Journey to CPA

Monday, November 16, 2015

Reviewer in Law 1 (from De Leon's

book) Chapter 3
Chapter 3 – Different Kinds of Obligations

Identification Reviewer

Section 1 – Pure and Conditional Obligation

icle 1179. Every obligation which is not subject to a future

uncertain, and with a past event which is unknown to the
ties, is demandable at once. Also, an obligation subject to a
olutory condition shall also be demandable, without
judice to the effects of the happening of the events.

re obligation – is an obligation which is not subject to a

dition and there is no date specified with its fulfillment and
herefore, demandable.

nditional obligation – is an obligation which its

sequences are subject in one way or another to the
llment of a condition.

ndition – is a future AND uncertain event in which the

ectivity or extinguishment of an obligation is subject to its
llment. It may refer to a past event which is unknown to the
ties. It is important that the event is uncertain, otherwise it
onsidered as obligation with a period. However, the
dition must be possible.

spensive condition – a condition in which its fulfillment will

e rise to an obligation. The demandability of the obligation
ubject to its fulfillment.

solutory condition – a condition in which the fulfillment of it

extinguish an existing obligation.

st event unknown to the parties – this term only refers to

knowledge of a future event with regards to a past event
ch makes it uncertain.

riod – is a future and certain event in which the effectivity

extinguishment of an obligation is subject to its fulfillment. It
s if the debtor will fulfill the obligation when his means
mit him to do so. Also, it is a certain event although it may
be known when.

spensive – the happening of which gives rise to an

gation.

esolutory – the happening of which extinguishes an

gation.

press – the condition is clearly stated.

plied – the condition is merely inferred.

ossible – the condition is capable of fulfillment, legally and

sically.

possible – the condition is not capable of fulfillment, legally

d physically.

otestative – the condition is dependent upon the will of one

he contracting parties.

asual – the condition is dependent upon chance or upon the

of a third person.

xed – the condition is dependent partly upon chance and

tly upon the will of a third person.

ositive – the condition consists in the performance of an act.

egative – the condition consists in the omission of an act.

onjunctive – there are several conditions and all must be

lled.

sjunctive – there are several conditions and one or two of

m must be fulfilled.

visible – the condition is susceptible to partial performance.

divisible – the condition must be performed as a whole.

hysically impossible conditions – when they, in nature of

gs, cannot be done or cannot exist. (Ex. Not rain in the
lippines for one year)

gally impossible conditions – when it is contrary to law,

rals, good customs, public order and public policy. (Ex.
ng, common-law-wife, slap, publicly advocate the
rthrow of the government and not appear as witness
ainst the criminal)

hysical loss – when the thing perishes as when the house is

ned and reduced to ashes.

gal loss – when the thing goes out of commerce or when it

egal before and it becomes illegal.

vil loss – when the thing disappears as if its existence is

nown or if known, it cannot be recovered, as a matter of
or of law.

sufruct – the right to enjoy the fruits of the thing belonging to

other.

pplicability of Article 1189 in obligation to return – in a

olutory condition, the fulfillment of the condition converts
debtor into a creditor and creditor into a debtor. Hence, the
es on loss, deterioration or improvement of the thing apply
he obligation to return.

nilateral obligation – obligation in which only one party is

und to comply with a prestation.

ateral obligation – obligation in which both parties are

und to give one another a prestation. This is a case in which
h parties are creditors and debtors of one another.

eciprocal obligation – obligation which arises from the same

se and the performance of one party is dependent upon
performance of another.

on-reciprocal obligations – are those which do not impose

ultaneous and correlative performance on both parties. The
formance of one party is not dependent upon the
formance of another.

e courts may grant guilty party term for performance – if

re is a just cause to give the party in default time to perform
obligation, the court may still approve it. This is applicable
e debtor is willing to perform.

emedy is alternative – it is not cumulative, meaning once

injured party decided to have the obligation performed, he
still ask for rescission if the obligation is impossible to
form, otherwise he could not choose both performance and
cission. If the injured party chose rescission, he could not
for the performance of the obligation anymore.

hen expressly stipulated in contract, it is possible for both

ties to enter in a contract whereby they agree that in case
breach or violation of the terms, the injured party may
ose rescission even without the intervention of the court.

here contract still executory – in an obligation where both

ties have not yet performed their obligations, however one
ty is already willing and ready to perform and the other is
, he may choose rescission even without the intervention of
court.

