Академический Документы
Профессиональный Документы
Культура Документы
dependent
upon performance of the other (Editors Note:
Example?)
Viewpoint of sanction
1. Civil (perfect) per 1156; sanction is judicial process
2. Natural duty not to recover what has voluntarily been pai
d
although payment was no longer required; sanction is law
because conscience motivated payment; Ex: A owes B 1M, A
knowing that the debt has prescribed pays B. A cannot get b
ack
what he paid.
Moral (imperfect) - duty of catholic to hear mass; sanction
conscience or morality
b. Viewpoint of subject matter
1. Real to give
2. Personal to do or not to do
c. Affirmativeness and negativeness
1. Positive or affirmative give or to do
2. Negative not to do or not to give
d. Persons obliged
1. Unilateral only one of the parties is bound; Ex. A owes B 1
3.
M,
2.
A must pay B.
Bilateral - both parties are bound; Ex. Contract of sale
a.
Reciprocal (sale)
hn
Obligations and Contracts | Carloman Notes 2014 | Atty. San P as to what has not been foreseen, by the provisions of this Book.
edro
1
1. Obligations derived from law are not presumed obligations must
1157: Obligations arise from
1.
2.
3.
4.
5.
Law
Contracts
Quasi-contracts
Acts or omissions punished by law; and
Quasi-delicts
1.
are
Sources of obligations:
a.
Law (ex lege) taxes/support; no agreement is necessary
b. Contracts (ex contractu) loan
c.
Quasi-contracts (ex quasi-contractu) solution indebiti /
negotiorom gestio
d. Crimes (ex maleficio or ex delicto) duty to return stolen thing
e.
Quasi-delicts (Torts or ex quasi-delicto or ex quasi-maleficio)
duty to repair damage due to negligence
2. Note in actuality only law and contract are the sources since c, d & e
3.
be
clearly (expressly or impliedly) set forth in the law (Civil Code or
Special Law)
2. Conflict between Civil Code and Special law, latter prevails unless t
he
contrary has been expressly stipulated in the New Civil code.
1159: Obligations arising from contracts have the force of law betwee
n the
contracting parties and should be complied with in good faith.
1.
Does not mean that contracts are superior to laws, since for a cont
ract
ng
2.
ns
mas they may deem convenient, provided, they are not contrary to
law,
voluntary
and unilateral act and which has for its purpose the payment of
1.
2.
ke of
fact
1.
no
2.
3.
Pertinent provisions of the RPC and other penal laws, subject to th 1162. Obligations derived from quasi-delicts shall be governed by the
provisions of Chapter 2, Title 17 of this book and by special laws.
1.
2.
3.
civil action
If acquitted due to exempting circumstances - civil liability
Independent civil action is allowed by law (libel, slander, estafa an
physical injuries)
Restitution
Reparation of damage caused
Indemnification for consequential damages
re
he
natural order of events, necessarily produces the damages o
r
injury complained of.
1.
2.
1.
t
other party; to give to do or not to do
1164: The creditor has a right to the fruits of the thing from the time the
2.
Real right (jus in re) enforceable against the whole world; power
obligation to deliver it arises. However, he shall acquire no real right ove
over
r
a specific thing (ownership or possession)
it until the same has been delivered to him.
complied with at the expense of the debtor.
3.
and
nation.
2. Generic or indeterminate thing refers only to a class, to a ge
nus, and
cannot be pointed out with particularity.
3. Remedies of creditor:
a.
Specific performance
b. Rescission (Resolution cancellation of juridical tie, find
out
when specific terms are used)
c. Damages; with or without in 1 or 2.
Obligations and Contracts | Carloman Notes 2014 | Atty. San P 1167. If a person obliged to do something fails to do it, the same shal
edro
3
4.
5.
)
6.
l be
executed at his cost.
2.
Remedies of creditor
a.
Have the obligation performed by himself or another at the
debtors expense; and
b. Damages cannot be substituted for nonperformance unless
substitution is permitted
ng
all its accessions and accessories, even though they may not have been 1168. When the obligation consists of not doing, and the obligor does
mentioned.
what
has been forbidden him, it shall also be undone at his expense.
1. Accessories joined to or included with the principal for the latters
better use, perfection or enjoyment (keys house)
1. Negative personal obligation
2. Accessions additions or improvements upon a thing. Includes
2. Remedies of obligor
alluvium (erosion deposits on a river bank)
a.
Undoing of the thing at the obligors expense; and
3. Exception if otherwise stipulated by the parties.
b. Damages
In reciprocal obligations, neither party incurs in delay if the other
1169. Those obliged to deliver or to do something 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
does
not comply or is not ready to comply in a proper manner with wh
at is
incumbent upon him. From the moment one of the parties fulfills
his
obligation, delay by the other begins.
1.
that
delay may exist:
1. When the obligation or the law expressly so declares;
2. When from the nature and the circumstances of the obligation
it
appears that the designation of the time when the thing is to
t be
be
time
act
(wedding dress); intent is sufficient so long as this is implied
.
d.
b.
c.
d.
2.
3.
4.
Dolo (Fraud)
Deliberate intent to
cause damage
Present
Absent
Yes
lfillment
rformance
Negligence
Default
Violation of terms of the obligation; unless excused by
fortuitous event
Culpa (Negligence)
CULPA
CONTRACTUAL
Nature of
negligence
Incidental
CULPA
AQUILIANA
CULPA CRIMINAL
1.
Direct,
Direct, substantive
substantive and and independent of
independent of a a contract
contract
Absent
Absent
Proof
needed
Preponderance of
evidence
Preponderance
of evidence
Guilty beyond
reasonable doubt
Defense
Ordinary diligence
is not a proper
defense in culpa
criminal.
Employees guilt is
automatically
employers civil
guilt in case of
insolvency.
Stipulations on negligence
a.
Gross negligence: can never be excused in advance contrary
by the courts,
according
to the circumstan
to public
policy; defeats
juridical tie
ces. b. Simple negligence: in certain cases be excused or mitigated
c.
Bill of lading, 3 usual stipulations:
i. Exemption of carrier from all liabilities for loss or
damage by its own negligence void; public policy.
ii. Limits the liability to an agreed valuation, regardless
of damage caused void; public policy, a wealthy
company can abuse this.
iii. Limits liability to an agreed value unless the shipper
declares a higher value and pays a higher rate of
freight or ad valorem basis valid
2. Contracts of adhesion
a.
Parties are not in equal positions (employment or
transportation contracts) stipulations on negligence are
strictly construed against the party situated in a higher or
more advantageous position.
3. Kinds of Culpa, according to source:
a.
Culpa contractual (contractual negligence) resulting from a
breach of conrtract.
b. Culpa aquiliana (civil negligence / tort / quasi-delict) results
from offenses due to negligence
c.
Culpa criminal (criminal negligence) results from a
commission of a crime or a delict
Applicable
As long as it was
Victim proves
Accused is
presumption proved that there was negligence. Sincepresumed innocent
a
s
action is based until the contrary is
contract and that it waon alleged
proved, so
s
negligence on theprosecution has the
not carried out, it is part of the
burden of proving
presumed that the
defendant.
negligence of the
debtor is at fault, and
accused.
4.
is his duty to prove tha
t
there was no
negligence in the
iii. Even if incident occurred as passenger was boarding
b. Passenger can bring such case to owner of transport company
i. Contract is between the passenger and owner and not
the driver unless they are one and the same
1.
2.
5.
ce
of driver and owner
e. Liability under Culpa Aquiliana is entirely separate and
distinct
from the liability arising from negligence under the RPC (ex
f.
the
immediate and proximate cause of the injury being the
defendants lack of due care.
g.
Doctrine of last clear chance cannot apply if:
i. Negligence of the plaintiff is concurrent with the
negligence of the defendant;
ii.
iii.
ll
all
1.
5.
t
1177. The creditors, after having pursued the property in possess
1175. Usurious transactions shall be governed by special laws.
1.
ount
allowed by law for the loan or use of money, goods, chattels or cred
its.
Extraction of excessive interest.
Kinds of interest:
a.
Moratory usual form, compensation or fee for the use of
money.
b. Compensatory by way of damages
3. Notes:
a.
Legal rate 6% for all.
b. Usury has been abolished 1/1/1983 will now depend on
mutual agreement.
c. 2% per month current jurisprudence unconscionable
2.
ment
2.
not
b.
pt
ion of
the debtor to satisfy their claims, may exercise all the rights and
bring all
the action of the latter for the same purpose, save those which ha
re
inherent in his person; they may also impugn the acts which the d
ebtor
may have done to defraud them.
1.
Rights of creditors
a.
Exact payment
b. Exhaust debtors properties by attachment, except th
ose
properties exempted by law (support)
c. Accion subrogatoria exercise all rights and actions of
debtor
in order to exact payment of obligation except those inh
erent
ns
Definition
No condition;
demandable at
once
Pure
Pure
w/ a period
Joint
Solidary
Compared
3.
ment
of foreclosure or mortgage):
a.
Family home (except; taxes, debts prior to family home,
workers in construction of family home)
b. Tools and implements for trade, employment or livelihood
c.
3 horses, 3 cows, 3 carabaos or other beast of burden used
ng
e.
g.
h.
i.
j.
k.
l.
m.
Legal
Conventional
exempt
from execution:
Right
to existence support
Penal
Rights of a public character positions in the government
Rights to affairs in the home and the family personal rights of
1178. Subject to the laws, all rights acquired in virtue of an obligation are
transmissible, if there has been no stipulation to the contrary.
GR Rights are transmissible (see 1311)
Exceptions (must be clearly proved):
a.
Law provides otherwise
b. Contract or stipulation provides otherwise
c. Obligation is purely personal
occupation
Necessary clothing and articles of personal use; except jew
f.
Negativehere)
(insert difference of Positive
resolution and rescission
1.
