Introduction to Law Law- any rule of action or any system of uniformity General Sense: all laws taken together;

er; mass of obligatory rules established for the purpose of governing the relations of persons in society; eg.law of the land Specific sense: Rule of Conduct, just, obligatory, promulgated by legitimate authority, and of common observance and benefit (characteristics of law); eg.law on obligations and contracts (legal rule) The need for internal order is as constant as the need for external defense(Why is law important?)

Divine Law- law or religion and faith which concerns itself with the concept of sin and salvation Natural Law- divine inspiration in man of the sense of justice, fairness, and righteousness, not by divine revelation or formal promulgation, but by internal dictates of reason alone Moral Law- totality of the norms of good and right conduct growing out of the collective sense of right and wrong of every community Physical Law (Laws of Physical Science)- uniformities of actions and orders of sequence which are the physical phenomena that we sense and feel State Law- law that is promulgated and enforced by the state; positive law, municipal law, civil law, imperative law Sources of Law: 1. Constitution- written instrument by which the fundamental powers of the government are established, limited, and defined, and by which these powers are distributed among the several departments for their safe and useful exercise for the benefit of the people; fundamental law or supreme law 2. Legislation-consists in the declaration of legal rules by a competent authority; preponderant source of law; enacted law or statute law; eg. ordinances 3. Administrative-issued by administrative officials under legislative authority; valid only when not contrary to the laws and constitution; Executive orders, regulations, rulings 4. Judicial decisions- jurisprudence; Decisions of courts applying or interpreting laws; Constitution form part of the legal system of the Philippines Doctrine of precedent (Stare Decisis)-decisions of a superior court on a point of law are binding on all subordinate courts. 5. Custom- habits and practices which through long and uninterrupted usage have become acknowledged and approved by society as binding rules of conduct 6. Other Sources- not binding on the courts; supplementary; eg. opinions, religions, principles Social Control- control of social behavior that affects others Judicial power- power to decide actual cases and controversies involving the interpretation and application of laws Regular Courts: Supreme Court, Court of Appeals, Regional Trial Court> Metropolitan Trial Courts (Metropolitan areas), Municipal Trial Courts (not Metropolitan), Municipal Circuit Trial Courts (municipal circuits) Special Courts: Sandiganbayan (anti-graft court), Court of Tax Appeals (special tax court) Quasi-judicial agencies- not part of integrated judicial system; involve settlement of adjudication of controversies or disputes; eg. Securities and Exchange Commission, Commission on Elections

Classification of Law 1. Substantive law-proportion of the body of law creating and defining rights and duties which may be either public or private in character; eg. law on obligations and contracts 2. Adjective Law- prescribing the manner or procedure by which rights may be enforced or their violations redressed; remedial law or procedural law; governed by the Rules of Court promulgated by the Supreme Court and by special laws 3. Public Law-body of legal rules which regulates the rights and duties arising from the relationship of the state to the people eg. Criminal law- law which defines crimes and provides for their punishment International law- governs the relations among nations or states Constitutional law- which governs the relationship between the state and its citizens; establishes the fundamental powers of the government Administrative law- governs the methods by which the functions of administrative are to be performed Criminal Procedure- governs the methods of trial and punishment in criminal cases 4. Private Law- regulates the relations of individuals with one another for purely private ends eg. law on obligations and contracts Civil Procedure- provides for the means by which private rights may be enforced law on obligations and contracts- body of rules which deals with the nature and sources of obligations and the rights and duties arising from agreements and the particular contracts; Book IV of the Civil Code of the Philippines (Republic Act no. 386) Obligations: Title I articles 1156-1304 Contracts: Title II, Articles 1305-1422 Natural Obligations: Title III, Articles 1423-1430 Civil law- law found on the civil code Obligation-juridical necessity to give or not to do (article 1156); a tie or bond recognized by law by virtue of which one is bound in favor of another to render something; talks about the duty under the law of the debtor or obligor when it speaks of obligation as a juridical necessity; act or performance which the law will enforce Latin word: Obligatio-tying or binding Juridical necessity-in case of noncompliance, courts of justice may be called upon by the aggrieved party to enforce its fulfillment or the economic value that it represents Damages- represents the sum of money given as a compensation for the injury or harm suffered by the creditor for the violation of his rights Civil Obligations- obligations which give to the creditor or obligee a right under the law to enforce their performance in courts of justice Natural obligations- based on equity and natural law; do not grant a right of action to enforce their performance although in case of voluntary fulfillment by the debtor, the latter may not recover what has been delivered or rendered by reason thereof; Title III, Arts. 1423-1430 Essential Requisites of Obligation 1. Passive Subject (debtor or obligor)- bound to the fulfillment of the obligation; has duty

