Obligation and Contracts

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San Beda College of Law 85

MEMORY AID IN CIVIL LAW

OBLIGATIONS AND CONTRACTS

I. OBLIGATIONS through mistake to another who has no


right to demand it.
OBLIGATION
 A juridical necessity to give, to do, QUASI-DELICTS
or not to do (Article 1156), one  An act or omission by a person
impressed with the character of (tortfeasor) which causes damage to
enforceability. another giving rise to an obligation
to pay for the damage done, there
 Requisites: being fault or negligence but there is
a. juridical or legal tie or efficient no pre-existing contractual relation
cause between the parties (Article 2176).
b. active subject (obligee or
creditor)  Requisites:
c. passive subject (obligor or 1. There must be an act or
debtor) omission;
d. fact, prestation or service 2. There must be fault or
constituting the object of the negligence;
obligation 3. There must be damage caused to
 Requisites: the plaintiff;
i) it must be licit 4. There must be a direct relation
ii) it must be possible, of cause and effect between the
physically & juridically act or omission and the damage;
iii) it must be determinate or and
determinable 5. There is no pre-existing
iv) it must have a possible contractual relation between the
equivalent in money parties.

 Sources (Article 1157): NOTES:


1. Law  The same negligent act or omission
2. Contracts causing damage may produce civil
3. Quasi-contracts liability arising from crime under
4. Delicts Art. 100 of the RPC or create an
5. Quasi-delicts action for quasi-delict under Article
2176.
QUASI-CONTRACTS  While it is true that in order that a
 Those juridical relations arising from person may be liable for quasi-
lawful, voluntary and unilateral acts, delicts, there must be no pre-
by virtue of which the parties existing contractual relationship
become bound to each other, based between the parties, yet, “the act
on the principle that no one shall be that breaks the contract may also
unjustly enriched or benefited at the be a tort.” (Air France vs.
expense of another. Carrascoso, 18 SCRA 155).

Principal Kinds of Quasi-contracts: Nature of Obligations


1. Negotiorum gestio - arises whenever 1. Personal Obligations - obligations to
a person voluntarily takes charge of do
the agency or management of the a. Positive – obligation to do
business or property of another b. Negative – obligation not to do
without any power or authority from 2. Real Obligations - obligations to give
the latter. a. Determinate or specific – object
2. Solutio indebiti - arises whenever a is particularly designated or
person unduly delivers a thing

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
86 2005 CENTRALIZED BAR OPERATIONS

physically segregated from all of the case, the result of the specific
other of the same class performance of the contract would
b. Generic – object is designated be harsh, inequitable, oppressive or
merely by its class or genus result in an unconscionable
c. Limited generic thing – when the advantage to the plaintiff. The
generic objects are confined to a courts may adjust the rights of the
particular class, e.g. an parties in accordance with the
obligation to deliver one of my circumstances obtaining at the time
horses (Tolentino, Volume IV, p. of rendition of judgment, when
91). these are significantly different from
those existing at the time of
PERSONAL vs. REAL RIGHT generation of those rights. (Agcaoili
Personal Real vs. GSIS, G.R. No. 30056, August 30,
1. jus ad rem, a 1. jus in re, a right 1988)
right enforceable enforceable against
only against a the whole world Obligations of the debtor
definite person or Determinate Generic
group of persons 1. deliver the thing 1. deliver the thing
2. right pertaining 2. right pertaining which he has which is neither of
to the person to to a person over a obligated himself to superior nor inferior
demand from specific thing, give quality
another, as a without a passive 2. take care of the 2. pay damages in
definite passive subject individually thing with the case of breach of
subject, the determined against proper diligence of the obligation by
fulfillment of a whom such right a good father of a reason of delay,
prestation to give, may be personally family fraud, negligence or
to do or not to do. enforced 3. deliver all contravention of the
accessions and tenor thereof
RIGHTS OF A CREDITOR accessories of the
Determinate Generic thing even though
1. compel specific 1. ask for they may not have
performance performance of the been mentioned
obligation 4. pay damages in
2. recover 2. ask that the case of breach of
damages in case of obligation be the obligation by
breach of the complied with at reason of delay,
obligation, the expense of the fraud, negligence or
exclusive or in debtor contravention of the
addition to tenor thereof
specific
performance Effects of Breach
3. entitlement to 3. recover damages Positive Personal Negative Personal
fruits, interests in case of breach Obligations Obligations
from the time the of the obligation The creditor can: If the obligor does
obligation to 1. have the what has been
deliver arises. obligation performed forbidden him, the
or executed at the creditor can:
Principle of Balancing of Equities as expense of the 1. have it undone at
Applied in Actions for Specific obligor (except in the expense of the
Performance cases where the obligor; and
 In decreeing specific performance, personal 2. ask for damages
equity requires not only that the qualifications of the
contract be just and equitable in its debtor are taken into
account in which
provisions, but that the
case the only remedy
consequences of specific is an action for
performance likewise be equitable damages)
and just. The general rule is that 2. ask that what has
this equitable relief will not be been poorly done be
granted if, under the circumstances undone
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

3. recover damages 1. Mora solvendi - delay of the debtor


because of breach of to perform his obligation. It may be:
the obligation a. Ex re – obligation is to
give
Cases where the remedy granted under b. Ex persona – obligation is
Article 1168 is not available: to do
1. Where the effects of the act which is 2. Mora accipiendi - delay of the
forbidden, are definite in character, creditor to accept the delivery of
in which case, even if it is possible the thing w/c is the object of the
for the obligee to ask that the act be obligation
undone at the expense of the 3. Compensatio morae - delay of the
obligor, consequences contrary to parties or obligors in reciprocal
the object of the obligation will have obligation
been produced which are permanent
in character  When incurred:
2. Where it would be physically or General Rule: There must be a demand
legally impossible to undo what has (judicial or extra-judicial) before delay
been undone because of the very may be incurred.
nature of the act itself or because of Exceptions:
a provision of law, or because of 1. obligation or law expressly so
conflicting rights of 3rd persons declares
NOTE: In either case, the remedy is to 2. time is of the essence of the
ask for damages. contract
3. demand is useless as when
BREACH OF OBLIGATIONS obligor has rendered beyond his
1. Voluntary - debtor, in the power to perform
performance of the obligation, is 4. there is acknowledgment of
guilty of: default
a. default (mora)
b. fraud (dolo) NOTES:
c. negligence (culpa)  There can be delay only in positive
d. contravention of the tenor of obligations (to give/to do). There
the obligation can be no delay in negative
NOTE: debtor is liable for damages obligations (not to give/not to do).
 In reciprocal obligations one party
2. Involuntary - debtor is unable to
incurs in delay from the moment the
comply with his obligation because
other party fulfills his obligation,
of fortuitous event
while he himself does not comply or
NOTE: debtor is not liable for
is not ready to comply in a proper
damages
manner with what is incumbent upon
him. The general rule is that
DEFAULT or DELAY
fulfillment by both parties should be
 Non-fulfillment of the obligation
simultaneous except when different
with respect to time
dates for the performance of
 Requisites:
obligation is fixed by the parties.
1. Obligation is demandable and
already liquidated  Demand is still necessary if their
2. The debtor delays performance respective obligations are to be
3. The creditor requires performance performed on separate dates
judicially or extra-judicially
FRAUD
 Deliberate and intentional evasion of
the fulfillment of an obligation

 3 Kinds:

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
88 2005 CENTRALIZED BAR OPERATIONS

NOTE: Future fraud cannot be waived Test of Negligence


because it would result to illusory  The test of negligence can be
obligation. determined by this standard: If the
defendant, in committing or causing
Incidental Causal Fraud/dolo the negligent act, had used
Fraud/dolo causante reasonable care and vigilance which
incidente (Article 1338) a man of ordinary prudence would
(Article 1170) have employed under the same
situation, he is not guilty of
1. Present during 1. Present during the
the performance time of birth or
negligence. Otherwise, he is guilty.
of a pre-existing perfection of the
obligation obligation Doctrine of Res Ipsa Loquitur as
Applied in Negligence Cases
2. Purpose is to 2. Purpose is to  The thing or transaction speaks for
evade the normal secure the consent of
fulfillment of the the other to enter
itself
obligation into a contract  When the thing which caused injury,
without fault of the injured person,
3. Results in the 3. Results in the is under the exclusive control of the
non-fulfillment or vitiation of consent defendant and the injury is such as
breach of the in the ordinary course of things does
obligation not occur if he having such control
use proper care, it affords
4. Gives rise to a 4. Gives rise to a
reasonable evidence, in the absence
right of the creditor right of an innocent
to recover damages party to annul the of explanation from the defendant,
from the debtor contract that the injury arose from
defendant’s want of care (Africa vs.
Caltex, 16 SCRA 448 and Republic
NEGLIGENCE vs. Luzon Stevedoring, 21 SCRA 279).
 Omission of that diligence which is
required by the nature of the FORTUITOUS EVENT
obligation and corresponds with the  An event which could not be
circumstances of the persons, of the foreseen or which though foreseen
time and of the place was inevitable.
NOTE: Negligence can be waived unless
the nature of the obligation or public  Requisites:
policy requires extraordinary diligence as 1. cause is independent of the will of
in common carrier. the debtor
2. the event must be unforeseeable or
Diligence Required unavoidable
1. That agreed upon by the parties 3. occurrence must be such as to
2. In the absence of stipulation, that render it impossible for the debtor
required by law in the particular to fulfill his obligation in a normal
case manner
3. If both the contract and law are 4. debtor must be free from any
silent, diligence of a good father of a participation in
family 5. the aggravation of the injury
resulting to the creditor (Lasam vs.
Concept of Diligence of Good Father of Smith, 45 Phil. 657)
a Family
NOTE: It must not only be the
 That reasonable diligence which an
proximate cause but it must be the
ordinary prudent person would have
ONLY and SOLE CAUSE.
done under the same circumstances

