T A B L E O F C O N T E N T S TITLE I - OBLIGATIONS
CHAPTER 1
General Provisions - - - 1
CHAPTER 2 NATURE AND EFFECT OF OBLIGATIONS - - - 3
CHAPTER 3 DIFFERENT KINDS OF OBLIGATIONS SECTION 1. - Pure and Conditional Obligations - - - 10
SECTION 2. - Obligations with a Period - - - 16
SECTION 3. - Alternative Obligations - - - 18
SECTION 4. - Joint and Solidary Obligations - - - 21
SECTION 5. - Divisible and Indivisible Obligations - - - 25
SECTION 6. - Obligations with a Penal Clause - - - 26
CHAPTER 4 EXTINGUISHMENT OF OBLIGATIONS GENERAL PROVISIONS SECTION 1. - Payment or Performance - - - 28
SUBSECTION 1. - Application of Payments - - - 34
SUBSECTION 2. - Payment by Cession - - - 35
SUBSECTION 3. - Tender of Payment and Consignation - - - 36
SECTION 2. - Loss of the Thing Due - - - 38
SECTION 3. - Condonation or Remission of the Debt - - - 41
SECTION 4. - Confusion or Merger of Rights - - - 42
SECTION 5. – Compensation - - - 43
SECTION 6. – Novation - - - 48
Title II. - CONTRACTS CHAPTER 1 GENERAL PROVISIONS - - - 53
CHAPTER 2 ESSENTIAL REQUISITES OF CONTRACTS GENERAL PROVISIONS SECTION 1. – Consent - - - 58
SECTION 2. - Object of Contracts - - - 71
SECTION 3. - Cause of Contracts - - - 72
CHAPTER 3 FORM OF CONTRACTS - - - 75 CHAPTER 4 REFORMATION OF INSTRUMENTS - - - 76 CHAPTER 5 INTERPRETATION OF CONTRACTS - - - 79 CHAPTER 6 RESCISSIBLE CONTRACTS - - - 81 CHAPTER 7 VOIDABLE CONTRACTS - - - 86 CHAPTER 8 UNENFORCEABLE CONTRACTS - - - 91 CHAPTER 9 VOID AND INEXISTENT CONTRACTS - - - 96
Title III. - NATURAL OBLIGATIONS - - - 101 TITLE 1 – OBLIGATIONS
CHAPTER 1 General Provisions
Art. 1156. An obligation is a juridical necessity to give, to do or not to do.
OBLIGATIONS is a juridical relation whereby a creditor may demand from the debtor the observance of a determinate conduct, and, in case of breach, may obtain satisfaction from the assets of the debtor.
Essential requisites of an obligation –
a) An active subject, who has the power to demand the prestation, known as the creditor or obligee;
b) A passive subject, who is bound to perform the prestation, known as debtor or obligor. c) An object or the prestation which may consist in the act of giving, doing or not doing
something.
d) The vinculum juris or the juridical tie between the two subjects by reason of which the debtor is bound in favor of the creditor to perform the prestation. It is the legal tie which constitutes the source of obligation—the coercive force which makes the obligation demandable. It is the legal tie which constitutes the devise of obligation… the coercive force which makes the obligation demandable.
Example:
Thonyx enters into a contract of sale with Skaei who paid the purchase of a Yamaha Mio. Thonyx did not deliver the Yamaha Mio. Thonyx is the passive subject or debtor and Skaei is the active subject or creditor. The object or prestation is the Yamaha Mio and the obligation to deliver is the legal tie or the vinculum juris which binds Thonyx and Skaei.
Art. 1157. Obligations arise from: (1) Law;
Law: Example is the duty to pay taxes and to support one’s family. Refer to Art. 1158. (2) Contracts;
Contracts: Example is the duty to pay a loan by virtue of an agreement. Refer to Art. 1159.
(3) Quasi-contracts;
Quasi-contracts: Example is the duty to refund an “over charge” of money because of solutio indebiti or negtiorum gestio. Refer to Art. 1160.
(4) Acts or omissions punished by law;
Acts or omissions punished by law or Delict: Example is the duty to return a stolen carabao. Refer to Art. 1161.
(5) Quasi-delicts
Quasi-delicts: Example is the duty to repair damages due to negligence. Refer to Art. 1162.
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 the law which establishes them; and as to what has not been foreseen, by the provisions of this Book.
Example: It is the duty of the Spouses to support each other. (Art. 291, New Civil Code)
And under the National Internal Revenue Code, it is the duty of every person having an income to pay taxes.
Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.
Example:
Tonix borrowed from Sky P1,000,000 and agreed that in case of non-payment on the date stipulated, Tonix’s house and lot would be sold to Sky for the amount of P1,000,000. Is the stipulation valid? Yes. If Tonix does not pay, he should sell the house and lot for P1,000,000 to Sky. The agreement is not contrary to law.
Art. 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book.
Quasi-contract is the juridical relation resulting from a lawful, voluntary and unilateral act which has for its purpose the payment of indemnity to the end that no one shall unjustly enrich or benefited at the expense of another. (Art. 2142, NCC)
Solutio Indebiti (Payment by mistake)
It is the juridical relation which arises when a person is obliged to return something received by him through error or mistake.
Example-Sky owed Tonix the sum of P1, 000.00. By mistake, Example-Sky paid P2, 000.00. Tonix has the obligation to return the P1, 000.00 excess because there was payment by mistake. Negotiorum gestio (management of another’s property)
It is the voluntary management or administration by a person of the abandoned business or property of another without any authority or power from the latter. (Art. 2144, NCC)
Example-Clint, a wealthy landowner suddenly left for abroad leaving his livestock farm unattended. John, a neighbor of Clint managed the farm thereby incurring expenses. When Clint returns, he has the obligation to reimburse John for the expenses incurred by him and to pay him for his services. It is bases on the principle that no one shall enrich himself at the expense of another.
