Law Reviewer

7/25/2019 Law Reviewer

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&eriod and (ondition !istinguished:As to fulfillment - period is a certain event which must happen sooner or later while acondition is an uncertain event.

As to time a period refers only to the future while a condition may refer to a past un)nownevent.

As to influence or effect on the obligation the period fixes the time of the effectivity of theobligation while a condition may cause the demandability of the obligation to arise or toterminate.

Example: 2leina promised to ac) that she will buy and give him an Ibane4 -stringguitar on une , #3#. 5hen une , #3# come, 2leina6s obligation to give will bedemandable.

Art. 119*. n case of loss, deterioration or improvement of the thing before the arrival ofthe day certain, the rules in Article 11$9 shall be observed. (n+

Effect of loss, deterioration, or improvement before the arrival of period.

lso refer to rticle 7, 8((.

Example: If ndrew was suppose to deliver to %rian a particular car on !ec. 7,#3 but the car was destroyed by fortuitous event in uly , #3, the obligation isextinguished.

Art. 119%. Anything paid or delivered before the arrival of the period, the obligor beingunaware of the period or believing that the obligation has become due and demandable,

may be recovered, with the fruits and interests. (11)4a+Effect /f &ayment %efore rrival of &eriod

This article which is similar to rticle , 8((, in an obligation to give, allows therecovery of what has been paid by mista)e before the fulfillment of a suspensivecondition.

Example: Erin owes 9rant ,333.33, which was supposed to be paid on !ecember #this year. %y mista)e, Erin paid his obligation on !ecember # last year. ssuming thattoday is only une ;3, Erin can recover the amount plus interest therein. %ut Erin cannotrecover, except the interest, if the debt had already matured or if Erin had )nowledge ofthe period.

Art. 1194. 5henever in an obligation a period is designated, it is presumed to have beenestablished for the benefit of both the creditor and the debtor, unless from the tenor ofthe same or other circumstances it should appear that the period has been established infavor of one or of the other. (11)6+

&resumption as to benefit of a &eriod: The general rule is that when a period is fixed bythe parties, the period is presumed to be for the benefit of both creditor and debtor.5hich means that before the expiration of the period, the debtor may not fulfill theobligation and neither the creditor demands its fulfillment interest per annum from2eo for one year. ac) has a period of one year within which to use themoney, while 2eo will benefit from the interest which the money will earn.

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#. =or the benefit of the creditorExample: ac) executes a promissory note in favor of 2eo which reads: ?Ipromise to pay 2eo for order the amount of &3,333 on demand. Thus, 2eocan demand payment from ac) anytime.

;. =or the benefit of debtorExample: ac) executes a promissory note which reads: ?I promise to pay2eo for order the amount of & 3,333 or before !ecember ;, #33. ac)can pay her obligation on or before !ec. ;, #33.

Art. 1196. f the obligation does not fi! a period, but from its nature and thecircumstances it can be inferred that a period was intended, the courts may fi! theduration thereof.

The courts shall also fi! the duration of the period when it depends upon the will of thedebtor.

n every case, the courts shall determine such period as may under the circumstanceshave been probably contemplated by the parties. 0nce fi!ed by the courts, the periodcannot be changed by them. (11)$a+

(ourt 9enerally is 5ithout &ower to =ix a &eriod

If an obligation does not state a judicial period and no period is intended, the court is notauthori4ed to fix a period. The courts have no right to ma)e contracts for the parties.

Exceptions:

. If the obligation does not fix a period but it can be inferred from its nature andcircumstances that a period is intended.

Example: @teff sold a parcel of land to bing with a right of repurchase. 8o term isspecified in the contract for the exercise of the right. Then, the court is authori4ed to fixthe period to repurchase.

#. If the duration of the period depends upon the sole will of the debtor

Example: I will pay you as soon as possible. 'ere, the period is not fixed, so the courtmay fix the same because if this is not so the obligation may never be complied with bythe debtor.

