Civil Law Review 2 Arts. 1156 to 1230

Civil Law Review 2Arts. 1156 to 1230by: Romar CambriDefinition (Article 1156) Elements of an ObligationDifferent Kinds of PrestationsClassification of ObligationsSources of Obligations (Article 1157) Obligation Ex Lege (Article 1158) Obligation Ex Contractu (Article 1159) Obligation Ex Quasi-Contractu (Article 1160) Obligation Ex Delicto (Article 1161) Obligations Ex Quasi-Delicto (Article 1162) Distinguished from Culpa Contractual and Culpa CriminalNatural Obligations (Article 1423 to 1430) Estoppel (Article 1431 to 1439)LachesOutlineNature and Effect of Obligations (Article 1163 to 1168) Breaches of ObligationsDelay (Article 1169) Fraud (Article 1171) Negligence (Article 1172 to 1173) Contravention of Tenor of Obligation (Violatio)Fortuitous Event (Article 1174) Remedies (also see Article 1175, 1176 and 1178) Specific Performance (Article 1177) Rescission (Article 1191) Damages (Article 1170) Subsidiary RemediesAccion SubrogatoriaAccion PaulianaAccion DirectaOutlineKinds of Civil ObligationsPure Obligations (Article 1179)Conditional Obligations (also see Article 1181, 1183-1186, and 1192)Suspensive Condition (Article 1187 to 1189) Resolutory Condition (Article 1190)Potestative Condition (Article 1182) Causal ConditionObligation with a Period (Article 1180 and 1193 to 1198) Alternative Obligation/Facultative Obligation (ARTICLE 1199 to 1206) Joint and Solidary Obligation (Article 1207 to 1208) Joint and Solidary Obligations (Article 1209) Joint Indivisible Obligations (Article 1210) Solidary Obligations (Article 1211 to 1222) Divisible and Indivisible Obligations (Article 1223 to 1225) Obligations with a Penal Clause (Article 1226 to 1230)

OutlineArticle 1156. An obligation is a juridical necessity to give, to do or not to do.

Note: Art. 1156 refers only to civil obligations which are enforceable in court when breached. It does not cover natural obligations (Arts. 1423-1430) because these are obligations that cannot be enforced in court being based merely on equity and natural law and not on positive law (Pineda, Obligations and Contracts, 2000 ed., p3).I. Definition1. Juridical tie or vinculum juris or efficient cause is the efficient cause by virtue of which the debtor has become bound to perform the prestation (Pineda, Obligations and Contracts, 2000, p.2). 2. Active subject [creditor (CR) or obligee] is the one who is demanding the performance of the obligation. It is he in whose favor the obligation is constituted, established or created (Pineda, Obligations and Contracts, 2000, p.2). 3. Passive subject [debtor (DR) or obligor] is the one bound to perform the prestation to give, to do, or not to do (Pineda, Obligations and Contracts, 2000 ed., p. 2). 4. Object or prestation it is the subject matter of the obligation which has an economic value or susceptible of pecuniary substitution in case of noncompliance. It is a conduct that may consist of giving, doing, or not doing something. (Pineda, Obligations and Contracts, p. 2, 2000) II. Elements of an ObligationOBLIGATION TO GIVEOBLIGATION TO DOOBLIGATION NOT TO DOConsists in the delivery of a movable or immovable thing to the creditor Covers all kinds of works or services whether physical or mental Consists in refraining from doing some acts i.e. Sale, deposit, pledge, donation, antichresis i.e. Contract for professional services like painting, modeling, singing, etc. i.e. Easement prohibiting building proprietor or possessor from committing nuisance(Art. 682), restraining order or injunction (Pineda, Obligations and Contracts, p. 3, 2000) III. Different Kinds of Prestations1. Sanction a. Civil gives a right of action to compel their performance b. Natural not based on positive law but on equity and natural law; does not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize retention of what has been delivered/ rendered by reason thereof. c. Moral cannot be enforced by action but are binding on the party who makes it in conscience and natural law. 2. Performance a. Positive to give; to do b. Negative not to do 3. Subject matter a. Personal to do; not to do b. Real to give 4. Object a. Determinate/specific particularly designated or physically segregated from all others of the same class. b. Generic is designated merely by its class or genus. c. Limited generic generic objects confined to a particular class (e.g. an obligation to deliver one of my horses) (Tolentino, Civil Code of the Philippines, Vol. IV, 2002 ed, p. 91) IV. Classification of Obligations5. Person obliged a. Unilateral only one party is bound b. Bilateral both parties are bound Note: A bilateral obligation may be reciprocal or non-reciprocal. Reciprocal obligations are those which arise from the same cause, wherein each party is a debtor and a creditor of the other, such that the performance of one is conditioned upon the simultaneous fulfilment of the other. 6. Creation a. Legal imposed by law (Art. 1158) b. Conventional established by the agreement of the parties like contracts 7. Susceptibility of partial fulfillment a. Divisible obligation is susceptible of partial performance (Art. 1223; 1224) b. Indivisible obligation is not susceptible of partial performance (Art. 1225) 8. Existence of burden or condition a. Pure is not burdened with any condition or term. It is immediately demandable (Art. 1179) b. Conditional is subject to a condition which may be suspensive (happening of which shall give rise to the obligation) or resolutory (happening of which terminates the obligation). (Art. 1181) IV. Classification of Obligations9. Character of responsibility or liability a. Joint each debtor is liable only for a part of the whole liability and to each creditor shall belong only a part of the correlative rights (8 Manresa 194; Art. 1207) b. Solidary a debtor is answerable for the whole of the obligation without prejudice to his right to collect from his co-debtors the latters shares in the obligation (Art. 1207) 10. Right to choose and substitution a. Alternative obligor may choose to completely perform one out of the several prestations (Art. 1199) b. Facultative only one prestation has been agreed upon, but the obligor may render one in substitution of the first one (Art. 1206) 11. Imposition of penalty a. Simple there is no penalty imposed for violation of the terms thereof (Art. 1226) b. Obligation with penalty obligation which imposes a penalty for violation of the terms thereof (Art. 1226; Pineda, Obligations and Contracts, 2000 ed, p. 5-7)

