6.

Customs - acknowledged and approved by society as binding

The Law on Obligation and Contracts rules of conduct
(2014) - De Leon 7. Others

Rules in case of doubt in the interpretation or application of laws:

INTRODUCTION TO LAW decision that will serve justice will prevail against another that
will deny it because of a too strict interpretation of the law
General Divisions of Law
Law (in the non-legal sense) which is not promulgated and Organs of Social Control
enforced by the state (Law as a means of social control - control of social behavior that
(Subjects of Law) affects others)
Divine law - law of religion and faith (philosophical theology) Legal institutions (National and Local)
Concerns about the concept of sin and salvation Churches Trade assoc. Professional orgs.
Rule of action Corps Schools Social Clubs
Source: God (by direct revelation) Political parties Labor unions Families
Sanction: assurance of rewards and punishments in the
present life or in the life to come Law compared with other means of social control (p. 10-11)
Natural law - internal dictates of reason (metaphysics)
Applicable only to men and rational beings Organization of Courts
Binding force: basic understanding of right and wrong 1. Regular courts
Compared to divine law: divine law is from God, natural Supreme court - interprets
law is on core Courts of general or
Court of appeals -appellate courts
Place in state law: reasonable basis of state law Superior jurisdiction
RTC (provinces and cities)
Moral law - totality of the norms of good and right conduct of Metropolitan TC*
the collective sense of right and wrong of every Municipal TC*
community (ethics) Municipal Circuit TC* - jurisdiction over 2 or more cities
Applicable only to men and rational beings and/or municipalities
Determination of right and wrong (* - Lower)
Sanction: public displeasure, contempt, indignation 2. Special courts - anti-graft court
Binding force: not absolute 3. Quasi-judicial agencies - administrative bodies under executive
Place in state law: influences state law branch
Physical Law - laws of physical science (physics) National Labor Relations Commission (NLRC)
Operates on all things Securities and Exchange Commission (SEC)
Order or regularity in nature LTFRB
Called law only by analogy Independent Constitutional Commission
Law (in the strict legal sense) which is promulgated and Civil Service Commission
enforced by the state Commission on Election
State law - promulgated and enforced by the state Commission on Audit
Positive law, municipal law, civil law, imperative law
Binding force: enforced by the state Classification of Law
1. As to purpose
Concepts of (State) Law a. Substantive law - gives rise to rights and obligations (e.
1. General sense - the mass of obligatory rules established for the ObliCon, RPC)
purpose of governing the relations of persons in society b. Procedural law - adjective law
2. Specific sense - a rule of conduct, just, obligatory, promulgated 2. As to subject matter
by legitimate authority, and of common observance and benefit. a. Public law - regulates the rights and duties arising from the
relationship of the state to the people (e.g. Criminal law)
Characteristics of Law b. Private law - regulates the relations of individuals with one
1. Rule of conduct - regulates actions of people another for purely private ends (e.g. ObliCon)
2. Obligatory - must be complied (no option to follow or not)
3. Promulgated by legitimate authority - decreed/enacted Law on Obligation and Contracts is the body of rules which
4. Common observance deals with the nature and sources of obligations and the rights and
duties arising from agreements and the particular contracts
Necessity and Functions of Law
1. Necessity: stability of society; needed for internal order as the Civil Code of the Philippines (R.A. 386 - Law on ObliCon)
need for external defense Dec. 7, 1889 - took effect ( Civil Code of Spain to Ph)
2. Function: serves justice; resolves social conflict; orders society; Jun. 18, 1949 - enacted (new R.A. 386)
protects interest; control social relations Aug. 30, 1950 - promulgated (4 Books)

Sources of Law Civil Code Provisions Of ObliCon (Book IV)

1. Constitution - fundamental law/supreme law (above all)
2. Legislation - enacted law/state law; 4ordinance; by legislative
branch
3. Administrative rules and regulation - executive orders (senate,
House of Representatives)
5. Judicial decision - jurisprudence; court decisions
Title I - General provisions on obligations (Art. 1156 - 1304)
Title II - General provisions on contracts (Art. 1305 - 1422)
(Applicable to particular kinds of contracts)
Title III - Natural Obligations (Art. 1423 - 1430)
Conclusive presumption of knowledge of law: Ignorance of law
excuses no one (Civil Code, Art. 3) p.16
 TITLE I - OBLIGATIONS
(Arts. 1156 - 1304, Civil Code)
CH.1 - GENERAL PROVISIONS
Art. 1156 - An obligation is a judicial necessity to give, to do, or not
to do.
(L) Obligatio - tying/binding; compliance in good faith
*juridical necessity - in case of non-compliance, the courts may be
called to enforce fulfillment or in default, the economic value of it
Essential requisites of an obligation
1. Passive subj. - (debtor/obligator) he who has duty
2. Active subj. - (creditor/obligee) he who has right
3. Obj./Prestation - subj. matter of obligation; may consist of
giving, doing, or not doing
4. Judicial/Legal tie - (efficient cause) source of obligation
Form of Obligations - manner in which an obligation is
manifested (oral, writing, partly oral, partly writing)
*Obligation - act or performance which the law will enforce (with
corresponding right in favor of another)
*Right - the power which the person has under the law; to
demand from another any prestation
*Wrong - (cause of action) an act or omission of one party in
violation of legal right(s) of another (only arises at the moment a
right has been violated)
Essential elements of legal wrong/injury:
a. Legal right in favor of a person (creditor/obligee/plaintiff)
b. Correlative legal obligation on the part of another (debtor/
obligor/defendant) to respect or not to violate said right
c. An act or omission by the latter in violation of said right with
resulting injury or damage to the former
Kinds of oblig accdg to subj. matter
1. Real oblig. (oblig. to give) - the subj. matter is a thing which the
obligor must give to the obligee
2. Personal oblig. (oblig. to do or not to do)
Kinds:
a. Positive personal oblig. - oblig. to do or render service
b. Negative personal oblig. - oblig. not to do (incl not to give)
Art. 1157 - Oblig arise fr: 1Law, 2Contracts, 3Quasi-contracts, 4Acts
or omissions punished by law, and 5Quasi-delicts.
Sources of Obligations
1. Law - imposed by law itself (pay taxes)
2. Contracts (private acts) - when they arise fr the stipulation of the
parties (bank loan)
3. Quasi-contracts - arise fr lawful, voluntary, unilateral acts which
are enforceable to the end that no one shall be unjustly enriched
or benefited at the expense of another (ret. cash paid by mistake)
4. Delicts - crimes or acts punishable by law - arise fr civil liab.
which is the consequence of a criminal offense (thief to return
stolen goods)
5. Quasi-delicts (torts) - damage caused by acts or omission, by
fault or negligence (animal owner to pay dmages caused by pet)
Sources Classified (law)
1. Law
2. Private acts
a. Licit acts (contracts, quasi-contracts)
b. Illicit acts (delicts/crimes - punishable,
quasi-delicts/torts - not punishable)
Art. 1158 - Obligs derived fr law are not presumed, only those
expressly determined in the Code or in special laws are
demandable, and shall be regulated by the precepts of the law
which establishes them; and as to what has not been foreseen, by
the provisions of this Book.
*Legal obligation - oblig arising fr law (except special laws)
e.g. an employer has no oblig to give free legal assistance to ee.
*special laws - all other laws not contained in the civil code
Art. 1159 - Obligs arising fr contracts have the force of law bet the
contracting parties and should be complied in good faith.
*Contractual obligation - oblig arising fr contracts of voluntary
agreement
*contract - meeting of minds bet. 2 persons whereby one binds
himself, w/ respect to the other, to give smg or render service
1
Binding force - have the force of law bet. contracting parties
2
Requirement of a valid contract (w/ essential elements present
1318, not contrary to law, morals, good customs, public order
and public policy (void if not; will not exist in the eye of the law)
*
Breach of contract - a party fails or refuses to comply
Art. 1160 - Obligs derived fr quasi-contracts shall be subj to the
provisions of Ch 1, Title XVII of this Book.
*Quasi-contract - (1157) judicial relation arising fr lawful,
voluntary, lawful, and unilateral acts by virtue of which the parties
become bound to each other to the end that no one will be unjustly
enriched or benefited at the expense of another
- not properly a contract; law considers the parties as having
entered into a contract
Kinds:
1. Negotiorum gestio - voluntary mgmt of the property or affairs
of another w/o the knowledge or consent of the latter
2. Solutio indebiti - 1there is no right to receive the thing
delivered and 2the thing was delivered through mistake
3. Other examples of quasi-contracts (2164-2175) - recovery
cannot be had on a true contract, recovery may be allowed on
the basis of quasi-contract
Art. 1161 - Civil obligs arising fr criminal offences shall be
governed by the penal laws, subj to the provisions of Art. 2177,
and of the pertinent provisions of Ch 2, Preliminary Title, on
Human Relations, and of Title XVIII of this Book, regulating
damages.
*Civil liab arising fr crimes or delicts (1157[4])
1. Every person criminally liable for an act or omission is also
civilly liable for damages.
2. In crimes with no material damage, no civil liab to be enforced
but a person not criminally responsible may still be liable civilly.
Scope of Civil Liability (for damages arising fr crimes)
1. Restitution
2. Reparation for the damage caused
3. Indemnification for consequential damages
Art. 1162 - Obligs derived fr quasi-delicts shall be governed by the
provisions of Ch 2, Title XVII of this Book, and by special laws.
*Quasi-delict (tort) - act or omission by a person (tort-feasor)
which causes damage to another (w/ no pre-existing contractual
relation bet the parties) (2176)
Requisites:
1. There must be an act or omission
 2. There must be fault or negligence Kinds of Fruits
3. There must be damage caused 1. Natural fruits - spontaneous products of the soil, and the young
4. There must be a direct relation or connection of cause and and other products of animals.
effect beet the act or omission and the damage 2. Industrial fruits - produced by lands of any kind through
5. There is no pre-existing contractual relation bet the parties cultivation or labor. (e. sugar cane)
3. Civil fruits - derived by virtue or judicial relation. (e. bldg rent)
Quasi-delict Crime
1. Negligence With malicious intent or criminal *Right of creditor to the fruits - creditor is entitled to the fruits of
negligence the thing to be delivered fr the time the oblig to make delivery
2. Purpose is indemnification Punishment arises.
of offended party
3. Concerns with private Affects public interest When oblig to deliver fruits arises
interest 1. On the “perfection of contract” (birth of contract or meeting of
4. Civil liability only Generally 2 liab; criminal and the minds bet parties)
civil 2. If oblig is subj to suspensive cond’n or period: on the fulfillment
5. Liab can be compromised Cannot be compromised or of the cond’n or arrival of the term
(as any other civil liab) settled by the party themselves 3. Contract of sale - on the perfection of contract even if in
6. The fault or negligence of The guilt of the accused must suspensive cond’n or a suspesive period (price was paid)
the defendant need only to be be proven beyond reasonable 4. Oblig arising fr law, quasi-contracts, delicts or torts - time of
proven by preponderance of doubt performance is determined by the specific provisions of the
evidence applicable law