Section 2 – Obligations with a period

bligation with a period – is one whose consequences are

jected in one way or another to the expiration of a period or
m.

uspensive period – an obligation arises upon the happening

a certain event or period.

esolutory period – an obligation is extinguished upon the

ppening of a certain event.

gal period – a period which is set or provided by law.

onventional or voluntary period – a period which is agreed

he parties.

dicial period – a period fixed by the court.

efinite period – a period/time known to the parties.

definite period – a period which is not known to the parties.

his case, the court may be called upon to set the time of
llment of the obligation.

ecovery of the thing (payment before arrival of the period) –

debtor may still recover the thing if it is delivered by
take prior to the fulfillment of a period. He carries the
den of proving that he is unaware that the period has not
arrived. However, if the period has already arrived, the
btor cannot recover the payment but he can still recover the
rest from the premature payment up to the date of the
turity of obligation.

o recovery in case of personal obligation – you cannot

over the service you have rendered, the same goes with a
gative obligation, you cannot recover what you have not
ne.

eriod for the benefit of both parties – it is presumed that the

iod agreed by both parties benefits both of them or one of
m. Therefore, the debtor cannot be compelled to pay and
ditor cannot demand prior to the fulfillment of period unless
erwise stipulated. However, it is rebuttable.

omputation of term or period – when the laws speak of

rs, months, days and nights, it should be understood as
5 days in a year, 12 months and 30 days in a month, 24
urs in a day and night is from sunset to sunrise. Also, in
mputing for a period, the last day should be included while
first day excluded. Also, holidays should be excluded. If
nths are designated by their name, the number of days they
pectively have should be computed.

Section 3 – Alternative Obligations

mple Obligation – an obligation in which there is only one

station required.

ompound Obligation – an obligation in which there are two

more prestation required.

onjunctive Obligation – an obligation in which there are

eral prestation and all must be fulfilled or given.

stributive Obligation – there are several prestation but only

e of them must be fulfilled.

ernative Obligation – One of the two or more prestation

st be fulfilled. The right of choosing the prestation to be
en, as a general rule, belongs to the debtor.

cultative obligation – is one where only one prestation has

en agreed upon but the obligor may render another in
stitution.

e right of choice, as a rule, belongs to the debtor – unless

ressly stated, the creditor can also choose the prestation to
given or a third person can choose by common agreement.

escission – creates an obligation to return what has been

en as an object of the obligation together with its fruits, and
e with its interest.

asis of indemnity – the value or price of the last prestation

t has disappeared or destroyed through the fault of debtor
uld be the basis of indemnity. In case of disagreement, the
ditor has to prove the value or which of the things last
appeared.

hen the right of choice belongs to the creditor – In

rnative obligation, the right of choice naturally belongs to
debtor. However, the debtor may expressly give the right of
ice to the creditor. In such, the rules regarding in the right
hoice of debtor are also applicable if it is upon the creditor.
ore the selection of the creditor, the debtor could not incur
elay.

CHAPTER 3 – SECTION 4: JOINT AND

SOLIDARY OBLIGATIONS
(Identification)

1) Individual obligation – an obligation where

there is only one obligor and obligee.

2) Collective obligation – an obligation where

there are two or more debtors and/or two or
more creditors.

3) Joint obligation – one where the obligation is

to be paid or fulfilled proportionately by the
different debtors and/or is to be demanded
proportionately by the different creditors.

4) 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 to
any of the debtors, the entire compliance with
the prestation.

5) Multiplicity of suits – the presumption in

Article 1208 is subject to the rules of Court
governing this. Otherwise, situations may arise
where there are as many suits as there are
debtors and creditors.

6) Passive Solidarity – solidarity on the part of

the debtors, where anyone of them can be
compelled to pay the entire obligation.

7) Active Solidarity – solidarity on the part of the

creditors, where anyone of them can demand
payment of the entire obligation from anyone
of the debtors.

8) Mixed Solidarity – solidarity on the part of the

debtors and creditors, where each one of the
debtors is liable to render, and each one of the
creditors has a right to demand, compliance of
the entire obligation.

9) Conventional Solidarity – when solidarity is

expressly stipulated in the contract or agreed
upon by the parties.

10) Legal Solidarity – when solidarity is imposed

by law

11) Real Solidarity – when solidarity is imposed

by the nature of obligation

12) Solidarity not presumed – if there are two or

more persons in the same obligation, it is
presumed to be joint because solidarity is very
burdensome for the part of the debtors and the
law tends to favor the debtors in presuming
that they are bound jointly and not solidarily.

13) Joint Indivisible obligation – an obligation

where it is joint as to liabilities of debtors and
rights of the creditors but indivisible as to
compliance.

14) Joint Indivisible Obligation – Debtors are

liable jointly to deliver a car (particular thing
which is indivisible).

