OBLIGATIONS AND CONTRACTS

JANUARY 2007
MIDTERM REVIEWER

LAW – imposed by law itself

1156. An obligation is a juridical necessity
to give, to do, or not to do. CONTRACTS – arise from stipulations of the
parties: meeting of the minds / formal agreement
JURIDICAL NECESSITY – juridical tie; connote that
in case of noncompliance, there will be legal QUASI-CONTRACTS – arise from lawful, voluntary
sanctions. and unilateral acts and which are enforceable to
the end that no one shall be unjustly enriched or
• An obligation is nothing more than the benefited at the expense of another
duty of a person (obligor) to satisfy a
specific demandable claim of another DELICTS – arise from civil liability which is the
person (obligee) which, if breached, is consequence of a criminal offense
enforceable in court.
QUASI-DELICTS – (torts) arise from damage
DAMAGES – sum of money given as a caused to another through an act or omission,
compensation for the injury or harm suffered by there being no fault or negligence, but no
the obligee for the violation of his right. contractual relation exists between the parties

2 KINDS OF OBLIGATION ** 2 sources of obligations: law and contract – q-

1. CIVIL OBLIGATION – an obligation, if not contract, delicts, and q-delicts are imposed by
fulfilled when it becomes due and law.
demandable, may be enforced in court
through action; based on law.
2. NATURAL OBLIGATION – a special kind of 1158. Obligations from law are not
obligation which cannot be enforced in
presumed. Only those (1) expressly
court but which authorizes the retention of
determined in this code or (2) in special
the voluntary payment or performance
laws are demandable, and shall be
made by the debtor; based on equity and
regulated by the precepts of the law which
natural law. (i.e. when there is prescription
establishes them; and as to what has not
of duty to pay, still, the obligor paid his
been foreseen, by the provisions of this
dues to the obligee – the obligor cannot
code.
recover his payment even there is
prescription)
• Unless such obligations are EXPRESSLY
ELEMENTS OF OBLIGATION provided by law, they are not demandable
1. ACTIVE SUBJECT – (Creditor / Obligee) the and enforceable, and cannot be presumed
person who is demanding the performance to exist.
of the obligation; • The Civil Code can be applicable
2. PASSIVE SUBJECT – (Debtor / Obligor) the suppletorily to obligations arising from
one bound to perform the prestation or to laws other than the Civil Code itself.
fulfill the obligation or duty; • Special laws – refer to all other laws not
3. PRESTATION – ( to give, to do, or not to do) contained in the Civil Code.
subject matter of the obligation; conduct
required to be observed by the debtor; 1159. Obligations arising from contracts
4. EFFICIENT CAUSE – the JURIDICAL TIE have the force of law between the
which binds the parties to the obligation; contracting parties and should be complied
source of the obligation. with in good faith.

PRESTATION CONTRACT – meeting of minds between two

1. TO GIVE – delivery of a thing to the persons whereby one binds himself, with respect
creditor (in sale, deposit, pledge, to the other, to give, to do something or to render
donation); some service; governed primarily by the
2. TO DO – covers all kinds of works or agreement of the contracting parties.
services (contract for professional
services); VALID CONTRACT – it should not be against the
3. NOT TO DO – consists of refraining from law, contrary to morals, good customs, public
doing some acts (in following rules and order, and public policy.
regulations).
• In the eyes of law, a void contract does
• INJURY – wrongful act or omission which not exist and no obligation will arise from
causes loss or harm to another it.
• DAMAGE – result of injury (loss, hurt,
OBLIGATIONS ARISING FROM CONTRACTS –
harm)
primarily governed by the stipulations, clauses,
terms and conditions of their agreements.
1157. Obligation arises from – (1) law; (2)
contracts; (3) quasi-contracts; (4) acts or
omissions punished by law; (5) quasi- • If a contract’s prestation is unconscionable
delicts. (unfair) or unreasonable, even if it does

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not violate morals, law, etc., it may not be 3. INDEMNIFICATION FOR CONSEQUENTIAL
enforced totally. DAMAGES – includes damages suffered by
the family of the injured party or by a third
• Interpretation of contract involves a person by reason of the crime.
question of law.
• The acquittal of the accused in the
COMPLIANCE IN GOOD FAITH – compliance or criminal case on ground of reasonable
performance in accordance with the stipulations doubt does not preclude the filing of a
or terms of the contract or agreement. subsequent civil action.

FALSIFICATION OF A VALID CONTRACT – only the 1162. Obligations derived from quasi-delicts
unauthorized insertions will be disregarded; the shall be governed by the provisions of
original terms and stipulations should be chapter 2, title 17 of this book, and by
considered valid and subsisting for the partied to special laws.
fulfill.
QUASI-DELICT (culpa aquiliana) – an act or
1160. Obligations derived from quasi- omission b a person which causes damage to
contracts shall be subject to the provisions another giving rise to an obligation to pay for the
of chapter 1, title 17 of this book. damage done, there being fault or negligence
but there is no pre-existing contractual relation
QUASI-CONTRACT – juridical relation resulting between parties.
from lawful, voluntary and unilateral acts by
virtue of which, both parties become bound to REQUISITES:
each other, to the end that no one will be unjustly 1. omission
enriched or benefited at the expense of the other. 2. negligence
3. damage cause to the plaintiff
• There is no consent  consent is 4. direct relation of omission, being the
PRESUMED. cause, and the damage, being the effect
5. no pre-existing contractual relations
1. NEGOTIORUM GESTIO – juridical relation between parties
which takes place when somebody
voluntarily y manages the property affairs Fault or Negligence – consists in the omission of
of another without the knowledge or that diligence which is required by the nature of
consent of the latter; owner shall the obligation and corresponds with the
reimburse the gestor for necessary and circumstances of the person, time, and of the
useful expenses incurred by the latter for place.
the performance of his function as gestor.
2. SOLUTIO INDEBITI – something is received TEST OF NEGLIGENCE
when there is no right to demand it and it Did the defendant, in doing the alleged negligent
was unduly delivered through mistake; act,, use the reasonable care and caution which
obligation to return the thing arises on the an ordinary prudent man would have used in the
part of the recipient. same situation?

BASIS DELICTS QUASI-

DELICTS
1. INTENT Criminal/maliciou Negligence
s
1161. Civil obligations arising from criminal 2. INTEREST Affects PUBLIC Affects PRIVATE
offenses shall be governed by the penal interest interest
laws, subject to the provisions of Article 3. LIABILITY Criminal and civil Civil liability
2177, and of the pertinent provisions of liabilities
Chapter 2, Preliminary in Human Relations, 4. PURPOSE Purpose – Indemnification
and of Title 18 of this book, regulating punishment
damages. 5. Cannot be Can be
COMPROMIS compromised compromised
• Every person criminally liable for a felony E
is also criminally liable (art. 100, RPC) 6. GUILT Proved beyond Preponderance
reasonable doubt of evidence
CRIMINAL LIABILITY INCLUDES:
1. RESTITUTION – restoration of property
previously taken away; the thing itself
shall be restored, even though it be found
in the possession of a third person who
has acquired it by lawful means, saving to
the latter his action against the proper
person who may be liable to him.
2. REPARATION OF THE DAMAGE CAUSED –
court determines the amount of damage:
price of a thing, sentimental value, etc. Basis Culpa Culpa

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Aquiliana Contractual • Ownership is transferred by delivery which

(Quasi-delict) (Breach of could be either actual or constructive.
contract) • The remedy of the buyer hen there is no
1. NATURE Direct, Incidental to the delivery despite demand is to file a
OF substantive performance of the complaint for “SPECIFIC PERFORMANCE
NEGLIGEN and obligation. AND DELIVERY” because he is not yet the
CE independent owner of the property before the delivery.
2.GOOD Complete and Not complete and
FATHER OF proper defense proper defense in ACTUAL DELIVERY – actual delivery of a thing
THE FAMILY (parents, the selection of from the hand of the grantor to the hand of the
DEFENSE guardian, employees. grantee (presonally), or manifested by certain
employers) possessory acts executed by the grantee with the
3.PRESUMP No There is consent of the grantor (realty).
TION OF presumption – presumption – CONSTRUCTIVE TRADITION – representative of
NEGLIGEN injured party defendant must symbolical in essence and with intention to
CE must prove prove that there deliver the ownership.
negligence of was no negligence
the defendant. in the carrying out
of the terms of the
contract.