2.
d.
elry
Definition
remedy
Real 3. No other
Personal
4. Transaction of conveyance is fraudulent
Determinate
Generic
5. 3rd party
is not IPV
Rights
a.
b.
c.
ingratitude
Right to appear in court proceedings, like settlement of an
estate
Properties exempt from execution (not applicable if there is a judg
e.
for
w/
a Penal Clausew/o
Penal Clause
Unilateral
Bilateral
2.
H&W
Rights granted by law to the debtor revoke donation due
to
Comp Definition
ared
Conditional
Alternative
Conjunctive
a. Primary
Classification
(facultative)
Definition
d.
Classification of obligations
2.
3.
ii.
iii.
1.
2.
No defect valid
Defective
By defects:
a.
b.
c.
d.
facultative
Rescissible
Voidable
Unenforceable
Void
b. Secondary Classification
n a future
uncertain event, or upon a past event unknown to the parties, is
demandable at once.
b.
Creditor to ask the court first to fix the term, after which he can
make demand upon arrival of the term
e
c.
3rd
1181. In conditional obligations, the acquisition of rights, as well as t
he
extinguishment or loss of those already acquired, shall depend upon
the
happening of the event which constitutes the condition.
1.
ht
2.
ed.
ng
re
donation cannot build a house if youre not owner, hence
donation must come first)
1182. When the fulfillment of the condition depends upon the sole wi
ll of
the debtor, the conditional obligation shall be void. If it depends upo
n
chance or upon the will of a third person, the obligation shall take eff
ect in
conformity with the provisions of this Code.
1.
son
1185. The condition that some event will not happen at a determinat
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, the part thereof which
s
not affected by the impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not
having been agreed upon.
1.
2.
e
i time shall render the obligation effective from the moment the time
indicated has elapsed, or if it has become evident that the event can
not
occur.
1186. The condition shall be deemed fulfilled when the obligor volunt
arily
prevents its fulfillment.
1184. The condition that some event happen at a determinate time shall
extinguish the obligation as soon as the time expires or if it has become
indubitable that the event will not take place.
1.
2.
Requisites:
a.
Either maliciously or not, intent to prevent must be presen
t if
b.
1.
ion is
fulfilled, because can only be enforced only from
said
iii.
date.
Real contracts (deposit or commodatum)
1188. The creditor may, before the fulfillment of the condition, bring
the
appropriate actions for the preservation of his right.
The debtor may recover what during the same time he has paid by
mistake in case of a Suspensive condition.
1.
in bad faith creditor knew that the payment was being mad
e
3.
a
danger the creditor will receive nothing, as when the object i
ze,
2.
r be
1.
If the thing is lost without the fault of the debtor, the obligati
2.
shall be extinguished;
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
on
when
it perishes, or goes out of commerce, or disappears in such a
way
3.
he
4.
may
ent,
with indemnity for damages in either case;
5.
If the thing is improved by its nature, or by time, the improv
ement
shall inure to the benefit of the creditor;
6.
ht
2.
on)
than that granted to the usufructuary.
1.
a.
Application of article:
a.
Suspensive condition is fulfilled; and
b. Object is specific (not generic)
1.
2.
3.
rescission;
specific performance + damages; or
purely damages
b.
c. Improved
n
i.
n
3.
ty
4.
Loss defined:
a.
Perishes (house burns down)
b. Goes out of commerce (unprohibited becomes prohibited)
c. Disappears in such a way that its existence becomes
unknown
(car missing for some time)
d. Disappears in such a way that it cannot be recovered (ring
dropped in middle of the ocean)
5. Partial loss:
a.
Loss important enough to be considered complete loss (co
urt
determines this)
b. Merely be considered a deterioration of the thing, in which
case the rules on deterioration applies.
Lost
i. w/o fault of debtor creditor bears loss
ii. w/ fault of debtor debtor liable for damages
Deteriorate (value is reduced or impaired)
i. w/o fault of debtor creditor bears deterioration
ii. w/ fault of debtor
1190. When the conditions have for their purpose the extinguish
ment of
an obligation to give, the parties, upon the fulfillment of said co
nditions,
shall return to each other what they have received.
In case of the loss, deterioration or improvement of the thing, th
e
provisions which, with respect to the debtor, are laid down in the
preceding article shall be applied to the party who is bound to re
turn.
As for obligations to do and not to do, the provisions of the seco
nd
paragraph of Article 1187 shall be observed as regards the effect
of the
extinguishment of the obligation.
1.
her
what they received.
e.
2.
The court shall decree the rescission, even after he has chosen fulfillmen
Reciprocal obligations
a.
Requires that the obligations should arise simultaneously
(dependency of obligations)
b. Obligation or promise of each party is the cause or
consideration for the obligation or promise to the other.
c.
The party who has not performed his end of the reciprocal
obligation cannot resolve the same even if there is slight
breach so long as the main obligation was complied with by
of
plaintiff (contrary to rescission in 1380 and 1381) but on the
breach of faith by the defendant, which breach is violative o
f
iv.
1659.
Cannot rescind if property is now in the hands
k.
l.
upon.
May be waived, expressly or impliedly. (accepting installme
3.
e
b.
et)
and not conjunctive, however, partial of both may be allowe
d
c.
(damages)
IMBA case; the ONLY Exception to 1191: Suria v IAC
Notes:
a.
Termination the party is relying on the
termination/penal/forfeiture clause
Day certain
a.
That which must necessarily come, although it may not be
known when. (term)
Notes:
a.
Differentiate an obligation with a suspensive condition and an
obligation with a suspensive term.
b. If no acceleration clause, only those installments that are due
are demandable
c.
There must be an agreement on duration of lease to allow
15
d.
e.
f.
g.
h.
i.
1195. Anything paid or delivered before the arrival of the period, the
obligor being unaware of the period or believing that the obligation
has
become due and demandable, may be recovered, with the fruits and
interests.
1.
]
Premature payment in GF
a.
Premature payment in good faith ([a] unaware of period [b
believed that obligation has become due and demandable)
entitles one for recovery and legal interest thereon. Except:
i. Paid with full knowledge of the existence of the ter
m.
b.
ii.
iii.
creditor is in BF
Subject to 5 year prescription
If w/ knowledge cannot recover, regardless of
BF,
since this operates as an implied waiver.
c. Debtors knowledge of prematureness is presumed
1196. Whenever in an obligation a period is designated, it is pre
sumed to
have been established for the benefit of both the creditor and th
e debtor,
unless from the tenor of the same or other circumstances it shou
ld appear
that the period has been established in favor of one or of the ot
her.
1.
Main:
a.
GR: Term constituted is for the benefit of the debtor or
creditor
b.
r cannot
demand prematurely
c. Exceptions: With contemporaneous intent;
ii.
ill
Interest is stipulated
be obtained even with debtors acts. (ex. Principal +
1. Creditor interest earned
interest for the whole period)
2. Debtor more time to pay
1197. If the obligation does not fix a period, but form its nature and t
ii. Creditor is interested in keeping his money safely
invested (debtor as depository) or when the creditor
he
want to protect himself from the dangers of currency
circumstances it can be inferred that a period was intended, the cour
depreciation
ts
b. For the benefit of the debtor:
may fix the duration thereof.
i. Without interest
The courts shall also fix the duration of the period when it depends u
1. Except: when clearly shown that creditor had
intention to protect himself from the risks
pon
associated with the possession of the object
the will of the debtor.
ii. When payment is to be made within a certain period
In every case the courts shall determine such period as may under th
from date of contract
c.
For the benefit of the creditor:
e
i. When stipulated. no payment made until after a
circumstances have been probably contemplated by the parties. Onc
certain period. Acceptance of partial payment even
e
before the expiration of the period means a waiver on
fixed by the courts, the period cannot be changed by them.
the part of the creditor of his right to refuse payment
i. Term is for the benefit of the debtor alone. He is
1. When court may fix the period
required to pay only at the end but he may pay even
a.
When duration depends upon the will of the debtor
before and he may resist premature demand for
i. means permit me to do so
compliance. within.
ii. ...little by little
ii. Term for the benefit of the creditor alone. He can
iii. as soon as possible
demand at any time even before the term expires, and
iv. .as soon as I have money
he cannot be compelled to accept payment from the
v. in partial payments
debtor prior to the stipulated period. given the right
vi. when the debtor is in a position to discharge his
to demand performance even before said date
obligation
2. Indicatio
i.
ns:
a.
o term
b.
d
that a period was intended.
i. Parties had knowledge of circumstances which woul
d
es)
2. When the court may not fix the term
b.
l
after the court has fixed the period for its compliance.
1198.
c. Fixing and demand for fulfillment cannot be asked at the sa
me
1.
time. Except when fixing the period would be a mere formali
ty
2.
and serve no other purpose but delay, there is no necessity
of
3.
such prior action.
d. No delay until period is fixed, demand must be made
subsequently.
new
4. How court fixes the period:
a.
Determining the time probably contemplated by the partie
4.
s.
f
b. Courts cannot change once period is fixed.
c. Same effect when the court approves a compromise
5.
agreement. courts cannot change terms
5. Notes:
1.
a.
Parties may change the period by mutual agreement or
disregard the same.
b. Article does not apply to a contract of lease where:
i. Parties has reserved to themselves the faculty of
2.
agreeing upon the period of the renewal contract
(Millare v Hernando); OR
ii. Renewal of the period is not left to the will of the
lessee alone, but rather to the will of the lessor or
lessee.
The debtor shall lose every right to make use of the period:
When after the obligation has been contracted, he becomes
insolvent, unless he gives a guaranty or security for the debt;
When he does not furnish to the creditor the guaranties or
security which he has promised;
When by his own acts he has impaired said guaranties or
securities after their establishment, and when through a
fortuitous event they disappear, unless he immediately gives
ones equally satisfactory;
When the debtor violates any undertaking, in consideration o
which the creditor agreed to the period;
When the debtor attempts to abscond.
Effect of losing period:
a.
Debtor loses every right to make use of the period; term is
extinguished and the obligation is demandable at once.
Term/period how computed:
a.
