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Obligations: Civil Action
Obligations: Civil Action
Obligations: Civil Action
Q: When do you have to make the reservation? if A.) To give a specific thing:
you're talking about a civil liability arising from a i.) To deliver a determinate
delict? thing: It involves an obligation
to deliver a specific thing.
A: before the prosecution presents evidence in the ii.) other accessory obligations:
criminal case. - to preserve the thing- which requires the
diligence of a good father EXCEPT in cases of
Q: What happens to the civil liability if the accused common carriers where extra-ordinary
died in the criminal case? Will the civil liability arising diligence is required. In case of innkeepers,
from the delict also be extinguished? under necessary deposit (Art. 2000) not just
diligence of a good father.
A: In the case of Bayotas and Diego, and the SC said
that, if the accused died the civil liability arising from Q: Can the parties enter into a stipulation, in such a
the delict is also extinguished. way that they can change the required degree of
Take note that in the RPC, the death of the accused diligence?
will extinguish the criminal liability but then, the SC
further said that the victim of the relatives of the A: As a general rule, parties may stipulate when it
victim may still pursue the civil liability provided that, come to the kind of diligence to be observed, but
it will now be based from the other sources of an there are exceptions:
obligation. a.) in relation to necessary deposit, under
art. 2003;
5.) Arising from Quasi-delict- one important b.) in relation to common carrier, with
element of a quasi-delict is negligence respect to the safety of the passengers
Q: is there any act or felony wherein there is an under art. 1757;
element of negligence?
A: yes, reckless imprudence resulting to homicide or - because it is the law that requires that it
physical injury. should be extra-ordinary or utmost diligence
and parties have no right to change the kind
- If the accused died and the crime charged is of diligence that should be observed by the
reckless imprudence resulting to homicide or obligor.
serious physical injury, the civil liability arising
from that delict is extinguished but, the Delivery of Accessions and Accessories
victim or the relatives of the victim may still
file a civil action for damages but this time, Distinction between accessions and accessories
treating the act not as delict but as a quasi- in Property
delict. - For accession: (A-P-I)
- Anything that is Attached (attach, meaning, if
-What is important here is that, even if in one single there is an attempt to remove it, it will cause
act wherein negligence is involved, you can treat it as injury)
a quasi-delict or as a delict, and therefore there is a
civil liability arising from the delict, and the civil Ex.) Eraser, how many properties are there in the
liability arising from the quasi-delict, you have no right eraser? 2- the foam and the board. If I detach it now?
to file two cases for civil damages because that would what will happen to the eraser? So that means that if I
be tantamount to unjust enrichment. attempt to remove the foam from the board, it will
cause injury, here there is an accession.
Obligations of the Obligor: Because only the foam was intended to be delivered?
I. Obligations in a prestation to give- Will I also have the obligation to deliver the board
- In a prestation to give, it involves money or that is now attached to the foam? In property, if there
other property. Under the provisions are two personal properties put together, the identity
of each is retained, what kind of accession is this? This Q: Do you have the obligation to deliver the
is adjunction. accessory?
A: No. Because we’re talking here of an indeterminate
In adjunction, two personal properties are attached thing. Accessions and accessories are not certain.
together but the identity is retained and since the
identity is retained and the removal will cause injury,
who will now have a better right over this? what is the II. Obligations in a prestation to do-
principal and what is the accessory? Is it the foam or - just simply perform the act as promised and
the board? What is the first rule in the determination not substitute it unless there is a mutual
on what is the principal and what is the accessory? agreement between obligor-obligee.
Rule of Importance - You can ask a third person to substitute at the
expense of the obligor except if the qualities
Even if the only obligation is to deliver the accession, of the obligor is considered.
the board is already attached to it, I have the
obligation to deliver to you the entire property. This is III. Obligations in a prestation not to do-
accession involving a personal property. - principal obligation is not to perform the
conduct prohibited.
- Anything that is Produced - if a debtor does what has been forbidden,
- Anything that is Incorporated then it has undone at the expense of the
debtor.
Accession involving real property Note: The diligence of a good father, the delivery of
- (D-F-A) Discreta referring to Fruits Accession accessories and accessions, they are only applicable if
- Accesion Discreta refers to the three fruits: what is involved is a prestation to give. But the two
natural, industrial, and civil fruits. prestations, they are not applicable.