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 FRUITS:
of the parties requires another standard of 1. NATURAL – spontaneous products of the
care. soil, the young and other products of
animals;
• Speaks of an obligation to care of a 2. INDUSTRIAL – produced by lands of any
DETERMINATE thing (that is one which is cultivation or labor;
specific; a thing identified by its 3. CIVIL – those derived by virtue of juridical
individuality) which an obligor is supposed relation.
to deliver to another.
1165. When what is to be delivered is a
DUTIES OF DEBTOR: determinate thing, the creditor … may
1. Preserve or take care of the things due. compel the debtor to make delivery. If the
a. DILIGENCE OF A GOOD FATHER – a thing is indeterminate or generic, he may
good father does not abandon his ask that the obligation be complied with at
family, he is always ready to provide the expense of the debtor. If the obligor
and protect his family; ordinary care delays or has promised to deliver the same
which an average and reasonably ting to two or more persons who do not
prudent man would do. have the same interest, he shall be
b. ANOTHER STANDARD OF CARE – responsible for any fortuitous event until he
extraordinary diligence provided in has effected the delivery.
the stipulation of parties.
c. FACTORS TO BE CONSIDERED – DETERMINATE THING
diligence depends on the nature of – something which is susceptible of
obligation and corresponds with the particular designation or specification;
circumstances of the person, time, – obligation is extinguished if the thing is
and place. lost due to fortuitous events.
INDETERMINATE THING
• Debtor is not liable if his failure to deliver – something that has reference only to a
the thing is due to fortuitous events or class or genus;
force majeure… without negligence or – obligation to deliver is not so extinguished
fault in his part. by fortuitous events.

2. Deliver the fruits of a thing REMIDIES FOR FAILURE OF DELIVERY

3. Deliver the accessions/accessories (determinate thing)
4. Deliver the thing itself 1. Complaint for specific performance – an
5. Answer for damages in case of non- action to compel the fulfillment of the
fulfillment or breach obligation.
2. Complaint for rescission of the obligation –
1164. The creditor has a right to the fruits action to rescind
of the thing from the time the obligation to 3. Complaint for damages – action to claim
deliver it arises. However, he shall acquire for compensation of damages suffered
no real right over it until the same has been
delivered to him. • As a general rule, “no person shall be
responsible for those events which could

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not be foreseen, or which, though 3. When demand would be useless

foreseen, are inevitable, except: (prestation is impossible);
a. in cases expressly specified by the 4. In reciprocal obligations, from the
law moment one of the parties fulfills his
b. when it is stipulated by the parties obligation;
c. when the nature of the obligation 5. When the debtor admits he is in
requires assumption of risk default
• An indeterminate thing cannot be object of
destruction by a fortuitous event because
genus never perishes. ORDINARY DELAY – mere failure to perform an
obligation at the appointed time.
1166. The obligation to give a determinate LEGAL DELAY (DEFAULT) – tantamount to non-
thing includes that of delivering all its fulfillment of the obligation and arises after an
accessions and accessories, even though extrajudicial or judicial demand was made upon
they may not have been mentioned. the debtor.

ACCESSIONS – fruits of the thing or additions to KINDS OF DEFAULT:

or improvements upon the principal. 1. MORA SOLVENDI – delay on the part of the
ACCESSORIES – things included with the principal debtor to fulfill his obligation;
for the latter’s embellishment, better use, or REQUISITES:
completion a. failure of the obligor to perform
obligation on the DATE agreed
• However, the parties may stipulate the upon;
b. demand (j/ej) by the creditor;
certain accessions or accessories which
c. failure to comply with such demand
shall be excluded as they have freedom to
stipulate.
EFFECTS:
a. debtor – liable for damages and
1167. If a person obliged to do something
interests
fails to do it, the same shall be executed at
b. debtor – liable for the loss of a
his cost. This same rule shall be observed if
thing due to a fortuitous event
he does it in contravention of the tenor of
2. MORA ACCIPIENDI – delay on the part of
the obligation … it may be decreed that
the creditor to accept the performance of
what has been poorly done be undone.
the obligation;
Effects:
THREE SITUATIONS:
a. creditor – liable for damages
1. Debtor’s failure to perform an obligation
b. creditor – bears the risk of loss of
- creditor may do the obligation, or
the thing
by another, at the expense of the
c. debtor – not liable for interest from
debtor;
the time of creditor’s delay
- recover damages
d. debtor – release himself from the
2. Performance was contrary to the terms
obligation
agreed upon
3. COMPENSATIO MORAE – delay of the
- order of the court to undo the same
obligors in reciprocal obligation.
at the expense of the debtor
Effect: the default of one compensates
3. Performance in a poor manner
the default of the other; their respective
- order of the court to undo the same
liabilities shall be offset equitable.
at the expense of the debtor
1170. Those who in the performance of
1168. When the obligation consists in NOT
their obligations are guilty of fraud,
DOING and the obligor does what has been
negligence, or delay, and those who in any
forbidden him, it shall also be undone at his
manner contravene the tenor thereof, are
expense.
liable for damages.
1169. Those obliged to deliver or to do
FRAUD (dolo) – deliberate intentional evasion of
something incur in delay from the time the
the faithful fulfillment of an obligation;
obligee judicially or extrajudicially demands
NEGLIGENCE (culpa or fault) – voluntary act or
from them the fulfillment of their
omission of diligence, there being no malice,
obligation.
which prevents the normal fulfillment of an
However, the demand by the creditor shall
obligation;
not be necessary in order that delay may
DELAY (mora) – default or tardiness in the
exists:
performance of an obligation after it has been
due and demandable;
1. When the law or obligation so
CONTRAVENTION OF TERMS OF OBLIGATION
expressly declares;
(violatio)– violation of terms and conditions
2. When from the nature of the
stipulated in the obligation; this must not be due
contract, time us the essence and
to a fortuitous event.
motivating factor for its
establishment;