Art. 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages.
While an act or omission is felonious because it is punished by law, the criminal act gives rise to civil liability as it caused damage to another.
Civil liability arising from delicts:
Restitution – which is the restoration of or returning the object of the crime to the injured party.
Reparation – which is the payment by the offender of the value of the object of the crime, when such object cannot be returned to the injured party.
Indemnification – the consequential damages which includes the payment of other damages that may have been caused to the injures party.
Example: Bowser was convicted and sentenced to imprisonment by the Court for the crime of theft, the gold necklace, of Luigi. In addition to whatever penalty that the Court may impose, Bowser may also be ordered to return (restitution) the gold necklace to Luigi. If restitution is no longer possible, for Bowser to pay the value (reparation) of the gold wrist watch. In addition to either restitution or reparation, Bowser shall also pay for damages (indemnification) suffered by Luigi.
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-delict is one where whoever by act or omission causes damage to another, there being fault of negligence, is obliged to pay for the damage done. Such fault of negligence, if there is no pre-existing contractual relation between the parties. (Art. 2176)
Example:
If Andrew drives his car negligently and because of his negligence hits Soriano, who is walking on the sidewalk of the street, inflicting upon him physical injuries. Then Andrew becomes liable for damages based on quasi-delict.
CHAPTER 2 NATURE AND EFFECT OF OBLIGATIONS
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)
To preserve or take care of the thing, with proper diligence of a good father to a family. It means the ordinary diligence that a prudent man would exercise in taking care of his own property taking into consideration the nature of the obligation, of the time and of the place. Example:
Richard obliged to give to Laila a wedding ring five days from now. When the promise was due, Richard, for being too busy, lost the wedding ring he promised to Laila. Richard is liable to Laila for being negligent in loosing the ring he promised. He should have properly taken care of it with proper diligence of a good father of a family.
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)
Kinds of Rights:
Personal right – is power demandable by one person of another.
Real right – is a power over a specific thing and is binding on the whole world only when the thing is actually delivered to him.
Example:
Leo obliged to give to Escorido a certain parcel of land on December 25. Before December 25, Escorido do not have the right to the fruits of the parcel of land Leo promised. After December 25, Escorido poseses the right to the fruits from the parcel of Land. Upon actual delivery of the property to Escorido, only then he becomes the owner of said fruit and land on the day of delivery.
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)
Determinate thing – a thing is determinate when it is particularly designated or physically segregated from all others from the same class. (Art. 1460, NCC)
Example:
Patrick promised to give to Ivy a Gucci Necklace Emperador model five days from now. If after 6 days, Patrick has not yet delivered the said necklace because he was robbed early in the morning on the 6th day, even after consistent demand of Ivy for the necklace since the day before, Ivy can compel Patrick to deliver the item since the object was determinate or specific.
Indeterminate or generic thing – A thing is generic when it refers to a class or thing or genus and cannot be designated with particularity. (Art. 1460, NCC)
Example:
Amy promised to give to Andrew a gun, five days from now. If after five days, Amy has not yet delivered the gun since she lost it on her way home, Andrew can ask Amy to comply with her obligation at her own expense.
Fortuitous Events – those events which could not be foreseen or which though foreseen were inevitable. (Art. 1174, NCC)
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)
Accessories – those joined to or included with the principal object for the latter’s better use, perfection, or enjoyment. (like the keys to a house and the dishes in the restaurant) Example:
Lleina promised to give Jack a particular pickup truck. Lleina should also deliver the tools and the spare tire of the said pickup truck.
Accessions – additions to or improvements upon a thing. Example:
Jack obliged to give Lleina a certain piece of land. Jack should also deliver including the accessions in the said piece of land, like the building attached to it and all other infrastructure constructed.
Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone. (1098)
This provision mainly focuses on Positive Personal Obligation, or an obligation to do. Remedies if the debtor fails to do
> To have the obligation performed at his expense and to demand damages. If a thing may be ordered undone
> If poorly made and if requires a negative obligation (not to do) for the debtor. Example:
Antonio promised to construct a two-storey house for Comique. Few hours after constructing the house of Comique, the roofing system of the garage fell down. Comique can demand Antonio to undo the defect and reconstruct the garage roof at his expense since it was made poorly.
Art. 1168. When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be undone at his expense. (1099a)
This provision mainly focuses on Negative Personal Obligation or an obligation not to do. Remedies if the debtor fails to do
> Is the undoing of the prohibited thing plus damages. Example:
Roniel promised to Inot not to use Inot’s money for gambling in Casinos but only for schooling, if in case Roniel does what he promised not to do, he will be liable to return the money he used in gambling in the Casino and to pay Inot the same amount as penalty. If in case Roniel goes to the Casino and use Inot’s money in gambling, he will be liable for the return of the money, the penalty and damages.
Art. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. However, the demand by the creditor shall not be necessary in order that delay may exist:
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. (1100a)
Mora means a legal delay or default and it consists of failure discharge a duty resulting to one’s own disadvantaged.
The debtor incurred delay if:
The debtor fails to perform his obligation when it falls due; and A demand has been made by the creditor judicially or extra judicially.
Example –
Ria obliged herself to deliver a Siberian Husky Puppy to Lleina on June 20, this year. Ria failed to delivered on the agreed date, is Ria already on delay on June 20? Only when Lleina makes a judicial or extra-judicial demand and from such date of demand when Ria still fails to deliver the said puppy, she is on default or delay.
Exceptions for the requirement of demand
When the obligation expressly so provides – An agreement to the effect that fulfillment or performance is not made when the obligation becomes due, default or delay by the debtor will automatically arise.