- Accessories and accessions will be included
provided that, they are attached at the time
the obligation to deliver arises. DELAY (mora)- failure to perform the obligation in due
- If what will be delivered is a lot wherein there time.
are fruit-bearing trees, so aside from - If it is an obligation arising from a contract,
delivering the lot, you also have to include the that is during the time specified or agreed
accessions, the fruit-bearing trees. upon by the parties.
- If it is an obligation arising from law, then that
Accessories have 2 meanings in Property: is based on what is provided under the law.
1.) Accessory per se refers to an ornament. For example, payment of taxes. There is a
Although it is attached, once removed, it will specified day of filing the income tax.
not cause injury.
2.) In relation to one of the properties that is Kinds of Delay
attached to the principal that cannot be a.) Mora solvendi- delay on the part of the
detached without causing an injury. debtor
b.) Mora accipiendi- delay on the part of the
Art. 1164 is simply a reiteration of what is the creditor
obligation to deliver accessions, because fruits DF-A c.) Compensatio morae- delay on the part of
refer to one of the kinds of accession involving a real both the creditor and the debtor.
property.
GR: no demand, no delay
XPN:
B.) To give a generic thing:
- The genus doesn’t perish 1.) If the obligation expressly declares it or the
- the principal obligation of the obligor if it law expressly declares it.
involves prestation to give a generic thing, is - Ex. Payment of income tax
to deliver a thing of the same quality 2.) Time is the controlling motive of the
specified. establishment of contract. Time is of the
- Which if you will go back to the classification essence
of properties, we're talking here of a fungible - Ex. Bar exam on Sept. all lectures must be
property. Same kind, same quality. done on or before the first Sunday of
September.
3.) Demand will be useless c.) Because of the FE, it is impossible for the
debtor to perform his obligation in a normal way.
Delay in reciprocal obligations: There is delay on the d.) The debtor has no concurrent fault
part of one of the parties from the moment that one
*concurrent fault- he was not in delay, not
of the parties fulfills his obligation.
negligent.
Ex.) in ordering food, you have the obligation to Exceptions: (debtor still liable)
deliver payment while the other party has the
obligation to deliver food. If you deliver the payment, 1.) If there is a law that expressly provides for it.
is it necessary for them to wait for you to demand Ex.
delivery of food? No. Art. 1942- refers to the liability of a bailee in a
contract of commodatum, and the law is very
clear, that inspite of the happening of the FE,
bailee can be held liable.
Art. 2201- under necessary deposit, if there is
Fortuitous Events-
the use of arms, the hotel, the innkeeper is
GR: In case there is a FE, the obligation is relieved from liability
extinguished. The debtor is released from his liability Art. 2147- in case of officious manager, even if
whether it involves a prestation to give or to do. there is an FE, he cannot be relieved from
liability.
Q: Juan Dela Cruz had the obligation to deliver a
wedding cake. In the delivery of the wedding cake,
2.) If it is expressly stipulated by the parties.
time is of the essence however, there was a super
- This will only be possible if we’re talking about
typhoon. In case he failed to deliver the cake, would
an obligation arising from a contract.
he be liable for damages?
A thing become a property in Properties: (U-S-A) If it is generic, since a genus does not perish, even if
a.) Utility there is a FE, even if there is physical loss, it can still
b.) Substantivity be substituted.
c.) Capable of being Appropriated
II. According to Prestations:
Q: Why do we say that a P10 bill is not anymore a a.) Individual- involves only one prestation
property although there is utility and substantivity? b.) Multiple-
i. Facultative- only one prestation
A: The last element however, is missing. It cannot agreed upon and that one
anymore be appropriated. prestation is due.
ii. Alternative- there are several
So insofar as Civil Law is concerned, that 10-peso bill is prestations due.
already considered as loss.
Common denominator between Facultative and
Q: What happens when there is loss, deterioration, or Alternative Obligation:
improvement of the thing in the prestation to give
while the condition or period is pending? - There is a choice. Choice to be exercised
A: primarily by the debtor.