IV. Classification of ObligationsArticle 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts.

V. Sources of ObligationsA. Obligation Ex Lege (Article 1158)

Article 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book.

Note: If there is conflict between the NCC and a special law, the latter prevails unless the contrary has been expressly stipulated in the NCC. (Art. 18, Paras, Civil Code of the Philippines Annotated, Vol. IV, 2008 ed., p. 86)

V. Sources of ObligationsB. Obligation Ex Contractu (Article 1159)

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

What are the requisites for a contract to give rise to obligations ex contractu? 1. It must contain all the essential requisites of a contract (Art. 1318) 2. It must not be contrary to law, morals, good customs, public order, and public policy. (Art. 1306)

V. Sources of ObligationsC. Obligation Ex Quasi-Contractu (Article 1160)

Article 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book. (n) What is quasi-contract? It is a juridical relation arising from lawful, voluntary and unilateral acts based on the principle that no one shall be unjustly enriched or benefited at the expense of another (Art. 2142).

What are the principal forms of quasi-contracts? 1. Negotiorum gestio (inofficious manager) arises when a person voluntarily takes charge of the management of the business or property of another without any power from the latter (Art. 2144). 2. Solutio indebiti (unjust enrichment)takes place when a person received something from another without any right to demand for it, and the thing was unduly delivered to him through mistake (Art. 2154).

Note: The delivery must not be through liberality or some other cause. V. Sources of ObligationsD. Obligation Ex Delicto (Article 1161)

Article 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages. (1092a)

What is the basis for civil liability arising from delicts as according to the penal code? Art. 100 of the Revised Penal Code provides that: Every person criminally liable for a felony is also civilly liable. A crime has dual character: (1) as an offense against the state because of the disturbance of the social order; and (2) an offense against the private person injured unless it involves the crime of treason, rebellion, espionage, contempt and others wherein no civil liability arises on the part of the offender either because there are no damages to be compensated or there is no private person injured by the crime (Reyes, The Revised Penal Code, Criminal Law, Book One, 2008, ed., p. 875). V. Sources of ObligationsE. Obligations Ex Quasi-Delicto (Article 1162)

Article 1162. Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special laws. (1093a)

