Reviewer

UNIT I INTRODUCTION TO LAW

Concepts of Law.

1. In its general sense, the term refers to all the laws taken
together. It may be defined as "the mass of obligatory rules
established for the purpose of governing the relations of persons
in society"

2.2. In its specific sense, the term Law has been defined as a "rule
of conduct, just, obligatory, promulgated by legitimate authority,
and of common observance and benefit-

Concepts of Law example

1.Law of the land - inforceable to the country, lahat ng batas

2.Rule of law and not of men - They are the same, the law applies
equally and no one is above the law, we are govern by the rule of
law not on people.

3.Equally before the laws - People are protected by the law

without any form of discrimination, every person is equal before
the law

4.Enforcement of the law - pagpapatupad ng batas

Characteristics of Law ( in its specific sense)

1. It is a rule of conduct;
2. It is obligatory;

3. It is promulgated by legitimate authority,

4. It is of common observance and benefit.

Just - fair

Characteristics of law

1. Rule of Conduct - Law tells us what shall be done and what

shall not be done. As a rule of human conduct, law takes
cognizance of external acts only. (internal) mere planning or
intention not pushinable by law, (external)act or execute shall be
pushinable)

2. It is obligatory - Law is considered a positive command

imposing a duty to obey and involving a sanction which forces
obedience.

3.It is promulgated by legitimate authority

3.1 National Legislature - Congress, laws enacted by congress is

called "statue"

3.2 Local Legislature - Mambabatas, empowered to enact

ordinances which have the binding force of law. (Konsehal)

the proper word is "ordinances". Ordinance applicable to its own

territory or juridicial territory.

4.It is common observance and benefit - law must therefor, be

observed by all for the benefit of all.
Sources of Law

1.The constitution - In general, it is the body of rules and

maxims(principles) in which accordance with which the powers of
the sovereignity

Body politic - the people or the sovereign

Continuation of the Meaning of Constitution

of the government are established, limited and defined, and by

which those powers are distributed among the several
departments for their safe and useful exercise for the benefit of
the body politic. (Malcolm and Laurel, Philippine constitutional
Love G.

Sources of Law

2. Legislation It consists in the declaration of legal rules by

competent authority.

2.1 Statute-enacted by Congress

2.2 Ordinance - local government units.

3. Administrative or executive orders, regulations and rulings.

They are those issued by administrative officials under legislative
authority. Administrative rules and regulations are intended to
clarify or explain the law and carry into effect its general
provisions.They are 'valid only' when 'they are not contrary' to law
or the Constitution.

4. Judicial decisions (or jurisprudence) - the

decisions of the courts, particularly the

Supreme Court, applying or interpreting the

laws or the Constitution form part of the legal

5. Custom "It consists of those habits and practices which

through long and uninterrupted usage have become acknowledge
and approved by society as binding rules of conduct" It has the
force of law when recognized and enforced by the states, system
of the Philippines.

Law on obligations and contracts- ,defined. "The law of

obligations and contracts is the body of rules which deals with the
nature and sources of obligations and the rights and duties
arising from agreements and the particular contracts." LINE IN
COND contact by De Lant Dalen, 202111.

"Hindi lahat ng agreement ay contract, lahat ng contract ay

agreement"

CIVIL CODE OF THE PHILIPPINES

The law on obligations and contracts is found in Republic Act No.

386, otherwise known as the Civil Code of the Philippines.

The Civil Code of the Philippines is based primarily on the Civil

Code of Spain which took effect in the Philippines on December 7,
1889.(Mijares vs. Neri 3 Phil. 196) It was approved as Republic
Act No. 386 on June 18, 1949 and took effect on August 30, 1950.

Civil Code, Concept.

A Civil Code has been defined "as a collection of laws which

regulate the private relations of the members of civil society,
determining their respective rights and obligations, with reference
to persons, things, and civil acts"

UNIT II

Notes on Obligation:

DEFINITION OF OBLIGATION :

What is an obligation?

The term obligation is derived from the Latin word “obligatio”

which means a “tying” or “binding.

And based on the Article 1156 of the civil code of the philippines :
An obligation is judicial necessity to give, to do or not to do.

Ito iyong mga dapat mong gawin na nakaayon sa law or once na

pumasok ka sa isang kontrata or promise.