Art. 119$. The debtor shall lose every right to make use of the period7

(1+ 5hen after the obligation has been contracted, he becomes insolvent, unless he givesa guaranty or security for the debt8

()+ 5hen he does not furnish to the creditor the guaranties or securities which he haspromised8

(#+ 5hen by his own acts he has impaired said guaranties or securities after theirestablishment, and when through a fortuitous event they disappear, unless heimmediately gives new ones e"ually satisfactory8

(*+ 5hen the debtor violates any undertaking, in consideration of which the creditoragreed to the period8

(%+ 5hen the debtor attempts to abscond. (11)9a+

The general rule is that the obligation is not demandable before the lapse of the period. Theexceptions are based on the fact that the debtor might not be able to comply with hisobligation:


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The debtor cannot choose those prestations which are:

a+ Impossible Example: 2leina promised to deliver to ac) 33 sac)s of rice or astone from 1ranus. 2leina cannot chose to deliver the stone coming from 1ranusas it is physically impossible.

b+ nlawful Example: ac) obliged herself to deliver to 2leina a )ilo of shabu or aparcel of land. ac) can choose only the delivery of parcel of land.

c+ !ould not have been the ob"ect of the obligation Example: 2leina borrowed fromac) &3,333. It was agreed that 2leina would give ac) her horse or her9erman &iano. 8ow, 2leina has two horses, a race horse worth &3,333 and anordinary horse which is worth for only &,333. 9aya cannot choose the ordinaryhorse, since it is not the horse which 2leina promised.

d+ #nly one prestation is practicable *rt. #3#+ D Example: 2leina will deliver toac) her carabao, or her horse or her refrigerator. Through no fault of 2leina, thehorse and the carabao were lost by fortuitous event. 2leina can only delivery therefrigerator which is the only one practicable.

Art. 1)1. The choice shall produce no effect e!cept from the time it has beencommunicated. (11##+

$ight of (hoice Bust be communicated D

1ntil the choice is made and communicated, the communicated, the obligation remainsalternative. /nce the notice to the effect that a choice is made, the obligation ceases tobe alternative and becomes a simple obligation.

5here the choice has been expressly given to the creditor, such choice shall li)ewiseproduce legal effects upon being communicated to the debtor. *rt. #3, par. +

Example: 2leina promised to give to ac) her 8etboo), or her Ipad or her mountain bi)e days from now. @he6s told some of ac)6s friend that she will give the netboo). 5henthe obligation was due, 2leina expressly communicated to ac) to give the mountainbi)e. The choice of giving the mountain bi)e is binding to 2leina.

Art. 1)). The debtor shall lose the right of choice when among the prestations wherebyhe is alternatively bound, only one is practicable. (11#*+

Example: ander obliged to give Furi either object or object % or object (. If objects and % are lost by fortuitous event before choice can be made, ander can deliver onlyobject (, because the obligation has become a simple one. If later, object ( is alsodestroyed by a fortuitous event, the obligation is extinguished, and ander would not beliable in any way.

Art. 1)#. f through the creditor:s acts the debtor cannot make a choice according to theterms of the obligation, the latter may rescind the contract with damages. (n+

5hen debtor may rescind contract: If through the creditor6s fault, the debtor cannot

made a choice according to the terms of the obligation the debtor is given the right torescind and recover damages.

Example: 9uno borrowed from Tonix &, 333.33. It was agreed that instead of &, 333,9uno could deliver a TC set or a refrigerator or a piano. If through the fault of Tonix, theTC set was destroyed, 9uno can rescind the contract if she wants. In case of rescission,the amount of & , 333.33 must be returned by 9uno with interest. Tonix, in turn, mustpay 9uno the value of the TC set plus damages.


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Art. 1)*. The creditor shall have a right to indemnity for damages when, through thefault of the debtor, all the things which are alternatively the object of the obligation havebeen lost, or the compliance of the obligation has become impossible.

The indemnity shall be fi!ed taking as a basis the value of the last thing whichdisappeared, or that of the service which last became impossible.

