CIVIL LAW REVIEW II - OBLIGATIONS & CONTRACTS Atty. Crisostomo Uribe - Course Outline (Dec. 2009)

Donnell R. Agaton | Recoletos de Manila - College of Law

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Joven Soriano JalosHighlight

A filed an action to compel B to fulfill the latters obligation to the former, will the action prosper?

Not necessarily because in natural actions no court action can compel performance because it is an action based on equity, conscience and natural justice.

Natural obligations are midway between civil obligations and the purely moral obligations.

In order that there may be a natural obligation, there must exist a juridical tie (vinculum juris) which is not prohibited by law and which in itself could give a cause of action, but because of some special circumstances is actually without such legal sanction or means of enforcing compliance by invoking the intervention of the court.

Basis: Art. 1423 Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the following articles.

What are the conditions necessary for the existence of natural obligation?

1. That there be a juridical tie between two persons.

2. This tie is not given effect by law.

What is the distinction between a moral obligation and a natural obligation?

X died, his heirs are ABC, ABC paid to Y 10 million 2 days after Xs death, after 6 months thereafter the heirs are trying to recover the excess because the estate is only 3 million. Can the heirs recover the excess of 7 million from Y?

The heirs can recover the excess from Y. This is because the payment is not voluntary.

In natural obligation, if the payer voluntarily paid, the creditor has the right to retain what he has paid.The test on whether an act is voluntary is whether the person knew that they cannot be compelled to pay but nonetheless they pay.

In this case, it could not be said that the payment is voluntary because when the heirs paid the amount of 10 million, it was only 2 days after the death of X, and by that time normally, the heirs still dont know the estate of the decedent and that they would receive less.

When is an act voluntary with respect to performance of a natural obligation?

It is voluntary when the payer paid without fraud, threat, or any vitiation being employed.

Most importantly, the payer knew that he is not compelled to pay but the payer nonetheless paid.

The reason why a person who is not legally obligated to pay, voluntary pays because of CONSCIENCE.

A executed a promissory note date Feb. 1, 1994 stating that I promise to pay X the amount of 1 million, and signed by him. To this day December 6, 2009, more than 10 years had lapsed, may X still recover from A?

It may be inferred that the obligation is a pure obligation demandable at once, and as such it is due and demandable on Feb. 1 1994. Therefore the action had already prescribed because more than 10 years had lapsed from Feb. 2, 1994. This scenario may be applicable in a contract of sale.

When if ever A paid to X the amount of 1 million to Y despite its prescription, A cannot recover from X because such is his natural obligation, provided it has been made voluntarily which means he knew that he is not compelled to pay but nonetheless paid it.

However, when the contract is one of loan as an example. The period of prescription cannot set in because a contract of loan is intended to be paid at some future time, and not demandable at once. In this instance, resort to what is intended by the parties to be the due date is controlling to determine whether or not the action had prescribed, and any payment thereafter converts it from civil obligation to a natural obligation.

Moral Obligation Natural Obligation

There is no juridical tie. There is a juridical tie.

It is an act of pure liberality which springs from blood, affection, or benevolence.

It is a legal fulfillment of an obligation.

It is within the domain of morals.

It is within the domain of law.

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For a natural obligation to arise does it require that that there is an agreement?

Not necessarily. It may either be a with or without an agreement. Why? go figure.

When shall natural obligation be converted into civil obligation?

The signing of a document has generally the effect of converting a natural obligation to a civil obligation. The signer renounces the defense which prevents enforcement of the obligation, which can thereafter be the basis of a judicial action.

The promise to perform a natural obligation is as effective as performance itself, and converts the obligation into a civil obligation.

A prescribed debt of the deceased mother of the debtor was held to be a sufficient consideration to make a valid and effective the promise of the son to pay the same ( Villaroel vs. Estrada 71 Phil 140)

Note however, that promise to perform must be voluntary. Therefore, payment by mistake is not voluntary and may be recovered.

One who pays a natural obligation believing it to be civil, does not thereby recognize the natural obligation; and there being no civil obligation either, he can recover what he has paid.

Note: Partial payment of an obligation does not generally convert such into a civil obligation, the part paid cannot be recovered but, the part not paid cannot be enforced, except when such natural obligation is one that is subject to ratification or confirmation, the partial payment converts it into a civil obligation (novation or natural obligation by prescription), except when the same is contrary to law, morals or public order.

Guaranty of natural obligation; when considered a civil obligation:

Generally, in principle, a natural obligation cannot be guaranteed because the liability of the guarantor presupposes that there must be a prior exhaustion of the property of the principal debtor, and that the debtor after paying can recover from the principal debtor- and both of this cannot legally be done when the obligation is natural.

However, because of Art. 2052 A natural obligation may be guaranteed. What really happens is that the guaranty of the natural obligation changes its character. When the debtor offers a guarantor for his natural obligation, he impliedly accepts the coercive remedies to enforce the guaranty, and

therefore, the transformation of the natural obligation into a civil obligation.

Illicit obligations:

Obligations which are contrary to morals and good customs do not constitute natural obligations, as such any payment can be recovered except when both are in pari delicto, or when one was at fault (see arts. 1411 and 1412).

Art. 1424 When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered.

Art. 1425 When without the knowledge or against the will of the debtor, a third person pays a debt which the obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he has paid.

Art. 1426 When a minor between (18 and 21) years of age who has entered into a contract without the consent of the parent or guardian, after the annulment of the contract voluntarily returns the whole thing or price received, notwithstanding the fact that he has not been benefited thereby there is no right to demand the thing or price thus returned.

Note: When a contract is annulled the parties are bound to make mutual restitution. However, when the ground of annulment is the incapacity of a person to enter into contract, such as minority, he is not bound to make restitution except to the extent that he was benefited. If there is no benefit he likewise not bound to make restitution. However, he has a natural obligation to do so, and he make a restitution (voluntarily) he cannot recover what he has delivered.

Note: The minor cannot recover what he has voluntarily returned whether or not the other party still has it in his possession.

Art. 1427 When a minor (between 18 and 21 years of age), who has entered into a contract (annulable but not yet annulled) without the consent of the parent or guardian, voluntarily pays a sum of money or delivers a fungible thing (means consumable) in fulfillment of the obligation, there shall be no right to recover the same from the obligee who has spent or consumed it in good faith.

Generally when a contract is annulled, there will be mutual restitution, except when the party who enters into a contract is a minor, he is not bound to

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make restitution of the thing received by him except to the extent he was benefited. If he is not obliged to make restitution, but he nevertheless returns the same, he can no longer recover because such is a natural obligation.

Under this article however, there is no natural obligation contemplated but a case of a civil obligation under an annullable contract. Compared to Art. 1426 the contract was already annulled, but Art. 1427, the contract is not yet annulled. Hence, the same is valid and is enforceable unless it is set aside by competent court in an action for that purpose. Any return made by the minor can be recovered, except when the creditor or obligee has spent or consumed it in good faith.

How good faith of creditor established:

Belief of the creditor that the debtor has capacity to deliver the object of the contract.

Note: If the thing delivered is non-consumable, the debtor cannot recover if the thing delivered is no longer in the possession of the creditor who has acted in good faith, either because he has alienated it or it has been lost.

Art. 1428 When, after an action to enforce a civil obligation has failed, the defendant voluntarily performs the obligation, he cannot demand the return of what he has delivered or the payment of the value of the service he has rendered.

Art. 1429 When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the property which he received by will or by the law of intestacy from the estate of the deceased, the payment shall be valid and cannot be rescinded by the payer.