For example ako at Si Judy napagkasunduan na magtayo ng

business naming dalawa so magkakaroon kami ng kontrata and
doon mapapaloob iyong mga obligations namin na dapat gawin
or hindi dapat gawin.

What is a Judicial Necessity?

Juridical Necessity – it means the rights and duties arising from

obligation are legally demandable and the courts of justice may
be called upon through proper action to order the performance.
An obligation is judicial necessity to give, to do or not to do.

It means na ang obligation is dapat talagang punan dahil once na

hindi ka nakapagcomply sa mga obligations mo is pwedeng
pumasok sa eksena si Court of Justice. For example, Hindi ako
tumupad sa kontrata namin Ni Judy Ang mangyayari is pwedeng
pumasok si Court of justice para lang mapilitan ako na
magcomply and also pwede akong maging liable for damages.

Nature of obligations under

the Civil Code.

A CIVIL OBLIGATION is a legal tie, which gives the party, with

whom it is contracted, the right of enforcing its performance by
law.

Ito is legal siya and sinusuportahan ng law

A natural obligation is an obligation that has no legal basis and

hence does not give a right of action to enforce its performance.
It is based on equity, morality, and natural law, and should be
voluntary.

Ito is wala siyang legal basis base lang siya sa equity, morality ni
Obligor.

REQUISITES OF OBLIGATION:

May apat na elements si Obligation Passive subject, Active

subject, object or prestation and Judirical or legal tie.
The PASSIVE SUBJECT is the person bound to perform or to pay.
He is the one against whom the obligation can be demanded. He
is also called the obligor or the debtor. Siya iyong nirerequired na
gumawa ng obligation or magbayad ng ano mang liable damage
or compensation na need.

Obligor means a person who is bound to another by contract or

legal procedure.

The ACTIVE SUBJECT is the person who has the right or power to
demand the performance or payment of the obligation. He is also
called the obligee or the creditor. Dito naman siya iyong
nanghihingi ng payment or action na dapat iperform na
nakapaloob sa obligation.

Obligee: nagpautang a person to whom another is bound by

contract or legal procedure.

The PRESTATION is the object of the contract. It is the conduct

required to be observed by the debtor or the obligor. It may be an
obligation to give, to do, or not to do. Ito naman iyong nakapaloob
na sa contrata na dapat gawin, hindi dapat gawin at mga dapat na
ibigay na siyang laging inoobserve ni Debtor if nagagawa ba.

The VINCULUM JURIS is also known as the juridical or legal Tie.

Other authors call it the efficient cause. It is that which binds or
connects the parties to the obligation. (De Leon) In other words, it
is the legal relation between the debtor and the creditor (or
obligor and obligee). Like ito iyong nagcoconnect kay Debtor and
creditor sa isang obligasyon. Example iyong nagtayo kami ni
Judy ng Business and magkakaroon kami ng contract that's the
Vinculum Juris or iyong naglilink sa'min para magkaroon ng
obligation.

If you have an obligation to do something, it is your duty to do that

thing.

SOURCES OF OBLIGATIONS

1. LAW

2. CONTRACTS

3. QUASI-CONTRACTS

4. ACTS OR OMISSIONS THAT IS PUNISHABLE BY LAW; (CRIME)

5. QUASI- DELICTS

Iyong mains sources talaga is Si law and Contracts dahil sila

Quasi- contracts, Crime and Quasi- Delicts are really imposed by
law.

1. LAW the system of rules which a particular country or

community recognizes as regulating the actions of its members
and which it may enforce by the imposition of penalties. Ito iyong
mga batas natin sa bansa.

2. CONTRACT is a ―meeting of the minds between two persons

whereby one binds

himself, with respect to the other, to give something or to render

some service. Ito iyong pinagkasunduan ng dalawang parties na
nasa isang agreement.

3. QUASI-CONTRACT refers to a lawful, voluntary and unilateral

act based on the maxim

that no one shall unjustly enrich himself at the expense of another.

Ito iyong legal na obligations na si law ang nag-iimpose para
mapigilan ang unjust enrichment between the two parties na
gagawa ng agreement. A quasi contract example involves an
agreement between at least two parties who had no prior
obligation to each other. Maiwasan ang paglalamangan.