What are the elements of a quasi-delict? 1. Negligent or wrongful act or omission; 2. Damage or injury caused to another; 3. Causal relation between such negligence or fault and damage; 4. No pre-exisitng contractual relationship between the parties (Article 2176). V. Sources of ObligationsCULPA CONTRACTUALCULPA AQUILIANACULPA CRIMINALContractual Negligence Civil Negligence, Quasi-Delict, Tort,or Culpa Extra-Contractual Criminal Negligence Proof NeededPreponderance of evidence Preponderance of evidence Proof of guilt beyond reasonable doubt Onus ProbandiContracting party must prove: 1. The existence of the contract; 2. The breach thereof. Victim must prove: 1. The damage suffered; 2. The negligence of the defendant; 3. The causal connection between the damage and the negligence. Prosecution must prove the guilt of the accused beyond reasonable doubt. Defense AvailableExercise of extraordinary diligence (in contracts of carriage), Force majeure Exercise of diligence of a good father of a family in the selection and supervision of employees Defenses provided for under the Revised Penal Code. Existence of Contract between the PartiesThere is pre-existing contract No pre-existing contract No pre-existing contract V. Sources of Obligations Distinguished from Culpa Contractual and Culpa CriminalVI. Nature and Effect of ObligationsRequired Diligence:Article 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. (1094a) Right to the Fruits:Article 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him. (1095) Right to Compel Delivery:Article 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him by article 1170, may compel the debtor to make the delivery. If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor. If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same interest, he shall be responsible for any fortuitous event until he has effected the delivery. (1096) VI. Nature and Effect of ObligationsRight to the Accessions and Accessories:Article 1166. The obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned. Right in Case of Breach:Article 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost. This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone. (1098) Article 1168. When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be undone at his expense. (1099a) Breaches of Obligations (1) Delay - Article 1169

Mora SolvendiRequisites of mora solvendi? 1. Obligation pertains to the debtor; 2. Obligation is determinate, due and demandable, and liquidated; 3. Obligation has not been performed on its maturity date; 4. There is judicial or extrajudicial demand by the creditor; 5. Failure of the debtor to comply with such demand.

Effects of mora solvendi? 1. Debtor may be liable for damages or interests; and Note: The interest shall commence from the filing of the complaint when there is no extrajudicial demand. 2. When it has for its object a determinate thing, debtor may bear the risk of loss of the thing even if the loss is due to fortuitous event. 3. Rescission or resolution

VI. Nature and Effect of ObligationsBreaches of Obligations (1) Delay - Article 1169

Mora Accipiendi

Requisites of mora accipiendi? 1. Offer of performance by a capacitated debtor; 2. Offer must be to comply with the prestation as it should be performed; and 3. Refusal of the creditor without just cause.

Effects of mora accipiendi? 1. Responsibility of debtor is limited to fraud and gross negligence 2. Debtor is exempted from risk of loss of thing; creditor bears risk of loss 3. Expenses by debtor for preservation of thing after delay is chargeable to creditor 4. If the obligation bears interest, debtor does not have to pay from time of delay 5. Creditor liable for damages 6. Debtor may relieve himself of obligation by consigning the thing

VI. Nature and Effect of ObligationsBreaches of Obligations: (1) Delay - Article 1169

Compensatio Morae

When does a party incur in delay in reciprocal obligations? In reciprocal obligations, one party incurs in delay from the moment the other party fulfills his obligation, while he himself does not comply or is not ready to comply in a proper manner with what is incumbent upon him.

Rules on default 1. Unilateral obligations GR: Default or delay begins from extrajudicial or judicial demand mere expiration of the period fixed is not enough in order that DR may incur delay. Exceptions:a. The obligation or the law expressly so dictates; b. Time is of the essence; c. Demand would be useless, as debtor has rendered it beyond his power to perform; or d. Debtor has acknowledged that he is in default. 2. Reciprocal obligations GR: Fulfillment by both parties should be simultaneous. Exception: When different dates for the performance of obligation is fixed by the parties.

VI. Nature and Effect of ObligationsBreaches of Obligations: (2) Fraud - Article 1171

Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.

Fraud is an intentional evasion of the faithful performance of the obligation (8 Manresa 72). It is also known as deceit or dolo.

What are the remedies of the defrauded party? 1. Specific performance (Art. 1233) 2. Resolution of the contract (Art. 1191) 3. Damages, in either case

VI. Nature and Effect of ObligationsBreaches of Obligations: (3) Negligence - Articles 1172 to 1173

Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances. (1103)

Article 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required.

VI. Nature and Effect of ObligationsBreaches of Obligations: (4) Contravention of Tenor of Obligation (Violatio)

What is violation of the terms of the contract? It is the act of contravening the tenor or terms or conditions of the contract. It is also known as violatio, i.e. failure of common carrier to take its passenger to their destination. (Pineda, Obligations and Contracts, 2000 ed, p. 50)

Note: Under Art. 1170, the phrase in any manner contravene the tenor of the obligation includes any illicit act which impairs the strict and faithful fulfillment of the obligation, or every kind of defective performance. Such violation of the terms of contract is excused in proper cases by fortuitous events. VI. Nature and Effect of ObligationsBreaches of Obligations: (5) Fortuitous Event - Article 1174)