- Pro-debtor: if you will look at it, alternative,
1.) In case of loss: (physical loss) facultative, the debtor has the right or may
options, or he has the priority to exercise the
choice. If he does not exercise the choice, - Classifications of obligations can co-exist
then it can be exercised by the creditor or simultaneously, because it is a classification
even by a third person. But, in facultative, the based on the quality of the obligation when
choice only belongs to him. He cannot be you talk about divisibility or indivisibility.
compelled by the creditor to make a - But if the obligation is Joint but at the same
substitution. time Indivisible, what the Civil Code provides
is, if one of the joint debtors would refuse to
Q: If one of the prestation becomes impossible, will it perform his obligation, but indivisible at the
extinguish the obligation? same time, that means for that joint and
A: If it is Alternative, NO. For as long as there are indivisible obligation to be fully fulfilled, there
other prestations that are due. should be a common desire of all the joint
debtors to perform their obligation.
In Facultative, if the substitute becomes impossible, - If the others did not agree, but the obligation
it becomes simply an individual obligation. is indivisible, according to the Civil Code, it will
now be converted into indemnity for
damages. So that it can be quantified.
III. According to Plurality of Parties - In case of insolvency, if A, B, and C are joint
A.) Joint- creditor can only demand from him debtors and A became insolvent, others shall
his share, he cannot be compelled to fulfill not be liable for the share of A.
the entire obligation. - The effect of remission/condonation upon a
Only one debtor can perform his own solidary obligation:
share, he's not obliged to perform the - In Total remission, all debtors are not
entire obligation. anymore liable to anything.
B.) Solidary- only one can be compelled to - In Partial, not all debtors are condoned so
perform the entire obligation. that means, it will just reduce the amount and
the balance remains a solidary credit.
Note: If there is no express stipulation as to what kind
of obligation is involved, the presumption of the Code
is, it is a joint obligation not a solidary obligation. This IV. According to Qualities of Object
shows that the Civil Code is pro-debtor. a.) Positive- performance of the obligation
b.) Negative- you are prohibited
2 exceptions or the 2 cases when there can be c.) Specific- determinate
solidary liability: d.) Generic- indeterminate
a.) Expressly stipulated e.) Divisible/Indivisible- whether it can be
b.) Law or nature requires solidarity performed partially or not. (payment by
installment is a divisible obligation)
Other cases wherein the law requires a solidary f.) Principal/Accessory- with reference to
obligation: the principal contract and the accessory
a.) under the RPC, liability among the co- contract
principals, co-accomplices, co-accessories, all - An example of a principal contract is simple
solidary obligations. mutuum, the obligation to pay is the principal
obligation.
b.) Liability among the bailees, Art. 1945, in - An example of an accessory contract
commodatum, solidary obligation. that simple mutuum will be supported or
guaranteed by a pledge. So, the obligation of
Note: the pledgor in the contract of pledge is an
- When the object involved has something to accessory obligation.
do with an obligation to give, it is INDIVISIBLE.
- The indivisibility of the obligation would be
better connected if the obligation is solidary GR: the law presumes that the obligation is indivisible.
because in solidary, you can compel one Note: Arts. 1233 and 1248, law would always
debtor to fulfill the entire obligation. require to pay in full not by installment.
- There can be plurality of debtors at the same
time, it can be subject to a condition at the XPN: 1248, if partly liquidated, installment contracts,
same time, the performance can be partial, or or if it is partially illegal.
it may not be partial.
Obligation with the Penal Clause
- This will only take place if we’re talking of an - Another exception of Art 1233
obligation arising from a contract or law. - In case of acceptance, the law considers that
- This serves like damages, but it doesn’t mean the creditor waives his right. The whole
that you are prohibited from claiming obligation is extinguished.
additional damages.
Art. 1236: Creditor is not bound to accept payment or
Q: What is the reason why this obligation with a penal performance by a third person who has no interest in
clause is allowed? the fulfillment of the obligation. Whoever pays for
A: To put some pressure to the debtor, that if you will another may demand from the debtor what he has
not be performing the obligation on time, in addition paid, except that if he paid without the knowledge or
to the principal obligation, this will be your penalty. against the will of the debtor.
*First and Second Mode are not in the recordings - Creditor should not be compelled to accept
- check LR notes for the first two modes payment from a third person whom he may
dislike or distrust.
First mode of extinguishment of an obligation: *(notes Art. 1237: Whoever pays on behalf of the debtor
from DE LEON book) without the knowledge or against the will of the
PAYMENT OR PERFORMANCE latter, cannot compel the creditor to subrogate him in
Art. 1232: Payment means not only the delivery of his rights, such as those arising from a mortgage,
money but also the performance, in any other guaranty, or penalty.
manner, of an obligation.