Under Art 13 of CC.
i. Years 365 days
ii. Months 30 days
iii. Days 24 hrs
iv. Nights sunset to sunrise
v. Months designated by name respective days
vi. Period 1st day excluded, last day included, if the la
st
day falls upon a Saturday, a Sunday or a legal holida
y
in the place where the court sits, the time shall not r
un
ate
y
from which time is to begin to run, and include the d
ay
viii.
all
of payment.
Treaty begins not on RP viewpoint, but at the time
Notes:
a.
Loss through FE in 3 is regardless of fault on the part of the
debtor. He still loses benefit of period. Exception also provided
b.
in 3.
Employment contract may be terminated even if there was
fixed duration for the job (under par.4)
a.
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 object of the
obligation.
1.
2.
1201. The choice shall produce no effect except from the time it has been
communicated.
1.
Notice
Form
i.
ii.
iii.
ii.
Notes:
a.
No automatic rescission, since debtor may choose to allow the
obligation to be in force insofar as the possible choices are
involved.
1204. The creditor shall have a right to indemnity for damages when,
through the fault of the debtor, all the things which are alternatively the
object of the obligation have been lost, or the compliance of the obligation
has become possible.
The indemnity shall be fixed taking as a basis the value of the last thing
which has disappeared, or that of the service which last become
impossible.
Damages other than the value of the last thing or service may also be
awarded.
1.
2.
Application of article:
a.
When right to choose belonged to the debtor; and
b. The loss or impossibility happened before selection was made.
Notes:
a.
Value of last thing lost w/ fault + damages = given to creditor
1205. When the choice has been expressly given to the creditor, the
obligation shall cease to be alternative from the day when the selection
has been communicated to the debtor.
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 even, he shall
perform the obligation by delivering that which the creditor
should choose from among the remainder, or that which remains
if only one subsists;
2. If the loss of the things occurs through the fault of the debtor, the
creditor may claim any of those subsisting, or the price of that
3.
19
if any.
accessory or substitute
1206. When only one prestation has been agreed upon, but the obligor
If it is impossible to give all except If it is impossible to give the princip may render another in substitution, the obligation is called facultative.
one, the last one must still be givenal,
The loss or deterioration of the thing intended as a substitute, through the
the substitute does not have to be negligence of the obligor, does not render him liable. But once the
given, if it is impossible to give the substitution has been made, the obligor is liable for the loss of the
substitute, the principal must still b substitute on account of his delay, negligence or fraud.
e
1. Facultative obligation
Right to choose may be given either
Right to choose is only to debtor
to
a.
Only one prestation has been agreed upon but the obligor may
the debtor (presumed) or creditor
render another in substitution.
(expressed)
2.
Notes:
a.
If substitute is lost w/ fault, no liability since debtor can still
choose the principal. And no rights were impaired.
Joint vs Solidary
a.
Joint each obligor answers only for a part of the whole
liability and each obligee belongs only a part of the correlative
rights. To each his own.
(1)
Mancommunada
(2)
Mancomunada simple
(3)
Proportionate
(4)
Pro rata
(5)
We promise to pay there are 2 or more
signatures
b. Solidary relationship between the active and passive subjects
is so close that each of the former or the latter may demand the
fulfillment of or must comply with the whole obligation. One
for all, all for one. Right to reimburse from other debtors arise.
(1)
Juntos o separademente
(2)
Mancomunada insolidum
(3)
Individually
Rules:
a.
GR: joint
b. Exceptions:
(1)
(2)
(3)
a.
b.
c.
d.
Stipulation or contract
Nature of obligation requires solidarity
Law declares obligation solidary
Tort (Culpa aquiliana or quasi-delict)
Quasi-contracts
Devisees and legatees
Liability of principals, accomplices and
accessories of a felony
e.
Bailees in commodatum
3.
Notes:
a.
Obligations can be joint or solidary on either creditor or
debtor. Rule: respect jointness.
b. Rules not applicable where only one party for each side (EN:
badum tss)
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
there are creditors or debtors, the credits or debts being considered
distinct from one another, subject to the Rules of Court governing the
multiplicity of suits.
1.
Presumed Joint
a.
Debt divided into as many shares as there are creditors or
debtors;
b. Credits and debts shall be distinct from one another;
c.
But regarding the bringing of the action in court, the RoC
governing the multiplicity of suits will be followed.
i. Ordinarily one creditor may sue one of the debtors for
the latters share obligation.
ii. Aim of the RoC is to obtain a just, speedy and
inexpensive determination of every action or
proceeding, it would be much better to sue all the
necessary parties at the same time.
20
2.
d.
wed
regardless of opposite to contract. Notwithstanding, the righ
d act
t
2.
he
others
Insolvency of one does not make others responsible for his
share
c. Demand by the creditor on one joint debtor puts him in
b.
default,
d.
t of
3.
o
problem here)
c. Fulfillment requires the consent of all the debtors, although
each for his part. On the side of the creditors, collective acti
on
together.
If any one of the debtors does not comply, converted t
o
monetary obligation, damages to party at fault.
e.
Legal by law
Obligations and Contracts | Carloman Notes 2014 | Atty. San P
edro
21
1211. Solidarity may exist although the creditors and the debtors ma
y not
Any of the joint debtors be insolvent, the others shall not be
be bound in the same manner and by the same periods and condition
liable for his share
s.
i. Transformed to monetary (damages)
d. If joint creditors, delivery must be made to all, and not merely
1. Solidarity despite different terms or conditions
to one, unless that one be specifically authorized by the others.
a.
Uniform same stipulations and clauses
e.
Each joint creditor is allowed to renounce his proportionate
b. Otherwise liable for same prestations, nevertheless not
credit. Other creditors do not receive benefit of renunciation.
subject to same secondary stipulation and clauses
Benefit goes to debtors.
i. Solidarity is preserved since creditor has power, but
f.
Demand to one debtor does not affect others.
still limited by the conditions.
c.
ii.
1213. A solidary creditor cannot assign his rights without the consen
t of
the others.
1.
2.
1214. The debtor may pay any one of the solidary creditors; but if an
y
demand, judicial or extrajudicial, has been made by one of them, pay
ment
should be made to him.
1.
2.
1212. Each one of the solidary creditors may do whatever may be use
ful to
the others, but not anything which may be prejudicial to the latter.
1.
Beneficial act:
a.
Interrupt running of prescription by filing before the courts
2. Prejudicial act:
a.
Nonperformance
b. Condonation of one solidary creditor
extinguish obligation, except insofar as the payees sh
are is
concerned. (wrong San Pedro, but ignore him for BAR
)
b. Creditor making demand has cause of action, other cr
editors
cannot do anything since they are represented by the
creditor
who made the demand.
c. Specific creditor should demand first before suing, reg
ardless if
other creditors has already made demand. Note that t
his is
legally correct, but would result in an absurdity, hence,
they
should be allowed to sue to protect their interests as w
ell.
d. Non demanded debtor pays to demanding creditor
extinguishes the obligation and nullifies demand made
by
other creditor to other debtors.
c.
Extension is novation, Art. 1211 applies.
Compensation two persons, in their own right are creditors and
debtors of each other. May be total (automatic extinguishment) or
partial, depending upon the amount involved.
3. Confusion or merger characteristics of creditor and debtor are
merged in the same person.
The creditor who may have executed any of these acts, as well as he
4. Remission or waiver act of liberality whereby a creditor condone
who
s the
collects the debt, shall be liable to the others for the share in the
obligation of the debtor. May be total or partial. No reimbursement
obligation corresponding to them.
among debtors (if total remission) for it is a gratuitous act, but ther
e
is
1. Novation modifies the obligation, changing its object or principal
reimbursement among creditors. If partial, as if no remission in
conditions, or by substituting the person of the debtor, or by
viewpoint of other debtors.
rd
subrogating the person of the debtor or by subrogating a 3 perso
5.
Payment before remission (full) remission is useless because the
n in
re
the rights of the creditor.
was nothing more to remit. So there will still be reimbursement am
a.
Other debtors will give the complying debtor equal to the
ong
benefit received.
debtors.
b. Other creditors can obtain reimbursement.
2.
1216. The creditor may proceed against any one of the solidary debt
ors or
some or all of them simultaneously. The demand made against one o
f
them shall not be an obstacle to those which may be subsequently b
e
directed against the others, so long as the debt has not been fully
collected.
1.
rty to
2.
3.
4.
5.
which corresponds to each, with the interests for the payment already
made. If the payment is made before the debt is due, no interest for the
intervening period may be demanded.
When one of the solidary debtors cannot, because of insolvency,
EN:
reimburse his share to the debtor paying the obligation, such share shall
be borne by all his co-debtors, in proportion to the debt of each.
1.
2.
3.
If there was fault on the part of any one of them, all shall be res
4.
ncy
5.
1221. If the thing has been lost or if the prestation has become impo
ssible
without the fault of the solidary debtors, the obligation shall become
extinguished.
ponsible to
the creditor for the price and the payment of damages and inter
est,
without prejudice to their action against the guilty or negligent
debtor.
If though a fortuitous event, the thing is lost or the performance
has
become impossible after one of the solidary debtors has incurre
d in delay
through the judicial or extrajudicial demand upon him by the cre
ditor, the
provisions of the preceding paragraph shall apply.
1.
of
action against negligent or guilty debtor
b. w/o fault no liability
c. FE after default same as (a)
v.
vi.
vii.
3.
Classes/kinds of indivisibility
a.
Conventional agreement
b. Natural/absolute by nature of object
c. Legal provided by law
Kinds of division
4.
Notes:
a.
Minority, there can still be reimbursement up to the extent
of
1223. The divisibility or indivisibility of the things that are the object of
obligations in which there is only one debtor and only one creditor does
not alter or modify the provisions of Chapter 2 of this Title.
Divisible vs indivisible
a.
Divisible one capable of partial performance
b. Indivisible not capable of partial performance
hypnotic spell)
viii. There are vices of consent
Personal to the debtor sued. (generally a complete defens
your
1.
b.
b.
benefit.