Art. 1430 When a will is declared void because it has not been executed, but one of the intestate heirs, after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable.

PRESCRIPTION OF ACTIONS

Art. 1139. Actions prescribe by the mere lapse of time fixed by law. (1961)

Note: The mere delay in the enforcement of a claim does not result in any reduction or loss of right, unless the period required by law for prescription has expired.

Prescription is only a defense and not a basis of right of action. It must be defensively pleaded otherwise it is deemed waived if not timely raised or pleaded before or during the hearing of the case.

Art. 1140. Actions to recover movables shall prescribe eight years from the time the possession thereof is lost, unless the possessor has acquired the ownership by prescription for a less period, according to Articles 1132, and without prejudice to the provisions of Articles 559, 1505, and 1133. (1962a)

Art. 1132. The ownership of movables prescribes through uninterrupted possession for four years in good faith.

The ownership of personal property also prescribes through uninterrupted possession for eight years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of which he has been illegally deprived, as well as with respect to movables acquired in a public sale, fair, or market, or from a merchant's store the provisions of Articles 559 and 1505 of this Code shall be observed. (1955a)

Art. 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor. (464a)

Art. 1595. Where, under a contract of sale, the ownership of the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the contract of sale, the seller may maintain an action against him for the price of the goods.

Where, under a contract of sale, the price is payable on a certain day, irrespective of delivery or of transfer of title and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price although the ownership in the goods has not passed. But it shall be a defense to such an action that the seller at any time before the judgment in such action has manifested an inability to perform the contract of sale on his part or an intention not to perform it.

Although the ownership in the goods has not passed, if they cannot readily be resold for a reasonable price, and if the provisions of article 1596, fourth paragraph, are not applicable, the seller may offer to deliver the goods to the buyer, and, if the buyer refuses to receive them, may notify the buyer that the goods are thereafter held by the seller as bailee for the buyer. Thereafter the seller may treat the goods as the buyer's and may maintain an action for the price. (n)

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Art. 1133. Movables possessed through a crime can never be acquired through prescription by the offender. (1956a)

Art. 1141. Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition of ownership and other real rights by prescription. (1963)

Art. 1142. A mortgage action prescribes after ten years. (1964a)

If the action to recover the mortgage debt itself has prescribed, the action to recover the interest must also prescribed.

Art. 1143. The following rights, among others specified elsewhere in this Code, are not extinguished by prescription:

(1) To demand a right of way, regulated in Article 649;

(2) To bring an action to abate a public or private nuisance. (n)

No prescription shall run in favor of a co-owner or co heir against his co-owners or co-heirs so long as he expressly or impliedly recognize the co-ownership, otherwise acquisitive prescription may set in.

Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (n)

When property is registered in anothers name, an implied or constructive trust is created by law in favor of the true owner. The action for reconveyance of the title to the rightful owner prescribes in ten years from the issuance of the title. But if fraud has been committed, and this is the basis of action, not implied trust, the action will be barred after 4 years.

Art. 1145. The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract. (n)

Art. 1146. The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff; (2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year. (As amended by PD No. 1755, Dec. 24, 1980.)

Note: A petition for quo warranto prescribes in 1 year from the date of ouster but when the plaintiff was separated from his employment for unjustifiable cause it prescribes in 4 years due to an injury to the rights of the plaintiff.

An action base on fraud prescribe in 4 years from discovery of the fraud.

Art. 1147. The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation. (n)

Art. 1148. The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147 are without prejudice to those specified in other parts of this Code, in the Code of Commerce, and in special laws. (n)

Art. 1149. All other actions whose periods are not fixed in this Code or in other laws must be brought within five years from the time the right of action accrues. (n)

Note: Limitations upon the right of the government to assess and collect taxes will not be presumed in the absence of clear legislation to the contrary, and where the government has not by express statutory provision provided a limitation upon its right to assess unpaid taxes, such right is imprescriptible.

Art. 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought. (1969)

The moment the right or duty occurs, then the right of action accrues, and the action can be legally instituted; from that moment, therefore, the period of prescription of action begins to run.

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When an obligation is subject to a suspensive condition, prescription runs only from the happening of the condition.

Where the obligation is without date of maturity, or a note is payable on demand, prescription begins to run from the date the note or obligation and not from demand, except when the liability for the unpaid balance of a subscription to shares of a corporation, here the liability of the subscriber does not arise until call or demand for payment by the board of directors, and therefore, prescription would run only from such demand.

Art. 1151. The time for the prescription of actions which have for their object the enforcement of obligations to pay principal with interest or annuity runs from the last payment of the annuity or of the interest. (1970a)

Note: The period of prescription in obligations with interest runs only from the last payment of interest, is applicable only to cases where the principal debt is already due.

When principal obligation is not yet due, payment of interest at stipulated intervals does not cause the running of period of prescription, which will commence only after the maturity of debt.

Art. 1152. The period for prescription of actions to demand the fulfillment of obligation declared by a judgment commences from the time the judgment became final. (1971)

Art. 1153. The period for prescription of actions to demand accounting runs from the day the persons who should render the same cease in their functions.

The period for the action arising from the result of the accounting runs from the date when said result was recognized by agreement of the interested parties. (1972)

Art. 1154. The period during which the obligee was prevented by a fortuitous event from enforcing his right is not reckoned against him. (n)

Art. 1155. The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.

Note: The extinctive prescription is interrupted when the creditor made a demand before the lapse of the period fixed by law. A verbal demand upon the debtor is not sufficient to interrupt or renew the prescriptive period.

What is an obligation?

Obligation is a juridical necessity to give, to do, or not to do (Art. 1156).

Is it correct to say that the definition is not accurate, in the sense that there must be another prestation which is not to give aside from to give, to do or not to do?

The definition is accurate. The obligation not to give includes not to do.

Is the definition defective because it only pertains to the debtor side and it lacks the juridical relation in its entirety?

The definition is not defective. The word obligation itself pertains to the debtor side, hence it is proper. The obligation pertains to the debtor and right pertains to the creditor. A person who has a right can compel the other, but he cannot be compelled to perform his right. An obligation may not be waived; but a right may be exercised or not. Rights and obligations are different matters.

What is the determining factor that the definition under Art. 1156 is a civil obligation?

Because of the phrase juridical necessity

What are the essential elements of obligation?

1. Active subject2. Passive subject3. Juridical tie (vinculum juris)4. Prestation

Who are the subjects of an obligation?

1. Active subject (creditor)2. Passive subject (debtor)

In a contract of lease, who is the active subject; the passive subject?

Since it is considered a reciprocal obligation (bilateral contract), both the lessee and the lessor may be considered the passive or active subjects, depending on the aspects of delivery of the property or payment of rent.

In the delivery of the property to the lessor is the passive subject and the lessee is the active subject. The former is obliged to deliver the property subject of the lease to the lessee.

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In the case of payment, the lessee is the passive subject, and the lessor is the active subject. The lessee is obliged to pay the amount of rent to the lessor.

In a contract of sale, who is the active and the passive subject?

In a contract of sale, since it is a reciprocal obligation (bilateral contract) both the seller and the buyer may be considered the passive and the active subject depending on whether it is for payment of the amount of the thing sold, and on the obligation to deliver the thing subject of the sale.

What is the reason why a debtor considered a passive subject?

He is considered a passive subject because in the absence of demand from the creditor the debtor could just wait, and let the prescription run in favor of the debtor. If the creditor does not demand for the performance of the obligation, there will be no compulsion.

