606 kinds of obligations continuation in lieu of august 18 absence.pptx

04/21/2023 BCMENDOZA 1

KINDS OF OBLIGATIONS

(in lieu of 8/18/’14 meeting)


Does a condition which depends upon the will of the debtor invalidate both the condition and the obligation?

• Yes. This is because its validity and compliance is left to the will of the debtor, and cannot therefore be easily demanded. (suspensive)

• But if the condition is a pre existing one, ‐ only the condition is void, leaving the obligation itself valid.

• Further, if the condition is RESOLUTORY, it is valid because what is left to the sole will of the debtor is not the existence or the fulfillment of the obligation but merely its extinguishment.


XPNs: PD DoNT. ‐1. Pre existing obligation ‐2. Obligation is Divisible 3. In simple or remuneratory Donations 4. In case of conditions Not to do an impossible thing 5. In Testamentary dispositions • THE OBLIGATIONS REMAIN VALID, ONLY THE

CONDITION IS VOID AND DEEMED TO HAVE NOT BEEN IMPOSED. IT IS APPLICABLE ONLY TO OBLIGATIONS NOT TO DO AND GRATUITOUS OBLIGATIONS.


Examples of suspensive potestative* conditional obligations

*depending upon the will of the debtor= conditions considered VOID by the Courts 1. I will pay you after I receive a loan from a bank.

(O=V/Pure)2. I will pay you after I have harvested fish.3. I will pay you upon the sale of the house in which

I live.4. I will pay you the price of the forest concession

you sold me upon my operation of the same.


Examples of suspensive potestative* conditional obligations

*To Mary, my beloved, I oblige myself to give you my mansion when I feel like it.- C and O = void

*To Perry, my sweetheart, I oblige to pay you the P1M I owe you when I feel like it.-C not considered imposed;- O is valid and enforceable, demandable at once as the same is a pre-existing one.


What about a condition which depends upon the will of the creditor?

• If the fulfillment depends upon the will of the creditor, in any case, both the condition and the obligation are valid.


Other types of conditions

• code: CaMP NID CAPI ‐ ‐1. Casual – the performance or fulfillment of the

condition depends upon chance and/or the will of a third person ex. I will give you P10,000 if I win tomorrow’s Lotto draw.

2. Mixed – the performance or fulfillment of the condition depends partly upon the will of a party to the obligation and partly upon chance and/or the will of a third person Ex. I will give you P10k if your proposition will be approved by the Board.


Other types of conditions?

• code: CaMP N‐ ID CAPI ‐3. Positive – involves the doing of an act

Ex. . . . if you will graduate . . . 4. Negative – involves the omission of an

act Ex. . . .if you will not graduate. . .



• code: CaMP N‐ ID CAPI ‐

5. Divisible – is susceptible of partial performance Art. 1225: when obli is presumed to be divisible

(#,met.units,I)6. Indivisible – is not susceptible of partial

performance Art. 1225: when obli is presumed to be indivisible

(specific thing, nature)**intention of the parties, law, character of the prestation –

determinants of severability of prestation

04/21/2023 BCMENDOZA 10


• code: CaMP NID‐ ‐CAPI 7. Conjunctive – there are several

conditions in an obligation all of which must be performed

8. Alternative – there are several conditions in an obligation but only one must be performed

04/21/2023 BCMENDOZA 11


• code: CaMP NID CA‐ ‐ PI • 9. Possible – is capable of fulfillment according

to the nature, law, public policy or good customs

• 10. Impossible – is not capable of fulfillment according to nature, law, public policy or good customs Exs. To make a dead man alive, to make a circle that is at the same time a square, to kill “XYZ”

04/21/2023 BCMENDOZA 12

Effect of an Impossible or Unlawful Condition

• 1. If the C – to do an impossible or illegal thing, both the C & the Obli are VOID.Ex. Carl will give Krisha P100k if Krisha will make a dead man alive.

