QUESTION:

What are the SOURCES OF

OBLIGATIONS which binds the
parties?
ANSWER:
1. Law
2. Contracts
3. Quasi-Contracts
4. Delicts
5. Quasi Delicts (Art. 1157)

UNILATERAL PROMISES; a source of
obligation
GENERALLY a unilateral promise
before acceptance is not binding, EXCEPT by
a unilateral declaration of the will with intent
to be bound to a particular person.

QUESTION:
Is the enumeration exclusive?
ANSWER:
YES. The enumeration is exclusive
as provided in the case of Sagrada Orden vs.
Nacoco where the SC rationalized that (not in
the express manner).

QUESTION:
Give an instance where 2 or more
sources of obligation exist at the same time?
ANSWER:
In the case Saludaga v. FEU, April
30, 2008 the court ruled that the school shall
be held liable for damages for breach of
contract in the schools obligation to provide
students with a safe and secure learning
atmosphere.
FEU breached the school-student
contract for negligence on its obligation to
ensure and take adequate steps to maintain
peace and order within the campus. It found
that FEU had failed to undertake measures to
ascertain and confirm that the security guards
assigned in the campus possess the
qualifications required in the Security Service
Agreement between FEU and Galaxy
(Security agency).
The Court also ordered Galaxy
and its president, Mariano D. Imperial, to
jointly and severally pay FEU damages
equivalent to the amount awarded to
Saludaga for acts of negligence that
resulted to FEUs breach of obligation to its
student. Galaxy was found negligent in the
selection and supervision of its employees, as
supported by the lack of administrative
sanction against Alejandro Rosete, the security
guard who shot Saludaga. Rosete, who was
instead allowed to go on leave after the
shooting incident, eventually disappeared.
Hence, contract and quasi delict
was applied at the same incident to hold the
above named parties liable.

<<ANOTHER CASE>>
CU: The security guard shot a
movie goer because the latter tried to hack the
former with a bolo. Because of this incident
the heirs of the deceased filed a criminal case
against the security guard. The case was
dismissed, as a result of which the guard
incurred expenses for the payment of his
attorney and demands reimbursement from his
employer. In this case, the employer is not
liable to reimburse his employee to
reimburse the expenses incurred by the
employee in defending himself primarily
because there is no law requiring such
employer to reimburse.
The fact that the direct and
proximate cause of the expenses incurred in
defending himself was derived from the
performance of his function does not make
the employer liable because there is an
efficient intervening causewhich is the filing
of the cases based on malicious prosecution.

1. LAW
Art. 1158. Obligations derived
from law are not presumed. Only those
expressly determined in this Code or in special
laws are demandable, and shall be regulated
by the precepts of law which establishes them;
and as to what has not been foreseen, by the
provisions of this book.

E.g.
The giving of legal assistance to
the employee is not a legal obligation. While it
might and possibly be regarded as a moral
obligation, it does not at present count with the
legal sanction of any man made law. If the
employer is not legally obliged to give legal
assistance to its employee to provide him with
a lawyer, said employee cannot recover from
the employer the amount he paid a lawyer
hired by him.

QUESTION:
In obligations arising from law,
who has the burden of proving the same?
ANSWER:
Generally, the person who alleges a
fact has the burden of proving the same.
However, there are certain facts which need
not be proven. There is no need to allege such
facts because the law presumes the existence
of a right and presumes
the existence of a fact.

QUESTION:
Who has the burden of proof in
obligations arising from contracts?
ANSWER:
The obligee has the burden of
proof.
Because in Art.1158, as expressly
provided, obligations arising from law are not
presumed. This is one instance where there is
no presumption not to allege facts.

***The princess of stars:
One of the deceased caused by the
sinking of the ship was buried by a third
person and asking later on for reimbursement
from the decedents aunt on the expenses for
the burial.
Here there is an obligation arising
from such act base on quasi contract under
Art. 2164 (other quasi contracts) and under
such provision only persons obliged to give
support can be compelled to reimburse. In
this case, since the aunt is not one of those
persons obliged to give support, she cannot be
compelled to reimburse the expenses for
burial.

2. CONTRACTS
Art. 1159. Obligations arising
from contracts have the force of law between
the contracting parties and should be complied
with in good faith.
Note: This provision presupposes
that the contract is valid and enforceable. The
same should not be contrary to law, morals,
good customs, public policy or public order.

E.g.
A contract stipulating that non
payment of the loan considers the house and
lot sold. This is a case of contract of loan and
a promise of sale of a house and lot. Such
contracts are perfectly legal, the agreement is
the law between them, and must be enforced.