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2. Diligence required by the law governing the

particular obligation
3. Diligence stipulated by the parties

1171. Responsibility arising from fraud is 1174. Except in cases expressly specified by
demandable in all obligations. Any waiver of the law, or when it is otherwise declared by
an action for future fraud is void. stipulation, or when the nature of the
obligation requires the assumption of risk,
• To allow such waiver will necessarily no person shall be responsible for those
render the obligatory force of contracts events which could not be foreseen, or
illusory. which, though foreseen, were inevitable.
• The law does not prohibit waiver of an
action for damages based on fraud FORTUITOUS EVENT – an occurrence or
already committed. happening which could not be foreseen or even if
• Any deliberate deviation from the normal foreseen, is inevitable; absolutely independent of
way of fulfilling the obligation may be a human intervention; act of God.
proper basis for claim for damages against
the guilty party. MORCE MAJEURE - an event caused by the
legitimate or illegitimate acts of persons other
INCIDENTAL FRAUD – committed in the than the obligor; there is human intervention.
performance of an obligation already existing
because of a contract. REQUISITES OF FORTUITOUS EVENT:
CAUSAL FRAUD – employed in the execution of 1. Independent of the human will (or at least
contract. of the obligor’s)
2. Unforeseen or unavoidable
1172. Responsibility arising from 3. Of such character as to render it
negligence in the performance of every kind impossible for the obligor to comply with
of obligation is also demandable, but such his obligation in a normal manner
liability may be regulated by the courts, 4. Obligor – free from any
according to circumstances. participation/aggravation of the injury to
the obligee (no negligence or imprudence)
Court’s discretion because:
1. negligence depends upon the EXEPTIONS:
circumstances of a case – good or bad 1. When it is expressly stipulated that he
faith of the obligor may be considered as shall be liable even if non-performance of
well as the conduct or misconduct of the the obligation is due to fortuitous events;
obligee; 2. When the nature of the obligation requires
2. it is not as serious as fraud. the assumption of risk;
3. When the obligor is in delay;
Negligence – lack of foresight or knowledge 4. When the obligor has promised the same
Imprudence – lack of skill or precaution thing to two or more persons who do not
have the same interest;
1173. The fault or negligence of the obligor 5. When the possessor is in bad faith and the
consists in he omission of that diligence thing lost or deteriorated due to fortuitous
which is required by the nature of the event;
obligation and corresponds with the 6. When the obligor contributed to the loss of
circumstances of the persons, of he time the thing.
and of the place… If the law or contract
does not state the diligence which is to be 1177. Usurious transactions shall be
observed in the performance, that which is governed by special laws.
expected if a good father of a family shall
be required. USURY – contracting for or receiving interest in
excess of the amount allowed by law for the loan
DILIGENCE – the attention and care required of a or use of money, goods, etc.
person in a given situation and is opposite of
negligence. SIMPLE LOAN – one of the parties delivers to
another, money or other consumable thing upon
NEGLIGENCE – consists in the omission of that the condition that the same amount of the same
diligence which is required by the nature of the kind and quality shall be paid.
particular obligation and corresponds with the
circumstances of the persons, of the time, and of USURY LAW – makes the usurers criminally liable
the place. if the interest charged on loans are more that the
limit prescribed by law.
KINDS of DILIGENCE: • This law is repealed – Circular No. 905 of
1. DILIGENCE OF A GOOD FATHER – a good the Central Bank has expressly removed
father does not abandon his family, he is the interest ceilings prescribed by the
always ready to provide and protect his USURY LAW.
family; ordinary care which an average and
reasonably prudent man would do.

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1176. The receipt of the principal by the extinguishment of an obligation is made to

creditor without reservation with respect to depend.
the interest, shall give rise to the
presumption that said interest has been PURE OBLIGATION – an obligation which does not
paid. contain any condition or term upon which the
The receipt of a later installment of a debt fulfillment is made to depend; immediately
without reservation as to prior installments, demandable by the creditors and the debtor
shall likewise raise the presumption that cannot be excused from not complying with his
such installments have been paid. prestation.

• To be sure – write the interest and the CONDITIONAL OBLIGATION – an obligation subject
dates covered by such payment in the to a condition.
receipt. 1. Suspensive Obligation – its fulfillment
gives rise to an obligation; the
1177. The creditors, after having pursued demandability of the obligation or the
the property in possession of the debtor to effectivity of the contract can take place
satisfy their claims, may exercise all the only after the condition has been fulfilled.
rights and bring all the actions of the latter 2. Resolutory Obligation – its happening
for the same purpose, save those which are extinguishes the obligation which is
inherent in his person; they may also already existing;
impugn the acts which the debtor may have
done to defraud them. 1180. When the debtor binds himself to pay
when his means permit him to do so, the
REMEDIES AVAILABLE TO CREDITORS FOR THE obligation shall be deemed to be one with a
SATISFACTION OF THEIR CLAIMS: period, subject to the provisions of Article
1. Exact fulfillment with right to damages 1197.
2. Exhaustion of the debtor’s properties still
in his possession – writ of attachment • Speaks of a period depending on the will
(before judgment) or writ of execution (for of the DEBTOR. If its purpose is to delay,
final judgment not yet executed) immediate action is allowed. The court
3. ACCION SUBROGATORIA – an action where fixes the terms.
the creditor whose claims had not been
fully satisfied, may go after the debtors PERIOD – a future and certain event upon the
(3rd person) of the defendant debtor. arrival of which, the obligation subject to it either
4. ACCION PAULIANA – an action where the arises or is extinguished.
creditor files an action in court for the
RESCISSION of acts or contracts entered INDICATIONS OF A TERM OR PERIOD:
into by the debtor designed to defraud the When the debtor binds himself to pay –
former. 1. when his means permit him to do so
2. little by little
1178. Subject to the laws, all rights 3. as soon as possible
acquired in virtue of an obligation are 4. from time to time
transmissible, if there has been no 5. as soon as I have the money
stipulation to the contrary. 6. in partial payment
7. when in the position to pay
EXCEPTIONS:
1. Those not transmissible by their nature 1181. In conditional obligations, the
like purely personal rights; acquisition of rights, as well as the
2. Those not transmissible by provision of extinguishment or loss of those already
law; acquired, shall depend upon the happening
3. Those not transmissible by stipulation of of the event which constitutes the
parties. condition.

Suspensive Condition – the acquisition of rights

by the creditor depends upon the happening of
the event which constitutes the condition; if such
condition does not take place, it would be as of
the conditional obligation had never existed.
1179. Every obligation whose performance (i.e. promise to give a car after graduating from
does not depend upon a future or uncertain law school as cum laude)
event, or upon a past event unknown to the
parties, is demandable at once. Resolutory Condition – the rights and obligations
Every obligation which contains a resolutory already existing are under threat of extinction
condition shall also be demandable, without upon the happening or fulfillment of such
prejudice to the effects of the happening of condition.
the event. (i.e. donation by reason of marriage – the
celebration of marriage is a resolutory condition;
CONDITION – an event which is both future and if the marriage did not push through, the
uncertain upon which the existence or donation may be revoked)

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extinguish the obligation as soon as the

1182. When the fulfillment of the condition time expires or if it has become indubitable
depends upon the sole will of the debtor, that the event will not take place.
the conditional obligation shall be void. If it
depends upon chance or upon the will of a Positive condition – refers to the fulfillment of an
third person, the obligation shall take effect event or performance of an act
in conformity with the provisions of this
Code. Negative condition – refers to the non-fulfillment
or non-performance of an act.
• Applies only to suspensive conditions.
POSITIVE SUSPENSIVE CONDITION
The obligation is extinguished:
3 KINDS OF CONDITIONS UNDER THIS ARTICLE: 1. As soon as the TIME EXPIRES without the
1. POTESTATIVE – a suspensive condition which event taking place;
depends upon the will of one of the 2. As soon as it has become certain that the
contracting parties  if at the sole will of the EVENT WILL NOT TAKE PLACE although the
debtor, it is void; if at the creditor’s, still valid. time specified has not yet expired.
  this is to prevUent the establishment of
** TIME is the condition – should happen for the
illusory obligations.
obligation to extinguish.
2. CASUAL – the condition depends upon chance
or the will of a third person;(i.e. cellphone
warranty)
3. MIXED – the condition depends partly upon
the will of the parties and partly upon chance
or the will of a third person;