2. If the C – not to do an illegal thing, both the C and the O are VALID.Ex. Eunice will give Joy P100k if Joy will not kill June.

3. If the C – not to do the impossible, disregard the C but the Obli remains.Ex. Arvin will give Percia P100k if Percia cannot make a triangle that is at the same time a rhombus.

04/21/2023 BCMENDOZA 13

DETERMINE THE VALIDITY OF THE FF Cs:

1. to bring goat milk extracted from a cow2. to allow a man’s wife to lay down with a male

neighbor tonight3. to incite rebellion and mass bearing of

weapons4. I will give you a score of 99 if you will deface a

certain website and another set of bonus points if you will submit to me the paper requirement within the week.

04/21/2023 BCMENDOZA 14

Art 1191 vs Art. 1380 in re the Power to Rescind

1191 1380

Right to cancel or to resolve the contract in case of non-fulfillment of the obligation on the part of one of the parties

Rescission of rescissible contracts (contract is valid until rescinded)

Voluntary breach of faith committed by the person who is supposed to comply with the obligation

Lesion or damage or injury to the economic interest of a person, badges of fraud

Applies only to reciprocal obligations Not limited to reciprocal obligations

The right to rescind is implied, no need to be stipulated in the contract

same

The right is not automatic. The injured party should apply to the court for a decree of rescission.

Same – action for rescission of a rescissible contract

04/21/2023 BCMENDOZA 15

Art 1191 vs Art. 1380 in re the Power to Rescind

1191 1380

Cannot choose rescission if have already chosen fulfillment except if fulfillment has become impossible (alternative not cumulative remedies)

The action for rescission is subsidiary. It cannot be instituted except when the party suffering damage has no other legal means to obtain reparation

If the contract is rescinded, the obligatory relations of the parties is extinguished. The extinction is retroactive. (invalidating the juridical tie, going back to the status quo)

Essence: indemnification for the economic injury

Must be commenced within the prescriptive period lest the right is waived

In case of slight or casual breach, the court is given discretion to fix a period instead of rescinding the obligation.

04/21/2023 BCMENDOZA 16

Concept of Bilateral and Reciprocal Obligations

BILATERAL RECIPROCALBoth parties are mutually bound to each other same

But the performance of their obligations are not at the same time or simultaneous

Obligations arising out of the same cause and are to be fulfilled at the same time

S sold to B a specific car for P400k. Delivery of the car is on Jan. 1, while payment of the price is on Jan. 15.

S sold to B a specific car for P400k. Delivery and payment to take place at SLU Bakakeng Campus on Jan. 1.

D borrowed from C P10k. On the other hand, C deposited with D 10 cavans of Jasmine rice.

Example on the left may not result to a reciprocal obligation - the oblis are not dependent upon each other.

04/21/2023 BCMENDOZA 17

OBLIGATIONS WITH A PERIOD / TERM• an obligation whose demandability or

extinguishment is subject to the expiration of a period or a term. (Art. 1193, NCC)

• Examples:– When his means permit– When I can afford– When I am able to– When I have money

• *THE PAYMENT HERE DOES NOT DEPEND UPON THE WILL OF THE DEBTOR-IT IS ONLY THE TIME WHEN PAYMENT IS TO BE MADE

04/21/2023 BCMENDOZA 18

Requisites of a Valid Period or Term

Future ; Certain ; Possible, legally and physically

• Decided cases considered obligation with a period (court to fix the period):a. Payable as soon as possibleb. Little by littlec. In partial paymentd. When I am in a position to pay

04/21/2023 BCMENDOZA 19

Is the stmt of a debtor that he will pay when his means permit him to do so relate to a period or a condition? Is such a stmt

valid considering that the same is left to the will of the debtor?

• When the debtor binds himself to pay when his means permit him to do so, the obligation is deemed with a period or term.

• This is valid because it is not the payment itself that is dependent upon the will of the debtor, but the moment of payment.

