Civil code of the Philippines; Obligation and Contract

Civil Code of the Civil Code of the PhilippinesPhilippines

The The Civil Code of the PhilippinesCivil Code of the Philippines is the product of the codification of private law in the Philippines. It is the general law that governs family and property relations in the Philippines.

History of the Civil CodeHistory of the Civil Code The Civil Code is strongly influenced by the Spanish Civil Code,

which was first enforced in 1889 within the Philippines, then a colony of Spain.

1940, the Commonwealth Government of President Manuel Quezon had created a Commission to create a new Civil Code. The Commission was initially headed by Supreme court Chief Justice Ramon Avanceña.

1945, the work of the Commission was interrupted by the Japanese invasion of the Philippines, and its records were destroyed during the Battle of Manila.

1947, President Manuel Roxas created a new Code Commission, this time headed by the former Dean of the University of the Philippines College of Law Jorge Bocobo.

May 8, 1947, the work on the civil code begun and the first draft was finished on October 22, 1947.

December 15, 1947, the Commission completed the final draft of the new Civil Code.

January 1948 , civil code was submitted to Congress, June 18, 1949, civil code was enacted it into law through Republic

Act No. 386.

Features of the Civil CodeFeatures of the Civil Code

The Civil Code is divided into 5 The Civil Code is divided into 5 “books”,“books”,

Persons and family relations; Property; Succession; Obligations and contracts; and Special contracts.

OBLIGATIONSOBLIGATIONS

OBLIGATIONOBLIGATION The legal relation between one party and

another, the latter is bound to the fulfillment of a prestation which the former may demand of him. Manresa, a Spanish Commentator in civil Law.

A legal bond between two or more persons, by which one person, the debtor, is held liable to another, the creditor, to perform a "prestation" consisting of "doing" or "not doing" something at the risk of legal sanction. Wikipedia.org

A juridical necessity to give, to do or not to do. Art. 1156

Elements of an ObligationElements of an Obligation1. A passive subject (called debtor or obligor): the person

who is bound to the fulfillment of the obligation.2. An active subject (called creditor or obligee): the

person who is entitled to demand the fulfillment of the obligation.

3. Object or prestation: subject matter of the obligation4. A juridical or legal tie: the vinculum; the efficient

cause that binds or connects the parties.

Example:By virtue of contract, Sandy obliged herself to ship the goods of Che from Manila to Batangas for Php10, 000.00.

Passive subject : SandyActive subject : CheObject or Prestation : The shipping of goods to BatangasJuridical or Legal Tie : Contract between Sandy and Che.

Art. 1157. Obligations arise from:Art. 1157. Obligations arise from:

(1) Law;(1) Law;

(2) Contracts;(2) Contracts;

(3) Quasi-contracts;(3) Quasi-contracts;

(4) Acts or omissions (4) Acts or omissions punished by punished by law; andlaw; and

(5) Quasi-delicts.(5) Quasi-delicts.

Art. 1157.

Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi- contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts

LAW AS A SOURCE OF LAW AS A SOURCE OF OBLIGATIONOBLIGATION

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 the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. Art. 1158.

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

Law Governing Obligations derived from Law

Obligations derived from law shall be governed by the law which establishes them. In case of insufficiency, the same shall be supplemented by the provisions of the Civil Code.

Examples:

The obligation of husband and wife to support each other. Art.195, Family Code

The obligation of a taxpayer to file his income tax return. Title II, Section 23, NIRC

The obligation of the legitimate ascendants and descendants to support each other. Art. 195, Family Code

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

CONTRACT AS A SOURCE OF CONTRACT AS A SOURCE OF OBLIGATIONOBLIGATION

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

“Compliance in Good Faith” – means that we must interpret “not by the letter that killeth but by the spirit that giveth life.”

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

QUASI-CONTRACT AS A SOUCE OF OBLIGATIONQUASI-CONTRACT AS A SOUCE OF OBLIGATION

CONCEPT OF QUASI-CONTRACTSA quasi-contract is that

juridical relation resulting from a lawful, voluntary and unilateral act, and which has for its purpose the payment of indemnity to the end that “no one shall be unjustly enriched or benefited at the expense of another”. (Article 2142, NCC)

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

KINDS OF QUASI-CONTRACTKINDS OF QUASI-CONTRACT

NEGOTIORUM GESTIO – the voluntary management of the property or affairs of another without the knowledge or consent of the owner.

