Part 1 – LAW
Criminal (defines different crimes, its elements
Law – is a rule of conduct, just and obligatory,
promulgated by a legitimate authority for the common
observance and benefit (Sanchez, Roman- Spanish
Civilis)
CHARACTERISTICS OF LAW
1. Rule of Conduct – any action, things, dictate of
reason if regulated or gathered become a
conglomeration of rules and regulations that
can create harmonious relations among people
(You should have drivers license to be able to
drive)
2. Promulgated by a legitimate authority –
Branches of government: Legislative, Executive
and Judiciary. Once law is enacted, the State
makes it known to those who are expected to
follow it.
3. Just and Obligatory – treatment should be
equal, regardless of sex, creed, age, and status
in life. Obligatory means any duty binding
parties to perform their agreement.
4. For the common observance and benefit – the
application of law should not be titled or
favoring an individual but by the observance of
all and the benefits that may be derived from it.
SOURCES OF OUR LAWS
1. CONSTITUTION – the fundamental law or the
basic law of our land (1987 Constitution)
2. LEGISLATIONS – laws enacted by the legislative
department (congress: Senate & House of
representative)
3. ADMINISTRATIVE ACTS – implementing rules
and guidelines promulgated by the different
agencies of the executive department
(executive department: the one who executes
the laws which are enacted by the legislative
branch)
4. JURISPRUDENCE- Supreme court decisions and
rulings.
5. CUSTOMS – old and good traditions (practices
by elders)
DIFFERENT BRANCHES OF OUR LAWS
1. Political (election laws, territorial laws, political
rights, international laws of States, etc.)
2.
and provide penalties)
3. Civil (body of laws that govern the different
relations of individuals, their property, defines
rights and obligations, and remedies in case of
disputes)
4. Adjective or Remedial (laws which provide the
procedures on enforcing or maintaining rights,
or obtaining redress for their invasion)
{obligations and contracts are under civil law)
REPUBLIC ACT. NO 386, enacted in June 1949, law
known as CIVIL CODE OF THE PHILIPPINES
Which contains 2,200 Articles and contained in six
books namely:
Book I – HUMAN RELATIONS (revised under the New
Family Code of 1988)
Book II – SUCCESSION
Book III – PROPERTY
Book IV – OBLIGATIONS & CONTRACTS (from Art 1156
to Art 1430)
Book V – TRUST
Book VI – SALES
OBLIGATIONS AND CONTRACTS
Obligation – Article 1156 defined Obligation as a
juridical necessity to give, to do or not to do.
Juridical – an adj which means relating to law
DIFFERENT KINDS OF OBLIGATION
1. TO GIVE (real obligation) “promised to pay”
2. TO DO (personal obligation) “agreed to sing”
3. NOT TO DO (negative- personal obligation)
“obliged not to fence”
ELEMENTS OF REQUISITES OF AN OBLIGATION
Ex. Eve promised Mario that she will repay her load of
Php 10,000 tomorrow.
1. PASSIVE SUBJECT – the one who has the
obligation to give, to do, or not to do
(obligor/debtor). EVE IS THE PASSIVE SUBJECT
2. ACTIVE SUBJECT – the one who has the right to
demand (the oblige/creditor). MARIO IS THE
ACTIVE SUBJECT
 3. OBJECT OF PRESTATION – the subject matter.
10,000 IS THE OBJECT
4. LEGAL OR JURIDICAL TIE – the efficient cause.
CONTRACT OF LOAN is the legal tie between
parties. It is the main criteria to determine if it
exist, so the injured person can file a case in
court.
OBJECT OR PRESTATION of an OBLIGATION must
comply with REQUISITES.
1. Must be licit (otherwise void) “the 10,000 must
be legal, lawful”
2. Must be possible, physically and juridically
(otherwise void) “Amy promised to build Mat a
house in Pacific Ocean” – void
3. Must be determinate or determinable
(otherwise void)
- Determinate and not a Generic or
indeterminate (Has to be specific)
4. Must have a pecuniary value. (Also known as:
- JURIDICAL TIE that binds parties or
- The CAUSE why obligation exist
SOURCES OF OBLIGATION
1. LAW: Must be expressly or impliedly set forth
and not presumed. Ex: Payment of taxes on or
before April 15
2. CONTRACTS: Agreements between individuals
which must be complied with in good faith. The
provisions or stipulations in the contract is the
law between the parties.