;amages other than the value of the last thing or service may also be awarded. (11#%a+

5hen right of choice is with debtor and all prestations were lost D

This article entitles the creditor to indemnity for damages when all the alternative objectsare lost through the fault of the debtor before he has made his choice. The indemnity forwhich the creditor is entitled shall be based on the value of the last thing whichdisappeared or lost or the compliance of the obligation has become impossible.

Example: ander obliged to give Furi either object or object % or object (. If all objects

were lost through the acts of the debtor event before choice can be made, ander isliable to pay Furi an amount e0ual to the last thing lost to be paid with damages.

Art. 1)%. 5hen the choice has been e!pressly given to the creditor, the obligation shallcease to be alternative from the day when the selection has been communicated to thedebtor.


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Example D Tonix and @)ai are solidary debtors of ac) in the amount of & 3,333

#. Active solidarity on the part of the creditors, where anyone of them can demand thefulfillment of the entire obligation.

Example D Tonix is liable to @)ai and ac) for the amount of &3,333. @)ai and ac)

are solidary creditors.

;. *i+ed olidarity solidarity on the part of the debtors and creditors where each one ofthe debtors is liable to render and each one of the creditors has a right to demand, entirecompliance with the obligation.

Example D Tonix and @)ai are solidarity debtors to ac) and !ann, solidary creditorsin the amount of & 3,333.

@olidarity not presumed D The presumption, where there are two or more persons in thesame obligation, is that it is joint. The reason is that solidary obligations are veryburdensome for they create unusual rights and liabilities. @olidarity between debtorsincreases their responsibility while solidarity between creditors presuming that they are

bound jointly and not solidarily.

Art. 1)9. f the division is impossible, the right of the creditors may be prejudiced onlyby their collective acts, and the debt can be enforced only by proceeding against all thedebtors. f one of the latter should be insolvent, the others shall not be liable for hisshare. (11#9+

Indivisible oint /bligation D The object is indivisible and the TKE between the parties aremerely proportionately liable.

Example D 2leina and $ia are jointly liable to give Emi a particular car. The obligation is joint

but since the object is indivisible, the creditor must proceed against all the joint debtor. If anyof the joint debtors be insolvent, the others shall not be liable for others.

Art. 1)1. The indivisibility of an obligation does not necessarily give rise to solidarity.or does solidarity of itself imply indivisibility. (n+

Indivisibility as !istinguished from @olidarity D Indivisibility refers to the subject matterwhile solidarity refers to the Tie between the parties.

Examples:

oint divisible obligation D bing and $oniel are jointly liable to (anoy for &3, 333.oint indivisible obligation D 2leina and $ia are jointly liable to give (anoy their car.

@olidary divisible obligation D Emi and 2leina are solidarily liable to give $ia &3, 333.

@olidary indivisible obligation D @aj and Emi are solidarily liable to give !ean their car.

Art. 1)11. -olidarity may e!ist although the creditors and the debtors may not be boundin the same manner and by the same periods and conditions. (11*+

The solidary character of the obligation is not destroyed even if the creditors and debtors

are bound by different terms and conditions. The solidarity is still preserved byrecogni4ing in the creditor the power of claiming from any or all debtors the payment ofthe entire obligation.

Example: ac) and 2leina solidarily bound themselves to pay a total of &3,333 to$ia, and Emi and @aj to the following conditions. $ia6s share will be due at the end ofthe year" Emi will get her share only after she passes the (& exams and @aj will gethis share only after he painted the house of $ia.


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Art. 1)1). ach one of the solidary creditors may do whatever may be useful to theothers, but not anything which may be prejudicial to the latter. (11*1a+

Art. 1)1#. A solidary creditor cannot assign his rights without the consent of the others.

(n+

@olidary (reditors Bay !o 1seful ct" 8ot &rejudicial cts D solidary creditor may doany act beneficial or useful to the others but he cannot act prejudicial to them.

