Art Given M.

Baraquio
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General Provisions
I. Definition
1. Obligation
-obligation is a juridical necessity to give, to do or not to do. Or they call it and referred
as “civil obligation”
2. Quasi contracts
-A quasi-contract is that juridical relation resulting from certain lawful, voluntary and
unilateral acts by virtue of which the parties become bound to each other to the end that no
one will be unjustly enriched or Benefited at the expense of another.
3. Compliance in good faith
-a sincere intention to deal fairly with others. Good faith is an abstract and
comprehensive term that encompasses a sincere belief or motive without any malice or the
desire to defraud others.
4. Wrong
-It is an act or omission that violates a right. Is a violation of public or private rights that
injures an individual and consequently is subject to civil redress or compensation.
5. Solutio Indebiti
-refers to the juridical relation which arises whenever a person unduly delivers a thing
through mistake to another who has no right to demand it. If something is received when there
is no right to demand it, and it was unduly delivered through mistake, the obligation to return it
arises.

II. Discussion
1. Requisites of Obligation
a. Passive subject (Obligor)
-person who is bound to the fulfillment of the obligation
b. Active subject (Obligee)
-person who is entitled to demand the fulfillment of the obligation
c. Prestation/Object/Subject Matter
-conduct required to be observed by the debtor (It may consist in giving, doing, or not
doing)
d. Juridical tie/Vinculum/Vinculum juris
-binds or connects the parties to the obligation
Example: Art Given obliged 500 to Jennie for his payment in electric bill
Passive subject: Art given (obligor)
Active subject: Jennie (obligee)
Prestation: to give 500
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Juridical tie: contract

2. why are obligation is a juridical necessity?

- The term juridical in the definition refers to the legal aspect of an obligation. If an
obligation is juridical, it follows that you can go to court and ask for a civil action in case of
breach or non-compliance. juridical necessity means, a person must comply to its obligation
because if not, the court of justice may protest and file against you and enforce you to do the
obligation (to give, to do, not to do).

3. what are the elements or requisites in order that a person may acquire a right of action in
court against another to enforce the performance of the latters obligation?
-A person may acquire a right in a law if he or she has the power to demand from
another any prestation in addition, the person may acquire right against the obligation of
another if the obligation is a civil obligation. It is based on positive law or laws made by man
that require some specific action.

4. May a person incur obligations even without entering into a contract?

-Yes, a person may incur obligations even without entering a contract. For example you
buy a certain goods from a grocery store and notice that the store gives you excessive change
as a person you are obliged to turn the excess change eve you and the store don’t have a
contract on giving the change if it too much, or in other words, you and the store don’t have a
contracts about it. Obligations do not only arise from contracts. they can be imposed by the
law, arise from quasi contracts, from crimes or acts or omissions punished by law and from
quasi delicts or torts. youy can have an obligation so that no one will be unjustly benefited or
enriched at the expense of someone else or if you commit a crime, or if you cause damage due
to fault of negligence.

III. Problems:
1. Yes, according to quasi-contracts, when without the knowledge or consent of the
person obliged to give a support, it is given by a stranger, the latter shall have a right to
reimburse or claim the same from the former unless it appears that the stranger gave it
out of piety and without intention of being repaid however, X has the right to reimburse
Y for the expense he made even X and Y doesn’t have a contract and X doesn’t have a
consent and knowledge of Y.
2. Yes, according to Quasi- Delicts of article 2176, whoever by act or omission cause
damage to another, there being fault or negligence is obliged to pay for the damage
done. So meaning, Y is fully liable for the damage done to the vehicle of X its either
reparation or restitution.
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3. Yes, X can have its indemnification, Indemnification for consequential damages shall
include not only those caused the injured party, but also those suffered by his family or
by a third person by reason of the crime. Therefore, Y acts resulted from loss of X so Y, is
liable for indemnification for X and gives X the loss that Y made.
4. No. because D has a obligation and made a contract to C, therefore in order to
extinguish the obligation of D, D must pay 10,000 to C. D cannot refuse to pay C because
in the first place, it is D’s negligence and fault.
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Nature and Effects of Obligations

I. Definition
1. Generic and indeterminate thing
-A thing that refers only to a class or genus to which it pertains and cannot be pointed
out with particularity.
2. Personal right
-Is the right or power of a person (creditor) to demand from another (debtor) as a
definite passive subject, the fulfillment of the latter’s obligation to give, to do, or not to do.

3. Legal delay or Default

-Is the failure to perform an obligation on time which failures constitutes a breach of the
obligation.
4. Fortuitous Event
-Any event which be foreseen, or which, though foreseen, is inevitable
-An event which is either impossible to foresee or impossible to avoid
5. Diligence of good father in a family
-Refers to the diligence equated with ordinary care; or Refers to diligence which an
average (a reasonably prudent) persons exercise over his own property

II. Discussion
1. Give the rules as to the liability of a person for loss or damage resulting from a fortuitous
event for loss or damage resulting from a fortuitous event.
(1) When expressly specified by law
a. The debtor is guilty of fraud, negligence, or delay, or contravention of the tenor
of the obligation;
b. The debtor has promised to deliver the same (specific) thing two or more
persons who do not have the same interest;
c. The obligation to deliver a specific thing arises from a crime; and
d. The thing to be delivered by stipulation.
(2) When declared by stipulation
(3) When the nature of the obligation requires the assumption of risk

2. What rights are given by law to the creditor in case the debtor fails to comply with his
obligation to deliver a specific thing?
-According to article 1165, when what is to be delivered is a determinate thing, the
creditor, in addition to the right granted him by article 1170, may compel the debtor to make
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the delivery. therefore, In an obligation, to deliver a determinate thing, the very thing itself
must be delivered. Consequently, only the debtor can comply with the obligation. The creditor
is granted the right to compel the debtor to make the delivery in addition to the right granted in
Article 1170.