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

GENERAL RULE: No liability in case of EXCEPTIONS:


fortuitous event. 1. When they are not transmissible
EXCEPTIONS: by their very nature e.g. purely
1 When expressly declared by law personal right
NOTE: e.g. Article 552(2), 2. When there is a stipulation of
1165(3), 1268, 1942, 2147, 2148 the parties that they are not
and 2159 of the Civil Code. transmissible
2 When expressly declared by 3. Not transmissible by operation of
stipulation or contract law
3 When the nature of the
obligation requires the PURE OBLIGATION
assumption of risk  One whose effectivity or
4 When the obligor is in default or extinguishment does not depend
has promised to deliver the same upon the fulfillment or non-
thing to 2 or more persons who fulfillment of a condition or upon the
do not have the same interest expiration of a term or period and is
[Article 1165(3)]. demandable at once.

EFFECT OF FORTUITOUS EVENT CONDITIONAL OBLIGATION


Determinate Generic Obligation  One whose effectivity is
Obligation subordinated to the fulfillment or
obligation is obligation is not non-fulfillment of a future AND
extinguished extinguished based uncertain fact or event
on the rule that a
genus never perishes Kinds of conditions:
(genus nunquam 1. Suspensive - fulfillment of the
peruit)
condition results in the acquisition of
rights arising out of the obligation
2. Resolutory - fulfillment of the
condition results in the
PRINCIPLE UNDER ARTICLE 1176
extinguishments of rights arising out
 Before the presumption that a prior of the obligation
installment had been paid may arise, 3. Potestative - fulfillment of the
the receipt must specify the condition depends upon the will of a
installment for which payment is party to the obligation
made. 4. Casual - fulfillment of the condition
depends upon chance and/or upon
 REMEDIES OF CREDITOR TO the will of a third person
PROTECT CREDIT: 5. Mixed - fulfillment of the condition
1. Exhaustion of debtor’s property depends partly upon chance and/or
2. Accion subrogatoria - to be the will of a third person
subrogated to all the rights and 6. Possible - condition is capable of
actions of the debtor save those realization according to nature, law,
which are inherent in his person. public policy and good customs
3. Accion pauliana - impugn all the acts 7. Impossible - condition is not capable
w/c the debtor may have done to of realization according to nature,
defraud them. law, public policy and good customs
NOTE: 2nd & 3rd remedies are 8. Positive - condition involves the
subsidiary to the first performance of an act
9. Negative - condition involves the
GENERAL RULE: Rights acquired by omission of an act
virtue of an obligation are transmissible 10. Divisible - condition is susceptible of
in character partial realization
11. Indivisible - condition is not
susceptible of partial realization

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
90 2005 CENTRALIZED BAR OPERATIONS

12. Conjunctive - where there are be deemed to have been mutually


several conditions, all of which must compensated
be realized 5. If the obligation is unilateral, the
13. Alternative - where there are several debtor shall appropriate the fruits &
conditions but only one must be interests received, unless from the
realized nature & circumstances it should be
inferred that the intention of the
Rule in Potestative Conditions persons constituting the same was
a. If the fulfillment of the different
potestative condition depends 6. In obligations to do or not to do, the
upon the sole will of the debtor, court shall determine the retroactive
the condition as well as the effect or the conditions that has
obligation itself is void. It renders been complied with
the obligation illusory.
(Applicable only to a suspensive Constructive fulfillment of Suspensive
condition and to an obligation Condition
which depends for its perfection
 The condition shall be deemed
upon the fulfillment of the
fulfilled when the obligor actually
potestative condition and not to a
prevented the obligee from
pre-existing obligation.)
complying with the condition and
b. If the fulfillment depends
such prevention must have been
exclusively upon the will of the
voluntary and willful in character.
creditor, both the condition and
obligation is valid.
Effects of Resolutory Condition
NOTE: In case of simple potestative
1. Before the fulfillment of the
condition, e.g. right of first refusal,
condition, the right which the
such condition is valid.
creditor has already acquired by
virtue of the obligation is subject to
Rule in Impossible Conditions
a threat of extinction.
GENERAL RULE: They shall annul the
2. If condition is not fulfilled, rights are
obligation which depends upon them.
consolidated; they become absolute.
EXCEPTIONS:
3. Upon fulfillment of the condition,
1. pre-existing obligation
the parties shall return to each other
2. if obligation is divisible
what they received including the
3. in simple or renumeratory donations
fruits
4. in testamentary dispositions
5. in case of conditions not to do an
SUMMARY:
impossible thing
SUSPENSIVE RESOLUTORY
Effects of Suspensive Condition CONDITION CONDITION
1. if fulfilled, 1. if fulfilled,
1. Before fulfillment of the condition,
obligation arises obligation is
the demandability as well as the or becomes extinguished
acquisition or effectivity of the effective
rights arising from the obligation is 2. if not fulfilled, 2. if not fulfilled,
suspended no juridical juridical
2. After the fulfillment of the relation is created relation is
condition, the obligation arises or 3. rights are not yet consolidated
becomes effective acquired, but 3. rights are
3. The effects of a conditional there is hope or already
expectancy that acquired, but
obligation to give, once the
they will soon be subject to the
condition has been fulfilled, shall acquired threat or danger
retroact to the day of the of extinction
constitution of the obligation
4. When the obligation imposes
reciprocal prestations upon the
parties, the fruits & interests shall
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

Effects of Loss, Deterioration and RIGHT TO RESCIND (ART 1191)


Improvement in real obligations (during GENERAL RULE: The right to rescind
the pendency of the condition) needs judicial approval.
EXCEPTIONS:
1. Loss 1. If there is an express stipulation
a. without debtor’s fault - of automatic rescission
obligation is extinguished 2. When the debtor voluntarily
b. with debtor’s fault - debtor pays returned the thing
damages
NOTES:
2. Deterioration  Article 1191 refers to judicial
a. without debtor’s fault - rescission. It does not apply if there
impairment to be borne by the is an express stipulation to rescind,
creditor in which case such stipulation must
b. with debtor’s fault - creditor prevail. There is nothing in the law
may choose between the which prohibits the parties from
rescission of the obligation and entering into an agreement that
its fulfillment with indemnity for violation of the terms of the
damages in either case contract would cause its cancellation
without court intervention. Said
3. Improvement stipulation is in the nature of
a. by the thing’s nature or by time facultative resolutory condition
- improvement shall inure to the (Angeles vs. Calasanz, 135 SCRA
benefit of the creditor 323).
b. at the debtor’s expense - debtor  Rescission will be ordered only
shall have no other right than where the breach is substantial as to
that granted to a usufructuary defeat the object of the parties in
entering into the agreement.
NOTE: Applies only to determinate  The injured party may choose
things
between fulfillment and rescission of
the obligations, with the payment of
A Thing is Lost when it:
damages in either case. These
1. perishes
remedies are alternative, not
2. goes out of commerce
cumulative. However, should
3. disappears in such a way that its
fulfillment become impossible, the
existence is unknown or it cannot be
injured party may also seek
recovered
rescission.
RECIPROCAL OBLIGATIONS
 The right to rescind belongs
 Those which are created or established exclusively to the injured party.
at the same time, out of the same
cause, and which result in mutual OBLIGATION WITH A PERIOD
relationships of creditor & debtor  Those whose demandability or
between the parties extinguishment is subject to the
expiration of a term or period
TACIT RESOLUTORY CONDITION  Requisites:
If one of the parties fails to comply 1. future
with what is incumbent upon him, there 2. certain
is a right on the part of the other to 3. possible, legally and physically
rescind the obligation.
CLASSIFICATION OF TERM OR PERIOD
1. a. suspensive (ex die) – obligation
becomes demandable only upon
arrival of a day certain

