default of express
make the whole obligation demandable. This is a stipulation, by the period of the
valid provision in contracts. payment of the salary of the employee,
in accordance with the custom
Effect of fortuitous event- relieve the contracting universally observed throughout the
parties from the fulfillment of their respective world.
obligations during the term or period. ◦ cannot be applied to pure obligations
Case: Victoria's Planters vs Victorias Milling • if the duration of the period depends upon
Co. the will of the debtor
◦ just and logical, because otherwise,
effect of advance payment or delivery- obligor
there would always be the possibility
can recover what he has paid or delivered with
that the obligation will never be fulfilled
fruits or interests. (Art. 1195)
or performed.
-applicable only to obligations to give
• if the debtor binds himself to pay when his
***There can be no right of recovery if the obligor means permit him to do so.
delivers the thing voluntarily or with knowledge of Case: Gonzales vs Jose
the period or term or the fact that the obligation has
not yet become due and demandable. ***No other action can prosper unless the court
has fixed the duration of the term or period.
the court, legally there can be no possibility of any obligation pure and without any
breach of contract or of failure to perform the condition, and consequently, the loan
obligation. Such cannot be raised for the first time become due and demandable.
on appeal.
(3) When by his own acts he has impaired said
***Art. 1197 applies to a lease agreement, where a guaranties or securities after their
contract of lease clearly exists. establishment, and when through a
fortuitous event they disappear, unless he
***It is not necessary that the creditor will expressly immediately gives new ones equally
ask in the complaint for the court to fix the period, satisfactory;
such may be granted although the complaint does (a) there is a difference between effects of
not ask for such relief. impairment and effects of
disappearance
***Two ultimate facts that need to be alleged in the 1. if the guaranty or security is
complaint to describe an obligation with an impaired through the fault of the
indefinite period. debtor, he shall lose his right to the
1. Facts showing that the contract was benefit of the period;
entered imposing on one of the parties an 2. if it is impaired without his fault, he
obligation in favor of the other shall retain his right;
2. facts showing that the performance of the 3. if the guaranty or security
obligation was left to the will of the obligor, disappears through any cause,
or clearly showing, or from which an even without the fault of the debtor,
inference can be reasonably drawn that a he shall lose his right to the benefit
period was intended. of the period
4. in either case of impairment or
***The action recognized by Art. 1197 may also disappearance, the debtor will not
prescribe like any ordinary civil action. (Gonzales lose his right to period if he gives a
vs Jose) new guaranty or security which is
equally satisfactory.
Extinguishment of Debtor's right to Period
(Art. 1198) (4) When the debtor violates any undertaking,
in consideration of which the creditor
(1) When after the obligation has been agreed to the period;
contracted, he becomes insolvent, unless
he gives a guaranty or security for the debt; (5) When the debtor attempts to abscond.
(a) insolvency needs no judicial (a) Mere attempt of the debtor disappear
declaration or run away from his obligation.
(b) includes any case in which it would be
impossible financially for the debtor to Sec. 3. - Alternative and Facultative Obligations
comply with his obligations
(c) such insolvency must not be pre- 5. Conjunctive vs Alternative
existing; arose after the constitution of Conjunctive Alternative
the obligation
(d) if there is a guaranty or security for the there are several there are several
debt, the debtor, in spite of insolvency, conditions, all of which conditions but only one
does not lose his right to the period. must be realized must be realized.
distributive obligation- when only one object of ***Par. 2 of Art. 1200 contemplates a case in which
the obligation is demandable. the right to choose or select is NOT lost or
• Alternative- comprehends several objects extinguished altogether.
or prestation which are due, but it may be
complied with by the delivery or
performance of only one of them. (Art. 1201)
◦ Performance of one of the obligation is ***Applicable to cases in which the choice is
sufficient dependent on the debtor, creditor, or third person.
• Facultative- comprehends only one object
or prestation which is due, but it may be ***Communication is needed to make the choice
complied with by the delivery of another effective.
object or the performance of another
prestation in substitution. ***No special form for the communication or
notification of choice, although it is always better to
Alternative Obligations make the notification either in a notarized
(Art. 1200) document or in any other authentic writing.