3. What are included to be dlivered in an obligation to give a definite thing? explain them.
-Accessions, Fruits of a thing or the additions to or improvements upon a thing.
Accessories, Things joined to or included with the principal thing for the latter’s embellishment,
better use, or completion.

4. Suppose yhe obligation of the debtor is to do something and he fails to do it or performs it

in contravention of the agreement, what are the remedies available to the creditor?
-According to article 1167 or the positive personal obligation, if a person obliged to do
something fails to do it, the same shall be executed at his cost, (1) If the debtor fails to comply
with his obligation to do, the creditor has the right:
a. To have the obligation performed by himself, or by another, unless personal
considerations are involved, at the debtor’s expenses;
b. To recover damages.
(2)In case the obligation is done in contravention of the terms of the same/ poorly done, it
may be ordered (by the court upon complaint) that it be undone if it is still possible to undo
what was done.

5. Can a debtor be put in delay and consequently incur liability even without demand from
creditor? Explain.
-No. this is according to article 1169, one of the conditions that must be present before
delay/ default by the debtor can exist is the demand mad by the creditor. The creditor has the
burden of proving that demand has been made.

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

-No, in fraud, there is deliberate intention to cause damage or injury. The waiver of
liability is void

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

-Yes, in negligence, there’s no such intention to cause damage and injury. In certain
sense, waiver is allowed.

III. Problems
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1. T acquires ownership over the horse as S delivered Silver on July 15. S shall be liable to B
for Damages. “Creditor does not become the owner until the specific thing has been
delivered to him.”
2. No, If S does not deliver the refrigerator on July 31, S is only in ordinary delay in the
absence of any demand from B although a period had been fixed for the fulfillment of
the obligation. Hence, there is no breach of the obligation and S is not liable for
damages.
3. (A.) based on Accessory Obligation, S has accessory duty to take care of the horse with
the diligence of a good father of a family
(B.) S, it is stated that “All fruits shall pertain to the vendee from the day on which the
contract was perfected. “ Since the colt was born before the obligation to deliver, S has the
right over it.
(C.) B, ownership and other rights over the horse are acquired and transmitted in a
consequence of delivery.
4. No, in order that the interest may be recovered, the payment of interest must be
expressly stipulated. From the given facts, the interest is not expressly stipulated.
5. No, as S issued a receipt for the month of March, the presumption is that, the rents for
the months of January and February had already been paid
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Different Kinds of Obligation

Pure and conditional obligation

I. Definition
1. Condition
-Future and uncertain event, upon the happening of which, the effectivity or
extinguishment of an obligation subject to it depends.
2. Civil loss
When a thing disappears in such a way that its existence is unknown; or even known, it
cannot be recovered, whether as a matter of fact of or of law.
3. Reciprocal obligation
Those which arise from the same cause and in which each party is a debtor and creditor
of the other, such that the performance of one is designed to be the equivalent and the
condition for the performance of the other.
4. Pure obligation
One which is not subject to any condition and no specific date is mentioned for its
fulfillment and is, therefore, immediately demandable.
5. Potestative obligation
A condition suspensive in nature and which depends upon sole will of one of the
contracting parties

II. Discussion

1. Illustrate an obligation subject to:

(a) Suspensive condition An obligation is subject to suspensive condition is when
wherein the obligation is subject to an occurrence of a certain event which will give rise to the
obligation. In other words, the obligation is suspended until the specific event has happened or
will happen that will constitute to the obligation. For example, B promises to give a parcel of
land to C when B’s father dies. This condition is a suspensive condition as the obligation is
suspended until the death of B’s father. Only when B’s father passes away will the obligation
towards C will start.

(b) Resolutory condition An obligation subject to a resolutory condition is when an

obligation will be extinguished in the fulfillment of a certain event that will end the already
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existing obligation. However, in this condition, there is no postponement or suspension of

contract as all rights and obligations immediately take into effect the moment the agreement
was made. For instance, B will give a ₱5,000 allowance every month to C as support until she
graduates from college. B’s obligation to give a monthly allowance to C starts from the day the
agreement was made until her graduation in college. Only when she graduates from college will
B’s obligation towards her is extinguished.
What is the effect of the fulfillment of the condition in a conditional obligation?

-In a suspensive condition, the happening of the event which gives rise to the obligation
constitutes the fulfillment of the conditional obligation and the acquisition of rights will thus,
begin.

2. Give (2) two cases of when the conditional obligation is valid although the condition
depends entirely upon the will of the debtor. Explain.
- Art Given promises to pay Liza his debt when his means permit him to do so. In this
scenario, it is up to the sole will of Art Given or on whether or not he will comply with his
obligation to Liza.

-Art Given obliges himself to sell a parcel of land to Jisoo if his father passes away within
three years. In the case that Art Given’s father passes away within the set time frame, Art Given
now has the obligation that depends upon his will on whether to give, to do or not to.

3. May an obligor be liable under an obligation to a suspensive although the condition has
not yet been fulfilled? Explain.
-No. According to Art. 1179, in suspensive conditions, the demandability and liabilities of
the obligation are also suspended with the obligation itself until the happening of an uncertain
event constitutes the obligation.

4-5. In an obligation to give a parcel of land to a suspensive condition, who is entitled to the
fruits that accrued during the pendency of the condition once said condition has been
fulfilled? State the rules in the case that the thing to be delivered:

a. Is lost with the debtor’s fault; without his fault

-According In Art 1189, If the thing is lost with the debtor’s fault, he is obliged to pay for
the damages. If the thing is lost without the debtor’s fault, then the obligation shall be
extinguished.
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b. Deteriorates with the debtor’s fault; without his fault

-According to Art. 1189, If the thing deteriorates with the debtor’s fault, the creditor
between two options, rescission of the obligations with damages or the fulfillment of the
obligation with indemnity for damages. If the thing deteriorates without the debtor’s fault, its
value will be impaired and reduced, and its impairment has to be shouldered by the creditor.