---------------------------------------------------------------------------------------- Personal right - right of a person (creditor) to demand fr another

CH.2 - NATURE AND EFFECT OF OBLIGATIONS (debtor); with definite passive subj
Real right - (ownership) right of a person over a specific thing; w/o
Art. 1163 - (SPECIFIC REAL OBLIG) Every person obliged to give definite passive subject
smg 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 Personal right Real right
party requires another standard of care. Definite active subject
Definite passive subj W/o definite passive subj
*Specific or determinate thing - particularly designated or Concerns with private interest Affects public interest
particularly segregated others of the same class. (1459) Enforceable against a Enforceable against the whole
Identified by individuality (debtor cannot substitute it w/ another) particular person world
*Generic or indeterminate thing - refers only to a class or genus
to which it pertains and cannot be pointed out w/ particularity Ownership acquired by delivery - creditor does not become the
Identified only by specie (debtor can give anything of the same owner until specific thing has been delivered to him
class as long as it is the same kind) *no delivery yet; should: demand for specific performance
(have a) rescission of oblig
Duties of a debtor in oblig to give a determinate thing  recovery of possession
1. Preserve the thing
a. Diligence of a good father of a family - ordinary care Art. 1165 - When what is to be delivered is a determinate thing,
b. Another standard care - if provided another standard that the creditor, in addition to the right granted to him by Art. 1170,
must prevail may compel the debtor to make the delivery.
c. Factors to be considered - the debtor is not liable if his failure If the thing is indeterminate or generic, he may ask that
to preserve the thing is not due to his fault or negligence but the obligation be complied with at the expense of the debtor.
to fortuitous events or force majeure (1174) If the obligor delays, or has promised to deliver the same
d. Reason for debtor’s obligation - debtor must exercise thing to 2 or more persons who do not have the same interest, he
diligence to ensure that the thing to be delivered would shall be responsible for fortuitous event until he has effected the
subsist in the same condition as it was when the oblig was delivery.
contracted
2. Deliver the thing itself Remedies of Creditor in Real Oblig
3. Deliver the fruits of the things (1164) 1. Specific real oblig (deliver a determinate thing)
4. Deliver the accession and accessories (1166) - can only be performed by the debtor
5. Answer for damages in case non-fulfillment or breach (1170) a. Demand specific performance or fulfillment of the oblig with a
right to indemnity for damages
Duties of a debtor in oblig to give a generic thing b. Demand rescission or cancellation of the oblig also with a
1. Deliver a thing which is of the quality intended. right to recover damages (1170)
2. To be liable for damages in case of fraud, negligence, or delay, c. Dmnd payment of damages only (if only the feasible remedy)
in the performance of his obligation, or contravention of the 2. Generic real oblig (deliver a generic thing) (1246)
tenor thereof. (1170) - can be performed by a 3rd person

