JHUNEGEN LUNA ELARDE

BSBA-HRM 4- LAW2

CHAPTER 1
STUDY GUIDE

I. Definitions

Define or give the meaning of the following:

1. Obligation
- derived from the Latin word obligatio which means tying or binding. It is a tie or
bond recognized by law by virtue of which one is bound in favor of another to
render something – and this may consist in giving a thing, doing a certain act, or not
doing a certain act.
2. Quasi-Contract
- when they arise from lawful, voluntary and unilateral acts which are enforceable to
the end that no one shall be unjustly enriched or benefited at the expense of
another.
3. Compliance in good faith
- compliance or performance in accordance with the stipulations or terms of the
contract or agreement.
4. Wrong
- (cause of action), according to its legal meaning, is an act or omission of one party
in violation of legal right or rights (i.e., recognized by law) of another.
5. Solutio indebiti
- is the juridical relation which is created when something is received when there is
no right to demand it and it was unduly delivered through mistake.

II. Discussions

1. What are the essential requisites of an obligation? Give examples and illustrate
them.

* A Passive subject (called debtor or obligor)

- the person who is bound to the fulfillment of the obligation; he was a duty.
* An Active subject (called creditor or oblige)
- the person who is entitled to demand the fulfillment of the obligation; he who has
a right.
* Object or prestation (subject matter of the obligation)
- the conduct required to be observed by the debtor. It may consist in giving, doing,
or not doing. Without the prestation, there is nothing to perform. In bilateral
obligations, the parties are reciprocally debtors and creditors.
* Juridical or legal tie (also called efficient cause)
- that which binds or connects the parties to the obligation. The tie in an obligation
can easily be determined by knowing the source of the obligation.
.
 2. Why are obligations under the Civil Code a juridical necessity? Explain.
- Because it is based on law and subject to court`s action. Obligations under civil
code are a judicial necessity in order to enforce local laws that involve civil matters.
Civil matters include matters that are brought on by another party that causes injury
or financial discord among people of a local jurisdiction.

3. What are the elements or requisites in order that a person may acquire a right
of action in court against another to enforce the performance of the latter’s
obligation?
- Right is the power a person has under the law to demand from another any
prestation. A person may acquire a right of action in court to enforce the
performance of another obligation if the obligation is a civil obligation, that is, it is
based on positive law.

4. May a person incur obligations even without entering into any contract or
voluntary agreement? Explain.
- Yes, because obligations do not only arise from contracts. They can be imposed by
law, arise from quasi-contracts, from crimes or acts or omissions punished by law
and from quasi-delicts or torts. You can have an obligation so that no one will be
unjustly benefited or enriched at the expense of someone else, or if you commit a
crime, or if you cause damage due to fault or negligence.

III. Problems

Explain or state briefly the rule or reason for your answers.

1. X saw at about one (1:00 pm) in the afternoon a child alone in a shopping mall.
The child who strayed from Y, his mother, was in tears and appeared very hungry.
Out of pity, X took him to a restaurant to eat for which he spent P150. Y did not
give her consent to the good deed of X.
Furthermore, they were on their way home before the child got lost. Is X entitled
to be reimbursed by Y for the amount of P150?
- Yes, because on the principle of quasi-contract, Y is liable to X even if she did not
give her consent. X fed Y’s child and incurred expenses and this should be
reimbursed by X to prevent anyone being unjustly enriched or benefited at the
others expense.

2. While the car of X was parked by the roadside, it was bumped at the rear by a
jeep belonging to Y. only the car of X suffered damage. Under the circumstances,
does it follow that Y is liable to X for the damage?
- Yes, because even if there is no preexisting contractual relation between them, X’s
car was damaged due to the negligence of Y. If Y did not bump X’s car, X’s car would
not have been damaged. Thus, Y is liable to X for the damages.

3. In the same problem, has X the right to ask indemnity from R, employer of X, on
the ground that the accident occurred when X was on his way to transact business
with a client of R?
- X doesn’t have a right to ask for indemnity from R because there is no law that
requires this.
4. D (debtor) borrowed P10,000 from C (creditor). On the due date of the loan, D
could not pay C because he lost to a robber the P10,000 intended for C. in addition,
he suffered financial reverses, and he was short of cash even for his current
family’s needs. Is D legally justified to refuse to pay C?

- No, because when D loaned from C, he entered a voluntary agreement and he was
willing and the contract is valid. Thus, D should comply with their agreement in good
faith and does not have a legal justification to refuse payment to C.
CHAPTER 2
STUDY GUIDE

I. Definitions

Define or give the meaning of the following:

1. Generic or indeterminate thing

- when it refers only to a class or genus to which it pertains and cannot be
pointed out with particularity.
2. Person right
- is the right or power of a person (creditor) to demand from another (debtor), as a
definite passive subject, the fulfillment of the latter’s obligation to give, to do, or not
to do.
3. Legal delay or default
- or mora is the failure to perform an obligation on time which failure constitutes a
breach of the obligations
4. Fortuitous event
- is any event which cannot be foreseen, or which, though foreseen, is inevitable.
Stated otherwise it is an event which is either impossible to foresee or impossible to
avoid.
5. Diligence of a good father of a family
- ordinary care or diligence which an average person exercises over his own
property.