III. Problems
1. D borrowed 20,000 from C payable on or before august 30. Before the arrival of the due
date, C agreed to the promise of B to pay C if B wants. Can C insist that B pay not later than
August 30?
- According to Art 1182, the obligation is valid if the suspensive condition depends partly
by chance and party upon the will of the third person. Therefore, If C demands B for the
payment of his debt before August 30 then B et.is inclined to pay C as agreed by the both of
them, however, C cannot insist the payment of D before the arrival of his due date as it has not
passed

2. Suppose in the same problem, D obliges himself to pay C 10,000 after C has paid his
obligation to T. is the obligation valid?

- Based on Art 1182, the obligation is void as the agreement is one of a conditional
obligation wherein D’s obligation to C will only arise once C pays his debt to T, therefore C
cannot demand payment from D. In order for the obligation of D to be valid, C must first fulfill
his obligation to T. the debtor is not liable to pay the creditor if the creditor has not fulfilled his
obligation to the third party involved.

3. Seller agreed to sell to B a specific car for 200,000, delivery of the car and the payment of
the price to be made on June 15. Suppose S delivered the car on June 15 but B failed to pay
the price, what are the remedies of S?

-If B does not comply with his obligation to pay S, then according to Art. 1191, S may
choose between two remedies:
a. Action for specific performance (fulfillment) of the obligation with damages; or
b. Action for rescission of the obligations also with damages.
4. S sold a parcel of land to B for 240,000 payable in installments of 20,000 a year the land
was delivered to B who obtained ownership thereof. After B had paid 200,000, he could no
longer continuing paying in view of financial reverses but he was willing to pay balance of
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40,000 if given more time. Thereupon, S sued for rescission under article 1191. If you were
the judge, would you grant the rescission?
- Basing it on Art. 1191, If I were the judge, I would not grant the rescission and instead
grant a term for performance, as the guilty party, B, is still willing to comply with his obligation
but needs time to do so.
5. D binds himself to pay C a sum of money. Give 3 cases when the obligation of D is
demandable at once by C?
-When the obligation is pure. Ex: Art Given binds himself to pay ₱10,000 to Rose
“upon the demand of Rose” therefore, the obligation is immediately due and demandable.

-When the obligation is subject to a resolutry condition Ex: Art lets borrow Rose his
car as a mode of transportation going to university until Rose graduates from college. Art’s
obligation is immediately demandable but will be terminated at once when Rose graduates
from college.
- When the obligation is subject to a resolutory period. Ex: Art promise to pay
Jennie ₱10,000 every month until the end of the year.
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Different kinds of obligation

Obligations with a period

I. Definition:
Obligation with a period one whose effects or consequences are subjected In one way or
another to the expiration or arrival of said period or term.
Period a future and certain event upon the arrival of which the obligation subject to it
either arises or is terminated
Indefinite period a day certain which must necessarily come, although it may not be
known then when. Like the death of a person.

II. Discussion:
1. Has the debtor the right to recover what he has paid to the creditor before the arrival
of the period agreed upon? Explain.
-Yes, he can. If the debtor has paid his obligation and has proven to be unaware of
the arrival of the period, then he may recover what he has paid. According to Art 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. Hence, the Debtor has a right to recover what he
has paid.

2. If an obligation does not state a period for its performance, has the party the right to
ask the court to fix a period or duration thereof? Explain.
-No. If the obligation does not state period and no period is intended, the court is
not authorized to fix a period. The court also has no right to make contracts for parties if
there is no period stated or period intended. According to Art. 1197, if the obligation does
not fix a period, but from its nature and circumstances it can be inferred that a period was
intended, the courts may fix the duration thereof.

3. Give the cases when the obligee can demand the performance of an obligation even
before the arrival of the period agreed upon.
-The general rule of this is that the obligation is not demandable before the lapse
of the period, however, it is not an absolute rule. In the event that the period is
disregarded, the obligation becomes pure and, therefore, immediately demandable. The
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exceptions of which a debtor may not be able to comply with his obligation are mentioned
in Art 1198 which is:
(a). When after the obligation has been contracted, he (the debtor) becomes
insolvent, unless he gives a guaranty or security for the debt;
(b). When he does not furnish to the creditor the guaranties or securities which he
has promised;
(c) When by his own acts he has impaired the guaranties or securities after their
establishment, when through a fortuitous event they disappear, unless he
immediately gives new ones equally satisfactory.
(d). When the debtor violates any undertaking, in consideration of which the
creditor agreed to the period. e. When the debtor attempts to abscond.

III: Problems
1. D (debtor) borrowed ₱10,000 from C (creditor) at 15% interest per annum payable on
December 31. Can D require C to accept payment before December 31?
-Yes, D can pay his debt to C provided that it would include the agreed upon interest of
15%. According to Art 1196, whenever in an obligation a period is designated, it is presumed to
have been established for the benefit of both the creditor and the debtor, unless from the
tenor of the same or other circumstances, it should appear that the period has been
established in favor of one or the other. In this scenario, in order to equally benefit both
parties, December 31 was the agreed upon date, in that time period, D’s benefit in the
agreement was that he can use the money in a period of one year and C’s benefit was the
interest of the cash he lent to D. Therefore, in a contract of a loan with interest, this rule would
generally benefit both the Debtor (D) and the Creditor (C).