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 1185. The condition that some event will
is divisible, that part thereof which is not not happen at a determinate time shall
affected by the impossible or unlawful render the obligation effective from the
condition shall be valid. moment the time indicated has elapsed, or
The condition not to do an impossible thing if it has become evident that the event
shall be considered as not having been cannot occur.
agreed upon. If no time has been fixed, the condition
shall be deemed fulfilled at such time as
POSSIBLE CONDITION – if it is capable of may have probably been contemplated,
realization or actualization according to nature, bearing in mind the nature of the
law, public policy or good customs. obligation.
2 KINDS OF IMPOSSIBLE CONDITIONS: ** This is a condition of non-happening of a future
1. Physically Impossible – cannot exist or cannot event.
be done in its nature;
2. Legally Impossible – contrary to law, good The obligation shall become effective and
customs, or public policy. binding:
1. From the moment the time indicated has
When a conditional obligation is VOID – elapsed without the event taking place;
impossible conditions annul the obligation which 2. From the moment it has become evident
depends upon them; the obligor knows his that the event cannot occur, although the
obligation cannot be fulfilled, he has no intention time indicated has not yet elapsed.
to comply with his obligation.
1184 -vs- 1185
When a conditional obligation is VALID – if the
condition is negative (not to do an impossible 1184 1185
thing), it is disregarded and the obligation is (POSITIVE (NEGATIVE
rendered pure and valid. SUSPENSIVE) SUSPENSIVE)
Jon Davis obliges Jon Davis obliges
Only the affected obligation is void, if the himself to give the himself to give the
obligation is divisible, and the part thereof not pregnant woman Amy pregnant woman Amy
affected by the impossible condition is valid. Lee $5000 if she would Lee $5000 if she would
give birth on or before NOT give birth on
Only the condition is void if there is already a pre- December 30. December 30.
existing obligation and it does not depend upon
a. Jon Davis is LIABLE if a. Jon Davis is NOT
the fulfillment of the condition which is
Amy Lee gives birth on LIABLE if Amy Lee gives
impossible.
or before December 30. birth on December 30.
b. Jon Davis is NOT b. Jon Davis is LIABLE if
1184. The condition that some event
LIABLE if Amy Lee gives Amy Lee DID NOT give
happen at a determinate time shall
birth after December birth on December 30 –

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30. if Amy Lee gives birth The debtor may recover what during the
BEFORE or AFTER same time he has paid by mistake in case of
December 30. a suspensive condition.
c. If Amy Lee would c. If Amy Lee would
have a miscarriage have a miscarriage Preservation of the rights of CREDITOR – the
before December 30, before December 30, debtor may render nugatory (not serious, ignore)
the obligation is the obligation is the obligation upon the happening of the
EXTINGUISHED. deemed FULFILLED. obligation.
1. Action for prohibition restraining the
alienation of the thing pending the
1186. The condition shall be deemed happening of the suspensive condition;
fulfilled when the obligor voluntarily 2. Action to demand security if the debtor
prevents its fulfillment. has become insolvent;
3. Action to set aside alienations made by
REQUISITES: the debtor in fraud of creditors;
1. The condition is SUSPENSIVE; 4. Actions against adverse possessors to
2. The obligor ACTUALLY PREVENTS the interrupt the running prescriptive period.
fulfillment of the condition;
3. He acts VOLUNTARILY. Rights of the DEBTOR – entitled to recover what
has been paid by mistake prior to the happening
• Malice or fraud is not required, as long as of the suspensive condition.
his purpose is to prevent the fulfillment of
the condition. 1189. When the conditions have been
• No person shall profit by his own wrong. imposed with the intention of suspending
the efficacy of an obligation to give, the
1187. The effects of a conditional obligation following rules shall be observed in case of
to give, once the condition has been the improvement, loss or deterioration of
fulfilled, shall retroact to the day of the the thing during the pendency of the
constitution of the obligation. Nevertheless, condition:
when the obligation imposes reciprocal
prestations upon the parties, the fruits and LOSS
interests during the pendency of the 1. debtor without fault – obligation is
condition shall be deemed to have been extinguished
mutually compensated. If the obligation is 2. debtor with fault – obligation to pay
unilateral, the debtor shall appropriate the damages
fruits and interests received, unless from
the nature and circumstances of the DETERIORATION
obligation it should be inferred that the 1. debtor without fault – impairment is to be
intention of the person constituting the borne by the creditor
same was different. 2. debtor with fault – creditor chooses:
In obligations to do and not to do, the rescission of obligation, fulfillment,
courts shall determine, in each case, the indemnity
retroactive effect of the condition that has
been complied with. IMPROVEMENT
1. by nature or time – improvement: inure to
the benefit of the creditor
• Applies only to fulfilled suspensive
2. at the expense of the debtor – granted to
conditions.
the usufructuary
• Retroactive statute
• The effects of the obligation is deemed to 1190. When the conditions have for their
commence not from the fulfillment of the purpose the extinguishment of an
obligation but from the day of its obligation to give, the parties, upon the
constitution (similar to the legitimation of fulfillment of said conditions, shall return to
a natural child) each other what they have received.
In case of the loss, deterioration or
• The article does not require the delivery of improvement of the thing, the provisions
fruits or payment of interests accruing which, with respect to the debtor, are laid
(accumulating) before the fulfillment of down in the preceding article shall be
the suspensive condition. applied to the party who is bound to return.
As for the obligations to do and not to do,
• Obligations to do or not to do – the the provisions of the second paragraph of
retroactive effect shall be determined by Article 1187 shall be observed as regards
the court using its sound discretion the effect of the extinguishment of the
without disregarding the intentions of the obligation.
parties.
• Refers to the fulfillment of a resolutory
1188. The creditor may, before the condition.
fulfillment of the condition, bring the • When the resolutory condition happened,
appropriate actions for the preservation of the obligation is considered as if it did not
his right. exist.
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• The parties are bound to return or restore deemed extinguished, and each shall bear
whatever they have received from each his own damages.
other – “reciprocal restitution”
FIRST INFRACTOR KNOWN
• Donation by reason of marriage – if the The liability of the first infractor should be
marriage does not happen, such donation equitably reduced. – equitably offset each other’s
should be returned to the donor. damages.
• Loss, deterioration and improvement –
governed by 1189. FIRST INFRACTOR CANNOT BE DETERMINED
• In obligations to do and not to do, the The court shall declare the extinguishment of the
courts shall determine, in each case, the obligation and each shall bear his own damages.
retroactive effect of the condition that has
been complied with. 1193. Obligations for whose fulfillment a
day certain has been fixed, shall be
1191. The power to rescind obligations is demandable only when that day comes.
implied in reciprocal ones, in case one of Obligations with a resolutory period take
the obligors should not comply with what is effect at once, but terminate upon arrival of
incumbent upon him. the day certain.
The injured party may choose between the A day certain is understood to be that which
fulfillment and the rescission of the must necessarily come, although it may not
obligation, with the payment of damages in be known when.
either case. He may also seek rescission, If the uncertainty consists in whether the
even after he has chosen fulfillment, if the day will come or not, the obligation is
latter should become impossible. conditional, and it shall be regulated by the
The court shall decree the rescission rules of the preceding Section.
claimed, unless there be just cause
authorizing the fixing of a period. PERIOD / TERM – consists in a space or length of
This is understood to be without prejudice time upon the arrival of which, the demandability
to the rights of third persons who have or the extinguishment of an obligation is
acquired the thing, in accordance with determined; it may be definite (exact date or
Articles 1385 and 1388 and the Mortgage time is known) or indefinite (arrival of date is
Law. unknown but sure to come).