II. Discussions

1. Give the rules as to the liability of a person for loss or damage resulting from a
fortuitous event.
- A person is not responsible for loss or damage resulting from a fortuitous event.
Thus, his obligation will be extinguished. (Except when expressly specified by law,
declared by stipulation, or when nature of obligation requires assumption of risk.).

2. What rights are given by law to the creditor in case the debtor fails to comply with his
obligation to deliver a specific thing?
- The creditor can demand specific performance or fulfillment of the obligation with
indemnity for damages, OR demand rescission or cancellation of the obligation with
a right to indemnity for damages, OR demand payment for damages only when it is
the only feasible remedy.

3. What are included to be delivered in an obligation to give a definite thing? Explain

them.
- The obligation includes the delivery of all its accessions and accessories. Accessions
are the fruits of a thing or additions to or improvements upon a thing. Accessories
are things joined to or included with the principal thing for the latter’s
embellishment, better use, or completion.
4. Suppose the obligation of the debtor is to do something and he fails to do it or performs
it in contravention of the agreement, what are the remedies available to the creditor?
- If the debtor fails to comply, the creditor has the right to have the obligation
performed by himself, or by another, (unless personal considerations are involved)
at the debtor’s expense and to recover damages. If the debtor performs contrary to
terms, it may be ordered by court that it be undone (if still possible to undo what
was done).

5. Can a debtor be put in delay and consequently, incur liability even without demand
from creditor? Explain.
- No. If the creditor does not demand, then it is presumed that he is giving the
debtor an extension of time and the latter in not liable for damages.

6. May an action arising from fraud be waived? Explain.

- Yes. If the creditor, with full knowledge of the fraud committed by the debtor,
decides to waive his right to indemnity, then it is considered as an act of forgiveness
by the former to the latter. Waiver is void only when it is a waiver of an action for
future fraud.

7. May an action arising from negligence be waived? Explain.

- Yes. An action for future negligence may be renounced except where the nature of
the obligation requires the exercise of extra ordinary diligence as in the case of
common carriers and when the negligence shows bad faith.

III. Problems

Explain or state briefly the rule or reason for your answers.

1. S (seller) sold to B (buyer) on July 5, a horse named Silver to be delivered on July 20.
However, on July 15, S sold again and delivered the horse to T. Who has a better right to
Silver?
- B has a better right to Silver because he had a right to Silver the moment his
contract with S was perfected, which was on July 5. This is before T’s contract with S
was perfected. Thus, B has a better right.

2. S sold to B a specific refrigerator which S agreed to deliver not later than July 31, S did
not deliver the refrigerator on said date. Is S guilty of legal delay?
- Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extra judicially demands from them the fulfillment of
their obligation. S is guilty of legal delay. The delay on the part of the debtor in
fulfillment of the obligation is called Mora solvendi.

3. S promised to deliver to B a female horse named Suzie on July 10. Suzie gave
birth to a colt on July 5.
a) What are the obligation of S
- Preserve the thing
- Deliver the fruits of the thing
- Deliver the accessions and the accessories
 - Deliver the thing itself.
- Answer for damages in case of non-fulfilment or breach
b) Who has a right to the colt?
-  S has the right to the colt.
c) Who has lawful owner of Suzie in case it was sold and delivered by S to T on July
8?
- T is the lawful owner of Suzie. T has a real right to Suzie.

4.  D (debtor) borrowed P20,000 from C(creditor) payable after 1 year? Is D liable

to pay interest?
- D is liable to pay interest to C if they have expressly stipulated that a certain
amount of interest may be recovered by C, There is a written agreement
between D and C about the interest. The payment of the interest is invalid if
there is no agreement on the interest per year.

5. R(lessor) issued a receipt that E(lessee) has paid the rent for the months of March,2008.
Can R still collect 5 from E the rents for January and February, 2008?

- Yes, R can still collect the rents for January and February 2008 from E.

CHAPTER 3
 STUDY GUIDE

SECTION 1:

I. Definitions

Define or give the meaning of the following:

1. Condition
- 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.
2. Civil loss
- civil loss is when a thing disappears in such a way that its existence is unknown: or
even if known, it cannot be recovered, whether as a matter of fact or of law.
3. Reciprocal obligations
- reciprocal obligations are those which arise from the same cause and in which each
part is a debtor and creditor of the other, such that the performance of one is
designed to be the equivalent and the condition for the performance of the other.
4. Pure obligation
- 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.
5. Potestative condition
- potestative condition is a condition suspensive in nature and which depends
upon the sole will of one of the contracting parties.