There are two common forms of Quasi Contract :

1. SOLUTIO INDEBITI °Which is payment by mistake It is receiving

payment by mistake that is not due or does not have such right to
demand such payment. It creates an obligation to return such
payment. For example : May utang sa'kin si Judy na 4,000 pero
ang ibinayad niya is 5,000 ibabalik ko syempre si 1,000.

2. NEGOTIORUM GESTIO °which takes place when a person

without the consent of the owner,

assumes the management of an abandoned business like siya

ang gumagawa kahit na walang consent.

°It arises whenever a person voluntarily takes charge of the

agency or management of the business or property of another
without any power or authority from the latter.

4. CRIMES °Civil obligations arising from criminal offenses are

governed: (1) by the

provisions of the Revised Penal Code (i.e. restitution, reparation

of the damage caused,

indemnification of consequential damages; (2) by the provisions

of the Civil Code on

damages (i.e. moral, exemplary and nominal damages)

Syempre kapag nakagawa ka ng krimen is magkakaroon ka ng

obligation para pagbayadan iyon, pwedeng money, service or like
pagkakulong na may service sa loob.

5. QUASI DELICT (also called culpa aquiliana) is any act or

omission which causes

damage to another, there being fault or negligence, and there

being no preexisting

contractual relation between the parties.

°A quasi-delict is a wrong which occurs unintentionally, as a result

of something like negligence, where as a true delict requires
intentional action.

For example someone who commit crime of Murder is a form of

Delict, while someone who commit manslaughter or hindi
sinasadyang pagpatay is a form quasi-delict.
UNIT III

MEANING OF FORTUITOUS EVENT

A fortuitous event is an event which cannot be foreseen or even

though foreseen are inevitable. (Otherwise stated, it is an event
which is either impossible to foresee or impossible to avoid).
(Art.1174)

•When the event is man-made or caused by human intervention,

the event is called force majeure.

•In our law, Fortuitous event or Force majeure are identical in so

far as they exempt the obligor from liability.

•Both are independent of the will of the obligor.CLASSES OF

FORTUITOUS EVENTS

1. As to origin or cause

a. Fortuitous event refers to an event which is absolutely

independent of human intervention. It is called an "act of God".

b. Force majeure (fuerza mayor) - refers to an event caused by

legitimate or illegitimate acts of persons other than the obligor. In
brief, in force majeure, there is human intervention.

(2) As to foreseeability

a. Ordinary fortuitous events - These are events which are

ordinarily happen or which could be reasonably foreseen but are
inevitable. Example: Flooding of lowly areas during typhoons and
thunderstorms.

b. Extraordinary fortuitous events - Those which do not

usually happen and could not be reasonably foreseen. Example:

Earthquake, fire, or conflagration, pestilence, war, locusts, unusual
flood. or other which are uncommon.

LIABILITY FOR FORTUITOUS EVENTS

General Rule: No liability in case of fortuitous event.

Exceptions:

a. When expressly declared by law.

b. When expressly declared by stipulation.

c. When the nature of the obligations requires the assumption of

risk.

d. When the object of the prestation is generic.

EXCEPTION:

(a) When expressly specified by law:

1. The debtor is guilty of fraud, negligence, or delay,

or contravention of the tenor of the obligation.

2. The debtor has promised to deliver the same (specific) thing to

two (2) or more persons who do not have the same interest
3. The obligation to deliver a thing arises from a crime.

(c) When the nature of the obligation sing the webcam

requires the assumption of risk.

•Doctrine of created risk

•The risk of loss or damage is a requisite in the obligation

REQUISITES OF A FORTUITOUS EVENTS

1. The event must be independent of the human will or

at least of the debtor's will:

2. The event could not be foreseen, or if foreseen, is inevitable;

3. The event must be of such a character as to render it

impossible for the debtor to comply with his obligation in a
normal manner; and

4. The debtor must be free from any participation in, or

aggravation of, the injury to the creditor, that is, there

is no concurrent negligence on his part.

Topic 6 Presumptions on: (a) receipt of principal and (b) later
installment.

PRESUMPTION

ART. 1176. The receipt of the principal by the creditor, without

reservation with respect to the interest, shall give rise to the
presumption that said interest has been paid.

•The receipt of a later installment of a debt without reservation as

to prior installments, shall likewise raise the presumption that
such installments have been paid.

MEANING OF PRESUMPTION

By Presumption is meant the inference of a fact not actually

known arising from its usual connection with another which is
known or proved.