E.g.
The validity of restraints upon
trade or employment is to be determined by
the intrinsic reasonableness of the restriction
in each case, rather than by any fixed rule, and
such restriction may be upheld when not
contrary to public welfare and not greater than
is necessary to afford a fair and reasonable
protection to the party in whose favor it is
imposed. The contract in question is not
obnoxious to the rule of reasonableness. While
such restraint, if imposed as a condition of the
employment of a day laborer, would at once
be rejected as merely arbitrary and wholly
unnecessary to the protection of the employer,
it does not seem so with respect to an
employee whose duties are such of necessity
to give him an insight into the general scope
and details of his employers business. The
contract in this case, considering the
circumstances, is not unreasonable. It must
therefore be enforced. The rule in this
jurisdiction have the force of law between the
contracting parties.

PRE-CONTRACTUAL OBLIGATIONS;
when binding; gives rise to liability
If the offer by one party is clear
and definite, leading the offeree in good faith
to incur expenses in the expectation of
entering into the contract; and the withdrawal
of the offer is without any legitimate cause.

3. QUASI CONTRACTS

Kinds of Quasi Contracts

1. Solution Indebiti
2. Negotorium Gestio
3. Other Quasi Contracts

1. Negotiorum gestio (officious
management)
Art 214. Whoever voluntarily
takes charge of the agency or management of
the business or property of another, without
any power from the latter, is obliged to
continue the same until the termination of the
affair and its incidents, or to require the person
concerned to substitute him, if the owner is in
a position to do so.
This juridical relation DOES NOT
ARISE in either of these instances:
1) When the property
or business is not neglected or
abandoned
2) If in fact the
manager has been tacitly
authorized by the owner

2. Solutio Indebiti (payment not due)
Art 2154. If something is received
when there is no right to demand it, and it was
unduly delivered through mistake, the
obligation to return it arises.

3. Other quasi-contracts (support given by
strangers and other Good Samaritans)

Art
216
4
When, without the knowledge of
the person obliged to give support,
it is given by a stranger, the latter
shall have a right to claim the same
from the former, UNLESS it
appears that he gave it out of piety
and without intention of being
repaid.
Art
216
5
When funeral expenses are borne by a
third person, without the knowledge
of those relatives who were obliged to
give support to the deceased, said
relatives shall reimburse the third
person, should the latter claim
reimbursement.
Art
216
6
When the person obliged to support
an orphan, or an insane or other
indigent person unjustly refuses to
give support to the latter, any third
person may furnish support to the
needy individual, with right of
reimbursement from the person
obliged to give support. The
provisions of this article apply when
the father or mother of a child under
eighteen years of age unjustly refuses
to support him.
Art
216
7
When through an accident or other
cause a person is injured or becomes
seriously ill, and he is treated or
helped while he is not in a condition
to give consent to a contract, he shall
be liable to pay for the services of the
physician or other person aiding him,
UNLESS the service has been
rendered out of pure generosity.
Art
216
8
When during a fire, flood, storm, or
other calamity, property is saved from
destruction by another person without
the knowledge of the owner, the latter
is bound to pay the former just
compensation.
Art
216
9
When the government, upon the
failure of any person to comply with
health or safety regulations
concerning property, undertakes to do
the necessary work, even over his
objection, he shall be liable to pay the
expenses.
Art
217
0
When by accident or other fortuitous
event, movables separately pertaining
to two or more persons are
commingled or confused, the rules on
co-ownership shall be applicable
Art
217
1
The rights and obligations of the
finder of lost personal property shall
be governed by Articles 719 and 720.
Art
217
2
The right of every possessor in
good faith to reimbursement for
necessary and useful expenses is
governed by Article 546.
Art
217
3
When a third person, without the
knowledge of the debtor, pays the
debt, the rights of the former are
governed by Articles 1236 (recover
what has been beneficial to debtor)
and 1237 (cannot compel creditor to
subrogate payor in his rights).
Art
217
4
When in a small community a
nationality of the inhabitants of age
decide upon a measure for
protection against lawlessness, fire,
flood, storm or other calamity, any
one who objects to the plan and
refuses to contribute to the expenses
but is benefited by the project as
executed shall be liable to pay his
share of said expenses
Art
217
5
Any person who is constrained to pay
the taxes of another shall be entitled
to reimbursement from the latter.



