SECTION 4 – JOINT AND SOLIDARY OBLIGATION Legal Indivisibility - where a specific provision of law

declares as indivisible, obligations which, by their nature, are

(Article 1207-1208)
Individual Obligation – one where there is only one creditor
and one debtor.
Collective Obligation – one where there are two or more
creditors and/or two or more debtors.
Joint Obligation – one where the whole obligation is to be
paid or fulfilled proportionately by different debtors and/or is
to be demanded proportionately by different creditors.
(Mancomunada, mancomunadamente and pro rata)
Solidary Obligation – one where each one of the debtors is
bound to render, and/or each one of the creditors has a right to
demand from any one of the debtors, entire compliance with
the prestation. (Solidaria, in solidum, juntos and
separadamente)
Rule on Multiplicity of Suits – seek to prevent the filling of
two or more suits or complaints for a single action or violation
of legal right.
Passive Solidarity – solidarity on part of the debtors, each one
of the debtors can be made liable for the fulfillment of the
entire obligation. (Mutual Guaranty)
Active Solidarity – solidarity on the part of the creditors,
where any one of them can demand the fulfillment of the entire
obligation
Mutual Representation – solidary creditors have
powers to exercise the right of the other in the same manner as
their rights.
Mixed Solidarity – solidary on part of the debtors and
creditors, when each one of the debtor is liable and each one of
the creditor has right to demand for the entire compliance with
the obligation.
Conventional Solidarity – where solidarity is agreed by the
parties.
Legal Solidarity – where solidarity is imposed by law.
Real Solidarity – where solidarity is imposed by the nature of
obligation.
divisible.
Conventional Indivisibility – where the will of the parties
makes as indivisible, obligations which, by their nature, are
divisible.
Natural Indivisibility – where the nature of the object or
prestation does not admit of division, e.g. to give a car, to sing a
song.
SECTION 6 – OBLIGATION WITH PENAL CLAUSE
(Article 1226)
Principal Obligation – is one which can stand by itself and
does not depend for its validity and existence upon another
obligation.
Accessory Obligation – is one which is attached to a principal
obligation and, therefore, cannot stand alone.
Obligation with a penal clause – is one which contains an
accessory undertaking to pay a previously stipulated
indemnity in case of breach of the principal prestation,
intended primarily to induce its fulfillment.
Penal Clause – is an accessory undertaking attached to an
obligation to assume greater liability in case of breach
Legal penal clause – when it is provided by law.
Conventional penal clause – when it is provided for the
stipulation of the parties.
Compensatory penal clause – when the penalty takes place of
damages
Punitive penal clause – when the penalty is imposed merely
as punishment for breach.
Subsidiary or alternative penal clause – when only the
penalty can be enforced.
Joint or cumulative penal clause – when both the principal
obligation and the penal clause can be enforced.

(Article 1211)
Uniform – when the parties are bound by the same
stipulations; or
Non-uniform or varied – when the parties are not subject to
the same stipulations

SECTION 5 – DIVISIBLE AND INDIVISIBLE OBLIGATION

(Article 1223)
Divisible Obligation – is one the object of which, in its
delivery or performance, is capable of partial fulfillment.
Indivisible Obligation – is one the object of which, in its
delivery or performance, is not capable of partial fulfillment.
Qualitative Division – or one based on quality, not on number
or quantity of the things which are the object of the obligation.
Quantitative Division – or one based on quantity rather than
on quality.
Ideal or Intellectual Division – or one which exists only in the
minds of the parties
CHAPTER 4 – EXTINGUISHMENT OF OBLIGATION
(Article 1232)
Payment – May consists of not only delivery of money but also
the giving of thing (other than money), the doing of an act, or
not doing of an act.
Payment – synonymous to performance
Debt – An obligation to deliver money, deliver a thing (other
than money), to do an act, or not to do an act.
(Article 1233)
Integrity of prestation – a debt to deliver a thing or to render
service is not understood to have been paid unless the thing or
service has been completely delivered or rendered.
Identity of prestation – the very prestation due must be
delivered or rendered.
(Article 1234)
Substantial performance – when the important or essential
part of the contract has been performed and only a small part
or minor part has not been carried out.
(Article 1251)
Venue – is the place where a court suit or action must be filled
or instituted.
Domicile – is the person’s habitual residence
Residence – element of domicile.
SUBSECTION 1 – APPLICATION OF PAYMENT
(Article 12 52)
Application of payment – is the designation of the debt to
which should be applied the payment made by a debtor who
has various debts of the same kind in favor of same creditor.
SUBSECTION 2 – PAYMENT BY CESSION
(Article 1255)
Payment by cession – is the assignment or abandonment of
all the properties of the debtor for the benefit of his creditor.
SUBSECTION 3 – TENDER OF PAYMENT AND CONSIGNATION

(Article 1237) (Article 1256)

Subrogation – the payer acquires not only the right to
reimbursed for he has paid but also all other rights which the
creditor could have exercised.
Reimbursement – right to be refunded to the extent of
payment beneficial to the debtor
Tender of payment – is the act of offering to the creditor the
thing or amount due
Consignation – is the act of depositing the thing due with the
proper court when the creditor does not desire or cannot
receive it.

(Article 1239)
Free disposal of the thing due – the thing to be delivered is
not subject to any claim, lien or encumbrance of a third party.
Capacity to alienate – the person is not incapacitated to enter
into a contract and to make a disposition of the thing due.

(Article 1241)
Estoppel – an admission or representation is rendered
conclusive upon the person making it and cannot be denied or
disapproved against the person relying thereon.

(Article 1245)
Dation in payment – is the conveyance of ownership of a
thing as an accepted equivalent of performance.

(Article 1246)
Principle of equity – supplies justice in cases where there is
lack of precise declaration in the obligation.

(Article 1247)
Judicial cost – are the statutory amounts allowed to a party to
an action for his expenses incurred in an action.
(Article 1249)
Legal tender – currency which is offered by the debtor in the
right amount, the creditor must accept in payment of debt in
money
(Article 1250)
Inflation – is a sharp sudden increase of money or credit or
both without corresponding increase in business transaction
Deflation – is the reduction of volume and circulation of
available money or credit, resulting in decline of the general
price level.