Art. 1164 - The creditor has a right to the fruits of the thing fr the Debtor delays or has promised delivery to separate creditors
time the oblig to deliver arises. However, he shall acquire no real Paragraph 2 refers to determinate thing; indeterminate thing
right over it until the same has been delivered to him. (1905) cannot be the obj of destruction*
*genus nunquam perit - genus never perishes
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.
*Accessions - fruits of a thing in add’n to or improvements upon a
thing (not necessary to the principal)
*Accessories - the things joined to or included with the principal
thing for the latter’s embellishment, better use or completion
(does not change the substance of the principal)
Right of Creditor to Accessions and Accessories
General rule: all a&a are considered incl’d although may not have
been mentioned.
In order to be excluded, there must be a stipulation to that effect
Art. 1167 - (POSITIVE PERSONAL OBLIG) If a person obliged to
do something and fails to do it, the same shall be executed at his
cost.
The same rule shall be observed if he does it in
contravention of the tenor of the obligation. Furthermore, it may be
decreed that what has been poorly done be undone.
Situations:
1. The debtor fails to perform an oblig to do
2. The debtor performs the oblig to do but contrary to the terms
thereof
3. The debtor performs the oblig to do but in a poor manner
Remedies of creditor in positive personal oblig
1. The debtor fails to comply with his oblig to do
a. to have the oblig performed by himself, or by another (unless
personal considerations are involved), at the debtor’s expense
b. to recover damages
2. Oblig is done in contravention of the terms or is poorly done
Ordered (by the court upon complaint) that it be undone if it is
still possible to undo
*Performance by a 3rd person
Oblig to do, generic performance - can be done by a 3rd person
Oblig to do, specific performance -  debtor
 others
indemnification of damages
Art. 1168 - (NEGATIVE PERSONAL OBLIG) When the oblig
consist in not doing, and the obligor does what has been forbidden
him, it shall also be undone at his expense.
*Oblig not to do - abstain fr the act; specific performance
Remedies of Creditor in negative personal oblig:
- Undoing + damages
- if not possible to undo either physically or legally,
bec. of the rights acquired by 3rd persons who acted in
good faith or bec of some other reason - action for damages
Art. 1169 - (DELAY) Those obliged to deliver or to do smtg incur in
delay from the time the obligee judicially or extrajudicially
demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be
necessary in order that delay may exist:
(1) When the obligation or the law expressly so declares;
(2) When from the nature and the circumstances of the
oblig it appears that the designation of the time when the thing is
to be delivered or the service is to be rendered was a controlling
motive for the establishment of the contract;
(3) When demand would be useless, as when the obligor
has rendered it beyond his power to perform.
In reciprocal obligs, neither party incurs in delay if the
other does not comply or is not ready to comply in a proper
manner with what is incumbent upon him. From the moment one
of the parties fulfills his oblig, delay by the other begins.
*Delay
Ordinary delay - the failure to perform an oblig on time
Legal delay (default or mora) - failure to perform an oblig on
time w/ch failure constitutes a breach of oblig
Kinds of delay or default
1. Mora solvendi - delay on the part of debtor
2. Mora accipendi - delay on the part of the creditor
3. Compensatio morae - delay of the obligors in reciprocal obligs
(delay of obligor cancels the delay of the obliigee, and vice-
versa)
- no actionable default (on the part of both parties)
*no delay in negative personal oblig
Requisites of delay in negative personal oblig
1. Failure of the debtor to perform his oblig on the date agreed
upon
2. Demand made by creditor for compliance
Judicial - complaint filed in court
Extrajudicial - made outside of court (oral or in writing)
3. Failure to comply w/ such demand
*presuppose that the oblig is due
Effects of delay
1. Mora solvendi (delay on the part of debtor)
a. Debtor is guilty of breach of oblig
b. Debtor is liable for interest or damages
c. Debtor is liable even for a fortuitous event when oblig is to
deliver a determinate thing unless the same will happen even if
debtor is not on default
Debtor is liable even for a fortuitous event when oblig is to
deliver a generic thing to deliver the same kind or held liable for
damages
2. Mora accipendi (delay on the part of creditor)
a. Crr is guilty of breach of oblig
b. Crr is liable for the damages suffered, if any, by the debtor
c. Crr bears the risk of loss of the thing due (1216)
d. (Oblig to pay money) Debtor is not liable for interest fr the
time of creditors delay
e. Debtor may relieve himself of oblig by the consignation or
deposit in court of the thing or amount due
3. Compensatio morae (delay on both parties)
a. No delay or default on the part of both parties
b. Delay of 1 party is followed by the other - liab of 1st infractor
c. 1st infractor undeterminable - contract is extinguished; each
shall bear his own damages (1192)
When demand is not necessary to put debtor in delay
(Delay of debtor beg. only fr the moment of demand; exeptions: )
1. When the oblig so provides (stated “even w/o demand”)
2. When the law so provides (taxes should be paid on or bef
specific date; otherwise: penalties and surcharges)
3. When time is of essence (e. wedding dress)
4. When demand would be useless
5. When there is performance by a party in reciprocal oblig (e. pay
on delivery)
Art. 1170 - (VOLUNTARY BREACH OF OBLIG) Those who in the
performance of their obligs are guilty of fraud, negligence, or delay
and those who in any manner contravene the tenor thereof, are
liable for damages.
*Breach - when a person fails or refuses to perform his oblig w/o
legal justification
Grounds for liability (for all kinds of oblig - 1157)
1. Fraud (deceit or dolo) - deliberate or intentional evasion of the
normal fulfillment of an oblig
- w/ malice or dishonesty (bad faith)
- involves misleading or deceiving another
*Incidental fraud (dolo incidente) - committed in the
performance of an already existing oblig (bec of contract)
*Casual fraud (dolo causante) - fraud employed in the
execution of a contract (1338)
2. Negligence (fault or culpa) - voluntary act or omission, w/o bad
faith or malice, w/ch prevent the normal fulfillment of oblig
3. Delay (mora) - 1169
4. Contravention of the terms and condn’s stipulated in the oblig
- must not be due to a fortuitous event (1174)
Fraud Negligence
Voluntary
Intention to cause danger or No intention to cause damage or
injury injury
Waiver for liab for future fraud (in certain sense) allowed
is void
Must be clearly proved Presumed fr the violation of
contractual oblig
Liab cannot be mitigated or Liab can be reduced accdg to
reduced by the courts circumstances (1173)
Art. 1171 - (INCIDENTAL FRAUD) Responsibility arising fr fraud is
demandable in all obligs. Any waiver of an action for future fraud is
void.
Responsibility arising fr fraud is demandable
- can be demanded w/ respect to all kinds of oblig
- court is not given the power to mitigate or reduce the damages
Waiver of action for future fraud is void
- time of commission of fraud: past or future
- bec. against law and public policy
Waiver of action fr past fraud is valid
- but if not filed, assumed forgiven
Art. 1172 - Responsibility arising fr negligence in the performance
of every kind of oblig is also demandable, but such liab may be
regulated by the courts, accdg to the circumstances.
Responsibility arising fr negligence is demandable
- court may increase or decrease the recoverable damages
- (both party is negligent) fault of one neutralizes the others’
Validity of waiver of action arising fr negligence
- action for future negligence may be renounced (except if
requires extraordinary diligence, waiver is void)
- negligence shows bad faith = fraud (waiver is void)
Kind of negligence (accdg to source of oblig)
1. Contractual nagligence (culpa contractual) - resulting in their
breach; not a source of oblig
- debtor is liable for damages due to his negligence in the
preexisting oblig
2. Civil negligence (culpa aquiliana) - negligence which is itself is
the source of oblig bet, the parties not so related bef. by any
preexisting oblig (tort/quasi-delict)
3. Criminal negligence (culpa criminal) - resulting from commission
of crime
- (same negligent act producing damages) may produce civil
liab arising fr a crime (under Art. 100 of RPC) OR create an