2. D binds himself to give ₱10,000 to C upon the death of the father of D. Is the obligation of
D conditional one or with a period?
-The obligation was one with a period—A suspensive period to be exact. According to
Art. 1193 par. 3, a day certain is understood to be that which must necessarily come, although
it may not be known when. In this scenario, the uncertainty consists not in the in whether the
day (ex. Death) will come or not but the exact time and date of the event taking place. The
death of D’s father is uncertain but is sure to come therefore D’s obligation to C will only begin
from the time D’s father passes away

3. D obtained a loan from C in the amount of ₱50,000, payable on August 10. As security for
his debt, D mortgaged his car in favor of C. The car, however, was substantially damaged
without the fault of D. What rights, if any, does C have under the law? May C demand
payment from D even before August 10?
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-According to Art 1198 par. 3, when the guaranties or securities given have been
damaged or have disappeared – If the security given deteriorates in such a manner that it
becomes illusory then it must have been deemed as lost or have disappeared as contemplated
in par. 3, however if in the case that the debt was secured by a bond – D’s car – and the failure
of D to renew the securities he has given with an equivalent guarantee upon its expiration will
give C the right to demand payment immediately, however, since hasn’t passed, C cannot ask
for payment as the due date has not passed yet.
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Different kinds of obligation

Alternative obligations
I. Definitions
Alternative obligation with 2 or more prestations, only 1 is due
Facultative obligation with only 1 prestation but can be substituted
Conjunctive obligation - One where there are several prestations and all of them are due

II. Discussion
1. Based on Art. 11200, the debtor cannot choose those prestations which are impossible,
unlawful, or which could not have been the object of the obligation. As an example, you cannot
kill someone in return for money, or deliver a horse with 10 legs from Mars in return for
something as well.
2. According to ART. 1203, if through the creditor’s acts, the debtor cannot make a choice according to
the terms of the obligation, the latter may rescind the contract with damages or the debtors may pay
any creditor of their choosing, however, if any demand has been made, then the debtors shall pay the
creditor who made the demand.
3. (a) As stated in ART. 1204, if some of the objects of the obligation have been lost or have
become impossible even through the fault of the debtor, the latter is not liable since he has the right of
choice and the obligation can still be performed.
(b) If all them have been lost or have become impossible through his fault, the creditor shall
have the right to indemnity for damages since the obligation can no longer be complied with.

III. Problems
1. D (debtor) borrowed P10,000 from C (creditor). It was agreed that D could pay P10,000 or deliver
his piano on August 22. On August 20, D informed C that the former would deliver his piano. Can D
still change his period considering that he was given the right of choice?
-Yes, D can as long as he gains consent from C since according to ART. 1201, the choice shall
produce no effect except from the time it has been communicated. Also, as a general rule stated in ART.
6, all rights may be waived

2. Under a contract, X (obligor) promised to deliver to Y(obligee) item one, or item two or item three.
Y was given the right of choice. What is the liability of X in case, through his fault:
a. Item two is lost or destroyed
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-If the loss of one of the things occurs through the fault of the debtor, the creditor may claim
any of those subsisting, or the price of that which, through the fault of the former has disappeared, with
a right to damages

b. all the item are lost or destroyed?

-If all the things are lost through the fault of the debtor, the choice by the creditor shall fall upon
the price of any one of them, also with indemnity for damages

3. S (seller) sold his TV set to B (buyer) who gave S the option to deliver instead his refrigirator. Is S
liable to B in case the TV is lost through S’s fault?
- Yes, S is liable. According to ART. 1206, if the principal thing is lost through the debtor’s fault,
he/she is liable for damages.
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Different kinds of Obligation

Joint and solidary obligation
I. Definition
1. Joint Obligation
-One where the whole obligation is to be paid or fulfilled proportionately by the different
debtors and/or is to be demanded proportionately by the different creditor.
2. Solidary Obligation
-One where each one of the debtors is bound to render, and/or each one of the creditors has a
right to demand from any of the debtors, entire compliance with prestation.
3. Active Solidarity
-Solidarity on the part of the creditors, where any of them can demand the fulfillment of the
entire obligation. Its essential feature is that of mutual representation among the solidary creditor with
powers to exercise the rights of others in the same manner of their rights.
4. Joint Indivisible Obligation
-The obligation is joint because the parties are merely proportionately liable. It is indivisible
because the object or subject matter is not physically divisible into different parts. In other words, it is
joint as toliabilities of the debtors or rights of the creditors but indivisible as to compliance.
5. Solidary Divisible Obligations
-The obligation is indivisible and the liability is solidary. In other words, we have a solidary
obligation the subject matter of which is indivisible.

II.Discussion
1. According to Art. 1207, the concurrence of two or more creditors or two or more debtors in one and
same obligation does not imply that each own of the latter is bound to render, entire compliance with
the prestation. There is a solidary liability only when the obligation expressly so states, or when the law
or the nature of the obligation requires solidarity

2. According to Art. 1214, the debtors may choose which creditor to pay; however, if a creditor makes a
demand, then the payment shall be made to him

3. (a) According to Art. 1215, the condonation will only affect the share of the certain debtor. The
obligation will not be extinguished and the other co-debtors will still have to comply with their
proportionate shares
(b) According to Art. 1215, the part of the obligation which is condoned or remitted shall be
extinguished. It is now the responsibility of the creditor who made the condonation/remission to be
liable to his co-creditors for their corresponding shares

4. According to Art. 1219, the debtor is not released from his responsibility to his co-debtors. If one of
the co-debtors would become insolvent, he still has the responsibility to share in the payment of the
insolvent debtor
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5. According to Art.1220, the debtor is not entitled to reimbursement from his co-debtors. The
remission of the entire obligation is essentially gratuitous and he paid nothing, thus, he shall not be
reimbursed

III. Problems
1. X,Y, and Z bind themselves to pay W P30,000. Only X received the money as per agreement
between X,Y, and Z. On the due date of the obligation, has W the right to demand the full payment of
P30,000 from Z alone?
- No. According to Art. 1207, if the obligation does not state solidarity, then it is a joint
obligation. And if it is a joint obligation, Z is only liable up to his proportionate share of P10,000, thus, W
cannot demand from Z the whole P30,000
2. X,Y, and Z promised to pay W solidarily P30,000 on or before September 10 without need of
demand. On September 9, X paid the whole P30,000 to W.
(a) How much can X collect from Y and Z?
-X can collect from Y and Z only the share corresponds to them, which is P10,000 each.
(b) May X collect interest from Y and Z?
- X cannot collect interest because payment was made before the debt was due.
(c) Suppose Z turns out to be insolvent, how much can X collect from Y?
- If Z becomes insolvent. X can collect from Y his share plus half of Z’s share, which is
P15,000
3. A owes B and C, solidary creditors, the sum of P20,000:
(a) Can C condone the debt without the consent of B?
- According to Article 1212, C can condone the debt without B’s consent. However, he
shall be liable to B and has to reimburse B’s share.
(b) Can C assign his rights without the consent of B?
- According to Article 1213, C cannot assign his rights to another person without B’s
consent. However, if there are 3 creditors, (B,C, and D) C can assign his rights to D even without
B’s consent

4. A, B and C are solidarily liable to D. For their failure to pay, D filed a complaint in court but only
against C. Has C the right to demand that A and B also included as party defendants?
-According to Art. 1216, C has no right to demand from D to include A and B as party defendants
because C, as a solidary debtor can be compelled to pay for the entire obligation.