• As the time of payment is not fixed, the court must fix the same before any action for collection may be entertained, unless, the prior action of fixing the term or period will only be a formality and will serve no purpose but delay.

04/21/2023 BCMENDOZA 20

For whose benefit is the period constituted?

• GR: When a period has been agreed upon for the performance or fulfillment of an obligation, it is presumed to have been established for the benefit of both the creditor and the debtor.

Ex. To pay the loan with interest on December 30, 2014.

04/21/2023 BCMENDOZA 21

For whose benefit is the period constituted?

• XPN: When it appears from the tenor of the period or other circumstances that it was established for the benefit of one of the parties.

• Debtor: . . .to pay on or before. . .– . . .within 2 yrs– - gratuitous loan to be pd on. . .

• Creditor: . . . To pay on demand. ..– . . .within 2 yrs on demand

04/21/2023 BCMENDOZA 22

What is the effect of the term being for the benefit of either the CR or the DR?

• When it is for the benefit of the Creditor –Creditor may demand the performance of the obligation at any time but the DR cannot compel him to accept payment before the expiration of the period (e.g. “on demand”)

04/21/2023 BCMENDOZA 23

What is the effect of the term being for the benefit of either the CR or the DR?

• When it is for the benefit of the Debtor – Debtor may oppose any premature demand on the part of the CR for performance of the obligation, or if he so desires, he may renounce the benefit of the period by performing his obligation in advance. (Manresa)

04/21/2023 BCMENDOZA 24

effect of a fortuitous event in an Obligation with a period

• It only relieves the contracting parties from the fulfillment of their respective obligation during the term or period.

04/21/2023 BCMENDOZA 25

When the court may fix the period• (JM-WiN)

1. If the obligation does not fix a period, but from its nature and circumstances it can be inferred that a period was intended by the parties

2. If the duration of the period depends upon the will of the DR

3. In case of reciprocal obligations, when there is a just cause for fixing the period

4. If the DR binds himself when his means permit him to do so

04/21/2023 BCMENDOZA 26

When a DR lose may his right to make use of the period

1. Insolvency of the DR, unless security is provided

2. Did not deliver security promised 3. Impaired security through his own acts

or through fortuitous event, unless he gives a new security equally satisfactory (if impairment is without the fault of DR, he shall retain the right)

04/21/2023 BCMENDOZA 27

When a DR lose may his right to make use of the period

4. Violates undertaking in consideration of extension of period

5. DR attempts to abscond (Art. 1198, NCC)

04/21/2023 BCMENDOZA 28

ALTERNATIVE VERSUS FACULTATIVEALTERNATIVE Obligations FACULTATIVE Obligations

Several objects are due Only one object is dueMay be complied with by fulfilling any of those alternately due

May be complied with by substitution of one that is due

If one prestation is void, the others free from vices preserve the validity of the obligation

If principal obligtion is void, the creditor cannot compel delivery of the substitute

GR: Choice pertain to debtor; XPN: Expressly granted to CR or third P

Choice pertains only to debtor

04/21/2023 BCMENDOZA 29

ALTERNATIVE OBLIGATIONS VERSUS FACULTATIVE OBLIGATIONS

ALTERNATIVE Obligations

FACULTATIVE Obligations

Fortuitous loss of all prestation will not extinguish the obligation

Fortuitous loss will extinguish the obligation

Culpable loss of any object due will give rise to liability to DR

Culpable loss obliges the debtor to deliver substitute prestation without liability to DR

04/21/2023 BCMENDOZA 30


ALTERNATIVE Obligations FACULTATIVE Obligations

If various prestations are impossible to perform except one, this one must be delivered. If all prestations are impossible to perform, the O is extinguished.

If there is impossibility to deliver the principal thing or prestation, the obligation is extinguished, even if the substitute obligation is valid.

04/21/2023 BCMENDOZA 31


ALTERNATIVE Obligations

FACULTATIVE Obligations

Where the choice is given to CR, the loss of the alternative through the fault of the DR renders him liable for damages.