Two kinds of Presumption:

1) Conclusive presumption - one which cannot be contradicted,

like the presumption that everyone is conclusively presumed to
know the law (see article 3 of the Civil Code);

2) Disputable presumption - presumption one which can be

contradicted or rebutted by presenting proof to the contrary, like
the presumption established in Article 1176.
PRESUMPTION THAT INTEREST HAD BEEN PAID.

If the creditor had issued a receipt to the debtor covering the

principal obligation, without reservation as regards the interest
due, there arises a rebuttable presumption that the interest had
already been paid by the debtor. This rule compliments article
1253 which provides:

"Art. 1253. if the debt produces interest, payment of the principal

shall not be deemed to have been made until the interest have
been covered" (NCC)

--ANOTHER EXAMPLE (PAR 1 OF ART. 1176)

In a promissory note, X borrowed from Y the amount of P100,000

with an interest of 6% per annum or 0.5% per month. Thereafter, X
paid P100,000 and Y issued a receipt for the principal. It is
presumed that the interest had been paid (this is because of Art
1253 of the Civil Code

-ILLUSTRATIVE CASE:

1. A receipt issued by the lessor dated June 1, 2014 to the lessee

covering the rent for the month, shows that the rent for the prior
month (May) had already been paid. The presumption is
rebuttable and not conclusive.

-EXAMPLE (PAR. 2 OF 1176)

In a promissory note, X borrowed from Y the amount of P100,000
payable in ten (10) monthly installments (P10,000 per month).
Thereafter, X paid P10,000 and Y issued a receipt for the 7th
installment. It is presumed that the first six (6) installmentt were
paid.

REMEDIES OF THE CREDITOR FOR THE SATISFACTION OF THEIR

CLAIMS (ART 1177)

1) Exact fulfillment (specific performance) with the right to

damages

2) Pursue the leviable (not exempt from attachment under the law)
property of the debtor. Che

3) Execute all rights and actions of the debtor, save

those personal to him (Accion subrogatoria); and 4) Seek

rescission of the contract executed by the

debtor in fraud of their rights (Accion pauliana)

UNIT IV

Different kind of Obligation

Topic 1

PURE AND CONDITIONAL OBLIGATIONS

ART. 1179. Every obligation whose performance does not depend
upon a future or uncertain event, or upon a past event unknown to
the parties, is demandable at once.

Every obligation which contains a resolutory conditions shall also

be demandable, without prejudice to the effects of the happening
of the events.

PURE OBLIGATION, CONCEPT

A pure obligation is one which is not subject to any condition and

no specific date is mentioned for its fulfillment and is, therefore,
immediately demandable.

ILLUSTRATION

➤ Jose promise to give Mario P50,000.00. The obligation is

immediately demandable because there is no date or a condition
which its fulfilment is made to depend.

►D binds himself to pay C P10,000.00 or upon demand

(Immediately demandable).

CONDITIONAL OBLIGATION, CONCEPT

A conditional obligation is one whose demandability

extinguishment depends upon the happening of a condition.
(Notes in Business Law By F. Soriano, 2016 Edition p. 27)

Condition is a future and uncertain event, upon the happening of

which, the effectivity or extinguishment of an obligation (or right)
subject to it depends.

CLASSIFICATION OF CONDITIONS AS TO EFFECT

1. Suspensive condition This is a condition the happening of

which will give rise to the obligation. This is also called condition
antecedent or condition precedent. Here, the demandability of the
obligation is suspended until the happening of the condition.

ILLUSTRATION

"I shall give you P50,000.00 if you pass the Certified Public
Accountant Licensure Examination (CPALE)." The condition here
suspensive. You may not demand the delivery of the P50,000.00
until you pass the CPALE.

2. Resolutory Condition This is a condition the happening of which

extinguishes the obligation. This is also called condition
subsequent. The obligation is demandable at once but it shall be
extinguished upon the happening of the condition.

ILLUSTRATION

"I shall allow you to use my Condo Unit until you finish your
CPALE review". The condition here is Resolutory. The obligation is
immediately demandable but is extinguished once the condition,
"until you finish your CPALE review", is fulfilled.

EXERCISES: SUSPENSIVE V. RESOLUTORY

1. "A" promised "B" (a law graduate), a particular brand new

Mercedez Benz car provided 'B" would pass the Bar Examination
before the year 2020. Is it suspensive or resolutory?