Basis of Quasi Contracts:
Art. 2142. Certain lawful,
voluntary and unilateral acts give rise to the
juridical relation of quasi contract to the end
that no one shall be unjustly enriched at the
expense of another.
The enumeration of the
provisions for quasi contracts, not
exclusive:
Art. 2143. The provisions for quasi
contracts in this Chapter do not exclude other
quasi contracts which may come within the
purview of the preceding article.
Note: Even if not so provided by
law it may be considered as falling within the
purview of quasi contract when it is lawful,
unilateral and voluntary, and the underlying
principle is that no one shall be unjustly
enriched at the expense of another.

QUESTION:
Will there be any liability even if
no one has been unjustly enriched?
ANSWER:
In case of negotorium gestio, the
owner has the obligation to reimburse the
gestor even if the latter has not been unjustly
enriched.
Therefore it would appear that the
principles behind quasi contracts does not
really fall under the principle of unjust
enrichment. The principle behind this
obligation is implied contracts, which is the
consent given by the obligor.

QUESTION:
The owner left his house for a short
vacation, the very night they lefts, their house
was burned, the neighbors saved some of their
appliances. Is there negotorium gestio in this
case?
ANSWER:
The appliances are not under the
management of the gestor and that there must
be abandonment and neglect of the property.
This case therefore falls under
other quasi contracts.

4. ACTS OR OMISSIONS
PUNISHED BY LAW (DELI CTS)
Under Art. 100 of the RPC
provides that every person criminally liable is
also civilly liable.
This however is not absolutely
true because there are certain felonies where
no civil liability will arise even if convicted of
a crime. This is because there is no private
offended party in some crimes.

Under Art. 104 of the RPC in
addition to civil liability, restitution, reparation
of damage caused, indemnification of
consequential damages.

Note: It is not correct to say that
every time a person is held criminally liable
under this source of obligation all these kinds
of liability (restitution, reparation of damage
caused, and indemnification of consequential
damages) would arise.

Note: In J USTI FYI NG AND
EXEMPTI NG circumstances though a person
is not held criminally liable does not
necessarily mean that he is not civilly liable.

In justifying circumstances,
GENERALLY there would be no civil
liability, EXCEPT in paragraph 4 where it
provides that: Any person who, in order to
avoid an evil or injury, does not act which
causes damage to another, PROVIDED
THAT THE FOLLOWING REQUISITES
ARE PRESENT:
First. That the evil
sought to be avoided actually
exists;
Second. That the injury
feared be greater than that done to
avoid it;
Third. That there be no
other practical and less harmful
means of preventing it.

In EXEMPTI NG
CI RCUMSTANCES, GENERALLY there is
civil liability EXCEPt paragraph 4 where it
provides that: Any person who, while
performing a lawful act with due care, causes
an injury by mere accident without fault or
intention of causing it.

Note: If there is no criminal
conviction, this source of obligation will not
arise but may arise from other source of
obligation or quasi delict.

4. CULPA AQUILIANA (QUASI DELI CT)

QUESTION:
Is culpa extra contractual an
appropriate name for quasi delict? NO.

In the case of Gangco vs. MRR (38
Phil 768) obligations can be classified either
from contractual obligations and extra
contractual obligations. As to obligations
where the source is not a contract, it
can be called extra contractual obligations.

Therefore culpa extra contractual
means negligence outside of a contract.

QUESTION:
If there is negligence outside of a
contract does it mean that it would fall under
quasi delict?
ANSWER:
Not necessarily because there are 4
other sources of obligations outside of a
contract like negligence arising from law, but
the source would be the law.

In quasi contracts, under
negotorium gestio, the negligence of the gestor
does not necessarily mean that it would fall
under quasi delict because it would fall under
quasi contracts.

Note: The use of the word culpa
extra-contractual nowadays are no longer
used by the Supreme Court. Commonly what is
used is the word torts.

QUESTION:
Is torts an appropriate term for
quasi delict?
ANSWER:
Torts as a name is not appropriate
because it is more encompassing as it would
include acts which could not be the basis of an
action under quasi delict.
Torts would include malicious act,
intentional act, wrongful acts punished by
law. In these names, it cannot be the basis of
an action for quasi delict. An action for quasi
delict can only arise based on a negligent act
or omission.
But the Supreme Court is of the
view that malicious acts, intentional acts, acts
punished by law can be the basis of an action
for quasi delict. It is well supported by the
history of the law and the present provisions
of the law.
Particularly Under Art. 2176 where
it provides that whoever by act or omission
causes damage to another, there being fault or
negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no
pre-existing contractual relation between the
parties, is called quasi delict and is governed
by the provisions of this chapter (chapter on
quasi-delicts).
Under the old civil code, in order
for one to be held liable under quasi delict, the
act must not be punished by law. This phrase
no longer appear under the new civil code,
therefore even if the act is not punished by law
it cannot be the basis of an action for quasi
delict.