Loss of the substitute before the substitution through the fault of the DR doesn’t make him liable.

04/21/2023 BCMENDOZA 32

In alternative obligations, when does the choice made take effect?

• The choice made takes effect only upon communication of the choice to the other party and from such time the obligation ceases to be alternative (Art. 1205, NCC).

04/21/2023 BCMENDOZA 33

In alternative obligations, when does the choice made take effect?

• Note: The notice of selection or choice may be in any form provided it is sufficient to make the other party know that the election has been made. (Tolentino)

04/21/2023 BCMENDOZA 34

Does the choice made by the DR require the concurrence of the CR? What happens when through

the CR’s fault, selection is deemed impossible?

• No. To hold otherwise would destroy the very nature of the right to select given to the DR. Once a choice is made, it can no longer be renounced and the parties are bound thereto.

04/21/2023 BCMENDOZA 35

Does the choice made by the DR require the concurrence of the CR? What happens when through

the CR’s fault, selection is deemed impossible?

• When choice is rendered impossible through the CR’s fault, the DR may bring an action to rescind the contract with damages (Art. 1203, NCC in re Art. 1191).

04/21/2023 BCMENDOZA 36

Limitations on the right of choice of the debtor

• Debtor CANNOT choose prestations which are: • Impossible; • Unlawful; and • could not have been the object of the

obligation.

04/21/2023 BCMENDOZA 37

When is an alternative obligation converted to a simple obligation?

• When the person who has a right of choice has communicated his choice; or • only one is practicable. (Art.

1202, NCC)

04/21/2023 BCMENDOZA 38

Art 1207

• Individual Obligation – one debtor and one creditor• Collective Obligation – concurrence

of 2 or more creditors or of 2 or more debtors in one and the same obligation; plurality of subjects

04/21/2023 BCMENDOZA 39

Art 1207• The concept of a joint and solidary

obligation does not arise when there is only one creditor and one debtor. Thus, if XX owes YY the amount of P100k, it is not correct to ask whether the obligation is joint or solidary. But, if there are two or more debtors or there are two or more creditors, or both, the concept of joint or solidary now comes into the picture.

04/21/2023 BCMENDOZA 40

JOINT OBLIGATION VERSUS SOLIDARY OBLIGATION

JOINT Obligation SOLIDARY Obligation

Presumed by law Not presumed. Must be expressly stipulated by the parties, or when the law or the nature of the obligation requires solidarity

Each DR is liable only for a proportionate part of the entire debt

Each DR is obliged to pay the entire obligation

04/21/2023 BCMENDOZA 41



Each CR, if there are several, is entitled only to a proportionate part of the credit

Each CR has the right to demand from any of the DRs the payment or fulfillment of the entire O

04/21/2023 BCMENDOZA 42



TERMSPro-rata

ProportionateMancomunada

Mancomunada simple

In solidumJointly and severally

Individually and collectively

Mancomunada solidaria

STREET PARLANCE Concept:

To each his ownOne for all, all for one

04/21/2023 BCMENDOZA 43

Rule as regards Joint or Solidary Character of an Obli

• GR: When two or more creditors or two or more debtors concur in one and the same obligation, the presumption is that the obligation is joint.

04/21/2023 BCMENDOZA 44


• XPNs: The obligation shall be solidary when: ELN CJ ‐

1. Expressly stipulated that there is solidarity;

2. Law requires solidarity; 3. Nature of the obligation requires

solidarity;

04/21/2023 BCMENDOZA 45


• XPNs: The obligation shall be solidary when: ELN CJ ‐

4. Charge or condition is imposed upon heirs or legatees and the will expressly makes the charge or condition in solidum ;or

5. solidary responsibility is imputed by a final Judgment upon several defendants.