Oano case
a.
Quantitative division same type divided in quantity
b. Qualitative division different types divided (quality)
c. Intellectual or moral co-ownership; only in the mind and not
real
1224. A joint indivisible obligation gives rise to indemnity for damages
from the time anyone of the debtors does not comply with his
undertaking. The debtors who may have been ready to fulfill their
promises shall not contribute to the indemnity beyond the corresponding
portion of the price of the thing or of the value of the service in which the
obligation consists.
1.
Effect
1.
2.
3.
of non-compliance
Converted into a monetary obligation
Joint debtor in BF obligation + damage
Joint debtor in GF share in monetary obligation only.
2.
3.
4.
Deemed indivisible
a.
To give definite things - specific car
b. Those not susceptible if partial performance orchestra
concert
c.
Provided by law
d. Intention of parties
Deemed divisible
a.
Execution of certain number of days of work 10 day work
b. Object is the accomplishment of work by metrical units
c.
Purpose of obligation is to pay in installments
d. Nature of obligation is susceptible of partial performance
character of prestation on negative obligations
Effect of illegality of a divisible contract
a.
If separable, the valid portion is upheld.
Notes:
a.
A contract to do several things at several times is divisible, and
24
Penal clause
a.
Coercive means to obtain from the debtor compliance fro
b.
e of
of
debtor.
An accessory undertaking to assume greater liability in cas
breach.
c. Attached to obligations in order to ensure performance and
substitute for damages and the payment of interest in case
non-compliance.
Kinds:
i. Legal by law
ii. Conventional - agreement
iii. Subsidiary only penalty may be asked
iv. Joint principal contract and penal clause can be
enforced
Compared to condition
a.
Condition is not an accessory, hence may become demand
d.
2.
able
s
never demandable.
3. GR: Penalty takes the place of indemnity for damages and th
e payment
of interest.
Exceptions:
a.
Express stipulation (interest + damages may still be r
ecovered
despite the presence of the penalty clause)
b. Debtor refuses to pay the penalty
c. Debtor is guilty of fraud or dolo in the fulfillment of the
obligation [ratio: no renunciation of future fraud] frau
d is
essential
4. Notes:
a.
Compounding of interest is prima facie penal clause
b. Court my reduce if iniquitous or unconscionable
c. GR 85161 read this
Obligations and Contracts | Carloman Notes 2014 | Atty. San P order that the penalty may be demanded.
edro
25
1.
1227. The debtor cannot exempt himself from the performance of the
ns
obligation by paying the penalty, save in the case where this right has be
in the obligation not as a mere security, it is a lawful means
en
for
expressly reserved for him. Neither can the creditor demand the
repairing losses and damages, and upon evidence of the
fulfillment of the obligation and the satisfaction of the penalty at the sam
violation of the conditions stipulated, the injured party is not
e
obliged to prove losses and damages suffered, nor the exte
time, unless this right has been clearly granted him. However, if after the
nt of
creditor has decided to require the fulfillment of the obligation, the
the same in order to demand the enforcement of the penal
performance thereof should become impossible without his fault, the
clause agreed upon.
penalty may be enforced.
1229. The judge shall equitably reduce the penalty when the principa
1. GR: Debtor cannot substitute penalty for the principal obligation
Exception: If such right has been expressly reserved (not implied)
2.
GR: Creditor cannot demand both fulfillment and the penalty at the
same time
Exception: If such right has been expressly granted
3.
Notes:
a.
Even if a lessee is ready to forfeit the improvements on the
estate, he may still be ousted from the premises for his having
violated the condition imposed upon him, namely, no
improvements without the permission of the lessor.
l
obligation has been partly or irregularly complied with by the debtor.
Even if there has been no performance, the penalty may also be redu
ced
by the courts if it is iniquitous or unconscionable.
1.
2.
n
The nullity of the principal obligation carries with it that of the p
3.
fit to
out
the aid of the debtor/obligor (Insular Government v.
Amachezurra)
b. This article does not apply to final and executory judgment
(Commercial Credit Corp. of Cagayan v CA)
1230. The nullity of the penal clause does not carry with it that of th
e
principal obligation.
enal
clause.
payment or performance;
the loss of the thing due;
the condonation or remission of the debt;
the confusion or merger of the rights of creditor and
compensation;
(6) By novation
Other causes of extinguishment of obligations, such as annulment,
rescission, fulfillment of a resolutory condition, and prescription, are
governed elsewhere in this Code.
1.
b.
c.
Remission
d. Mutual dissent (disenso)
e.
Compromise
2. Simultaneous with creation of obligation
a.
Resolutory term/extinctive period
b. Resolutory condition/conditions
subsequent
Involuntary causes:
i. Failure to bring action Ex. Prescription
ii. Resolutory condition or condition subsequent
Ex:
1.
2.
3.
iii.
Merger or confusion
Death for personal oblgiations
Change in civil status obligations due to
family relations
Reason of the object:
1. Impossibility
2. Loss of thing due
b.
2.
y in
b.
g or
things
c. If the debt is the doing of a personal undertaking, by the
performance of said personal undertaking
d. If the debt is not doing something, by refraining from doing
the
action
Burden of proof
a.
Creditor has burden to prove existence of debt
b. Debtor has burden of proving that he has paid the debt
c. Art. 1176 should be used to determine primary
presumptions
3.
Notes:
a.
Article affords just compensation relative to the breach
committed by the obligor.
b. No right to rescind, since the article assumes that substant
ial
performance in good faith is already equivalent to fulfillmen
t
or payment.
c. Article focuses on slight breaches.
1235. When the obligee accepts the performance, knowing its
incompleteness or irregularity, and without expressing any protest o
r
objection, the obligation is deemed fully complied with.
1.
2.
debtor.
Accept defined:
a.
To take a satisfactory or sufficient, or agree to an inco
mplete or
irregular performance
b. Mere receipt is not equivalent to acceptance of perfor
mance
and would not extinguish the whole obligation
3.
c.
Whoever pays for another may demand from the debtor what he has paid
BF
Instances where recovery from creditor may be availed:
i. Prescribed
ii. Completely remitted
iii. Paid
iv. Compensation has been affected
,
1237. Whoever pays on behalf of the debtor without the knowledge
except that if he paid without the knowledge or against the will of the
debtor, he can recover only insofar as the payment has been beneficial to or
against the will of the latter, cannot compel the creditor to subrogat
the debtor.
e him
1. Creditor can refuse payment by a stranger, EXCEPT:
in his rights, such as those arising from mortgage, guaranty, or pena
a.
Stipulation
lty.
b. 3rd person has an interest in the fulfillment of the obligation
1. Subrogation
i. Co-debtor
a.
Act of enabling the former to exercise all the rights and act
ii. Guarantor
ions
iii. Joint debtor
that could have been exercised by the latter.
2. Ratio why creditor must not be compelled to receive payment from
b.
This is actually the reason why a stranger would volunteer
stranger
to
a.
Personal choice should be respected
pay in behalf of the debtor.
3. Payment by a 3rd person
c.
Rights exercised are those arising from:
a.
With knowledge and consent of debtor payor is entitled to
i. Mortgage ;
reimbursement; subrogation
ii.
Guaranty; or
b. Without knowledge or against his will payer is not entitled to
iii.
Execution of penalty (via penal clause)
subrogation; only allowed beneficial reimbursement from
a.
2.
there
is none;
b. In subrogation original debt is extinguished, but gives rise
to
new creditor with the same rights. In reimbursement the ne
w
creditor has different rights.
c. Reimbursement is limited to a personal action of recovery,
in
dissent
ng such
information; DEEMED CONSENT, (EN: supported by Art.
1302)
1238. Payment made by a third person who does not intend to b
e
reimbursed by the debtor is deemed to be a donation, which req
uires the
debtors consent. But the payment is in any case valid as to the
creditor
who has accepted it.
1.
t
3.
of
a.
b.
GR:
i. Invalid if accepted
ii. Creditor cannot be compelled to accept
iii. Remedy of consignation would not be proper
)
Exception:
i. 1427: when a minor between 18 and 21 (EN: old la
1.
b.
c.
w),
who entered into a contract without the consent of t
2.
he
Successor-in-interest (heirs)
Authorized to receive it (agreement or law)
i. Received without authority (GR: void)
Notes:
a.
Vales in the hands of the creditor constitute presumption o
nonpayment, in the hands of the debtor, presumption of
payment.
b. Payment made to entities authorized by an occupation
government of debts in favor of enemy persons and
corporations is valid. (Haw Pia v CHB)
c.
Payment to a wrong party in good faith, debt is not
extinguished. Hence, interest will still continue to run.
d. Consignment instead of payment will not extinguish obliga
tion,
unless creditor could not be located. No mora solvendi.
1241. Payment to a person who is incapacitated to administer his
property shall be valid if he has kept the thing delivered, or insofar a
s the
payment has been beneficial to him.
Payment made to a third person shall also be valid insofar as it has
redounded to the benefit of the creditor. Such benefit to the creditor
need
not be proved in the following cases:
1.
3.
at
the third person had authority to receive the payment.
1.
2.
3.
xtent
of benefit.
Exception: When benefit is presumed:
a.
injunction
4.
a.
3rd person acquires creditors rights
b. Creditor ratifies payment
c. Creditors conduct, the debtor has been led to make the
payment (estoppel)
Notes:
a.
Burden in proving is on the person who made the payment
.
ved.
b.
3.
who
attached the property does not constitute good faith
(Panganiban v. Cuevas)
1243. Payment made to the creditor by the debtor after the latter ha
s been
judicially ordered to retain the debt shall not be valid.
1.
2.
3.
that
or garnishment
Garnishment
a.
Debtor of a debtor is ordered not to pay the latter so
b.
and the
means of
citation required of him to pay his debt, not his former
creditor, but to the new creditor, who is the creditor of
the
main litigation. (Tayabas Land Co. v. Charruf)
a
t
r
t
m
d
m
e
o
e
or
Interpleader:
a.