Example of %eneficial cts D To interrupt the running of prescription, the act of onesolidary creditor in ma)ing a judicial demand upon any of the solidary debtors issufficient. *rt. , 8((+

Example of &rejudicial cts D @hould not be performed, otherwise, there will beliability for damages. 'owever, in the case of remission or condonation, the solidarycreditor is allowed to so remit, and the obligation is extinguished.

Art. 1)1*. The debtor may pay any one of the solidary creditors8 but if any demand,judicial or e!trajudicial, has been made by one of them, payment should be made to him.(11*)a+

&ayment to ny of the @olidary (reditors: The rule is that the debtor may pay any one ofthe creditors. %ut when a demand is made by any of the creditors, payment should bemade to him who made the demand, judicially or extra-judicially.

Example: is liable to % and ( &, 333. may pay either % or ( %ut if % made ademand then payment should only be made to him. If paid (, % is still entitledto his share from in case ( does not turn over to % his share.

Art. 1)1%. ovation, compensation, confusion or remission of the debt, made by any ofthe solidary creditors or with any of the solidary debtors, shall e!tinguish the obligation,without prejudice to the provisions of Article 1)19.

The creditor who may have e!ecuted any of these acts, as well as he who collects thedebt, shall be liable to the others for the share in the obligation corresponding to them.(11*#+

2iability of @olidary (reditor in case of 8ovation, (ompensation, (onfusion or $emission D

5hen a creditor who executed any of these acts, it is logical that he is liable to theother solidary creditors for their corresponding shares considering that such acts areprejudicial to them. *rt. ##, 8((+

Art. 1)14. The creditor may proceed against any one of the solidary debtors or some orall of them simultaneously. The demand made against one of them shall not be anobstacle to those which may subse"uently be directed against the others, so long as thedebt has not been fully collected. (11**a+

(reditor Bay &roceed gainst ny @olidary !ebtor D In a solidary obligation, the creditormay proceed against any, some or all of the solitary creditors simultaneously so long as it

has not been fully collected.

Example: patric), %atonix and (ajac) solidarily owe !aleo the amount of &7,333.!aleo can collect from patric) or %atonix or (ajac) alone or from any two of them or allof them simultaneously. If demand is made on patric), the latter cannot re0uire !aleoto ma)e a demand also on %atonix and (ajac) or to include them as party defendantsas !aleo has the right to proceed against any one of them.



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Art. 1)16. 3ayment made by one of the solidary debtors e!tinguishes the obligation. ftwo or more solidary debtors offer to pay, the creditor may choose which offer to accept.

He who made the payment may claim from his co2debtors only the share whichcorresponds to each, with the interest for the payment already made. f the payment ismade before the debt is due, no interest for the intervening period may be demanded.

5hen one of the solidary debtors cannot, because of his insolvency, reimburse his shareto the debtor paying the obligation, such share shall be borne by all his co2debtors, inproportion to the debt of each. (11*%a+

Effects of &ayment by a @olidary !ebtor D &ayment is one of the ways by which anobligation is extinguished and consist in the delivery of the thing or the rendition of theservice which is the object of the obligation.

Example D lleina, %aria and (alila are solidarily liable to !ann and Etonix in theamount of &7,333 due on !ec. ;. If both lleina and %aria offer to pay !ann on!ec. ;, the latter may choose which offer to accept. If lleina pays the entireamount of &7,333 on !ec. ;, the obligation is extinguished.

The payment of gives him the right of reimbursement from % and ( &;, 333 each withinterest from the date of payment. 'owever, if ( is insolvent, both and % shall bear theinsolvency in proportion to their shares.

Art. 1)1$. 3ayment by a solidary debtor shall not entitle him to reimbursement from hisco2debtors if such payment is made after the obligation has prescribed or become illegal.(n+

Effect of &ayment fter /bligation 'as &rescribed or %ecome Illegal D

&rescription D is one where one ac0uires ownership and other rights through thelapse of time in the manner and under the conditions laid down by law.

