LAW ON OBLIGATION & CONTRACTS

1. Payment in good faith to any person in possession of the credit shall not release the debtor.
2. Condonation or remission is essentially onerous, and requires the acceptance by the obligor. It may be made expressly or impliedly.
3. A commits the crime of theft and is asked to return the car to its owner B. If, before the car is delivered to B it is destroyed by fortuitous
event, in this case A’s liability is extinguished.
4. Using above statement, A had previously asked the owner to accept the car, but the owner without any justifiable reason refuses to
accept the car, and it is destroyed by fortuitous event, therefore A’s liability is extinguished.
5. Whoever pays for another may demand from the debtor what he has paid , except that if he paid without the knowledge or against the
will of the debtor he cannot recover anything.
6. The law provides that the delivery of mercantile documents including checks shall produce the effect of payment only when they have
been deposited.
7. As a general rule, check constitute legal tender, but a creditor may validly refuse it.
8. A check does not constitute legal tender but it does not prevent a creditor from accepting a check as payment.
9. In case of extraordinary inflation or deflation the value of the currency at the time of the establishment of the obligation shall be the
basis for the payment when no agreement to the contrary is stipulated, has strict application only to contractual obligations.
10. As a general rule, payment shall be made in the place of business of the debtor.
11. In case the debtor does not make the application of payment nor the creditor does not also state in which application of payment is
made, then application is made by operation of law.
12. There should be notice to the creditor prior and after consignation as required by the civil code.
13. An obligation to pay money is generic; therefore it is not excused by fortuitous loss of any specific property of the debtor.
14. The general rule is that if the thing is lost while in possession of the debtor, it shall be presumed that the loss was due to fortuitous
events, unless there is proof to the contrary.
15. The donation and acceptance of a movable, the value of which does not exceeds P 5,000 must be in writing, otherwise the same shall be
voidable.
16. If the confusion takes place in the person of any of the guarantors, there is extinguishment of the principal obligation.
17. A contractual agreement is not needed for the effects of extraordinary inflation to be taken into account to alter the value of the
currency.
18. Payment made by the debtor to a third person who is not the creditor shall never extinguish the obligation.
19. The delivery to and acceptance by the creditor of the certified cashier’s check produces payment of the debtor’s obligation.
20. Loss of an indeterminate thing which is the object of an obligation, even without the fault of the debtor, does not extinguish the debtor’s
obligation.
21. The debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely
delivered or rendered as the case may be.
22. The creditor is bound to accept payment or performance by a third person who has no interest in the fulfillment of the obligation unless
there is stipulation to the contrary.
23. Generally, payment made by unauthorized third person to the creditor is not valid.
24. Payment to a person who is incapacitated to administer his property shall not be valid of he has kept the thing delivered or insofar as the
payment has been beneficial to him.
25. The extrajudicial expenses required by the payment shall be for the account of the creditor.
26. The debtors right to apply payment is mandatory.
27. The debtors right to apply payment cannot be waived.
28. In Dacion en pago, the debtor is in state of partial or relative insolvency.
29. In payment by cession, what is ceded by the debtor is the universality of all his property.
30. There should be notice to the creditor prior and after consignation as required by the civil code.
31. Proof of actual damages suffered by the creditor is nit necessary in order that the penalty previously agreed upon may be demanded.
32. Proof of actual damages suffered by the creditor is not necessary an obligation with penal clause.
33. A debtor who is adjudged an insolvent and subsequently discharged by the court shall be release from obligations of all debts but
thereafter cannot engaged in business and acquire property until he has paid his former debts.
34. Dwarfina owes Dennis P100,000. With the consent of both, Jennelyn, a third person pays Dennis P50,000. Thus, Dennis and Jennelyn are
now creditors of Dwarfina at 50,000 each. If Dwarfina has only 50,000, it will be divided by Dennis and Jennelyn equally.
35. As a rule, the creditor may demand fulfillment of the obligation and penalty at the same time.
36. A third person who has an interest in the fulfillment of the obligation such as guarantor, may compel the creditor to accept the payment.
37. Payment made in good faith by the debtor to a person in possession of the credit releases him from liability.
38. Payment to a third person is not valid if the payment to the third person has redounded to the benefit of the creditor.
39. The debtor of a thing may compel the creditor to accept a different one if the latter is more valuable than which is due.
40. If payment by a third person is made with the consent of the debtor, the payor shall have the right of reimbursement and subrogation,
that is, to recover what he has paid and acquire all the rights of the creditor.
