obligation and contract - notes (ecsalao)
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CHAPTER 1GENERAL PROVISIONS
Art. 1156. An obligation is a juridical necessity to give, to do or not to do.
1. JURIDICAL NECESSITY MAY BE ENFORCED THRU COURT ACTION AS DISTINGUISHEDFROM NATURAL OBLIGATIONS.
2. ELEMENTS OF OBLIGATION (CIVIL)
- Juridical or Legal Tie
- Active Subject (One who has right to compel)
- Passive Subject (One who is directed to perform)
- Prestation (Object of the obligation)
Art. 1157. Obligations arise from:(1) Law;(2) Contracts;(3) Quasi-contracts;(4) Acts or omissions punished by law; and(5) Quasi-delicts. (1089a)
NOTES:
1. QUASI-CONTRACTS (OR IMPLIED CONTRACT) LAWFUL, VOLUNTARY OR UNILATIRAL
ACTS CAN GIVE RISE TO QUASI-CONTRACTS (E.G. UNJUST ENRICHMENT, SOLUTIO
INDEBITI (E.G. PAYMENT BY MISTAKE)
2. QUASI-DELICTS ACTS OR OMISSION CAUSES DAMAGE TO ANOTHER THERE BEINGFAAULT OR NEGLIGENCE IF THERE IS NO PRE-EXISTING CONTRACTUAL RELATIONS
Art. 1158. Obligations derived from law are not presumed.
NOTE: ONLY THOSE EXPRESSED BY LAW ARE DEMANDABLE.
Art. 1159. Obligations ARISING FROM CONTRACTS HAVE FORCE OF LAW BEWEEN
PARTIES. SHOULD BE COMPLIED WITH IN GOOD FAITH.
Art. 1160. Obligations from QUASI-CONTRACTS governed by Chap 1, Titles XVII
Art. 1161. Civil obligations from CRIMINAL OFFENSES - governed by the penal laws,
subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2,
Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages.
Art. 1162. Obligations derived from QUASI-DELICTSshall be governed by the
provisions of Chapter 2, Title XVII of this Book, and by special laws.
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CHAPTER 2
NATURE AND EFFECT OF OBLIGATIONS
Obligation Debtors obli. Creditors right CRs right to damages
To give a
determinate
thing
1. To deliver2. Take care of thing (1163)
To demand delivery In case of debtors:1. fraud2. negligence3. delay4. breach (1170)
Responsible if thing is lost
due to fortuitous event if he
promised to deliver thing to
2 or more person (1165)
Right to fruits only from
time deliver arises.
No real right until thing
delivered (1164)
If there is fraud,
damages is
demandable. Waiver of
action against FUTURE
fraud is void (1171)
Deliver accessions and
accessories even if not
mentioned (1166)
Note: To exclude accessions
and accessories, it must be
made clear
If there is negligence,
liability is regulated by
court (1172)
To give generic
thing1. To deliverNote: No obligation to take
care of thing since it is
replaceable
Ask obligation to be
complied with at the
expense of debtor
(1165)
NO LIABILITY IF NON-
PERFORMANCE IS DUE
TO UNFORSEEN
EVENT, ORFORTUITOUS EVENT
To do Perform the obligation atdebtors cost (1167)
No to do Undo at debtors expense(1168)
Notes:
Delay: There is delay when creditor demands and debtors fail to perform. There is delay also when (1)law provides, (2) nature and circumstance of obligation, (3) when demand is useless like when debtorcannot perform the obli.
Reciprocal obligation, one party is in delay when one party fulfilled his obligation (1169)
Negligence: omission of diligence required by the nature of obligation
CHAPTER 3: KINDS OF OBLIGATIONS
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PURE when
obligation does not
depend on any
condition
Example:
I will give you P1,000.
Demandable at once (pwede ng hingin agad) (1179)
Obligation based on resolutory condition is also demandable at once.