There must be proof of demand in writing.

Is there an instance in case of consignation a right may be exercised?

None. Consignation is a legal obligation. An obligation and a right are two different concepts.

Should an obligation and a right co-exist?

Yes. If someone has an obligation somebody is going to have a right.

Is there an instance where a right and an obligation pertain to the same person?

Yes there are is an instance where an obligation and a right pertain to the same person, such that the person acquired such right as in the case of confusion.

What is the object (prestation) of an obligation?

The object of an obligation is nothing but a particular conduct of the debtor. The thing is not the object of the obligation; it is his conduct necessary to produce the effects of the obligation whether it is an obligation to give, to do or not to do.

It may involve a thing in an obligation to give.

What are the requisites of prestation or object?

1. It must be possible, physically and juridically

2. It must be determinate, or at least determinable according to pre-established elements or criteria; and

3. it must have a possible equivalent in money.

Note: The prestation need not actually be of pecuniary value. The criterion to determine whether an obligation has a pecuniary value is not limited to the object or prestation thereof, but extends to the sanction which corresponds to the juridical duty.

Therefore, the creditors interest need not be economic or patrimonial; it may be sentimental, moral or ideal. But the object of prestation must have an economic value or in case of nonfulfillment, be susceptible of substitution in money or something of patrimonial value.

What is a juridical tie or vinculum juris?

It is the efficient cause, juridical tie, or legal tie which binds the parties established either by (any source of an obligation):

a. lawb. bilateral actsc. unilateral acts (crimes or quasi-delicts)

What obligation has no juridical tie?

Moral obligations has no juridical tie because it is an act of pure liberality which springs from blood, affection or benevolence. It is within the domain of morals.

What are the sources of obligations which binds the parties?

1. Law2. Contracts3. Quasi-Contracts4. Delicts5. Quasi Delicts (Art. 1157)

Unilateral Promises; a source of obligation

Generally a unilateral promise before acceptance is not binding, except by a unilateral declaration of the will with intent to be bound to a particular person.

Is the enumeration exclusive?

Yes. The enumeration is exclusive as provided in the case of Sagrada Orden vs. Nacoco where the SC rationalized that (not in the express manner)

Give an instance where 2 or more sources of obligation exist at the same time?

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In the case Saludaga v. FEU, April 30, 2008 the court ruled that the school shall be held liable for damages for breach of contract in the schools obligation to provide students with a safe and secure learning atmosphere.

FEU breached the school-student contract for negligence on its obligation to ensure and take adequate steps to maintain peace and order within the campus. It found that FEU had failed to undertake measures to ascertain and confirm that the security guards assigned in the campus possess the qualifications required in the Security Service Agreement between FEU and Galaxy (Security agency).

The Court also ordered Galaxy and its president, Mariano D. Imperial, to jointly and severally pay FEU damages equivalent to the amount awarded to Saludaga for acts of negligence that resulted to FEUs breach of obligation to its student. Galaxy was found negligent in the selection and supervision of its employees, as supported by the lack of administrative sanction against Alejandro Rosete, the security guard who shot Saludaga. Rosete, who was instead allowed to go on leave after the shooting incident, eventually disappeared.

Hence, contract and quasi delict was applied at the same incident to hold the above named parties liable.

CU: The security guard shot a movie goer because the latter tried to hack the former with a bolo. Because of this incident the heirs of the deceased filed a criminal case against the security guard. The case was dismissed, as a result of which the guard incurred expenses for the payment of his attorney and demands reimbursement from his employer. In this case, the employer is not liable to reimburse his employee to reimburse the expenses incurred by the employee in defending himself primarily because there is no law requiring such employer to reimburse.

The fact that the direct and proximate cause of the expenses incurred in defending himself was derived from the performance of his function does not make the employer liable because there is an efficient intervening cause which is the filing of the cases based on malicious prosecution.

1. Law

Art. 1158 Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of law which establishes them; and as to what has not been foreseen, by the provisions of this book.

E.g. The giving of legal assistance to the employee is not a legal obligation. While it might and possibly be regarded as a moral obligation, it does not at present count with the legal sanction of any man made law. If the employer is not legally obliged to give legal assistance to its employee to provide him with a lawyer, said employee cannot recover from the employer the amount he paid a lawyer hired by him.

In obligations arising from law, who has the burden of proving the same?

Generally, the person who alleges a fact has the burden of proving the same. However, there are certain facts which need not be proven. There is no need to allege such facts because the law presumes the existence of a right and presumes the existence of a fact.

Who has the burden of proof in obligations arising from contracts?

The obligee has the burden of proof because in Art. 1158, as expressly provided, obligations arising from law are not presumed. This is one instance where there is no presumption not to allege facts.

The princess of stars:

One of the deceased caused by the sinking of the ship were buried by a third person and asking later on for reimbursement from the decedents aunt on the expenses for the burial.

Here there is an obligation arising from such act base on quasi contract under Art. 2164 (other quasi contracts) and under such provision only persons obliged to give support can be compelled to reimburse. In this case, since the aunt is not one of those persons obliged to give support cannot be compelled to reimburse the expenses for burial.

2. Contracts

Art. 1159 Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

Note: This provision presupposes that the contract is valid and enforceable. The same should not be contrary to law, morals, good customs, public policy or public order.

E.g. A contract stipulating that non payment of the loan considers the house and lot sold. This is a case of contract of loan and a promise of sale of a house and lot. Such contracts are perfectly legal,

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the agreement is the law between them, and must be enforced.

E.g. The validity of restraints upon trade or employment is to be determined by the intrinsic reasonableness of the restriction in each case, rather than by any fixed rule, and such restriction may be upheld when not contrary to public welfare and not greater than is necessary to afford a fair and reasonable protection to the party in whose favor it is imposed. The contract in question is not obnoxious to the rule of reasonableness. While such restraint, if imposed as a condition of the employment of a day laborer, would at once be rejected as merely arbitrary and wholly unnecessary to the protection of the employer, it does not seem so with respect to an employee whose duties are such of necessity to give him an insight into the general scope and details of his employers business. The contract in this case, considering the circumstances, is not unreasonable. It must therefore be enforced. The rule in this jurisdiction have the force of law between the contracting parties.

Pre-Contractual Obligations; when binding; gives rise to liability

If the offer by one party is clear and definite, leading the offeree in good faith to incur expenses in the expectation of entering into the contract; and the withdrawal of the offer is without any legitimate cause.

3. Quasi Contracts

Kinds of Quasi Contracts

1. Solution Indebiti2. Negotorium Gestio3. Other Quasi Contracts

1. Negotiorum gestio (officious management) Art 2144 Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. This juridical relation DOES NOT arise in either of these instances:

1) When the property or business is not neglected or abandoned

2) If in fact the manager has been tacitly authorized by the owner

2. Solutio indebiti (payment not due)Art 2154 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.

3. Other quasi-contracts (support given by strangers and other Good Samaritans)

Art 2164

When, without the knowledge of the person obliged to give support, it is given by a stranger, the latter shall have a right to claim the same from the former, UNLESS it appears that he gave it out of piety and without intention of being repaid.

Art 2165

When funeral expenses are borne by a third person, without the knowledge of those relatives who were obliged to give support to the deceased, said relatives shall reimburse the third person, should the latter claim reimbursement.