41. If the object of obligation is a generic thing, the loss or destruction of anything of the same kind even without the debtor’s fault and
before he has incurred in delay will not have the effect of extinguishing the obligation.
42. If a person obliged to do something fails to do it, the same shall be executed at his cost.
43. In reciprocal obligations, as in a contract of sale, the general rule is that the fulfillment of the parties’ respective obligations should be
simultaneous.
44. Dolo incidente, is a fraud which renders the contract voidable.
45. In negligence, liability cannot be mitigated by courts.
46. In culpa contractual, the negligence of the defendant is merely an incident in the performance of an obligation.
47. In culpa aquiliana, there is an pre-existing contractual relation.
48. If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same interest, he shall not
be responsible for any fortuitous event until he has affected the delivery.
49. The receipt of the principal by the creditor without reservation with respect to the interest, shall give rise to the conclusive presumption
that said interest has been paid.
50. Delay or mora is one of the sources of obligation.
51. When what is to be delivered is a determinate thing, the creditor may compel the debtor to make the delivery and if the debtor refuses,
the creditor may ask that the obligation be complied with at the expense of the debtor.
52. If the law or contract does not state the diligence which is to observe in the performance of an obligation, ordinary diligence shall be
required.
53. A passenger in a taxi who was hurt because of the negligence of its driver may bring civil case of culpa contractual against a taxi driver.
54. An obligation with a period may at times become a pure obligation demandable at once.
55. As a rule, the creditor has a right to the fruits of the thing from the time the obligation to deliver it arises.
56. D binds himself to pay C 10,000. The court in this case shall fix the period, since the parties failed to fix the period.
57. The condition not to do impossible thing shall render the obligation demandable at once.
58. When the fulfillment of the suspensive or resolutory condition depends upon the sole will of the debtor, the conditional obligation shall
be void.
59. Mere delinquency in payment does not necessarily mean delay in the legal conxepr.
60. An obligation to pay money is generic, therefore it is not excised by fortuitous loss of any specific properry of the debtor.
61. If the resolutory condition is not fulfilled, no juridical relation is created.
62. The power to rescind obligations is implied in reciprocal ones, in case one the obligors should not comply with what is incumbent upon
him.
63. A person alternatively bound by different prestations shall completely perform both if them.
64. The debtor shall lose the right to make use of the period when he does not furnish any guaranty or security to the creditor.
65. The injured party may seek rescission even after he has chosen the fulfillment of the obligation if the latter should become impossible.
66. The receipt of the principal by the creditor without reservation with respect to the interest, shall give rise to the conclusive presumption
that said interest has been paid.
67. If a party is negligent and at the same time in bad faith, he shall be liable for damages by reason of fraud.
68. A natural obligation is valid obligation.
69. When the debtor binds himself to pay when his means permits him to do so, the obligation is with a period.
70. Accessories are not necessary to the principal thing but both must go together.
71. Accessions are necessary to the principal thing.
72. A potestative condition does not necessary make an obligation void.
73. If the obligation does not fix a period, the court shall fix the period.
74. Solutio indebiti is a contract.
75. In civil obligation, the fulfillment of the obligation depends solely on the conscience of the person.
76. Suspensive condition is one which extinguishes the obligation upon the happening of the condition.
77. D binds himself to pay “little by little”. The obligation is for the benefit of the debtor.
78. The creditor acquires real rights over the thing from the moment the thing is delivered and not from the time the obligation to deliver it
arises.
79. D binds himself to pay C 10,000. The court in this case shall fix the period, since the parties failed to fix the period.
80. Loss of a generic thing which is the object of an obligation, even without the fault of the debtor, does not extinguish the debtor’s
obligation.
81. In alternative obligation, the right if choice belongs to the creditor, unless it has been expressly granted to the debtor.
82. D obliged himself “to pay to C the sum of 50,000 which he owes him when D feels like it.” This kind of obligation is valid and legally
enforceable.
83. “ I promise to give you a specific ring if I go to subic this Sunday”. This obligation is valid and legally demandable from the creditor should
he really go to subic as he promised.
84. In alternative obligations, what converts the same into a pure or simple obligation is the choice of prestation to be performed by the
debtor.
85. A natural obligation is a valid obligation.
86. In an obligation subject to a suspensive period, what is suspended is the birth of the obligation.
87. “I will give you 10,000 if you will not marry X this year 2019”. If on Dec. 25 2019 X entered the convent, the next day Dec. 26 my
obligation is extinguished.
88. “I will give you 10,000 when my means permit me to do so.” This is a conditional obligation for the benefit of the debtor.
89. The debtor shall lose the right to make use of the period when he does not furnish any guaranty or security to the creditor.