What are the requisites of a fortuitous event? 1. Cause of breach is independent of the will of the debtor; 2. The event is unforeseeable or unavoidable; 3. Occurrence renders it absolutely impossible for the debtor to fulfill his obligation in a normal manner - impossibility must be absolute not partial, otherwise not force majeure; and 4. Debtor is free from any participation in the aggravation of the injury to the creditor. Note: The fortuitous event must not only be the proximate cause but it must also be the only and sole cause. Contributory negligence of the debtor renders him liable despite the fortuitous event (Pineda, Obligations and Contracts, 2000 ed, p. 62). If the negligence was the proximate cause, the obligation is not extinguished. It is converted into a monetary obligation for damages

General Rule: There is no liability for loss in case of fortuitous event. Exceptions:1. Law 2. Nature of the obligation requires the assumption of risk 3. Stipulation 4. The debtor is guilty of dolo, malice or bad faith, has Promised the same thing to two or more persons who does not have the same interest (Art. 1165) 5. The debtor Contributed to the loss (Tan v. Inchausti & Co., G.R. No. L-6472, Mar. 7, 1912) 6. The possessor is in Bad faith (Art. 552) 7. The obligor is Guilty of fraud, negligence or delay or if he contravened the tenor of the obligation (Juan Nakpil v. United Construction Co., Inc. v. CA, G.R. No. L-47851, Apr. 15, 1988) VI. Nature and Effect of ObligationsRemedies (also see Article 1175, 1176 and 1178) Specific Performance (Article 1177)

Article 1177. The creditors, after having pursued the property in possession of the debtor to satisfy their claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are inherent in his person; they may also impugn the acts which the debtor may have done to defraud them. (1111)

What are the remedies in connection with specific performance? 1. Exhaustion of the properties of the debtor (not exempt from attachment under the law) 2. Accion subrogatoria (subrogatory action) an indirect action brought in the name of the debtor by the creditor to enforce the formers rights except: a. personal rights of the debtor b. rights inherent in the person of the debtor c. properties exempt from execution (e.g .family home) 3. Accion pauliana (rescissory action) an action to impugn or assail the acts done or contracts entered into by the debtor in fraud of his creditor.

VI. Nature and Effect of ObligationsRemedies (also see Article 1175, 1176 and 1178) Rescission (Article 1191)

Rescission under Article 1191 refers to the cancellation of the contract or reciprocal obligation in case of breach on the part of one, which breach is violative of the reciprocity between the parties. This is properly called resolution. Note: The rescission under Art. 1380 is rescission based on lesion or fraud upon creditors. May an injured party avail of both fulfillment and rescission as remedy? GR: The injured party can only choose between fulfillment and rescission of the obligation, and cannot have both. Exception: If fulfillment has become impossible, Article 1191 allows the injured party to seek rescission even after he has chosen fulfillment. (Ayson-Simon v. Adamos,G.R. No. L-39378, Aug. 28 1984) VI. Nature and Effect of ObligationsRemedies (also see Article 1175, 1176 and 1178) Damages (Article 1170) Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. (1101)

When does liability for damages arise? Those liable under Art. 1170 shall pay damages only if aside from the breach of contract, prejudice or damage was caused (Berg v. Teus, G.R. No. L-6450, Oct 30, 1954). Note: If action is brought for specific performance, damages sought must be asked in the same action; otherwise the damages are deemed waived (Daywalt v. Augusitinian Corp, 39 Phil 567). VI. Nature and Effect of ObligationsRemedies (also see Article 1175, 1176 and 1178) Damages (Article 1170) : Bar Question Roland, a basketball star, was under contract for one year to play-for-play exclusively for Lady Love, Inc. However, even before the basketball season could open, he was offered a more attractive pay plus fringes benefits by Sweet Taste, Inc.Roland accepted the offer and transferred to Sweet Taste.Lady Love sues Roland and Sweet Taste for breach of contract. Defendants claim that the restriction to play for Lady Love alone is void, hence, unenforceable, as it constitutes an undue interference with the right of Roland to enter into contracts and the impairment of his freedom to play and enjoy basketball.Can Roland be bound by the contract he entered into with Lady Love or can he disregard the same? Is he liable at all?How about Sweet Taste? Is it liable to Lady Love?Answer using Art. 1159: Roland is bound by the contract he entered into with Lady Love and he cannot disregard the same, under the principles of obligatoriness of contracts. Obligations arising from contracts have the force of law between the parties.Answer using Art. 1170: Yes, Roland is liable under the contract as far as Lady Love is concerned. He is liable for damages under Article 1170 of the Civil Code since he contravened the tenor of his obligation.Not being a contracting party, Sweet Taste is not bound by the contract but it can be held liable under Art. 1314. The basis of its liability is not prescribed by contract but is founded on quasi-delict, assuming that Sweet Taste knew of the contract. Article 1314 of the Civil Code provides that any third person who induces another to violate his contract shall be liable for damages to the other contracting party.VI. Nature and Effect of ObligationsSubsidiary RemediesAccion SubrogatoriaAccion subrogatoria is an action whereby the creditor whose claim had not been fully satisfied, may go after the debtors (third persons) of the defendant-debtor. Requisites of accion subrogatoria: 1. The debtors assets must be Insufficient to satisfy claims against him; 2. The creditor must have Pursued all properties of the debtor subject to execution; 3. The right of action must Not be purely personal; and 4. The debtor whose right of action is exercised must be Indebted to the creditor. Note: Accion subrogatoria is different and distinct from active subjective subrogation governed by Articles 1300 to 1304. In the latter, there is change of creditors whereas in the former there is no change of creditors; the creditor merely acts in the name and for the account of the debtor after exhausting the assets of the latter but not enough to satisfy the claims of the creditor.