Art 2166

When the person obliged to support an orphan, or an insane or other indigent person unjustly refuses to give support to the latter, any third person may furnish support to the needy individual, with right of reimbursement from the person obliged to give support. The provisions of this article apply when the father or mother of a child under eighteen years of age unjustly refuses to support him.

Art 2167

When through an accident or other cause a person is injured or becomes seriously ill, and he is treated or helped while he is not in a condition to give consent to a contract, he shall be liable to pay for the services of the physician or other person aiding him, UNLESS the service has been rendered out of pure generosity.

Art 2168

When during a fire, flood, storm, or other calamity, property is saved from destruction by another person without the knowledge of the owner, the latter is bound to pay the former just compensation.

Art 2169

When the government, upon the failure of any person to comply with health or safety regulations concerning property, undertakes to do the necessary work, even over his objection, he shall be liable to pay the expenses.

Art 2170

When by accident or other fortuitous event, movables separately pertaining to two or more persons are commingled or confused, the rules on co-ownership shall be applicable.

Art 2171

The rights and obligations of the finder of lost personal property shall be governed by Articles 719 and 720.

Art 2172

The right of every possessor in good faith to reimbursement for necessary and useful expenses is governed by Article 546.

Art 2173

When a third person, without the knowledge of the debtor, pays the debt, the rights of the former are governed by Articles 1236 (recover what has been beneficial to debtor) and 1237 (cannot compel creditor to subrogate payor in his rights).

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Basis of Quasi Contracts:

Art. 2142 Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi contract to the end that no one shall be unjustly enriched at the expense of another.

The enumeration of the provisions for quasi contracts, not exclusive:

Art. 2143 The provisions for quasi contracts in this Chapter do not exclude other quasi contracts which may come within the purview of the preceding article.

Note: Even if not so provided by law it may be considered as falling within the purview of quasi contract when it is lawful, unilateral and voluntary, and the underlying principle is that no one shall be unjustly enriched at the expense of another.

Will there be any liability even if no one has been unjustly enriched?

In case of negotorium gestio, the owner has the obligation to reimburse the gestor even if the latter has not been unjustly enriched.

Therefore it would appear that the principles behind quasi contracts does not really fall under the principle of unjust enrichment. The principle behind this obligation is implied contracts, which is the consent given by the obligor.

The owner left his house for a short vacation, the very night they lefts, their house was burned, the neighbors saved some of their appliances. Is there negotorium gestio in this case?

The appliances are not under the management of the gestor and that there must be abandonment and neglect of the property.

This case therefore falls under other quasi contracts.

4. Acts or omissions punished by law (Delicts)

Under Art. 100 of the RPC provides that every person criminally liable is also civilly liable. This however is not absolutely true because there are certain felonies where no civil liability will arise even if convicted of a crime. This is because there is no private offended party in some crimes.

Under Art. 104 of the RPC in addition to civil liability, restitution, reparation of damage caused, indemnification of consequential damages.

Note: It is not correct to say that every time a person is held criminally liable under this source of obligation all these kinds of liability (restitution, reparation of damage caused, and indemnification of consequential damages) would arise.

Note: In justifying and exempting circumstances though a person is not held criminally liable does not necessarily mean that he is not civilly liable.

In justifying circumstances, generally there would be no civil liability, except in paragraph 4 where it provides that Any person who, in order to avoid an evil or injury, does not act which causes damage to another, provided that the following requisites are present: First. That the evil sought to be avoided actually exists; Second. That the injury feared be greater than that done to avoid it; Third. That there be no other practical and less harmful means of preventing it.

In exempting circumstances, generally there is civil liability except paragraph 4 where it provides that: Any person who, while performing a lawful act with due care, causes an injury by mere accident without fault or intention of causing it.

Note: If there is no criminal conviction, this source of obligation will not arise but may arise from other source of obligation or quasi delict.

4. Culpa Aquiliana (Quasi Delict)

Is culpa extra contractual an appropriate name for quasi delict? No.

In the case of Gangco vs. MRR (38 Phil 768) obligations can be classified either from contractual obligations and extra contractual obligations. As to obligations where the source is not a contract, it can called extra contractual obligations.

Therefore culpa extra contractual means negligence outside of a contract.

Art 2174

When in a small community a nationality of the inhabitants of age decide upon a measure for protection against lawlessness, fire, flood, storm or other calamity, any one who objects to the plan and refuses to contribute to the expenses but is benefited by the project as executed shall be liable to pay his share of said expenses.

Art 2175

Any person who is constrained to pay the taxes of another shall be entitled to reimbursement from the latter.

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If there is negligence outside of a contract does it mean that it would fall under quasi delict? Not necessarily because there are 4 other sources of obligations outside of a contract like negligence arising from law, but the source would be the law.

In quasi contracts, under negotorium gestio, the negligence of the gestor does not necessarily mean that it would fall under quasi delict because it would fall under quasi contracts.

Note: The use of the word culpa extra-contractual nowadays are no longer used by the Supreme Court. Commonly what is used is the word torts.

Is torts an appropriate term for quasi delict?

Torts as a name is not appropriate because it is more encompassing as it would include acts which could not be the basis of an action under quasi delict.

Torts would include malicious act, intentional act, wrongful, acts punished by law. In these names, it cannot be the basis of an action for quasi delict. An action for quasi delict can only arise based on a negligent act or omission.

But the Supreme Court is of the view that malicious acts, intentional acts, acts punished by law can be the basis of an action for quasi delict. It is well supported by the history of the law and the present provisions of the law.

Particularly Under Art. 2176 where it provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called quasi delict and is governed by the provisions of this chapter (chapter on quasi-delicts).

Under the old civil code, in order for one to be held liable under quasi delict, the act must not be punished by law. This phrase no longer appear under the new civil code, therefore even if the act is not punished by law it cannot be the basis of an action for quasi delict.

Is Fault the same as negligence?

No. Because fault would cover intentional and unintentional acts.

Compliance with Obligations:

How should these sources of obligations be complied with? The manner of complying with this sources of obligations.

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

Art. 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. (1094a)Art. 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him. (1095)

Art. 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 the delivery.

If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor.

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 be responsible for any fortuitous event until he has effected the delivery. (1096)

Art. 1166. The obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned. (1097a)

Art. 1244. The debtor of a thing cannot compel the creditor to receive a different one, although the latter may be of the same value as, or more valuable than that which is due.

In obligations to do or not to do, an act or forbearance cannot be substituted by another act or forbearance against the obligee's will. (1166a)

Art. 1246. When the obligation consists in the delivery of an indeterminate or generic thing, whose quality and circumstances have not been stated, the creditor cannot demand a thing of superior quality. Neither can the debtor deliver a thing of inferior quality. The purpose of the obligation and other circumstances shall be taken into consideration. (1167a)

Art. 1460. A thing is determinate when it is particularly designated or physical segregated from all other of the same class.

The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties. (n)

Art. 442. Natural fruits are the spontaneous products of the soil, and the young and other products of animals.

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Industrial fruits are those produced by lands of any kind through cultivation or labor.

Civil fruits are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. (355a)

Art. 443. He who receives the fruits has the obligation to pay the expenses made by a third person in their production, gathering, and preservation. (356)

If the sources of the obligations is the law, then the provisions of the law would provide how this source of obligation can be complied with.

If it is a contract then the stipulation provide how the contract shall be complied with.

If it is an obligation to give, what is the manner of compliance?

It depends on what is to be given, whether it is a determinate thing or an indeterminate thing.

Can there be a valid obligation to deliver a generic thing?