3. QUASI- CONTRACTS:
a. NEGOTIORUM GESTIO (UNAUTHORIZED
MGT) – when a person voluntary manages
an abandoned property or business
belonging to another without the latter’s
consent. (Ex, when a bldg. is on fire and
another person was able to put out the fire,
then the owner is obliged to repay that
person or compensate if ever he or she was
injured)
b. SOLUTIO INDEBETI (UNDUE PAYMENT) –
when a person unduly delivers mistake to
another person, who has no right to
demand it. (Ex. When the bank mistakenly
deposits more than the money you
expected and you did not return it)
4. DELICTS – Obligation Ex Maleficio or Ex Delicto
Crimes – RPC art 100 – Every person criminally
liable for a felony is also civilly liable (Goes to
prison and pays for damages)
Example: X raped and murder G, who was a manager
and only 33 years old.
What are the Criminal’s Scope of Civil Liability?
a. Restitution or restoration – since G was dead, X
cannot restore the life so he must pay
b. Reparation for damaged caused – pay for
damages, funeral, burial others.
c. Indemnity for Consequential damages – Salary
of the victim
5. QUASI-DELICTS/ TORTS – It is an act or
omission arising from fault or negligence which
cause damage to another, there being no
proper contractual relations between parties.
Negligence – failure to observe diligence, that
degree of care, precaution and vigilance, which the
circumstance justly demand.
Degree of diligence:
1. Extra- ordinary – required of public
transportation
2. Ordinary – to act as a good father of a family
3. Diligence agreed by the parties
DIFFERENT KINDS OF QUASI-DELICTS
1. Culpa Aquiliana (no existing contract): Example;
Randy broke the windshield of Ed’s car after
carelessly throwing a baseball
2. Culpa Contractual: Ces sustained injuries when
the taxicab she was in turned turtle. (Turned
upside down); contract of carriage
3. Culpa Criminal: 18 pupils died after eating
cassava cake in the cafeteria.
DUTIES OF A DEBTOR WHO PROMISES TO GIVE A
DETERMINATE THING
(Eve obliged herself to give sue on her birthday, a sports
car, Toyota 86, with plate number ASA 222.)
1. TO PRESERVE THE THING DUE with diligence of
a good father of a family (ordinary care)
2. TO DELIVER THE FRUITS OF THE THING
[Fruits: Natural (grown naturally), Industrial
(with human intervention), Civil (product of a
capital)]
 3. TO DELIVER ITS ACCESSION AND ACCESSORIES
Ex. Air conditioner in a car
4. TO DELIVER THE THING ITSELF
5. TO PAY FOR DAMAGES IN CASE OF BREACH of
the obligation by NEGLIGENCE, FRAUD (tikas),
DELAY OR CONTRAVENTION of the tenor of the
obligation.
What if the debtor promised to deliver and
indeterminate or generic thing?
What are his obligations?
Ex. May promised to give Ange a high-end smart phone
on her birthday. (The phone is generic since brand or
serial is not specified)
1. TO DELIVER THE THING which is neither
superior nor of inferior
2. TO PAY FOR DAMAGES in case of breach
(DELAY, FRAUD, NEGLIGENCE, CONTRAVENTION
of the terms of the obligation)
Delay or Mora – a failure to deliver the thing due within
the period promised. When it is committed by the
debtor, it is known as MORA SOLVENDI
Ex: Bo promised to Gee an expensive watch on New
Year’s Day. Gee demanded from Bo the delivery of the
watch but Bo never showed up.
GEN RULE: DELAY happens form the time the Creditor
judicially (before a court) or extra-judicially demands the
fulfillment.
Except: 1. When the law or obligation expressly so
declare; 2 When from the nature and the circumstances
of the obl. 3 When the demand would be useless, as
when the obligor has rendered it beyond is power to
perform
What if the debtor fails to deliver or perform the
obligation because of events or circumstances beyond
his control, is the debtor still liable?