action for quasi-delict (under Art. 2176, et. seq., of Civil Code)
- (in negligent cases) aggrieved party may choose bet. a
criminal action or a civil action
- prohibited to recover twice for the same negligent act (2177)
Effect of negligence on the part of the injured party
Creditor is also guilty of negligence
- his own negligence was the immediate cause and proximate of
injury - cannot recover damages (2176)
- his own negligence was contributory; debtor is the immediate
cause of injury) - may recover damages
Art. 1173 - The fault or negligence of obligor consists in the
omission of that diligence which is required by the nature of the
oblig and corresponds with the circumstances of the person, of the
time and of the place. When negligence shows bad faith, the
provisions of Arts. 1171 and 2201[2], shall apply.
If the law or contract does not state the diligence which is
to be observed in the performance, that which is expected of a
good father of a family shall be required.
*Fault/negligence - failure to observe for the protection of the
interests of another person, that degree of care, precaution and
vigilance which the circumstances justly demand, whereby other
person suffers injury.
Factors:
1. Nature of the oblig (smoking while carrying flammable goods)
2. Circumstance of the person (healthy guard sleeping on duty)
3. Circumstance of time (broken car headlights at night)
4. Circumstance of the place (driving 100km/h in EDSA)
*Damages - the monetary compensation awarded to a party for
loss or injury resulting fr breach of contract or oblig by the other
Measure of liab for damages
[Purpose of awarding damages is to place the innocent party in
the same (not better) position he would be (if no fault has been
committed against him)
Kinds of diligence required
1. Agreed upon by the parties (orally or in writing)
2. (In the absence of stipulation) that required by law in the
particular case
3. (If both contract and law is silent) the diligence expected of as
good father of a family
Art. 1174 - (FORTUITOUS EVENT) Except in cases expressly
specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the oblig requires the
assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which though foreseen is
inevitable.
*Fortuitous event - (involuntary breach) underlined
- events which is either impossible to foresee or impossible to
avoid
- independent fr the will of the debtor
- happening makes the fulfillment of oblig impossible
 - act of man - independent fr the will of debtor but not of other
human wills (war, murder)
- act of God (majeure) - independent of every human will (flood)
Kinds:
1. Ordinary fortuitous events - common events which the
contracting parties could reasonably foresee
2. Extra-ordinary fortuitous events - uncommon events which the
contracting parties could not have reasonably foreseen
Requisites:
1. Independent of debtor’s will
2. Event could not be foreseen, or if foreseen, is inevitable
3. Event made debtor impossible to render oblig in normal manner
4. Debtor is free fr any participation in, or the aggravation of, the
injury to the creditor (no concurrent negligence on his part)
*Absence of any requisite would prevent the debtor fr exemption
of liab
*Not excuse for the non-fulfillment of oblig: poverty, difficulty to
foresee the happening of an event (diff’t fr the impossiblility to
foresee the same)
Rules to liab in case of fortuitous event
[A person is not responsible for loss/damage caused to another
resulting fr the non-performance of oblig due to a fortuitous event;
exemptions:]
1. When expressly specified by law
a. The debtor is guilty of fraud, negligence, or delay, or
contravention of the tenor of the oblig (1170, 1165[3])
b. The debtor has promised to deliver the same (specific) thing
to 2 or more persons who do not have the same interest.
c. The oblig to deliver a specific thing arises fr a crime
d. The thing to be delivered is generic
2. When declared by stipulation
3. When the nature of the oblig requires the assumption of risk -
risk of loss or damage is essential element in the oblig
Art. 1175 - Usurious transactions shall be governed by special
laws.
*Simple loan (mutuum) - contract where the delivery of money or
other consumable thing, upon the cond’n that the same kind and
qlty shall be paid
- may be gratuitous or w/ a stipulation to pay interest
*Usury - contracting for or receiving interest in excess of the amt
allowed by law for the loan
Requisites for recovering interest
1. Paym’t of interest must be expressly stipulated
2. Agreement must be in writing
3. Interest must be lawful
*Stipulation for the paym’t of usurious interest is void if no
stipulation as to interest
*No ceiling of i under usury law; usury is now legally non-existent
(but does not give absolute right to crreditor to charge i that is
iniquitous or unconscionable. (1229)
Art. 1176 - The receipt of the principal by the creditor, w/o
reservation w/ respect to the interest, shall give rise to the
presumption that said interest has been paid.
The receipt of a latter installment of a debt w/o
reservation as to prior installments, shall likewise raise the
presumption that such installments have been paid.
*Presumption - inference of a fact not actually known arising fr its
unusual connection w/ another w/ch is known and proven (e.
receipt of paym’t)
Kinds of presumption
1. Conclusive presumption - cannot be contradicted (everyone is
presumed to know the law)
2. Disputable (or rebuttable) presumption - contradictable by
presenting proof to the contrary
Exceptions:
1. W/ reservation as to interest (writing or verbal)
2. Receipt w/o indication of a particular installment period (no
mention of w/ch mo. is paid ~ if rent)
3. Receipt for a part of the principal (implies that creditor waives
his right to apply the paymt 1st to the i and then to the principal)
4. Paymt of taxes
5. Non-payment is proven (fact prevails over a presumption)
Art. 1177 - The creditors, after having pursued the property in
possession of the debtor to satisfy their claims, may exercise all
the rights and bring all the actions of the latter for the same
purpose, save those which are inherent in his person; they may
also impugn the acts which the debtor may have done to defraud
them.
Remedies available to creditors for the satisfaction of their
claims
1. Exact fulfillment (specific performance) w/ the right to damages
2. Pursue the leviable (not exempt fr attachment under the law)
property of the debtor
3. (After pursuing prop of debtor) Exercise all the rights and bring
all actions of the debtor except those inherent in or personal of
the latter
4. Ask the court to rescind or impugn acts or contracts w/ch the
debtor may have done to defraud him when he cannot in any
manner recover his claim
*Debtor is liable w/ all his prop (present and future), for the
fulfillment of oblig, subj to the exemptions in law
Art. 1178 - Subject to the laws, all rights acquired in virtue of an
oblig are transmissible, if there has been no stipulation to the
contrary.
Transmissibility of rights, exemptions:
1. Prohibited by law - rights w/ch are personal in character
a. By the contract of partnership (2 or more person bind
themselves to contribute to a common fund w/ the intention of
dividing profits among themselves)
b. By the contract of agency (a person binds himself to render
some service on behalf of another, w/ the consent of the latter)
c. By the contract of commodatum (a party delivers and lends
non-consumable smg to another for a certain time and the
return of it by the latter; gratuitous
2. Prohibited by stipulation of the parties - must be clearly proved
or implied by the wordings of the contract
----------------------------------------------------------------------------------------
CH.3 - DIFFERENT KINDS OF OBLIGATIONS
Classification of obligs
1. Primary classification under the Civil Code
a. Pure and conditional obligs (Arts. 1179-1192)
b. Obligs w/ a period (Arts. 1193-1198)
c. Alternative (Arts. 1199-1205) and facultative obligs (Art 1206)
d. Joint and solidary obligs (Arts. 1207-1222)
e. Divisible and indivisible obligs (Arts. 1223-1225)
f. Obligs with a penal clause (Arts. 1226-1230)
2. Secondary classification under the Civil Code
a. Unilateral and bilateral obligs (Arts. 1169-1191)
b. Real and personal obligs (Arts. 1163- 1168)
 c. Determinate and generic obligs (Art. 1165) Art. 1181 - In cond’nal obligs, the acquisition of rights, as well as
d. Civil and natural obligs (Art. 1423) the extinguishment or loss of those already acquired, shall depend
e. Legal, conventional, and penal obligs (Arts. 1157, 1156, 1161 upon the happening of the event w/ch constitutes the cond’n.