QUESTION:
Is Fault the same as negligence?
ANSWER:
NO. Because fault would cover
intentional and unintentional acts.

COMPLIANCE WITH OBLIGATIONS:

QUESTION:
How should these sources of
obligations be complied with?
ANSWER:
The manner of complying with
these sources of obligations.



Art. 19. Every person must, in the exercise of
his rights and in the performance of his duties,
act with justice, give everyone his due, and
observe honesty and good faith.

Art. 1163. Every person obliged to give
something is also obliged to take care of it
with the proper diligence of a good father of a
family, unless the law or the stipulation of the
parties requires another standard of care.
(1094a) Art. 1164. The creditor has a right to
the fruits of the thing from the time the
obligation to deliver it arises. However, he
shall acquire no real right over it until the
same has been delivered to him. (1095)

Art. 1165. When what is to be delivered is a
determinate thing, the creditor, in addition to
the right granted him by Article 1170, may
compel the debtor to make the delivery.
If the thing is indeterminate or
generic, he may ask that the obligation be
complied with at the expense of the debtor.
If the obligor delays, or has
promised to deliver the same thing to two or
more persons who do not have the same
interest, he shall be responsible for any
fortuitous event until he has effected the
delivery. (1096)

Art. 1166. The obligation to give a
determinate thing includes that of delivering
all its accessions and accessories, even though
they may not have been mentioned. (1097a)

Art. 1244. The debtor of a thing cannot
compel the creditor to receive a different one,
although the latter may be of the same value
as, or more valuable than that which is due.
In obligations to do or not to do, an
act or forbearance cannot be substituted by
another act or forbearance against the obligee's
will. (1166a)

Art. 1246. When the obligation consists in the
delivery of an indeterminate or generic thing,
whose quality and circumstances have not
been stated, the creditor cannot demand a
thing of superior quality. Neither can the
debtor deliver a thing of inferior quality. The
purpose of the obligation and other
circumstances shall be taken into
consideration. (1167a)


Art. 1460. A thing is determinate when it is
particularly designated or physical segregated
from all other of the same class.


The requisite that a thing be
determinate is satisfied if at the time the
contract is entered into, the thing is capable of
being made determinate without the necessity
of a new or further agreement between the
parties. (n)

Art. 442. Natural fruits are the spontaneous
products of the soil, and the young and other
products of animals.
Industrial fruits are those produced
by lands of any kind through cultivation or
labor.
Civil fruits are the rents of
buildings, the price of leases of lands and
other property and the amount of perpetual or
life annuities or other similar income. (355a)

Art. 443. He who receives the fruits has the
obligation to pay the expenses made by a third
person in their production, gathering, and
preservation. (356)
If the sources of the obligations is
the law, then the provisions of the law would
provide how this source of obligation can be
complied with.
If it is a contract then the
stipulation provide how the contract shall be
complied with.
If it is an obligation to give, what is
the manner of compliance?
It depends on what is to be given,
whether it is a determinate thing or an
indeterminate thing.

QUESTION:
Can there be a valid obligation to
deliver a generic thing?
ANSWER:
YES. This may arise from law and
not from a contract of sale. Sale of a car or of
a horse cannot be considered a valid sale. But
a testamentary provision in a will which is a
generic thing is valid disposition. The law
expressly allows this.

QUESTION:
A testamentary provision giving an
heir a car, is the testamentary provision allow
the heir to reject the disposition?
ANSWER:
He may validly reject or
wrongfully reject the disposition. For
obligations to deliver a generic thing, the
debtor cannot deliver a thing which is of
inferior kind, but neither can the creditor
demand a thing which is of superior quality.
However, what is superior or
inferior is a very subjective determination.
What may be superior to me may be inferior to
most of you.
Therefore if the purpose of the
testator is to give his car is to allow the
grandson to use the car in competitions, then a
car insufficient to perform in race tracks is
improper. Moreover, aside from the purpose is
the value of the estate which should not impair
the legitime of the estate.

QUESTION:
In obligations to give a determinate
thing, what is the manner of compliance?
ANSWER:
The primary obligation of a debtor
is to give the very same thing which he
promised to deliver.

QUESTION:
In an obligation to deliver a Kia
Pride, the debtor offered to deliver a BMW,
can the obligation be validly extinguished?
ANSWER:
YES, though the creditor cannot be
compelled to accept, he may however want to
accept. Thus, the obligation will be
extinguished.

