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Concepts OBLICONATTY. D PDF
Concepts OBLICONATTY. D PDF
”You are excuse for not knowing the facts.” Bilateral ee & or Contract of Lease
Page 1 of 28 LFA
DELICT crime PP vs. Accused
A if Convicted Criminal Liability = imprisonment
Civil Liability = damages
B demands delivery “All owners can possess, but possessors are not all owners.”
Deliver = obligation extinguished
A Court A to deliver specific performance
Fails B or &
To require another to deliver = pay damages = delay
C demands delivery
Deliver obligation extinguish Superior
A neither Inferior = obligation extinguish
Fails C court to require A to deliver specific performance
or &
to require another to deliver pay damages = delay
Page 2 of 28 LFA
A to paint B portrait. B demands fulfillment.
Paints Obligation = Extinguish
A Done properly = obligation extinguish
poorly = should be undone at the expense of A
Fails B Court to require A to paint = specific performance
or damages breach of contract
To require another to paint
1. As required by law
DILIGENCE 2. As stipulated by parties
3. Absence of #1 and #2, diligence of a good father of a family = ordinary diligence
Page 3 of 28 LFA
SPECIFIC CIRCUMSTANCES AFFECTING OBLIGATIONS IN GENERAL
1. FORTUITOUS EVENT
cannot be foreseen
foreseeable are inevitable
GENERAL RULE: No person shall be liable for fortuitous events. (Obligation Extinguished)
Causal Fraud
Vitiating consent / obtaining consent
Dolo Causante Consent would not have been given
The contract is voidable
Committed at the time of performance or after the contract is already perfected
KINDS OF FRAUD
Incidental Fraud
Giving rise to the right to demand damages
Dolo Incidente Consent would have still been given
The contract is valid
Committed at the time of performance or after the contract is already perfected
Page 4 of 28 LFA
Cannot be renounced
Future Fraud
Waiver cannot be made void the debtor is liable for damages
Can be renounced
Past Fraud
Waiver may be made valid act of liberality of creditor
Source: Contract
CULPA CONTRACTUAL Example: Breach of Contract of Carriage
(Contractual Negligence) (Even with the supervision, the employer may mitigate the liability)
Performance of contract
The master-servant rule applies
Source: Quasi-delict
Example: Reckless driving of the driver
KINDS OF CULPA AQUILIANA (With the supervision, the employer may escape the liability)
NEGLIGENCE (or Culpa) (Civil Negligence) Independence of contract & without criminal intent
The master-servant rule does not apply
Culpa extra-contractual
Source: Delict
CULPA CRIMINAL Example: Physical injuries through reckless imprudence
(Criminal Negligence) (The employee‟s guilt is automatically the employer‟s guilt if the
former is insolvent)
Commission of a crime
EXAMPLE:
A
Contractual Demandable?
A – Driver Y A F
B – Passenger Aquiliana Responsibility
C – Pedestrian A Y N
Y - Operator Criminal
Y
Page 5 of 28 LFA
4. DELAY (or Mora)
Nonfulfillment of obligation with respect to time
Effect of Delay: Liable for payment of damages
Note: There is no delay in „obligation not do‟ as one cannot be delay for not doing something
General Rule: “No demand, no delay”
(1) The law expressly so declares (e.g. Such in the case of taxes)
(2) The obligation itself so stipulates (Expressly declares: “without need of demand”)
EXCEPTIONS (3) Time is of the essence (Time was the controlling motive)
(to the General Rule) (4) Demand is useless (Demandable: Breach of Contract / Dolo / Culpa)
(5) When there is performance by a party in reciprocal obligation (Compensatio Morae)
(6) DEMAND
KINDS OF DAMAGES
MORAL Moral and physical anguish Proof is required
Court EXEMPLARY Corrective or to set an example
NOMINAL To vindicate right Proof is not required/
TEMPERATE Moderate or exact amount cannot determine Adjudicated
Receipt ACTUAL Compensatory or actual losses & unrealized profit
Parties LIQUIDATED Predetermined beforehand by agreement
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ACCION PAULIANA the right to rescind or impugn fraudulent act
the rights to set aside, revoke, or cancel the acts, which the debtor may have done to defraud him.