Where conflicting claims upon the same subject matter are or
may be made against a person who claims no interest
st
whatever in the subject matter, or an interest which in whole
be given to the clerk, sheriff or other proper officer of the c
or in part is not disputed by the claimants, he may bring an
ourt
action against the conflicting claimants to compel them to
(Sec.8 Rule 57 of RROC)
interplead and litigate their several claims among themselves.
b. A 1244. The debtor of a thing cannot compel the creditor to receive a
Sale
Dation
nd B bo different one, although the latter may be of the same value as, or mo
h have re
No pre-existing credit
Pre-existing credit
eceipts valuable than that which is due.
Gives rise to an obligation
Extinguishes an obligation
o claim
erchan In obligations to do or not to do, an act or forbearance cannot be
Cause or consideration is the PRIC
Cause or consideration
ise fro substituted by another act or forbearance against the obligees will.
EXTINGUISHMENT OF DEBT
E
C. C fil
1. Also applicable to personal positive/negative obligations.
(debtor); or OBJECT (creditor)
(seller); or OBJECT (buyer)
s
a.
In obligations to do or not to do, an act or forbearance can
Greater freedom in price
Lesser freedom in price
an acti not
determination
determination
n to int
be substituted by another act or forbearance against the
rplead
obligees will. Of course, if the obligee consents, this is all ri
litigate amongst themselves for their
ght.
conflicting rights. Court then issues an order prohibiting
2. 1244 does not apply:
payment. Any payment/delivery made by C will be invalid
a.
Facultative obligations;
tantamount to BF.
b. Another agreement resulting in either:
5. Injunction:
i. Dation in payment
a.
A judicial order to refrain from doing something. invalid
ii. Novation
payment if injunction is granted.
c.
Waiver by the creditor (express or implied)
6. Notes:
a.
When garnishment proceedings are subsequently dropped, but
Dation in payment
a.
Mode of extinguishing an obligation whereby the debtor
alienates in favor of the creditor, property for the satisfaction
of monetary debt.
b. Synonyms:
i. Datio in solutom
ii. Adjudication en pago
c. Governed by law on sales
i. In substance it is a sale
ii. Creditor is really buying some property of the debtor,
payment for which is to be charged against the
iii.
2.
3.
debtors debt.
Also a form of novation
GR: Debtor pays extrajudicial expenses. (by law. Ratio: since debtor
primarily benefits since his obligation is extinguished)
Exception: Stipulation to the contrary.
2.
Notes:
a.
Judicial costs are governed by ROC Rule 142.
30
However, when the debt is in part liquidated and in part unliquidated, the
creditor may demand and the debtor may effect the payment of the former
without waiting for the liquidation of the latter.
1.
Stipulation;
Different prestations are subject to different conditions or
different terms (installment);
1.
c. Debt is in part liquidated and in part unliquidated,
performance of the liquidated may be insisted upon either b
2.
mised
as to whole obligation)
e. Solidary debtor pays only the part demandable because the
rest are not yet demandable on account of their being subje
ct
to different terms and conditions;
In case of compensation, when one debt is larger than the
other, a balance is left.
g.
When work is to be done by parts.
f.
me
t
Legal tender
a.
That which a debtor may compel a creditor to accept i
s fault
ii.
iii.
ut
because of the exercise of the right of conventio
nal
3.
redemption
Notes:
a.
Ask if you still need to study the Japanese Rules for BA
R
purposes.
Obligations and Contracts | Carloman Notes 2014 | Atty. San P There being no express stipulation and if the undertaking is to delive
edro
31
ra
determinate thing, the payment shall be made wherever the thing mi
1250. In case an extraordinary inflation or deflation of the currency
ght
stipulated should supervene, the value of the currency at the time of the
be at the moment the obligation was constituted.
establishment of the obligation shall be the basis of payment, unless ther
In any other case the place of payment shall be the domicile of the d
e
is an agreement to the contrary.
ebtor.
1. Inflation
If the debtor changes his domicile in bad faith or after he has incurre
a.
Sharp sudden increase of money or credit or both without a
corresponding increase in business transaction. Since the value d in
of money here tends to decrease, the natural result is an
delay, the additional expenses shall be borne by him.
increase in the price of goods and services.
These provisions are without prejudice to venue under the Rules of C
b. Deflation is opposite
ourt.
c.
Extraordinary when decrease or increase is unusual and
beyond the contemplation of the parties at the time of the
1. Where payment must be made:
establishment of the obligation
a.
Stipulation place designated
2. Notes:
b.
No
stipulation:
a.
1250 applies only to cases where a contract or agreement is
i.
Deliver determinate thing
involved. Does not apply to obligations to pay which arise from
1. Place where thing usually or habitually
law. (eminent domain) [Commissioner of Public Highways v.
located at the time the obligation was
Hon. Burgos]
constituted.
b. Insert here the requisites of extraordinary inflation
2. If merely temporary, domicile of the debtor.
1251. Payment shall be made in the place designated in the obligation.
ii. Any other thing (generic, money, personal)
1. Domicile of the debtor
the payment is made, the former cannot complain of the same,
unless
there is a cause for invalidating the contract.
SUBSECTION 1: APPLICATION OF PAYMENTS
1. Special forms of payment:
a.
Application
1252. He who has various debts of the same kind in favor of one and
b. Dation
c. Cession
the
d. Tender of payment and consignation
same creditor, may declare at the time of making the payment, to wh
2. Application of payments:
ich of
a.
Defined the designation of the debt to which should
them the same must be applied. Unless the parties so stipulate, or w
be
hen
applied a payment made by a debtor who owes severa
the application of payment is made by the party for whose benefit th
l debts in
e
favor of the same creditor.
term has been constituted, application shall not be made as to debts
b. Requisites:
which
i. 2 or more debts
are not yet due.
ii. Debts must be of the same kind
iii. Debts are owned by the same debtor in favor o
If the debtor accepts from the creditor a receipt in which an applicati
f the
on of
same creditor (i.e. 1 debtor and 1 creditor)
iv.
efit
of the terms is given to the person making the
application, unless contrary is stipulated
v. Payment is not enough to extinguish all the debts.
c. When debts are not yet due
i. GR: no application of payments under 1252
Exception:
d.
(1) Stipulation
(2) Application is made by the party for whose
benefit the term has been constituted
Debtors preferential right:
i. GR: Debtor has right to select which of his debts he
How made:
i. Debtor makes designation
ii. If not, creditor makes it, by stating in the receipt he
is
issuing
If neither the debtor nor the creditor has made the
application, or if the application is not valid, then
application is made by operation of law. (onerousity)
When made
i. At the time when payment by the debtor is made, n
iii.
f.
is
paying.
Exception:
1. Agreement
ot
g.
3.
Notes:
a.
If the debtor makes a proper application and the creditor
refuses mora accipliendi
b. If obligation is void, application of payment is void
c.
If debtors consent in accepting the receipt was vitiated (fr
aud,
d.
e.
d
en if
ed.
f.
to
ed
the right of choice.
1253. If the debt produces interest, payment of the principal shall no
t be
deemed to have been made until the interests have been covered.
Dacion
Cession
1254. When payment cannot be applied in accordance with the preceding
Affects all properties of debtor
rules, or if application cannot be inferred from other circumstances, the Does not affect all properties
debt which is most onerous to the debtor, among those due, shall be
Does not require plurality of creditorRequires more than one creditor
deemed to have been satisfied.
s
Only specific creditors consent is Requires consent of all creditors
If the debts due are of the same nature and burden, the payment shall be required
applied to all of them proportionately.
May take place during solvency
Requires full or partial insolvency
1. Rules when no application of payment made
Transfers ownership upon delivery Does not transfer ownership
a.
Most onerous; in case the due and demandable debts are of
different natures
Extinguishes obligation
Extinguishment up to extent of
b. Pro rata; if same in nature and burden (different from equal)
proceeds
1255. The debtor may cede or assign his property to his creditors in
payment of his debts. This cession, unless there is stipulation to the
contrary, shall only release the debtor from responsibility for the net
proceeds of the thing assigned. T
Tender
t of the
cession, are made between the de
Antecedent; preparatory act of
rned
consignation
by special laws.
May be extrajudicial
Judicial
1. Kinds
a.
must
2.
agree
b. Voluntary 1255
Requisites
a.
More than 1 debt
b. More than 1 creditor
c. Complete or partial insolvency
d. Abandonment of all debtors property not exempt from
execution, unless waived in favor of creditors
e. Acceptance or consent on the part of the creditors; cannot be
Legal governed by I
1.
Consignation
33
2.
Consignation
a.
Act of depositing the thing due with the court or judicial
authorities whenever the creditor cannot accept or refuses to
accept payment
3.
1256. If the creditor to whom tender of payment has been made refu
ses
without just cause to accept it, the debtor shall be released from
responsibility by the consignation of the thing or sum due.
Consignation alone shall produce the same effect in the following cas
egal
3.
f
a.
b.
es:
(1) When the creditor is absent or unknown, or does not appear
at the
(2)
s due;
(3)
(4)
(5)
1.
2.
place of payment;
When he is incapacitated to receive the payment the time it i
When, without just cause, he refuses to give a receipt;
When two or more persons claim the same right to collect;
When the title of the obligation has been lost.
Invalid payment, creditors refusal is justified. To be valid:
a.
Made in legal tender (lawful currency)
i. Fusion of intent, ability and capability to make good
each offer, which must be absolute and cover the
amount due.
ii. Valid defense: Estoppel
b. It must include whatever interest is due.
c. Unconditional. Unless, if made with conditions, and creditor
has accepted without protest. (estoppel)
d. Obligation must already be due.
Interest
b.
has
accepted)
c. Refusal without just cause
d. Two or more persons claim the same right to collect (
action of
b. Requires
prior tender
of
interpleader
is proper)
payment
e. Title of the obligation is lost (written title)
f. Prior notice of non-acceptance
4. Notes:
a.