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
92 2005 CENTRALIZED BAR OPERATIONS

b. resolutory (in diem) – arrival of 3. If the debtor binds himself when his
day certain terminates the obligation means permit him to do so (Article
2. a. legal – granted by law 1180)
b. conventional – stipulated by
parties NOTE: The only action that can be
c. judicial – fixed by courts maintained is an action to ask the court
3. a. definite – date/time is know to fix the duration of the term or period.
beforehand The fulfillment of the obligation itself
b. indefinite – the date/time of day cannot be demanded until after the
certain is unknown court has fixed the period for
compliance therewith, and such period
TERM CONDITION has arrived. However, such technicality
1. interval of time 1. fact or event w/c need not be adhered to when a prior and
w/c is future & is future and separate action would be a mere
certain uncertain formality and would serve no other
2. interval of time 2. future and purpose than to delay (Borromeo vs. CA,
w/c must uncertain fact or 47 SCRA 65).
necessarily come, event w/c may or
although it may may not happen
not be known when Reason for Fixing the Period (ART 1197)
3.exerts an 3. exerts an  There can be no possibility of any
influence upon the influence upon the breach of contract or failure to
time of very existence of the perform the obligation unless the
demandability or obligation itself period is fixed by courts.
extinguishment of
an obligation When debtor loses right to make use of
4. does not have 4. has retroactive period: (IGIVA)
any retroactive effect 1. when after the obligation has
effect unless there
been contracted, he becomes
is an agreement to
the contrary insolvent, unless he gives
5. when it is left 5. when it is left guaranties or securities for the debt
exclusively to the exclusively to the will (the insolvency need not be
will of the debtor, of the debtor, the judicially declared)
the existence of very existence of the 2. when he does not furnish to the
the obligation is obligation is affected creditor the guaranties or securities
not affected he promised
3. when by his own act he has
GENERAL RULE: When a period is impaired said guaranties or
designated for the performance or securities after their establishment,
fulfillment of an obligation, it is and when through fortuitous event
presumed to have been established for they disappear, unless he gives new
the benefit of both creditor and debtor. ones equally satisfactory when
EXCEPTION: When it appears from the debtor violates any undertaking, in
tenor of the obligation or other consideration of which the creditor
circumstances that the period has been agreed to the period or
established in favor of one or of the 4. when debtor attempts to
other. abscond

When court may fix period: FACULTATIVE ALTERNATIVE


1. if the obligation does not fix a Obligations Obligations
period, but from its nature and
circumstances it can be inferred that 1. comprehends 1. comprehends
a period was intended by the parties only one object or several objects or
2. if the duration of the period depends prestation which is prestations which are
upon the will of the debtor; and due, but it may be due but may be
complied with by complied with by the
the delivery of delivery or
another object or performance of only
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

performance of one of them b. If the loss of 1 of the things


another prestation occurs through the fault of the
in substitution debtor, the creditor may claim
any of those subsisting, or the
2. fortuitous loss 2. fortuitous loss of price of that which, through the
extinguishes the all prestations will
obligation extinguish the
fault of the former, has
obligation disappeared with a right to
damages
3. culpable loss 3. culpable loss of any c. If all the things are lost through
obliges the debtor object due will give the fault of the debtor, the
to deliver rise to liability to choice by the creditor shall fall
substitute debtor upon the price of any 1 of them,
prestation without also with indemnity for damages
liability to debtor
JOINT AND SOLIDARY OBLIGATIONS
4. choice pertains 4. choice may pertain
GENERAL RULE: Obligation is presumed
only to debtor to creditor or even joint if there is concurrence of two or
third person more debtors and/or creditors.
EXCEPTIONS:
1. when expressly stated that
NOTES: there is solidarity
2. when the law requires solidarity
 In alternative obligations, choice 3. when the nature of the
takes effect only upon obligation requires solidarity
communication of the choice to the
other party and from such time the JOINT DIVISIBLE OBLIGATIONS
obligation ceases to be alternative.  Each creditor can demand for the
 The debtor cannot choose those payment of his proportionate share
prestations or undertakings which of the credit, while each debtor can
are impossible, unlawful or w/c be held liable only for the payment
could not have been the object of of his proportionate share of the
the obligation. debt.
 A joint creditor cannot act in
EFFECT OF LOSS OF OBJECT OF representation of the other creditors
OBLIGATION: while a joint debtor cannot be
1. If right of choice belongs to debtor compelled to answer for the acts or
a. If through a fortuitous event - liability of the other debtors.
debtor cannot be held liable for
damages JOINT INDIVISIBLE OBLIGATIONS
b. If 1 or more but not all of the 1. If there are 2 or more debtors, the
things are lost or one or some fulfillment of or compliance with the
but not all of the prestations obligation requires the concurrence
cannot be performed due to the of all the debtors, although each for
fault of the debtor, creditor his own share. Consequently, the
cannot hold the debtor liable for obligation can be enforced only by
damages because the debtor can proceeding against all of the
still comply with his obligation. debtors.
2. If right of choice belongs to the 2. If there are 2 or more creditors, the
creditor concurrence or collective act of all
a. If 1 of the things is lost through the creditors, although each for his
a fortuitous event, the debtor own share, is also necessary for the
shall perform the obligation by enforcement of the obligation.
delivering that which the
creditor should choose from Effect of breach – If one of the joint
among the remainder, or that debtors fails to comply with his
which remains if only 1 subsists undertaking, the obligation can no

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
94 2005 CENTRALIZED BAR OPERATIONS

longer be fulfilled or performed. Effect of Assignment by Solidary


Consequently, it is converted into one of Creditor Without Consent of Others
indemnity for damages. Innocent joint 1. assignee is co-creditor – no violation
debtors shall not contribute to the of Article 1213 because there can be
indemnity beyond their corresponding no invasion of the personal or
share of the obligation. confidential relationship
2. assignee is third person – co-
Effect of insolvency of a debtor – If one creditors and debtors are not bound
of the joint debtors should be insolvent, by the assignment
the others shall not be liable for his
share. Effect of Novation upon Solidary
Obligation
INDIVISIBILITY SOLIDARITY 1. If the novation is prejudicial, the
1. refers to the 1. refers to the solidary creditor who effected the
prestation which legal tie or vinculum novation shall reimburse the others
constitutes the juris & consequently for damages incurred by them
object of the to the subjects or 2. If it is beneficial and the creditor
obligation parties of the who effected the novation is able to
obligation
secure performance of the
2. plurality of 2. plurality of
subjects is not subjects is obligation, such creditor shall be
required indispensable liable to the others for the share
3. in case of breach, 3. when there is which corresponds to them, not only
obligation is liability on the part in the obligation, but also in the
converted into 1 of of the debtors benefits
indemnity for because of the 3. If the novation is effected by
damages because of breach, the substituting another person in place
breach, indivisibility solidarity among the of the debtor, the solidary creditor
of the obligation is debtors remains
who effected the novation is liable
terminated
for the acts of the new debtor in
case the is deficiency in
performance or in case damages are
KINDS OF SOLIDARITY
incurred by the other solidary
1. Active solidarity
creditors as a result of the
 solidarity of creditors
substitution.
 each creditor is empowered to
4. If the novation is effected by
exercise against the debtor not only
subrogating a third person in the
the rights which correspond to him,
rights of the solidary creditor
but also all the rights which
responsible for the novation, the
correspond to the other creditors,
relation between the other creditors
with the consequent obligation to
not substituted and the debtor or
render an accounting of his acts to
debtors is maintained.
such creditors
 creates a relationship of mutual
Effect of Compensation and Confusion
agency among solidary creditors
upon Solidary Obligation
2. Passive solidarity
1. If the confusion or compensation is
 solidarity of debtors
partial, the rules regarding
 liability of each debtor for the
application of payment shall apply.
payment of the entire obligation,
This is without prejudice to the
with the consequent right to demand
right of other creditors who have
reimbursement from the others for
not caused the confusion or
their corresponding shares once
compensation to be reimbursed to
payment has been made
the extent that their rights are
3. Mixed solidarity
diminished or affected.
 solidarity among creditors and
2. If the confusion or compensation is
debtors
total, the obligation is extinguished,
what is left is the ensuing liability
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