Section 1 - Pure and Conditional Obligations Effects of happening of cond’n

1. Acquisition of rights - obligs subj to a suspensive cond’n
Art. 1179 - Every oblig whose performance does not depend upon if it happens = rights
a future or uncertain event, or upon a past event unknown to the if it doesn’t = oblig has never existed
parties, is demandable at once. 2. Loss of rights already acquired - obligs subj to a resolutory cond
Every oblig w/ch contain a resolutory cond’n shall also be if it happens = extinguished
demandable, w/o prejudice to the effects of the happening of the
event. Art. 1182 - When the fulfillment of the cond’n depends upon the
sole will of the debtor, the cond’nal oblig shall be void. If it
*Pure oblig - one w/ch is not subj to any cond’n and no specific depends upon chance or the will of a 3 rd person, the oblig shall
date is mentioned for its fulfillment; immediately demandable take effect in conformity w/ the provisions of this Code.
*Cond’nal oblig - one whose consequences are subj in one way
or another to the fulfillment of a cond’n Classification of cond’ns
1. As to effect
*Cond’n - future and uncertain event, upon the happeninng of a. Suspensive - happening of w/ch gives rise to the oblig
w/ch, the effectivity of extinguishment of oblig subj to it depends. b. Resolutory - happening of w/ch extinguishes the oblig
Characteristics: 2. As to form
1. Future and uncertain (or should be and in art.) a. Express - cond’n is clearly stated
2. Past but unknown (if future event, occurrence and time of b. Implied - cond’n is merely inferred
occurrence must be uncertain) 3. As to possibility
*Not impossible (1183) a. Possible - cond’n is capable of fulfillment
Principal Kinds: b. Impossible - cond’n is not capable of fulfillment
1. Suspensive cond’n (Cond’n precedent or cond’n antecedent) - 4. As to cause or origin
one the fulfillment of w/ch will give rise to an oblig (sell of land a. Potestative - cond’n depends upon the will of one of the
after innheritance is given) contracting parties
2. Resolutory cond’n (cond’n subsequent) - one of the fulfillment of b. Casual - cond’n depends upon chance or the will of a 3rd p
w/ch will extinguish an already existing oblig (allow. until grad) c. Mixed - cond’n depends partly upon chance and partly upon
the will of a 3rd person
Suspensive Cond’n Resolutory Cond’n 5. As to mode
If fulfilled Oblig arises Oblig is extinguished a. Positive - cond’n consists in the performance of an act
If did not Tie of law doesn’t appear b. Negative - cond’n consists in the omission of an act
Tie of law is consolidated 6. As to numbers
took place (juridical or legal tie)
Until it takes Effects flow, but has the a. Conjunctive - several cond’ns and all must be fulfilled
Mere hope b. Disjunctive - several cond’ns and only 1 or some must be
place possibility of termination
7. As to divisibility
When oblig is demandable at once a. Divisible - cond’n is susceptible of partial performance
1. Pure oblig (1179[1]) b. Indivisible - cond’n is not susceptible of partial performance
2. Subj to a resolutory cond’n [2]
3. Subj to a resolutory period (1193[2]) *Postative cond’n [4a] - suspensive and w/ch depends on the will
Past event unknown to parties - pertaining to knowledge to be of one of the contracting parties
acquired in the future of a past event w/ch in the moment is -Where suspensive cond’n depends upon will of debtor is void
unknown, therefore, uncertain 1. Condn’al oblig is void - debtor will just not fulfill the oblig in
order not to be liable (= I will pay if I want)
Art. 1180 - When the debtor binds himself to pay when his means 2. Only the cond’n is void - (pre-existing one - does not depend
permits him to do so, the oblig shall be deemed to be one w/ a for its existence upon the will of the debtor) cond’n is imposed
period, subj to the provisions of art 1197. not on the birth of oblig but on its fulfillment
-Where suspensive cond’n depends upon will of creditor is valid
*Period - future and certain event upon the arrival of w/ch oblig -Where suspensive cond’n depends upon will of debtor is valid
subj to it either arises or is extinguished the position of the debtor when the cond’n is resolutory is
exactly the same as that of creditor when the cond’n is
Wen duration of the period depends on the will of debtor suspensive (eg Repurchase in a sale)
1. Debtor promises to pay when his means permits him to do so *Casual cond’n [4b] - suspensive and w/ch depends upon chance
(deemed with a period) - ?duration of the period or the will of a 3rd person, oblig is valid
- If creditor cannot agree as to the specific time for paymt - court *Mixed cond’n [4c] - suspensive depends partly upon chance and
shall fix partly upon the will of a 3rd person, oblig is valid; void if suspensive
2. Other cases a. little by little cond’n depends partly on the will of debtor (if it is w/in his power to
b. as soon as possible comply or not)
c. fr time to time
d. at any time I have money Art. 1183 - Impossible cond’ns, those contrary to good customs or
e. in partial paymts publc policy and those prohibited by law shall annul the oblig w/ch
f. when I am in a position to pay depends upon the. If the oblig is divisible, the par thereof w/ch is
not affected by the impossible or unlawful cond’n shall be valid.
 The cond’n not to do an impossible thing shall be
considered ass not having been agreed upon.
[Refers to suspensive cond’ns]
Applies to: cases when the impossibility already existed at the
time the oblig was constituted (if arises after, 1266)
Kinds of impossible cond’ns
1. Physically impossible cond’ns - when they in nature of things,
cannot exist or cannot be done
2. Legally impossible cond’ns - when they are contrary to law,
morals, good customs, public order, or public policy
Effects of impossible cond’ns
1. Cond’nal oblig is void - both oblig and cond’n is void [obligor
knows his oblig cannot be fulfilled]
2. Cond’nal oblig is valid - cond’n is negative (= do not do an
impossible thing; as if no cond’n) [= oblig is pure and valid;
demandable at once]
3. Only the affected oblig is void - oblig is divisible; the part thereof
not affected by the impossible cond’n shall be valid
4. Only the cond’n is void - pre-existing oblig and does not depend
upon the fulfillment of the impossible cond’n for its existence
Art. 1184 - The cond’n that some event happen at a determinate
time shall extinguish the oblig as soon as the time expires or if it
has become indubitable that the event will not take place.
[Refers to positive (suspensive) cond’n - happening of an event at
a determinate time]
Extinguish the oblig:
1. As soon as the time expires w/o the event taking place
2. As soon as it has become indubitable that the event will not
take place although the time specified has not expired
Art. 1185 - The cond’n that some event will not happen at a
determinate time shall render the oblig effective fr the moment the
time indicated has elapsed, or if it has become evident that the
event cannot occur.
If no time has been fixed, the condition shall be deemed
fulfilled at such time as may have probably been contemplated,
bearing in mind the nature of the oblig.
[Refers to negative (suspensive) cond’n - event will not happen at
a determinate time]
Effective and binding:
1. Fr the moment the time indicated has elapsed w/o the event
taking place
2. Fr the moment it has become evident that the event cannot
occur, although the time indicated has not yet elapsed
Art. 1186 - The cond’n shall be deemed fulfilled when the obligor
voluntarily presents its fulfillment.
Constructive fulfillment of suspensive cond’n
1. Cond’n is suspensive
2. Obligor actually prevents the fulfillment of the cond’n
3. He acts voluntarily
*The law doesn’t require the obligor acts w/ malice or fraud (as
long as his purpose is to prevent the fulfillment of the cond’n)
Constructive fulfillment of resolutory cond’n - w/ respect to the
debtor who is bound to return what he has received upon the
fulfillment of the cond’n (1190)
[eg p 100: allowed occupation of house until promotion; occupant
prevented the promotion; occupant is required to vacant the house
(as If the owner was promoted bec he prevented it)
Art. 1187 - The effects of a cond’nal oblig to give, once the cond’n
has been fulfilled, shall retroact to the day of the constitution of the
oblig. Nevertheless, when the oblig imposes reciprocal prestations
upon the parties, the fruits and interests during the pendency of
the condition shall be deemed to have been mutually
compensated. If the oblig is unilateral, the debtor shall appropriate
the fruits and interests received, unless from the nature and
circumstances of the oblig it should be inferred that the intention of
the person constituting the same was different.
In obligs to do and not to do, the courts shall determine,
in each case, the retroactive effect of the cond’n that has been
complied with.
Retroactive effects of fulfillment of suspensive cond’n
1. In oblig to give - becomes demandable only upon the fulfillment
of the suspensive cond’n [1]
- the cond’n is only an accidental element of the contract
2. In oblig to do or not to do - w/ respect to the retroactive effect of
the fulfillment of a suspensive cond’n; no fixed rule
- courts: have the discretion to determine the retroactive effect
of the suspensive cond’n that has been complied w/; the power
to decide that the fulfillment of the cond’n shall have no
retroactive effect or fr what date such retroactive effect shall
take effect
Retroactive effects as to fruits and interests in oblig to give
1. In reciprocal obligs - no retroactivity (f and i received during the
pendency of the cond’n is deemed to have been compensated)
2. Unilateral obligs - usually no unilateral effect (they are gratitous)
- drr receives nothing fr the creditor (f and i belong to the drr
unless inferred and stipulated)
Art. 1188 - The creditor may, bef the fulfillment of the cond’n bring
the appropriate actions for the preservation of his rights.
The debtor may recover what during the same time he
has paid by mistake in case of a suspensive cond’n.
Rights pending on fulfillment of suspensive cond’n
1. Rights of creditor - may go to court to prevent the concealment
of property bound to be delivered to him by the debtor or his right
annotated on the deed title
2. Rights of debtor - recover what he has paid by mistake
Art. 1189 - When the cond’ns have been imposed with the
intention of suspending the efficacy of an oblig to give, the ff rules
shall be observed in case of the improvement, loss or deterioration
of the thing during the pendency of the condition:
(1) If the thing is lost w/o the fault of the debtor, the oblig
shall be extinguished
(2) If the thing is lost through the fault of the debtor, he
shall be obliged to pay damages; it is understood that the thing is
lost when it perishes, or goes out of commerce, or disappears in
such a way that its existence is unknown or it cannot be recovered