Answer: It depends because there are exceptions
GENERAL RULE: NO PERSON IS LIABLE FOR
FORTUITOUS EVENTS
Exceptions:
1. When expressly declared by law.
2. When expressly stipulated in the contract.
3. When the nature of obligation requires
assumption of risk.
4. When the obligor has promised to deliver the
same thing to two or more person who do not
have the same interest.
5. When the obligor is guilty of DELAY, FRAUD,
NEGLIGENCE, OR BREACH of terms of the
agreement.
6. When the thing promised is a generic object
because of the principle “GENUS NUNQUAM
PERUIT” or GENERIC NEVER PERISHES.
When an obligation consists of payment of interest or
installments, what does the law requires from the
creditor:
Art. 1176 provides that “The receipt of the
principal by the .. reservation with the respect to the
interest, shall give rise to the presumption that the 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.
Ex: D is indebted to C P10,000 and an interest of P1000.
Upon paying, P10,000, C issued a receipt stating “FULL
PAYMENT OF LOAD”.
- C cannot anymore collect the interest of 1k
because the receipt states that there is a
full payment of the loan
Ex: D buys a motorcycle from C thru installment at
P3000/month. D failed to pay on January. At the end of
February, D paid C, then C issued a receipt stating
“Payment for the month of February”

EVENTS OR CIRCUMSTANCES BEYOND A PERSON’S

CONTROL – FORTUITOUS EVENTS

1. Acts of God or Force Majeure (Tsunami,

flooding, typhoon etc
2. Acts of Men (War, riot, coup, robbery etc.)
PART 2 - OBLIGATIONS
DIFFERENT KINDS OF OBLIGATION
- According to demandability (demandability
of the obligation)
1. PURE – not subject to any conditions or
period.
Ex. Pio promised to lend his book to
Josh. (DEMANDABLE AT ONCE)
2. CONDITIONAL – is subject to a condition
(uncertain future event)
Ex. Pau promised Jo to build a house if
Jo graduates cum laude.
Other examples of condition: Job
promotion; winning a legal case in
court; passing an exam; marriage;
accepted in a job, etc.
3. WITH A PERIOD- is a subject to a period
(a certain date or future event)
Ex. Pop promised Pat a Rolex watch
with serial no. 1-A, if Pop’s dog, Aw-aw,
dies.
Other examples: one’s birthday, fixed
date, paying little by little, time to time,
or when money is available, or when
based on one’s ability or capacity to
pay.
- According to parties liable:
1. UNILATERAL
2. RECIPROCAL
- According to plurality of object
1. SIMPLE (
2. ALTERNATIVE
3. FACULTATIVE (with only one object
agreed to be delivered, but the debtor
may substitute it with another.)
Note: The amount is payable at once to any creditor,
Ex. Don promised to give Joe his Apple
except if agreed to be payable on different dates.
laptop with serial no 1223. Before
Example: X and Y promised to pay C and D jointly and
delivery, Don has the option to
severally Php 50,000, half of an Jan 1 and half on June 1.
substitute the laptop with a Yamaha Jet
ski.
In cases of losing the thing due and the debtor is at
fault;
- Loss of the laptop (Principal Object) –
debtor is liable for damages
- Loss of the Jet ski (Substitute) – debtor is
not liable but still bound to deliver the
laptop
- According to plurality of subject (ACTIVE
AND PASSIVE)
1. SIMPLE with only one debtor and one
creditor)
Ex. Ann obliged herself to give may, her
18-karat gold necklace.
2. JOINT (when an obligation has two or more
debtors, who are bound proportionately to
deliver or perform to two or more creditors)
Each of the obligation is separate and
distinct from that of the others.
Ex. D and E promised to pay X and Y
Php60,000 jointly.
Upon maturity, if X collects from D, D is only
bound to pay Php15k only to X. (60k divided
by number of parties)
- SEPARATE AND DISTINCT OBLIGATIONS
means that D’s obligation to X is separate
and distinct from 1) D’s obligation to Y; 2)
E’s obligation X; 3) E’s obligation to Y.
Words to express that obligation is JOINT:
Jointly, proportionately, pro rata, non-
comunada, non-comandante.
3. SOLIDARY (must be expressed in stipulation;
provided by law; or by nature of the
obligation)
Words to express solidarity: CO-maker, joint
and several, pro-indiviso, in solidum, using
the pronoun “I” instead “We”
Example: I promise to pay C and D, 50k on
Jan 1 of the following year, signed by X and
Y.