TRANSMISSIBILITY OF RIGHTS
GENERAL RULE: All rights acquired by virtue of an obligation are transmissible.
Note:
It is the right of a person that is transmissible not the obligation.
The creditor may assign a third person or such right is transmitted to the heirs upon death.
KINDS OF OBLIGATION
FULFILLMENT Law
Before Upon Moral
Suspensive ― Contrary Good Custom
2. CONDITION
Resolutory Ext. Public Order
CONDITION – not Public Practice
Impossible
Page 7 of 28 LFA
Condition precedent/antecedent
Will give rise to an obligation
SUSPENSIVE
No fulfillment, no obligation
CONDITION OBLIGATION
PRINCIPAL KINDS OF CONDITION
Condition subsequent
RESOLUTORY Will extinguish an obligation
OBLIGATION CONDITION
POTESTATIVE
DEBTOR Kill C =
Suspensive = VOID A ₱8M B Sex A =
Resolutory = VALID If B will Slap faces of parents =
CREDITOR Pose nude = ; beside Rizal Monument =
Suspensive = VALID Draw rectangle with 4 sides =
Resolutory = VALID Draw circle with 4 sides =
Suspensive (void)
DEBTOR
Resolutory (valid)
POTESTATIVE
Suspensive (valid)
CREDITOR
Resolutory (valid)
Chance
FULFILLMENT CONDITION CASUAL
Will third persons
One person
(1) WILL
Third person
MIXED
Will one person
(2)
Chance
Page 8 of 28 LFA
Obligation = Extinguished
Fortuitous Event
June 8, 2017 B bear loss
DIES
A only Horse B Value If B fulfills condition
Fault of A liable
If B will pass CPA Damages
Before fulfillment Fortuitous Event B bears impairment
condition ― HORSE IMPAIRED Damages
Fault of A B
Specific Performance
By nature B gets improvement
IMPROVED
Effort of A A ―― right to usufruct
3. OBLIGATION WITH A PERIOD One whose consequences are subjected in one way or another to the
expiration of said period/term.
It is presumed that the period have been established for the benefit of both the
debtor and creditor.
PERIOD future and certain event
CONCEPT
DAY CERTAIN must necessarily come although it may not be known when
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DISTINGUISHMENT CONDITION PERIOD
1. As to FULFILLMENT May or may not happen Must necessarily come
2. As to TIME May refer to the future or to a past event Always refers to the future
3. As to INFLUENCE on the obligation Causes to arise or to cease Merely fixes the time for the efficaciousness of an
obligation
A ―― ₱100,000 ―― B
Debtor
BENEFIT both
Creditor
“when my means permit” = period
Suspensive ― ex die
KINDS
Resolutory ― in diem
Page 10 of 28 LFA
4. ALTERNATIVE two or more Cow June 8 lightning
dies ― fortuitous event
fulfillment of one obligation ― ext.