(3) When the thing deteriorates w/o the fault of the debtor
the impairment is to be borne by the creditor
(4) If it deteriorates through the fault of the debtor, the
creditor may choose bet the rescission of the oblig and its
fulfillment, w/ indemnity for damages in either case
(5) If the thing is improved by its nature, or by time, the
improvement shall inure to the benefit of the creditor
(6) If it is improved at the expense of the debtor, he shall
have no other right than that granted to the usufructuary.
Applies only if:
1. Oblig is a real oblig
2. The obj is a specific or determinate thing
3. The oblig is subj to suspensive cond’n
4. The cond’n is fulfilled
5. There is loss, deterioration, or improvement of the thing during
the pendency of the cond’n
Kinds of loss (in Civil Law)
1. Physical loss - a thing perishes (house burned to ashes)
2. Legal loss - a thing goes out of commerce
- a thing heretofore legal becomes illegal
3. Civil loss - a thing disappears in such a way that its existence is
unknown; even if known, it cannot be recovered (1189[2])
Rules in case of loss, deterioration, or improvement of thing
during pendency of suspensive cond’n
1. Loss of thing w/o debtor’s fault - extinguishes the oblig
2. Loss of thing through debtor’s fault - debtor is entitled to pay
damages
*A thing deteriorates when its value is reduced or impaired w/ or
w/o the fault of the debtor]
3. Deterioration of a thing w/o the debtor’s fault - cr suffers the
deterioration of the thing
4. Deterioration of thing through debtor’s fault - rescission of the
oblig w/ damages or fulfillment of the oblig also w/ damages
*A thing is improved when its value is enhanced by nature or by
time or at the expense of the of the debtor or creditor]
5. Improvement of thing by nature or by time - crr would benefit
6. Improvement of thing at the expense of the debtor - drr has the
right granted to a usufructury w/ respect to the improvements
made on the thing held in usufruct (no indemnification)
*Usufruct - rights to enjoy and use of i and fruits of a thing
belonging to another
Art. 1190 - When the conditions have for their purpose the
extinguishment of an oblig to give, the parties, upon the fulfillment
of said cond’ns, shall return to each other what they have received
In case of loss, deterioration or improvement of the thing,
the provisions w/ch, w/ respect to the debtor, are laid down in the
preceding art shall be applied to the party who is bound to return.
As for the obligs to do or not to do, the provisions of the
2nd paragraph of art 1187 shall be observed as regards the effect
of the extinguishment of the oblig.
Effects of fulfillment of resolutory cond’n
1. In obligs to give - extinguished (1181) and the parties are
obliged to return to each other what they have received under the
oblig [2]
a. The fulfillment of the oblig is retroactive
b. Thing to be returned is possessed by 3 rd party (in good faith),
remedy is restitution
c. Oblig of mutual restitution is absolute (also applies to fruits i)
d. Oblig to give (subj to suspensive cond’n): retroactivity admits
exception s accd’g as the oblig is bilateral or unilateral.
2. In obligs to do or not to do - court shall determine the retroactive
effect
Applicability of Art 1190 to party w/ oblig to return
If a resolutory cond’n was fulfilled: dr becomes the creditor (should
return the thing), cr becomes the dr (can demand the thing)
Art. 1191 - The power to rescind obligs is implied in reciprocal
ones, in case one of the obligors should not comply w/ what is
incumbent upon him.
The injured party may choose bet the fulfillment and the
rescission of the oblig, w/ the paymt 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 of a period.
This is understood to be w/o prejudice to the rights of 3 rd
persons who have acquired the thing, in accordance with arts
1385 and 1388 and the Mortgage Law.
Kinds of oblig accdg to the person obliged
1. Unilateral - only 1 party is obliged to comply w/ a prestation
2. Bilateral - both parties are cr and dr of each other
a. Reciprocal obligs - impose simultaneous and correlative
performance of the oblig
b. Non-reciprocal oblig - performance of a party is not
dependent upon the other
Remedies in reciprocal obligs
1. Choice of remedies
a. Action for specific performance (fulfillment) w damages or
b. Action for recission also w damages
2. Remedy of recission for non-compliance - depends; also above
*Court may grant guilty party term for performance
*Remedies are alternative (not cumulative) w except’n [2]
Limitation on right to demand recission
1. Resort to courts (the other party will be heard too)
2. Power of court to fix period
3. Right of a 3rd person - (x) recission if the 3 rd party acted in good
faith
4. Substantial violation - (x) recission for slight breaches
5. Waiver of right - right to rescind may be waived; expressed or
implied
Recission w/o previous judicial decree
1. Automatic recission is expressly stipulated
2. Where contract is still executory - no performance of both party
yet; a party is willing and the other is not, willing party may
rescind
Art. 1192 - In case both parties have committed a breach of the
oblig, the liab of the 1st infractor shall be equitably tempered by the
courts. If it cannot be determined w/ch of the parties 1 st violated
the contract, the same shall be deemed extinguished, and each
shall bear his own damages.
Both parties are guilty of breach
1. 1st infractor known - liab of the 1st infractor should be equitably
reduced
2. 1st infractor cannot be determined - contract shall be
extinguished and each shall bear his own damages
Section 2 - Obligations with a Period
Art. 1193 - Obligs for whose fulfillment a day certain has been
fixed, shall be demandable only when that day comes.
Obligs w/ a resolutory period take effect at once, but
terminate upon arrival of the day certain.
A day certain is understood to be that which must
necessarily come, although it may not be known when.
If the uncertainty consists in whether the day will come or
not, the oblig is cond’nal, and it shall be regulated by the rules of
the preceding section.
*Oblig w a period - effects are subjt’d to the arrival of said term
Period (or term)- future and certain event upon the arrival of w/ch
the oblig subj to it either arises or is terminated (eg death of a
person)
 The courts shall also fix the duration of the period when it
As to Period Cond’n depends upon the will of the debtor.
fulfillment Certain event Uncertain event In every case, the courts shall determine such period as
time Future event May also refer to past may under the circumstances have been probably contemplated
influence on Merely fixes the time of Arise or cease by the parties. Once fixed by the courts, the period cannot be
the oblig efficaciousness changed by them.
effect (left on Empowers court to fix Invalidates the oblig
dr’s will) duration [*Contractual period - period fixed by parties]
retroactivity None W/ Court generally w/o power fix a period (judicial period) - if
of effects oblig period is not stated, court is not authorized to fix a period
Exeptions:
Kinds of Period 1. No period is fixed but a period was intended (eg. house constr)
1. Accdg to effect 2. Duration of the period depends upon the will of the dr - to
a. Suspensive period (ex die) - begins only fr a day certain upon forestall the possibility that the oblig may never be fulfilled
the arrival of the period
b. Resolutory period (in diem) - the oblig is valid up to a day Legal effect where suspensive period/condn depends upon
certain and terminates upon arrival of the period will of dr
2. Accdg to source 1. The existence of oblig is not affected. Only the performance w/
a. Legal period - when it is provided for by laws respect to time that is left to the will of the dr
b. Conventional or voluntary period - agreed to by the parties 2. Oblig is subj to a cond’n on the sole will of the dr - void
c. Judicial period - fixed by the court
3. Accdg to definiteness Period fixed cannot be changed by the courts
a. Definite period - fixed or known when it will come 1. If period agreed upon already lapsed, court cannot fix another
b. Indefinite period - it is not known when it will come period
2. Acceptance on period fixed by the court = as if their agreement
Art. 1194 - In cases of loss, deterioration or improvement of the
thing bef the arrival of the day certain, the rules in Art 1189 shall Art. 1198 - The debtor shall lose every right to make use of the
be observed period:
(1) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or security for the
Art. 1195 - Anything paid or delivered bef the arrival of the period, debt
the obligor being unaware of the period or believing that the oblig (2) When he does not furnish to the creditor the
has become due and demandable, may be recovered, with the guaranties or securities which he has promised
fruits, and interests. (3) When by his own acts he has impaired said
guaranties or securities after their establishment, and when
*1195 Applies in only to oblig to give through a fortuitous event they disappear, unless he immediately
Paymt bef the arrival of the period - similar to 1188[2] (recovery gives new ones equally satisfactory
of what has been paid by mistake) (4) When the debtor violates any undertaking, in
Dr presumed aware of period - can recover fruits or i thereof fr consideration of which the creditor agreed to the period
the date of premature performance to the date of maturity of oblig (5) When the debtor attempts to abscond.
No recovery in personal obligs
When oblig can be demanded bef lapse of period
Art. 1196 - Whenever in an oblig a period is designated, it is 1. Dr becomes insolvent
presumed to have been established for the benefit of both the 2. Dr does no furnish guaranties or securities promised have been
creditor and the debtor, unless fr the tenor of the same or other impaired or have disappeared
circumstances, it should appear that the period has been 3. Guaranties or securities given
established in favor of one or of the other. 4. Dr violates an undertaking
5. Dr attempts to abscond
Presumption as to benefit of period - period is fixed for the
benefit of both parties Section 3 - Alternative Obligations
Exceptions:
1. Term is for the benefit of dr alone - cannot be compelled to pay Art. 1199 - A person alternatively bound by different prestations
prematurely, but he can, if he wants to shall completely perform one of them.
2. Term is for the benefit of the cr - may demand fulfillment but dr The creditor cannot be compelled to receive part of one
cannot require him to accept paymt bef end of term and part of the other undertaking.
Computation of term or period Kinds of oblig acccdg to object
1. Administrative Code of 1987 1. Simple oblig - only 1 prestation
Legal Periods - year=12 calendar mos.; month=30d unless 2. Compound oblig - 2 or more prestations
refering to specific calendar month; day=24h; night=sunset to a. Conjunctive oblig - all prestations are due