RESCISSION – resolution or cancellation of the GENERAL CLASSIFICATIONS:

contract 1. EX DIE – from a day certain give rise to the
• Applies only to reciprocal obligations obligation; suspensive effect.
where two parties are mutually debtor and 2. IN DIEM – arrival of a term certain
creditor of each other in the same terminated the obligation; resolutory
transaction. The cause must be identical effect.
ad the obligations must arise
simultaneously.
• The party who can demand rescission
should be the party who is ready, willing, Term – length of time sure to come
and able to comply with his own Condition – fact or event uncertain to come
obligations while the other is not capable
to perform his own. Basis Period/Term Condition
1. TIME Always refers Can refer to
REMEDIES: to FUTURE past events
1. Specific performance or fulfillment unknown to
of obligation with damages; the parties
2. Rescission of contract with 2. Sure to happen May or may
damages. FULFILLMENT at an exact not happen.
date or
Effect of rescission: the parties must surrender indefinite time
whatever they have received from the other, and but sure to
the obligation to pay is extinguished. come.
3. INFLUENCE Merely fixes May cause the
If there is an express stipulation of automatic the time for arising or
rescission between parties – such resolution shall the cessation of
take place only after the creditor has notified the demandability the obligation.
debtor of his choice of rescission  subject to or
judicial scrutiny. performance
of obligation.
1192. In case both parties have committed
a breach of the obligation, the liability of REQUISITES:
the first infractor shall be equitably 1. Future
tempered by the courts. If it cannot be 2. Certain, sure to come
determined which of the parties first 3. Physically or legally possible
violated the contract, the same shall be

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1194. In case of loss, deterioration or The courts shall also fix the duration of the
improvement of the thing before the arrival period when it depends upon the will of the
of the day certain, the rules in Article 1189 debtor.
shall be observed. In every case, the courts shall determine
such period as may under the
1195. Anything paid or delivered before the circumstances have been probably
arrival of the period, the obligor being contemplated by the parties. Once fixed by
unaware of the period or believing that the the courts, the period cannot be changed by
obligation has become due and them.
demandable, may be recovered, with the
fruits and interests. JUDICIAL PERIOD – period designated by the
court.
• The payment or delivery is done before CONTRACTUAL PERIOD – period fixed by the
the arrival of the period. parties in their contract.

CONSEQUENCES: Court will fix a period:

1. If he was not aware of the period or he 1. When no period is mentioned, but it is
believes that the obligation has become inferable from the nature and
due and demandable – he can recover circumstances of the obligation that a
what he paid or delivered including fruits period was intended by the parties.
and interests; 2. When the period is dependent upon the
2. If he was aware and he paid voluntarily – will of the debtor.
he cannot recover the delivery made; it is
deemed a waiver of the benefit of the • If the obligation does not state and intend
term and the obligation is considered a period, the court is not authorized to fix
already matured. a period.
• The court must fix the duration of the
• The presumption is that the debtor knew period to prevent the possibility that the
that the debt was not yet due. He has the obligation may never be fulfilled or to cure
burden of proving that he was unaware of a defect in a contract whereby it is made
the period. to depend solely upon the will of one of
the parties.
1196. Whenever in an obligation a period is
designated, it is presumed to have been Court cannot fix the period:
established for the benefit of both the 1. If there is a period agreed upon by the
creditor and the debtor, unless from the parties and it has already lapsed or
tenor of the same or other circumstances it expired.
should appear that the period has been 2. From the very moment the parties give
established in favor of one or of the other. their acceptance and consent to the
period fixed by the court, it becomes a law
• Cannot apply when the court was governing their contract.
authorized by the parties to fix a
reasonable term. 1198. The debtor shall lose every right to
• The benefit of the term may be the subject make use of the period:
of stipulation of the parties. (1) When after the obligation has been
1. Term is for the benefit of the debtor contracted, he becomes insolvent, unless
alone – he cannot be compelled to he gives a guaranty or security for the debt;
pay prematurely, but he can if he (2) When he does not furnish to the creditor
desires to do so. the guaranties or securities which he has
2. Term is for the benefit of the promised;
creditor – He may demand (3) When by his own acts he has impaired
fulfillment even before the arrival said guaranties or securities after their
of the term but the debtor cannot establishment, and when through a
require him to accept payment fortuitous event they disappear, unless he
before the expiration of the immediately gives new ones equally
stipulated period. satisfactory;
(4) When the debtor violates any
undertaking, in consideration of which the
• The creditor may have reasons other than
creditor agreed to the period;
the maturity of interest, that’s why, unless
(5) When the debtor attempts to abscond.
the creditor consents, the debtor has no
right to accelerate the time of payment  escape
even if the premature tender include an
offer to pay the principal and interest in The period is disregarded and the obligation
full. becomes pure and immediately demandable:

1197. If the obligation does not fix a period, 1. When debtor becomes insolvent;
but from its nature and the circumstances it • The insolvency need not be
can be inferred that a period was intended, judicially declared. It is sufficient
the courts may fix the duration thereof.

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that debtor could not pay his debts • Once the choice has been communicated
due to lack of money or funds. to the other party:
2. When the debtor does not furnish 1. The obligation is now LIMITED only to
guaranties or securities; the PRESTATION CHOSEN, with all the
3. When guaranties or securities given have natural consequences flowing
been impaired or have disappeared; therefrom;
• If security was lost through 2. The choice is IRREVOCABLE.
debtor’s fault - impairment • The performance of prestation without
• If security was lost through announcing the choice to the creditor is
fortuitous event - disappearance NOT BINDING.
• The consent of the other party is NOT
4. When debtor violates an undertaking;
REQUIRED in making the choice – that will
• If such undertaking is the reason
in effect frustrate the clear intention of the
for the creditor to agree with such
law and the nature of the alternative
period.
obligation.
5. When debtor attempts to abscond
(escape).
• If there is delay in the making of choice –
punish the one who is supposed to exercise
• Mere attempt to abscond is
the right of choice for the delay he caused
sufficient. It is an indication of bad
– court may order the debtor to make a
faith.
choice, or creditor to make the choice
within certain period, or court makes the
choice.

1202. The debtor shall lose the right of

1199. A person alternatively bound by
choice when among the prestations
different prestations shall completely
whereby he is alternatively bound, only one
perform one of them.
is practicable.
The creditor cannot be compelled to receive
part of one and part of the other
• There being but one prestation available,
undertaking.
this prestation becomes a simple
OBLIGATIONS WITH PLURAL PRESTATIONS: obligation.
1. CONJUNCTIVE/COMPOUND OBLIGATION -
an obligation where the debtor has to 1203. If through the creditor's acts the
perform ALL the several prestations in the debtor cannot make a choice according to
contract to extinguish the obligation. the terms of the obligation, the latter may
rescind the contract with damages.
2. ALTERNATIVE OBLIGATION – an obligation
where the debtor is required to fulfill ONLY
ONE of the several prestations to 1. If the debtor could not make a choice due
extinguish the obligation. to the creditor’s act of making the
prestations impossible, debtor may
3. FACULTATIVE OBLIGATION – an obligation
RESCIND the contract with damages.- 
where the debtor is bound to perform
rescission takes place at the initiative of
ONLY ONE prestation, with a reserved right
the debtor.
to choose another prestation as
2. If the debtor is being prevented to choose
SUBSTITUTE for the principal.
only a particular prestation, and there are
others available, he is free to choose from
1200. The right of choice belongs to the
them, after notifying the creditor of his
debtor, unless it has been expressly granted
decision.
to the creditor.
The debtor shall have no right to choose
1204. The creditor shall have a right to
those prestations which are impossible,
indemnity for damages when, through the
unlawful or which could not have been the
fault of the debtor, all the things which are
object of the obligation.
alternatively the object of the obligation
have been lost, or the compliance of the
• Implied grant to the creditor is not
obligation has become impossible.
allowed. If it does not appear on the The indemnity shall be fixed taking as a
agreement as to whom among them has basis the value of the last thing which
the right to choose, it is the debtor who disappeared, or that of the service which
can choose. last became impossible.
Damages other than the value of the last
1201. The choice shall produce no effect thing or service may also be awarded.
except from the time it has been
communicated.
• If the impossibility of all the objects of the
alternative obligation is caused by the
• The choice shall not produce any legal
debtor, the creditor is entitled to damages.
effect until it has been duly communicated
• If such impossibility is caused by a
to the other party.
fortuitous event, the obligation is
• It can be done in writing, verbally,
extinguished and the debtor is released
impliedly, or any unequivocal means.