Carabao June 9, AM A hits
dies ― fault of A
Cow or Horse June 9, PM collides ― bus
A ―――― B
Carabao dies ― fortuitous event
only or
Horse
Obligation ― Ext.? The lost of the last thing is
June 12, 2017
due to fortuitous event
1 kilo shabu
Page 11 of 28 LFA
B. Debtors – Joint; Creditors – Solidary C. Debtors – Solidary; Creditors – Solidary
(1) W - ₱4000 A - ₱4000 (1) W - ₱6000 A - ₱6000
C W B - ₱4000 B or
₱4000 Y - ₱4000 ₱12000 C - ₱4000 ₱12000 Y - ₱6000 W B - ₱6000
₱6000 or
C - ₱6000
(2) W - ₱2400 A - ₱2400 (2) W - ₱4000
A - ₱8000
A or Y B - ₱3600 C
or
₱2400 Y - ₱2400 ₱12000 C - ₱6000 ₱12000 Y - ₱8000
Y B - ₱8000
₱8000 or
C - ₱8000
D. Debtors – Solidary; Creditors – Solidary (2:3:5) Debtors – Solidary; (1:2) Creditors – Solidary
(1) & (2) A - ₱12000 Y demands payment from A
W - ₱12000 or (1) A pays Y – ₱12000 (2) Minor C
A W B - ₱12000
B - ₱3600 A pays Y – ₱6000
₱12000 Y - ₱12000 ₱12000 or
R
C - ₱12000
C - ₱6000 R B – ₱3600
Y condones the obligation of A: Y condones the obligation of B: Y condones the obligation of C: Y condones the obligation of A, B, C:
A pays Y ₱9600 A pays Y ₱8400 A pays Y ₱6000 A pays Y ₱-0-
B - ₱3600 R = C ₱6000 R = B ₱3600 B - ₱-0-
R A 2/5 A 2/7 R
If insolvent If insolvent
C - ₱6000 B 3/5 C 5/7 C - ₱-0-
With prescription:
A pays Y ₱9600
B - ₱3600
R
C - ₱6000
Page 12 of 28 LFA
A ― ₱2400 A pays Y ₱6000 SITUATIONS ()VALID/VOID()
R B - ₱-0- 1. A ₱8M B, if B kills C
June 15, 2017 C - ₱6000 2. D ₱8M E, if F dies of TB
Y demand 3. G ₱8M H or G sex H
payment or B pays Y ₱6000 4. J sex K or J 8M K
B ― ₱3600 R A - ₱-0- P S
C - ₱6000 5. L ₱8M M or if L wants sex M
P S
or C pays Y ₱6000 6. N sex O or if N wants sex O
C ― ₱6000 R A - ₱-0- P PC
due B - ₱-0- 7. P ₱8M Q and if P fails sex Q
P PC
8. R sex S and if R fails ₱8M S
Page 13 of 28 LFA
To whom
PAYMENT By whom
EXTINGUISHMENT OF OBLIGATION or When
Where
PERFORMANCE How
Special Form
Creditor Ratification
Representative/Agent Subrogation
TO WHOM Estate Executor burden to prove Debtor Except Estoppel
Administrator
Third Person If redownded benefit Creditor ― Ext. presumed benefit Creditor
Page 14 of 28 LFA
Aware ― Not due Cow
Can A recover? If A Not aware ― Not due Before June 15, 2018 Fruits June 15, 2017 – May 10, 2018
May 10, 2018 ₱100,000
Interest June 15, 2017 – May 10, 2018
On or after June 15, 2018 Cow
If A seeks to recover July 4, 2018 Fruits June 15, 2017 – June 14, 2018
₱100,000
Interest June 15, 2017 – June 14, 2018
Indeterminate / Generic
Domicile / Residence Debtor
Money
Page 15 of 28 LFA
EXAMPLE: ₱8,000 = Application of payment
2017 June 15 A pays ₱10,000
10k June 4 ₱20,000 = Application of payment ₱15,000
15k June 8 Due ₱20,000
AB
20k June 14 If the debtor waives,
30k June 30 application of payment right Creditor Issue Receipt Onerous
If silent Mortgage Equal burden = Proportionately
A ₱1,000,000 B B ― ₱2M
Due on June 15, 2017 offers to pay A C ― ₱3M proportionately
D ― ₱4M to sell = proceeds
Cash – ₱400,000 Possession
B (INSOLVENT) Creditor possession
Cars – 8 – BMW Last yr. 3M Ownership
Assets Assets = ₱5M deliver
Planes – 8
Ownership = Debtor
Vessels – 8
Extinguished up to the proceeds PAYMENT BY CESSION
Extinguished = DATION IN PAYMENT (*debtor is solvent)
Page 16 of 28 LFA
EXAMPLE: Creditor refuses to issue (3) RECEIPT without just cause.
2017
Debtor Creditor BF dies Creditor (4) ABSENT
due 2020 2019
Loss of the
crying (5) Title Obligation lost thing
Creditor refuse to eat due
crying Determinate/Specific
EXAMPLE:
(1) Perishes A only Carabao B
June 30, 2017
LOSS OF THE (2) Goes out of commerce Carabao dies fortuitous event
THING DUE Extinguished perishes
Existence unknown
(3) Disappears A buys 2 pigs B Obligation ― B Ext.?