QUESTION:
Is there an exception where a
debtor is obliged to deliver a thing requires a
different kind of diligence in taking care of the
thing other than a good father of a family?
ANSWER:
YES, if the law requires a higher
degree of diligence such as what is required of
common carriers. Other than the law, is the
stipulation of the parties would require a
higher degree of diligence. In the absence of a
law or a stipulation to that effect, the diligence
of a good father of a family should be
observed.

KINDS OF OBLIGATIONS:

QUESTION:
When would an obligation become
due?
ANSWER:
It depends on what kind of
obligation is involved. It is wrong to say that
an obligation becomes due upon demand.
Since there can be no valid demand when the
obligation is not yet due. Therefor demand has
got nothing to with an obligation becoming
due.

QUESTION:
What kind of obligations become
due and demandable at once?
ANSWER:
1. In pure obligations
2. In conditional obligations if the
condition is resolutory but will be
extinguished at the happening of the event.
3. In obligation with a term or
period if resolutory in character but it will be
extinguished at the happening of the term.

QUESTION:
Is there such a thing as suspensive
obligation?
ANSWER:
None. It only exists in suspensive
term or condition.

QUESTION:
Is there such a thing as void
condition?
ANSWER:
There is no such thing as void
condition. A condition is merely an event
which may or may not happen. There is
nothing valid or void about conditions.

***Void and Valid = pertain to obligations.
***Suspensive, potestative, etc = pertains to
conditions.

QUESTION:
A pure obligation whose
performance does not depend upon a future
and uncertain event or upon a past event
unknown to the parties. Is this statement
valid?
ANSWER:
This is not valid. To be pure it
must not be conditional and not with a term. In
the above statement both the future and
uncertain must both concur and this would
only exclude a condition. A term can never be
uncertain. It is just a space of time. An event is
certain to happen. Therefore it should be or. If
and is used, it would only exclude a
condition with a condition and not those with
a term. If or is used it would exclude
obligations with a conditions and also those
with a term.
If in a promissory note, on its face it does not
say or it cannot be determined whether it is
conditional or pure obligation. But there is a
provision in the note that upon receipt from
the estate there is no assurance that the
creditor will receive in the estate, which
presupposes a conditional obligation.
Note however, the court treated it
as a pure obligation because...... (Pay vs.
Palanca)

QUESTION:
What is the consequence of a pure
obligation or a conditional obligation but
resolutory in character?
ANSWER:
I t is demandable at once, and
necessarily the prescriptive period starts to
run from the time the cause of action
accrues. It is wrong to say that a cause of
action accrues from the time the demand was
made. If such be the case no action shall
prescribe.

QUESTION:
What are the kinds of conditions?
ANSWER:
1. Suspensive
2. Resolutory
3. Potestative
4. Causal
5. Mixed
6. Possible
7. Impossible
8. Negative - requires the omission
of an act.
9. Positive - requires the
performance of an act.
QUESTION:
What is the effect of an impossible
condition?
ANSWER:
If the obligation is with an
impossible condition, it shall annul the
obligation. The phraseology is defective,
instead of annulled it should have been void.
Annullable presupposes a valid obligation
which is valid until annulled. This instance is
an impossible condition with a suspensive
condition.

QUESTION:
May there be a valid obligation
with an impossible condition?
ANSWER:
Yes. If the condition though
impossible is in the negative, like i will give
you 1 million if you dont kill my wife.
Negative impossible conditions are deemed
not written, as such it is considered as a pure
obligation UNLESS there are other words and
phrases which would not make it a pure
obligation.

QUESTION:
What are the kinds of impossible
conditions?
ANSWER:
Legal impossibility and physical
impossibility.

QUESTION:
Is it proper to say unlawful
conditions?
ANSWER:
Yes. What is improper is void
conditions.

QUESTION:
In unlawful or impossible
conditions in testamentary dispositions, what
is the effect?

ANSWER:
It does not result in a void
testamentary disposition. Under the law in
succession, such unlawful or impossible
condition is deemed not written.

QUESTION:
The debtor promises to pay if his
son does not die of cancer within 1 year. State
the status of the obligation whether it is valid
or not, and if valid state whether the obligation
is due and demandable?
ANSWER:
The condition is suspensive
negative possible (mixed) condition. This is a
valid obligation. It is due and demandable
depending on what happened to the son.
If the son dies of cancer within 1
year, the obligation does not arise. But even if
the son did not die of cancer within 1 year the
debtor can be compelled to pay, because in
that moment it is already certain that the son
will not die of cancer within 1 year such as
when the son died of a car accident.