General rule: The right of choice belongs or ***Debatable: Can the creditor to whom the
pertains to the debtor. selection has been duly communicated impugn
such selection?
***Once the debtor has made the choice, and such
choice is duly communicated to the creditor, the
obligation becomes simple. ***Once the choice is made by the debtor (or
creditor, or 3rd person) and such selection has been
communicated, the obligation ceases to be
Exceptions: alternative. The loss of the object of prestation
• when the right of choice belongs or chosen and communicated extinguishes the
pertains to the creditor liability.
• when it has been expressly granted to a
third person. (Art. 1202)
Limitation to the right of choice: ***When only one prestation is practicable, the
• debtor cannot choose those prestations or debtor loses his right of choice altogether. The
obligation becomes simple.
undertakings that are impossible, unlawful,
or which could not have been the object of
the obligation. Art. 1202 Art. 1200, par. 2
Only one prestation There are still two or
“Prestations which could not have been the object which can be performed more prestations that
of prestation” can be performed.
• undertakings that are not included among
Obligation is converted The obligation is still
others those from which the obligor may
to a simple one alternative because the
select, or
because the debtor debtor can still exercise
• those which are not yet due and
loses his right of his right of election.
demandable at the time the selection is
election
made, or
• those by reason of accident or some other
cause, have acquired a new character
distinct or different from that contemplated ***When the debtor's right of choice is rendered
by the parties when the obligation was ineffective through the creditor's fault, the only
constituted. possible remedy for the debtor is to bring an action
for the rescission of the contract with damages.
creditors and debtors,the presumption is that the debtors, although each is necessary for the
obligation is JOINT and not solidary. for his own share enforcement of the
Exceptions: obligation.
1. when the obligation expressly states that
there is solidarity; The obligation can be Not susceptible of
➢ “jointly and severally” enforced only by partial fulfillment.
proceeding against all
➢ “individually and collectively”
the debtors
2. when the law requires solidarity; and,
➢ Art. 927, 1824, 1911, 1915, 2146,
***If one of the joint debtors fails to comply with his
2157, and 2194 NCC
undertaking, the obligation can no longer be
➢ Art. 110, RPC
fulfilled or performed.
3. when the nature of the obligation requires
solidarity.
***The debtors who are ready to fulfill what was
➢ Obligations arising from criminal
incumbent upon them shall not contribute to the
offenses or torts indemnity beyond the corresponding portion of the
price of the thing or of the value of the service in
Joint Divisible Obligations which the obligation consists. (Art. 1224)
(Art. 1208)
***Each creditor can demand only for the payment ***If one of the joint debtors be insolvent, the
of his proportionate share of the credit, while the others shall not be liable for his share.
debtors can be held liable only for the payment of
his proportionate share of the debt. ***Debatable: If there are two or more creditors or
debtors, will the claim of a creditor addressed to a
***Joint creditor cannot act in representation of the single debtor or the acknowledgment made by one
others; neither can debtor be compelled to answer of the debtors in favor of one or more creditors be
for the liability of the others. sufficient to interrupt the period of prescription?
***The payment or acknowledgement by one of the
joint debtors will not stop the running of the period ***Indivisibility and solidarity are NOT identical.
of prescription as to the others.
Indivisibility vs Solidarity
Joint Indivisible Obligations Prestation nature Legal tie or
(Art. 1209) which vinculum, and
constitute the consequently to
-midway between joint and solidary obligations object of the the parties of
characteristics: obligation. the obligation.
• no creditor can act in representation of the
Plurality of requisites Plurality of
other subjects not subjects is
• no debtor can be compelled to answer for required indispensable.
the liability of the others.
Terminated Effect of Remains even
– joint with respect of the parties when the breach though there is
– indivisible with respect the fulfillment of the obligation is a liability on the
obligation converted into part of the
one of debtors
indemnity for because of
2 or more debtors 2 or more creditors damages breach.