VI. Nature and Effect of ObligationsSubsidiary RemediesAccion PaulianaAccion pauliana is an action where the creditor files an action in court for the rescission of acts or contracts entered into by the debtor designed to defraud the former. Note: When the creditor could not collect in any manner, accion pauliana may be resorted by him to rescind a fraudulent alienation of property (Regalado, v. Luchsinger and Co., 5 Phil 625). Requisites of accion pauliana? 1. Defendant must be Indebted to plaintiff; 2. The fraudulent act performed by the debtor subsequent to the contract gives Advantage to another; 3. The creditor is Prejudiced by such act; 4. The creditor must have Pursued all properties of the debtor subject to execution; and 5. The creditor has no other Legal remedy. VI. Nature and Effect of ObligationsSubsidiary RemediesAccion DirectaAccion directa is the right of a person to go directly against another who has no privity to the contract. (Arts. 1652, 1608, 1729, 1893) 1) Art. 1652 subsidiary liability of sublessee for the rent. 2) Art. 1608 right of sellers a retro to redeem property from persons other than the buyer a retro. 3) Art. 1729 subsidiary liability of owners to laborers and material men. 4) Art. 1893 the principal may sue the substitute of the agent with respect to the obligations which the substitute has contracted under the substitution.

VI. Nature and Effect of ObligationsPure Obligations (Article 1179)

Article 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once. Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event.

VII. Kinds of Civil ObligationsB. Conditional Obligations (also see Article 1181, 1183-1186, and 1192)Suspensive Condition (Article 1187 to 1189) A condition the fulfillment of which will give rise to the acquisition of a right. While the condition has not arrived yet, in the meantime, the rights and obligations of the parties are suspended. Note: In suspensive condition or condition precedent, the efficacy or the obligatory force is subordinated to the happening of a future and uncertain event; if the suspensive condition does not take place the parties would stand as if the conditional obligation never existed. (Gaite v. Fonacier, 2 SCRA 830; Cheng v. Genato, 300 SCRA 722; Pineda, Obligations and Contracts, 2000, ed. p. 76)