90. The injured party may seek rescission even after he has chosen the fulfillment of the obligation id the latter should become impossible.
91. In a natural obligation, the creditor has the right to enforce the performance thereof it being based on positive law.
92. In reciprocal obligations, where the obligations arise out of the same cause and must be fulfilled at the same time, from the moment one
of the parties fulfills his obligation, delay by the others begins notwithstanding the absence of demand.
93. A defendant who is acquitted in a criminal case is no longer liable civilly.
94. Proof of a actual damages suffered by the creditor is not necessary in order that the penalty may be demanded.
95. When the debtor is guilty of fraud in the fulfillment of the obligation, the creditor can demand the payment of damages and interest in
addition to the penalty.
96. Solutio indebiti and negotiorum gestio are quasi-contracts that give rise to civil obligations.
97. A potestative period does not make an obligation void.
98. A potestative condition does not necessarily make an obligation void.
99. The condition that some event happens at a determinate time shall extinguish the obligation as soon as the time expires or it has become
indubitable that the event will not take place.
100. The condition that some event will not happen at a determinate time shall render the obligation effective from the moment the time
indicated has elapsed, or it has become evident that the event cannot occur.
101. All rights acquired by virtue of an obligation are transmitted in the absence of any law or stipulation to the contrary.
102. A thing although it is physically exists,may be considered lost if it goes out of commerce of men.
103. Whenever the thing is lost while in the possession of the debtor it shall be presumed to have been lost through his fault .
104. If the law or contract does not state the diligence which is to be observed in the performance of the obligation, neither party is liable for
negligence.
105. The receipt of the installment shall give rise to a distputable presumption that the principal loan has been paid.
106. Solidarity cannot exist if the creditorcreditors and the debtors are not bound in the same manner and by the same periods and
conditions.
107. If it is the creditor who hasthe right of choice, he loses his choice if all the prestations are alternatively lost by fault of the debtor.
108. The creditor acquires real rights over the thing from the time the obligation to deliver arises.
109. If the condition is potestative onn the part of the debtor, the obligation is void.
110. Obligations with a resolutory period take effect at once, but terminate upon the happening of the condition
111. Obligations with a resolutory condition take effect at once, but terminate upon arrival of the day certain.
112. Negligence signifies the idea of delay and fulfillment of an obligation.
113. If an obligation states that the debtors bind themselves jointly and severally, the obligation is considered joint.
114. The creditor is entitled to recover damages and interest in addition to the penalty stipulated when debtor refuses to pay the penalty.
115. The creditor is entitled to recover damages and interest in addition to the penalty stipulated when the debtor is guilty of fraud in the
fulfillment of the obligation.
116. Proof of actual damages suffered by the creditor is not necessary in order that the penalty previously agreed upon may be demanded.
117. Proof of actual damages suffered by the creditor is not necessary in an obligation with a penal clause.
118. If a third person pays without the debtor's or against his will, the payor is entitled to reimbursement of what he has paid.
119. If a third person pays without the debtor's or against his will, the payor is entitled to subrogation of the rights of the creditor.
120. Consignation without tender of payment is sufficient if two or more persons claim the same right to collect.
121. When the debt of the thing certain proceeds from a criminal offense, the debtor shall be exempted from the payment of the price of the
thing lost through a fortuitous event.
122. As a general rule, the extrajudicial expenses required by the payment shall be for the account of the creditor.
123. If there is no stipulation and the thing to be delivered is specific, the place of payment shall be the domicile of the debtor.
124. The renunciation of the principal debt shall not extinguish the accessory obligations; but the waiver of the latter shall leave the former in
force.
125. It is presumed that the accesory obligation of pledge has been remitted when the thing pledge has been remitted, after its delivery to the
creditor, is found in the possession of the debtor, or of a third person who owns the thing.
126. Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly.
127. One and the other kind shall be subject to the rules which govern inofficious donations. Express condonation shall furthermore, comply
with the forms of donations.
128. Payment made by a third person who does not intend to be reimbursed bybthe debtor is deemed to be a donation, whuch requires the
debtor's consent. But payment is in any case valid as to the creditor who has accepted it.
129. Whoever pays on behalf of the debtor without the knowledge or against the will of the latter can compel the creditor to subrogate him in
his rights, such as those arising from a mortgage, guaranty, or penalty.
130. The creditor is not bound to accept payment or performace by a third person who has no interest in the fulfillment of the obligation,
unless there is stipulation to the contrary.
131. Whoever pays for another may demand from the debtor what he has paid, 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 the debtor.