SOLUTIO INDEBITI – the juridical relation which is created when something is received when there is no right to demand it and it was unduly delivered through mistake.

QUASI-CONTRACT AND CONTRACTThe distinctive mark of quasi-contract from contract is that in contract, there is consent of the parties, while in quasi-contract, the obligation arises without a contract.

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

DELICT AS A SOURCE OF OBLIGATIONDELICT AS A SOURCE OF OBLIGATION

It is an act or omission punishable by law. The principle is that: “ if a person committed an act or omitted to do an act and the act or omission is punishable by law, he is civilly liable.

Example:Ai kills Yoe. Yoe is survived by his 3 children. Since killing is punishable by law, Ai will not only go to jail but he will also be required to indemnify the heirs of Yoe for his felonious act. The imprisonment is the criminal liability, while the indemnification is the civil liability.

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

MAY A PERSON WHO COMMITTED AN ACT CONSTITUTING A CRIME BE EXEMPTED FROM CRIMINAL LIABILITY?Yes, this is provided for in Article 12 of the Revised Penal Code.

The following persons are exempted from criminal liability even if the act committed constitutes a crime.

An imbecile or insane person, unless he acted during a lucid interval

A person under 9 years old A person over 9 years old but below 15, unless

he acted with discernment. Persons acting under the compulsion of an

irresistible force. Persons acting under the impulse of an

uncontrollable fear of an equal or greater injury.

NOTE: These persons are exempted from criminal liability but not from civil liability. This civil liability shall devolve upon their guardians or persons whose control or authority they under.

Art. 1157.Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

Art. 1162 Obligations derived from

quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special laws.

QUASI-DELICTS (Tort or Culpa Acquiliana)

A quasi-delict is a fault or act of negligence (or omission of care) which causes damages to another, there being no pre-existing contractual relations between the parties. Culpa Acquiliana (Quasi-Delicts) can refer to acts which are criminal in character, whether the same be voluntary or negligent.

Example:Atty. Luz, while driving her car negligently hit a pedestrian, inflicting upon the latter bodily injury. In here, Atty. Luz is liable because of her negligent act and this is called quasi-delict.

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

QUASI-DELICT AS A SOURCE OF QUASI-DELICT AS A SOURCE OF OBLIGATIONOBLIGATION

One which caused damaged to another, there being fault or negligence, but there is no pre-existing contractual relation between the parties, is obliged to pay for the damage done. Art. 2176

NEGLIGENCE The failure to observe, for the protection

of the interests of another person, that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury.

Art. 1157.


(1) Law;

(2) Contracts;



(5) Quasi-delicts

ContinuationContinuation

As defined in the Civil Code, negligence is the omission of the diligence which is required by the circumstances of person, place, and time. Thus, negligence is a question of fact

KINDS OF NEGLIGENCE

Culpa Acquiliana or quasi-delict. The negligence as a source of obligation.

Culpa Contractual. The negligence in the performance of an obligation.

DIFFIRENT KINDS DIFFIRENT KINDS

OF OBLIGATIONOF OBLIGATION

DIFFERENT KINDS OF OBLIGATIONSDIFFERENT KINDS OF OBLIGATIONS

Pure and Conditional Obligation with a Period or Term Alternative or Facultative Obligation and Conjunctive Joint Obligation and Solidary Obligation Divisible Obligation and Indivisible Obligation Obligation with a Penal Clause and Without a Penal

Clause

Pure and Conditional

Obligation with a Period or Term

Alternative or Facultative Obligation and Conjunctive

Joint Obligation and Solidary Obligation

Divisible Obligation and Indivisible Obligation

Obligation with a Penal Clause and Without a Penal Clause

Art. 1179 Every obligation whose

performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once.

Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event.







PURE OBLIGATION One without a condition or a term;

hence, demandable at once, provided there will be absurdity.

CONDITIONAL OBLIGATION When the obligation has a condition. VOID CONDITION• I will pay you after I receive a loan

from a bank.• I will pay you after I have harvested

fish.• I will pay you upon the sale of the

house in which I live.







Art. 1193Art. 1193

Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes.

Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.

Art. 1193Art. 1193

A day certain is understood to be that which must necessarily come, although it may not be known when.

If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section.













PERIODPERIODIt is a certain length of time which determines the effectivity or the extinguishment of an obligation.