Yes. This may arise from law and not from a contract of sale. Sale of a car or of a horse cannot be considered a valid sale. But a testamentary provision in a will which is a generic thing is valid disposition. The law expressly allows this.

A testamentary provision giving an heir a car, is the testamentary provision allow the heir to reject the disposition?

He may validly reject or wrongfully reject the disposition. For obligations to deliver a generic thing, the debtor cannot deliver a thing which is of inferior kind, but neither can the creditor demand a thing which is of superior quality.

However, what is superior or inferior is a very subjective determination. What may be superior to me may be inferior to most of you.

Therefore if the purpose of the testator is to give his car is to allow the grandson to use the car in competitions, then a car insufficient to perform in race tracks is improper. Moreover, aside from the purpose is the value of the estate which should not impair the legitime of the estate.

In obligations to give a determinate thing, what is the manner of compliance?

The primary obligation of a debtor is to give the very same thing which he promised to deliver.

In an obligation to deliver a Kia Pride, the debtor offered to deliver a BMW, can the obligation be validly extinguished?

Yes, though the creditor cannot be compelled to accept, he may however want to accept. Thus, the obligation will be extinguished.

Is there an exception where a debtor is obliged to deliver a thing requires a different kind of diligence in taking care of the thing other than a good father of a family?

Yes, if the law requires a higher degree of diligence such as what is required of common carriers. Other than the law, is the stipulation of the parties would require a higher degree of diligence. In the absence of a law or a stipulation to that effect, the diligence of a god father of a family should be observed.

Kinds of Obligations:

When would an obligation become due?

It depends on what kind of obligation is involved.

It is wrong to say that an obligation becomes due upon demand. Since there can be no valid demand when the obligation is not yet due. Therefor demand has got nothing to with an obligation becoming due.

What kind of obligations become due and demandable at once?

1. In pure obligations2. In conditional obligations if the condition is

resolutory but will be extinguished at the happening of the event.

3. In obligation with a term or period if resolutory in character but it will be extinguished at the happening of the term.

Is there such a thing as suspensive obligation?

None. It only exists in suspensive term or condition.

Is there such a thing as void condition?

There is no such thing as void condition. A condition is merely an event which may or may not happen. There is nothing valid or void about conditions.

Void and Valid pertain to obligations.Suspensive, potestative, etc pertains to conditions.

A pure obligation whose performance does not depend upon a future and uncertain event or

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upon a past event unknown to the parties. Is this statement valid?

This is not valid. To be pure it must not be conditional and not with a term. In the above statement both the future and uncertain must both concur and this would only exclude a condition. A term can never be uncertain. It is just a space of time. An event is certain to happen. Therefore it should be or. If and is used, it would only exclude a condition with a condition and not those with a term. If or is used it would exclude obligations with a conditions and also those with a term.

If in a promissory note, on its face it does not say or it cannot be determined whether it is conditional or pure obligation. But there is a provision in the note that upon receipt from the estate there is no assurance that the creditor will receive in the estate, which presupposes a conditional obligation. Note however, the court treated it as a pure obligation because...... (Pay vs. Palanca)

What is the consequence of a pure obligation or a conditional obligation but resolutory in character?

It is demandable at once, and necessarily the prescriptive period starts to run from the time the cause of action accrues. It is wrong to say that a cause of action accrues from the time the demand was made. If such be the case no action shall prescribe.

What are the kinds of conditions?

1. Suspensive2. Resolutory3. Potestative - 4. Casual 5. Mixed6. Possible7. Impossible8. Negative - requires the omission of an act.9. Positive - requires the performance of an act.

What is the effect of an impossible condition?

If the obligation is with an impossible condition, it shall annul the obligation. The phraseology is defective, instead of annulled it should have been void. Annullable presupposes a valid obligation which is valid until annulled. This instance is an impossible condition with a suspensive condition.

May there be a valid obligation with an impossible condition?

Yes. If the condition though impossible is in the negative, like i will give you 1 million if you dont kill

my wife. Negative impossible conditions are deemed not written, as such it is considered as a pure obligation unless there are other words and phrases which would not make it a pure obligation.

What are the kinds of impossible conditions?

Legal impossibility and physical impossibility.

Is it proper to say unlawful conditions?Yes. What is improper is void conditions.

In unlawful or impossible conditions in testamentary dispositions, what is the effect?

It does not result in a void testamentary disposition. Under the law in succession, such unlawful or impossible condition is deemed not written.

The debtor promises to pay if his son does not die of cancer within 1 year. State the status of the obligation whether it is valid or not, and if valid state whether the obligation is due and demandable?

The condition is suspensive negative possible(mixed)condition. This is a valid obligation. It is due and demandable depending on what happened to the son.

If the son dies of cancer within 1 year, the obligation does not arise. But even if the son did not die of cancer within 1 year the debtor can be compelled to pay, because in that moment it is already certain that the son will not die of cancer within 1 year such as when the son died of a car accident.

In a condition that B should marry C within 1 year but after 2 weeks he entered the seminary? Is it certain that the condition is not longer possible?

No. B may go out of the seminary before the 1 year period lapsed.

However, if C married D is it possible that the condition mentioned above is no longer possible?

No. because D may die and B can marry C within the time mentioned in the condition.

What is a potestative conditon?

Under 1182, it is a condition that is dependent upon the sole will of the debtor.

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When the condition depends upon the sole will of the debtor and it is a suspensive condition? Will such be valid?

It is void. This is because a debtor who can impose a condition upon his sole will, he will make sure that the suspensive condition will not happen so that the obligation will not arise.

A promise to give B his car if A will go to Baguio within 5 days? Is it potestative?Yes, such is potestative that is dependent upon the sole will of the debtor. It is because whether or not A will go to Baguio solely depend upon his will.

Is passing the Bar exam a potestative condition? Casual or dependent upon chance?

It is neither a potestative nor a casual condition.

The grandfather promises to give his grandson a car upon the latters passing the bar exam. The grandson passed the bar and demanded the delivery of the car. But the grandfather refused to deliver the car and argued that he cannot be compelled to deliver the same because it is a potestative condition.

It is not a potestative condition but rather a suspensive condition. Therefore the grandfather can be compelled to deliver.

Assuming for the sake of argument that such condition is a potestative condition, can the grandfather be compelled to deliver because the condition is void?

The grandfather still cannot be compelled because under 1182, it provides that a condition is made by the sole will of the debtor. In this case it is not the grandson who is the debtor but rather the grandfather. It is not dependent upon the sole will of the grandfather. Hence not a potesative condition. Therefore the obligation is a valid one.

A obliged herself in 2001 to sell to B a house and lot upon his passing the bar exam. B passed the bar exam in 2005. However in 2003 A sold the house and lot to C and this house from 2001 was being rented by D. B upon passing the bar exam demanded upon A to deliver to him the house and lot pursuant to the 2001 obligation made by A. Who has a better right over this house and lot? B or C?

As a rule, it is B who has a better right because under Art. 1187 the effect of the happening of the condition retroacts to the time of the constitution of the obligation as if the condition already happened as early as 2001.

However, as an exception, C may have a better right if C can prove that he is a buyer in good faith and for value, he would have a better right. But it must be noted that in order to be a purchaser in good faith and for value, such should be registered. As such, C would not be bound by the agreement made by A and B.

Assuming that B has a better right, B demanded all the proceeds of the rentals from 2001 until 2005, is he entitled to the rentals?

Since, under Art. 1187 the effect of the happening of the condition retroacts to the constitution of the obligation, would presuppose that B may be entitled to the proceeds of the rents as if he was the owner of the property from 2001.