Art. 1238: Payment made by a third person who does
“Payment” is not only the delivery of money but also not intend to be reimbursed by the debtor is deemed
the giving of a thing. In law, payment and to be a donation, which requires the debtor's consent.
performance are synonymous. But the payment is in any case valid as to the creditor
who has accepted it.
Elements of Payment - Payment is valid
1. Persons- who may pay & who to pay
2. Thing or object- in which payment must Art 1240: Payment shall be made to the person in
consist whose favor the obligation has been constituted, or
3. The course thereof his successor in interest, or any person authorized to
4. The mode or form receive it.
5. Place and time in which it must be made - When payment is made to the wrong party,
6. Imputation of expenses occasioned by it the obligation is not extinguished as to the
7. Special parts which may modify the same and creditor who is without fault or negligence
the effects they generally produce even if the debtor acted in outmost good faith
and by mistake.
Art. 1233: A debt shall not be understood to have - “Any person authorized” – not only a person
been paid unless the thing or service in which the authorized by the creditor, but also a person
obligations consists has been completely delivered, as authorized by the law to receive the payment,
the case may be. such as guardian, executor or administrator of
the estate of the deceased.
GR: partial or irregular performance will not produce
the extinguishment of an obligation. Article 1241. Payment to a person who is
incapacitated to administer his property shall be valid
Art. 1234: If the obligation has been substantially if he has kept the thing delivered, or insofar as the
performed in good faith, obligor may recover as payment has been beneficial to him.
though there had been a strict and complete
fulfillment. Payment to a third person shall also be valid insofar as
it has redounded to the benefit of the creditor.
- An exception to the rule in Art. 1233
Such benefit need not be proved if:
Art. 1235: When the oblige accepts the performance a. After payment, 3rd person acquires the
knowing its incompleteness and without any protest, creditor’s rights.
obligation is deemed fully completed with. b. Creditor ratifies the payment to 3rd person
c. Debtor has been led to believe that 3 rd person Article 1253. If the debt produces interest, payment of
had the authority to receive. the principal shall not be deemed to have been made
until the interests have been covered.
Art. 1245: Dation in payment, whereby property is
alienated to the creditor in satisfaction of a debt in Article 1254. When the payment cannot be applied in
money, shall be governed by the law of sales. accordance with the preceding rules, or if application
can not be inferred from other circumstances, the
Special Forms of Payment debt which is most onerous to the debtor, among
1. Dation in payment those due, shall be deemed to have been satisfied.
2. Application of payments
3. Payment by cession If the debts due are of the same nature and burden,
4. Tender of payment and consignation the payment shall be applied to all of them
proportionately.
Dation en Pago
- The conveyance of ownership of a thing by - A debt is more onerous than another when it
the debtor to creditor as an accepted is more burdensome to the debtor.
equivalent of performance of a monetary
obligation.
- Payment by the transmission of ownership of
a thing by debtor to creditor. Payment by Cession
Requisites of dation in payment: Article 1255: The debtor may cede or assign his
a. There must be performance of the prestation property to his creditors in payment of his debts. This
in lieu of payment cession, unless there is stipulation to the contrary,
b. There must be some difference between the shall only release the debtor from responsibility for
prestation due and that is given in the net proceeds of the thing assigned. The
substitution agreements which, on the effect of the cession, are
c. There must be an agreement between the made between the debtor and his creditors shall be
creditor and the debtor that obligation is governed by special laws.
extinguished by the reason if the performance
of a prestation. “Payment by Cession” is the assignment or
abandonment of all the properties of the debtor for
Art. 1250: In case an extraordinary inflation or the benefit of his creditors in order that the latter may
deflation of the currency stipulated should supervene, sell the same and apply the proceeds thereof.
the value of the currency at the time of the
establishment of the obligation shall be the basis of Requisites:
payment, unless there is an agreement to the a. there must be 2 or more creditors
contrary.. b. debtor must be (partially) insolvent
c. assignment must involve all the properties of
Article 1251: Payment shall be made in the place
the debtor.
designated in the obligation.
d. Cession must be accepted by the creditors.