-Answer; Suspensive condition.

If year 2020 had already arrived and "B" had not passed the Bar
Examination yet, the Suspensive condition had not been fulfilled.
Therefore, "A" has no obligation to deliver the Mercedez Benz car
to "B".

2. A piece of land was donated subject to the condition that it

shall be used as a Park. No park was constructed.

Is it suspensive or resolutory?

What if a park was constructed?

Answer: Resolutory condition

•This is resolutory because noncompliance with the condition

entitles the donor to revoke the

obligation.

•In resolutory, the obligation is already existing. The happening or

result of which extinguishes the right.

•If park was constructed it will result in the birth or

acquisition because the obligation is fulfilled (Suspensive).

DISTINGUISH EFFECTS OF SUSPENSIVE AND RESOLUTORY

UPON THE OBLIGATIONS

SUSPENSIVE CONDITIONS vs RESOLUTORY CONDITIONS

1. Ifthe suspensive condition fulfilled the obligation arises or

becomes effective.

- if the resolutary condition is fulfilled, the obligation is

extinguished.

2. If the suspensive condition is not fulfilled, no is not fulfilled,

juridical relation is created.

-If the resolutary condition is not fulfilled, the juridical relation is

consolidated.

3.In suspensive condition, rights are not yet acquired but there is
hope or expectancy that they will soon acquired.

-In resolutory condition, rights are already acquired, but the

subject to the threat of extinction.

CLASSIFICATION OF CONDITION AS TO CAUSE:

• Article 1182. When the fulfillment of the condition depends upon

the will of the debtor, the conditional obligation shall be void. If it
depends upon chance or upon the will of the third person, the
obligation shall take effect in conformity with the provisions of
this code. (NCC)

1. Potestative (or facultative) condition This is a condition the

fulfillment of which depends on the exclusive will of one of
the parties, that is, either the debtor or creditor.

EFFECT OF POTESTATIVE (FACULTATIVE)CONDITION

•If the fulfillment of the potestative condition depends exclusively

upon the will of the debtor, the conditional obligation is void, that
is, both the obligation and condition are void.

•But, if the fulfillment of condition depends upon the exclusive will

of the creditor, the condition and the obligation are valid.

ILLUSTRATIONS

1. Jose promised to sell his car to Pedro next month. If Jose finds
it appropriate to do so.

In this case, both the condition and obligation are void because
the fulfillment of the condition is purely dependent upon the will
of debtor Jose."

2. "I will pay you my debt in the amount P50,000.00 upon your
demand". The obligation is valid because the condition depends
exclusively upon the will of the creditor.
2. Casual Condition- This is a condition the fulfillment of which
depends upon (a) chance, or (b) upon the will of a third person.

ILLUSTRATIONS

1. Jose promise to give Mario P50,000.00 if the "lotto" ticket he

purchased this afternoon will win the first price. The condition in
this case is dependent upon chance.

2. Jose obliged himself to give Pedro P50,000.00 if Maria goes to

Davao City.

3. Mixed condition A condition that - depends partly upon the will

of one of the parties and partly upon chance or upon the will of a
third person. (Example: D is to give C P50,000.00 if C will marry X.)

EFFECT OF IMPOSSIBLE CONDITION

ART. 1183. Impossible conditions, those contrary to good

customs or public policy and those prohibited by law shall annul
the obligation which depends upon them. If the obligation is
divisible, that part thereof which is not affected by the impossible
or unlawful condition shall be valid.

KINDS OF IMPOSSIBLE CONDITION

1. Physically impossible condition- when they, in nature of things,
cannot exist or cannot be done. Examples: (1) "I will pay you
P10,000.00 if it will not rain in the Philippines for one year.", (2) "I
will pay you P10,000.00 if you will carry fifty (50) cavans of palay
on your shoulder."

2. Legally impossible condition - when they are contrary to law,

morals, good customs, public order, or public policy. Examples: X
will give Y P10,000.00 if Y (1) will kill Z (against the law); or (2) will
be the common-law wife of X (against morals); or (3) will slap his
father (against good custom); or (4) will publicly advocate the
overthrow of the government (against public order); or (5) will not
appear as a witness against X in a criminal case (against public
policy)

EFFECT OF IMPOSSIBLE CONDITION

1. Conditional obligation void. - Impossible conditions annul the

obligation which depends upon them.