Cannot be recovered pays deliver ― July 4 10
June 15 10 A did not choose July 1-4 6
2 pigs generic – limited 9 partial
Essentially gratuitous
CONDONATION Essential
(Remission) Nature: Donation REQUISITES
Formal
Page 17 of 28 LFA
EXAMPLE:
Husband & Wife:
Obligation ― Extinguished?
Birthday Greeting
FBF Letter ₱8M W ― accepts
Condones
FGF Letter Condones ₱7M H ― accepts
H Letter Condones ₱7M W ― accepts
₱5k F ― accepts
H ― cellphone ― calls Condones ₱8k G ― accepts
Page 18 of 28 LFA
Arises from the obligations of a bailee in commodatum
Arises from a deposit
INSTANCES OF FACULTATIVE COMPENSATION
Arises because of a claim for support by gratuitous title
Consists in civil liability arising from a penal offense
CONFUSION/MERGER (1) It must take place between the principal debtor and creditor
One person REQUISITES FOR VALID MERGER (2) The merger must be clear and definite
Debtor and creditor of himself (3) Obligations are the same or identical
Page 19 of 28 LFA
AS TO OBJECT/ REAL (objective) Novation by changing the object or principal condition
PURPOSE PERSONAL (subjective) Novation by change of the parties (debtor/creditor)
(1) Substituting the person of the debtor EXPROMISION initiated by new debtor
(always with the creditor’s consent) DELEGACION initiated by original debtor
PERSONAL NOVATION
(2) Subrogating a third person in the CONVENTIONAL by the agreement of the parties
rights of the creditor LEGAL by operation of law
MIXED change of object and parties of obligation
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RFBT: Law on Contract
Page 21 of 28 LFA
(3) According to the PARTIES OBLIGATED CHARACTERISTICS OF CONTRACT
(a) UNILATERAL Mutuality bind both contracting parties
One of the parties obligated Autonomy liberty/freedom to stipulate
Examples: Commodatum, Gratuitous Deposit
Consensuality perfected by mere consent
(b) BILATERAL (or reciprocal) Relativity take effect only between the parties, their
Both parties are obligated assigns and heirs, except where the rights
Examples: Sale, Barter and obligations are not transmissible by law,
stipulations, or nature
Obligatoriness obligatory force of contract and compliance
(4) According to CAUSE in good faith
(a) ONEROUS
There is an exchange of valuable consideration
Examples: Sale, Barter, Lease CONSENT
Manifestation of the meeting of the offer and acceptance
(b) GRATUITOUS upon the thing and the cause.
No equivalent consideration
Examples: Donation, Commodatum, Remission
Page 22 of 28 LFA
RULES ON ACCEPTANCE VICES OF CONSENT (VIMFU)
Page 23 of 28 LFA
(b) Mere exaggeration if given opportunity to know KINDS OF SIMULATION
in trade dealer‟s talk
(1) ABSOLUTE
(c) Mere expression of opinion EXCEPT: Expert The parties do not intend to be bound, void from the
beginning.
(5) UNDUE INFLUENCE
When a person takes improper advantage of his power (2) RELATIVE
over the will of another Parties conceal their true agreement, yet they are bound.
Depriving the latter of reasonable freedom of choice
Page 24 of 28 LFA
CAUSE OF CONTRACTS INTERPRETATION OF CONTRACTS
The determination of the meaning of the terms or words used
Always presumed to exist in a contract.
by the parties in their contract
CAUSE The essential reason, which impels the To give effect to the true intention
contracting parties to enter into the contract.
RULES:
The “why of the contract”.