for reimbursement within each Defenses available to a Solidary Debtor


group: 1. Defenses derived from the very
a. The creditor causing the nature of the obligation
confusion or compensation is 2. Defenses personal to him or
obliged to reimburse the other pertaining to his own share
creditors 3. Defenses personal to the others, but
b. The debtors benefited by the only as regards that part of the debt
extinguishments of the for w/c the latter are responsible
obligation are obliged to
reimburse the debtor who made DIVISIBLE OBLIGATIONS
the confusion or compensation  Those which have as their object a
possible. prestation which is susceptible of
partial performance without the
Effect of Remission upon Solidary essence of obligation changed.
Obligation
1. If the remission covers the entire INDIVISIBLE OBLIGATIONS
obligation, the obligation is totally  Prestation is not susceptible of
extinguished and the entire juridical partial performance, otherwise, the
relation among the debtors is essence of the obligation will be
extinguished all together. changed
2. If the remission is for the benefit of
one of the debtors and it covers his NOTES:
entire share in the obligation, he is  Divisibility or indivisibility of the
completely released from the obligation refers to the performance
creditors but is still bound to his co- of the prestation and not to the
debtors. thing which is the object thereof.
3. If the remission is for the benefit of  Intention of parties should be taken
one of the debtors and it covers only into account to determine whether
a part of his share in the obligation, obligation is divisible or not.
his character as a solidary debtor is
not affected. GENERAL RULE: The creditor cannot be
compelled partially to receive the
Effect of Payment by Solidary Debtor prestation in which the obligation
1. Whole or partial extinguishment of consists; neither may the debtor be
debt required to make partial payments.
2. Right to recover against co-debtor EXCEPTIONS:
3. Right to recover interest from time 1. When the obligation expressly
the obligation becomes due stipulates the contrary;
2. When the different prestations
Effect of Loss or Impossibility of constituting the objects of the
Performance obligation are subject to
1. If it is not due to the fault of the different terms and conditions;
solidary debtors, the obligation is and
extinguished. 3. When the obligation is in part
2. If the loss or impossibility is due to liquidated and in part
the fault of one of the solidary unliquidated.
debtors or due to a fortuitous event
after one of the solidary debtors had OBLIGATIONS WITH A PENAL CLAUSE
already incurred in delay, the  One to which an accessory
obligation is converted into an undertaking is attached for the
obligation of indemnity for damages purpose of insuring its performance
but the solidary character of the by virtue of which the obligor is
obligation remains. bound to pay a stipulated indemnity
or perform a stipulated prestation in
case of breach.

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
96 2005 CENTRALIZED BAR OPERATIONS

 Purpose of Penalty: 3. compensation


1. To insure the performance of the 4. condonation or remission of the debt
obligation; 5. confusion or merger of rights of the
2. to liquidate the amount of creditor and debtor
damages to be awarded to the 6. novation
injured party in case of breach 7. annulment
of the principal obligation 8. rescission
(compensatory); and 9. prescription
3. in certain exceptional cases, to 10. payment or performance
punish the obligor in case of
breach of the principal Payment or Performance
obligation (punitive).  Means not only the delivery of
money but also the performance, in
GENERAL RULE: The penalty fixed by any other manner, of an obligation.
the parties is a compensation or
substitute for damages in case of Integrity of Payment
breach. GENERAL RULE: A debt shall not
EXCEPTIONS: be understood to have been paid unless
1. when there is a stipulation to the thing or service in which the
the contrary; obligation consists has been completely
2. when the debtor is sued for delivered or rendered, as the case may
refusal to pay the agreed be.
penalty; and EXCEPTIONS:
3. when debtor is guilty of fraud 1. When the obligation has been
substantially performed in good
NOTE: Article 1228 does not apply to faith;
these exceptions; there must be 2. When the obligee accepts
proof of actual damages. performance, knowing its
incompleteness or irregularity &
NOTES: w/out expressing any protest or
 The debtor cannot exempt himself objection;
from the performance of the 3. When there is an express stipulation;
principal obligation by paying the and
stipulated penalty unless when the 4. When the debt is in part liquidated
right has been expressly reserved for and in part unliquidated.
him.
 The creditor cannot demand the Identity of Payment
fulfillment of the principal obligation  requires that the very thing, service
and the satisfaction of the stipulated or forbearance, as the object of the
penalty at the same time unless the prestation, must be performed or
right has been clearly granted him. observed

When penalty may be reduced Persons who may pay the obligation:
1. If the principal obligation has been 1. the debtor himself or his legal
partly complied with; representative
2. If the principal obligation has been 2. any third person
irregularly complied with; and
3. If the penalty is iniquitous or GENERAL RULE: Creditor is not bound to
unconscionable even if there has been accept payment or performance by a
no performance. third person.
EXCEPTIONS:
1. when made by a third person
MODES OF EXTINGUISHMENT OF who has an interest in the
OBLIGATIONS (LFC3NARP2) fulfillment of the obligation;
1. loss of the thing due 2. when there is a stipulation to
2. fulfillment of resolutory condition the contrary.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

Rights of 3rd person who paid the Rules in Monetary Obligations:


obligation: 1. Payment in cash - must be made in
the currency stipulated; if it is not
1. If payment was made with
possible to deliver such currency,
knowledge and consent of the
then in the currency which is legal
debtor:
tender in the Philippines.
a. can recover entire
2. Payment in check or other
amount paid
negotiable instrument - not
b. can be subrogated to all
considered payment; not considered
the rights of the
legal tender and may be refused by
creditor.
the creditor. It shall only produce
2. If payment was made without
the effect of payment:
knowledge or against the will of
a. when it has been cashed or
the debtor, he can recover only
b. when it has been impaired
insofar as the payment has been
through the fault of the creditor.
beneficial to the debtor.
LEGAL TENDER
To whom payment must be made:
 Such currency which may be used for
1. The person in whose favor the
the payment of all debts, whether
obligation has been constituted;
private or public. The kind of
2. His successor in interest; or
currency which a debtor can legally
3. Any person authorized to receive it.
compel a creditor to accept in
payment of a debt in money when
GENERAL RULE: If payment is made to a
tendered by the debtor in the right
person other than those enumerated, it
amount.
shall not be valid.
 Legal tender of the Philippines would
EXCEPTIONS:
be all notes and coins issued by the
1. Payment made to a 3rd person,
Central Bank.
provided that it has redounded
 Section 52, R.A. No. 7653
to the benefit of the creditor.
1. 25c and above, legal tender up
Such benefit to the creditor is
to P50
presumed in the following cases:
2. 10c and below, legal tender up
 If after the payment, the to P20
third person acquires the
creditor’s rights; Extraordinary inflation or deflation
 If the creditor ratifies the  unusual or beyond the common
payment to the third fluctuation in the value of currency,
person; which the parties could not have
 If by the creditor’s conduct, reasonably foreseen or which was
the debtor has been led to manifestly beyond their
believe that the third contemplation at the time the
person had authority to obligation was established.
receive the payment.  Applies only to contractual
2. Payment made to the possessor obligations
of the credit, provided that it  Requisites:
was made in good faith. a. The decrease in the value of the
currency could not have been
Obligation to Deliver a Generic Thing reasonably foreseen by the
 If the quality and circumstances parties or beyond their
have not been stated, the creditor contemplation at the time the
cannot demand a thing of superior obligation was established ;
quality; neither can the debtor b. There must be a declaration of
deliver a thing of inferior quality. such extraordinary inflation or

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
98 2005 CENTRALIZED BAR OPERATIONS

deflation by the Bangko Sentral. Legal Application of Payment (ART1254)


Without such declaration, the 1. If neither the debtor nor the creditor
creditors cannot demand an makes any application of payment,
increase, and debtors a or if it cannot be inferred from other
decrease, of what is due to or circumstances, the debt which is
from them. (Ramos vs. CA, 275 most onerous to the debtor, among
SCRA 167 and Mobil Oil Phils. vs. those which are due, shall be
CA, 180 SCRA 651) deemed to have been satisfied.
2. If the debts due are of the same
Place of payment nature and burden, payment shall be
1. Place stipulated by the parties. applied to all of them
2. No stipulation and the obligation is proportionately.
to deliver a determinate thing,
payment shall be made at the place b. Dation in Payment (DACION EN
where the thing might be at the time PAGO)
the obligation was constituted.  Delivery and transmission of
3. In any other case, the payment shall ownership of a thing by the debtor
be made at the domicile of the to the creditor as an accepted
debtor. equivalent of the performance of the
obligation.
Special Forms of Payment:  Requisites:
a. Application of payment a. existence of a money obligation
b. Dation in Payment b. alienation to the creditor of a
c. Payment by Cession property by the debtor with the
d. Tender of payment and consent of the former
Consignation c. satisfaction of the money
obligation of the debtor
a. Application of Payment
 Designation of the debt to which the c. Payment by Cession
payment must be applied when the  Debtor abandons all of his property
debtor has several obligations of the for the benefit of his creditors in
same kind in favor of the same order that from the proceeds
creditor. thereof, the latter may obtain
 Requisites: payment of their credits.
a. there must be only 1 debtor &  Requisites:
only 1 creditor; a. plurality of debts
b. there must be 2 or more debts of b. partial or relative insolvency of
the same kind; the debtor
c. all of the debts must be due; c. acceptance of the cession by
except: if there’s stipulation to the creditors
the contrary; or application of
payment is made by the party DATION IN PAYMENT BY
for whose benefit the term has PAYMENT CESSION
been constituted; and
1. one creditor 1. plurality of
d. amount paid by the debtor must creditors
not be sufficient to cover the
total amount of all the debts. 2. not necessarily 2. debtor must be
in state of financial partially or
GENERAL RULE: The right to designate difficulty relatively insolvent
the debt to which the payment shall be
applied primarily belongs to the debtor. 3. thing delivered 3. universality of
EXCEPTION: If the debtor does not avail is considered as property of debtor is
of such right and he accepts from the equivalent of what is ceded
performance
creditor a receipt in which the
application is made.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