Application of Payment - Debtor is still liable if there is balance
Art. 1252: He who has various debts of the same kind since it is only from the net proceeds of
in favor of one and the same creditor, may declare at the sale of the property.
the time of making the payment, to which of them the *Dation en pago vs. Cession is in p. 327-328 of De
same must be applied. Leon book
(1) When the creditor is absent or unknown, The consignation shall be ineffectual if it is not made
or does not appear at the place of payment; strictly in consonance with the provisions which
regulate payment
(2) When he is incapacitated to receive the
payment at the time it is due; - In the absence of prior notice, the
consignation, when properly made, shall be
(3) When, without just cause, he refuses to charged against the creditor.
give a receipt;
Article 1259. The expenses of consignation, when
(4) When two or more persons claim the same properly made, shall be charged against the creditor.
right to collect;
- Consignation is made necessary because of
(5) When the title of the obligation has been the fault or unjust refusal of the creditor to
lost. accept payment.
- Thus, it is but just that the expenses should be
“tender of payment” is an act on the part of the charged against him.
debtor, of offering to the creditor the thing or amount When Consignation Deemed Properly Made
due. a. Creditor accepts the thing or sum deposited
without objection.
“consignation” is an act of depositing the thing or b. The court after hearing, declares it has been
amount due with the proper court when the creditor properly made
does not desire, or refuses to accept payment, or c. The court orders the cancellation of the
cannot receive it, after complying with the formalities obligation
required by law.
Article 1260. Once the consignation has been duly
Nature and Rationale of Consignation made, the debtor may ask the judge to order the
cancellation of the obligation.
- A facultative remedy
- Avoidance of greater liability Before the creditor has accepted the consignation, or
- Always judicial before a judicial declaration that the consignation has
been properly made, the debtor may withdraw the
Requisites of a Valid Consignation thing or the sum deposited, allowing the obligation to
remain in force.
1. Existence of a valid debt
2. Tender of payment by the debtor and refusal - If the withdrawal is with the consent of the
without justifiable reason by the creditor creditor, Art. 1261 applies
3. Previous notice of consignation to persons the creditor shall lose every preference
interested in the fulfillment of the obligation. which he may have over the thing, and the co-
4. Consignation of the thing or sum due debtors, guarantors, and sureties shall be
5. Subsequent notice of consignation made to released.
the interested parties ex.) D is indebted to C of P10k, G (guarantor) on due
date, C refused to accept payment of D.
Requisites for Valid Tender of Payment D made a consignation. Withdrew the deposit with C’s
consent
1. Tender of payment must comply with the C shall lose any preference over the amount and G
rules on payment is released as guarantor.
2. It must be unconditional and for the whole
amount Second mode of extinguishing an obligation *from De
3. It must be actually made Leon book)
Article 1257. In order that the consignation of the LOSS OF THE THING DUE
thing due may release the obligor, it must first be
Article 1262. An obligation which consists in the - Another exception to the obligatory force of a
delivery of a determinate thing shall be extinguished if valid and enforceable contract
it should be lost or destroyed without the fault of the - Remedy of the obligor is not annulment but to
debtor, and before he has incurred in delay. be released from his obligation in whole or in
part.
When by law or stipulation, the obligor is liable even
for fortuitous events, the loss of the thing does not Article 1268. When the debt of a thing certain and
extinguish the obligation, and he shall be responsible determinate proceeds from a criminal offense, the
for damages. The same rule applies when the nature debtor shall not be exempted from the payment of its
of the obligation requires the assumption of risk. price, whatever may be the cause for the loss, unless
the thing having been offered by him to the person
“thing is lost” is when it perishes or goes out of who should receive it, the latter refused without
commerce or disappears in such a way that its justification to accept it.
existence is unknown or cannot be recovered.
Article 1269. The obligation having been extinguished
Obligation To Give May Be Extinguished By Loss Of by the loss of the thing, the creditor shall have all the
The Thing Due if the ff requisites are present: rights of action which the debtor may have against
third persons by reason of the loss.
a. The obligation is to deliver a
specific/determinate thing
b. Loss of the thing occurs without the fault of
the debtor Third mode of extinguishing an obligation:
c. Debtor is not guilty of delay CONDONATION OR REMISSION
- Condonation is gratuitous, it is an act of
When Loss Of The Thing Will Not Extinguish Liability: liberality. Therefore, it has to comply with the
a. When the law so provides formalities of a donation.
b. Stipulation so provides - What are the formalities? Dependent upon
c. Nature of the obligation requires the the kind of object or property being donated.
assumption of risk (necessary for validity not enforceability)
d. Obligation to deliver a specific thing arises
from a crime If it is a personal property, a
movable property, it the value does
Article 1264. The courts shall determine whether, not exceed P5000, it need not to be
under the circumstances, the partial loss of the object in writing. Only requires
of the obligation is so important as to extinguish the simultaneous acceptance on the
obligation. part of the donee.