QUESTION:
In a condition that B should marry
C within 1 year but after 2 weeks he entered
the seminary? Is it certain that the condition is
no longer possible?
ANSWER:
No. B may go out of the seminary
before the 1 year period lapsed.

QUESTION:
However, if C married D is it
possible that the condition mentioned above is
no longer possible?
ANSWER:
No. because D may die and B can
marry C within the time mentioned in the
condition.

QUESTION:
What is a potestative conditon?
ANSWER:
Under 1182, it is a condition that is
dependent upon the sole will of the debtor.

QUESTION:
When the condition depends upon
the sole will of the debtor and it is a
suspensive condition? Will such be valid?
ANSWER:
It is void. This is because a debtor
who can impose a condition upon his sole will,
he will make sure that the suspensive
condition will not happen so that the
obligation will not arise.

QUESTION:
A promise to give B his car if A
will go to Baguio within 5 days? Is it
potestative?
ANSWER:
Yes, such is potestative that is
dependent upon the sole will of the debtor. It
is because whether or not A will go to Baguio
solely depend upon his will.

QUESTION:
Is passing the Bar exam a
potestative condition? Causal or dependent
upon chance?
ANSWER:
It is neither a potestative nor a
casual condition.

QUESTION:
The grandfather promises to give
his grandson a car upon the latters passing the
bar exam. The grandson passed the bar and
demanded the delivery of the car. But the
grandfather refused to deliver the car and
argued that he cannot be compelled to deliver
the same because it is a potestative condition.
ANSWER:
It is not a potestative condition but
rather a suspensive condition. Therefore the
grandfather can be compelled to deliver.

QUESTION:
Assuming for the sake of argument
that such condition is a potestative condition,
can the grandfather be compelled to deliver
because the condition is void?
ANSWER:
The grandfather still can be compelled
because under 1182, it provides that a
condition is made by the sole will of the
debtor. In this case it is not the grandson who
is the debtor but rather the grandfather. It is
not dependent upon the sole will of the
grandfather. Hence not a potesative condition.
Therefore the obligation is a valid one.

QUESTION:
A obliged herself in 2001 to sell to
B a house and lot upon his passing the bar
exam. B passed the bar exam in 2005.
However in 2003 A sold the house and lot to
C and this house from 2001 was being rented
by D. B upon passing the bar exam demanded
upon A to deliver to him the house and lot
pursuant to the 2001 obligation made by A.
Who has a better right over this house and lot?
B or C?
ANSWER:
AS A RULE, it is B who has a
better right because under Art. 1187 the effect
of the happening of the condition retroacts to
the time of the constitution of the obligation as
if the condition already happened as early as
2001.
However, as an EXCEPTION, C
may have a better right if C can prove that he
is a buyer in good faith and for value, he
would have a better right. But it must be noted
that in order to be a purchaser in good faith
and for value, such should be registered. As
such, C would not be bound by the agreement
made by A and B.

QUESTION:
Assuming that B has a better right,
B demanded all the proceeds of the rentals
from 2001 until 2005, is he entitled to the
rentals?
ANSWER:
Since, under Art. 1187 the effect of
the happening of the condition retroacts to the
constitution of the obligation, would
presuppose that B may be entitled to the
proceeds of the rents as if he was the owner of
the property from 2001.
However, it is submitted that B is
not entitled to the rentals because fruits
received in reciprocal obligation (since this
is a contract of sale) it is deemed mutually
compensated. B is obliged to pay the price
and A has the obligation to transfer ownership.
Under the law it is deemed mutually
compensated because, A is entitled to
interests on the price while B is entitled to
the rentals, under the law fruits received are
deemed mutually compensated.

QUESTION:
Is the view that the retroactive
effect of Art. 1187 does not cover fruits?
ANSWER:
No. That is why there is a
provision that in reciprocal obligations, the
fruits received are deemed mutually
compensated. There is therefore a retroactive
effect. In the above case, B is entitled to the
fruits but due to the provision on mutual
compensation, he shall no longer receive the
fruits.

QUESTION:
In conditional obligations, if the
condition is suspensive in character, the
happening of the condition shall give rise to
the obligation. Ordinarily if the condition did
not happen, the obligation will not arise. When
shall the obligation even if the condition did
not happen, it shall give rise to the obligation?
ANSWER:
When it was the debtor who
voluntarily prevented the happening of the
condition.