The fulfillment of or The concurrence or
compliance with the collective act of all the Kinds of solidarity
obligation requires the creditors, although • active – among creditors
concurrence of all the each for his own share,
◦ tie or vinculum existing among several Liable for the payment Liable for the debt of
creditors of one and the same of the debt of another another.
obligations by virtue of which each of but also for the payment
them, in relation to his co-creditors, of a debt which is
possesses the character of a creditor properly his own.
only with respect to his share of the
obligation but in relation to other debtor If he pays the entire If the surety pays the
or debtors, represents all other obligation, he has a entire obligation, he
creditors. right to demand acquires a right to
◦ Mutual representation reimbursement from his reimbursement from the
co-debtor of their share principal debtor of the
• passive – among debtors
in the obligation. entire amount he has
◦ tie or vinculum existing among several paid.
debtors of one and the same
obligations by virtue of which each of An extension of time An extension of time
them, in relation to his co-debtors, granted by the creditor granted by the creditor
possesses the character of a debtor to one of the solidary to the principal debtor
only with respect to his share of the debtors without the would release the
obligation, but in relation to other knowledge of the other surety from the
creditor or creditors, represents all solidary debtors would obligation.
other debtors. not have the effect of
◦ each solidarity debtors, as far as the releasing the latter from
creditors are concerned, is the debtor their obligation.
to the entire amount
• mixed – among creditors and debtors
***Uniform bond or tie- when the creditors and
debtors are bound in the same manner and by the
fundamental effect of active solidarity- creation same conditions or periods.
of a relationship of mutual agency among
solidary creditors by virtue of which the creditor is ***Varied bond or tie- when the creditors and
empowered against the debtor or debtors not only debtors are not bound in the same manner and by
the rights which corresponds to him, but also all the same conditions or periods.
the rights which correspond to the other creditors,
with the consequent obligation to render an ***In Art. 1211, the right of the creditor is limited to
accounting of his acts to such creditors. the recovery of the share owed by the debtor
(equal mutual representation) whose obligation has become mature leaving in
suspense his right to recover the shares
***relationship of mutual agency, basis of the corresponding to the debtors whose obligations
difference of the rules in Art. 1212 and 1215. have not yet matured.
Case: Inchausti & Co. vs Yulo
fundamental effect of passive solidarity- liability
of each debtor for the payment of the entire (Art. 1212)
obligation, with the consequent right to demand
reimbursement from the others for their Effects of Prejudicial acts of a creditor to...
corresponding shares, once payment has been • debtor/debtors – valid and binding because
made. of the principle of mutual representation
which exists among the creditors
Passive solidary Surety • solidary creditors – the creditor who
debtor performed the act shall incur the obligation
of indemnifying the others for damages.
Both are solidarily liable to the creditor for the
payment of the entire obligations ***Art. 1212 refers to effect of prejudicial acts upon
principal debtor by the creditor without the consent the creditors proceed against any one
of the surety extinguishes the latter's liability, of the solidary debtors for the payment
except when the surety is liable for different of the entire obligation.
payments or upon series of installments.
***Such rules cannot be applied if the debt had
Compensation – weighing two obligations already been totally paid by anyone of the solidary
simultaneously in order to extinguish them to the debtors before the remission is effected.
extent that the amount of one is covered by the
amount of the other. ***If one of the solidary creditor was able to collect
the entire amount from one or some, or all of the
Confusion – refers to the merger of the qualities of solidary debtors, the obligation is totally
creditor and debtor in one and the same person extinguished and that creditor must render an
with respect to one and the same obligation. account to his co-creditors.
(Art. 1239)
persons who may pay obligation:
***It is essential that the person who pays the
• the debtor himself or his legal
obligation should have the necessary legal
representatives capacity to effect such payment.
• any third person who have an interest in – free disposal of the thing due
the fulfillment of the obligation. (subject to
– capacity to alienate the thing
some juridical effects)
effect of absence of one or another will effect the
invalidity of payment
– Art.1236-1237 are not applicable to a third