CONDITIONAL when
obligation depends on a
condition (1181)
2 Types:
1. Suspensive if this
happens, it will give rise
to the obligation
Example:
I will give you P1,000 if
you pass the final exams
2. Resolutory if this
happens, the obligation
stops
Example:
I will give you P1,000
monthly until you
graduate from college
Condition based on sole will (solong kagustuhan) of debtor, the
OBLIGATION is VOID. NOTE: THIS IS CALLED POTESTATIVE
CONDITION
If it depends on 3rd person or by chance, VALID (1182)
Impossible conditions. Physical (hindi talaga pwedeng mangyari) or
Legal (ipinagbabawal ng batas o ng kabutihang asal o ngpublic policy),
the obligation is ANNULED
Just disregard condition NOT to do IMPOSSIBLE THING (1183)
Condition that something happens at a DETERMINATE thing, obligation
will be EXTINGUISHED if:1. Time expires2. Sure that it will not happen
example:
I will give you P1,000 if you will win as Class President on October 1,
2012.
I will not be obligated (hindi ko kailangan magbayad) if:1. Oct. 1, 2012 came and you are not yet elected class president2. You dropped out even before October 1, 2012, hence it is sure that
you will not be class president (1184)
Condition that event will NOT happen at a determinate date shall render
obligation EFFECTIVE when:
1. time elapsed
2. it is evident that the event cannot occur
example:
I will give you P1,000 if you DONT become class president on Oct. 1,
2012
1. I need to pay you on Oct. 1, 2012 if you are not yet class president
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then even if no election was called
2. I need to pay you even if its still August 2012 if you dropped out since
you will never be elected class president if you are not a student
anymore (1185)
Condition deemed fulfilled (hence, obligation arises) when debtor
(obligor) voluntarily prevents its fulfillment (sinadya ng may utang wag
matupad ang kondisyon) (1186)
Obligation to give: Effect retroacts to the day obligation was constituted.
Example:
On August 7, 2012, I promised to give you my car with plate numberXXX 888 if you pass the exam on October 1, 2012.
You sold the car on August 10, 2012. You passed the exam on October 1, 2012. The sale you made is valid since you are deemed owner ofthe car on August 7, 2012 (retroactive effect)
Reciprocal obli fruits and interests mutually compensated. (No need to
turnover, unless there is an agreement)
Example:
I promise to give you 2 cows. You promised to give me yourapartment for rent.
Until delivery of the cows and the galaxy tab, I will own the milk
and
the young of the cows assuming that it produces milk and give birth
to
young. You will own the rent of the apartment until you give it to me.
Unilateral obli fruits and interests belong to the debtor (Unless there is
agreement) (1187)
I promise to give you the 2 cows. I will own the milk and the youngunless there is a contrary stipulation (pwere na lang kung
napagkasunduan natin na pati iyon ay ibibigay ko sayo)
While condition is NOT yet happening:
1. Creditor may file action to preserve his right (1188)
2. Debtor may recover if he paid by mistake
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3. When thing is LOST, DETERIORATED or IMPROVED
Lost without fault of debtor obli is extinguishedWith fault debtor liable for damages
Deteriorated without fault cost borne by creditorWith fault Creditor may chose (1) rescind (2) fulfillWith damages on both cases
Improved by nature inure to the benefit of creditorBy expense of debtor debtor enjoy right to use (1189)
In case of Resolutory Condition is fulfilled:
a. Obligation is to Give (determinate thing):
1. Parties to RETURN to each other what they have received
2. In case of LOST, DETERIORATED or IMPROVED, apply rule in Art.
1189 WITH RESPECT TO THE DEBTOR
b. Obligation to Do or Not to do: Apply Art. 1187 (1190)
Reciprocal obligation:
1. Power to rescind by the party willing and able to comply is IMPLIED.
2. Injured party may choose:
a. Fulfillment with damages (may still be rescinded if fulfillment isimpossible)b. Rescission with damages (1191)
If BREACH committed by both parties:
1. Liability of FIRST infractor will be equitably tempered (pabababain ng
husgado) by the court
If first infractor cannot be determined, obligation is extinguished and
each party shall bear his own damages
WITH A PERIOD when
obligation is based on a
day certain (exact date)
or an event sure to come
Payable when means of the DEBTOR permits him (1180)
Demandable when day comes.
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even though not known
when (death, next rain,
next sunrise).
Example:
1. On August 7, 2012, I
promised to pay you
P1,000 on October 1,
2012 (day certain).