However, it is submitted that B is not entitled to the rentals because fruits received in reciprocal obligation (since this is a contract of sale) it is deemed mutually compensated. B is obliged to pay the price and Ahas the obligation to transfer ownership. Under the law it is deemed mutually compensated because, A is entitled to interests on the price while B is entitled to the rentals, under the law fruits received are deemed mutually compensated.

Is the view that the retroactive effect of Art. 1187 does not cover fruits?

No. That is why there is a provision that in reciprocal obligations, the fruits received are deemed mutually compensated. There is therefore a retroactive effect. In the above case, B is entitled to the fruits but due to the provision on mutual compensation, he shall no longer receive the fruits.

In conditional obligations, if the condition is suspensive in character, the happening of the condition shall give rise to the obligation. Ordinarily if the condition did not happen, the obligation will not arise. When shall the obligation even if the condition did not happen, it shall give rise to the obligation?

When it was the debtor who voluntarily prevented the happening of the condition.

However, is there an instance where the debtor who voluntarily prevented the happening of the condition in order to give rise to the obligation, still not be compelled to perform?

Yes, when though he prevented the happening of the condition, such prevention was made when he was exercising his right.

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In obligation is an obligation with a suspensive term , the obligation arise because the term is certain to arrive, it will only give rise to the demandability of the obligation.

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In suspensive condition, the creditor filed an action, will the action prosper?

It may prosper for as long as it is not an action for specific performance because the condition being suspensive, there is yet no obligation that arise. But, the creditor may file an action for the preservation of his rights, like if the action is to compel the other party to have the agreement registered with the appropriate registry of property.

In suspensive conditions imposed on an obligation, what is the effect of any improvement or deterioration on the thing to be delivered?

In improvements, if the cause of the improvement is through nature, such improvements shall pertain to the creditor.

If in improving the property the debtor spent a sum of money, the creditor is entitled to the improvements. Under the law the creditor in this case only has the rights of a usufructuary. The debtors rights is limited to the removal of the improvement as long as it will not cause damage to the thing to be delivered.

In obligations with a term or period, may be definite if there is a day certain. Indefinite periods will arrive, but dependent on certain events which is certain to happen but the specific date is not certain.

Another classifications of periods is the source of the period on whether it is by conventional or voluntary period (by agreement of the parties), fixed by law, or fixed by the court.

Is a 1 year period of redemption, a period in relation to obligations?

No. It is a period in the exercise of a right, because who has a right is not compelled to redeem.

Give examples of period fixed by law?

1. Non payment of taxes2. In a lease contract, even when the parties did

not fix a period but it provides that the payment

of rents be paid annually, it is presumed that the period of rent is for 1 year.

Under Art. 1197 it was provided that if the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. What is the guidelines wherein the court in this instance may fix the period?The court having power to fix the period presupposes that there is a perfected contract. If there is no perfected contract, the court has no power to fix the period.

What is the procedure for the court to fix a period?

To determine whether there is a period or no period stated in the contract. If there is, the fixing of the period is not proper under Art. 1197.

Secondly, to determine whether the parties intended that there be a period, if none, such as when the parties intended that it be a pure obligation, then the fixing of a period is not proper under Art. 1197.

Thirdly, even if there is a period intended by the parties, the court must also determine whether such period had already prescribed or not. Such that an action for specific performance on an obligation which does not yet arise, the action cannot prosper because the action is premature. Or if a period had already lapsed and the obligation involves an obligation to do, an action for specific performance can no longer prosper, but the action for damages shall prosper.

In a contract between the parties it was provided, that debtor must remit the proceeds upon the sale of the tobacco. Is a period contemplated by the parties?

The argument by the debtor that the estafa case is premature because the remedy of the creditor if to go to court for the latter to fix the period is not proper because the agreement by the parties is one with a period.

The argument by the debtor that there was no period fixed by the parties, which would render the provisions of Art. 1197 not to apply, will not prosper. The provisions of the agreement clearly provides for a period which is upon the sale of the tobacco. Therefore, upon the sale the debtor can be compelled to remit. There is no need for the court to fix the period (Lim vs. People).

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Under Art. 1180 which provides that when the debtor binds himself to pay when his means permit him to do so, the obligation shall be deemed to be one with a period subject to the provisions of Art. 1197, and as such the court shall fix the period. In this case, when will the obligation become due, so that an action for the court to fix the period may prosper?

The creditor should only go to the court if he knew that the debtor already has the means to pay. If the debtor already has the means to pay, go to court to fix the period and upon the lapse of the period, the obligation become due and demandable.

When the period is solely dependent upon the will of the debtor, such is also a judicial period.

Under Art. 1191 The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing the period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance, with Articles 1385 and 1388 and the Mortgage Law.

Can the debtor be compelled to perform the obligation before the arrival of the period, or can the creditor be compelled to accept the obligation even before the arrival of the period?

In the second scenario the creditor cannot be compelled to accept the obligation even before the arrival of the period because the creditor may not want to accept because he had not place to store the goods which is the subject of the obligation.

Is a period for the benefit of both the creditor and the debtor?

No. It is merely a disputable presumption that the period is both for the benefit of the creditor and the debtor.

If the phrase provided for in the obligation is payable on or before December 31, and no other factor has been provided for, is it both for the benefit of the creditor and the debtor?

No such phrase is clearly for the benefit of the debtor. This is because the debtor cannot be

compelled to perform the obligation before the arrival of the period.

On the other hand, however, the debtor can compel the creditor to accept the performance of the obligation even before the expiration of the period.Is there contracts solely for the benefit solely of the creditor?

Yes, when there are stipulations that the debtor cannot pay within 3 months or 2 years. This could be said to be for the benefit of the creditor because of a scenario where the creditor has the right to the fruits of the thing subject of the obligation. This is probably because the creditor would want to harvest first before the returns the thing.

However, the creditor may return it at any time because the provision is solely for the benefit of the creditor.

A borrowed money from B in January payable at the end of the year. To secure the fulfillment of the obligation A delivered his car to B and it was stipulated that B can use the car. After a few months, come August of the same year, the debtor offered to pay the entire amount to the creditor and also demanded for the return of his car. Can the creditor be compelled to accept the payment? Can he be compelled to return the car?

While the debtor cannot be compelled to pay before the arrival of the period, the creditor cannot also be compelled to accept the performance of the obligation because of the principle that a period is both for the benefit of both the debtor and the creditor.

Base on the facts the above principle finds application in the present case because the debtor cannot be compelled pay before the arrival of the period which is the end of the year. However, the creditor has an interest in the period because it was stipulated that he can use the car before the arrival of the period. Therefore under the facts, the period is both for the benefit of the debtor and the creditor.

Even assuming that the period is solely for the benefit of the debtor, before the arrival of the term, is it possible that the creditor validly demand for the performance of the obligation?

Yes. That can happen if the debtor lost his right to make use of the period. Under Art. 1198, a debtor may lose his right to make use of the period.

Art. 1198. The debtor shall lose every right to make use of the period:

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(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt;

(2) When he does not furnish to the creditor the guaranties or securities which he has promised;

(3) When by his own acts he has impaired said guaranties or securities after their establishment, and when through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;

(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period;

(5) When the debtor attempts to abscond.

A borrowed a sum of money from B. To secure the fulfillment of his obligation he mortgaged his house and lot. Before the arrival of the period (before the obligation became due), the house was burned due to a fortuitous event. The day after the creditor demanded the payment of the debt.