15) Joint Divisible Obligation – debtors are liable

jointly to pay money (money is divisible).

16) Solidary Indivisible Obligation – debtors are

liable solidarily to deliver a car (particular thing
which is indivisible).

17) Solidary Divisible Obligation – debtors are

liable solidarily to pay sum of money (money is
divisible).

18) Uniform Solidary obligation – when the

parties are bound by the same stipulations.

19) Non-uniform or varied Solidary obligation –

when the parties are not bound by the same
stipulations.

20) Solidarity not affected by diverse stipulations

– the rule is that the creditor may bring his
action in toto against any of the solidary
debtors less the shares of the other debtors
with unexpired terms or unfulfilled conditions
or less the shares already been paid by other
debtors.

21) Act of solidary creditor prejudicial to others –

a solidary creditor may do any act beneficial or
useful to the others but he cannot perform any
act prejudicial to them. If he performs such act
and as a result the obligation is extinguished,
he shall be responsible to the others for
damages.

22) Remission or condonation – gratuitous

abandonment of debt.

23) Assignment by solidary creditor of his rights

– in the absence of consent given by the
others, a solidary creditor cannot assign his
rights to a third person. The assignee may not
give the shares of the others. However, if the
assignment is made to a co-creditor, the
consent of the other creditors is not necessary.

24) Payment to any of the solidary creditors – in

case of active or mixed solidarity, the debtor(s)
can pay either of the creditors but if a judicial
or extra-judicial demand was made by one of
the creditors, the debtor who was asked to pay
is bound to make the payment to that creditor.
If the debtor made the payment to other
creditor who did not make the demand and if
that creditor did not give the other his share of
the payment, the other creditor can still collect
from the debtor his share of the payment.

25) Effect of novation, etc. where obligation is

joint – In a joint obligation, causes of
modification or extinction does not terminate
the obligation except with respect to the
creditor or debtor affected.

26) Creditor may proceed against any solidary

debtor – if a demand is made by the creditor to
one of the debtors and that debtor did not
make the payment in full, the creditor can still
demand from other solidary debtors for the
remaining obligation. However, if demand is
made to A, he cannot ask for the creditor to
make a demand to other debtors as the
creditor has the right to proceed against any
one of them.

27) Prescription – one acquires ownership and

other rights through the lapse of time in the
manner and under the conditions laid down by
law.

28) Effect of remission of share after payment – if

payment is made before remission, the
remission will have no effect because there is
no more obligation to remit. However, if
remission is made and payment is made
subsequently, solutio indebiti arises. The
solidary debtor who made the payment is
entitled to receive back his proportionate
share.

29) No right to reimbursement in case of

remission – the solidary debtor who received
remission is not entitled to ask for
reimbursement from his co-debtors because
remission is gratuitous and he did not actually
make payments to the creditor.

SECTION 5 – DIVISIBLE AND INDIVISIBLE

OBLIGATIONS

1) Divisible Obligation – is one where the object

of which, in its delivery or performance, is
capable of partial fulfillment.

2) Indivisible Obligation – is one where the

object of which, in its delivery or performance,
is not capable of partial fulfillment.

3) Absolute Rule in Divisibility – divisibility of

obligation is not subject to possibility or
impossibility of partial prestation, you can
determine it according to the purpose or
intention of the parties. However, an indivisible
prestation will remain indivisible even if the
intention of the parties is otherwise.

4) An obligation is presumed to be indivisible

when there are only one debtor and creditor.

5) Applicability of Article 1223 – although it may

appears that the article refers to a real
obligation, divisibility of obligation refers to the
object or prestation of an obligation in its
broad sense, whether it may be a service or a
thing.

6) Qualitative Division – division of object of

obligation based on quality rather than on
numbers or quantity.

7) Quantitative Division – division of object of

obligation based on numbers or quantity rather
than on quality.

8) Ideal or Intellectual Division – is one which

exists only in the mind of the parties.

9) Legal indivisibility – an indivisible obligation

set by law even if the object is by nature
divisible.

10) Conventional Indivisibility – an indivisible

obligation set or contracted by the parties,
even though the object is by nature divisible.

11) Natural Indivisibility – an object which is by

nature indivisible, regardless of the intention of
the parties. (Example: car)

12) Where there is only one debtor and creditor –

the debtor has to perform the obligation in
totality, whether the prestation is divisible or
not. The creditor cannot be compelled to
receive partial performance and a partial
performance would not extinguish the
obligation unless it is fully performed.