2. On August 7, 2012, I
promised to pay you
P1,000 on the opening of
the enrollment for School
Year 2013-14 (sure to
come but not known
when)
If resolutory period, obligation is terminated when period comes. (1193)
In case of Loss, Deterioration, or Improvement, apply 1189 (1194)
Payment by mistake (debtor unaware that period has not yet arrived)
may be recovered together with fruits and interest (1195)
Period is for the benefit of both parties unless it is clear that period is for
the benefit of one party only (1196)
Hence, a creditor cannot be forced to receive early payment if it is not
agreed upon.
Court will fix the period if:
1. parties failed to fix it (as long as intention to fix the period is clear)2. period depends on sole will of debtor (1179)
Debtor loses right to use the period when:
1. He becomes insolvent and he did not give new security2. He did not give promised security to the creditor3. When his security was impaired (nasira) by own act (after
establishment) or when they disappear thru fortuitous event4. He violated any undertaking (kasunduan) which is the reason why
creditor agreed to the period5. He attempts to abscond (tumakas) (1198)
ALTERNATIVE when
the debtor is bound by
different prestations
(obligation)
Example:
A is obliged to deliver 2
labrador dogs or 1 iphone
4s or sing until the
creditor
Only one prestation is due
Creditor cannot be compelled (mapipilit) to receive part of both
obligation.
Example:In the given example, A cannot be compelled (hindi pwede pilitin) togive just 1 labrador dog and to sing for the creditor for 4 days only.Unless of course A would approve it (pwera na lang kung papayag siA) (1199)
Right of choice belongs to the Debtor unless expressly granted to the
debtor (1200)
Effective only when choice was communicated (1201)
Right is lost when only one prestation is practicable (1202)
If debtor cannot make a choice because of the creditor, the debtor may
rescind the contract with damages (1203)
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Creditor has right to indemnity (mabayaran) when:
Debtors fault, all choices were lost or become impossible.
Basis: value of last thing disappeared or service last became impossible.
Damages may also be awarded (1204)
When choice given to CREDITOR:
Obligation ceases (tumigil) to be alternative from day selection has been
communicated to the debtor.Until then, debtors responsibility is:
1. To perform the choice of the creditor from the remainder of the
prestation when original choice is lost thru fortuitous event (di sinasadya
at inaasahang pangyayari)
2. If only one remains, perform that remaining prestation
3. If loss is due to fault of debtor, creditor may ask for the price of that
lost thing with right to damages
4. If all things were lost due to fault, the creditor may choose with right
to damages also.
Same rule applies to obligation to do or not to do. (1205)
FACULTATIVE - when
only one obligation agreed
upon but debtor may
render another in
substitution.
Example:
A is obliged to deliver 2
labrador dogs to B. They
agreed that A may give
just his iphone 4s as a
substitute .
Loss or deterioration of substitute does not make debtor liable UNLESS
the substitution has been made and there is delay, negligence or fault of
the debtor. (1206)
JOINT when there are
2 or more debtors and
each of them answers
only their part.
When there are 2 or more debtors or 2 or more creditors. General rule is
obligation is joint (obligation is divided into as many equal shares as
there are creditors or debtors) (1208)
Example:
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Example:
Peter, John and Paul owed
Mary P1,000 each. Mary
can demand only P1,000
per person. She cannot
demand entire amount to
only one or two.
Peter, John and Paul owed Mary P3,000 each. Mary can demand onlyP1,000 per person since without any stipulation, the obligation isdeemed joint.
If division is impossible, rights of creditors may be prejudiced (masisira)
only by collective acts and the debt can be enforced only by proceeding
against all the debtors. If one of the debtor should be insolvent, others
shall be liable for his share. (1209)
Example:
Jose and Carlo are obliged to deliver a horse to Mario. Mario must sueboth Jose and Carlo for specific performance since law provides that
debt can be enforced only by proceeding against ALL debtors.
SOLIDARY when there
are 2 or more debtors and
the entire debt may be
demanded from just 1
debtor
Example:
Peter, John and Paul owed
Mary P3,000 jointly and
severally. Mary can
demand P3,000 to any ofthe debtors.