Example D jac) and %atonix are solidarily indebted to (alliena in the amount of& 3,333. The debt prescribed. If jac) paid the debt, he cannot collect form%atonix his share of the debt. 8either can jac) can recover from (alleina.

%ecomes Illegal D jac) and %atonix are solidarily bound to deliver medical drugs to(alliena. the transaction of such medical drugs were later prohibited by law.8otwithstanding the prohibition, %atonix performed the obligation by delivering theprohibited drugs. %atonix is not anymore entitled to reimbursement from jac).

Art. 1)19. The remission made by the creditor of the share which affects one of thesolidary debtors does not release the latter from his responsibility towards the co2debtors, in case the debt had been totally paid by anyone of them before the remissionwas effected. (11*4a+

Example: ac) and 2leina solidarily owe $ia &,333,333. ac) paid $ia the wholeamount. 2ater $ia remitted 2leina6s share. (an ac) still recover reimbursement of&33,333 from 2leina< Fes.

Art. 1)). The remission of the whole obligation, obtained by one of the solidary debtors,does not entitle him to reimbursement from his co2debtors. (n+

$emission by (reditor D

.+ If payment if made first, the remission is of no effect. There is no more to remit.

#.+ If remission is made prior to the payment and payment is made, then there ispayment by mista)e.


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Art. 1))#. The divisibility or indivisibility of the things that are the object of obligations inwhich there is only one debtor and only one creditor does not alter or modify theprovisions of /hapter ) of this Title. (11*9+

. divisible obligation is one the object of which in its delivery or performance is capableof partial fulfillment.

Example: ntonio agreed to pay @)y &3,333 in five monthly installments. Theobligation of ntonio is divisible because it is payable in partial payments.

#. n indivisible obligation is one the object which in its delivery or performance is notcapable of partial fulfillment.

Example: ntonio agreed to deliver a determinate car to @)y on !ec. ;. This is anindivisible obligation because it is not subject to partial performance.

Art. 1))*. A joint indivisible obligation gives rise to indemnity for damages from the time

anyone of the debtors does not comply with his undertaking. The debtors who may havebeen ready to fulfill their promises shall not contribute to the indemnity beyond thecorresponding portion of the price of the thing or of the value of the service in which theobligation consists. (11%+

Art. 1))%. @or the purposes of the preceding articles, obligations to give definite thingsand those which are not susceptible of partial performance shall be deemed to beindivisible.

5hen the obligation has for its object the e!ecution of a certain number of days of work,the accomplishment of work by metrical units, or analogous things which by their natureare susceptible of partial performance, it shall be divisible.

However, even though the object or service may be physically divisible, an obligation isindivisible if so provided by law or intended by the parties.

n obligations not to do, divisibility or indivisibility shall be determined by the characterof the prestation in each particular case. (11%1a+

/bligations !eemed Indivisible D The general rule of determining the divisibility orindivisibility of an obligation depend on the purpose of the obligation.

. /bligation to give definite things

Example: To give a particular house. 'ere the obligation is indivisible because of thenature of the subject matter.

#. /bligations which are not susceptible of partial performance

Example: @aj is obliged to sing a song. 'ere the obligation is indivisible by reasonits purpose which re0uires the performance of all the parts.

;. /bligation provided by law to be indivisible even if thing or service physically divisible.

Example: Taxes should be paid within a definite period. lthough money is physicallydivisible, the amount of tax payable must be delivered in Toto, not partially.

G. /bligations intended by the parties to be indivisible even if thing or service is physicallydivisible.

Example: The obligation of 2leina to give &3,333 to ac) on a certain date. Boneyis physically divisible by the clear intention here for 2leina to deliver the amount at ontime and as a whole.

/bligations !eemed divisible

. /bligations which have for their object the execution of a certain number of days of wor).



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Example D ac) obliged himself to paint the house of 2leina to be finished in 3 days.The obligation is divisible because it will not be finished in one time.