If it exceeds P5000, it has to be in
Article 1265. Whenever the thing is lost in the writing with acknowledgement of
possession of the debtor, it shall be presumed that acceptance on the part of the
the loss was due to his fault, unless there is proof to donee.
the contrary, and without prejudice to the provisions If it is a real property, it has to be in
of article 1165. This presumption does not apply in a public instrument.
case of earthquake, flood, storm, or other natural
calamity. Requisites for Condonation or Remission to be Valid:
Sixth mode of extinguishing an Obligation If it is without the knowledge of the debtor, if the new
NOVATION debtor is insolvent, it is advantageous to the old
- Will take place if any of these will change: debtor because the obligation of the old debtor will
1.) it can be the object or the principal not be revived. So, creditor assumes the risk.
condition
2.) if there is a change in the debtor CONTRACTS
3.) Change in the creditor -One of the sources of an obligation
- Strictly speaking, it does not totally extinguish Art. 1305- definition of contracts. 3 important things
an obligation. Because, the moment that appear:
there is a change, one obligation is terminated 1.) contract refers to a meeting of the minds.
but a new obligation is created. 2.) whereby one of the parties or both of them
would bind themselves
- Novation= one obligation is extinguished but 3.) what does one bind himself to do, it's either
another is created. to give or to render service
- Novation is not presumed. It should be in Note: The third component of the definition of what a
equivocal terms. contract is will now connect you to the definition of
an obligation. Juridical necessity to give, to do, or not
Requisites for Novation to be a Valid Mode of to do.
Extinguishing an Obligation:
1. Substantial difference in the old and new
obligation STAGES IN THE FORMATION OF A CONTRACT
2. capacity of the parties *examples in the transcribed file 028*
3. intention to extinguish 1.) Preparatory Stage- that is where the offer
comes into play
- Any element or requisite that is missing, the 2.) Stage of Perfection-
answer should always be, there is no 3.) Consummation Stage- when one binds
novation. himself to another. Both parties have already
performed their respective obligations if the if there is the meeting of
contract gives rise to a reciprocal obligation. the minds, even if it is
verbal, even if you have
- The mere fact that one binds himself to the witnesses at the time of
other, there is a corresponding knowledge the verbal agreement, the
that there is a corresponding obligation witnesses will not make
attached to it. the deed of donation
- The moment that the contract is perfected, valid.
obligation arises. That's the reason why one of
the sources of an obligation is a contract. II.) According to Importance
i.) Principal Contract- a contract that
Note: consummation stage is not applicable to can exist by itself
marriage contracts because consummation has a ii.) Accessory Contract- a contract
different meaning under the FamCode. whose existence is dependent
upon a principal contract
KINDS OF CONTRACTS
I.) According to Perfection Note: That is why, if the principal contract is void, it
i.) Consensual Contract- what they follows that the accessory contract will be void. But, if
call an ordinary contract. Ordinary the accessory contract will be void, it does not follow
in the sense that the contract is that the validity of the principal contract will be
perfected just because of the affected.
meeting of the minds of the
parties. Ex.) A contract of mortgage without any other
Meeting has something to do contract attached to it is not possible because
with the object involved. - if mortgage is an accessory contract. But a contract of
the object is definite and simple mutuum without any other contract attached
certain, and both parties have to it is possible because simple mutuum is a principal
agreed on it, the contract is contract.
then deemed perfected.
*Example in LR notes part 5* III.) According to the parties obligated to
perform or to render service
ii.) Real Contract- perfected upon i.) Unilateral- only one of the parties
the delivery of the property. has the obligation to perform.