There is solidary obligation when:
1. Stipulated (words like jointly and severall, in solidum, Ipromise
to pay signed by 2 or more2. Provided by law3. When nature of obligation requires
Indivisibility (hindi mahahati) of an obligation does not necessarily gives
rise to solidarity. (1210)
May exist although creditors and debtors may not be bound in the same
manner and by the same periods and condition. (1211)
Example:
Peter, John and Paul owed Mary P3,000jointly and severally. Peters isliable to pay on August 15, 2012 while John is liable when B-Megbecame champion this PBA conference. Pauls obligation is pure.
Mary can demand only P2,000 from any of the debtors on August 16,2012 since B-Meg lost in the championship.
Solidary Creditors may do whatever is useful to the others but not
anything which may be prejudicial to other creditors. (1212)
Solidary Creditor cannot assign (ilipat) his rights without consent (pagsangayon) of others. (1213)
Debtor may pay any of the solidary creditors. But if demand was made
by one of them, payment must be made to that creditor. (1214)
Obligation extinguished when there is novation, compensation,
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confusion, or remission of debt made by any of the solidary creditors
without prejudice to Art. 1219.
The creditor who executed any of the acts as well as he who collects the
debt shall be liable to the others for the share in the obligation
corresponding to them. (1215)
Creditor may proceed against anyone of the solidary debtor or some or
all of them simultaneously. Others may be run after if debt is not fully
paid yet. (1216)
Debt extinguished if any of debtor pay. Creditor may choose if 2 or more
solidary debtors offer to pay.
He who made payment may claim from co-debtors. When one solidary
debtor cannot pay, such share shall be borne by all his co-debtors in
proportion to the debt of each. (1217)
If debt prescribed (lumipas na), solidary debtor who paid does not have
right to reimbursement (1218)
Remission (pagpapatawad ng utang):
Remission made by creditor to solidary debtor does not release that
debtor from his responsibility to co-debtors in case debt has been fully
paid by any one of them BEFORE remission. (1219)
When obtained by one debtor, does not entitle him to reimbursement
from other debtors. (1220)
Obligation extinguished when:
Thing lost or if prestation becomes impossible without fault of the
solidary debtors.
If with fault on any debtor, ALL shall be responsible to the creditor.
Same thing when thing is lost when there is delay on any of the debtor.
(1221)
Defenses: Solidary debtor may avail:
1. All defenses derived from nature of obligation2. All defensPersonal to him3. Pertain to his share
If personal to other debtor, he may avail thereof only as regards that
part of the debt for which the latter is responsible.
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(1222)
DIVISIBLE when
obligation may be
performed partially
Example:
Obligation to deliver 10
sacks of rice. It is possible
the 5 sacks will be
delivered today and the
rest, tomorrow.
When obligation may be executed for a certain number of days, or by
metrical units, or analogous things, it is divisible.
Example:
Certain number of days: House painting job that will last for 10 days. Metrical units: 10 sacks of riceAnalogous: Typing job per paper
But even if thing may be divisible, the obligation is indivisible if it is
provided by law or by intention of the parties. (1125)
INDIVISIBLE when
obligation is not capable
of partial performance.
Example:
Obligation to deliver a
specific mobile phone
Joint indivisible obligation gives rise to indemnity for damages from time
any of the debtors does not comply with his undertaking. Debtor who is
ready to comply with his obligation shall not contribute to the indemnity
beyond his portion of the price of the obligation. (1224)
Example:
Peter and John are obliged to give to Maria a specific Nokia Phone.Obligation is NOT solidary but it is indivisible.
If the phone is worth P10,000. Peter and John for whatever reasoncannot deliver the phone. Their obligation is converted to monetary.Peter is ready with is P5,000 but John is not.
Peter is only duty bound to give P5,000 to Maria. He is not answerableto the P5,000 debt of John (unless the obligation is SOLIDARY)
WITH PENAL CLAUSE
obligation that contains
provision that debtor will
pay a penalty for failure to
perform the obligation
according to agreement
Example:
Obligation to pay on 10
equal monthly
installments. For failure to
pay any of the
installments, the debtor
will be charged with 10%
interest and the entire
Penalty shall substitute the indemnity for damages and payment of
interests if there is no contrary stipulation. Damages will have to be
paid if debtor refuses to pay penalty or is guilty of fraud. (1226)
Debtor cannot excuse himself from performing the obligation by paying
the fine, unless that right is expressly granted to him.