04/21/2023 BCMENDOZA 46

Instances when law requires solidarity

1. all partners are liable solidarily with the partnership if the act complained of arises from crime or quasi-delict

2. in agency, if two or more persons have appointed an agent for a common transaction, they shall be solidarily liable to the agent for all the consequences of the agency

04/21/2023 BCMENDOZA 47

Instances when law requires solidarity

3. The responsibility of two or more persons who are liable for a quasi-delict is solidary

4. the responsibility of two or more payees, when there has been payment of what is not due, is solidary–***list not exclusive***

04/21/2023 BCMENDOZA 48

legal consequences of joint obligation

1. Each debtor is liable only for a proportionate part of the entire debt;

2. Each creditor, if there are several, is entitled only to a proportionate part of the credit;

04/21/2023 BCMENDOZA 49


3. The demand made by one creditor upon one debtor, produces effects of default only as between them;

4. Interruption of prescription caused by the demand made by one creditor upon one debtor, will NOT benefit the co creditors or the co debtors; ‐ ‐

04/21/2023 BCMENDOZA 50


5. Insolvency of a debtor will not increase the liability of his co debtors; ‐

6. Vices of each obligation emanating from a particular debtor or creditor will not affect the others; and

04/21/2023 BCMENDOZA 51


7. In indivisible or joint obligation, the defense of res judicata of one does not extend to the others.

Res judicata – a case that has been decided; a thing adjudicated

04/21/2023 BCMENDOZA 52

Legal effects of joint indivisible obligations

1. If there are two or more debtors, compliance with the obligation requires the concurrence of all the debtors, although each for his own share. The obligation can be enforced only by preceding against all of the debtors.

04/21/2023 BCMENDOZA 53


2. If there are two or more creditors, the concurrence or collective act of all the creditors, although each of his own share, is also necessary for the enforcement of the obligation.

04/21/2023 BCMENDOZA 54


3. Each credit is distinct from one another; therefore a joint debtor cannot be required to pay for the share of another with debtor, although he may pay if he wants to.

04/21/2023 BCMENDOZA 55


4. In case of insolvency of one of the debtors, the others shall not be liable for his shares. To hold otherwise would destroy the joint character of the obligation.

04/21/2023 BCMENDOZA 56

effect of breach of a joint indivisible obligation by one debtor

• If one of the joint debtors fails to comply with his undertaking, the obligation can no longer be fulfilled or performed. It is the converted into one of indemnity for damages. Innocent joint DR shall not contribute to the indemnity beyond their corresponding share of the obligation.

04/21/2023 BCMENDOZA 57

Effect of solidary obligations

• Each one of the debtors is obliged to pay the entire obligation, and each one of the creditors has the right to demand from any of the debtors the payment or fulfillment of the entire obligation

04/21/2023 BCMENDOZA 58

Factual Problem

• J1, J2 and J3 are solidary debtors under a loan obligation of P300,000 which has fallen due. The creditor has, however, condoned J3's entire share in the debt. Since J2 has become insolvent, the creditor makes a demand on J1 to pay the debt.- How much, if any, may J1 be compelled to pay?

04/21/2023 BCMENDOZA 59

Factual Problem

- To what extent, if at all, can J3 be compelled by J1 to contribute to such payment?

04/21/2023 BCMENDOZA 60

Answers

A)

J1 can be compelled to pay only the remaining balance of P200,000, in view of the remission of J3’s share by the creditor. (Art. 1219, NCC)

04/21/2023 BCMENDOZA 61

Answers

B)Jojo can be compelled by Joey to contribute P50,000. When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co debtors, in proportion to the ‐debt of each.(par. 3, Art. 1217, NCC)

Since the insolvent debtor's share which Joey paid was Pl00,000, and there are only two remaining debtors namely Joey and Jojo these two shall ‐ ‐share equally the burden of reimbursement. Jojo may thus be compelled by Joey to contribute P50,000.

04/21/2023 BCMENDOZA 62

kinds of solidary obligation

1. Passive – solidarity on the part of the debtors 2. Active – solidarity on the part of the creditors 3. Mixed – solidarity on both sides

04/21/2023 BCMENDOZA 63

In cases of solidary creditors, may one act for all? What are the limitations?