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from responsibility, unless the contrary is

stipulated by the parties. 1207. The concurrence of two or more
• The creditor cannot claim for damages if creditors or of two or more debtors in one
the debtor can still perform the remaining and the same obligation does not imply that
prestations. each one of the former has a right to
• The damages that may be recovered is demand, or that each one of the latter is
bound to render, entire compliance with the
based on the last thing which disappeared
prestation. There is a solidary liability only
or the service which became impossible.
when the obligation expressly so states, or
This last one is converted into a simple
when the law or the nature of the obligation
obligation.
requires solidarity.
1205. When the choice has been expressly
INDIVIDUAL OBLIGATION – one debtor and one
given to the creditor, the obligation shall
creditor
cease to be alternative from the day when
COLLECTIVE OBLIGATION – two or more debtors
the selection has been communicated to the
and two or more creditors
debtor.
1. JOINT – entire obligation is to be paid or
Until then the responsibility of the debtor
performed proportionately by the debtors;
shall be governed by the following rules:
2. SOLIDARY – each one of the debtors are
obliged to pay the entire obligation, each
A. only one thing lost – fortuitous event – one of the creditors has the right to
creditor chooses from the remainder – demand from any of the debtors, the
debtor delivers the choice to creditor; fulfillment of the entire obligation;
B. only one remains – debtor delivers the A. Passive Solidarity – solidarity on
same to the creditor; the part of the DEBTORS
C. only one thing lost – fault of the debtor B. Active Solidarity – solidarity on the
1. creditor may choose any one of the part of the CREDITORS.
remainders; • SOLIDARITY SHOULD BE EXPRESSED – law,
2. creditor may choose the price or
stipulation, nature of obligation.
value of the one which was lost;
3. may choose 1 or 2 plus damages • When the obligation is ambiguous, it must
D. all things lost – fault of the debtor – be considered as joint obligation.
creditor may choose the price of ANYONE
of the things, with damages if warranted. CONSEQUENCES OF SOLIDARITY:
1. Passive Solidarity – full payment made by
The same rules shall be applied to anyone of the solidary debtors
obligations to do or not to do in case one, extinguishes the obligation. The one who
some or all of the prestations should paid can claim reimbursement from his co-
become impossible. debtors as regards their corresponding
shares in the obligation.
• This article applies only when the right of Karen, Kim, & Ken are solidary debtors of
choice has been expressly granted to the Kathrina in the sum of $900.
creditor. Kathrina can demand payment of the
entire obligation when it becomes due,
1206. When only one prestation has been from any one of the debtors or from all
agreed upon, but the obligor may render of them at the same time.
another in substitution, the obligation is If Kenneth paid the whole $900 to
called facultative. Kathrina, he may claim reimbursement
The loss or deterioration of the thing from Karen and Kim.
intended as a substitute, through the
negligence of the obligor, does not render 2. Active Solidarity – full payment to any of
him liable. But once the substitution has the creditors extinguishes the obligation.
been made, the obligor is liable for the loss The creditor who received the entire
of the substitute on account of his delay, amount will be liable to pay the
negligence or fraud. corresponding shares of his co-creditors in
accordance with their internal agreement.
• If loss or deterioration happened before Lily owes the sum of P40,000 to Aling
substitution is made, obligor is not liable; Choleng, Boy Tagas, Mae Taba, and
after substitution is communicated, he is Dodeng Adik, who are solidary creditors.
liable for loss (through delay, negligence or If Lily can pay anyone of them. If Aling
fraud) Choleng received the P40,000, she is
liable to pay the corresponding shares of
her co-creditors.

MIXED SOLIDARITY

A. Solidary Debtors, Joint Creditors

• $ 9,000.00 – total debt
Debtors (Solidary) Creditors (Joint)

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Aida pays $ John =$ mean that the others are in default too
4,500.00  4,500.00 because Eddie did not demand from
Lorna pays $ Marsha =$ them.
4,500.00  4,500.00 4. The interruption of prescription caused by
Fe the demand made by one creditor upon
one debtor will not benefit the co-
B. Joint Debtors, Solidary Creditors creditors;
• $ 9,000.00 – total debt Waffle extended the period in which
Debtors (Joint) Creditors (Solidary) Chammy should have paid her debt to
Aida ($ 3,000.00) John (can claim from her. This does not mean that the same
debtors) extension applies to Chammy’s debt to
Lorna ($ 3,000.00) Marsha (-same-) Almond.
Fe ($ 3,000.00) 5. The insolvency of one debtor will not
increase the liability of his co-debtors, nor
will it allow a creditor to demand anything
from the co-creditors.
If Joel and Tess are debtors of Rene for
P1,000,000.00 and Joel becomes
insolvent, the liability of Tess will only be
P500,000.00 representing her
1208. If from the law, or the nature or the proportional share of ½ in the whole
wording of the obligations to which the obligation.
preceding article refers the contrary does
not appear, the credit or debt shall be 1209. If the division is impossible, the right
presumed to be divided into as many shares of the creditors may be prejudiced only by
as there are creditors or debtors, the their collective acts, and the debt can be
credits or debts being considered distinct enforced only by proceeding against all the
from one another, subject to the Rules of debtors. If one of the latter should be
Court governing the multiplicity of suits. insolvent, the others shall not be liable for
his share.
• When there is a concurrence of several
creditors or of several debtors in one and in JOINT INDIVISIBLE OBLIGATION – an obligation
the same obligation, there is a presumption where solidarity is not provided and the
that the obligation is joint. prestation or object is not susceptible of division;
• Each of the creditors shall be entitled to its fulfillment requires the concurrence of all
demand only the payment of his debtors, while doing each one’s parts.
proportionate share of the credit.
Babycakes and Babyangel jointly obliged
• Each of the debtors can be compelled to themselves to deliver a brand new Toyota
pay only his proportionate share of the Fortuner worth P 1,500,000.00 to Superman.
debt. The object, a vehicle, is indivisible. They must
• The credits or debts shall be considered deliver the thing jointly. In case of breach, the
distinct from one another. obligation is converted into monetary obligation
for indemnity for damages. Babycakes and
CONSEQUENCES OF JOINT OBLIGATION: Babyangel will be liable only for P 750,000.00
1. Each debtor – liable for a proportionate each.
part of the entire debt;
Angge, Babes, Cheng, & Dang  owe
P100 to Eddie
= 4 debts and 1
credit
Each of them owe Eddie P25 1210. The indivisibility of an obligation does
Eddie cannot collect the entire P100 not necessarily give rise to solidarity. Nor
from any one of them. does solidarity of itself imply indivisibility.
2. Each creditor – entitled to a proportionate
part of the credit; • Solidarity is expressed in the stipulations of
Chammy  owes $100 to Waffle and the party, law governing the obligation, or
Almond the nature of the obligation.
= 1 debt and 2 credits
Waffle can only collect $50 from INDIVISIBLE OBLIGATION – an obligation where
Chammy, the prestation or object to be delivered cannot be
Same with Almond performed by parts without altering its essence or
substance.
3. Demand made by one creditor upon one
debtor produces the effects of default only
Basis Indivisibility Solidarity
as between them, but not with respect to
the others; 1. Nature Refers to the Refers to the
prestation of tie existing
Eddie demanded payment from Angge;
the contract between
Angge was in default. This does not
parties of the
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obligation
(who is liable)
2. Number of Does not Requires
subjects / require plurality of
parties plurality of parties
parties
3. Effect of Obligation is The liability, 1213. A solidary creditor cannot assign his
breach of converted into even if rights without the consent of the others.
obligation monetary converted into
obligation for indemnity for Assign – transfer of right
indemnity for damages,
damages – remains • The assignee does not become a solidary
each debtor is solidary. creditor, and any payment made upon him
liable only for by the debtor does not extinguish the
his part in the obligation. He is considered a STRANGER,
indemnity. and his acts are not binding to the
solidarity.
1211. Solidarity may exist although the
creditors and the debtors may not be bound 1214. The debtor may pay any one of the
in the same manner and by the same solidary creditors; but if any demand,
periods and conditions. judicial or extrajudicial, has been made by
one of them, payment should be made to
• The solidarity of the debtors is not affected him.
even if different terms and conditions are
made applicable to them. • The debtor can pay any one of the solidary
• Enforcement of the terms and conditions creditors. Such payment when accepted by
may be made at different times. The any of the solidary creditors will extinguish
obligations which have matured can be the obligation.
enforced while those still undue will have • To avoid confusion on the payment of the
to be awaited. Enforcement can be made obligation, the debtor is required to ay only
against any one of the solidary debtors to the demanding creditor and that
although it can happen that a particular payment is sufficient to effect the
obligation chargeable to a particular debtor extinguishment of the obligation.
is not yet due. He will be answerable for all • In case two or more demands made by the
the prestations which fall due although other creditors, the first demand must be
chargeable to the other co-debtors. given priority.