When the law so provides – The express provision of law that a debtor is in default. For instance, taxes must be paid on the date prescribed by law, and demand is not necessary in order that the taxpayer is liable for penalties.
latter on her wedding date. Vicky did not deliver the wedding gown on the date agreed upon. Even without demand, Vicky will be in delay because time of the essence.
When demand would be useless – When the debtor cannot comply his obligation as when it is beyond his power to perform. Like when the object of the obligation is lost or destroyed through the fault of the debtor, demand is not necessary.
In a reciprocal obligation, from the moment one of the parties fulfills his obligation, delay to the other begins – For instance, in a contract of sale between Jack and Jamero, if Jack, the seller, delivers the object to Jamero, the buyer, and Jamero does not pay, then delay by Jamero begins and vice versa, if Jamero pays and Jack did not deliver the object, then Jack is on delay.
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)
Fraud (dolo) – is the intentional deception made by one person resulting in the injury of another. The fraud referred to is incidental fraud, that is, fraud incident to the performance of a pre-existing obligation. Refer to Article 1171.
Negligence (culpa) – consists in the omission by the obligor of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the person, of the time and of the place. Refer to Article 1173.
Delay (Mora) – like when there has been judicial or extra-judicial demand and the debtor does not comply his obligation, delay will occur. Also refer to Article 1169.
In contravention of the tenor of the obligation – refers to the violation of the terms and conditions or defects in the performance of the obligation, like when a landlord fails to maintain a legal and peaceful possession of a tenant being leased by the latter because the landlord was not the owner and the real owner wants to occupy the land, there is contravention of the tenor of the obligation.
Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void. (1102a)
Fraud may be either past or future. Meaning of fraud may be classified as a. Fraud in obtaining consent
Example:
Jack violently forced Jamero to sign a gratuitous contract in favor of Jack which he also accepted. The means employed in order to obtain consent was vitiated, thus the contract is considered void and inexistent.
b. Fraud in performing the contract.
• Dolo causante (causal fraud)
• Dolo incidental (incidental fraud) Example:
Lleina and Canoy entered into a contract of sale wherein Lleina will buy a certain scooter of Canoy and in turn deliver the scooter upon payment of Lleina which is five days after the birth of the contract. It is also stipulated in their contract that if ever Canoy cannot deliver for any reason, she will not be responsible for it. Canoy sold and delivered the scooter to Jack, thus never delivered the scooter to Lleina. Canoy is still liable for damages since the stipulation in the contract waiving any act of future fraud is deemed void, so Lleina can still claim damages against Canoy.
Art. 1172. Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances. (1103)
Kinds of Culpa classified as to source of obligations
• Culpa Contractual – that which results in a breach of a contract.
Example: Emi, proprietor of Emi Taxi Company, hired Parekoy as one of her driver of her taxi units. Tonix was able to chance upon Emi’s taxi, Parekoy being the driver. Parekoy drove negligently fast on a barangay road and accidentally hit a lamp post while turning a curb. The accident resulted to some bruises on Tonix. However, Emi is liable for the negligence acted by Parekoy, and is subject for damages for breach of contract of carriage.
• Culpa Aquiliana – also referred to as civil negligence or tort or quasi-delict
Example: Referring to the same problem stated above. If Parekoy while driving Tonix to his place, drove negligently fast and accidentally hit a lamp post while turning a curb, and at the same time caused physical injuries to a Sky, a bystander in the curb. Sky can file a case against Emi, the owner of Emi Taxi Company and her driver parekoy.
• Culpa Criminal – also called as criminal negligence, or that which results in the commission of a crime or a delict.
Example: Referring to the same problem stated above. Sky can also file an criminal action against Parekoy for reckless imprudence resulting to physical injuries.
Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required. (1104a)
Degrees of Culpa
• Grave Negligence is required – slight negligence will make the debtor liable.
• Ordinary Negligence is required – ordinary negligence will make the debtor liable.
• Slight Negligence is required – grave negligence will make the debtor liable
Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. (1105a)
Fortuitous even – is an event which cannot be foreseen which though foreseen is inevitable. Fortuitous event proper are acts of God such as volcanic eruption, earthquake, lightning, etc. is now similar with force majuere or acts of man such as conflagration, war, robbery, etc.
Requisite necessary to constitute fortuitous event
The occurrence makes it impossible for the debtor to fulfill the obligation on a normal manner, and the obligor did not take part as to aggravate the injury of the creditor. (Vasquez v.C.A. G.R. 42926)
As a general rule, no person shall be held responsible for fortuitous events
Example – Lyka obliged herself to deliver a determinate car to Dockie on Dec. 30, 2012. Before the arrival of the period, the car was struck by lightning and was totally destroyed. Lyka cannot be held responsible for the destruction of the car, hence her obligation to deliver is extinguished.
Exceptions (when the person is responsible despite the fortuitous even). a. When the law expressly so provides, such as:
The debtor is guilty of fraud, negligence or in contravention of the tenor of the obligation. Refer to Article 1170.
The debtor has proved to deliver the same thing to two or more persons who do not have the same interest. Refer to Article 1165.
The thing to be delivered is generic.
The debtor is guilty of default or delay. Refer to Article 1169. The debtor is guilty of concurrent negligence.
b. When declared by stipulation;
c. When the nature of obligation requires the assumption of risk. An example of this is a contract of insurance.
Art. 1175. Usurious transactions shall be governed by special laws. (n)
Art. 1176. The receipt of the principal by the creditor without reservation with respect to the interest, shall give rise to the presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior installments, shall likewise raise the presumption that such installments have been paid. (1110a)
Example: Dong Juan, creditor of P 1M, with 8% interest, received P1,000,000 in payment of the principal. Interest was not referred to in the payment. It is presumed that the 8% interest had already been previously paid. This is because under Article 1253 of this code, payment of the interest as a rule precedes payment of the principal.