2. Active Subject (creditor or oblige)- entitled to demand the fulfillment; has right 3. Object or prestation (subject matter of obligation)-conduct required to be observed by the debtor 4. Juridicial or legal tie- efficient cause; binds or connects the parties to the obligation Form of an obligation-manner in which an obligation is manifested or incurred; writing, oral, or partly Obligation arising from contracts- not require a form Obligation from other sources- no form at all

Right- power which a person has under the law to demand from another any prestation Wrong act or omission of one party in violation of the legal right or rights of another Injury- wrongful violation of the legal right of another An obligation cannot exist without a corresponding right in favor of another, and vice versa Kinds of Obligation according to subject matter: 1. Real Obligation- obligation to give; subject matter is a thing which the obligor must deliver to the obligee 2. Personal Obligation- obligation to do or not to do; subject matter is an act to be done or not to be done a. Positive personal obligation- obligation to do or to render service (art. 1167) b. Negative personal obligation- obligation not to do (or sometimes, not to give) Sources of Obligation/ Obligations arise from ( Article 1157): 1. Law-imposed by law itself 2. Contracts- from stipulation of the parties; voluntary agreements; meeting of minds between 2 persons whereby one binds himself, with respect to the other, to give something or to render some service;void contract DOES NOT EXIST in the eyes of the law( article 1409) 3. Quasi-contracts- juridical relation resulting from lawful, voluntary and unilateral acts which are enforceable to the end that no one shall be unjustly enriched or benefited at the expense of another; eg. obligation to return money paid by mistake The law considers the parties as having entered a contract although they have not actually did so to prevent injustice. 4. Acts or Omissions punishable by law- from civil liability which is the consequence of a criminal offense; eg. return stolen car 5. Quasi-delicts (torts)- from damage caused to another through an act or omission, there being fault of negligence but no contractual relation exist between parties; act or omission by a person (tortfeasor) which causes damage to another in his person, property, or rights giving rise to an obligation to pay for the damage done, there being fault or negligence but there is no pre-existing contractual relation between parties (art. 2176) Sources classified: 1. Emanating from law 2. Emanating from private acts a. Arising from licit acts- contracts and quasi-contracts b. From illicit acts- punishable (delicts or crimes) or not punishable (quasi-delicts/torts) 2 MAIN SOURCES: Contracts and law. Quasi-contracts, delicts, quasi-delicts are really imposed by law

Legal obligations-article 1168

Special Laws- article 1158; not in the Civil Code

Compliance in good faith- compliance or performance in accordance with the stipulations or terms of the contract or agreement; Sincerity and honesty is OBSERVED Quasi-contractual obligations- article 1160 1. Negotiorum Gesto- voluntary management of the property or affairs of another without the knowledge or consent of the latter. (art.2144) 2. Solutio indebiti- juridical relation which is created when something is received when there is no right to demand it and it was unduly delivered through mistake (art. 2154) Civil Liability arising from crimes or delicts: Every person criminally liable for an act or omission is also civilly liable for damages (art. 100, revised penal code) Crimes with no material damage= no civil liability to be enforced A person not criminally responsible may still be liable civilly, eg. failure to pay contractual debt

Civil Liability includes: 1. Restitution 2. Reparation for the damage caused 3. Indemnification for consequential damages (art. 104, revised penal code) Crime vs. Quasi-delict Criminal or malicious intent or criminal negligence PUNISHMENT Public Interest Criminal and Civil Cannot be compromised or settled by the parties themselves Proof Beyond Reasonable Doubt Nature and Effect of Obligations Purpose Affected party Liability Liability ONLY negligence INDEMNIFICATION of the offended party Private Interest ONLY Civil Can be compromised as any other civil liability Preponderance of evidence

Every person obliged to give something is also obliged to take care of it (art. 1163) ^Specific or Determinate- particularly designated or physically segregated others of the same class; identified by its individuality Generic or Indeterminate- a class or genus to which it pertains and cannot be pointed out with particularity; identified only by its specie

Different kinds of Fruits: 1. Natural Fruits-spontaneous products of the soil, and the young and other products of animals; without the intervention of human labor 2. Industrial Fruits- produced by lands of any kind through cultivation or labor 3. Civil Fruits- derived by virtue or juridical relation; eg. Rents of buildings (article 442) In contract of sale, all the fruits shall pertain to the vendee from the day on which the contract was perfected ( article 1537, 2nd par.) Seller has a right to fruit, if it was born before the obligation to deliver and buyer (art. 1164) has NOT YET PAID.