A period or term consists in a space of time which has an influence on obligations as a result of a juridical act and either suspends their demandableness or produces their extinguishment. Manresca

KINDS OF PERIODKINDS OF PERIOD

According to source Legal Voluntary Judicial

According to effect Suspensive period – a period

which must lapse before the obligations can be demanded.

Resolutory period – a period after which the obligation is extinguished.







KINDS OF PERIODKINDS OF PERIOD

According to definiteness Definite – refers to a fixed

known date or time. Indefinite – refers to an

event which will necessarily happen but the date of its happening is not known.







Illustrative CaseIllustrative CaseMr. Jones obliges himself to pay Mr. Bart P10,000 “as soon as possible”. Three months after, Mr. Bart demanded payment from Mr. Jones but latter refuses to pay.

Q: Can Mr. Bart file an action in court compelling Mr. Jones to pay the obligation?

A: NO. This obligation is subject to a period. Mr. Bart’s right is to go to court so that the court will fix the date of payment.

When my means permit me to do so. I will pay you little by little. As soon as I have money In partial payment







Art. 1197If 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.

The courts shall also fix the duration of the period when it depends upon the will of the debtor.

In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.







Art. 1199A person alternatively

bound by different prestations shall completely perform one of them.

The creditor cannot be compelled to receive part of one and part of the other undertaking.

ALTERNATIVE OBLIGATIONSOne where out of two or

more prestations which may be given, only one is due. In short, there are several things due but the delivery of one is sufficient to extinguish the obligation.







Art. 1200The right of choice

belongs to the debtor, unless it has been expressly granted to the creditor.

The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not have been the object of the obligation.

Pure and Pure and Conditional






RULES, OBLIGATIONS AND RIGHT

CHOICE BELONGS TO THE DEBTOR

A. Loss is due to fortuitous event

If all are lost, obligation is extinguished.

If 2 or more of the objects remains, the debtor can deliver any of the two remaining.

If only one remains, there’s no alternative obligation. What he should deliver is the remaining object.








CHOICE BELONGS TO THE DEBTOR

B. Loss due to debtor’s fault

• If all are lost, the obligation is converted into monetary consideration.

If 2 or more of the objects remains, the debtor can choose which one to deliver but no damages.

If only one remains, there’s no alternative obligation. What he should deliver is the remaining object but no damage.








CHOICE BELONGS TO THE CREDITOR

A. Loss is due to fortuitous event

The effects are the same as where the right of choice belongs to the debtor.


• If all are lost, the obligation is converted into monetary consideration plus damage.








CHOICE BELONGS TO THE CREDITOR


If 2 or more of the objects remains, the creditor can choose which one to 2 remaining objects with damages. If he chooses the lost object, the debtor is liable for the value plus damage.

If only one remains, The creditor may choose the remaining object with damages. If he chooses anyone of the two which were lost, the debtor must pay the value plus damages.







FACULTATIVE OBLIGATIONIt is one where only one

prestation has been agreed upon but the debtor may give another object as substitute.


Before Substitution

If the principal thing was lost due to fortuitous event, obligation is extinguished. If lost due to debtor’s fault , he is liable for damages.








If the thing intended as a substitute is the one which was lost, with or without debtor’s fault, the obligation to deliver the substitute is extinguished because what is to be delivered is the principal object and not the substitute,

After Substitution If the principal thing was lost,

the debtor is no longer liable whatever be the cause of the loss, because it is no longer due.

If the substitute is lost due to fortuitous event, obligation is extinguished. If due to debtor’s fault, he is liable for damages.







Art. 1207 The concurrence of two or

more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity.







JOINT OBLIGATION It is one where the whole liability

is to be paid or fulfilled proportionately by the different debtors and/ or is to be demanded also proportionately by the different creditors.

SOLIDARY OBLIGATION It is one where each one of the

debtors is bound to render compliance of the entire obligation and/or each one of the creditors has a right to demand entire compliance of the prestation.







Art. 1223 The divisibility or indivisibility of

the things that are the object of obligations in which there is only one debtor and only one creditor does not alter or modify the provisions of Chapter 2 of this Title.

DIVISIBLE OBLIGATION Capable of division or capable

of partial performance. INDIVISIBLE OBLIGATION Not capable of division or nor

capable of partial performance.







KINDS OF INDIVISIBLE OBLIGATION

Conventional – agreed by the parties to be indivisible, although by nature is divisible

Natural o absolute indivisility – by nature the object does not admit of division.