Art. 1177. The creditors, after having pursued the property in possession of the debtor to satisfy their claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are inherent in his person; they may also impugn the acts which the debtor may have done to defraud them. (1111)
Rights of Creditors – In order to satisfy their claims against the debtor, creditors have the following successive rights:
1. to levy by attachment and execution upon all the property of the debtor, except such as are exempt by law from execution;
2. to exercise all the rights and actions of the debtor, except, such as are inherently personal to him; and
Art. 1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has been no stipulation to the contrary. (1112)
As a rule, all rights acquired in virtue of an obligation are transmissible, except in the following cases:
When the law so provides.
When the parties stipulate otherwise – by agreement of parties that the rights acquired by them will not be transmitted to any other person.
When the obligation is purely personal in nature.
CHAPTER 3 DIFFERENT KINDS OF OBLIGATIONS
SECTION 1. - Pure and Conditional Obligations
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. (1113)
Pure Obligation – when the obligation contains no term or condition whatever upon which depends the fulfillment of the obligation contracted by the debtor. It is immediately demandable and there is nothing to exempt the debtor from compliance therewith.
Example – Ivy obliged herself to pay her loan of P1,000 to Sky on demand.
Art. 1180. 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 Article 1197. (n)
Example: Tonix promised to pay Jack his P50,000.00 loan when his means permit. This is an obligation with an indefinite period. Jack’s remedy to insure and schedule the payment of Tonix is to go to let the court fix a period.
Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition. (1114)
Suspensive condition – the happening of the condition gives rise to an obligation.
Example: Lyka binds herself to deliver a determinate car to Tonix if he marries Guno. The obligation is only demandable upon the happening of the condition that is, if Tito marries Guno. The obligation is suspended and not yet demandable.
Resolutory condition – the happening of the condition extinguishes the obligation already existing.
Example: Sky binds himself to lend his only car to Ivy until the latter passes the Bar Exam. The obligation to lend is immediately demandable. Ivy’s right over the car is extinguished upon his passing the Bar exam. Ivy is now obliged to return the car.
Art. 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this
Potestative – is one the fulfillment of which depends upon the sole will of the debtor. This kind of condition is void.
Example: Andrew Promised to give his only parcel of land to Amy if he decides to leave for the United States.
Casual – is one the fulfillment of which depends upon chance.
Example: Marianne agrees to give Lila a determinate car if Marianne’s only racing horse will win the sweepstake race.
Mixed – is one which depends partly upon the will of third person and partly upon chance.
Example: Tonix promise to give Sky a new Toyota Car if Sky will be able to play with and beat Dominic in a game of chess. This is mixed condition, that is Dominic’s willingness to play chess with Sky and the latter’s winning over Dominic.
Art. 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not having been agreed upon. (1116a)
Impossible condition is divided into 2:
a) Physical Impossibility – the condition imposed is not capable of being performed physically.
Example: Lleina will give Jack an Ipad if he can bring a dead man alive. b) Illegal Impossibility – when the condition imposed is contrary to law, good custom or public policy.
Example:
1. Contrary to law – Pedro agrees to give Paulino P100,000 if Paulino will kill Maria.
2. Contrary to good custom – Andrew binds himself to give Marianne a gold bracelet if she will cohabit with Mr. Abing without benefit of marriage.
3. Contrary to public policy – Marianne agrees to employ Guno in her company if Guno will not join a labor union.
Effects of Impossible conditions:
If the condition is Positive and Impossible = the condition and obligation is void
Example: Andrew obliged to pay Jack P1,000,000 if Jack kills Andrew’s business competitor.
If the condition is Negative and Impossible = the condition is void but the obligation remains.
Example: Lleina obliged to give Jack a condominium unit if he does not raise a dead man alive. In this case the obligation still subsists.
Art. 1184. The condition that some event happen at a determinate time shall extinguish the obligation as soon as the time expires or if it has become indubitable that the event will not take place. (1117)
This article contemplates on a positive obligation, or an obligation to do. Example: I’ll give you my land if you marry Amy this year. If before the end of the year Amy died, and you have not yet married her, the obligation is extinguished.
Art. 1185. The condition that some event will not happen at a determinate time shall render the obligation effective from the moment the time indicated has elapsed, or if it has become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been contemplated, bearing in mind the nature of the obligation. (1118)
This article contemplates on a negative obligation, or an obligation to not to do. Example: I’ll give you my land if you will not marry Amy this year. If before the end of the year Amy died, and you have not yet married her, the obligation is effective.
Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. (1119)
Requisites:
Voluntary – intent to prevent the fulfillment of the condition must be present. Actually Prevents – the intention has been fully acted
Example: Lleina promised Jack that she will give him an 8-string guitar if he passes the bar exam. On the day of the bar exam, Lleina poisoned Jack. Jack missed some of the exams as a result and flunked the bar exam. Lleina is still bound to give Jack an 8-string guitar.
Art. 1187. The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of the constitution of the obligation. Nevertheless, when the obligation imposes reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless from the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the same was different.
In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition that has been complied with. (1120)
Once the condition is fulfilled, the effects of the conditional obligations shall retroact to the day of the constitution of the obligation and not on the date when the condition was fulfilled.
Example: On Jan. 1, 2015 Jack agreed to give Lleina a parcel of land if she passes the May, 2015 bar exams. If Lleina passes the bar exams in May, 2015, she is entitled to the land effective Jan. 1, 2015 because Lleina’s right over the land retroacts to the date when the obligation was constituted.
As to the fruits and interest – The effect of conditional obligation to give, as a rule, do not retroact to the date of the constitution of the obligation. The following rules shall govern:
In reciprocal obligation (like a contract of sale) – the fruits and interest during the pendency of the condition shall be deemed to have been mutually compensated.