Upon maturity, either X or Y, is bound to
pay either C and D, Ph50,000.
- According to performance:
1. DIVISIBLE – the obligation is susceptible
or capable of partial performance or
delivery or its performance can be
measured by number of days, or metric
units.
Ex. 1) Dan promised to pay his loan to
Ina pf Php20,000 in four monthly
 installments starting January to April 20
AA.
2) Watts obliged to build Wep a 200sq
meter bungalow in one year for
P2,000,000.
2. INDIVISIBLE – Obligation is not
susceptible of partial performance.
Ex 1) Dan promised to pay his loan to
ina of Php 20k on Feb 10
2) Watts obliged to give Wep a FJ
Cruiser with plate No LM 25.
- According to Sanctions for breach
1. With a penal cause (an accessory
contract which provides for penalty in
case of non-performance or non-
delivery of the thing promised without
just cause)
Ex 1) Dan promised to pay his loan to
Ina php 20k on Feb 10. In case of failure
to pay, Dan shall be liable to Ina an
additional P500 per day of delay
reckoned from Feb 10.
In case, the penal clause serves to replace the provision
for paying interest. In some cases, the clause may
replace the delivery of fruits (civil and natural)
2. Without a penal cause – Simply without
an agreement of penalty in case of
delay
TYPES OF CONDITION
1. SUSPENSIVE – the obligation is suspended until
the fulfillment or happening of the condition.
Ex. D promised to give C, a ring if C graduates
from college.
2. RESOLUTORY – the obligation is extinguished
upon the fulfillment or happening of the
condition.
Ex. D promised to give C P100 per day until C
graduates college.
TYPES OF PERIODS
1. SUSPENSIVE – the obligation is suspended until
the happening or arrival of the period.
Ex. D promised to give C, a ring on C’s 23rd
birthday.
2. RESOLUTORY – the obligation is extinguished
upon the happening of the period.
Ex. D promised to give C100 per day until C’s
23rd birthday.
AN OBLIGATION WHICH IS SUBJECT TO EITHER
RESOLUTORY CONDITION OR RESOLUTORY PERIOD is
demandable at once. (Same as PURE OBLIGATION)
Obligations that are demandable at once
1. Pure obligation
2. Obligation which is subject to resolutory
condition
3. Obligation which is subject to resolutory period
SUSPENSIVE OR RESOLUTORY CONDITIONS
Could either be:
a. POTESTATIVE – the condition depends upon the
will of the debtor or creditor;
Ex. D promised to pay C Php50K if C will vacate
form his house.
b. CASUAL – the condition depends upon a
chance, hazard or will of a third person; Ex. D
promised to pay C Php50k if C can survive the
Amazon Jungle for 30 days.
c. MIXED – the condition depends PARTLY on the
will of the debtor or creditor AND partly on
chance and will of a third person
d. IMPOSSIBLE – the condition is contrary to law,
good morals or public policy
EFFECTS OF VARIOUS SUSPENSIVE CONDITIONS ON
OBLIGATION
a. POTESTATIVE (dependent on the sole will of the
debtor)
b. IMPOSSIBLE (contrary to law etc.)
= both obligation and condition are VOID. But if the
obligation is pre-existing, the obligation remains VALID
and the court may fix the period for paying the debt.
c. POTESTATIVE (dependent on the sole will of the
creditor)
d. CASUAL OR MIXED
= Both obligation and Condition are VALID
e. POSITIVE suspensive condition (Ex. D promised
C, Php 50k, if C gets married before Dec 31,
2020) = If Jan 1, 2021, C remains single, then the
obligation is extinguished.
f. NEGATIVE suspensive condition (Ex. D promised
to refund C’s entire school tuition if C is not
married at the end of 2020) = if on Jan. 1, 2021,
 C is sill unmarried, then the obligation becomes
due and demandable.