Tender without consignation does not extinguish the
debt.
b. Tender of payment must be accompanied by the tend
er of
accrued interest. Otherwise tender is invalid.
c. Tender is not required when there really exists no oblig
ation,
hence, payment is purely voluntary, that is, the person
offering,
b.
c.
at his option, could have refused the offer. May happen in case
of Options where only a right, not a duty, exists.
d. Consignation is not required to preserve right of redemption,
tender. Tender only sufficient to compel redemption but is not
in itself payment.
1257. In order that the consignation of the thing due may release the
obligor, it must first be announced to the persons interested in the
fulfillment of the obligation.
The consignation shall be ineffectual if it is not made strictly in
consonance with the provisions which regulate payment.
1.
Requisites of consignation:
a.
Existence of valid debt which is due
i. Not an option, legal/conventional redemption or any
form of privilege, must be an obligation
ii. Invalid debt:
1. Prescribed
2. Illegal cause or consideration
3. Null and void
4. Unfulfilled condition
iii.
sale
4. Consignor can also be assigned as receiver i
n
case of real property
e. Subsequent notice of consignation
i. In compliance with 1258, on notice to interested
parties
ii. Exempt if amount due is a consequence of a final
judgment
1258. Consignation shall be made by depositing the things due at th
e
d.
nce
ii.
ss
tender is excused
disposal of judicial authority, before whom the tender of paymen
t shall be
proved, in a proper case, and the announcement of the consigna
tion in
other cases.
The consignation having been made, the interested parties shall
also be
notified thereof.
1259. The expenses of consignation, when properly made, shall
be
charged against the creditor.
1. Reason: creditors fault for non-acceptance
2. Expenses preservation, warehousing of the goods pending l
itigation.
1260. Once the consignation has been duly made, the debtor ma
y ask the
judge to order the cancellation of the obligation.
2.
3.
c.
Same as dismissal of case
d. Same as waiver
Debtor may withdraw thing consigned
a.
As a matter of right
i. Before acceptance of creditor
ii. Before judicial declaration
iii. Since ownership is still with debtor
b. As a matter of privilege
i. When there is proper consignation and creditor give
s
authority for debtor to withdraw
1261. If, the consignation having been made, the creditor should aut
horize
the debtor to withdraw the same, he shall lose every preference whic
h he
may have over the thing. The co-debtors, guarantors and sureties
shall be
released.
1.
2.
Loss
a.
b.
c.
d.
e generic
1262. An obligation which consists in the delivery of a determinate t
hing
shall be extinguished if it should be lost or destroyed without the fa
ult of
the debtor, and before he has incurred in delay.
When by law or stipulation, the obligor is liable even for fortuitous e
vents,
the loss of the thing does not extinguish the obligation, and he shall
be
responsible for damages. The same rule applies when the nature of t
he
obligation requires the assumption of risk.
1.
2.
Obligation to give
a.
Generic not extinguished by loss or FE
b. Specific
i. GR: obligation is extinguished
Exception:
1. Debtor is at fault
2. Liable even if FE
a.
Provision of law
i. Debtor promised to deliver
the same thing to two or
more persons who do not
have the same interest
ii. Obligation from crimes
iii. Borrower has lent the thing
to another who is not a
member of his own
household
iv. When the thing loaned has
been delivered with
appraisal of the value
v. Payee in solutio indebiti is in
BF
b. Stipulation
c. Nature of the obligation requires the
assumption of risk on the part of the
debtor.
Notes:
a.
Mortgaged property is lost, the mortgagor being the owner
of it
bears the loss. Owner still liable to pay the debt, since this
b.
etary
in character.
Obligation to deliver thing is extinguished, but a mon
obligation for damages is created.
1.
proved as accidental.
1263. In an obligation to deliver a generic thing, the loss or destruction o
f
1266. The debtor in obligations to do shall also be released when the
anything of the same kind does not extinguish the obligation.
prestation becomes legally or physically impossible without the fault
of
1. GR: Genus non quam perit.
the obligor.
Exemption:
a.
b.
2.
1.
2.
n.
b.
c.
1264. The courts shall determine whether, under the circumstances, the
partial loss of the object of the obligation is so important as to extinguish
an
the obligation.
1265. Whenever the thing is lost in the possession of the debtor, it shall
be
presumed that the loss was due to his fault, unless there is proof to the nd
contrary, and without prejudice to the provisions of Article 1165. This
presumption does not apply in case of earthquake, flood, storm, or other
natural calamity.
e
2.
4.
1267. When the service has become so difficult as to be manifestly b
nifestly
eyond
the contemplation of the parties, the obligor may also be released
therefrom, in whole or in part.
l be
1.
2.
3.
Moral impossibility
a.
Due to change in circumstances/conditions
Rebus sic stantibus
a.
A treaty or agreement remains valid only if the same
conditions prevailing at the time of contracting continue to
exist at the time of performance.
b. Also doctrine of the frustration of the commercial object ,
frustration of enterprise
c. Not apply to real obligations
Non-applicability to real obligations
a.
The article speaks of service personal obligation
b. Real obligations are not included within its scope.
Notes:
a.
When the service has become so difficult as to be ma
beyond the contemplation of the parties, the court shal
authorized to release the obligor in whole or in part. Th
e
intention of the parties should govern and if it appears
that the
service turns out to be so difficult as to have been bey
ond their
b.
m his
bad bargain.
1268. When the debt of a thing certain and determinate proceeds fro an Pedro
37
ma
a.
Since obligation to give is already extinguished, the credit
criminal offense, the debtor shall not be exempted from the payment
ors
of its
obligation subsists, hence, the debtors right of action for
price, whatever may be the cause for the loss, unless the thing havin
remedies due to the loss is transferred to the creditor.
g been
2.
Notes:
offered by him to the person who should receive it, the latter refuse
a.
Includes insurance indemnities as a right transferred.
d
without justification to accept it.
1.
Notes:
SECTION 3: CONDONATIN OR REMISSION OF THE DEBT
a.
2 options if creditor refuses acceptance
i. Consign extinguishes obligation once consignation
is
1270. Condonation or remission is essentially gratuitous, and require
judicially approved or accepted
ii. Keep not liable for FE, but requires ordinary diligen s the
ce
acceptance by the obligor. It may be made expressly or impliedly.
in taking care of thing
One and the other kinds shall be subject to the rules which govern
1269. The obligation having been extinguished by the loss of the thi inofficious donations. Express condonation shall, furthermore, compl
y
ng, the
creditor shall have all the rights of action which the debtor may have with the forms of donation.
against third persons by reason of the loss.
1. Requisites:
a.
Agreement, since acceptance is required.
1. Transfer of the rights of action from debtor to creditor in case of lo
b. Capacity and consent, court cannot condone interest unles
ss
s
creditor consents.
c.
Existing subject matter
d. Consideration must be Liberality (not love), if not liberality,
its
going to be dation, novation or compromise.
e.
Obligation must be due and demandable
f.
Not be inofficious, so that it wont be reducible, so that the
legitimes of the compulsory heirs would not be impaired.
g.
Formalities of a donation are required in the case of an ex
press
remission
2. Classes:
a.
To effect or extent:
i. Total
ii. Partial
b. Date of effectivity
i. Inter vivos
ii. Mortis causa must have the formalities of a will an
d
the will must be probated.
c.
Form:
i. Implied or tacit conduct is sufficient
ii. Express or formal requires formalities of a donation
inter vivos; of a will or codicil if mortis causa
3.
4.
Gratuitous
a.
If not totally gratuitous compromise
Effect of non-acceptance by debtor
2.
7.
a.
No remission
b. But may still be extinguished by prescription
What it includes
a.
Only what is stated in the agreement
b. Not applicable to other properties as well as future propert
ies
(in case of H&W), property relations subsist
1271. The delivery of a private document evidencing a credit, made
voluntarily by the creditor to the debtor, implies the renunciation of t
he
action which the former has against the latter.
If in order to nullify this waiver it should be claimed to be inofficious,
the
debtor and his heirs may uphold it by proving that the delivery of th
e
document was made in virtue of the payment of the debt.
1.
2.
ts
b.
n
1272. Whenever the private document in which the debt appears is f
ound
in the possession of the debtor, it shall be presumed that the credito
r
delivered it voluntarily, unless the contrary is proved.
1.
3.
3.
Remission of pledge
a.
Accessory obligation of pledge is presumed remitted
b. Principal obligation of loan remains
c.
Presumption is disputable (theft, repairs, etc)
d. 3rd person in possession must be owner of the thing to create
the presumption.
4.
es
extinguish
5.
Defined
a.
Meeting in one person of the qualities of creditor and debtor
with respect to the same obligation
Basis
a.
Absurdity
Requisites
a.
Take place between principal debtor and creditor.
i. If confusion of the creditor with the guarantor, no
extinguishment of principal obligation, only the
accessory (guaranty) is extinguished.
b. Clear and definite merger
c.
Obligation involved must be the same or identical
Effect of transfer of rights only
a.
Mere transfer to a third person of rights belonging to both
debtor and creditor but not the credit as against the debt do
6.
7.
8.
SECTION 5: COMPENSATION
b.
1276. Merger which takes place in the person of the principal debtor
or
creditor benefits the guarantors. Confusion which takes place in the
person of any of the latter does not extinguish the obligation.
1.
2.
3.
ng
2.
Defined
a.
The extinguishment in the concurrent amount of the
obligations of those persons who are reciprocally debto
3.
n
Use
a.
b.
ion
4.
6.
er
ual
of qualities of creditor and debtor
ii. Compensation there must be two persons who are
mutually creditor and debtor of each other.
b. As to number of obligations:
i. Confusion only 1
ii. Compensation must be 2
5. Distinguished from counter-claim or set-off (judicial
e
compensation)
a.
SO must be pleaded to take effect. C Operation of law.
Kinds of compensation
a.
According to effect or extent:
i. Total complete extinguishment due to same or eq
amounts
Partial a balance remains, one is larger than the
other.