Both the obligation and the condition are void.

2. Conditional obligation valid. If the condition is negative, that is,

not to do an impossible thing, it is disregarded and the obligation
is rendered pure and valid.

3. Only the affected obligation void. - If the obligation is divisible,

the part thereof not affected by the impossible condition shall be
valid.

EFFECT ULICATION IS DIVISIBLE

➤What if the obligation is Divisible (what is the effect)?

If the obligation is divisible, that portion/part which is not affected

by the impossible or unlawful condition. shall be valid.

ILLUSTRATION:

1. "A" who is a contractor obligated himself to build a private road

on the land of "B" for the sum of P 1 Million subject to the
condition that the payment shall be in a specific prohibited drugs
worth P500,000.00 and P500,000.00 Philippine currency.

Answer. The payment in money is valid but not the payment in

drugs.

DOCTRINE OF CONSTRUCTIVE FULFILLMENT OF CONDITION

ART. 1186. The condition shall be deemed fulfilled when the

obligor voluntarily prevents its fulfillment.

▪ Requisites:

1. Condition is suspensive;

2. Debtor actually prevents the fulfillment of the condition; and

3. He acts voluntarily.
ILLUSTRATION

1. Jose promised to give Mario P100,000.00, if Mario passes the

May 2020 CPALE. However, on the eve of the scheduled
examination, Jose put a substance on the milk tea of Mario who
experienced weakening after taking the milk tea, and hence, was
not able to take the exam because he was hospitalized. Here,
Jose must give Mario P100,000.00 because the conditioned is
deemed fulfilled when he voluntarily prevents its fulfillment.

(ART. 1187)

The obligation becomes effective. From what day?

a. Retroacts (as a general rule) to the day the obligation was

constituted.

b. No retroactivity with reference only to

•Fruits or interest

•Period of prescription

EXAMPLE OF RETROACTIVE EFFECTS

Jose in 2015 promised to sell to Maria his land provided Maria

passes the Bar in 2017. Maria passed the bar in 2017.

It is as if Maria was entitled to the land beginning 2015. Note: This

retroactive effect can apply only to consensual contracts (like
sale), and not to real contracts, such as deposits or commodatum,
which are perfected only upon delivery.

NO RETROACTS INTEREST:

AS TO FRUITS & Interest

1. In unilateral obligations, debtor gets the fruits and interests

unless there is a contrary intent.

2. In reciprocal obligations, the fruits and interest during the

pendency of the condition shall (for purposes of convenience and
practical effectiveness) be deemed to compensate each other
(even though they really be unequal).

RULES IN CASE OF LOCUTEULENICILATION, OR IMPROVEMENT

OF THING DURING PENDENCY OF SUSPENSIVE CONDITION.
(ART. 1189)

1. Loss of the thing (when it perishes; goes out of commerce;

disappears in such a way that its existence is unknown or it
cannot be recovered)

a) Without debtor's fault - Obligation is extinguished.

b) With debtors fault Obligation is converted into one of indemnity

for damages.

ILLUSTRATION

1. D is obliged to give C a specific house if C passes the CPA

Examination. If the house is destroyed in a fire without the fault of
D before C passes the CPA Examination, D's obligation is
extinguished even if C, thereafter, passes the CPA Examination.
But if the house is destroyed through the fault of D such as when
he placed inside the house highly flammable chemicals which
caused the fire, then D shall be obliged to pay damages should C
pass the CPA Examination.

ILLUSTRATIVE PROBLEMS:

A promised to give B his car if B passes the Bar Examination.

Pending the results of the Bar Examinations, the car is destroyed
by a fortuitous event, without any fault at all on the part of the
debtor. When B passes the Bar, does A have to give B anything?

-ANS: No, A does not have to give B anything. "If the thing is loss
without the fault of the debtor, the obligation is extinguished" (1st
par. Art. 1189 NCC). The reason is that as a general rule no one
should be liable for the fortuitous event unless otherwise provided
by law or contract.

A promised to give B P1,000 if B passes the bar. Pending the

results of the bar, A's money is destroyed by fire, not imputable to
A. When B passes the bar, does A still have to give him P 1,000?