II. Discussions

1. Illustrate an obligation subject to:

(a) suspensive condition
- According to Article 1179, when an obligation is subject to a suspensive
condition, the happening of the obligation will depend upon the fulfillment of the
condition.
For example, Luffy will give his ship to Sanji if he wins the cooking competition. This
one is a suspensive condition because, once Sanji fulfilled the condition, which is to
won the race, the obligation will rise which is to Luffy give his ship to Sanji. In other
words, the obligation is suspended until Sanji wins the cooking competition.

(b) resolutory condition

- In Article 1179, resolutory condition or one the fulfillment of which will
extinguish an obligation (or right) already existing. This is demandable at
once.
For example, Luffy lets Zoro use his ship until he becomes a seaman. This one is a
resolutory condition because Luffy’s obligation is demandable at once which is to
let Zoro use his ship and will be extinguished once the condition fulfilled which is
when Zoro becomes a seaman.

What is the effect of the fulfillment of the condition in a conditional obligation?

 - There will be two effect of the fulfillment of the condition in a conditional
obligation it can be:

1. Acquisition of rights- this one is in the obligations subject to suspensive

condition, the acquisition of rights by creditor depends upon the happening of the
event which constitutes the condition. In this one, once the condition is fulfilled, an
obligation arises.
2. Loss of rights already acquired- this one is in the obligations subject to a
resolutory condition, the happening of the event which constitutes the condition
produces the extinguishment or loss of rights already acquired. In other words, once
the condition is done, the obligation will be terminated or ended.

2. Give two (2) cases when the conditional obligation is valid although the condition
depends entirely upon the will of the debtor. Explain.
- According to Article 1182, if the obligation is a pre-existing one and, does not
depend for its existence upon the fulfillment of the obligation. In here, only the
condition will be void while the obligation is still valid since the existence of the
obligation does not depends on the condition’s fulfillment.
- Next, according to Article 1182, when resolutory condition depends upon the will
of the debtor, it is considered valid. In here, the position of the debtor when the
condition is resolutory is the same as that of the creditor when the condition is
suspensive.

3. May an obligor be liable under an obligation subject to a suspensive condition although

the condition has not yet been fulfilled? Explain.
- Yes, according to the Article 1186, if the obligation is a suspensive condition, and
the debtor actually prevents the fulfillment of the condition, and he acts
voluntarily, he can be held liable. The debtor is liable because he voluntarily
prevents the condition to happen to avoid his obligations.

4. In an obligation to give a parcel of land subject to a suspensive condition, who is

entitled to the fruits that accrued during the pendency of the condition once said
condition is fulfilled?

- When it was a unilateral obligation to suspensive condition, the fruits belong to

the debtor. Because according to the Article 1187, fruits and interest shall be
appropriated by the debtor. Unless they agreed or stipulated that the fruits will
belong to the creditor. While in reciprocal obligation to suspensive condition, the
fruits are deemed mutually compensated. Meaning, the debtor is not obliged to
give the fruits to the creditor, as well as the creditor is not obliged to pay the
interest to the debtor.

5. State the rules in case the thing to be delivered:

(a) is lost with the debtors fault; without his fault;

- If the thing is lost with the debtor’s fault: the debtor is liable to pay the
damages that affects the creditor and the cost of the thing that is lost.
 - If the thing is lost without the debtor’s fault: the debtor is not liable for any
damages and obligation shall be extinguished because no one shall be liable for any
fortuitous event.
(b) deteriorates with the debtors fault; without his fault;
- If thing deteriorates with the debtor’s fault: the creditor may choose between two
remedies, it is either the recession or fulfillment of the obligation. Both included
indemnity for damages.
- If the thing deteriorates without the debtor’s fault: the value of the thing that will
be delivered will depreciate and the value of the thing will reduce.

III. Problems

Explain or state briefly the rule or reason for your answers.

1. D (debtor) borrowed P20,000 from C (creditor) payable on or before August 30. Before
the arrival of the due date, C agreed to the promise of B to pay C if B wants. Can C insist
that B pay not later than August 30?
- No, the creditor cannot insist B to pay not later than August 30, because
according to the Article 1182, when the agreement depends upon partly on the will
of the third party and the debtor’s will to pay, it is considered valid, this one applies
in this situation, wherein, the creditor cannot demand the third person to pay him
not later than August 30, because as mentioned on the case, they agreed on the
promise of the third person to pay the creditor if only he wants. Therefore, the
creditor cannot demand payment from B not later than August 30.