Creditor cannot demand fulfillment of the obligation and payment of the
penalty at the same time unless this right has been expressly grandted.
(1227)
Proof of actual damage not necessary to demand penalty payment.
(1228)
Judge shall equitable reduce penalty when obligation has been partly or
irregularly complied with. Penalty may also be reduced even if there is
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debt shall be considered
due and demandable.no performance at all, if it is iniquitous or unconscionable (hindi na
makatarungan dahil sobra sobra na)(1229)
Nullity of penalty clause does not carry nullity of principal obligation. But
nullity of principal obligation carries with it nullity of penalty clause.
(1230)
Chapter 4 Extinguishment of Obligations
Reasons 1. Payment or performance2. Loss of thing due3. Condonation or remission4. Confusion or merger of the rights of creditor and debtor5. Compensation6. Novation
PAYMENT when money
owed is delivered or
obligation has been
complied with (nabayaran
na o nagawa na ang dapat
gawin) (1232)
Requisite for Payment:
1. Thing or service itself must be paid (Identity)2. Completely delivered or rendered (Integrity) (1233)
Less than perfect payment:
If obligation has been substantially performed in good faith (pwede na,
hanggat sa abot ng makakaya) the debtor may recover as if there wascomplete performance, less damages suffered by the creditor. (1234)
When creditor accepts knowing incompleteness or irregularity of
performance, and did not express protest or objection, obligation is
deemed fully complied with. (1235)
Creditor not bound to accept payment from third person who has NO
interest in the fulfillment of obligation, unless there is stipulation to the
contrary.
Whoever pays for another may demand from debtor what he has paid.
Except: When he paid WITHOUT knowledge or against the will of the
debtor, he can recover only insofar as the payment has been beneficial
to the debtor. (1236)
Example:
Peter paid the airline ticket of Maria for P2,000.00. It was done
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without the knowledge (or against the will) of Maria. Later, Mariatold Peter that she is entitled to half-the-price for the ticket.
In this case, Peter can only recover P1,000 from Maria.
Whoever pays on behalf of the debtor without the knowledge or againstthe will of the latter, cannot compel (pilitin) the creditor to subrogate
(ilipat sa kanya) him in his rights, such as those arising from a mortgage
guaranty, or penalty. (1237)
Example:
Peter owed Maria P10,000.00. They agreed that in case Peter cantpay, Maria will own Peters iphone. John paid the debt of Peter. It
was
done without the knowledge of Peter.
In this case, John can recover P10,000.00 from Peter. But if Peter
cannot pay, he cannot have Peters iphone. Reason: No subrogation.
Payment made by third person who does NOT INTEND TO BE
REIMBURSED (di nya gusto mabayaran) by the debtor is deemed to be a
DONATION (bigay) which requires debtors consent. But the payment is
valid as to the creditor who has accepted it. (1238)
Obligation to give: Payment by someone who does not have the FREE
DISPOSAL (pagaari) and CAPACITY TO ALIENATE (kakayahang ibenta) it
shall NOT be valid. Without prejudice to provisions on Natural
Obligations. (1239)
To whom payment must be made:
1. To the person in whose favor the obligation has been constituted2. Or his successor in interest (tagapagmana)3. Or any person authorized to receive it (1240)
If payment was made to INCAPACITATED or UNAUTHORIZED persons,
payment is INVALID as a general rule.
Incapacited persons who by law are not capable of administering(pangalagaan) their properties. Example: Insane (mga baliw)
Unauthorized person who is not authorized (hindi binigyan ngkatungkulan)
Payment to incapacitated valid when he kept the thing delivered or
insofar as the payment has been beneficial to him.
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Payment to unauthorized person is valid if it has redounded to the
benefit of the creditor (nakabuti).
Benefit need not be proved in the following cases:
1. if after payment, the third person acquires creditors rights2. if the creditor ratifies the payment (sinangayunan)3. if by creditors conduct, debtor has been led to believe that the third
person had authority to receive the payment. (1241)
If payment was made to any person in possession of credit (evidence of
indebtedness), it will release the debtor if it was done in good faith.