QUESTION:
However, is there an instance
where the debtor who voluntarily prevented
the happening of the condition in order to give
rise to the obligation, still not be compelled to
perform?
ANSWER:
Yes, when though he prevented the
happening of the condition, such prevention
was made when he was exercising his right.

???In obligation is an obligation with a
suspensive term , the obligation arise because
the term is certain to arrive, it will only give
rise to the demandability of the obligation.

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QUESTION:
In suspensive condition, the
creditor filed an action, will the action
prosper?
ANSWER:
It may prosper for as long as it is
not an action for specific performance
because the condition being suspensive, there
is yet no obligation that arise. But, the
creditor may file an action for the
preservation of his rights, (example) like if
the action is to compel the other party to have
the agreement registered with the appropriate
registry of property.

QUESTION:
In suspensive conditions imposed
on an obligation, what is the effect of any
improvement or deterioration on the thing to
be delivered?
ANSWER:
In improvements, if the cause of
the improvement is through nature, such
improvements shall pertain to the creditor.

If in improving the property the
debtor spent a sum of money, the creditor is
entitled to the improvements. Under the law
the creditor in this case only has the rights
of a usufructuary. The debtors rights is
limited to the removal of the improvement
as long as it will not cause damage to the
thing to be delivered.











In obligations with a term or period, may be
definite if there is a day certain. In definite
periods will arrive, but dependent on certain
events which is certain to happen but the
specific date is not certain.


Another classifications of periods is the source
of the period on whether it is by conventional
or voluntary period (by agreement of the
parties), fixed by law, or fixed by the court.

QUESTION:
Is a 1 year period of redemption, a
period in relation to obligations?
ANSWER:
No. It is a period in the exercise of
a right, because who has a right is not
compelled to redeem.

QUESTION:
Give examples of period fixed by
law?
ANSWER:
1. Payment of taxes
2. In a lease contract, even when
the parties did not fix a period but
it provides that the payment of
rents be paid annually, it is
presumed that the period of rent is
for 1 year.

QUESTION:
Under Art. 1197 it was provided
that if the obligation does not fix a period, but
from its nature and the circumstances it can be
inferred that a period was intended, the courts
may fix the duration thereof. What is the
guidelines wherein the court in this instance
may fix the period?
ANSWER:
The court having power to fix the
period presupposes that there is a perfected
contract. If there is no perfected contract, the
court has no power to fix the period.

QUESTION:
What is the procedure for the court
to fix a period?
ANSWER:
To determine whether there is a
period or no period stated in the contract. If
there is, the fixing of the period is not proper
under Art. 1197.

Secondly, to determine whether the
parties intended that there be a period, if none,
such as when the parties intended that it be a
pure obligation, then the fixing of a period is
not proper under Art. 1197.

Thirdly, even if there is a period
intended by the parties, the court must also
determine whether such period had already
prescribed or not. Such that an action for
specific performance on an obligation which
does not yet arise, the action cannot prosper
because the action is premature. Or if a period
had already lapsed and the obligation involves
an obligation to do, an action for specific
performance can no longer prosper, but the
action for damages shall prosper.

QUESTION:
In a contract between the parties it
was provided, that debtor must remit the
proceeds upon the sale of the tobacco. Is a
period contemplated by the parties?
ANSWER:
The argument by the debtor that
the estafa case is premature because the
remedy of the creditor if to go to court for the
latter to fix the period is not proper because
the agreement by the parties is one with a
period.
The argument by the debtor that
there was no period fixed by the parties, which
would render the provisions of Art. 1197 not
to apply, will not prosper. The provisions of
the agreement clearly provides for a period
which is upon the sale of the tobacco.
Therefore, upon the sale the debtor can be
compelled to remit. There is no need for the
court to fix the period (Lim vs. People).

QUESTION:
Under Art. 1180 which provides
that when the debtor binds himself to pay
when his means permit him to do so, the
obligation shall be deemed to be one with a
period subject to the provisions of Art. 1197,
and as such the court shall fix the period. In
this case, when will the obligation become
due, so that an action for the court to fix the
period may prosper?
ANSWER:
The creditor should only go to the
court if he knew that the debtor already has the
means to pay. If the debtor already has the
means to pay, go to court to fix the period and
upon the lapse of the period, the obligation
become due and demandable.
When the period is solely
dependent upon the will of the debtor, such is
also a judicial period.

