A.

Give 1 situational example for:

1. Confusion in a joint obligation
2. Confusion in a solidary obligation
B. Explain the legal rights of the parties for each of the situational examples given.
C. Explain how contracts are perfected.
D. Explain the Stages of the Life of a Contract.

Answers:
A and B.
1. X, Z and W are liable to V in the amount of P15, 000 evidenced by a
negotiable promissory note. V indorsed the note to Y, who, in turn, indorsed
it to W. The presumption is that X, Z and W are jointly liable.
In this case, W’s share in the obligation is extinguished because of
confusion in his person. However, the indebtedness of X and Z in the
amount of P5,000 remains, because there is no confusion as to the two
debtors. Consequently, X and Z would be duly liable to W, the new creditor,
P5,000 each. This is according to Art. 1277 which states that, “Confusion
does not extinguish a joint obligation except as regards the share
corresponding to the creditor or debtor in whom the two characters
concur.”
2. X, Z and W are liable to V in the amount of P15, 000 evidenced by a
negotiable promissory note. V indorsed the note to Y, who, in turn, indorsed
it to W. The presumption is that X, Z and W are in solidum.
Compared to situation 1, the indorsement to W, in this case,
extinguishes the entire obligation of P15,000. However, W can demand
reimbursement from X and Z. The basis of this right is not the original
obligation which has been extinguished by the confusion that takes place in
his person but the confusion itself, as if W paid the entire debt. He can,
therefore, collect proportionate shares belonging to X and Z on an implied
contract of reimbursement.
C.
Art. 1305 states that, “A contract is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give something or to render
some service.” A contract is deemed perfected when the following essential elements
are present - consent, object of the contract, cause of the contract. In classification
according to perfection, a contract may be:
Consensual Contract – perfected by mere consent, such as contract of sale
Real Contract – perfected by mere consent and delivery of the object
Solemn Contract - perfected through compliance with the form required by law
D.
A contract has three distinct stages: preparation, perfection, and
consummation. Preparation or negotiation begins when the prospective contracting
parties manifest their interest in the contract and ends at the moment of their
agreement. Perfection or birth of the contract occurs when they agree upon
the essential elements thereof. Consummation, the last stage, occurs when the parties
"fulfill or perform the terms agreed upon in the contract, culminating in the
extinguishment thereof."