(1242)
Payment made to the creditor by the debtor after the latter has been
judicially ordered to retain the debt shall not be valid. (1243)
Example:
Peter owed Maria P100,000. Maria owed John P100,000.John sued Maria. Maria claims she is insolvent but claims thatPeter owed her the same amount.
Peter was asked by the court to retain the debt (this is called garnishment). Any payment made by Peter to Maria at thispoint shall be invalid.
Obligation to give:
Debtor cannot compel creditor to receive a different one, even if it is of
same value or more valuable.
Obligation to do or not to do:
An act or forbearance cannot be substituted by another act or
forbearance against the creditors will. (1244)
DATION IN PAYMENT to pay the debt, the debtor gave his property
to the creditor and the creditor agreed with it.
Example:
Peter owed MariaP1,000. Peter gaveMaria his cell phonebecause he did not haveany cash. Maria agree.
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Debt is extinguished.
Governed by the law on Sales. (1245)
Obligation to give a generic thing:
Creditor cannot demand thing of superior quality. Neither can debtor
deliver a thing of inferior quality. The purpose and circumstance of the
obligation shall be taken into consideration. (1246)
Unless agreed upon:
Creditor cannot be compelled to partially receive prestations in which the
obligation consists. Neither may the debtor be required to make partial
payments.(1248)
Payment of debts in money shall be made in currency stipulated. If not
possible, then the currency which is legal tender in the Philippines.
Legal Tender -
All notes and coins issued by the Bangko Sentral shall be legaltender: Provided, however, That, unless otherwise fixed by the MonetaryBoard, coins shall be legal tender in amounts not exceeding Fifty pesos(P50.00) for denominations of Twenty-five centavos and above, and inamounts not exceeding Twenty pesos (P20.00) for denominations of Tencentavos or less.
Delivery of promissory notes or bills of exchange shall produce effect of
payment only when they have been cashed, or when through the fault of
the creditor they have been impaired.In case of extraordinary inflation or deflation, the value of the currency
at the time shall be the basis of payment, unless there is agreement to
contrary. (1250)
INFLATION sharp increase of money without increase in businesstransaction. Results in sharp increase in prices.
DEFLATION opposite of inflation
Place of payment place agreed upon.
If there is no agreement:
To give determinate thing delivery at the place where thing might be
at the moment obligation was constituted.
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In any other cases payment at domicile of the debtor. (1251)
Application of payment out of 2 or more debts owing to the same
creditor, it refers to the debt that is being paid.
Example:
Peter has several debts to Maria, to wit:P1,000 because he bought Marias puppy.P2,000 because he bought Marias new book.P5,000 because he hired Maria to do his project.
If Peter paid P1,000 to Maria, to what debt should Maria apply this
payment?
Peter may declare to which debt his payment must be applied. If Peter
does not say so, the payment may not be applied to debt that is not due.
(1252)
If Maria issued a receipt to Peter stating that his payment is applied to
the P2,000 for the book and Peter accepted it, Peter cannot complain
about it later. The payment will be applied to that debt. (1252)
If Peter did not declare and Maria did not issue a receipt stating where
she applied the payment, the payment will be applied to the most
onerous (pinakamabigat). (1254)
Example:
In the example above:
P 1,000 loan bears no interestP 2,000 loan bears 10% interestP 5,000 loan bears 5% interest
The P2,000 loan is the most onerous.
If the debts due are of the same nature and burden, it will be applied to
all proportionately. (1254)
If debt produces interest, payment shall be applied to the interest first
before it shall be applied to the principal. (1253)
Payment by cession - where debtor transfer all of his properties not
subject to execution (free to dispose) to the creditors so that they may
sell them and apply proceeds to the debt.
Requirements:
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1. More than one debt2. More than one creditor3. Insolvency of debtor, complete or partial4. Abandonment of all debtors property not exempt from execution5. Consent of all creditors
Effect:
1. Creditors shall not own the properties. They shall sell it and apply
proceeds to the debt.
2. Debtor is released up to the amount of the net proceeds of the sale,
unless there is stipulation to the contrary. Debtor still liable to balance.
3. Creditors will collect in the order of preference agreed upon. If no
agreement, based on order established by law.
Tender of Payment act of offering the creditor what is due him
together with a demand that the creditor accept the same.