Example: Abing agrees to sell and Baring agrees to buy Abing’s parcel of land if Baring passes the May, 2013 Bar exams. If Baring passes the May, 2013 bar, the obligation becomes demandable. Baring is entitled to all the interests that his money (with which to pay Abing) may earn while Abing is entitled to the fruits which the parcel of land may have produced during the pendency of the
In unilateral obligation – the debtor shall appropriate the fruits and interests received during the pendency of the condition unless a contrary intention appears.
Example: Xam agreed to give Yuri a parcel of land if Yuri passes the CPA Board in May, 2012 exams. Pending the happening of the condition, Xam is entitled to the fruits which the land may produce, Xam will deliver only the parcel of land if the condition is fulfilled, unless a contrary intention appears.
Art. 1188. The creditor may, before the fulfillment of the condition, bring the appropriate actions for the preservation of his right.
The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition. (1121a)
Preservation of Creditor’s Right –
The action for the preservation of the creditor’s right may have for their objectives:
To prevent the loss or deterioration of the things which are the objects of the obligation by enjoining or restraining acts of alienation or destruction by the debtor himself or by third person;
Paragraph I of the above article authorizes the creditor to take any appropriate actions for the preservation of creditor’s right during the pendency of the condition:
Example: On Jan. 1, 2012, Paul obliged himself to sell a parcel of land to Densyo if he passes the CE Board exams in December, 2012. From the time the obligation was constituted and pending the happening of the condition (passing the CE Board Exams) Densyo may cause the annotation of the condition in the certificate of title in the Register of Deeds where the land is located, to preserve his right over the parcel of land.
Paragraph II in order that debtor may recover what he has paid by mistake, during the pendency of the condition, the following requisites may be present:
1. The debtor paid the creditor before the fulfillment of the condition; 2. Payment made by debtor was through mistake and error;
The action to recover what was paid by mistake should be made before the fulfillment of the condition.
Example: Patrick obliged himself to pay Sky P20,000 if a PAL plane crashes at Cebu before Dec. 30, 2012. After the obligation was constituted and before December 30, 2012, a plane crushed in Cebu. Patrick honestly and believing that the condition was fulfilled paid the P20,000 to Santos. It turned out however that it was a Cebu airline that crushed. Thus, Pedro may recover the amount paid to Santos by mistake for the reason that the condition has not yet been fulfilled.
Art. 1189. When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration of the thing during the pendency of the condition: (1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished; (2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered;
(3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the obligation and its fulfillment, with indemnity for damages in either case; (5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary. (1122)
These rules apply only to obligation to give a determinate or specific thing subject to a suspensive condition in case of loss, deterioration or improvement of the thing.
1. In case of loss of the thing without the fault of the debtor, the obligation shall be extinguished. If the thing is lost through the fault of the debtor, he shall be obliged to pay damages. If in the example above, the specific car was lost through the fault of Reyes, he shall be liable for damages upon the fulfillment of the condition. Example: Jack obliged himself to give Lleina a determinate car if he passes the CE Board Exams in Oct. the current year. If during the pendency of the condition the car was lost through fortuitous event without the fault of Jack, the obligation to deliver the car is extinguished even if the condition is fulfilled later.
It is understood that the thing is lost:
When it perishes (as when a house is burnt to ashes)
When it goes out of commerce (as when the object before is unprohibited becomes prohibited)
When disappears in such a way that its existence is unknown (as when a particular car has been missing for some time)
When it disappears in such a way that it cannot be recovered (as when a particular diamond ring is dropped in the middle of the Atlantic Ocean).
2. When the thing deteriorates -
a) When the thing deteriorates during the pendency of the condition, without the fault of the debtor, the impairment is to be borne by the creditor.
Example: Jack obliged himself to give Tonix a determinate Toyota car if Tonix passes the October CPA Exams. During the pendency of the condition, the car was partially damaged by flood, without the fault on the part of Jack. If the condition is fulfilled, Ian will bear the impairment.
b) If the thing deteriorates, during the pendency of the condition, through the fault of the debtor, the creditor may choose, after the fulfillment of the condition, between the rescission of the obligation or its fulfillment, with indemnity for damages in either case.
3. When the thing improved –
a) If the thing improved during the pendency of the condition, by its nature, or by time, the improvement shall inure to the benefit of the creditor. The reason for this is to compensate the creditor who would suffer in case, instead of improvement, there would be deterioration without the fault of the debtor.
b) If the thing is improved at the expense of the debtor, he have no other right than that granted to the usufructuary. By us usufruct is meant the right to enjoy the property of another which includes the right to enjoy and use the fruits of the property.
In summary:
Creditor's
Rights Debtor's Fault
Not thru
Debtor's Fault Nature
Lost Pay Damages Extinguished
-Deteriorate Recission or Fulfillment, both with damages Impairment to the Creditor -Inure to the
Art. 1190. When the conditions have for their purpose the extinguishment of an obligation to give, the parties, upon the fulfillment of said conditions, shall return to each other what they have received.
In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding article shall be applied to the party who is bound to return.
As for the obligations to do and not to do, the provisions of the second paragraph of Article 1187 shall be observed as regards the effect of the extinguishment of the obligation. (1123)
Effects when resolutory condition is fulfilled:
1. The obligation is extinguished. (Art. 1181, NCC)
2. Because the obligation is extinguished and considered to have had no effect, the parties should restore to each other what they have received.
3. The fruits and interests thereon should also be returned after deducting of course the expenses made for the production, gathering and preservation, if any.
4. The rules given in Art. 1189, N CC will apply to whoever has the duty to return in case of loss, deterioration or improvement of the thing.
5. The courts are given power to determine the retroactivity of the fulfillment of a resolutory conditions.
Example : Abing gave Ivy a parcel of land on condition that Ivy will pass the Bar Exams on May, this year. Ivy did not pass the Bar Exams. The obligation is extinguished and therefore, it is as if there was never an obligation at all. Ivy will therefore have to return both the land and the fruits he had received there from the moment Abing has given him the land.