(1) WORDS
(a) Provision
(1) It must exist. Printed
REQUISITES OF CAUSE (2) It must be lawful. Writing later intention
(3) It must be real or true. (b) Two or more
“I” solidary
“We” joint
CAUSE
(c) Conflict
Inadequacy of cause = LESION Mistake, Fraud, Undue Influence
Fictitious/Simulated
Amount
(a) Absolute void ― Words
(b) Relative give effort true agreement ― Figures (if ambiguous)
False stated but not true ― Other documents available, if absent
Want of cause total lack or absence of consideration Intention
Illegal cause contrary to law, moral, good custom, public order, (d) Clear and unambiguous literal meaning
and public policy (e) Conflict
Oral Words
Forms Any Writing Intention shall prevail
Public Instruments
(2) ACTS
EXCEPT, if forms required: Contemporaneous shall be taken
Donation ― ₱5,000 ↑ Subsequent into consideration
(1) VALIDITY ― Failure = Void Example Agent ― authority
(3) CUSTOMS and USAGE shall be borne in mind.
Valid
(2) ENFORCEABILITY ― Failure = Unenforceable Without effect, Example:
unless written Possession V
Annulment
Valid July 6, 2017 Use I
or
(3) CONVENIENCE ― Failure Enforceable = inconvenience 5 yrs. Acts Fruits A M
Specific
July 5, 2022 RPT F
Performance
Title U
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F – fraud Annulment (b) A made by representative property Absentee
A – accident Heir of Reformation lesion > ¼ value
M – mistake A Option or 7 years
I – inequitable Specific 2 years missing = Absentee without any news
conduct Performance,
Agent 5 years Presumed Death
if chosen
Estoppel PRESUMPTIVE DEATH (Old–4years; New–3 years = Missing):
1. He boarded an airplane then the latter is missing.
REFORMATION IS NOT ALLOWED 2. He boarded a vessel then the latter is missing.
(1) Will except by testator
3. He was sent to war then he was missing in action.
(2) Simple donation inter vivos, if no condition imposed
4. He was lost and he was endanger of death
(3) Real agreement void
Go to court File a declaration of presumptive death
Page 26 of 28 LFA
RESCISSION STATUTE OF FRAUD
The right to rescind in case of deterioration of the thing to be ― A law which required that certain contracts must be in
delivered. (ARTICLE 1189) writing otherwise unenforceable
The right to rescind given to an unpaid seller. (ARTICLE 1526) ― Not applicable executed = has been performed
The right to rescind given to a vendee in sale of real property per ― Applicable executory = has not yet been performed
unit measure or lump sum price.
Page 27 of 28 LFA
(4) VOID (or Inexistent) In marriage,
Most defective Bigamous or Polygamous = VOID
No force and without effect Direct ascendants/descendants = VOID
Inexistent from the beginning
Collateral within fourth degree of consanguinity = VOID
MAXIM: “No contract at all”
Cannot be validated either by time or ratification Parent and surviving spouse of his child = VOID
To question period imprescriptible Civil Code: Step brothers/sisters = VOID
third person if right affected Amendment – Family Code: Step brothers/sisters = VALID
Donation H & W = VOID except, family Rejoicing
Celebration
The following are some characteristics of a void contract:
Guilty of adultery/concubinage = VOID
(a) A void contract cannot be ratify.
Sale H & W = VOID except Separation of property
(b) The defense of illegality cannot be waived.
Juridical separation
(c) The action or defense for the declaration of the inexistence
Separation of Property
of a contract does not prescribe.
Example: Pre-nuptial Agreement
(d) The defense of illegality of contacts is not available to third
persons whose interests are not directly affected. Juridical Separation
(e) A contract is void / inexistent if it is the direct result of a Example: Legally separated by court separation in bed & board
previous illegal contract.
*ADDITIONAL NOTE:
The following contracts are void from the very beginning Rescission remedy allowed by law to repair damages
(O3ICAD): cause by a contract.
(a) Object, cause or purpose is illicit. Annulment action brought to set aside a voidable
(Illicit contrary to law, morals, good customs, public order contract.
or public policy)
(b) Object is outside the commerce of men.
(c) Object or cause did not exist at the time of the transaction.
(d) Intention of the parties relative to the principal object of the
contract cannot be ascertained.
(e) Contemplate an impossible service.
(f) Absolutely simulated or fictitious.
(g) Declared void by law. Atty. Dante O. Dela Cruz, CPA
Reviewer
CPA Review School of the Philippines
Page 28 of 28 LFA