VII. Kinds of Civil ObligationsB. Conditional Obligations (also see Article 1181, 1183-1186, and 1192)Suspensive Condition (Article 1187 to 1189) What are the effects of fulfillment of the suspensive condition? 1. Real obligations: GR: Retroacts to the day of the constitution of the obligation. Exceptionss: There is no retroactive effect with respect to the fruits and interest: a. In reciprocal obligations, the fruits and interests shall be deemed to have been mutually compensated; b. In unilateral obligations, the debtor appropriates the fruits and interest received before the fulfillment of the condition unless contrary to the intention of the parties (Art. 1187) 2. Personal obligations- the court determines the retroactive effect of the condition fulfilled (Art. 1187)VII. Kinds of Civil ObligationsB. Conditional Obligations (also see Article 1181, 1183-1186, and 1192)Resolutory Condition (Article 1190)Bar Question (1999)In 1997, Manuel bound himself to sell Eva a house and lot which is being rented by another person, if Eva passes the 1998 bar examinations. Luckily for Eva, she passed said examinations.(a) Suppose Manuel had sold the same house and lot to another before Eva passed the 1998 bar examinations, is such sale valid? Why? (2%)(b) Assuming that it is Eva who is entitled to buy said house and lot, is she entitled to the rentals collected by Manuel before she passed the 1998 bar examinations? Why? (3%)(a) Yes, the sale to the other person is valid as a sale with a resolutory condition because what operates as a suspensive condition for Eva operates a resolutory condition for the buyer.Yes, the sale to the other person is valid. However, the buyer acquired the property subject to a resolutory condition of Eva passing the 1998 Bar Examinations. Hence, upon Eva's passing the Bar, the rights of the other buyer terminated and Eva acquired ownership of the property. The sale to another person before Eva could buy it from Manuel is valid, as the contract between Manuel and Eva is a mere promise to sell and Eva has not acquired a real right over the land assuming that there is a price stipulated in the contract for the contract to be considered a sale and there was delivery or tradition of the thing sold.(b) No, she is not entitled to the rentals collected by Manuel because at the time they accrued and were collected, Eva was not yet the owner of the property.Assuming that Eva is the one entitled to buy the house and lot, she is not entitled to the rentals collected by Manuel before she passed the bar examinations. Whether it is a contract of sale or a contract to sell, reciprocal prestations are deemed imposed A for the seller to deliver the object sold and for the buyer to pay the price. Before the happening of the condition, the fruits of the thing and the interests on the money are deemed to have been mutually compensated under Article 1187.Under Art. 1164, there is no obligation on the part of Manuel to deliver the fruits (rentals) of the thing until the obligation to deliver the thing arises. As the suspensive condition has not been fulfilled, the obligation to sell does not arise.VII. Kinds of Civil ObligationsB. Conditional Obligations (also see Article 1181, 1183-1186, and 1192)Potestative Condition (Article 1182) A condition said to be potestative when the condition depends upon the will of one of the contracting parties (Art. 1182).Bar Question (2000)Pedro promised to give his grandson a car if the latter will pass the bar examinations. When his grandson passed the said examinations, Pedro refused to give the car on the ground that the condition was a purely potestative one. Is he correct or not?No, he is not correct. First of all, the condition is not purely potestative, because it does not depend on the sole will of one of the parties. Secondly, even if it were, it would be valid because it depends on the sole will of the creditor (the donee) and not of the debtor (the donor).

VII. Kinds of Civil ObligationsB. Conditional Obligations (also see Article 1181, 1183-1186, and 1192)Causal ConditionCasual condition is the performance or the fulfillment of the condition which depends upon chance and/or the will of a third person. Mixed condition is the performance or fulfillment of the condition which depends partly upon the will of a party to the obligation and partly upon chance and or the will of a third person. The status of casual and mixed conditions? Casual and mixed conditions, unlike purely potestative conditions, are VALID.

VII. Kinds of Civil ObligationsB. Conditional Obligations (also see Article 1181, 1183-1186, and 1192)Causal ConditionBar Question (2003)Are the following obligations valid, why, and if they are valid, when is the obligation demandable in each case? a) If the debtor promises to pay as soon as he has the means to pay; b) If the debtor promises to pay when he likes;c) If the debtor promises to pay when he becomes a lawyer; d) If the debtor promises to pay if his son, who is sick with cancer, does not die within one year. 5%

(a) The obligation is valid. It is an obligation subject to an indefinite period because the debtor binds himself to pay when his means permit him to do so (Article 1180, NCC).When the creditor knows that the debtor already has the means to pay, he must file an action in court to fix the period, and when the definite period as set by the court arrives, the obligation to pay becomes demandable (Article 1197, NCC).(b) The obligation to pay when he likes is a suspensive condition the fulfillment of which is subject to the sole will of the debtor and, therefore the conditional obligation is void. (Article 1182, NCC).(c) The obligation is valid. It is subject to a suspensive condition, i.e. the future and uncertain event of his becoming a lawyer. The performance of this obligation does not depend solely on the will of the debtor but also on other factors outside the debtors control.(d) The obligation is valid. The death of the son of cancer within one year is made a negative suspensive condition to his making the payment. The obligation is demandable if the son does not die within one year (Article 1185, NCC).VII. Kinds of Civil ObligationsB. Conditional Obligations Bar Question (1997)In two separate documents signed by him, Juan Valentino "obligated" himself each to Maria and to Perla, thus - 'To Maria, my true love, I obligate myself to give you my one and only horse when I feel like It." - and -'To Perla, my true sweetheart, I obligate myself to pay you the P500.00 I owe you when I feel like it." Months passed but Juan never bothered to make good his promises. Maria and Perla came to consult you on whether or not they could recover on the basis of the foregoing settings. What would your legal advice be?I would advise Maria not to bother running after Juan for the latter to make good his promise. [This is because a promise is not an actionable wrong that allows a party to recover especially when she has not suffered damages resulting from such promise. A promise does not create an obligation on the part of Juan because it is not something which arises from a contract, law, quasi-contracts or quasidelicts (Art, 1157)].Under Art. 1182, Juan's promise to Maria is void because a conditional obligation depends upon the sole will of the obligor.As regards Perla, the document is an express acknowledgment of a debt, and the promise to pay what he owes her when he feels like it is equivalent to a promise to pay when his means permits him to do so, and is deemed to be one with an indefinite period under Art. 1180. Hence the amount is recoverable after Perla asks the court to set the period as provided by Art. 1197, par. 2.VII. Kinds of Civil ObligationsC. Obligation with a Period (Article 1180 and 1193 to 1198) Obligation with a period or a term is the obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes. (Art. 1193)Bar Question:In a deed of sale of a realty, it was stipulated that the buyer would construct a commercial building on the lot while the seller would construct a private passageway bordering the lot.The building was eventually finished but the seller failed to complete the passageway as some of the squatters, who were already known to be there at the time they entered into the contract, refused to vacate the premises. In fact, prior to its execution, the seller filed ejectment cases against the squatters. The buyer now sues the seller for specific performance with damages. The defense is that the obligation to construct the passageway should be with a period which, incidentally, had not been fixed by them, hence, the need for fixing a judicial period. Will the action for specific performance of the buyer against the seller prosper?No, the action for specific performance filed by the buyer is premature under Art. 1197 of the Civil Code. If a period has not been fixed although contemplated by the parties, the parties themselves should fix that period, failing in which, the Court maybe asked to fix it taking into consideration the probable contemplation of the parties. Before the period is fixed, an action for specific performance is premature.