Ex.) commodatum- unless and Ex.) contract of commodatum-
until the property is actually because only the borrower or bailee
delivered, there is no contract has the obligation to perform. The
that is perfected.*more lender has no obligation to lend his
examples of commodatum in property.
transcribed file 029* ii.) Bilateral
Ex.) pledge/pawns- it is an Ex.) contract of sale, contract with
accessory contract. It is a the school
collateral wherein there is
transfer of possession. IV.) According to Equivalence of Prestation-
i.) Gratuitous- without any
iii.) Solemn/Formal Contract- what consideration (eg. Commodatum,
makes it a solemn/formal donation)
contract is because there is a ii.) Onerous- if there is an exchange
formal requirement according to of equivalent prestations. (eg.
the civil code or a special law. Sale)
iii.) Remuneratory- outstanding
Ex.) Deed of donation or a prestation premised in services or
real property benefits already received.
Purpose of reducing into a
public instrument: to ELEMENTS OF A CONTRACT
protect your interest
because without this 1.) Natural- it is already presumed existing. It is
formal requirement, even already within the contract.
2.) Essential- these are elements without which
there can be no contract. The absence of an - Contract must bind both parties. And its
essential element will make the contract void. validity or compliance cannot be left to the
3.) Accidental- it will only exist upon the will of one of the parties, so both should
stipulation of the parties. agree.
o eg. In sale of a real property, you
allow that you can be paid by 4.) Principle of Obligatoriness of Contracts- From
installment. Art. 1159, obligations arising from contracts
have the force of law between parties. In case
Elements of a Valid Solemn/Formal Contract they want to change something in the
1.) consent contract, it must be agreed upon by the
2.) subject matter parties.
3.) cause or consideration - In case one of the parties cannot perform the
4.) formality required by law obligation as agreed upon in the contract, the
other party has the right to go to court and
The absence of any of these elements will make the demand for specific performance.
solemn/formal contract void ab initio.
5.) Principle of Relativity of Contracts- the
Elements of a Real Contract contracts take effect only between the
1.) consent parties, their assigns and heirs.
2.) subject matter - XPN: Stipulation pour atrui or stipulation is in
3.) cause/consideration favor of a third person who is not an assignee,
4.) delivery of the thing not an heir, but only a stranger.
Nature and Effect of advertisement: insofar as the In option money, what is perfected is the option
Civil Code is concerned, if it involves the sale of a real contract wherein, you are buying the period to make
property or personal property, they cannot be a a final decision as to whether you will acquire the
definite offer but they are simply an invitation to property or not.
make an offer
VICES OF CONSENT
Counter-offer- a qualified or conditional acceptance.
(eg. Bargaining) Vices- are circumstances that affect adversely the
decision of a party in entering the contract.
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Option Money and Earnest Money - In FamCode: Art. 4 states that the the absence
of any of the essential requisites will make the
Similarity: Both involves the delivery of money marriage null and void. The defect will make it
Distinction: with respect to the effect, if it is an voidable.
earnest money, that gives rise to a perfected contract
of sale since it forms part of the contract price. Classifications of Vices of Consent
1.) Vices affecting cognition (intellectual faculty)
An option money does not give rise to a perfected a) Incapacity (In relation to Art. 37 and 38 of
contract of sale but simply a perfected option the Civil Code)
contract. b) Error
c) Fraud
“option contract’- a reasonable period by the vendor 2.) Vices affecting volition (faculty of the will)
within which to make a final decision as to whether a) Violence
b) Intimidation
c) Undue Influence - Ex.) or if one is a government official and you
Error/Mistake- inadvertent and excusable disregard of have no choice but to say yes, because you're
a circumstance material to the contract. afraid.
- Your employer, you're afraid that if you will
- mistake of fact and not mistake of law not agree to what he is telling you, you might
- Example: Justice Gonzales, since he has the be terminated from employment.
title of a Justice, he celebrated the marriage,
and since according to the FamCode, SIMULATION OF CONTRACT
members of the judiciary, and thinking that a - Declaration of non-existent will be made
person who the title of a Justice is deliberately and by agreement of the parties.
automatically a member of the judiciary, you
believe in good faith that Justice Gonzales has It can be ABSOLUTELY SIMULATED CONTRACT (ASC) or
the authority, will the marriage be valid? No, RELATIVELY SIMULATED CONTRACT (RSC)
because that is tantamount to a mistake of
law and not a mistake of fact. ASC- there is really no intention to enter into a
- if it is an error or a mistake, no qualification contract.