5. A, B, and C, co-owners, sold a printing equipment to D. they solidarily bound themselves to deliver
the equipment on certain date. Through the fault of C, the equipment was completely destroyed. Give
the rights and obligation of the parties.
-According to Art. 1221, as far as D is concerned, A, B and C are all liable for the price of the
printing equipment as well as damages. A and B can recover from C since it was through his fault that
the object was destroyed. If C paid for the price and damages, he cannot ask for reimbursement from A
or
Art Given M. Baraquio
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Different kinds of obligations

Divisible and indivisible obligations
I. Definition
1. Divisible Obligation;
-One where the whole obligation is to be paid or fulfilled proportionately by the different
debtors and/or is to be demanded proportionately by the different creditor.
2. Individual Obligation;
-One the object of which, in its delivery or performance, capable of partial fulfillment.
3. Legal Indivisibility;
-Where a specific provision of law declares as indivisible, obligations which by their nature, are
divisible.

II. Discussion
1. According to Art. 1223, the obligation’s divisibility or indivisibility is not determined by the divisibility
or indivisibility of its object. Even if the object is divisible but the law or the parties intend the obligation
to be indivisible, then it is indivisible. But if the object is indivisible, the obligation is always indivisible as
well

2. Obligations deemed Indivisible Obligation provided by law to be indivisible even if thing or service
physically divisible

3. Obligations deemed Divisible Obligations which have for their the execution of a certain number of
days of work

III. Problems
1. A and B bind themselves to pay C their loan of P10,000 on a certain date. Is the obligation divisible
or indivisible?
-According to Art. 1225, Indivisible, as stated on the contract that A and B bind themselves to
pay C their loan P10,000 on a certain date.

2. A, B and C oblige themselves jointly to deliver to D a particulars horse on a certain date. The
agreement among A, B and C which was made known to D is that they will contribute the amount in
buying the horse. The horse was not delivered on the due date because of the failure of B to give his
share of the purchase price. State the rights and obligations of the parties.
-According to Art. 1224, The obligation to deliver the horse is converted into money obligation,
meaning, A, B and C will contribute the amount in buying the horse. A and C are liable to give their
shares. But, A and C are not liable for the share of B. On the other hand, B is now indebted to D.
Damages may be imposed against “B” the erring debtor if warranted by the circumstances.
Art Given M. Baraquio
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3. D finds himself to pay his loans of P10,000 in four equal monthly installments. Is the obligation of D
divisible or indivisible?
-Divisible. According to Art. 1225, loans to be paid by installments are deemed divisible
obligations. However, each installment of P2,500 is indivisible.
Art Given M. Baraquio
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Different kinds of obligation

Penal cause
I. Definition
1. Obligations with a Penal Clause;
-Obligations with a penal clause is one which contains an accessory undertaking to pay a
previously stipulated indemnity in case of breach of the principal prestations intended primarily to
induce its fulfillment.
2. Penal Clause;
-Penal clause is an accessory undertaking attached to an obligation to assume greater liability in
case of breach i.e., the obligation is not fulfilled, or is partly or irregularly compiled with.
3. Joint Penal Clause;
-When both principal obligation and the penal cause can be enforced.

II. Discussion
1.What is the purpose of incorporating a penal clause to an obligation? They are:
a. To insure their performance by creating an effective deterrent against breach, making the
consequences of such breach as onerous as it may be possible. This is the general purpose of a penal
clause; and
b. To substitute a penalty for the indemnity for damages and the payment of interests in case of
non-compliance; or to punish the debtor for the nonfulfillment or violation of the obligation. In the first
case, the purpose is reparation; the second, punishment.

2. In an obligation with a penal clause, may the creditor still recover damages and interests in addition
to the stipulated penalty? The creditor, in addition to the penalty, may recover damages and
interests:
a. When it is expressly stipulated by the parties;
b. When the obligor refuses to pay the penalty in which case the creditor may recover legal
interest thereon; or
c. When the obligor is guilty of fraud in the fulfillment of the obligation, in which case the
creditor may recover damages caused by the fraud.

3. In what cases may the debtor validly object to the enforcement of the stipulated party?
-(Art. 1227) The debtor cannot exempt himself from the performance of the obligation by
paying the penalty, save in the case where this right has been expressly reserved for him

III. Problems
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1. X promises to deliver to Y a specific horse. Their contract contains a penal clause that in case of
non-fulfillment, X shall pay a penalty of ₱10,000. X to just pay the penalty of ₱10,000instead of
delivering the horse. Has Y the right to refuse in lieu of the horse?
-Yes. According to Art. 1227, X cannot exempt himself from delivering the horse by paying the
penalty, unless this right was reserved for him.

2. In the same problem, X was able to show that Y did not suffer any damage by X’s violation of his
obligation. Can Y still enforce the penalty?
-Yes, According to Art. 1228, Y does not have to prove that he suffered damages in order to
demand the penalty. Since X violated the obligation. Y can enforce the penalty.