According to origin or cause
i. Legal operation of law, need not be pleaded
ii. Voluntary or conventional due to agreement of th
ii.
b.
iii.
4.
e
b.
c.
of lawsuit.
Between intermediary and a principal party.
sult
a.
b.
es
2.
3.
Affirmative requisites
a.
1,2,3 and 4
Negative requisite (5)
a.
Over neither of the debts must there be any retention or
controversy commenced by third persons and communicat
ed
in due time to the debtor. No compensation is claim is subje
ct
to court litigation.
i. Compensation is suspended during court litigation.
b. No waiver of the compensation
c. Not prohibited by law.
i. Debts arising from a deposit (except bank deposits,
considered as loans to the bank)
ii. Debts arising from obligations of a depositary
iii. Debts arising from the obligations of a bailee in
commodatum (borrowing, returning the same w/o
charge)
iv. Debts arising from future support due to gratuitous
title
v. Debts consisting of civil liability arising from a penal
offense.
vi. Damages suffered by a partnership thru the fault of
partner cannot be compensated with profits and
benefits which he may have earned for the partners
hip
4.
5.
d as
such).
Requisites in 1279.
Operation of law, hence, compensation exists even if parti
c.
6.
of
period if debts are not due yet.
Obligations and Contracts | Carloman Notes 2014 | Atty. San P are not yet due.
edro
40
1. Conventional or voluntary compensation
7.
a.
b.
o be
1283. If one of the parties to a suit over an obligation has a claim for
damages against the other, the former may set it off by proving his ri
1280. Notwithstanding the provisions of the preceding article, the
ght to
guarantor may set up compensation as regards what the creditor may ow said damages and the amount thereof.
e
1. Judicial compensation
the principal debtor.
a.
Pleading and proof must be made
1. Guarantor may set-up compensation with respect to principal debt
b. All requisites of 1279 must be present, except that at the t
a.
Exception to 1279, since guarantor is not a principal, only a
ime
subsidiary.
of pleading, the claim need not yet be liquidated.
b. Subsidiary party can setup compensation to the extent of the
c.
Court can only act when there is proof and pleading,
relative obligations between the principal, hence, liable only
supplicatory nature of civil procedure.
for the excess.
d. Compensation takes place by judgment
c.
Principal cannot setup compensation using the rights of
1284. When one or both debts are rescissible or voidable, they may
subsidiary. This is solely the right of the subsidiary.
1281. Compensation may be total or partial. When the two debts are of th be
compensated against each other before they are judicially rescinded
e
or
same amount, there is a total compensation.
avoided.
Art. 1282. The parties may agree upon the compensation of debts which
2.
Art. 1285. The debtor who has consented to the assignment of rights
made
by a creditor in favor of a third person, cannot set up against the ass
ignee
the compensation which would pertain to him against the assignor, u
nless
the assignor was notified by the debtor at the time he gave his cons
ent,
that he reserved his right to the compensation.
If the creditor communicated the cession to him but the debtor did n
ot
b.
debtor,
such consent operates as a waiver of the rights of
compensation.
c. Exception to exception: Right to compensation was
reserved
2.
e,
by debtor.
1286. Compensation takes place by operation of law, even though th
Cases covered
e
a.
Assignment made with consent
debts may be payable at different places, but there shall be an inde
i. No compensation due to waiver (retoracts)
mnity
ii. Except if reserved upon consent (applies whether
for expenses of exchange or transportation to the place of payment.
consent to cession was before or after compensation
1. If different places, whoever claims compensation shall pay for exc
b. Assignment may be made with the knowledge but without
hange
consent or against the will of debtor
(monetary) or transportation (goods) costs.
i. Consent of debtor immaterial if debts have not
matured yet, provided that there is knowledge. Henc 1287. Compensation shall not be proper when one of the debts arise
s from
can be assigned.
Compensation can be setup if assignment made aft a depositum or from the obligations of a depository or of a bailee in
commodatum.
maturity and without consent.
Neither can compensation be set up against a creditor who has claim
c. Assignment made without knowledge of debtor.
for
i. Can setup compensation for all debts prior to
support due by gratuitous title, without prejudice to the provisions o
knowledge of assignment.
f
Purpose
paragraph 2 of Article 301.
a.
Prevent fraudulent deprivation of the benefits
ii.
er
3.
1.
but
a loan)
i. To prevent breach of trust and confidence
ii. Depositary cannot claim compensation, however
depositor can do so.
b. When one debt arises from the obligations of a depositary
i. Same as above, depositor has power to claim
c.
When one debt arises from the obligations of a bailee in
commodatum
i. To prevent breach of trust and confidence
ii. Lender may claim compensation, borrower cannot.
d. When one debt arises because of a claim for support due t
o
gratuitous title
i. Support in arrears can be compensated but not futu
re
2.
support
Obligations of a depositary
a.
Obliged to keep the thing safely and to return it.
b. Unless there is a stipulation to the contrary, the depositary
c.
the
3.
Notes:
a.
Bank can effect compensation for deposit vs. loan, since
relationships are both loan transactions. Hence, debtor and
creditor relationship exists.
SECTION 6: NOVATION
1291. Obligations may be modified by:
(1)
(2)
(3)
1.
creditor.
Principal conditions
a.
Include a change in the period to comply with the
obligation
(partial, since affecting only performance and not t
he creation
of the obligation)
2.
4.
Purpose
a.
Extinguishes old and creates a new one
b. Novate (extinguish) or modify (relative extinguishment),
depends on nature of change or intent of parties
Kinds:
a.
According to object or purpose
i. Real or objective change object or principal
condition
ii. Personal or subjective change of persons
1. Substituting Debtor
a.
Expromision
b. Delegacion
2. Subrogating Creditor
a.
Conventional
b. Legal
iii. Mixed
b. According to from of constitution
i. Express
ii. Implied two obligations are essentially incompatible
with each other
c.
According to its extent or effect
i. Total or extinctive old is completely extinguished,
i.
ii.
iii.
6.
d,
In
5.
crime because the parties, a short time after the delivery of the
check, changed the original trust relation into an ordinary
creditor-debtor situation. Hence, the novation of the contract
took place long before the filing of the criminal complaint.
(Gonzales v. Serrano)
6.
Note:
a.
Subscriber for a stock of a proposed corporation is relieved of
debtor
Personal/subjective novation
a.
Change in debtor (passive)
i. Expromission initiative comes from the 3rd person
(old debtors consent not essential)
ii. Delelgacion - initiative comes from debtor (all 3 mu
st
b.
2.
e or
agree)
Change in creditor (active)
Expromission
a.
Initiative comes from 3rd person
b. Old debtor is released entirely, regardless of his knowledg
consent. There should be an agreement to this.
c. Requisites:
i. Initiative coming from 3rd person
ii. New debtor and creditor must consent
1. Old debtor must be excused/released from h
is
obligation
Delegacion
a.
Initiative coming from old debtor
b. Old debtor must be released, new debtor as principal
not as an agent
c. Requisites:
i. Initiative from old debtor
ii. All parties consent
1. Creditors consent may be expressed o
2.
implied
Creditors timing of consent not materi
al, may
be before or after new debtor gave cons
ent
d.
against
ii.
the will
Subrogation w/ knowledge or consent
b.
c.
for
obligation
1294. If the substitution is without the knowledge or against the will of th
d. New debtor merely agreed to make himself jointly liable.
e
Delegation only affects the proportionate share
debtor, the new debtors insolvency or non-fulfillment of the obligation
1296. When the principal obligation is extinguished in consequence
shall not give rise to any liability on the part of the original debtor.
1.
of a
novation, accessory obligations may subsist only insofar as they may
benefit third persons who did not give their consent.
1297. If the new obligation is void, the original one shall subsist, unless
the parties intended that the former relation should be extinguished in
any event.
1.
4.
5.
Old obligation is void new one is also void, nothing more to novate
Old obligation is voidable and not annulled
a.
Valid if annulment may be claimed by debtor.
b. Valid if ratified
Old obligation extinguished by loss
a.
May be novated if loss made the debtor liable, since an
obligation still exists.
b. If novation absolves liability, no more novation possible.
Prescribed obligations
a.
May be novated. Unless, prescription is setup by debtor.
b. Failure to setup prescription amounts to a waiver.
c. The prescribed debt now constitutes a natural obligation and
may be the cause or consideration of a new obligation.
Voidable novated via expromission
a.
Old debtor still released
b. If new debtor sues for beneficial reimbursement, old debtor
can set up defenses constituting voidability of old obligation.
Conditions attached to old obligation are also attached to the new one
unless there is stipulation to the contrary.
2. If condition is not fulfilled, the old obligation did not arise, hence there
was nothing to novate.
45
3.
presumed (1302)
Conventional subrogation must be established
Conventional/voluntary subrogation
a.
Consent of all parties required
b. Generally, debtor loses the right to present against new
creditor any defense which he, the debtor, could have set up
against the old creditor
a.
on, new
2.
a sort
of subrogation, with the account being continued in the name of th
e
Effect of subrogation
ed
1304. A creditor, to whom partial payment has been made, may
exercise
his right for the remainder, and he shall be preferred to the pers
on who
has been subrogated in his place in virtue of the partial paymen
t of the
same credit.
1.
Partial subrogation
a.
2 creditors
i. Old creditor as to the balance due to partial
payment
ii. New creditor to the balance of excess
iii. Old creditor has preference in case of insolven
cy.
Preference is only on the assets remaining with
the
debtor not those already transferred to others (
Molina
v. Somes). Old must assert preference over the
assets
only while they are still in the hands of the sher
iff who
has levied on the properties, cannot be done aft
er that.
3.
TITLE 2: CONTRACTS
CHAPTER 1: GENERAL PROVISIONS
1305. A contract is a meeting of minds between two persons whereby on
e
binds himself, with respect to the other, to give something or to render
some service.
1.
2.
ii. Interest
iii. Place of payment/performance
Classification
a.