Bonnier, Glenn, and Arnel got a loan of $150 1215. Novation, compensation, confusion or
from Jeff. They signed a promissory note remission of the debt, made by any of the
solidarily binding themselves to pay Jeff under solidary creditors or with any of the solidary
the following terms: debtors, shall extinguish the obligation,
Bonnier will pay $50 with 3% on without prejudice to the provisions of
December 30, 2006 Article 1219.
Glenn will pay $50 with 4% on December The creditor who may have executed any of
30, 2007 these acts, as well as he who collects the
Arnel will pay $50 with 5% on December debt, shall be liable to the others for the
30, 2008 share in the obligation corresponding to
On December 31, 2006, Jeff can collect his $50 them.
with 3% from any one of the debtors, but not
the whole $150 because it is not yet entirely NOVATION – obligations are modified by:
due. The maturity of the other amounts should 1. Changing their object or principal
still be awaited. If maturity comes, Jeff can conditions;
collect from any of the debtors, because they 2. Substituting the person of the debtor; and
are expressly solidary in liabilities, and not 3. Subrogating (placing) a third person in the
affected by the secondary stipulations. rights of the creditor.

1212. Each one of the solidary creditors COMPENSATION – takes place when two persons,
may do whatever may be useful to the in their own right, become creditors and debtors
others, but not anything which may be of each other
prejudicial to the latter. Ingrid borrowed P100 from Claudette.
Claudette borrowed P75 from Ingrid.
• Every solidary creditor is benefited by the Ingrid’s obligation to Claudette is now P25 only,
useful acts of any one of them. because the original obligation was offset by
• If a solidary creditor performs an act which Claudette’s supposed-to-be obligation to Ingrid.
is not fair to his co-creditors, the act may
have valid legal effects or the obligation of CONFUSION – takes place when the characters of
the debtor due to them may be creditor and debtor are merged in the same
extinguished, but the performing creditor person.
shall be liable to his co-creditors.

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Ian pays his debt to John with a check payable Payment – consists in the delivery of the thing or
to “cash”. the rendition (rendering) of the service whish is
John paid his debt to Jeremiah with the same the object of the obligation.
check.
Jeremiah paid his debt to Ian, with the same Interest – compensation for the use of borrowed
check Ian issued to John. money
Ian becomes paid by his own check. He
becomes the debtor and the creditor of himself Partial payment – the solidary debtor who made
at the same time. the partial payment is entitles to be reimbursed
only for such amount of money which he had paid
REMISSION – the gratuitous abandonment by the and which exceeds his own share in the
creditor of his right; acceptance of the obligor is obligation.
necessary.
If one of the debtors is insolvent and could not
• These 4 modes of extinguishing obligations pay his share in the obligation, all solidary
are acts prejudicial to the other solidary co- debtors including the paying debtor shall share
creditors because these have the effect of proportionately in the settlement of the
extinguishing the debt or obligation which corresponding share of the insolvent debtor. [In
is due to all of them. short, his co-debtors will save his ass.]
• The only recourse of the co-creditors is to
1218. Payment by a solidary debtor shall
let the one who executed any of those acts
not entitle him to reimbursement from his
be liable for the shares corresponding to all
co-debtors if such payment is made after
his co-creditors (in their internal
the obligation has prescribed or become
agreement).
illegal.

No reimbursement if:

1. Obligation PRESCRIBES
• The creditor did not make any demand for
1216. The creditor may proceed against any more than 10 years.
one of the solidary debtors or some or all of 2. Obligation becomes ILLEGAL
them simultaneously. The demand made • Law has been passed, making such
against one of them shall not be an obstacle prestation illegal.
to those which may subsequently be
directed against the others, so long as the 1219. The remission made by the creditor of
debt has not been fully collected. the share which affects one of the solidary
debtors does not release the latter from his
• When there is passive solidarity, the responsibility towards the co-debtors, in
creditor can proceed against: case the debt had been totally paid by
1. Any of the solidary debtors; anyone of them before the remission was
2. Some of the solidary debtors; effected.
3. All of the solidary debtors,
simultaneously. • Any belated (delayed) remission by the
creditor of the share of any of the debtor
Extrajudicial demands - first demand shall not has no effect on the internal relationship of
prevent subsequent demands on the other co- the co-debtors.
debtors, if co-debtor first to have been required Aaron, Carlo, and Ags solidarily owe Neil
to fulfill obligation did not act on it. P1,500.00. Carlo paid the entire obligation. After
which, Neil remitted the share of Ags. Carlo can
1217. Payment made by one of the solidary collect P500.00 each from Aaron and Ags even
debtors extinguishes the obligation. If two if the share of Ags in the obligation had been
or more solidary debtors offer to pay, the remitted.
creditor may choose which offer to accept.
He who made the payment may claim from • After the prior payment of the entire
his co-debtors only the share which obligation, there is nothing to remit
corresponds to each, with the interest for because the obligation had been
the payment already made. If the payment extinguished.
is made before the debt is due, no interest
for the intervening period may be
demanded. 1220. The remission of the whole
When one of the solidary debtors cannot, obligation, obtained by one of the solidary
because of his insolvency, reimburse his debtors, does not entitle him to
share to the debtor paying the obligation, reimbursement from his co-debtors.
such share shall be borne by all his co-
debtors, in proportion to the debt of each. • There is nothing to be reimbursed because
he did not spend any money, the remission
being a gratuitous act.