3. In the same problem, supposed that X was guilty of negligence in the fulfillment of his obligation. Is
X still liable for damages in addition to the penalty
-No. According to Art. 1226, X will only liable for damages if the stipulations so states, if X
refuses to pay the penalty, or when there is fraud on X’s part. Since there is only negligence and not
fraud, Y cannot demand for damages in addition to the penalty and X in only liable for the penalty.
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Extinguishment of obligation
Payment or performance
I. Definition
1.Payment
-Payment means not only the delivery of money but also the performance, in any other manner,
of an obligation.
2. Dation in payment
-It is the conveyance of ownership of a thing as an accepted equivalent of performance.
3. Application of payment
-It is the designation of the debt to which should be applied the payment made by the debtor
who has the various debts of the same kind in favor of one.
4. Payment by cession
-It is another form of payment. It is the assignment or abandonment of all properties of the
debtor for the benefit of his creditors in order that the latter may sell and apply the proceeds thereof to
the satisfaction of their credit.
5. Consignation
-It is the act of depositing the thing or amount due with the proper court, when the creditor
does not desire or cannot receive it, after complying with the formalities required by the law.

II. Discussion
1. May an obligor recover although there has been no strict and complete fulfillment by him and his
obligation?
-Yes. Usually, a debt or obligation to deliver must be completed or rendered to extinguish the
obligation as stated by Art. 1233, however, there are exceptions to this rule. Art. 1234 is the exception
to Art. 1233. According to Art. 1234, if the obligation was partially fulfilled and performed in good faith,
then the obligor may recover as though there had been aa strict and completed fulfillment, less
damages suffered by the obligor. If in the case of substantial performance, the obligee has benefitted
from that partial performance then it may be decided that the obligor is allowed to recover as if there
had been a strict and complete fulfillment of the obligation

2. What must be delivered when the obligation consists of:

(a) the delivery of the specific thing
-according to article 1244, the specific thing that is obliged to deliver is a thing that is one of a
kind or called “only” for instances, a car with plate number of 1111, a house with address in a specific
location or anything. What must be delivered is the real obligation to deliver the specific thing as this
cannot be substituted and neither can it be offered or demanded against the will of the debtor and or
the creditor.

(b) the delivery of a generic thing

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-as for the generic thing, it means the same equivalent either performance or thing for example,
Art Given obliged to deliver Lisa a Sunglasses, however Art Given loss the glasses. Contrast to specific
thing, generic thing will be right of the debtor or Art Given, Art Given can buy a new one glasses for the
obligation to extinguish. If the prestations consists of a generic thing, the debtor can either delivery the
object or offer dation in payment as an equivalent fulfillment of performance

3. When is the partial performance of the obligation allowed? There are cases, however, when partial
performance may be either required or insisted. Among these cases are:
a. When there is an express stipulation to that effect;
b. When debt is in part liquidated (definitely and determined or computed) and in part
unliquidated; and
c. When the different prestations in which the obligation consists of different terms or
conditions which affect some of them. In obligations which comprehend several distinct prestations, it is
evident that the prestations need not be executed simultaneously but each successive execution thereof
must be complete

4. What must a debtor do to be released from his obligation if the creditor refuses to accept payment
without a justifiable reason?
-According to Art. 1257 There shall be a consignation of the thing as it may release the obligor
from his obligation and shall be announced to the persons interested in the fulfillment of the obligation.
-according to Art. 1258 the consignation shall be made by depositing the things due at the
disposal of judicial authority, before whom the tender payment shall be proved, in a proper case, and
the announcement of the consignation in other cases.

5. Give the requisites of payment by cession. What rights are acquired by the creditor in this form of
payment as distinguished from dation on payment?

-There must be two (2) or more creditors; The debtor must be (partially) insolvent; The
assignment must involve all the properties of the debtor; and The cession must be accepted by the
creditors. In dation, the creditor becomes the owner of the thing given by the debtor, while in cession,
the creditors only acquire the right to sell the thing and apply the proceeds to their credits
proportionately.

III. Problems
1. D (debtor) owes C (creditor) ₱10,000 with G as guarantor. On the due date of the obligation, T, a
third person, offered to pay the obligation of D. Can C legally refuse to accept the payment? How
about an offer of payment from G?
-C can legally refuse the payment because creditor is not bound to accept the payment by the
third party (T) who has no interest in the fulfilment of the obligation, unless there is a stipulation to the
contrary. C is bound to accept the payment from G (guarantor) because he has an interest in the
obligation
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2. M (maker) issued a promissory note for ₱10,000 in favor of P (payee) who lost the note which was
found by T who demands payment from M. M did not know that the note was lost by P. Is M justified
in Paying T?

-Yes, M is justified in not paying T because payment to T is not valid and T is just the possessor
merely of the document evidencing the credit and not of the credit itself.
3. D owes C P10, 000 which was paid by T who demands reimbursement from D. a) When is D liable to
T? b) When is D not liable to T? c) When is D liable for less than ₱10,000 to T? d) May D be liable to T
for ₱12,000 if that was the amount paid by him to C?

(a) When is D liable to T?

-D become liable to T when T claims the reimbursement and D cannot pay it.
(b) When is D not liable to T?
-D is not liable to T when T paid the obligation and D previously accepted T’s generosity.
c) When is D liable for less than P10,000 to T?
-T paid P10 000 to C without the knowledge or against the will of D. And if D paid P4000
to C, then T can only reimburse P6000 because it is the only amount benefited to D.
Whereas T cannot recover anymore the P4000 from C. therefore, D’s liable becomes
lesser.
(d) May D be liable to T for P12,000 if that was the amount paid by him to C.
-D may become liable to T even T pay P12 000.

4. D owes C ₱10,000. Without the knowledge of C, D in good faith paid to T his obligation to C. Is D
required by law to prove that the payment has been received by C in order to be released from
liability
-D is not require any more to prove the payment from C because he is benefited in the payment.
It is not necessary because T acquired the rights of C against D, or C ratified or subsequently consented
to the payment to T

5. D owes C P10,000 in payment for which C accepts a check from D. On the ground that a check is not
legal tender, C later insists that D pay him in cash. Is D justified in rejecting this demand of C?
-yes, as long as the obligation has been extinguish.
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Extinguishment of the obligation

Loss of the thing due
I. Definition
1. Legal impossibility – This occurs when the obligation cannot be performed because it is rendered
impossible by the provision of law, although physically it may be possible of performance.
2. Loss of thing – It is understood when it perishes, or goes out of commerce or disappears in such a way
that its existence is unknown or it cannot be recovered.
3. Difficulty of performance – When the performance of the service has become so difficult as to be
manifestly beyond the contemplation of both parties, the court is authorized to release the obligor in
whole or in part.