• Yes. However, while each one of the solidary creditors may execute acts which may be useful or beneficial to the others, he may not do anything which may be prejudicial to them. (Art. 1212, NCC)

04/21/2023 BCMENDOZA 64

To whom must payment be made in a solidary obligation?

• GR: To any of the solidary creditors.

• XPN: If demand, judicial or extra judicial, has ‐been made by one of them, payment should be made to him.(Art. 1214, NCC)

04/21/2023 BCMENDOZA 65

DIVISIBLE VS INDIVISIBLE OBLIGATIONS

DIVISIBLE INDIVISIBLESusceptibility of an obligation to be performed partially

Non-susceptibility to be performed partially

Partial performance is tantamount to non-performance

04/21/2023 BCMENDOZA 66

When may an obligation to deliver a divisible thing be considered indivisible?

• When the law so provides; or • By stipulation of the parties.(3rd par., Art.

1255, NCC)

04/21/2023 BCMENDOZA 67

effect of illegality of a part of a contract

• Divisible contract – illegal part is void and unenforceable. Legal part is valid and enforceable. (Art. 1420, NCC)

• Indivisible contract – entire contract is indivisible and unenforceable.

04/21/2023 BCMENDOZA 68

OBLIGATIONS WITH A PENAL CLAUSE

• What is a penal clause? It is an accessory obligation attached to the principal obligation to assure greater responsibility in case of breach.

• Note: Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded. (Art. 1228, NCC)

04/21/2023 BCMENDOZA 69

effect of incorporating a penal clause in an obligation

• GR: The penalty fixed by the parties is a compensation or substitute for damages in case of breach.

04/21/2023 BCMENDOZA 70

effect of incorporating a penal clause in an obligation

• XPNs: Damages shall still be paid even if there is a penal clause if:

1. there is a stipulation to the contrary 2. the debtor refuses to pay the agreed

penalty 3. the debtor is guilty of fraud in the

fulfillment of the obligation. (Art. 1126, NCC)

04/21/2023 BCMENDOZA 71

OBLIGATIONS WITH A PENAL CLAUSE

• Note: The nullity of the penal clause does not carry with it that of the principal obligation.

• The nullity of the principal obligation carries with it that of the penal clause. (Art. 1230, NCC)

04/21/2023 BCMENDOZA 72

When penalty may be reduced by the courts

Code: PIU 1. Partial performance of the obligation; 2. Irregular performance of the obligation; or 3. Penalty is Unconscionable even if there has

been no performance.

04/21/2023 BCMENDOZA 73

ACTIVITY

1. D1 and D2 are debtors of C1, C2, C3, and C4 to the amount of P10,000. How much can C4 collect from D1?–Ans. P1,2502. D1 and D2 are debtors of C1, C2 and C3, solidary creditors to the amount of P30,000. How much can C3 collect from D1?-Ans. P15,000

04/21/2023 BCMENDOZA 74

ACTIVITY

3. D1 and D2 are solidary debtors of C1, C2 and C3 creditors to the amount of P30,000. How much can C3 collect from D1?Ans. P10,0004. D1, D2, and D3 obliged themselves to give C a specific car valued at P30k. If C demanded payment from all, D1 and D2 are willing to deliver, but D3 is insolvent, how much will D1 pay C?

04/21/2023 BCMENDOZA 75

ACTIVITY

Ans. P10,000. The obli will be converted into a monetary obli. The value of P30k is / into 3 debtors. The insolvency of D3 will not affect the liability of D1 and D2 because their liability is joint.

5. Same facts as #4 only that the liability to debtors is solidary?Ans. P30,000, subject to reimbursement from solidary co-debtor D2 amounting to P15,000.

606 kinds of obligations continuation in lieu of august 18 absence.pptx

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Transcript of 606 kinds of obligations continuation in lieu of august 18 absence.pptx