whether it is a mistake of fact or law, what the - Ex.) Agrarian reform- so that their property
civil code is telling us, is if it will affect a will not be covered by carp. They divided it
material, decision on the part of the party in either by selling or donating to a third person
entering in to the contract because of that when in truth, there is really no intention to
mistake or that error, then that is considered dispose the property.
as a vice of consent and therefore, will be a - if the real intention of the parties is not really
ground for the annulment of the contract. to dispose it, only to remove it from the
- So, if the consent is there but it is not freely coverage of carp, then in so far as the contract
given, the contract is voidable. is concerned, it is in-existent. It is void ab
initio.
Fraud- insidious words or machinations whereby the RSC- parties really intend to be bound to each other
other is induced to execute the contract. but the real intention is not reflected in the
instrument.
2 Kinds of Fraud - Ex.) instead of making a deed of absolute sale,
a.) Fraud in the celebration of the contract (dolo what they execute is a deed of
causante) donation. There is really intention to dispose
- The party would not have given his consent if the property, but that real intention is not
he is aware that there is fraud appearing in the document.
- Ground for annulment
b.) Fraud in the execution of the contract (dolo SUBJECT MATTER OR OBJECT
incidente) Meaning of object:
- Party deceived would have agreed but under 1.) object per se refers to the property if it refers
different terms. to a prestation to give.
- Even if you’re aware of the fraud, you would 2.) it refers to the prestation. Prestation to give,
still give your consent under a different term to do, or not to do. Prestation must be lawful
or condition and possible.
- Ground for damages
For one to be a valid object of a contract:
It has to be- (a) property and (b) it has to be within
Violence- in order to rest consent, serious or the commerce of men.
irresistible force is employed.
- Not limited to physical violence. CAUSE OR CONSIDERATION
- the reason why you entered into a contract.
Intimidation- what is involved is the kind of - It is different from motive.
intimidation that would vitiate one’s consent. Threat. - essential element of a contract
- Ex.) shotgun marriage - inadequacy of cause will not invalidate the
contract it is simply a ground for rescission of
Undue Influence- Improper advantage of one’s power. contract
“motive”- is something that is incidental. It has 3.) cause or consideration.
nothing to do with the perfection of a contract.
A. Contracts which must be reduced into a
PUBLIC INSTRUMENT not necessarily for
FORMALITIES OF A CONTRACT validity, but for enforceability
- The formality of a contract is necessary for
validity if it is a formal contract based on - Art. 1358
perfection. 1. CMET- Contracts for the Creation,
- the formality is necessary for enforceability. Modification, Transmission, or
- if the contract falls under the statute of fraud, Extinguishment of REAL RIGHTS. (in relation
then failure to comply with the written to Property: “right” that is attached to a real
requirement will not affect validity but simply property like usufruct and right to lease)
enforceability. XPNS:
- If it is not on the coverage on the statute of a. under the statute of fraud (1407), if the lease
fraud, check if it's required under the law that contract is for 1 year, it has to be covered by
non-compliance will affect its validity, then the statute of fraud "it should be in writing, it
that will make the contract a formal or a need not be in a public instrument"
solemn contract. b. Sale of a real property
2.) Donation of a Personal Property, the value of A real RIGHT is a right that is attached to the property.
which exceeds P5000 (you only have to remember So, regardless if that property is transferred to
this for the purposes of passing the bar exam not another person, the real right is still existing.
for purposes of applying it.) There is no need to
apply strictly the provision in the Civil Code. 2. WAR- hereditary rights. Waiver, Assignment,
and Repudiation of Hereditary Right
3.) Payment of Interest. Interest cannot be - When it comes to waiver of hereditary right,
imposed upon the debtor especially if it is simple you have to connect it with Art. 6 of the Civil
loan or mutuum unless it is expressly stipulated, Code because for a waiver of a hereditary
and for it to be expressly stipulated, it has to be right to be valid:
reduced into writing. Otherwise, you cannot a. the right should actually be
impose interest. (Art. 1956, 1874) existing
4.) Partnership where the partner contributes a b. the holder of the right is
real property. It has to be in writing otherwise, it knowledgeable about his
is void. right
c. the one waiving the right is
5.) Sale of a property through an agent voluntarily waiving the right.