Legal Indivisibility – The indivisibility is provided by law.







Art. 1226In obligations with a penal

clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in accordance with the provisions of this Code.







In an obligation with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interest in case of non-compliance, if there is no stipulation to the contrary. A penal clause is an accessory undertaking to assume greater liability in case of breach.

It is attached to an obligation to ensure their performance, to substitute for the indemnity of damages and the payment of interest in case of non-compliance and to punish the debtor for the non-fulfillment of his obligation.







EXCEPTIONS WHERE ASIDE FROM PENALTY, DAMAGES AND INTEREST MAY DEMANDABLE BY THE CREDITOR.

When it is stipulated When the debtor is guilty fraud When the debtor refuses to

pay the penalty







EXTINGUISHMENT OF EXTINGUISHMENT OF OBLIGATIONSOBLIGATIONS

Art. 1231. Obligations are extinguished by:

1. Payment or performance;2. Loss of the thing due3. Condonation or remission of the debt;4. Confusion or merger of rights of

the creditor and debtor;5. Compensation;6. Novation

Payment or fulfillment consists in the delivery of money or a thing, or doing a thing, or not d

going something.

HOW PAYMENT OR PERFORMANCE IS MADE?

A. If obligation is monetary, by delivery of the money in full.ART. 1249

The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines.

Art. 1231 Obligations are extinguished by:

Payment or performance;

Loss of the thing due

Condonation or remission of the debt;

Confusion or merger of rights of the creditor and debtor;

Compensation;

Novation


Legal Tender in the Philippines (PD No. 82, Nov. 29, 1972) as amended

The 5 centavo coin up to P20.00

Other coins (P0.10, P0.25, P0.50, P1.00) are valid legal tender up to P50.00

All bills are valid legal tender for any amount.






Compensation;

Novation


Dation in payment (payment in kind) is the mode of extinguishing an obligation where by the debtor alienates property in favor of the creditor for a satisfaction of monetary obligation. In short, the obligation is money, the payment is property.

ART. 1245. Dation in payment, whereby property is alienated to the creditor in satisfaction of a debt in money, shall be governed by the law of sales.






Compensation;

Novation


B. If it is a thing or an object, by delivery of the thing or object.

C. If to do something, by the performance of the same undertaking.

D. If not doing a thing, to desist or refrain from doing the thing.






Compensation;

Novation


ART. 1244The 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.






Compensation;

Novation


Art. 1235When the obligee accepts

the performance, knowing its incompleteness or irregularity and without expressing any protest or objection, the obligation is deemed fully complied with.






Compensation;

Novation

There is loss when; the thing perishes goes out of commerce when it disappears in such

away that its existence is unknown or cannot be recovered

Concept of LossThe concept of loss is called “impossibility of performance”, and this must be subsequent to the execution of the contract in order to extinguished the obligation, for if the impossibility existed at the time the contract is executed, the result is not extinguishment, but inefficacy of the obligation






Compensation;

Novation

ART. 1263In an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does not extinguish the obligation.

DELIVERY OF DELIMITED GENERIC THING

When there is a limitation of the generic object to a particular existing mass or a particular group of thing, the obligation is extinguished by the loss of a particular mass or group or limited quantity from which the prestation has to be taken.






Compensation;

Novation

“Obligation is extinguished” It means that the obligation to deliver the same thing is no longer possible because there is no more thing to deliver. Hence, if there is default on the part of the debtor, the debtor’s obligation to deliver the same thing is extinguished but the same is converted into monetary consideration for damages. The same holds true if the debtor is at fault – the obligation is converted into its monetary value.






Compensation;

Novation

ART. 1270Condonation or remission

is essentially gratuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly.

One and the other kind shall be subject to the rules which govern inofficious donations. Express condonation shall, furthermore, comply with the forms of donation






Compensation;

Novation

Classes of Remission

As to effect o extentTotalPartial

Date of EffectivityLifetimeAfter death

As to FormImplied o tacitExpress or Fomal






Compensation;

Novation

It is the meeting in one person of the qualities of creditor and debtor with respect to the same obligation.

ART. 1275The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person.

CONFUSION IN JOINT AND SOLIDARY OBLIGATION.

If the obligation is joint, only the share corresponding to the creditor or debtor in whom the two characters concur.

If the obligation is solidary, the obligation is totally extinguished.