4. payment 4. merely releases efficacy of the consignation, the


extinguishes debtor for net obligation is extinguished.
obligation to the proceeds of things 2. If the creditor contests the
extent of the value ceded or assigned, validity or efficacy of the
of the thing unless there is
consignation or if the creditor is
delivered as agreed contrary intention
upon, proved or not interested or unknown or is
implied from the absent, the result is a litigation.
conduct of the If the debtor complied with all
creditor the requisites, the obligation is
extinguished.
d. Tender of Payment and Consignation
Tender of Payment GENERAL RULE: Consignation shall
 Manifestation of he debtor to the produce effects of payment only if there
creditor of his decision to comply is a valid tender of payment.
immediately with his obligation. EXCEPTIONS: (TIRAT or TRAIT)
 It is the preparatory act and 1. creditor is absent or unknown, or
extrajudicial in character. does not appear at the place of
payment
Consignation 2. creditor incapacitated to receive
 Deposit of the object of the payment at the time it is due
obligation in a competent court in 3. when two or more persons claim the
accordance with the rules prescribed right to collect
by law, after the tender of payment 4. when the title of the obligation has
has been refused or because of been lost
circumstances which render direct 5. when without just cause creditor
payment to the creditor impossible refuses to give a receipt
or inadvisable.
 It is the principal act and judicial in NOTES:
character.
 It is the consignation which
 Special Requisites: constitutes a form of payment and
a. The debt sought to be paid must must follow, supplement or
be due; complete the tender of payment in
b. There must be a valid and order to discharge the obligation.
unconditional tender of payment  A valid tender of payment has the
or any of the causes stated by effect of exempting the debtor from
law for effective consignation payment of interest and/or
without previous tender of damages.
payment exists;  If tender is made by means of a
c. The consignation of the thing check, such tender is valid because
due must first be announced to it is an exercise of a right. Article
the persons interested in the 1249 is not applicable.
fulfillment of the obligation;
d. Consignation shall be made by LOSS OF THE THING DUE
depositing the things due at the In Determinate Obligations to Give
disposal of judicial authority;
and GENERAL RULE: Obligation is
e. The consignation having been extinguished.
made, the interested parties  Requisites:
shall also be notified thereof. 1. The thing which is lost is
determinate;
 Effects of consignation: 2. The thing is lost without the
1. If the creditor accepts the thing fault of the debtor; and
or amount deposited without 3. The thing is lost before the
contesting the validity or debtor has incurred in delay.

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
100 2005 CENTRALIZED BAR OPERATIONS

EXCEPTIONS: 3. The event must not be


1. when by law, obligor is liable due to the act of any of the
even for fortuitous event; parties; and
2. when by stipulation, obligor is 4. The contract is for a
liable even for fortuitous event; future prestation.
3. when the nature of the
obligation requires the Principle of Subjective Impossibility
assumption of risk;  When there is no physical or legal
4. when the loss of the thing is due loss but the thing object of the
partly to the fault of the debtor; obligation belongs to another, the
5. when the loss of the thing occurs performance by the debtor of the
after the debtor incurred in obligation undoubtedly becomes
delay; impossible. Failure of performance is
6. when the debtor promised to imputable to the debtor. Thus, the
deliver the same thing to two or debtor must indemnify the creditor
more persons who do not have for the damages suffered by the
the same interest; and latter. (Tolentino, Volume IV, p.
7. when the debt of a certain and 336)
determinate thing proceeds from
a criminal offense Effect of Loss on Reciprocal Obligations
 First view (Tolentino, Volume IV, pp.
In Generic Obligations to Give 337-338) – If an obligation is
extinguished by the loss of the thing
GENERAL RULE: Obligation is not or impossibility of performance
extinguished because the genus of a through fortuitous events, the
thing cannot perish. counter-prestation is also
EXCEPTION: In case of generic extinguished. The debtor is released
obligations whose object is a particular from liability but he cannot demand
class or group with specific or the prestation which has been
determinate qualities (Limited Generic stipulated for his benefit. He who
Obligations) gives nothing has no reason to
demand anything.
In Obligations to Do
 Second View (JBL Reyes) – The loss
Obligation is extinguished when or impossibility of performance must
prestation becomes legally or physically be due to the fault of the debtor. In
impossible. this case, the injured party may ask
for rescission under Article 1191 plus
Effect of Relative Impossibility or damages. If the loss or impossibility
Doctrine of Unforeseen Events (ART was due to a fortuitous event, the
1267) other party is still obliged to give the
 When the service has become prestation due to the other.
difficult as to be manifestly beyond
the contemplation of the parties, CONDONATION OR REMISSION OF THE
the obligor may also be released DEBT
therefrom, in whole or in part.  An act of pure liberality by virtue of
 Requisites: which the obligee, without receiving
1. The event or change in any price or equivalent, renounces
circumstances could not have the enforcement of the obligation,
been foreseen at the time of the as a result of which it is extinguished
execution of the contract; in its entirety or in that part or
2. It makes the aspect of the same to which the
performance of the contract remission refers.
extremely difficult but not  It is the gratuitous abandonment by
impossible; the creditor of his right.
 Requisites:
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

a. It must be gratuitous other


b. It must be accepted by the 2. there must be 2. only one
debtor at least two obligation
c. The obligation must be obligations
demandable
Compensation Payment
NOTE: Express condonation or remission 1. The requisites prescribe by law for
must comply with the formalities of compensation are different from those
donation. prescribed by law for payment.
2. Takes effect by 2. Takes effect by
operation of law act of the parties
CONFUSION OR MERGER OF RIGHTS
3. Capacity to 3. Capacity to give
 Merger of the characters of the give and to and to acquire is
creditor and the debtor in one and acquire is not essential
the same person by virtue of which necessary
the obligation is extinguished. 4. As a rule, it is 4. As a rule,
 Requisites: partial complete and
a. that the characters of creditor & indivisible
debtor must be in the same
person;
b. that it must take place in the Compensation Counterclaim
person of either the principal
creditor or the principal debtor; 1. Requires 2 1. Not necessary
and debts must consist
in money or if
c. it must be complete & definite
fungibles, same
kind and quality
COMPENSATION
 Extinguishment in the concurrent 2. Both debts 2. Does not require
amount of the obligation of those must be that debts be
persons who are reciprocally debtors liquidated liquidated
and creditors of each other.
3. Need not be 3. Must be pleaded
 Requisites:
pleaded to be effectual
a. there must be 2 parties, who, in
their own right, are principal
creditors & principal debtors of Kinds of Compensation
each other (except in case of 1. Legal – takes effect by operation
guarantor, Article 1280); of law
b. both debts must consist in 2. Voluntary – agreed upon by the
money, or if the things due are parties
fungibles, they must be of the 3. Judicial – takes effect by judicial
same kind & quality; decree
c. both debts must be due; 4. Facultative – when it can be
d. both debts must be liquidated & claimed by one of the parties
demandable; who, however, has the right to
e. there must be no retention or object to it
controversy commenced by 3rd
persons over either of the debts Debts not subject to Compensation:
& communicated in due time to 1. debts arising from contracts of
the debtor; and deposit
f. compensation must not be 2. debts arising from contracts of
prohibited by law. commodatum
3. claims for support due by
Compensation Confusion gratuitous title
1. two persons 1. one person 4. obligations arising from criminal
who are mutual where qualities of
offenses
debtors and debtor and creditor
creditors of each are merged

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
102 2005 CENTRALIZED BAR OPERATIONS