VII. Kinds of Civil ObligationsD. Alternative Obligation/Facultative Obligation (ARTICLE 1199 to 1206)

Alternative obligation is one where the debtor is alternatively bound by different prestations but the complete performance of one of them is sufficient to extinguish the obligation. Facultative obligation is one where the debtor is bound to perform one prestation or to deliver one thing with a reserved right to choose another prestation or thing as substitute for the principal.VII. Kinds of Civil ObligationsD. Alternative Obligation/Facultative Obligation (ARTICLE 1199 to 1206)

VII. Kinds of Civil ObligationsFACULTATIVE OBLIGATIONSALTERNATIVE OBLIGATIONSNumber of prestation Only one object is due Several objects are due Manner of compliance May be complied with by substitution of one that is due May be complied with by fulfilling any of thos Right to choice Choice pertains only to debtor GR: Choice pertain to debtor XPN: Expressly granted to creditor or third person Effect of fortuitous loss Fortuitous loss extinguishes the obligation Fortuitous loss of all prestation will extinguish the obligation Effect of culpable loss Culpable loss obliges the debtor to deliver substitute prestation without liability to debtor Culpable loss of any object due will give rise to liability to debtor Liability of the debtorSubstitution has been made and communicated to the creditor, the obligor is liable for the loss of the thing on account of delay, negligence or fraud The creditor shall have the right of indemnity for damages when, through the fault of the debtor, all the things which are alternatively the object of the obligation have been lost or the compliance of the obligation has become impossible. Void prestation If principal obligation is void, the creditor cannot compel delivery of the substitute If one prestation is void, the others free from vices preserve the validity of the obligation Impossibility of prestation If there is impossibility to deliver the principal thing or prestation, the obligation is extinguished, even if the substitute obligation is valid If various prestations are impossible to perform except one, this one must be delivered. If all prestations are impossible to perform, the obligation is extinguished Loss of substitute Loss of substitute before the substitution through the fault of the debtor doesnt make him liable Where the choice is given to the creditor, the loss of the alternative through the fault of the debtor renders him liable for damages E. Joint and Solidary Obligation (Article 1207 to 1208) Joint and Solidary Obligations (Article 1208) Joint obligations is one where the credit or debt shall be presumed to be divided into as many equal shares as there are creditors or debtors, the credit or debts being considered distinct from one another (Art. 1208). It is where each debtor is liable only for a proportionate part of the debt and each creditor is entitled only to a proportionate part of the credit. Solidary obligations is one where each of the debtors obliges to pay the entire obligation, and where each one of the creditors has the right to demand from any of the debtors, the payment or fulfillment of the entire obligation (Art. 1207; Pineda, Obligations and Contracts, 2000 ed, p. 139).Chua bought and imported to the Philippines dicalcium phosphate. When the cargo arrived at the Port of Manila, it was discovered that some were in apparent bad condition. Thus, Chua filed with Smith, Bell, and Co., Inc., the claim agent of First Insurance Co., a formal statement of claim for the loss. No settlement of the claim having been made, Chua then filed an action. Is Smith, Bell, and Co., solidarily liable upon a marine insurance policy with its disclosed foreign principal? No. Article 1207 of the Civil Code clearly provides that "there is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity." The well-entrenched rule is that solidary obligation cannot lightly be inferred. It must be positively and clearly expressed (Smith, Bell & Co., Inc. v. CA, G.R. No. 110668, Feb. 6, 1997).VII. Kinds of Civil ObligationsE. Joint and Solidary Obligation (Article 1207 to 1208) Joint Indivisible Obligations (Article 1209) Article 1209. If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the others shall not be liable for his share. What is the effect of breach of a joint indivisible obligation by one debtor? If one of the joint debtors fails to comply with his undertaking, the obligation can no longer be fulfilled or performed. It is converted into one of indemnity for damages. Innocent joint debtor shall not contribute to the indemnity beyond their corresponding share of the obligation.VII. Kinds of Civil ObligationsE. Joint and Solidary Obligation Solidary Obligations What is the effect of solidary obligation? Each one of the debtors is obliged to pay the entire obligation, and each one of the creditors has the right to demand from any of the debtors the payment or fulfillment of the entire obligation.Rules in a solidary obligation:1. Anyone of the solidary creditors may collect or demand payment of the whole obligation; there is mutual agency among solidary debtors (Arts. 1214, 1215) 2. Any of the solidary debtor may be required to pay the whole obligation; there is mutual guaranty among solidary debtors (Arts. 1216, 1217, 1222) 3. Each one of solidary creditors may do whatever maybe useful to the others, but not anything prejudicial to them (Art. 1212); however, any novation, compensation, confusion or remission of debt made by any solidary creditors or with any of the solidary debtors shall extinguish the obligation without prejudice to his liability for the shares of other solidary creditors (Art. 1215; Art.1219).