II. Discussions
1. Give two (2) cases when a person may be released from an obligation validly entered into.
According to Art. 1266, a person may be released from an obligation if the prestation becomes
legally or illegally impossible without the fault of the obligor. Another case is when (According to Art.
1267) the service has become so difficult, as to be manifestly beyond the contemplation of both parties,
the obligor may be released in whole or part.
2. Give the cases when loss of the specific thing to be delivered will not exempt the obligor from
liability even in the absence of fault or delay.
According to Art.1262, the obligor will not be exempt from liability if it is stated by law or
stipulation. This also applies when the nature of the obligation requires the assumption of risk.
3. Will partial loss of the specific thing to be delivered extinguish the obligation? Explain.
According to Art. 1264, the courts will determine if the partial loss of the object of the obligation
is so important as to extinguish the obligation. There is a partial loss when a portion of the thing
destroyed or lost or when it suffers deterioration. In case of partial loss, the court will decide whether
the partial loss is such as to be equivalent to a complete or total loss.

III. Problems
1. X obliged himself to deliver to Y a specific carabao to Y on July 31. The carabao died on July 25. Y
has no proof that X was negligent. Is X liable to Y?
-Yes, X is still liable to Y because the specific thing carabao died on the possession of X, it shall be
presumed that carabao died was due on the fault of X.
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2. X obliges himself to deliver a specific thing to Y on a certain date. The thing was lost by X without
his fault and before he has incurred in delay. Does it mean that X is already exempt from liability?
-Yes, X is free from liability. According to article 1262, whenever a determinate thing is loss
without the fault of the debtor and before he has incurred in delay, the obligation shall be extinguished.
In the case of X, he lost that specific thing without his fault and before he has incurred in delay.
3. Suppose in the preceding problem, the thing was lost through the fault of Z, third person. State the
effect of the loss as far as X, Y, and Z are connected.
- According to Art. 1269, Y is given the right to proceed against to Z (third person) who is
responsible for the loss. The obligation of X is extinguished and he is not liable to Y.
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Extinguishment of obligation
Condonation or Remission of Debt
I. Definitions
1. Condonation or remission of debt – he gratuitous abandonment by the creditor of his right against
the debtor. It is thus a form of donation.
2. Inofficious remission – when the remission given is more than that which the creditor can give by will.

II. Discussions
1. Give the requisites in order that a condonation or remission of debt may be valid.
-According to Art. 1270, for condonation or remission to be valid, the following requisites must
concur: the existence of a demandable debt, renunciation of the debt is purely gratuitous, acceptance of
the condonation or remission by the debtor, formalities required by law on donation must be complied
with, what has been condoned or remitted must not be inofficious

2.When is the condonation or remission of debt considered inofficious? What is the remedy of the
party adversely affected thereby?
- According to Art. 1270, if the condonation or remission made by the creditor is excessive or
inofficious, it may be totally revoked or reduced depending on whether or not it is totally or only
partially inofficious

III. Problems
1. D (debtor) borrowed money to C (creditor) evidenced by a promissory note signed by D.
(a) What presumption arises if:
1. The promissory note voluntarily given by C to D?
-The presumption is that C is renouncing his right from the credit.
2. It is found in the possession of D?
- The presumption is that it was voluntarily delivered by C.
(b) When will the presumption of remission arise?
- The presumption is that it was voluntarily delivered by C.
2. Suppose in the same problem, the debt of D, aside from being guaranteed by G, is secured
by a pledge of a certificate of shares of stock delivered by D to C. What presumption arises if:
(a) the debt of D condoned by C?
-When the debt of D is condoned by C, the accessory obligation together with
the principal will both be extinguished.
(b) the certificate is later found in the possession of D?
-It is presumed that only the accessory obligation of pledge, which is the
certificate, is remitted, not the obligation itself. D shall continue to be indebted but does
not have to return the thing pledged.
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Extinguishment of obligations
Confusion or merger
I.Definition
1. Confusion – Is a mode of extinguishing of obligation wherein the characters or qualities of the
creditor and debtor are merged in the same person.
2. Merger – is the combination of fusion of one thing or right into another thing or larger importance so
that the lesser thing or right loses its individuality and becomes identified with the greater whole. It is
the merger of contracts whereby one obligation is absorbed by the other to extinguish the old.

II. Discussion
1. What is the rationale behind confusion or merger as a mode of extinguishing an obligation?
-According to Art. 1275, Obligation is extinguished if the roles of creditor and debtor are merged
in the same person. This is so because it becomes absurd since the person cannot claim payment from
himself.
2. Give the effect of merger when it takes place:
a. In the person of the principal debtor or creditor.
-According to Art. 1276, merger in the person of the principal debtor or creditor extinguishes the
obligation.
b. In the person of the guarantor of the principal obligation.
-According to Art. 1276, confusion which takes place in the person of the guarantor does not
extinguish the obligation. It only extinguishes the guaranty.

III.Problems
1. A, B and C are jointly liable to D in the amount of Php 15,000. Subsequently, D assigned his credit to
C in consideration for goods sold by C to D. Give the effect of the assignment.
-According to Art. 1277, confusion does not extinguish a joint obligation. Since C, who is
originally a joint debtor, becomes the creditor, then A and B are now liable to him for their share of Php
5,000 each.