Was there a valid demand?

Yes.

Can the debtor be compelled to pay?

He lost his right to make use of the period even if the lost was due to a fortuitous event, unless of course he gives another security for the debt.

Why would the debtor lost his right to make use of the period when the lost was due to a fortuitous event and the same is not imputable to the fault of the debtor?

This is because the creditor would not have left him money if not for the security.

In number of Art. 1198, how can the debtor give another security if the debtor is already insolvent?

If the debtor still has other properties even if he is still insolvent. Or he may not have any properties, but he can provide for a guarantor or a secure a mortgage to secure the fulfillment of the obligation.

Kinds of obligations as to multiple prestations:

In multiple prestations where one of the prestation is impossible to perform even if the other prestation still are possible to perform, may the obligation be considered to have been extinguished?

It depends on the kind of obligation involved. It may be a conjunctive obligation, alternative obligation, facultative obligation.

In conjunctive obligations, the impossibility of performance of one will not result in the extinguishment of the obligation because there is another or two or more other obligations to be performed.

In facultative obligations, it depends on whether there is already substitution at the time of the impossibility of the performance of one of the prestation. If before substitution the impossibility of one of the obligation becomes impossible to perform due to a fortuitous event, the obligation is extinguished. But if one of the obligation become impossible to perform due to the fault of the debtor, the obligation is not extinguished (debatable on the second scenario).

If in facultative obligation what was lost or became impossible to perform was the substitute prestation and there was no substitution yet at the time of the loss, the obligation is not extinguished because the due prestation was the principal prestation.

Conjunctive- and; alternative-or; facultative-debtor has the right to make a substitution or to perform instead a substitute prestation.

In alternative obligations, if there was already a communication of a choice. By then the obligation is converted into a simple obligation and the one chosen was the one impossible to perform especially if it is due to a fortuitous event. As such, the obligation is extinguished. If there was already a communication of a choice but what become impossible was the other prestation which was not chosen, the obligation is not extinguished.

Bs car was lost due to the fault of the debtor, what are the remedies of the creditor?

It depends on who has the right to choose. If it shows that the choice is not expressly granted to the creditor, the right of choice pertains to the debtor. Under the law it was provided that the choice is with the debtor, unless otherwise expressly granted to the creditor.

If the choice is with the debtor, even if it was due to his fault, he has other prestations to choose from without being held liable for damages. Anyway, there is yet no due prestation because the debtor has not yet able to make a choice.

If however in alternative obligations, the first two prestations become impossible to perform due to the fault of the debtor, and the remaining

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prestation becomes impossible to perform due to a fortuitous event. Can the debtor be held liable for damages?

The debtor can be held liable if this is the choice of the creditor. However, if the choice is with the debtor, he cannot be held liable for damages even if the loss of the last remaining prestation was due to a fortuitous event. This is because the debtor diminished the possibility of the performance of the obligation and secondly he was at fault therefore he can be held liable for damages under Art. 1170. However, the provisions in Art. 1170 presupposes a simple obligation, and thus not applicable in the present case to make the debtor liable. Secondly, even if the obligation has diminished the performance of the obligation imputable to the debtor, he cannot be held liable because it can be considered as his choosing to make the first two prestations impossible to perform, and the last prestation be considered as his choice. The last though lost due to fortuitous event, cannot make the debtor liable.

Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. (1101)

The horse died due to the fault of the debtor, this time the creditor has the right to choose. What are the rights of the creditor?

He can choose from one of the remaining prestations or choose the prestatation which was lost due to the fault of the debtor.

If the creditor choose to demand for the value of the obligation which was lost due to the fault of the debtor, the debtor can be held liable for damages.

If the creditor chose to compel performance through the remaining prestations, the debtor cannot be held liable for damages.

The horse was lost due to the fault of the debtor, then after the second prestation was also lost due to the fault of the debtor, and thirdly a book was lost due to the fault of the debtor. What is the extent of the liability of the debtor under the foregoing circumstances? Can the creditor choose for the value for any of the three prestations?

It depends on who has the right to choose. If the creditor has the right of choice, he can choose on the value of any of the three prestations.

But if the choice is with the debtor, the liability will be based on the value of the prestation which was lost last due to his fault.

Qualification in Alternative Obligation: If one of the prestations become impossible to perform due to the fault of the debtor, and the choice is with the creditor:

The creditor can either demand for the value of the prestation with damages or he can demand for the performance of one of the remaining prestations without damages.

Second view: If the creditor can demand for the performance of one of the remaining prestations, the creditor may opt to demand for the value of the thing which was lost due to the fault of the debtor. In this instance under alternative obligations, it is possible that the debtor is not the owner of the horse. In alternative obligations the debtor is not sure whether he can deliver the horse or not. if the horse was owned by the creditor, as such he can seek damages. If the thing lost was owned by the debtor as a valid premise, the debtor cannot be held liable for damages. In alternative obligations it must be remembered that the prestation may either be owned by the debtor or not.

Facultative obligations

In facultative obligations it is improper to say that there is only one prestation. For how could it be considered to fall in obligations with multiple prestations if there is only one prestation involved. Rather it is better to say that there is only one prestation due in a facultative obligation. At any given point in time there can only be one prestation due unlike the other prestations.

When will the obligation in facultative obligation become due?

If there is already a communication of the substitution.

If the principal prestation before substitution became impossible to perform due to the fault of the debtor , can the creditor demand to perform the substitute prestation?

No. This is because in facultative obligation, the choice is always with the debtor.

The remedy of the creditor is to demand for damages.

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If before substitution became impossible to perform due to the fault of the debtor, can the debtor be held liable for damages by the creditor?

The debtor cannot be held liable for damages because that was not the due prestation. The debtor will bear the lost, but he cannot be held liable for damages.

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When can the debtor make the substitution?

The debtor can make the substitution at any time.

Can the debtor make the substitution if the debtor is already in delay?

No. Why should the law allow the debtor to make substitution is he is already in delay. If he is already in delay he can already be liable for damages. There is no sense to give him a right if he is already liable for damages.

If the obligation is already impossible, can the debtor make a substitution?

No. For how can the debtor make a substitution if the obligation is already impossible, unless it was really the agreement or the intention of the parties. Otherwise, it is considered simply as an obligation with a penal clause. Upon non compliance with the obligation, the debtor can be compelled to perform the other prestation or the accessory undertaking.

Is the substitute prestation had already been agreed upon by the parties?

Yes. There can never be a valid facultative obligation when the substitute prestation has not been agreed upon. Otherwise if the debtor has the right to make a substitution without the substitute prestation having been agreed upon, it may be prejudicial to the creditor because such will give the right to the debtor to deliver an inferior prestation.

JOINT AND SOLIDARY OBLIGATIONS

A filed an action against B for the recovery of a sum of money. Would it matter if it is a joint or solidary obligation?

Yes. There will be an issue because A may file an action against A as a joint debtor or a solidary debtor. There is a difference on an action filed against one defendant or an action filed against a debtor. A defendant may either be a joint debtor or

a solidary debtor. The creditor need not sue everyone.

Assuming there is an issue whether the obligation is a joint or a solidary obligation, who would claim that it is a joint obligation?

It would be B who would claim that the obligation is joint. The plaintiff A on the other hand who demanded payment from only one of the debtors would definitely claim that the obligation is a solidary obligation.

What would be an indication in a case which will warn the examinee on whether the obligation is joint or solidary?