5. certain obligations in favor of new one w/c substitutes the


government same.
NOTE: Taxes are not subject to set-off b. Implied - when the old & new
or legal compensation because the obligation are incompatible w/
government & taxpayers are not each other on every point.
mutually creditors & debtors of each
other (Francia vs. IAC, 162 SCRA 753). Test of Incompatibility
 Whether or not the old and new
Facultative Compensation obligations can stand together, each
 This is compensation which can be having its own independent
set up only at the option of a existence. If they can stand
creditor, when legal compensation together, there is no incompatibility;
cannot take place because of want consequently, there is no novation.
of some legal requisites for the If they cannot stand together, there
benefit of the creditor. The latter is incompatibility; consequently,
can renounce his right to oppose the there is novation.
compensation and he himself can set
it up. It differs from conventional Forms of Substitution of Debtors:
compensation because it is unilateral 1. Expromision - effected with the
while the latter depends upon the consent of the creditor at the
agreement of both parties. instance of the new debtor even
(Tolentino, Volume IV, p. 367) without the consent or even
against the will of the old
NOVATION debtor.
 Substitution or change of an Requisites:
obligation by another, resulting in its a. Initiative for substitution must
extinguishment or modification, emanate from the new debtor
either by changing its object or b. Consent of the creditor to the
principal conditions, or by substitution
substituting another in place of the 2. Delegacion - effected with the
debtor, or by subrogating a third consent of the creditor at the
person in the rights of the creditor. instance of the old debtor, with
 Requisites: the concurrence of the new
a. a previous valid obligation; debtor.
b. agreement of the parties to the Requisites:
new obligation; a. Initiative for substitution must
c. extinguishment of the old emanate from the old debtor
obligation; and b. Consent of the new debtor
d. validity of the new obligation. c. Acceptance by the creditor

Kinds: Effect of insolvency of new debtor


1. As to its essence 1. Expromision – the new debtor’s
a. Objective/Real - refers to the insolvency or nonfulfillment of
change either in the cause, the obligation shall not revive
object or principal conditions of the original debtor’s liability to
the obligations the creditor whether the
b. Subjective/Personal - refers to substitution is effected with or
the substitution of the person of without the knowledge or
the debtor or to the subrogation against the will of the original
of a 3rd person in the rights of debtor.
the creditor 2. Delegacion – the creditor can sue the
c. Mixed old debtor only when the
2. As to its form/constitution insolvency was prior to the
a. Express - when it is declared in delegation and publicly known or
unequivocal terms that the old when the old debtor knew of
obligation is extinguished by a
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

such insolvency at the time he prejudice to the effects of confusion


delegated the obligation. as to the latter’s share.

NOTE: A change in the incidental II. CONTRACTS


elements of, or an addition of such
elements to an obligation, unless CONTRACT
otherwise expressed by the parties, will  A contract is a meeting of minds
not result in its extinguishment. between two persons whereby one
binds himself, with respect to the
CONVENTIONAL ASSIGNMENT OF other, to give something or to render
SUBROGATION RIGHTS some service (Article 1305).
1. governed by Arts. 1. governed by Arts.  Elements
1300 to 1304 1624 to 1627
1. Essential – those without which
there can be no contract.
2. debtor’s consent 2. debtor’s consent
is required is not required a. Consent
b. Object or Subject Matter
3. extinguishes the 3. transmission of c. Cause or Consideration
obligation and gives right of the creditor 2. Natural – those derived from the
rise to a new one to third person nature of the contract and ordinarily
without modifying or accompany the same.
extinguishing the 3. Accidental – those which exist only
obligation when the parties expressly provide
for them for the purpose of limiting
4. defects and 4. defects and vices
or modifying the normal effects of
vices in the old in the old obligation
obligation are cured are not cured the contract.
5. takes effect 5. as far as the
upon moment of debtor is concerned, Nominate contracts
novation or takes effect upon  Those which have their own
subrogation notification distinctive individuality and are
regulated by special provisions of
 Kinds of Subrogation law.
1. Conventional – takes place by Innominate contracts
agreement of the parties; this kind  Those which lack individuality and
of subrogation requires the are not regulated by special
intervention and consent of 3 provisions of law.
persons: the original creditor, the  Regulated by the stipulations of the
new creditor and the debtor. parties, by the general provisions of
2. Legal – takes place without the Civil Code on obligations and
agreement but by operation of law contracts, by rule governing the
because of certain acts (Article most analogous nominate contracts
1302). and by the customs of the place.
 Kinds:
GENERAL RULE: Legal subrogation a. Do ut des - I give that you give
cannot be presumed. b. Do ut facias - I give that you do
EXCEPTIONS: c. Facio ut des - I do that you give
1. Creditor pays another creditor who is d. Facio ut facias - I do that you do
preferred, without debtor’s NOTE: According to some
knowledge; authorities. do ut des in no longer an
2. A third person not interested in the innominate contract. It has already
obligation pays with the express or been given a name of its own, i.e.
tacit approval of the debtor; or barter or exchange (Article 1638).
3. Even without debtor’s knowledge, a
person interested in the fulfillment Characteristics of Contracts: (ROMA)
of the obligation pays without 1. Relativity (ART 1311)
2. Obligatory Force and Consensuality

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
104 2005 CENTRALIZED BAR OPERATIONS

(ART 1315) b. knowledge of contract by


3. Mutuality (ART 1308) third person; and
4. Autonomy (ART 1306) c. interference by third person
Relativity without legal justification or
GENERAL RULE: Contracts take effect excuse.
only between parties, their assigns and 3. Third persons who come into
heirs. possession of the object of the
EXCEPTIONS: contract creating real rights
1. Stipulation pour atrui - 4. Contracts entered into in fraud
stipulation in favor of a third of creditors
person.
 Requisites: Mutuality
a. the stipulation must be a  The contract must bind both parties;
part, not the whole of its validity or compliance must not
the contract; be left to the will of one of them.
b. the contracting parties (ART 1308)
must have clearly and  The contract cannot have any
deliberately conferred a stipulation authorizing one of the
favor upon a third contracting parties (a) to determine
person, not a mere whether or not the contract shall be
incidental benefit or valid, or (b) to determine whether
interest; or not the contract shall be fulfilled.
c. the third person must
have communicated his Autonomy
acceptance to the  The parties are free to stipulate
obligor before its anything they deem convenient
revocation; provided that they are not contrary
d. the favorable stipulation to law, morals, good customs, public
should not be order and public policy. (ART 1306)
conditioned or
compensated by any kind Consensuality
of obligation whatever;  Contracts are perfected by mere
and consent and from that moment, the
e. neither of the parties are bound not only to the
contracting parties bears fulfillment of what has been
the legal representative expressly stipulated but also to all
or authorization of the consequences which, according to
third person. their nature may be in keeping with
good faith, usage and law.
Test of Beneficial Stipulation – the
fairest test to determine whether the CONSENT
interest of a 3rd person in a contract is a  Manifested by the concurrence of
stipulation pour atrui or merely an the offer and acceptance upon the
incidental interest is to rely upon the thing and the cause which are to
intention of the parties as disclosed by constitute the contract.
their contract. Determine whether the  Requisites:
contracting parties desired to tender him a. Legal capacity of the contracting
such an interest (Uy Tam vs. Leonard, 30 parties
Phil. 471). b. Manifestation of the conformity
of the contracting parties
2. When a third person induces a c. The parties’ conformity to the
party to violate contract object, cause, the terms and
(ART1314) conditions of the contract must
 Requisites: be intelligent, spontaneous and
a. Existence of a valid contract; free from all vices of consent

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

d. The said conformity must be real element (i.e., donation of real


and not simulated or fictitious property).
 An offer made inter praesentes must
Offer be accepted IMMEDIATELY. If the
 A proposal made by one party to parties intended that there should
another to enter into a contract. be an express acceptance, the
 It must be certain or definite, contract will be perfected only upon
complete and intentional. knowledge by the offeror of the
express acceptance by the offeree of
NOTE: Offer/proposal may be withdrawn the offer. An acceptance which is
so long as the offeror has no knowledge not made in the manner prescribed
of acceptance by offeree. by the offeror is NOT EFFECTIVE BUT
Acceptance A COUNTER-OFFER which the offeror
 Manifestation by the offeree of his may accept or reject. (Malbarosa vs.
assent to the terms of the offer. CA, et al., G.R. # 125761, April 30,
 It must me absolute. 2003)
 A qualified acceptance constitutes  Contracts under the Civil Code
counter-offer. generally adhere to the Cognition
Theory (contract is perfected from
NOTE: Acceptance may be revoked the moment the acceptance comes
before it comes to the knowledge of the to the knowledge of the offeror),
offeror. while transactions under the Code of
Commerce use the Manifestation
Amplified Acceptance
Theory (it is perfected from the
 Under certain circumstances, a mere
moment the acceptance is declared
amplification on the offer must be
or made).
understood as an acceptance of the
original offer, plus a new offer which
PERSONS INCAPACITATED TO GIVE
is contained in the amplification.
CONSENT:
(Tolentino, Volume IV, p. 452)
1. Minors
Rule on Complex offers
EXCEPTIONS:
1. Offers are interrelated – contract is
 Contracts where the minor is
perfected if all the offers are
estopped to raise minority as a
accepted.
defense through his own
2. Offers are not interrelated – single
misrepresentation
acceptance of each offer results in a
perfected contract unless the offeror  Contracts for necessaries
has made it clear that one is  Contracts by guardians or legal
dependent upon the other and representatives
acceptance of both is necessary.  Voluntary fulfillment of a natural
obligation provided that the
NOTES: minor is between 18-21 years of
age
 Consensual contracts are perfected  Contracts of life, health or
from the moment there is a accident insurance taken on the
manifestation of concurrence life of the minor
between the offer and the 2. Insane or demented persons, unless
acceptance regarding the object and the contract was entered into during
the cause. a lucid interval
 Real contracts like deposit, pledge 3. Deaf-mutes who do not know how to
and commodatum requires delivery read and write
of object for perfection.
 Solemn contracts are those which Effect of Misrepresentation of Age by
requires compliance with certain the Minor
formalities prescribed by law, such  Misrepresentation by minors with
prescribed form being an essential regard to their age when entering
into a contract shall bind them in