RETROACTIVE EFFECT OF CONDITIONAL OBL. TO GIVE
1. When obl. With suspensive cond. Acquires
force: upon the happening of the event
2. When retroactive effect applies: If debtor
promises to deliver the same object to two
creditors both subject to a suspensive
condition, the 1st creditor has a better right over
the 2nd creditor even if his condition is not yet
fulfilled. Hence, the 1st creditor may institute an
action to preserve his right, such as:
1. Annotating a notice of pending litigation on
the title of the object;
2. Filing an Adverse Claim with the Register of
Deeds/Assessor;
3. File a court action to stop delivery of the
object to the 2nd creditor.
3. In case delivery was made by the debtor to the 2nd
creditor:
a. 2nd creditor acquires REAL RIGHT over the property if
he is in good faith; (Real right is one attaches to the
property, the person who attains possession of the
property will have the right to use, right to mortgage.)
(1st creditor remedy: File a claim for damages against
the debtor)
b.If he is a buyer with bad faith, the 2nd
creditor acquires no legal right over the
property. Hence, the 1st creditor can
demand delivery of the thing in court.
OBLIGATION AS TO PARTY/IES LIABLE
1. Unilateral – only one party is obliged to
deliver/perform. (May promised to give Juan a
dog)
2. Reciprocal (Bilateral) – both parties are either
passive/active subject
Ex. Contract of Sale (Where there is a seller and
a buyer)
- The seller is obliged to deliver the object
- The buyer is obliged to deliver the payment
Hence both parties are obliged to deliver
WHEN RESCISSION IS A REMEDY IN RECIPROCAL
OBLIGATIONS:
Remedy of 1. Specific performance + damages; or
Injured Party 2. Rescission + damages (only in case of
substantial breach)
THESE REMEDIES ARE AVAILABLE ONLY IN THE
ALTERNATIVE… However, if the thing is already in the
hands of a third person who is a buyer in good faith,
then the injured party can proceed to rescission.
NOTE: Obligation of parties in case of RESCISSION:
Return the objects they respectively received by virtue
of the contract. RESCISSION can either be JUDICIAL or
EXTRAJUDICIAL.
OBLIGATIONS subject to a PERIOD (articles 1195-1998)
Example: D promised to pay C Php50k on Jan 1 of the
following year.
1. When a period is designated by the parties, it is
presumed to have been established for the
benefit of both;
2. If no period is designated; when the period is
dependent on the debtor’s will; or when debtor
pays when his means permit him to do so, then
the Creditor can go to Court so the latter may
fix the period.
Ex. D promised to pay C Php 10k as soon as
possible.
3. When debtor losses the benefit of a Period:
a. When after entering a contract, debtor
becomes insolvent (few assets left not
enough to pay for his obligation), except
when he gives guaranties or security for the
debt;
b. When debtor does not furnish the
guaranties or security he promised;
c. When debtor has impaired the guaranties
or security by his own acts or thru
fortuitous events, unless he immediately
furnishes new ones;
d. When debtor violates any undertaking un
consideration of the period; or
e. When debtor attempts to abscond (escape
or invade)
Obligations According to PLURALITY OF OBJECT:
1. SIMPLE (with only one subject)
2. ALTERNATIVE (with two or more objects
promised but the delivery of any of the object
shall extinguish the obligation)
Ex. Lea promised to give Fe on her graduation
either a Sony Tv, a HD stereo, or a cash of 50k.
If not agreed, the debtor has the right of choice. The
moment the debtor communicates his choice to the
creditor, the obligation becomes a “Simple” one.
By agreement, the creditor may have the right to
choose. In the same token, communication of his choice
to the debtor shall make the obligation “Simple”.
The creditor can have the right of choice if agreed
between them.
Loss of the thing:
Debtor’s fault:
A) If one thing should be lost, the Creditor may choose
from the remaining objects plus indemnity for damages;
B) If all things were lost, the debtor is bound to pay the
Creditor the value of the object which disappeared last
plus damages;
Creditor’s fault:
A) If one thing should be lost, the debtor can
choose to cancel the obligation and collect
payment of damages from the creditor.
B) If all things were lost, the creditor pays debtor
the value of all the things plus payment of
damages
Note: If a thing is lost without the debtor’s fault
(fortuitous event), the obligation shall be extinguished.