Consignation act of depositing the thing due with the court whenever
the creditor cannot accept or refuses to accept payment
If the creditor refuses without just cause to accept tender of
payment, the debtor shall be released from responsibility by the
consignation of the thing or sum due.
Consignation ALONE shall produce the same effect if:
(1) When the creditor is absent or unknown, or does not appearat the place of payment;(2) When he is incapacitated to receive the payment at the time
it is due;(3) When, without just cause, he refuses to give a receipt;(4) When two or more persons claim the same right to collect;(5) When the title of the obligation has been lost. (1256)
LOSS OF THING DUE An obligation to deliver DETERMINATE thing is extinguished ifthing lost or destroyed without the fault of the debtor, unless:
1. Debtor incurred delay before loss2. When by law or stipulation, the obligor is liable even for
fortuitous events3. When the nature of the obligation requires the assumption of
risk. (1262)
If loss is partial, court will determine whether loss is so
important to extinguish obligation. (1264)
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When the service has become so difficult as to be manifestly
beyond the contemplation of the parties, the obligor may also be
released therefrom, in whole or in part. (1267)
If obligation is to deliver a GENERIC thing, the loss ordestruction of anything of the same kind does NOT extinguish
the obligation. (1263)
Presumption of fault when the thing is lost while in the
possession of the debtor, unless there is proof to the contrary.
This presumption does not apply in case of earthquake, flood,
storm, or other natural calamity. (1265)
The debtor in obligations to do shall also be released when the
prestation becomes legally or physically impossible without the
fault of the obligor. (1266)
When the debt of a thing certain and determinate proceeds from
a criminal offense, the debtor shall not be exempted from the
payment of its price, whatever may be the cause for the loss,
unless the thing having been offered by him to the person who
should receive it, the latter refused without justification to
accept it. (1268)
Example:
Tonyo stole Annas cellphone. Tonyo was caught and was
asked to return the cellphone. Tonyo lost the cellphone due tofortuitous event. Tonyo is still liable for the amount of thecellphone.
The obligation having been extinguished by the loss of the thing,
the creditor shall have all the rights of action which the debtor
may have against third persons by reason of the loss. (1269)
CONDONATION OR
REMISSION OF DEBT
gratuitous abandonment
by the creditor of his
right.
Needs to be accepted by the debtor expressly (hayagang sinabi)
or impliedly (masasabi dahil sa mga senyales kahit di hayagang
sinabi). (1270)
Example of Implied Condonation:
Delivery of private document evidencing credit, voluntarily by
the creditor to the debtor (1271)
If creditor renounce (pinatawad) the principal debt, it shall
extinguish the accessory obligation. But waiver of accessory
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obligation does not extinguish the principal debt. (1273)
CONFUSION OR
MERGER OF RIGHTS Meeting in one person of
the qualities of creditorand debtor with respect to
the same obligation
Example:
Jun issued a check payable to Cash. It was given to Terry.
Terry paid it to Migs, who later paid it to Jun.
COMPENSATION takes
place when two persons,
in their own right, are
creditors and debtors of
each other (1278)
Kinds:
1. According to effect or extent:a. Total both debts completely extinguished (1281)b. Partial balance remains
2. According to origin:a. Legal takes place by operation of lawb. Voluntary agreement of both partiesc. Judicial set-off (1283)d. Facultative one party has the choice of claiming the
compensation
Requisites:
(1) That each one of the obligors be bound principally, and that
he be at the same time a principal creditor of the other;(2) That both debts consist in a sum of money, or if the things
due are consumable, they be of the same kind, and also of the
same quality if the latter has been stated;
(3) That the two debts be due;(4) That they be liquidated and demandable;(5) That over neither of them there be any retention or
controversy, commenced by third persons and communicated in
due time to the debtor.
Novation change of an
obligation by another,
which extinguishes the
first
Obligations may be modified (changed) by:(1) Changing their object or principal conditions;(2) Substituting the person of the debtor;(3) Subrogating a third person in the rights of the creditor.
In order that an obligation may be extinguished by anotherwhich substitute the same, it is imperative that it be so declared
in unequivocal terms, or that the old and the new obligations be
on every point incompatible with each other. (1292)
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