The extent of the liability is the determining factor that the obligation is joint or solidary. The question is whether one of the debtors can be compelled the entire amount.A and B sold 1000 sacks of rice to X and Y. X demanded delivery of 1000 sacks of rice from A and B. A and B delivered the 1000 sacks of rice to X. Y did not receive anything out of the 1000 sacks of rice. Can Y still compel A and B to deliver a portion of the 1000 sacks of rice. If he can, how many can Y demand?

It is a joint obligation unless from the stipulation of the parties or in the nature, or the law it shows solidarity. Under the facts, when A and B delivered the 1000 sacks to X it did not actually extinguished the obligation to Y because he did not receive anything from the 1000 sacks of rice, therefore it did not extinguish the obligation.

What obligations are considered solidary?

Art. 927. If two or more heirs take possession of the estate, they shall be solidarily liable for the loss or destruction of a thing devised or bequeathed, even though only one of them should have been negligent. (n)

Art. 1824. All partners are liable solidarily with the partnership for everything chargeable to the partnership under Articles 1822 and 1823. (n)

Art. 1822. Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of co-partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act. (n)

Art. 1823. The partnership is bound to make good the loss:

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1) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and

(2) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership. (n)

Art. 1911. Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. (n)

Art. 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. (1731)

Art. 1945. When there are two or more bailees to whom a thing is loaned in the same contract, they are liable solidarily. (1748a)

Art. 2157. The responsibility of two or more payees, when there has been payment of what is not due, is solidary. (n)

Art. 2194. The responsibility of two or more persons who are liable for quasi-delict is solidary. (n)

Art. 2146. If the officious manager delegates to another person all or some of his duties, he shall be liable for the acts of the delegate, without prejudice to the direct obligation of the latter toward the owner of the business.

The responsibility of two or more officious managers sha l l be so l idary, un less the management was assumed to save the thing or business from imminent danger. (1890a)

Art. 94. (FC) The absolute community of property shall be liable for:

(1) The support of the spouses, their common children, and legitimate children of either spouse; however, the support of illegitimate children shall be governed by the provisions of this Code on Support;

(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the community, or by both spouses, or by one spouse with the consent of the other;

(3)(3) Debts and obligations contracted by either

spouse without the consent of the other to the extent that the family may have been benefited;

(4) All taxes, liens, charges and expenses, including major or minor repairs, upon the community property;

(5) All taxes and expenses for mere preservation made during marriage upon the separate property of either spouse used by the family;

(6) Expenses to enable either spouse to commence or complete a professional or vocational course, or other activity for self-improvement;

(7) Ante-nuptial debts of either spouse insofar as they have redounded to the benefit of the family;

(8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for self-improvement;

(9) Ante-nuptial debts of either spouse other than those falling under paragraph (7) of this Article, the support of illegitimate children of either spouse, and liabilities incurred by either spouse by reason of a crime or a quasi-delict, in case of absence or insufficiency of the exclusive property of the debtor-spouse, the payment of which shall be considered as advances to be deducted from the share of the debtor-spouse upon l iquidation of the community; and

(10)Expenses of litigation between the spouses unless the suit is found to be groundless.

If the community property is insufficient to cover the foregoing liabilities, except those falling under paragraph (9), the spouses shall be solidarily liable for the unpaid balance with their separate properties.

Art. 121. (FC) The conjugal partnership shall be liable for:

(1) The support of the spouse, their common children, and the legitimate children of either spouse; however, the support of illegitimate children shall be governed by the provisions of this Code on Support;

(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other;

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(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have benefited;

(4) All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnership property;

(5) All taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse;

(6) Expenses to enable ei ther spouse to commence or complete a professional, vocat ional , or other act iv i ty for sel f -improvement;

(7) Ante-nuptial debts of either spouse insofar as they have redounded to the benefit of the family;

(8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for self-improvement; and

(9) Expenses of litigation between the spouses unless the suit is found to groundless.

If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance with their separate properties.

Give an example of an obligation which is solidary by nature?

The liability of those who figured in vehicular mishaps where a person is a passenger of one at the time of the mishap, such passenger hold the owner of the vehicle under breach of contract together with the driver under the contract. The owner of the vehicle as well as the driver may be held liable under quasi delict. There is no basis under the law which would make them solidarily liable the case being based on different causes of action. There is no law which provides for solidarity, but by the nature of the obligation they are held solidarily liable.

For contractual obligations, may the partners be held solidarily liable?

No. because as a rule joint without prejudice that the partners binding themselves solidarily.

May an insurance company of a vehicle be held solidarily liable with the owner of the vehicle , the driver, and the employer of the driver?

No. It is only the owner of the vehicle (Sio Choy) and the the employer of the driver (San Leon Rice Mill) should be held solidarily liable and not the insurance company.

The basis of the liability of the owner of the vehicle is Art. 2184 which provides that in motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have, by the use of due diligence, prevented the misfortune it is disputably presumed that a driver was negligent, if he had been found guilty of reckless driving or violating traffic regulations at least twice within the next preceding two months. Since the owner was not in the vehicle Art. 2184 is not applicable. If the owner was not in the motor vehicle, the provisions of article 2180 may be applicable.

Secondly the basis of the liability of the employer is in Art. 2180 which provides: The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged ill any business or industry. But the owner of the vehicle is not the employer so Art. 2180 is likewise not applicable.

xxx xxx xxx

The responsibility treated in this article shall cease when the persons herein mentioned proved that they observed all the diligence of a good father of a family to prevent damage.

Under the foregoing, the employer and the owner of the vehicle are solidarily liable as joint tortfeasors. Under the law: The responsibility of two or more persons who are liable for a quasi-delict is solidarily.

The basis of the liability of the insurer is the insurance contract while the employer and the owner is torts which could not make the insurer be solidarily liable (Malayan Insurance vs. CA)

For contractual obligations may the partners in a partnership be hold solidarily liable?

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No. As a rule joint unless of course if the partners bind themselves solidarily and under certain specific scenarios or exceptional circumstances under the civil code which make them solidarily liable. (See provisions above)

Note: In these scenarios the examinee must be ab l e t o de te rm ine unde r wha t spec i fic circumstances that the debtor may be held solidarily liable.

Other word or phrase for solidary?

Joint and collective, joint and several, jointly and individually.

Ronquillo vs. CA

Clearly then, by the express term of the compromise agreement and the decision based upon it, the defendants obligated themselves to pay their obligation "individually and jointly".

The term "individually" has the same meaning as "col lect ively", "separately", "dist inct ively", respectively or "severally". An agreement to be "individually liable" undoubtedly creates a several obligation, 14 and a "several obligation is one by which one individual binds himself to perform the whole obligation. 15

In the case of Parot vs. Gemora 16 We therein ruled that "the phrase juntos or separadamente or in the promissory note is an express statement making each of the persons who signed it individually liable for the payment of the fun amount of the obligation contained therein." Likewise in Un Pak Leung vs. Negorra 17 We held that "in the absence of a finding of facts that the defendants made themselves individually liable for the debt incurred they are each liable only for one-half of said amount

The obligation in the case at bar being described as "individually and jointly", the same is therefore enforceable against one of the numerous obligors.

A and B, debtors X and Y creditors. X filed an action against A, the action was dismissed, thereafter X filed an action against B, may the action be dismissed?

It would depend on what kind of obligation is involved, whether it is joint or solidary.

If the obligation is solidary, there is more reason that the action against B should likewise be dismissed since it joint obligation is solidary.

However, even if A and B are solidarily liabl