PART 3 – EXTINGUISHMENT
EXTINGUISHMENT OF OBLIGATIONS
Articles 1232 to 1304 of the CIVIL CODE
MODES OF EXTINGUISHING OBLIGATIONS
1. By payment or by performance
2. By loss of thing due
3. By the condonation or remission of debt
4. By confusion or merger of rights
5. By compensation
6. By novation
Note the other modes: Annulment (the parties annul the
obligation), rescission (consolation of the agreement or
contract) or fulfillment of resolutory condition (the
condition of the obligation has already arrived)
(extinguishment is the same as termination), death of a
debt in a personal obligation (to do), mutual desistance
What is payment or performance?
PAYMENT is the delivery of money, while
PERFORMANCE is the delivery of the thing due or the
services promised (not partial; not another thing).
NOTE: Substantial delivery is valid when it is not
attributed or the fault of the debtor. (ex. Wala na sa
market ang specific thing na iya dapat ihatag sa creditor)
HOW SHOULD PAYMENT/PERFORMANCE BE MADE?
To be valid it must comply with the following:
1. Must made by the debtor to the creditor:
DEBTOR: by himself, his heirs, or assigns or
authorized agent or anyone interested in the
fulfillment of the obligation, or anyone as long
as the CREDITOR consents.
WHO SHOULD PAY?
1. The debtor, his heirs or assigns
2. 3rd person with his consent or person interested
3. 3rd person without his consent or person
without interest
Effects of Payment made by above-persons:
#2 – is entitled to subrogate the person of the creditor
(includes: Principal, accessory like mortgage, guaranty
and penalty)
Subrogate: to put in the place of another
#3 – is entitled to reimbursed by the debtor only to the
extent that he was benefitted
NOTE: Payment made by a 3rd person who doesn’t not
intend to be reimbursed by the debtor, extinguished
obligation and is deemed as a DONATION.
Reimbursed: Repay/Compensate
WHEN IS PAYMENT TO A THIRD PARTY, WHO IS NOT
AUTHORIZED, VALID?
1. After payment, the third person acquires the
creditor’s rights
 2. Creditors ratifies payment to 3rd person (ratifies
meaning approves, can be action or without
action)
3. By creditor’s conduct, debtor has been led to
make the payment (creditor is in estoppel/
something you cannot retract); creditor
instructed to debtor to make payment to
another person but the person has not been
authorized, so no one receives the payment.
Estoppel: refers to a legal principle that prevents
someone from arguing something or asserting a right
that contradicts what they previously said
WHEN IS PAYMENT MADE TO A PERSON IN
POSSESSION OF A CREDIT VALID? (he has the check,
promissory note)
1. Payment by debtor must be made in good faith
2. Creditor must be in possession of the credit and
not merely the evidence of indebtedness. (after
the payment the debtor collects the docs
(promissory note), so that the obligation would
be extinguished)
WHERE SHOULD PAYMENT BE MADE?
1. In the place designated by the parties
2. If there is no express stipulation and the
undertaking is to deliver a determinate thing- at
the place where the thing might be at the
moment the obligation was constituted (where
the thing is found)
3. In other case – in the place pf the domicile of
the debtor
PRINCIPLES IN PAYMENT:
1. Application of payment: several debts with the
same debtor and creditor. Payment is applied to
the account which is:
1. Debtor’s choice
2. Creditor’s choice with debtor’s consent;
3. If neither party exercised the option, then
the court will apply the payment to the
most onerous obligation
2. Dation in payment (Dacion en pago) is the
delivery of another object by the debtor to the
creditor, upon the latter’s consent. Ownership
of the thing transfers from the debtor to the
creditor. It is governed by the Law on sales.
3. Cession: When debtor has several creditors, and
he is insolvent or having financial difficulties.
Here, the debtor shall assign/transfer all of his
properties to creditors, who shall sell them to
the public (There is no transfer of ownership).
The proceeds of the sale shall be applied
proportionately to the creditors. Obligation of
the debtor are only extinguished to the extent of
net proceeds of the sale.
4. TENDER OF PAYMENT/ CONSIGNATION: if upon
payment, the creditor refuses without just
cause (WJC) to accept it, the debtor shall be
released from the responsibility by consignation
of the thing or sum due in court.