sunrise b. Distributive oblig - 2 or more prestations are due
2. Calendar month - month designated w/o regard to no of days it 1. Alternative oblig - several prestations are due but
contains (Jan 1-31; a calendar month fr Jan 31 is Feb 1-28) performance of 1 is sufficient (dr chooses one) (1199)
2. Facultative oblig - a prestation is due but debtor may
Art. 1197 - If the oblig does not fix a period, but fr its nature and substitute another
the circumstances it can be inferred that a period was intended,
the courts shall fix the duration thereof.
Art. 1200 - The right of choice belongs to the debtor, unless it has
been expressly granted to the creditor.
The debtor shall have no right to choose those
prestations which are impossible, unlawful or which could not have
been the obj of the lawful oblig.
Right of choice as a rule, given to the debtor, unless: expressly
granted to him or by a 3rd person when the right given to him by
common agreement
Right of choice of debtor is not absolute (Limitations:)
1. Dr cannot choose those prestations which are: (a) impossible,
(b) unlawful, or (c) which could not have been the object of the
obligation
2. Dr has no more right of choice if only one is practicable
3. Dr cannot choose part of 1 prestation and part of another
prestation
Art. 1201 - The choice shall produce no effect except fr the time it
has been communicated.
Communication of notice that choice has been made
1. Effect of notice - until the choice is made and communicated,
the oblig remains alternative
(a) Once notice of election has benn given to cr, the oblig
becomes simple
(b) Choice is irrevocable and could not be changed unless
agreed upon by both parties
2. Proof and form of notice - orally or in writing; expressly or
impliedly
Art. 1202 - The debtor shall lose the right of choice when among
the prestations whereby he is alternatively bound, only one is
practicable.
Effect when only 1 prestation is practicable - oblig becomes simple
Art. 1203 - If through the creditor’s acts, the debtor cannot make a
choice accdg to the terms of the oblig, the latter may rescind the
contract w damages.
Art. 1204 - The creditor shall have a right to indemnify for
damages when, through the fault of the debtor, all the things which
are alternatively the object of the oblig have been lost, or the
compliance of the oblig has become impossible.
The indemnity shall be fixed taking as a basis the value
of the last thing which disappeared, or that of the service which
last became impossible.
Damages other than the value of the last thing or service
may also be awarded.
1203 & 1204 - right to choose belongs to the dr
Effects of loss of objects of oblig
1. Some of the objects - (even though the fault of the dr, he is not
liable
2. All of the objects - through the fault of the dr: cr has the right to
indemnify for damages. If bec of fortuitous event: extinguished
Basis of indemnity - value of the last thing which disappeared;
other damages may also be awarded
Art. 1205 - When the choice has been expressly given to the
creditor, the oblig shall cease to be alternative fr the day when the
selection has been communicated to the dr.
Until then the responsibility of the debtor shall be
governed by the following rules:
(1) If one of the things is lost through a fortuitous event,
he shall perform the oblig by delivering that which the creditor
should choose fr among the remainder, or that which remains if
only one subsits;
(2) If the loss of one of the things occurs through the fault
of the debtor, the creditor may claim any of those subsisting, or
the price of that which, through the fault of the former, has
disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor,
the choice by the creditor shall fall upon the price of any one of
them, also with indemnify for damages.
The same rules shall be applied to obligs to do or not to
do in case one, some or all of the prestations should become
impossible.
Right of choice belongs to creditor (if expressly stated)
Rules in case of loss before creditor has made a choice
1. A thing is lost through a fortuitous event - choose bet the others
2. A thing is lost through dr’s fault - w/ rights to damages
3. All the things are lost through dr’s fault - paymt of the price of
any alternative w/ right to damages
4. All the things are lost through a fortuitous event - extinguished
Rules are applicable to personal oblig
Art. 1206 - When only one prestation has been agreed upon, but
the obligor may render another in substitution, the oblig is called
facultative.
The loss or deterioration of the thing intended as a
substitute, through the negligence of the obligor, does not render
him liable. But once the substitution has been made, the obligor is
liable for the loss of the substitute on account of his delay,
negligence or fraud.
*Facultative oblig - a prestation has been agreed upon but
obligor may substitute another
Effects of loss
1. Bef substitution: Principal thing is lost bec of a fortuitous event -
extinguished, otherwise, dr is liable for damages. Loss of
substitute w or w/o the fault of the dr - not liable
2. After substitution: Principal thing is lost - dr is not liable.
Substitute is lost - depends whether the loss is his fault or not
Alternative oblig Facultative oblig
No of Several is due but Only 1 is due but can be
prestations compliance of 1 sufficient substituted
Right of To cr or 3rd person (substitution right) dr
choice
Loss through a Does not extinguish oblig Extinguishes oblig
fortuitous event
Loss through Loss of an alternative: Loss of principal: liable
debtor’s fault not liable
(if choice belongs to cr) Loss of sub bef substn:
Loss of an alternative: liable not liable
Section 4 - Joint and Solidary Obligations
Art. 1207 - The concurrence of two or more creditors or two or
more debtors in one and the same oblig does not imply that each
one of the former has a right to demand, or that each one of the
latter bound to render, entire compliance with the prestation.
There is a solidary liability only when the obligation expressly so
states, or when the law or the nature of the obligation requires
solidarity.
*Presumed joint oblig unless otherwise
Art. 1208 - If from the law, or the nature or the wording of the
obligations to which the preceding article refers, the contrary does
not appear, the credit or debt shall be presumed to be divided into
as many equal shares as the creditors or debtors, the credits or
debts being considered distinct from one another, subj to the
Rules of Court governing the multiplicity of suits.
Kinds of oblig accdg to the number of parties
1. Individual oblig - 1 obligor and 1 obligee
2. Collective oblig - 2 or more debtors and/or 2 or more creditors;
may be joint or solitary
a. Joint oblig - whole oblig is to be fulfilled proportionately by the
different debtors and/or is to be demanded proportionately by
the different creditors (prestation is proportionately divided)
b. Solidary oblig - each debtor is bound to render, and/or each
one of the creditors has a right to demand fr any of the
debtors, entire compliance w the prestation. (Indivisible)
*Rules on multiplicity of suits seeks to prevent the filing of 2 or
more suits for the same violation of the legal right of the plaintiff
*Words used to indicate joint liability: mancomunada;
mancomunnadamente; pro rata; proportionately; “we promise to
pay” signed by 2 or more
Oblig is solidary (when)
1. The oblig expressly so states (or)
2. The law requires solidarity (or)
3. The nature of the oblig requires solidarity
*Words used to indicate solidary liability: solidaria, in solidum,
together and/or separately, individually and/or collectively,
juntos o separadamente; “I promise to pay” signed by 2 or more;
(declares that each one of the debtors are to pay the entire
oblig)
Kinds of solidarity
1. Accdg to the parties bound:
a. Passive solidarity - solidarity on the part of the debtors (any
one of them can be made liable for the fulfillment of the entire
oblig; mutual guaranty)
b. Active solidarity - solidarity on the part of the creditors (any
one of them demand the fulfillment of the entire oblig; mutual
prestation)
c. Mixed solidarity - solidarity on the part of the debtors and
creditors (each one of the debtors is liable to render, each
one of creditors has right to demand, entire compliance w the
oblig)
2. Accdg to source:
a. Conventional solidarity - stated and agreed by the parties
b. Legal solidarity - imposed by law
c. Real solidarity - imposed by the nature of the oblig
Art. 1209 - (JOINT INDIVISIBLE OBLIG) If the division
impossible, the right of the creditors may be prejudiced only
their collective acts, and the debt can be enforced only
proceeding against all the debtors. If one of the latter should
insolvent, the others shall not be liable for his share.
*Joint to liab but indivisible as to compliance
*Remedy of violation will be damages to the extent of his share
Art. 1210 - The indivisibility of an oblig does not necessarily give
rise to solidarity. Nor does solidarity of itself imply indivisibility.
{1} In an indivisible oblig, liab may be either joint or solidary
{2} In a solidary oblig, the subj matter may either be divisible or not
Indivisibility Solidarity
Refers to prestation Refers to juridical or legal tie
(intention of parties)
Dr guilty of breach is liable All drs are liable for a breach
Can exist even if 1dr and 1cr Must have at least 2dr or 2cr
Others are not liable in case of The other debtors are
insolvency of 1 proportionately liable
Art. 1211 - Solidarity may exist although the creditors and the
debtors may not be bound in the same manner and by the same
periods and conditions.
Kinds of solidary oblig accdg to legal tie
1. Uniform - parties are bound by the same stipulations
2. Non-uniform or varied - parties are not subject to the same
stipulations
*Creditor may bring his action against any of the solidary debtor
less the shares of the other debtors with unexpired terms or
unfulfilled conditions
Art. 1212 - Each one of the solidary creditors may do whatever
may be useful to the others, but not anything which may be
prejudicial to the latter.
*If he does smg prejudicial: oblig is extinguished and w damages
Mutual agency - right of one to act for in the name of the others
Art. 1213 - A solidary creditor cannot assign his rights without the
consent of the others.
Art. 1214 - The debtor may pay any one of the solidary creditors;
but if any demand, judicial or extrajudicial, has been made by one
of them, payment should be made to him.
Art. 1215 - Novation, compensation, confusion or remission of the
debt, made by any of the solidary creditors or w any of the solidary
debtors, shall extinguish the oblig, w/o prejudice to the provisions
of Art 1219.
The creditor who may have executed any of these acts,
as well as he who collects the debt, shall be liable to the others for
the share in the oblig corresponding to them.
is
by
by
be
1157 - end