According to perfection or formation
i. Consensual perfected by mere consent (sale)
ii. Real perfected by delivery (pledge, deposit,
commodatum)
iii. Formal/solemn special formalities are essential
before perfection (donation inter vivos requires it to
be in public instrument)
b. According to cause or equivalence of prestation value
i. Onerous exchange of equal values
ii. Gratuitous/lucrative free, no equivalent is received
by one party except Liberality.
iii. Remunerative prestation is given for a benefit or
service that had been previously rendered
c.
According to importance or dependence of one upon anot
her
i.
ii.
i.
to
return)
Bilateral/synalagmatic both parties are required to
render reciprocal prestations (sale)
e. According to name/designation
i. Nominate given a particular special name (sales,
agency, deposit)
ii. Innominate not given special name (do ut des)
f. According to risk of fulfillment
i. Commutative real fulfillment is contemplated (sal
ii.
of
credit)
iii. Involving services (agency, lease)
i. According to obligations imposed
i. Ordinary (sale)
ii. Institutional (marriage)
j. According to evidence required for proof
i. Oral or parol evidence
ii. Written proof (statute of frauds)
k.
According to number of persons
i. Ordinary different persons (sale)
ii. Auto-contracts when one person represents
e)
ii.
g.
d
for)
two
opposite parties but in different capacities (age
nt,
principal is seller and he himself buys). As a rul
e, agent
4.
Preparation/Conception/Generacion/negotiation parties a
re
progressing with their negotiations; they have not yet arrive
d
at any definite agreement, although there may have been a
preliminary offer and bargaining.
b. Perfection/Birth parties came to a definite agreement,
elements have been accepted by mutual consent
c.
Consummation/Death/Termination terms of the contract
are
5.
6.
no
performed.
Characteristics
a.
Freedom to stipulate not contrary to 1306
b. Obligatory force and compliance in food faith (1159, 1315)
c.
Perfection by mere consent Consensuality (1315)
d. Binds both parties (1308)
e.
Relative (binds parties, heirs and assigns) (1311)
Notes:
a.
Death prior to the time of perfection dissolves contract.
b. Bank deposits are not deposits but loans (mutuum). (Serra
c.
v. CB)
Extension of expiry date does not extend delivery date, he
nce
no waiver.
Contracts of adhesion interpreted against the party who
drafted it.
e.
Oral contracts are valid, except when the law requires ano
d.
ther
f.
Limitations on stipulations
a.
Law
i. Only for mandatory and prohibitive laws
ii. Directory and suppletory laws need not be complied
with since they are discretionary
iii.
vii.
b.
ce
ii.
iii.
iv.
v.
vi.
vii.
viii.
Involuntary servitude
Reimbursement of scholarship grant upon leaving
school
Excessive interest
Promise of marriage based on carnal consideration
(Editors note: huh? Arent all marriages based on
carnal consideration? Hahaha)
Unreasonable lawyers fees
Waiving right to prosecute
Unilateral increase in rent if: (1) option to renew wa
s
reciprocal (2) uncomplied condition; OR (3) w/
option to review. Unless there is stipulation to
contrary
c. Good customs
i. Given practical and social confirmation
d. Public order
i. Public safety
e. Public policy
i. Will of the state
ii. Contrary if has a tendency to injure the public, agai
nst
public good, or contravenes some established intere
st
iii.
iv.
v.
vi.
vii.
of
2.
3.
b.
ll of
Even if (lease) contract is not termed as such, its nature will govern an
2.
d
be referred to as an innominate contract.
1308. The contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them.
1.
2.
Mutuality of contracts
a.
Both parties are bound
b. When cancelled, both are released.
Consequence of mutuality
a.
A party cannot revoke or renounce a contract without the
consent of the other, nor can it have set aside on ground that
1.
have effect.
Arbitration
a.
Court does not determine issues to be arbitrated, it only
determines whether or not parties should go to arbitration.
Arbitration board hears the issues.
sed
1311. Contracts take effect only between the parties, their assigns and
heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by
provision of law. The heir is not liable beyond the value of the property
he
received from the decedent.
1.
3.
b.
Ex:
iv.
i.
ii.
6.
d into
lessee.
Even though he is not have to respect sub-lease contract. S
ubb.
ce
the laborers, employees, and furnishers of materials:
i. Payment made by owner to contractor before due;
ii. Renunciation by contractor of amount due to him fr
om
owner.
c. Owner is bound by contract between contractor and his
laborers. (1311)
1312. In contracts creating real rights, third persons who come into
possession of the object of the contract are bound thereby, subject t
o the
provisions of the Mortgage Law and the Land Registration Laws.
1.
2.
3.
ease.
4.
nder
ejudiced.
a.
b.
1314. Any third person who induces another to violate his contr
act shall
be liable for damages to the other contracting party.
1.
erence.
2. Injured party may properly sue for damages.
3. 3rd party cannot have greater liability than the obligor. Most
probably,
the liability here is solidary. (tort)
his
1315. Contracts are perfected by mere consent, and from that moment th
should be actual delivery, nonsense if just constructive, violates co
e
ncept
parties are bound not only to the fulfillment of what has been expressly
of real contracts)
stipulated but also to all the consequences which, according to their
1317. No one may contract in the name of another without being
nature, may be in keeping with good faith, usage, and law.
authorized by the latter, or unless he has by law a right to represent
1. Consensuality of contracts. (perfected by mere consent)
him.
2. Perfection of contracts
A contract entered into in the name of another by one who has no
a.
Consensual by mere consent (sale, carriage)
i. Moment there is agreement on subject matter, and the authority or legal representation, or who has acted beyond his power
s,
cause or consideration.
shall be unenforceable, unless it is ratified, expressly or impliedly, by
ii. If true intent is not reflected in written agreement,
the
proper remedy is Reformation.
person on whose behalf it has been executed, before it is revoked by
b. Real by delivery (deposit, pledge)
the
c.
Formal/solemn special form required for perfection
other contracting party.
(donation public instrument)
3. Consequence of perfections see 1159 and 1315.
1. Requisite to contract in the name of another
a.
b.
1316. Real contracts, such as deposit, pledge and commodatum, are not
perfected until the delivery of the object of the obligation.
1.
Real contracts require delivery for perfection, due to the very nature of
the contract.
a.
There cant be a pledge without the act of pledging (EN: haha)
2. Future real contracts or real contracts in expectancy are mere
iii.
c.
2.
s
CHAPTER 2: ESSENTIAL REQUISITES OF CONTRACTS
GENERAL PROVISIONS
1318. There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
1.
3.
Effect of non-consent
a.
No contract, void, non-existent, absolutely simulated
contracts
parties never intended to be bound (EN:duh)
b. Vice of consent voidable
i. Error, fraud, undue influence etc.
4. Notes:
a.
Transportation ticket is a contract
i. Consent boarding of passenger and acceptan
ce by
shipper
ii. Cause/consideration fair in ticket
iii. Object transport from origin to destination
b. Manner of payment should be agreed upon during
Consent
a.
Meeting of the minds between the parties on the subject
matter and the cause of the contract, even if neither one ha
been delivered.
Requisites of consent
a.
2 or more parties
i. One person can represent two or more parties
(agency)
b. Legal capacity
c.
No vitiation of consent
d. No conflict between what was expressly declared and what
was really intended. Remedy is reformation if parties really
intended to be bound, if not contract is void since contract
may
3.
ame
b.
to his knowledge.
Contract presumed to have been entered in where the offe
c.
was made.
Knowledge may be actual or constructive (received by a
5.
6.
Requisites of MOM
a.
Offer certain
i. Non-existent when: willing to entertain the idea
intend to enter highest price these are mere
invitations
ii. Must convey the idea to be bound
b. acceptance is absolute or unqualified
i. if qualified or with condition = counter-offer
Notes:
a.
Conformity to original contract presupposes conformity to
inal.
(failure to state cause/consideration)
b. If two contracts are offered, but are independent of each o
ther
e
ii.
sired
qualified acceptance
If offeree was satisfied with original but just de
the difference if possible, there is perfected con
tract
with regards to the original volume. But there w
ill be
no contract regarding the difference (Tolentino
Book)
h.
mplete in
t is
but a
Must
be
nd
b.
he
other
not
d.
4.
2.
Forms of acceptance
a.
Express (1320)
b. Implied (1320) from conduct or acceptance of unsolicited
service
c.
Presumed (bay law, 1057) failure to repudiate hereditary
rights within the period prescribed by law (EN: is this
prescription?) silence or acts which will misled the other party
to think that he has accepted it (EN: force of estoppel)
Implied rejection
a.
Failure to act on an offer
b. Failure to enter compromise before final judgment
1.
sion
nger,
b.
c.
of principals personality)
Perfection the moment agent obtains knowledge
Any other intermediary (not an agent) is merely a messeg
who must communicate to the person who sent him the
acceptance to create MOM.
nd
1321. The person making the offer may fix the time, place, and manner of
acceptance, all of which must be complied with.
1.
2.
3.
)
d.
e.
1324. When the offerer has allowed the offeree certain period to accept,
the offer may be withdrawn at any time before acceptance by
communicating such withdrawal, except when the option is founded upon
a consideration, as something paid or promised.
1.
Options
a.
If without consideration, seller may offer to others.
i. Mere offer of a contract of sale, not binding until
accepted.
b. If with consideration binds the seller/offeror to stipulation.
c. A contract granting a person the privilege to buy or not to buy
at any time within the agreed period at a fixed price. It is a
separate and distinct contract which the parties may enter into
upon the consummation of a contract (Enriquez v. Diaz)
d. Consideration must be of pure liberality.
e. Perfected by MOM
f. Offer offer to grant option and not option itself, may be
withdrawn even if there is consideration, since merely
consensual.
g.
Acceptance of contract of option is different from acceptance of
the option. Former creates the option, latter perfects the
contract. Hence option here is a preparatory contract.
h. Acceptance of COS binds the parties even if the preparatory
option contract did not have consideration (Atkins, Kroll and
Co. v. Cua Hian Tek)