2. Suppose in the same problem, D obliges himself to pay C P10,000 after C has paid his
obligation to T. Is the obligation valid?
- In this case, the condition mentioned is considered as suspensive condition
which means the obligation will only arise only if the condition is already
fulfilled. In here, D only obliges himself to pay C, if and only if C paid the third
party, which is T. And in accordance to Article 1182, the conditional obligation is
considered void when the suspensive condition depends upon will of the debtor.
Therefore, the obligation of the debtor is void. This only means that, the debtor is
not liable to pay the creditor if the creditor is not yet paid to the T.

3. S (seller) agreed to sell to B (buyer) a specific car for P200,000, delivery of the car and
the payment of the price to be made on June 15. Suppose S delivered the car on June 15
but B failed to pay the price, what are the remedies of S?
- According to the Article 1191, the power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should not comply with what is
incumbent upon him. Therefore, if the B failed to pay the car, the aggrieved
party which is S may choose between two remedies. It can be (a) action for
specific performance (fulfillment) of the obligation with damages, or (b) action for
rescission of the obligation also with damages. B should only choose one between
the two remedies.

4. S sold a parcel of land to B for P240,000 payable in installments of P20,000 a year. The
land was delivered to B who obtained ownership thereof. After B had paid P200,000, he
could no longer continuing paying in view of financial reverses but he was willing to pay
the balance of P40,000 if given more time. Thereupon, S sued for recission under Article
1911. If you were the judge, would you grant recission?
- According to Article 1191, the court shall decree the recission claimed, unless there
be just cause authorizing the fixing of a period. If I were to be the judge, I will grant
the recission of S in favor of a term of period for the performance of B, since B is
willing to fulfill his obligation to pay the maintaining balance that cost P40,000 but
needs time, due to the view of his financial reverses, not because he does not want
to pay the unpaid balance.

5. D (debtor) binds himself to pay C (creditor) a sum of money. Give the three cases when
the obligation of D is demandable at once by C?
- First case, the obligation is demandable at once if it is a pure obligation.
Because according to the Article 1179, pure obligations are obligations which is
demandable at once, and is not subject to any condition and no specific date is
mentioned.
- Second case, if the obligation is subject to a resolutory condition. According to
Article 1179, in resolutory condition, the obligation is already demandable at once
and it will be extinguished due to the fulfillment of the condition.
- Third case, if the obligation is subject to a resolutory period. According to
Article 1193, in resolutory condition, same as stated above, it is already
demandable and will take effect at once, but it will be extinguished upon
arrival of the certain period.

SECTION 2:

I. Definitions

Define or give the meaning of the following:

1. Obligation with a period

 - An obligation with a period is one whose effects or consequences are
subjected in one way or another to the expiration or arrival of sad period or
term.
 - Obligations for whose fulfillment a day certain has been fixed, shall be
demandable only when that day comes.
2. Period
- A period is a future and certain event upon the arrival of which the
obligation or right subject to it either arises or is terminated. It is a day
certain which must necessarily come, although it may not be known
when.
3. Indefinite period
- Indefinite period is when it is not fixed or it is not known when it will come.
Where the period is not fixed but a period is intended, the courts are
usually empowered by law to fix the same.

II. Discussions
 1. Has the debtor the right to recover what he has paid to the creditor
before the arrival of the period agreed upon? Explain.
 - Yes, anything paid or delivered by the debtor before the arrival of the period may
be recovered. But only if he is being unaware of the period or believing that the
obligation has become due and demandable. Therefore, he has the burden of
proving that he is unaware of the period
2. If an obligation does not state a period for its performance, has a party the
right to ask a court to fix a period or the duration thereof? Explain.
 - Yes, a party has a right to ask a court to fix a period for the obligation. But the court
is not authorized to fix a period unless asked by a party, because the court have no
right to make contracts for the parties. Once fixed by the courts, the period cannot
be changed by them.
3. Give the cases when the obligee can demand the performance of an obligation
even before the arrival of the period agreed upon.
 - When the debtor becomes insolvent. The creditor can demand immediate
payment from the debtor even before maturity unless gives sufficient guaranty or
security. The insolvency of the debtor must occur after the obligation has been
contracted.
- When debtor does no furnish guaranties or securities promised. When the
debtor fails to secure his debt or show collateral to the creditor, the debtor will lose
his right to the period.
- When guaranties or securities given have impaired or have disappeared.
When the security got destroyed due to debtor’s fault, and when it was destroyed
due to fortuitous event, the obligation becomes demandable unless the debtor gives
a new security equally satisfactory.
- When debtor violates an undertaking. The violation of the debtor’s undertaking
gives the creditor the right to demand immediate payment of the loan.
 - When debtor attempts to abscond. When the debtor tries to escape his
obligation. This act of the debtor is a sign of bad faith which results in the loss of
his right to the benefit of the period stipulated. The court put a period to
avoid the possibility that the obligation may never be fulfilled.