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 of a 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. (1124)
The right to rescind means the right to cancel or to resolve in case of reciprocal obligation in case of non-fulfillment on the part of one.
Example: In a contract of sale, the buyer can rescind if the seller does not deliver or the seller can rescind if the buyer does not pay.
The power to rescind is given to the injured party and the injured party has the following alternative remedies:
1. Demand fulfillment of the obligation plus damages; or 2. Demand rescission of the obligation plus damages.
Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages. (n)
Rules if Both Parties Have Committed a Breach: The above rules are deemed just. The first one is fair to both parties because the second infract or, though they would derive some advantage by his own act or neglect. The second rule is likewise just, because it is presumed that both parties at about the same time tried to reap some benefits. (Report of the Code Commission)
Example: Jack agreed with Richard that he will sell his brand new 8-string guitar to Richard. Jack delivered to Richard the 8-string guitar, not mentioning to Richard that it is defective. Richard also paid Jack with half of the amount with fake money. In this case, the remedy is to let the courts temper each liability to the other.
SECTION 2. - Obligations with a Period
Art. 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.
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. (1125a)
A period is a future and certain length of time which determines the effectivity or the extinguishment of obligation. Obligation with a period is one whose consequences are subject in one way or another to the expiration of said period or term. A day certain is understood to be that which must necessarily come, although it may not be known when. Period and Condition Distinguished:
As to fulfillment - A period is a certain event which must happen sooner or later while a condition is an uncertain event.
As to time – a period refers only to the future while a condition may refer to a past unknown event.
As to influence or effect on the obligation – the period fixes the time of the effectivity of the obligation while a condition may cause the demandability of the obligation to arise or to terminate.
Example: Lleina promised to Jack that she will buy and give him an Ibanez 8-string guitar on June 1, 2012. When June 1, 2012 come, Lleina’s obligation to give will be demandable.
Art. 1194. In case of loss, deterioration or improvement of the thing before the arrival of the day certain, the rules in Article 1189 shall be observed. (n)
Effect of loss, deterioration, or improvement before the arrival of period. Also refer to Article 1189, NCC.
Example: If Andrew was suppose to deliver to Brian a particular car on Dec. 19, 2011 but the car was destroyed by fortuitous event in July 1, 2011, the obligation is extinguished.
Art. 1195. Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or believing that the obligation has become due and demandable, may be recovered, with the fruits and interests. (1126a)
Effect Of Payment Before Arrival of Period
This article which is similar to Article 1188, NCC, in an obligation to give, allows the recovery of what has been paid by mistake before the fulfillment of a suspensive condition.
Example: Erin owes Grant P20,000.00, which was supposed to be paid on December 25 this year. By mistake, Erin paid his obligation on December 25 last year. Assuming that today is only June 30, Erin can recover the amount plus interest therein. But Erin cannot recover, except the interest, if the debt had already matured or if Erin had knowledge of the period.
Art. 1196. Whenever in an obligation a period is designated, it is presumed to have been established for the benefit of both the creditor and the debtor, unless from the tenor of the same or other circumstances it should appear that the period has been established in favor of one or of the other. (1127)
Presumption as to benefit of a Period: The general rule is that when a period is fixed by the parties, the period is presumed to be for the benefit of both creditor and debtor. Which means that before the expiration of the period, the debtor may not fulfill the obligation and neither the creditor demands its fulfillment?
By way of exceptions, however, if the tenor of the obligation or other circumstances may indicate that a period is have been established for the benefit of either the creditor or debtor:
1. For the benefit of both creditor and debtor
Example: Jack obtained a loan of P10, 000 at 12% interest per annum from Leo for one year. Jack has a period of one year within which to use the money, while Leo will benefit from the interest which the money will earn. 2. For the benefit of the creditor
Example: Jack executes a promissory note in favor of Leo which reads: “I promise to pay Leo for order the amount of P10,000 on demand. Thus, Leo can demand payment from Jack anytime.
3. For the benefit of debtor
Example: Jack executes a promissory note which reads: “I promise to pay Leo for order the amount of P 10,000 or before December 31, 2001. Jack can pay her obligation on or before Dec. 31, 2001.
Art. 1197. 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.
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. (1128a)
If an obligation does not state a judicial period and no period is intended, the court is not authorized to fix a period. The courts have no right to make contracts for the parties. Exceptions:
1. If the obligation does not fix a period but it can be inferred from its nature and circumstances that a period is intended.
Example: Steff sold a parcel of land to Abing with a right of repurchase. No term is specified in the contract for the exercise of the right. Then, the court is authorized to fix the period to repurchase.
2. If the duration of the period depends upon the sole will of the debtor
Example: I will pay you as soon as possible. Here, the period is not fixed, so the court may fix the same because if this is not so the obligation may never be complied with by the debtor.
Art. 1198. The debtor shall lose every right to make use of the period:
(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. (1129a)
The general rule is that the obligation is not demandable before the lapse of the period. The exceptions are based on the fact that the debtor might not be able to comply with his obligation:
When debtor becomes insolvent:
The insolvency need not be judicially declared. It is sufficient that the debtor has less assets than his liabilities or if debtor is unable to pay his debts as they mature. It is noted that the insolvency of the debtor must occur after the obligation has been contracted. When debtor does not furnish guaranties or securities promised:
Example: Green borrowed loan from Tonix which loan was secured by a chattel mortgage of Green’s car as a guaranty. After obtaining the loan, Green fails or does not execute a chattel mortgage, the loan becomes demandable or the debtor loses her right to make use of the period.
When by his own acts he has impaired said guaranties or securities:
Example: Green borrowed P50, 000 from Tito which loan was secured by a chattel mortgage on Green‘s car. Later, Green’s fault, the car was damaged or she causes the impairment of the car, Green loses her right to make use of the period, unless she gives another one equally satisfactory.