-ANS, YES, because the money here is generic. "In an obligation to

deliver at generic thing the loss or destruction of anything of the
same kind does not extinguish the obligaton" (Art. 1263 of the
C.C.) the reason is " Genus nunquam peruit" genus never perishes.

KINDS OF LOSS; LOSS IN CIVIL LAW MAYBE:

1. Physical Loss when thing perishes as when a house is burned

and reduced to ashes.

2. Legal Loss - when a thing goes out of commerce or when a

thing heretofore legal becomes illegal.

3. Civil Loss when a thing disappear in such a way that its

existence is unknown or even if known, it cannot be recovered,
whether as a matter of fact or law.

2. Deterioration

a) Without debtor's fault impairment is to be

borne by the creditor.

b) With debtor's fault the creditor may choose between the

rescission of the obligation and its fulfillment, with indemnity for
damages in either case.

ILLUSTRATION

1. D is obliged to give a specific car to C if C finishes his

economic degree. The deterioration of the car due to wear and
tear before C finishes his economic degree will be borne by C if C
later finishes the said degree. However, if the car is damaged in
an accident due to D's fault, C, if he finishes his economic degree,
may rescind the contract and ask for damages, or ask D to deliver
the car in its deteriorated condition plus damages.

RULES IN CASE OF depozitareMATION, ON IMPROVEMENT OF

THING DURING PENDENCY OF SUSPENSIVE CONDITION. (ART.
1189)

1. Improvement.

a) By nature or by time If the thing is improved by its nature, or by

time, the improvement shall inure to the benefit of the creditor.

b) At the expense of the debtor - If the thing is improved at the

expense of the debtor, he shall have no other right than that
granted to the usufructuary. Usufruct is the right to enjoy the use
and fruits of a thing belonging to another.

APPLICABILITY OF ARTICLE 1191, (NCC.)

The power to rescind under the Article means the right to cancel
or resolve the contract or reciprocal obligations in case of non-
fulfillment on the part of one of the contracting parties.
• Art 1191 applies only to reciprocal obligations where two parties
are mutually debtor and creditor of each other in the same
transactions. The reciprocity must arise from identity of cause.
This presupposes that the two obligations are created at the
same time.

Example:

In a contract of sale, the buyer can rescind if the seller does not
deliver, or the seller can rescind if the buyer does not pay. (This all
right for this is a reciprocal obligation).

REMEDIES TO THE AGRRIEVED PARTY (CHOICE OF REMEDIES)

The Injured/aggrieved party may choose only one of the following

remedies:

1. Action for specific performance (fulfillment) of the obligation

with damages; or

2. Action for rescission of the contract also with damages.

CHOICE OF REMEDIES:

•The injured party cannot seek both remedies.

•The right to rescind is not conjunctive (cumulative) but

alternative, that is, he is privileged to choose only one of the
remedies, and not both.

Q. Is the rule absolute?

CHOICE OF REMEDIES:

•No, it admits exception:

•Exception: paragraph 2, to wit; he may also seek rescission even

after he has chosen fulfillment if the latter should become
impossible.

•But after choosing rescission of the obligation,

he cannot thereafter demand its compliance.

EFFECT WHEIN PARTIES ARE BREACH. (ARTICLE 1192- NCC).

GUILTY OF BREACH

•When both parties are guilty of breach of their respective

obligations, the liability of the first violator shall be tempered
because the other party is also guilty of breach.

• If both parties claim that they are not the firstinfractor and it
cannot be determined from the circumstances who really breach
first the contract, the court shall declare the extinguishment of
the obligation and each shall bear his ow d

amages

•Art.1192 are deemed just. The first one is fair for both parties
because the second infractor also derived or thought he would
derived, some advantage by his own act or neglect.

•The second rule is likewise just, because it ispresumed that both

at about the same time tried to reap some benefit. (Commission
Report, p.130.)

A. Topic 2

OBLIGATION WITH A PERIOD

•An obligation with a period is one, which is demandable only

when that day comes. (A 1193 NOC)

•Hence, if Jose promises to pay his debt to Mario on December

30, 2020, Mario cannot demand payment before the said date
comes. Neither can debtor Jose compel creditor Mario to accept
payment before the due date.

•Whenever a period is designated in an obligation, such period is

presumed to be for the benefit of both creditor and debtor
Obligation With A Period.