Compensation;

Novation

ILLUSTRATIVE CASE:April owes June Php10,000.00 with her mother’s land given as a security (with April’s mother consent). Later, April’s mother donated the same land to June.

Q: Is the mortage valid even if April does not own the land mortage?

A: Yes, this is provided in ART. 2085.“That the persons constituting the pledge or mortgage have the free disposal of their property and in the absence thereof, that they be legally authorized for the purpose.”

Q: Is the contract of mortgage extinguished? How about the principal obligation?

A: Yes, the contract of mortgage is also extinguished but not the principal obligation to pay Php10,000.00. In short, the obligation to pay June still subsist, only the loan of Php10,000.00 is now without security.






Compensation;

Novation

It is the extinguishment to the concurrent amount of the debts of two persons who, in their own rights are debtors and creditors of each other. Also called abbreviated or simplified payment because the two debts are extinguished without the transfer of money or property from one party to the other.

ART. 1278Compensation shall take

place when two persons, in their own right, are creditors and debtors of each other.






Compensation;

Novation

KINDS OF COMPENSATION

a. As to their effects:1. Total – same amount2. Partial – not equal

ART. 1281 Compensation may be

total or partial. When the two debts are of the same amount, there is a total compensation.






Compensation;

Novation

KINDS OF COMPENSATIONb. As to origin 1. Legal – by operation of law

The requisites mentioned apply to compensation by operation of

law. Even if there is no agreement voluntarily and validity entered into there is compensation by operation of

law.

2. Facultative – one party can claim compensation, the other cannot






Compensation;

Novation

KINDS OF COMPENSATIONb. As to origin

3. Conventional – by agreement of the parties

Debts which are not demandable cannot be compensated, but the parties may compensate them voluntarily.

ART. 1282. The parties may agree upon the compensation of debts which are not yet due.






Compensation;

Novation

KINDS OF COMPENSATIONb. As to origin

4. Judicial – decreed by the court, in case where there is counterclaim

In judicial compensation or set- off, the parties must prove his right on the damages claimed at the time of pleading. The claim must be unliquidated because the fixing or liquidation must be made in the proceeding itself.






Compensation;

Novation

It is the extinction of an obligation through the creation of a new one which substitutes the old one.

MODIFICATION OF OBLIGATIONa. Changing their object or principal conditionb. Substituting the person of the debtorc. Subrogating a third person in the rights of the creditor

DUAL PURPOSE OF NOVATIONa. Original obligation is extinguishedb. A new obligation is created






Compensation;

Novation

KINDS OF NOVATION

As to formExpress – declared in an

unequivocal termImplied – both obligations

are incompatible with each other

ART. 1292. In order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other.






Compensation;

Novation

KINDS OF NOVATION

As to object or purposePersonal of subjective –

person of the debtor is substituted or the rights of the creditor is subrogated.

Real or Objective – change of the object or principal condition

Mixed – change of the parties and object or principal condition






Compensation;

Novation

NOVATION IN VOID OBLIGATION

a. If the original obligation is void, the novating is also void. If the novating contract is the one which is void, the original one shall subsist.

ART. 1298. The novation is void if the original obligation was void, except when annulment may be claimed only by the debtor or when ratification validates acts which are voidable.






Compensation;

Novation

NOVATION IF OLD OBLIGATION IS VOIDABLE

If the original is voidable only, a valid novation can take place because voidable contracts are valid until annulled by proper action in court.

NOVATION IF THE NEW OBLIGATION IS VOIDABLE

If the new obligation is voidable, not void, the old one is xtinguished and the new one shall be given force and effect until it is annulled. Take note that voidable contracts are subject to ratification to give them a lasting effect.






Compensation;

Novation

NOVATION IF THE ORIGINAL OBLIGATION IS SUBJECT TO A CONDITION

If the original obligation was subject to a suspensive or resolutory condition, the new obligation shall be under the same condition, unless it is otherwise stipulated. ART.1299

SUBROGATIONThe transfer to a third person of

all the rights appertaining to the creditor, including the right to proceed against the guarantor, possessor of mortgages, subject to any legal provision or any modification that may be agreed upon.






Compensation;

Novation

Art. 1302It is presumed that there

is legal subrogation:a. When a creditor pays another creditor who is preferred, even without the debtor's knowledge;b. When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor; c. When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter's

share. (1210a)






Compensation;

Novation

Civil code of the Philippines; Obligation and Contract

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Transcript of Civil code of the Philippines; Obligation and Contract