Under Art. 1191 The power to rescind
obligations is implied in reciprocal ones, in
case one of the obligors should not comply
with what is incumbent upon him.
The injured party may choose
between the fulfillment and the rescission of
the obligation, with the payment of
damages in either case. He may also seek
rescission, even after he has chosen
fulfillment, if the latter should become
impossible.
The court shall decree the
rescission claimed, UNLESS there be just
cause authorizing the fixing the period.
This is understood to be without
prejudice to the rights of third persons who
have acquired the thing, in accordance, with
Articles 1385 and 1388 and the Mortgage
Law.

QUESTION:
Can the debtor be compelled to
perform the obligation before the arrival of the
period, or can the creditor be compelled to
accept the obligation even before the arrival of
the period?
ANSWER:
In the second scenario the creditor
cannot be compelled to accept the
obligation even before the arrival of the
period because the creditor may not want to
accept because he had not place to store the
goods which is the subject of the obligation.

QUESTION:
Is a period for the benefit of both
the creditor and the debtor?
ANSWER:
No. It is merely a disputable
presumption that the period is both for the
benefit of the creditor and the debtor.









QUESTION:
If the phrase provided for in the
obligation is payable on or before December
31, and no other factor has been provided for,
is it both for the benefit of the creditor and the
debtor?
ANSWER:
No such phrase is clearly for the
benefit of the debtor. This is because the
debtor cannot be compelled to perform the
obligation before the arrival of the period.
On the other hand, however, the
debtor can compel the creditor to accept the
performance of the obligation even before the
expiration of the period.

QUESTION:
Are there contracts solely for the
benefit solely of the creditor?
ANSWER:
Yes, when there are stipulations
that the debtor cannot pay within 3 months or
2 years. This could be said to be for the benefit
of the creditor because of a scenario where the
creditor has the right to the fruits of the thing
subject of the obligation. This is probably
because the creditor would want to harvest
first before he returns the thing.
However, the creditor may return it
at any time because the provision is solely for
the benefit of the creditor.

QUESTION:
A borrowed money from B in
January payable at the end of the year. To
secure the fulfillment of the obligation A
delivered his car to B and it was stipulated that
B can use the car. After a few months, come
August of the same year, the debtor offered to
pay the entire amount to the creditor and also
demanded for the return of his car. Can the
creditor be compelled to accept the payment?
Can he be compelled to return the car?
ANSWER:
While the debtor cannot be
compelled to pay before the arrival of the
period, the creditor cannot also be compelled
to accept the performance of the obligation
because of the principle that a period is both
for the benefit of both the debtor and the
creditor.
Base on the facts the above
principle finds application in the present case
because the debtor cannot be compelled pay
before the arrival of the period which is the
end of the year. However, the creditor has an
interest in the period because it was stipulated
that he can use the car before the arrival of the
period. Therefore under the facts, the period is
both for the benefit of the debtor and the
creditor.

QUESTION:
Even assuming that the period is
solely for the benefit of the debtor, before the
arrival of the term, is it possible that the
creditor validly demand for the performance
of the obligation?
ANSWER:
Yes. That can happen if the debtor
lost his right to make use of the period. Under
Art. 1198, a debtor may lose his right to make
use of the period.
Art. 1198. The debtor shall lose
every right to make use of the period:

(1) When after the
obligation has been contracted, he
becomes insolvent, unless he
gives a guaranty or security for
the debt;

(2) When he does not
furnish to the creditor the
guaranties or securities which he
has promised;

(3) When by his own
acts he has impaired said
guaranties or securities after their
establishment, and when through a
fortuitous event they disappear,
unless he immediately gives new
ones equally satisfactory;

(4) When the debtor
violates any undertaking, in
consideration of which the creditor
agreed to the period;

(5) When the debtor
attempts to abscond.

QUESTION:
A borrowed a sum of money from
B. To secure the fulfillment of his obligation
he mortgaged his house and lot. Before the
arrival of the period (before the obligation
became due), the house was burned due to a
fortuitous event. The day after the creditor
demanded the payment of the debt. Was there
a valid demand?
ANSWER:
Yes.

QUESTION:
Can the debtor be compelled to
pay?
ANSWER:
He lost his right to make use of the
period even if the lost was due to a fortuitous
event, UNLESS of course he gives another
security for the debt.

QUESTION:
Why would the debtor lost his right
to make use of the period when the lost was
due to a fortuitous event and the same is not
imputable to the fault of the debtor?
ANSWER:
This is because the creditor would
not have left him money if not for the security.

QUESTION:
In number _____ of Art. 1198,
how can the debtor give another security if the
debtor is already insolvent?

ANSWER:
If the debtor still has other
properties even if he is still insolvent. Or he
may not have any properties, but he can
provide for a guarantor or a secure a mortgage
to secure the fulfillment of the obligation.