VII. Kinds of Civil ObligationsE. Joint and Solidary Obligation Solidary Obligations Joey, Jovy and Jojo are solidary debtors under a loan obligation of P300,000.00 which has fallen due. The creditor has, however, condoned Jojo's entire share in the debt. Since Jovy has become insolvent, the creditor makes a demand on Joey to pay the debt. 1. How much, if any, may Joey be compelled to pay? 2. To what extent, if at all, can Jojo be compelled by Joey to contribute to such payment? (1998 Bar Question) 1. Joey can be compelled to pay only the remaining balance of P200, 000, in view of the remission of Jojos share by the creditor. (Art. 1219) 2. Jojo can be compelled by Joey to contribute P50,000. When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each (par. 3, Art. 1217). Since the insolvent debtor's share which Joey paid was P100, 000, and there are only two remaining debtors - namely Joey and Jojo - these two shall share equally the burden of reimbursement. Jojo may thus be compelled by Joey to contribute P50, 000.

VII. Kinds of Civil ObligationsF. Divisible and Indivisible Obligations (Article 1223 to 1225)

What is the true test in determining divisibility? Whether or not the prestation is susceptible of partial performance, not in the sense of performance in separate or divided parts, but in the sense of the possibility of realizing the purpose which the obligation seeks to obtain. If a thing could be divided into parts and as divided, its value is impaired disproportionately, that thing is indivisible (Pineda, Obligations and Contracts, 2000 ed, p. 174).VII. Kinds of Civil ObligationsG. Obligations with a Penal Clause (Article 1226 to 1230) Penal clause is an accessory obligation or undertaking attached to the principal obligation to assure greater responsibility in case of breach. Note: Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded (Art. 1228). Can the debtor just choose penalty over non-fulfillment? GR: No. The debtor cannot exempt himself from the performance of the obligation by paying the penalty (Art. 1227). Exception: Yes, when the right has been expressly reserved to the debtor (Art. 1227). Can the creditor demand both the fulfillment of the principal obligation and the penalty? GR: No. The creditor cannot demand the fulfillment of the obligation and the satisfaction of the penalty at the same time (Art. 1227). Excetions: 1. When the right has been clearly granted to him; 2. If the creditor has decided to require the fulfillment of the obligation, the performance thereof should become impossible without his fault, the penalty may be enforced. (Art. 1227) What is the effect of incorporating a penal clause in an obligation? GR: The penalty fixed by the parties is a compensation or substitute for damages in case of breach. Exceptions: Damages shall still be paid even if there is a penal clause if: SRG 1. there is a Stipulation to the contrary 2. the debtor Refuses to pay the agreed penalty 3. the debtor is Guilty of fraud in the fulfillment of the obligation. (Art. 1126) Note: The nullity of the penal clause does not carry with it that of the principal obligation. The nullity of the principal obligation carries with it that of the penal clause. (Art. 1230)

VII. Kinds of Civil Obligations