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
106 2005 CENTRALIZED BAR OPERATIONS

the sense that they are estopped profit. (Martinez vs. Hongkong and
subsequently from impugning the Shanghai Bank, 15 Phil. 252)
validity of the contract on the
ground of minority. It is necessary
that the misrepresentation must be Simulation of Contracts
active (e.g. when minors specifically 1. Absolute – when the contracting
stated in a contract that they were parties do not intend to be bound by
of age), not merely constructive. the contract at all. Thus, an
absolutely simulated contract is
VICES OF CONSENT (VIMFU) VOID.
1. Violence - when in order to wrest 2. Relative – when the contracting
consent, serious or irresistible force parties conceal their true
is employed. agreement. A relatively simulate
2. Intimidation - when 1 of the contract binds the parties to their
contracting parties is compelled by real agreement, when it does not
a reasonable & well-grounded fear prejudice a 3rd person and is not
of an imminent & grave evil upon his intended for any purpose contrary to
person or property, or upon the law, morals, good customs, public
person or property of his spouse, order or public policy.
descendants or ascendants, to give
his consent. OBJECT
3. Mistake - should refer to the  The thing, right or service which is
substance of the thing which is the the subject matter of the obligation
object of the contract, or to those arising from the contract.
conditions which have principally  Requisites:
moved one or both parties to enter a. It must be w/in the commerce of
into the contact. man
 Must be mistake of fact and not of b. It must be licit or not contrary
law, except under Article 1334. law, morals, good customs,
 Requisites under Article 1334: public order or public policy
a. Mistake must be with respect c. It must be possible
to the legal effect of an d. It must be determinate as to its
agreement kind
b. Mistake must be mutual
c. Real purpose of the parties Things which Cannot be the Object of
must have been frustrated. Contract
4. Fraud - when, through insidious 1. Things which are outside the
words or machinations of 1 of the commerce of men
contracting parties, the other is 2. Intransmissible rights
induced to enter into a contract 3. Future inheritance, except in
which, without them, he would not cases expressly authorized by
have agreed to. law
5. Undue influence - when a person 4. Services which are contrary to
takes improper advantage of his law, morals, good customs,
power over the will of another, public order or public policy
depriving the latter of a reasonable 5. Impossible things or services
freedom of choice. 6. Objects which are not possible of
determination as to their kind
Reluctant Consent
 A contract is valid even though one CAUSE
 The immediate, direct and most
of the parties entered into it against
proximate reason which explains and
his wishes and desires or even
justifies the creation of obligation.
against his better judgment.
 Requisites
Contracts are also valid even though
they are entered into by one of the
parties without hope of advantage or
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

a. Cause should be in existence at 1. When the law requires that a


the time of the celebration of contract be in some form in order
the contract that it may be valid
b. Cause should be licit or lawful 2. When the law requires that a
c. Cause should be true contract be in some form in order
that it may be enforceable
 Rules:
1. In onerous contracts, the cause is NOTES:
understood to be, for each
contracting party, the prestation of  Parties may compel each other to
promise of a thing or service by the comply with the form required once
other. the contract has been perfected.
2. In remuneratory contracts, the (Article 1357)
service or benefit w/c is  Contracts under Art 1358 which are
remunerated. required to be in some specific form
3. In contracts of pure beneficence, is only for the convenience of parties
the mere liberality of the donor or and does not affect its validity and
benefactor. enforceability as between them.
4. In accessory contracts (mortgage or
pledge), the cause is identical with RA 8792 (E- COMMERCE ACT) provides
the cause of the principal contract, that the formal requirements to make
that is, the loan from which it contracts effective as against third
derives its life and existence. persons and to establish the existence of
a contract are deemed complied with
CAUSE EFFECT provided that the electronic document is
the contract confers unaltered and can be authenticated as
1. Absence of cause no right and produces to be usable for future reference.
no legal effect
does not render the REFORMATION OF INSTRUMENTS
2. Failure of cause contract void  Requisites:
the contract is null
a. meeting of the minds to the
3. Illegality of cause and void
contract
the contract is void,
4. Falsity of cause unless the parties b. true intention is not expressed in
show that there is the instrument by reason of
another cause which mistake, accident, relative
is true and lawful simulation, fraud, or inequitable
does not invalidate conduct
5. Lesion the contract, unless c. clear and convincing proof of
(a) there is fraud, mistake, accident, relative
mistake or undue simulation, fraud, or inequitable
influence; or (b)
conduct
when the parties
intended a donation
or some other Instances when there can be no
contract reformation:
1. Simple unconditional donations
inter vivos;
FORM OF CONTRACTS 2. Wills;
GENERAL RULE: Contracts shall be 3. When the agreement is void;
obligatory, in whatever form they may
have been entered into, provided all the When one of the parties has brought an
essential requisites for their validity are action to enforce the instrument, no
present. subsequent reformation can be asked.
EXCEPTIONS:

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
108 2005 CENTRALIZED BAR OPERATIONS

COMPARATIVE TABLE OF DEFECTIVE CONTRACTS

VOID VOIDABLE RESCISSIBLE UNENFORCEABLE

1. Defect is caused Defect is caused by vice Defect is caused by Defect is caused by


by lack of essential of consent injury/ damage either lack of form,
elements or illegality to one of the parties of authority, or capacity
to a 3rd person of both parties not
cured by prescription

2. Do not, as a Valid and enforceable Valid and enforceable Cannot be enforced


general rule produce until they are annulled until they are rescinded by a proper action in
any legal effect by a competent court by a competent court court

3. Action for the Action for annulment or Action for rescission Corresponding action
declaration or nullity defense of annulability may prescribe for recovery, if there
or inexistence or may prescribe was total or partial
defense of nullity or performance of the
inexistence does not unenforceable
prescribe contract under No. 1
or 3 of Article 1403
may prescribe

4. Not cured by Cured by prescription Cured by prescription Not cured by


prescription prescription

5. Cannot be ratified Can be ratified Need not be ratified Can be ratified

6. Assailed not only Assailed only by a Assailed not only by a Assailed only by a
by a contracting contracting party contracting party but contracting party
party but even by a even by a third person
third person whose who is prejudiced or
interest is directly damaged by the
affected contract

7. Assailed directly Assailed directly or Assailed directly only Assailed directly or


or collaterally collaterally collaterally

3. those undertaken in fraud of


RESCISSIBLE CONTRACTS creditors when the latter cannot in
 Contracts validly agreed upon but, any manner claim what are due
by reason of lesion or economic them;
prejudice may be rescinded in cases
established by law. 4. those which refer to things under
litigation if they have been entered
What contracts are rescissible into by the defendant without the
1. those entered into by guardians knowledge and approval of the
where the ward suffers lesion of litigants and the court;
more than ¼ of the value of the 5. all other contracts especially
things which are objects thereof; declared by law to be subject to
2. those agreed upon in representation rescission; and
of absentees, if the latter suffer 6. payments made in a state of
lesion by more than ¼ of the value insolvency on account of obligations
of the things which are subject not yet enforceable
thereof;
 Requisites:

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

a. the contract must be rescissible the rescission of the demand the


b. the party asking for rescission contract. rescission of the
must have no other legal means contract.
c. to obtain reparation for the 5. Court may fix a 5. Court cannot grant
period or grant extension of time for
damages suffered by him
extension of time for fulfillment of the
d. the person demanding rescission the fulfillment of the obligation.
must be able to return whatever obligation.
he may be obliged to restore if 6. Its purpose is to 6. Its purpose is to
rescission is granted cancel the contract. seek reparation for
e. the things w/c are the object of the damage or injury
the contract must not have caused, thus allowing
passed legally to the possession partial rescission of
of a 3rd person acting in good the contract.
faith
f. the action for rescission must be VOIDABLE CONTRACTS
brought w/in the prescriptive  Those in which all of the essential
period of 4 years elements for validity are present,
although the element of consent is
vitiated either by lack of capacity of
BADGES OF FRAUD: one of the contracting parties or by
1. Consideration of the conveyance VIMFU.
is inadequate or fictitious;
2. Transfer was made by a debtor What contracts are voidable
after a suit has been begun and 1. Those where one of the parties is
while it is pending against him; incapable of giving consent to a
3. Sale upon credit by an insolvent contract
debtor; 2. Those where the consent is vitiated
4. Evidence of indebtedness or by mistake, violence, intimidation,
complete insolvency undue influence or fraud
5. Transfer of all his property by a
debtor when he is financially Causes of extinction of action to annul:
embarrassed or insolvent; 1. PRESCRIPTION
6. Transfer made between father &  the action must be commenced
son, where there is present any within 4 years from:
of the above circumstances a. the time the incapacity
7. Failure of the vendee to take ends;
exclusive possession of all the b. the time the violence,
property intimidation or undue
influence ends; or
c. the time the mistake or
Rescission in Rescission Proper fraud is discovered.
Article 1191 in Article 1381 NOTE: Discovery of fraud must be
1. It is a principal 1. It is a subsidiary reckoned to have taken place from
action retaliatory in remedy. the time the document was
character. registered in the office of the
2. The only ground is 2. There are 5 register of deeds. Registration
non-performance of grounds to rescind.
constitutes constructive notice to
one’s obligation/s or Non-performance by
what is incumbent the other party is not the whole world. (Carantes vs. CA,
upon him. important. 76 SCRA 514)
3. It applies only to 3. It applies to both
reciprocal obligation unilateral and 2. RATIFICATION
reciprocal  Requisites:
obligations. a. there must be knowledge of
4. Only a party to the 4. Even a 3rd person the reason which renders
contract may demand who is prejudiced by the contract voidable
fulfillment or seek the contract may

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
110 2005 CENTRALIZED BAR OPERATIONS

b. such reason must have


ceased and NOTES:
c. the injured party must have
executed an act which  The contracts/agreements under the
expressly or impliedly Statute of Frauds require that the
conveys an intention to same be evidenced by some note,
waive his right memorandum or writing, subscribed
3. By loss of the thing which is the by the party charged or by his agent,
object of the contract through fraud otherwise, the said contracts shall
or fault of the person who is entitled be unenforceable.
to annul the contract.  The statute of frauds applies only to
executory contracts, not to those
NOTE: If the object is lost through that are partially or completely
fortuitous event, the contract can still fulfilled.
be annulled, but the person obliged to
return the same can be held liable only Ratification of contracts in violation of
for the value of the thing at the time of the Statute of Frauds
the loss, but without interest thereon. 1. Failure to object to the presentation
of oral evidence to prove such
UNENFORCEABLE CONTRACTS contracts
 Those which cannot be enforced by 2. Acceptance of benefits under these
proper action in court unless they contracts
are ratified
VOID CONTRACTS
What contracts are unenforceable  Those where all of the requisites of a
contract are present but the cause,
1. those entered into in the name of
object or purpose is contrary to law,
another by one without or acting in
morals, good customs, public order
excess of authority;
or public policy, or contract itself is
2. those where both parties are
prohibited or declared void by law.
incapable of giving consent; and
3. those which do not comply with the
What contracts are void
Statute of Frauds
1. Those whose cause, object or
Agreements within the scope of the purpose is contrary to law, morals
Statute of Frauds (EXCLUSIVE LIST): good customs, public order or public
1. Agreements not to be performed policy;
within one year from the making 2. Those whose object is outside the
thereof; commerce of men;
2. Special promise to answer for the 3. Those which contemplate an
debt, default or miscarriage of impossible service;
another; 4. Those where the intention of the
NOTE: This does not refer to the original parties relative to the principal
or independent promise of the object of the contract cannot be
debtor to his own creditor. It refers ascertained; and
rather to a collateral promise. 5. Those expressly prohibited or
3. Agreement in consideration of declared void by law.
marriage other than a mutual
promise to marry; INEXISTENT CONTRACTS
4. Agreement for the sale of goods,  Those where one or some or all of
etc. at a price not less than P500.00; the requisites essential for the
5. Contracts of lease for a period validity of a contract are absolutely
longer than one year; lacking.
6. Agreements for the sale of real
property or interest therein; and What contracts are inexistent
7. Representation as to the credit of a 1. Those which are absolutely
third person. simulated or fictitious; and
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT
CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 85

MEMORY AID IN CIVIL LAW

2. Those whose cause or object did not the other party by reason of the
exist at the time of the transaction. contract.
b. Innocent party may demand for
NOTE: The principle of In Pari Delicto is the return for the return of
applicable only to void contracts and not what he has given.
as to inexistent contracts. 2. Executory Contracts - Neither of the
Principle of In Pari Delicto contracting parties can demand for
GENERAL RULE: When the defect of a the fulfillment of any obligation
void contract consists in the illegality of from the contract nor may be
the cause or object of the contract and compelled to comply with such
both of the parties are at fault or in pari obligation
delicto, the law refuses them every
remedy and leaves them where they are. NATURAL OBLIGATIONS
EXCEPTIONS:  They are real obligations to which
1. Payment of usurious interest the law denies an action, but which
2. Payment of money or delivery of the debtor may perform voluntarily.
property for an illegal purpose,  It is patrimonial, and presupposes a
where the party who paid or prestation.
delivered repudiates the  The binding tie of these obligations
contract before the purpose has is in the conscience of man, for
been accomplished, or before under the law, they do not have the
any damage has been caused to necessary efficacy to give rise to an
a 3rd person. action.
3. Payment of money or delivery of
property made by an Examples of natural obligations
incapacitated person enumerated under the Civil Code:
4. Agreement or contract which is 1. Performance after the civil
not illegal per se & the obligation has prescribed;
prohibition is designed for the 2. Reimbursement of a third person for
protection of the plaintiff a debt that has prescribed;
5. Payment of any amount in excess 3. Restitution by minor after annulment
of the maximum price of any of contract;
article or commodity fixed by 4. Delivery by minor of money or
law or regulation by competent fungible thing in fulfillment of
authority. obligation;
6. Contract whereby a laborer 5. Performance after action to enforce
undertakes to work longer than civil obligation has failed;
the maximum # of hours fixed by 6. Payment by heir of debt exceeding
law. value of property inherited; and
7. Contract whereby a laborer 7. Payment of legacy after will have
accepts a wage lower than the been declared void.
minimum wage fixed by law.
8. One who lost in gambling ESTOPPEL
because of fraudulent schemes  A condition or state by virtue of
practiced on him is allowed to which an admission or representation
recover his losses [(Art. 315, 3 is rendered conclusive upon the
(b), RPC] even if gambling is a person making it and cannot be
prohibited one. denied or disproved as against the
person relying thereon.
Rules when only one of the parties is at  Kinds:
fault: 1. Estoppel in Pais (by conduct)
1. Executed Contracts: a. Estoppel by silence
a. Guilty party is barred from b. Estoppel by acceptance of
recovering what he has given to benefits
the other party is barred from 2. Technical Estoppel
recovering what he has given to a. Estoppel by deed

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)
112 2005 CENTRALIZED BAR OPERATIONS

b. Estoppel by record
c. Estoppel by judgment
d. Estoppel by laches

LACHES or “STALE DEMANDS” LACHES PRESCRIPTION


 Failure or neglect, for an
unreasonable and unexplained length 1. concerned with 1. concerned with
of time, to do that which, by effect of delay fact of delay
exercising due diligence, could or
should have been done earlier; it is 2. question of 2. question or
negligence or omission to assert a inequity of matter of time
right within reasonable time, permitting the claim
warranting a presumption that the to be enforced
party entitled to assert it either has
abandoned it or declined to assert it. 3. not statutory 3. statutory

 Elements: 4. applies in equity 4. applies at law


a. Conduct on part of the
defendant, or of one under 5. not based on a 5. based on a fixed
whom he claims, giving rise to fixed time time
the situation of which complaint
is made and for which the
complaint seeks a remedy
b. Delay in asserting the
complainant’s rights, the
complainant having knowledge
or notice, of the defendant’s
conduct and having been
afforded the opportunity to
institute a suit
c. Lack of knowledge or notice on
the part of the defendant that
the complainant would assert
the right on which he bases his
suit
d. Injury to the defendant in the
event relief is accorded tot the
complainant, or the suit in not
held to be barred

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT


CHAIRPERSONS
Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)

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