When by fortuitous event, the guaranty or security was lost.
Example: Green borrowed P50,000 from Tonix which loan was secured by a chattel mortgage on Green’s car. After obtaining the loan, the car was lost by fortuitous event. Green loss his right to make use of the period unless he gives
When debtor violates an undertaking –
Example: Arthur secured a loan from Arnel on condition that Art will paint the house of Arnel. If after the proceeds of the loan were given to Arthur, he did not pant the house of Arnel, Arthur loses his right to make use of the period.
When the debtor attempts to abscond.
Abscond means a depart or escape from creditor’s knowledge to avoid payment of his debt. Mere attempt on the part of debtor will entitle the creditor to demand payment of the obligation without waiting for the period to expire.
SECTION 3. - Alternative Obligations
Art. 1199. A 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. (1131)
Meaning of Alternative Obligation: It means an obligation where two or more prestations are due but the delivery of one is sufficient to extinguish the obligation.
Example: Lleina binds herself to give Jack either a determinate refrigerator or a TV set. If Lleina chooses and delivers the TV set, the obligation is extinguished. Thus, Lleina cannot compel Jack to accept part of one and the part of the other prestations.
Art. 1200. The 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. (1132)
Rule on who makes the choice:
As a general rule, the right of choice or to select the prestation belongs to the debtor, unless the right to choose is expressly granted to the creditor. But the right of the debtor is subject to the following:
The debtor cannot choose those prestations which are:
a) Impossible – Example: Lleina promised to deliver to Jack 100 sacks of rice or a stone from Uranus. Lleina cannot chose to deliver the stone coming from Uranus as it is physically impossible.
b) Unlawful – Example: Jack obliged herself to deliver to Lleina a kilo of shabu or a parcel of land. Jack can choose only the delivery of parcel of land.
c) Could not have been the object of the obligation – Example: Lleina borrowed from Jack P50,000. It was agreed that Lleina would give Jack her horse or her German Piano. Now, Lleina has two horses, a race horse worth P50,000 and an ordinary horse which is worth for only P5,000. Gaya cannot choose the ordinary horse, since it is not the horse which Lleina promised.
d) Only one prestation is practicable (Art. 1202) – Example: Lleina will deliver to Jack her carabao, or her horse or her refrigerator. Through no fault of Lleina, the horse and the carabao were lost by fortuitous event. Lleina can only delivery the refrigerator which is the only one practicable.
Art. 1201. The choice shall produce no effect except from the time it has been communicated. (1133)
Right of Choice Must be communicated –
Until the choice is made and communicated, the communicated, the obligation remains alternative. Once the notice to the effect that a choice is made, the obligation ceases to be alternative and becomes a simple obligation.
Where the choice has been expressly given to the creditor, such choice shall likewise produce legal effects upon being communicated to the debtor. (Art. 1205, par. 1)
Example: Lleina promised to give to Jack her Netbook, or her Ipad or her mountain bike 5 days from now. She’s told some of Jack’s friend that she will give the netbook. When the obligation was due, Lleina expressly communicated to Jack to give the mountain bike. The choice of giving the mountain bike is binding to Lleina.
Art. 1202. The debtor shall lose the right of choice when among the prestations whereby he is alternatively bound, only one is practicable. (1134)
Example: Xander obliged to give Yuri either object A or object B or object C. If objects A and B are lost by fortuitous event before choice can be made, Xander can deliver only object C, because the obligation has become a simple one. If later, object C is also destroyed by a fortuitous event, the obligation is extinguished, and Xander would not be liable in any way.
Art. 1203. If through the creditor's acts the debtor cannot make a choice according to the terms of the obligation, the latter may rescind the contract with damages. (n)
When debtor may rescind contract: If through the creditor’s fault, the debtor cannot made a choice according to the terms of the obligation the debtor is given the right to rescind and recover damages.
Example: Guno borrowed from Tonix P5, 000.00. It was agreed that instead of P5, 000, Guno could deliver a TV set or a refrigerator or a piano. If through the fault of Tonix, the TV set was destroyed, Guno can rescind the contract if she wants. In case of rescission, the amount of P 5, 000.00 must be returned by Guno with interest. Tonix, in turn, must pay Guno the value of the TV set plus damages.
Art. 1204. The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the things which are alternatively the object of the obligation have been lost, or the compliance of the obligation has become impossible.
The indemnity shall be fixed taking as a basis the value of the last thing which disappeared, or that of the service which last became impossible.
Damages other than the value of the last thing or service may also be awarded. (1135a) When right of choice is with debtor and all prestations were lost –
This article entitles the creditor to indemnity for damages when all the alternative objects are lost through the fault of the debtor before he has made his choice. The indemnity for which the creditor is entitled shall be based on the value of the last thing which disappeared or lost or the compliance of the obligation has become impossible.
Example: Xander obliged to give Yuri either object A or object B or object C. If all objects were lost through the acts of the debtor event before choice can be made, Xander is liable to pay Yuri an amount equal to the last thing lost to be paid with damages.
Art. 1205. When the choice has been expressly given to the creditor, the obligation shall cease to be alternative from the day when the selection has been communicated to the debtor.
Until then the responsibility of the debtor shall be governed by the following rules:
(1) If one of the things is lost through a fortuitous event, he shall perform the obligation by delivering that which the creditor should choose from among the remainder, or that which remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of the debtor, the creditor may claim any of those subsisting, or the price of that which, through the fault of the former, has disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor, the choice by the creditor shall fall upon the price of any one of them, also with indemnity for damages.