Applied also: 1) When creditor is absent
unknown;
2)When he incapacitated to receive payment;
3) When he refuses to issue a receipt WJC
4) When 2 or more persons claim the right to
collect; and
5) the title of the obligation has been loss
OBLIGATION IS EXTINGUISHED
2) BY LOSS OF THE THING DUE…
WHEN IS THERE A LOSS:
1. When the object perishes (Physically)
2. When it goes out of commerce
3. When it disappears in such a way that its
existence is unknown or it cannot be recovered.
WHEN IS THERE IS IMPOSSIBILITY OF PERFORMANCE:
1. Physical impossibility
2. Legal impossibility
GEN RULE: Loss of the thing due to extinguishes an
obligation
Exceptions:
1. WHEN DEBTOR IS AT FAULT
- Guilty of DELAY, NEGLIGENCE, FRAUD, and
BREACH
2. WHEN THERE IS STIPULATION OR AGREEMENT
MADE BY THE PARTIES OR PROVISION OF LAW,
OR THE NATURE OF THE OBLIGATION REQUIRES
ASSUMPTION OF RISK ON PART OF DEBTOR.
3. WHEN THE THING PROMISED IS GENERIC
CONDONATION is another mode to extinguish
obligation
CONDONATION OR REMISSION OF DEBT is gratuitous
abandonment of debt by the creditor
This is done by the creditor who either expressly or
impliedly forgives the debtor in paying the obligation.
The cause or consideration of forgiving is due to the
creditor’s liberally or generosity. The debtor is required
to express his acceptance.
Applies in solidary obligation: example: A and B are
indebted to Y and Z for 1,000,000 solidarily. If Y
condones the debt of A (PM1) then the obligation is
extinguished. Note: Z can demand his share from Y.
COMPENSATION is another mode to extinguish
obligation
Also known as SET OFF; this occurs when persons, in
their own right, are debtors and creditors to each other.
Ex. Ben is indebted to Cha for Php 50,000, while Cha is
indebted to Ben for Php 60,000.
In this case, Ben and Cha are both debtors and creditors
to each other. But since the amounts of the debts are
not equal, the COMPENSATION is only partial.
When compensation is effected, Cha still owes Ben, Php
10,000.
CONFUSION OR MERGER of rights is another mode to
extinguish obligation
It occurs when the traits of the debtor and the creditor
are merged in one person.
Example: Jam issues a bill of exchange for Php 20,000 to
Ken. After a while, Ken indorsed the bill to Lu. On one
hand, Lu paid his debt to Jam of Php 20,000 by indorsing
the bill to Jam.
Jam becomes the holder of the instrument she
previously issue. Therefore, the traits of the debtor and
creditor are merged in one person.
NOVATION is another mode to extinguish obligation
There are three types of Novation, namely:
1. Changing the objects of the obligation.
Ex. Sy is indebted to Val Php 40k. On the due
date, Sy offered to pay his debt by delivering his
Canon DSLR camera worth 50k pesos. The
moment Val agrees and accepts the camera,
Sy’s obligation is extinguished.
2. Substituting the person of the debtor.
Ex. Sy is indebted to Val Php 40k. Another
person, Koko is indebted to Sy for the same
amount. Sy and Koko agreed that Koko will pay
Val on due date. As a result, Sy’s obligation to
Val is extinguished.
3. Subrogating the rights of the creditor.
Ex. Sy is indebted to Val for Php 40k. On the
other hand, Val is indebted to Yu for the same
amount.
Instead of collecting the amount from Sy, Val
offered Yu that the latter shall collect the
amount from Sy.
INTERNET BASED Q AND A
1. Which does not extinguish an obligation?
a. Annulment
b. Fulfillment of suspensive condition
c. Prescription
d. Non
2. X owes Y PHP50k payable on September 2,
2022. Z, a third person pays Y without intention
of being reimbursed by X.
a. Z’s payment to Y will be considered a
donation in favor of X.
3. Which is a special mode of payment?
a. Application of payment
b. Cession en pago
c. Dacion en pago
d. All of the above
4. Which is not a requisite of cession en pago?
a. Title to the properties transferred to the
creditor
5. Which is a characteristic of dacion de pago?
a. Delivery transfers ownership
6. The act of depositing the thing due or amount
due with proper court when the creditor does
not desire or cannot receive it subject to
formalities of the law.