1165 end
Delay - 1169
Fortuitous events - 1174

1172 - (CONTRACTUAL NEGLIGENCE)

Kinds of Negligence no3, last - choose bet. a criminal action

(under Art. 100 of RPC) or a civil action (under Art. 2176 of
the Civil Code)
Effects (last) his own negligence was contributory; debtor is the
immediate cause of injury) - may recover damages (court will
mitigate damages awarded)
1177 Remedies available to creditors for the satisfaction of
their (e. p 77)
3. (After pursuing prop of debtor) Exercise all the rights (e. right to
redeem) and bring all actions of the debtor (debtor to collect fr his
debtor) except those inherent in or personal of the latter (e. right to
vote)

1178 Transmissibility of rights, exemptions:

1. b. 1868
c. 1933

Ch3 2. e. Legal, conventional, and penal obligs (Arts. 1157,

1156, 1161)

When oblig is demandable at once

1. Pure oblig (1179[1])
2. Subj to a resolutory cond’n [2]
3. Subj to a resolutory period certain (1193[2])

1181 Effects of happening of cond’n (suspensive and

resolutory cond’n)

Effects of happening of cond’n

1. Acquisition of rights - obligs subj to a suspensive cond’n
if it happens = rights
if it doesn’t = oblig has never existed
2. Loss of rights already acquired - obligs subj to a resolutory
cond’n

Classification of cond’ns
3. As to possibility
a. Possible - cond’n is capable of fulfillment (legally and physically)
b. Impossible - cond’n is not capable of fulfillment (legally or
physically)
4b. 3rd person
6b. only 1 or soome must be fulfilled
1184 - indubitable - unquestionable
1187 - Retroactive effects of fulfillment of suspensive cond’n
1. In oblig to give - becomes demandable only upon the fulfillment
of the suspensive cond’n [1] eg. index
1189 (1) end recovered;
1189 inure - advantage
*Usufruct - rights to enjoy and use of i and fruits of a thing
belonging to another (add’l see! p 108 2 end paragraph)

1190 [1] end received.

1208
kinds ... no of parties
2.a. end
[insolvency of one dr doesn’t make others more liable]