The same rules shall be applied to obligations to do or not to do in case one, some or all of the prestations should become impossible. (1136a)
When Right of Choice is With Creditor and All Prestations Were Lost
This article provides for the rules to be observed when the right of choice is expressly granted to the creditor, the rules are as follows:
1. When a thing is lost through a fortuitous event
Example: Ivy obliged herself to deliver to Skai a TV set, or a refrigerator, or a piano. If the TV set was lost through fortuitous event, Skai can choose from among the remainder or that which remains if only one subsists.
2. When a thing is lost through debtor’s fault
Example: If the loss of the TV set occurs through the fault of Ivy, Skai may claim the refrigerator or the piano with a right of damages or the price of the TV set with a right of damages.
3. When all the things were lost through debtor’s fault
Example: If all the items are lost through the fault of Ivy, then Skai can demand the payment of the price of any one of them with a right to indemnity for damages.
4. When all the thing are lost through a fortuitous event
Example: The obligation of Ivy shall be extinguished if all the items which are alternatively the object of the obligation are lost through a fortuitous event (Art. 1174 will apply).
Art. 1206. When only one prestation has been agreed upon, but the obligor may render another in substitution, the obligation is called facultative.
The loss or deterioration of the thing intended as a substitute, through the negligence of the obligor, does not render him liable. But once the substitution has been made, the obligor is liable for the loss of the substitute on account of his delay, negligence or fraud. (n)
Meaning of Facultative Obligation –
A facultative obligation is one where only one prestation has been agreed upon but the obligor may render another in substitution.
Example: I will give you my piano but I may give my television set as a substitute.
SECTION 4. - Joint and Solidary Obligations
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. (1137a)
Art. 1208. If from the law, or the nature or the wording of the obligations to which the preceding article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many shares as there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court governing the multiplicity of suits. (1138a)
Joint Obligation – It is an obligation where there is a concurrence of two or more debtors or two or more creditors or of several debtors and creditors, by virtue of which each of the debtors is liable for a proportionate part of the credit.
Example of different instances
1.) Patrick, Leo, and Roniel borrowed P9,000 for Lyka. The presumption is that Patrick, Leo, and Roniel are jointly liable. Lyka demand only P3,000 from each or a total of P9,000.
2.) Abing borrowed from Leo, Roniel and Lyka P9,000. There is one debtor and three creditors. Each creditor can demand only P3,000 from A.
3.) Abing and Leo are liable to Roniel and Lyka for P9,000. There are two debtors and two creditors. Each creditor can demand only P4,500 from each debtor.
There are solidary liability when:
1.) The obligation expressly so states, or 2.) The law requires solidarity or
3.) The nature of the obligation requires solidarity. Kinds of Solidary Obligation
1. Passive – solidarity on the part of the debtors, where anyone of them can be made liable for the fulfillment of the entire obligation.
Example – Tonix and Skai are solidary debtors of Jack in the amount of P 10,000 2. Active – solidarity on the part of the creditors, where anyone of them can demand the
fulfillment of the entire obligation.
Example – Tonix is liable to Skai and Jack for the amount of P10,000. Skai and Jack are solidary creditors.
3. Mixed Solidarity – solidarity on the part of the debtors and creditors where each one of the debtors is liable to render and each one of the creditors has a right to demand, entire compliance with the obligation.
Example – Tonix and Skai are solidarity debtors to Jack and Dann, solidary creditors in the amount of P 10,000.
Solidarity not presumed – The presumption, where there are two or more persons in the same obligation, is that it is joint. The reason is that solidary obligations are very burdensome for they create unusual rights and liabilities. Solidarity between debtors increases their responsibility while solidarity between creditors presuming that they are
Art. 1209. If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the others shall not be liable for his share. (1139)
Indivisible Joint Obligation – The object is indivisible and the T/E between the parties are merely proportionately liable.
Example – Lleina and Ria are jointly liable to give Emi a particular car. The obligation is joint but since the object is indivisible, the creditor must proceed against all the joint debtor. If any of the joint debtors be insolvent, the others shall not be liable for others.
Art. 1210. The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity of itself imply indivisibility. (n)
Indivisibility as Distinguished from Solidarity – Indivisibility refers to the subject matter while solidarity refers to the Tie between the parties.
Examples:
Joint divisible obligation – Abing and Roniel are jointly liable to Canoy for P10, 000. Joint indivisible obligation – Lleina and Ria are jointly liable to give Canoy their car. Solidary divisible obligation – Emi and Lleina are solidarily liable to give Ria P10, 000. Solidary indivisible obligation – Saj and Emi are solidarily liable to give Dean their car.
Art. 1211. Solidarity may exist although the creditors and the debtors may not be bound in the same manner and by the same periods and conditions. (1140)
The solidary character of the obligation is not destroyed even if the creditors and debtors are bound by different terms and conditions. The solidarity is still preserved by recognizing in the creditor the power of claiming from any or all debtors the payment of the entire obligation.
Example: Jack and Lleina solidarily bound themselves to pay a total of P10,000 to Ria, and Emi and Saj to the following conditions. Ria’s share will be due at the end of the year; Emi will get her share only after she passes the CPA exams and Saj will get his share only after he painted the house of Ria.
Art. 1212. Each one of the solidary creditors may do whatever may be useful to the others, but not anything which may be prejudicial to the latter. (1141a)
Art. 1213. A solidary creditor cannot assign his rights without the consent of the others. (n)
Solidary Creditors May Do Useful Act; Not Prejudicial Acts – A solidary creditor may do any act beneficial or useful to the others but he cannot act prejudicial to them.
Example of Beneficial Acts – To interrupt the running of prescription, the act of one solidary creditor in making a judicial demand upon any of the solidary debtors is sufficient. (Art. 1155, NCC)
Example of Prejudicial Acts – Should not be performed, otherwise, there will be liability for damages. However, in the case of remission or condonation, the solidary creditor is allowed to so remit, and the obligation is extinguished.