13) Effect of non-compliance by a debtor in a joint

indivisible obligation – the obligation will be
turned into one for damages (i.e., to pay
money). The creditor cannot demand specific
performance or rescission because there is no
cause of action against the other debtors who
are willing to fulfill their promises.

14) General Rule – generally, obligations to do

and not to do are indivisible. However,
obligations to do stated in article 1225 are
divisible.

SECTION 6 – OBLIGATION WITH A PENAL

CLAUSE

1) Principal obligation – is one which can stand

by itself and its validity and existence do not
depend on another obligation.

2) Accessory obligation – is one which cannot

stand by itself and depends upon a principal
obligation.

3) Obligation with a penal clause – is one which

there is an accessory undertaking attached to
it in order to pay previously stipulated
indemnity in case of breach.

4) Penal clause – is an accessory undertaking

attached to an obligation to assume greater
liability in case of breach.

5) Legal Penal clause – when it is provided for

by law.

6) Conventional penal clause – when it is

provided by the contracting parties.

7) Compensatory penal clause – when the

purpose of the penalty is for payment of
damages.

8) Punitive penal clause – when the purpose of

the penalty is to punish the violator.

9) Subsidiary or alternative penal clause – when

only the penalty can be enforced.

10) Joint or cumulative penal clause – when the

principal obligation and penalty can be
enforced.

11) Penalty substitutes for damages and interests

– as a general rule, the penal clause
substitutes for damages and payment of
interests in case of non-compliance. The
creditor does not need to go to court to prove
the actual damages if there is penal clause.

12) When penalty may be enforced – penalty can

only be demandable if there is a breach
committed by the obligor and if it is not
contrary to law, morals, customs, public policy
and public order. The penalty may also be
reduced if it is iniquitous or unconscionable
and if there is already partial fulfillment.

13) Penalty not substitute for performance – the

debtor cannot just pay the penalty in
substitution for non-compliance of the
obligation. By the general purpose of penal
clause, it is to ensure the compliance of the
obligation, thus penalty is not a substitute.
However, the debtor can do so if it is clearly
stipulated that the creditor allowed him, thus
the obligation is not with a penal clause
anymore but an alternative.

14) When penal clause joint – with respect to the

creditor, he has the right to demand both the
principal obligation and penalty jointly if this
right is clearly granted to him. However, it is
not required for it to be expressed clearly if it
can be understood impliedly through the
nature of obligation. Example, if the principal
obligation is to pay a sum of money, in case of
non-compliance it is implied that the creditor
can demand both principal and the penalty.

15) Penalty demandable even without proof of

actual damages – the creditor need not to
present proof of actual damages in obligation
with a penal clause, the only thing needs to be
proven is the breach of contract or non-
compliance. The creditor may enforce penalty
whether he suffered or not. However, the
penalty cannot exceed the amount stipulated
even if actual damages are more than the
penalty stipulated.

16) Damages recoverable in addition to penalty

must be proved – in case when the creditor
can still demand damages in addition to the
penalty, the creditor must prove those
damages which he actually suffered.

17) The nullity of penal clause does not carry with

it that of the principal obligation – if the penal
clause is void, the principal obligation can still
be enforced. In case of non-compliance or
breach, the creditor may demand payment for
damages and not the void penalty.

18) The nullity of principal obligation carries with

it that of the penal clause – the penal clause is
dependent to the principal obligation; therefore
if the principal is void, penal clause will also be
void. However, if the nullity is due to the fault
of debtor who acted in bad faith, the creditor
who suffered damages can demand for the
payment of penalty (which is not void).
apter 3 – Different Kinds of Obligations (Section 1, 2, 3)

Enumeration Reviewer

assifications of Obligation

· Primary Classification of obligations

· Secondary Classification of obligations

mary Classification of obligations

· Pure and conditional obligations

· Obligations with a period

· Alternative and facultative obligations

· Joint and solidary obligations

· Divisible and indivisible obligations

· Obligations with a penal clause

ction 1 – Pure and Conditional Obligations

condary Classification of obligation

· Unilateral and bilateral obligations

· Real and personal obligations

· Determinate and generic obligations

· Civil and natural obligations

· Legal, conventional and penal obligations

ncipal Kinds of Conditional Obligation

· Suspensive condition (condition precedent or

antecedent)

· Resolutory condition (condition subsequent)

hen obligation is demandable at once

· When it is pure

· When it is subject to a resolutory condition

· When it is subject to a resolutory period

hen the debtor obliges himself to pay (other cases of

iod)

· Little by little

· As soon as possible

· From time to time

· At any time I have the money

· In partial payments

· When I am in a position to pay

Effects of Happening of a Condition

· In a suspensive condition, the creditor will only have