2. Assuming the obligation of A, B, and C is solidary, distinguish the effect of the assignment from the
first problem.
-According to Art. 1277, merger in the person of one of the solidary debtors shall extinguish the
entire obligation. Thus the solidary obligation of A, B, and C to D is extinguished. However, C can still ask
for reimbursement from A and B of their share in the obligation of Php 5,000 each.
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Extinguishment of obligation
Compensation
I. Definitions
1. Compensation Compensation
-is the extinguishment to the concurrent amount of debts of two persons who, in their own
right, are debtors and creditors of each other.
2. Legal Compensation
-When it takes place by operation of law even without the knowledge of parties.
3. Facultative Compensation
-When it can be set up by only one of the parties.

II. Discussions
1. What are the distinctions between confusion and compensation as modes for extinguishing an
obligation?
-In confusion, there is only one person who is a creditor and a debtor of himself, while in
compensation, there are two persons involved, each of whom is a creditor and a debtor of the other;
-In confusion, there is but one obligation, while in compensation, there are two obligations; and
-In confusion there is an impossibility of payment, while in compensation there is indirect
payment.

2. In what way is compensation similar to payment?

- According to Art. 1289, Compensation is similar to payment as the rules of application of
payments apply to compensation. For example, if a debtor has various debts which are susceptible of
compensation, he must inform the creditor which all of them shall be the object of compensation. In
case he fails to do so, then the compensation shall be applied to the most onerous obligation.
3. May there be compensation similar to payment?
-Compensation is not similar to payment as it cannot take place when the object of the
obligation and its substitute are not of the same kind. According to Art. 1279, par. 2, In order that
compensation may be proper, it is necessary that both debts consist in a sum of money, or if the things
are consumable, they be of the same kind, and of the same quality if the latter has been stated.
4. When may compensation take place when one of the debts is due?
-Compensation may take place when the debtor has not yet paid the creditor on the date that
debtor’s obligation is due.

III. Problems
1. D borrowed ₱50,000 as character loan (no security) from a bank. Despite demands for payment
after the loan fell due, D did not pay the bank. D has a savings deposit of ₱40,000 with the bank. Has
the bank the rights to apply the payment of these debt?
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-according to Art. 1287, a bank has a right to set-off of the deposits in its hands for the payment
of any indebtedness to it on the part of a depositor. Since D failed to pay his obligation constitutes to
the failure of the bank to honor a deposit.
2. D owes C ₱10,000 payable on November 20. C owes D ₱10,000 on October 20. Can compensation
take place although the debts are not payable on the same date?
-based on Art. 1279 under requisites, (3) Two debts are demandable, however, as stated by Art.
1281, the parties involved may agree to compensation of the debts which are not due just yet.

3. Illustrate compensation which can be set up only by one of the parties.

-To According to Art. 1277-1288, one of its instances, wherein one of the debts arise from a
commadatum. A commadatum is a gratuitous contract wherein one of the contracting parties delivers a
non-consumable thing, to be used by the latter may use for a certain time and can return it.
-EX: Art borrows a set of jewelry from Rose. Rose cannot refuse to return the ring with the
reason of compensation because no compensation takes place if one of the debts arise from a
commadatum.

4. After contracting a debt in the amount of P10, 000 in favor of C, D succeeded through fraudulent
means to make C liable to him in the same amount. Assuming that both obligations are now due, may
the two debts be compensated against each other? What is the effect if the debt of C is later annulled
in court at the instance of D?
-Yes. The debts may be compensated against each other, assuming that all the requisites for
legal compensation is present in their agreements. Hence, the effect of the annulment is retroactive, as
if there had been no compensation that has happened.
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Extinguishment of obligation
Novation

I. Definition
1. NOVATION – Is the act of replacing an obligation to perform with another obligation; or adding an
obligation to perform; or replacing a party to an agreement with a new party.
2. MIXED NOVATION – When the object and/or principal conditions of the obligation and the debtor or
the credit, or both the parties, are changed. It’s a combination of real and personal novations.
3. EXPROMISSION – The act by which a creditor accepts a new debtor, who becomes bound instead of
the old, the latter being released.
4. DELAGACION – is substitution made at the instance of old debtor.

II. Discussion
1. Give the requisites of novation.
-A previous valid obligation, capacity and intention of the parties to modify or extinguish the
obligation, modification or extinguishment of the obligation and creation of a new obligation.
2. When there is subrogation, what rights are acquired by the new creditor?
-According to Art. 1293, states that subrogation with new debtor with original one may be made
even without the knowledge or against the will of the latter but not without the consent fo the creditor.
3. In novation, give the effect where:
a. The new obligation is violable
-Novation can take place. But if annulled, the novation must be considered as not having
taken place and the original one can be enforced, unless the intention of the parties is
otherwise.
b. The old obligation is voidable
-Novation cannot take place because there is nothing to novate. However, if the original
is only voidable or validated by ratification, the novation is valid.
4. In novation, are accessory obligations necessarily extinguished? Explain.
- No. Only the principal obligations unless otherwise agreed upon by parties.

III. Problems
1. T (third person) tells C (creditor) that T will pay the debt of D (debtor). C agrees. Is D released from
pay the debt of D (debtor) his obligation to C?
-In Art. 1293 D’s obligation is extinguished due to T’s exopromision, which substitutes D’s place.
Hence, D is not liable to pay C as his debt was paid without his consent.

2. Suppose in the above problem, D proposed to C that T would substitute D as the new debtor to
which C agreed. Is D still liable to C in case of insolvency of T?
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-According to Art. 1295, D is not liable in the event of the insolvency of T. As D, the old debtor,
has already assigned it to the new debtor, which is T.

3. T paid C the debt of D without objection from the latter. What are the rights of T?
-It is stated in Art 1302 par. 2, T automatically has the rights of C as he fulfilled the obligation of
the old debtor.

4. Illustrate a mixed novation.

- X is in debt Y ₱10,000 with an interest of 5% and Y has a debt to Z amounting to ₱500.
- It was agreed among the parties that X would pay the interest of P500 to Z. In this case, besides
the principal obligation of X, there is a stipulation in favor of Z, a third person.