#. /bligations which have for their object the accomplishment of wor) by metrical units.

Example D ac) obliged himself to deliver # cubic meter of sand.

;. /bligations which by their nature are susceptible of partial performance

Example D The obligation of ac) to pay a debt of &3,333 to 2leina in ten *3+monthly installments.

-/T0 4. 2 0bligations with a 3enal /lause

Art. 1))4. n obligations with a penal clause, the penalty shall substitute the indemnityfor damages and the payment of interests in case of noncompliance, if there is nostipulation to the contrary. evertheless, damages shall be paid if the obligor refuses topay the penalty or is guilty of fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in accordance with theprovisions of this /ode. (11%)a+

Beaning of &enal (lause D n obligation with a penal clause is one which contains anaccessory underta)ing to pay a previously stipulated indemnity incase of breach. It isattached to obligations in order to insure their performance.

&urpose of the penal clause:

.+ To insure the performance of the obligation.

#.+ To substitute for indemnity for damages and the payment of interest in case of non-compliance of the principal obligation.

;.+ To penali4e the obligor in case of breach of the principal obligation.

Art. 1))6. The debtor cannot e!empt himself from the performance of the obligation bypaying the penalty, save in the case where this right has been e!pressly reserved forhim. either can the creditor demand the fulfillment of the obligation and the satisfactionof the penalty at the same time, unless this right has been clearly granted him. However,if after the creditor has decided to re"uire the fulfillment of the obligation, the

performance thereof should become impossible without his fault, the penalty may beenforced. (11%#a+

!ebtor (annot @ubstitute &enalty =or the &rincipal /bligation D The general rule is thatthe debtor is not allowed to just pay the penalty instead of fulfilling the obligation. 'e cando so if the right has been expressly reserved. The reason is that if he can just pay,fulfillment of the obligation will be considered an alternative one. The word expresslymeans that any implied reservation is not allowed.

Art. 1))$. 3roof of actual damages suffered by the creditor is not necessary in order thatthe penalty may be demanded. (n+

Example: rthur was obliged under a contract with %rad, not to sell shares of stoc) forone year. penal clause was provided. %ut rthur sold shares of stoc) within the periodspecified but damages were not proved by %rad to have been suffered by him. Bay %radrecover the penalty< Fes, %rad may lawfully recover the penalty.


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Art. 1))9. The judge shall e"uitably reduce the penalty when the principal obligation hasbeen partly or irregularly complied with by the debtor. ven if there has been noperformance, the penalty may also be reduced by the courts if it is ini"uitous orunconscionable. (11%*a+

5hen &enalty Bay be $educed by the (ourt D

+ 5hen the obligation has been partly complied with by the debtor"

#+ 5hen the obligation has been irregularly complied with by the debtor

;+ 5hen the penalty is ini0uitous or unconscionable, even if there has been noperformance at all.

Art. 1)#. The nullity of the penal clause does not carry with it that of the principalobligation.

The nullity of the principal obligation carries with it that of the penal clause. (11%%+

Effect of 8ullity of &enal (lause D The general principle that the accessory follows theprincipal. If only the penal clause is void, the principal obligation remains valid anddemandable. The penal clause may be disregarded.

Example: rthur agreed to sell merchandise to %rad. It is provided in their agreementthat in case of default, rthur will deliver a prohibited drug as penalty. 'ere, theobligation to sell merchandise is valid by the penalty to deliver the prohibited drug isvoid. =or failure of rthur to comply with the obligation, %rad may recover damages.

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#. 'is successor in interest *li)e an heir or assignee+.

;. ny person authori4ed to receive it.

Ex. $ia owes Emi &,333.33. $ia must pay Emi or any person authori4ed by Emi or incase of his death, his heirs or any person authori4ed by law. &ayment to any otherperson is not valid except as provided in rt. #G, par. #. If $ia acted in good faith in

paying to the wrong party is not an excuse.

1niversity of (ebu( ll f 2

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