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1221. If the thing has been lost or if the DIVISIBILITY – refers to the susceptibility of an
prestation has become impossible without obligation to be performed partially.
the fault of the solidary debtors, the • Obligation to deliver 100 sacks of rice or a
obligation shall be extinguished. particular type
If there was fault on the part of any one of INDIVISIBILITY – refers to the non-susceptibility of
them, all shall be responsible to the an obligation to partial performance.
creditor, for the price and the payment of • Obligation to deliver a particular computer
damages and interest, without prejudice to
set
their action against the guilty or negligent
debtor.
If through a fortuitous event, the thing is If a thing could be divided into parts and as
lost or the performance has become divided, its value is impaired disproportionately,
impossible after one of the solidary debtors that thing is INDIVISIBLE.
has incurred in delay through the judicial or
extrajudicial demand upon him by the 1224. A joint indivisible obligation gives rise
creditor, the provisions of the preceding to indemnity for damages from the time
paragraph shall apply. anyone of the debtors does not comply with
his undertaking. The debtors who may have
been ready to fulfill their promises shall not
Loss of the thing or impossibility of prestation – contribute to the indemnity beyond the
1. NO FAULT – solidary debtors – obligation is corresponding portion of the price of the
extinguished thing or of the value of the service in which
2. FAULT – any one of them – all are liable the obligation consists.
because of their mutual agency
3. FORTUITOUS EVENT – delay on the part of JOINT INDIVISIBLE OBLIGATION – the object is
the debtors – all will be liable indivisible but the liability of the parties is joint.

• If the thing due was not lost, but there is • The unfulfilled undertaking (duty) is
merely a delay, fraud or negligence on the converted into a monetary obligation which
part of one of the solidary debtors, all is no divisible.
(including the innocent) debtors will share • The guilty debtor is liable for damages.
in the payment of the PRINCIPAL
prestation. The damages and interest 1225. For the purposes of the preceding
imposed will be borne by the guilty debtor. articles, obligations to give definite things
• Obligation to deliver is converted into an and those which are not susceptible of
obligation to pay indemnity when there us partial performance shall be deemed to be
loss or impossibility of performance. indivisible.
When the obligation has for its object the
1222. A solidary debtor may, in actions filed execution of a certain number of days of
by the creditor, avail himself of all defenses work, the accomplishment of work by
which are derived from the nature of the metrical units, or analogous things which by
obligation and of those which are personal their nature are susceptible of partial
to him, or pertain to his own share. With performance, it shall be divisible.
respect to those which personally belong to However, even though the object or service
the others, he may avail himself thereof may be physically divisible, an obligation is
only as regards that part of the debt for indivisible if so provided by law or intended
which the latter are responsible. by the parties.
In obligations not to do, divisibility or
DEFENSES OF A SOLIDARY DEBTOR: indivisibility shall be determined by the
character of the prestation in each
1. Defense arising from the nature of the particular case.
obligation – such as payment, prescription,
remission, statute of frauds, presence of The following are considered INDIVISIBLE
vices of consent, etc. obligations:
1. Obligation to give definite things
2. Defenses which are personal to him or
2. Obligations which are not susceptible of
which pertains to his own share alone –
partial performance
such as minority, insanity and others
3. Even though the object or service may be
purely personal to him.
physically divisible, it is indivisible if:
3. Defenses personal to the other solidary
a. the law so provides
creditors but only as regards that part of
b. when the parties intended it to be
the debt for which the other creditors are
indivisible
liable.
The following obligations are deemed DIVISIBLE:
1223. The divisibility or indivisibility of the
1. When the object of the obligation is the
things that are the object of obligations in
execution of a certain number of days of
which there is only one debtor and only one
work
creditor does not alter or modify the
2. When the object of the obligation is the
provisions of Chapter 2 of this Title.
accomplishment of work measured in units

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3. When the object of the obligation is time, unless this right has been clearly
susceptible of partial compliance granted him. However, if after the creditor
4. When the object of the obligation is such has decided to require the fulfillment of the
that the debtor is required to pay in obligation, the performance thereof should
installments become impossible without his fault, the
penalty may be enforced.
• If the contract is divisible, and a part of it is
illegal, the illegal part is void, and the rest • A debtor cannot evade from payment of his
shall be valid and enforceable. principal obligation by choosing to pay the
• If the contract is indivisible, and a part of it penalty stipulated, except when the debtor
is illegal, the entire contract is void. is EXPRESSLY granted with the right to
• Partial performance of an indivisible substitute the penalty for the principal
obligation is tantamount to non- obligation. – an obligation with penalty
performance. clause cannot be turned to facultative
obligation unless expressly stipulated in
1226. In obligations with a penal clause, the the contract.
penalty shall substitute the indemnity for • The creditor cannot demand the stipulated
damages and the payment of interests in fulfillment of the principal obligation and
case of noncompliance, if there is no the penalty at the same time, except
stipulation to the contrary. Nevertheless, 1. when the creditor was clearly given
damages shall be paid if the obligor refuses the right to enforce both the principal
to pay the penalty or is guilty of fraud in obligation and penalty;
the fulfillment of the obligation. 2. when the creditor has demanded
The penalty may be enforced only when it is fulfillment of the obligation but cannot
demandable in accordance with the be fulfilled due to the
provisions of this Code. a. debtor’s fault – creditor may
demand for penalty
PENALTY CLAUSE b. creditor’s fault – he cannot
• This is an accessory obligation attached to claim the penalty
the principal obligation, which imposes an c. fortuitous event – principal
additional liability in case of breach of the obligation and penalty are
principal obligation. extinguished
• It pushes the debtor to perform his
obligation faithfully and without delay – 1228. Proof of actual damages suffered by
within the period agreed upon, or else, he the creditor is not necessary in order that
suffers a fixed civil penalty without need of the penalty may be demanded.
proving the damages of the other party.
• As long as the agreement or contract is
The penalty imposable is a substitute for the breached.
indemnity for: • The mere non-fulfillment of the principal
a. damages obligation entitles the creditor to the
b. payment of interest in case of breach of penalty stipulated.
obligation • The purpose of the penalty clause is
- unless the contrary is stipulated! precisely to avoid proving damages.

EXCEPTIONS – additional damages may be 1229. The judge shall equitably reduce the
recovered from the following acts: penalty when the principal obligation has
1. If the debtor refuses to pay the been partly or irregularly complied with by
penalty the debtor. Even if there has been no
2. If the debtor is guilty of fraud in the performance, the penalty may also be
fulfillment of the obligation reduced by the courts if it is iniquitous or
3. If there is express stipulation that unconscionable.
the other damages or interests are
demandable to the penalty in the JUDICIAL REDUCTION OF PENALTY
penal clause 1. Principal obligation – partly complied with
by the debtor (but not in indivisible
Melvin obliged himself to proctor the exam in obligation, because it is tantamount to
Constitutional Law to 1LLB, and in case he fails, non-compliance)
he will pay P10,000. Melvin has no choice but to 2. Principal obligation – complied not in
pay P10,000 if he fails to supervise said exam accordance with the tenor of the
results. agreement
3. Penalty – iniquitous or unconscionable
1227. The debtor cannot exempt himself
from the performance of the obligation by • Judge’s power to reduce penalties are
paying the penalty, save in the case where limited to private contracts.
this right has been expressly reserved for
him. Neither can the creditor demand the INIQUITOUS OR UNCONSCIONABLE – when it is
fulfillment of the obligation and the revolting to the conscience or common sense;
satisfaction of the penalty at the same grossly disproportionate to the damages suffered.

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PENALTY NOT ENFORCEABLE:

1. Impossible performance of principal
obligation due to fortuitous events
2. Creditor prevented the debtor from
fulfilling the obligation
3. Penalty is contrary to good morals
or good customs
4. Both parties are guilty of breach of
contract
5. Breach of contract by the creditor
6. None of the parties committed any
willful or culpable violation of the
agreement

1230. The nullity of the penal clause does

not carry with it that of the principal
obligation.
The nullity of the principal obligation
carries with it that of the penal clause.

• Because the penal clause is only an

accessory to the principal obligation, it
cannot exist alone.
• If the penal clause is void, the principal
obligation remains enforceable.

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