1. Personal Right-power of a person(creditor) to demand from another (debtor), as a definite passive subject, the fulfillment of the latters obligation to give, to do, or not to do; has a definite active and passive subject; binding only against a particular person 2. Real Right- interest of a person over a SPECIFIC thing, WITHOUT a definite passive subject against whom the right may be personally enforced; only has definite active subject (creditor); directed against whole world He shall acquire no real right over it until the same has been delivered to him -Creditor does not become the owner until the specific thing has been delivered to him Remedies of Creditor in REAL Obligation (art. 1165) In Specific Real Obligation: 1. Demand specific performance or fulfillment with the right to indemnity for damages 2. Demand Rescission or cancellation also with the right to recover damages 3. Demand payment of damages only The very thing itself must be delivered (art. 1244); only the debtor can comply with the obligation (art. 1165, par. 1)

In Generic Real Obligation: Can be performed by a third person; Creditor has right to recover damage (art. 1170); The manner of compliance to deliver a generic thing is governed by article 1246. No person shall be imprisoned for non-payment of debt (art. 3, section 20 thereof)

Genus nunquam perit- genus never perishes ( for indeterminate things)( article 1174, 1263) Accessions- fruits of a thing or additions to improvements upon a thing (principal); eg. house on land Accessories- things joined to or included with the principal thing for the latters EMBELISHMENT, better use, or completion All accessions and accessories are considered included in the obligation to deliver a determinate thing (based on: accessory follows principal) 1. Ordinary Delay-failure to perform an obligation on time 2. Legal Delay default; mora; failure to perform an obligation on time which failure constitutes a breach of the obligation Kinds of default: 1. Mora Solvendi- delay on the part of the debtor to fulfill his obligation ( to give/ to do) 2. Mora Accipiendi- delay on the part of the creditor to accept the performance of the obligation 3. Compensatio Morae- delay of the obligors in reciprocal obligations (in sale); delay of the obligor cancels the delay of the oblige Requisites of default by the debtor 1. Failure of the debtor to perform his obligation on the date agreed upon 2. Demand made by the creditor upon the debtor to comply with his obligations which demand may be either judicial (court) or extra-judicial (oral or written) 3. Failure of the debtor to comply with such demand

Effects of Delay: Mora Solvendi Debtor Interest or Damages even for Fortuitous event Mora Accipiendi Creditor Damages by debtor Compensatio Morae NO DELAY ON BOTH PARTIES If it cannot be determined which of the parties is guilty of delay, the contract shall be deemed extinguished and each shall bear his own damage.

Guilty Liability

Bears the risk of loss debtor may release himself from obligation (art. 1256) Delay by the debtor begins only from the moment of a demand. When demand is not necessary:

Taxes should be paid on/before a specific date without the need of a DEMAND Partner is liable to the fruits of the thing he may have promised to contribute from the time they should have been delivered ( art. 1786) When there has been ABSOLUTE refusal by debtor Neither party incurs in delay if the other does not comply (compensation morae) o When a party fulfills (or ready) his obligation, delay by other begins.

Grounds for Liability: Article 1157-> breach of the obligation is voluntary Article 1174> Involuntary

1. Incidental Fraud>dolo incidente; performance in an obligation already existing (art. 1170) 2. Casual Fraud>fraud employed in execution under article 1338, which vitiates consent Negligence (Fault or culpa)- any voluntary act or emission, there being no bad faith or malice, which prevents the normal fulfillment of an obligation Delay (mora) Violation of the terms and conditions of the obligation NOT due to a fortuitous event or force majeure (art. 1174) Fraud Deliberate Intention VOID Cannot be mitigated or reduced Clearly proved With respect to all kinds of obligations (art. 1172) Negligence NO intention Allowed May be reduced according to the circumstances Presumed from the violation of a contractual obligation

Waiver of the liability for future fraud Liability Proof Demand Fraud may be past or future

A past fraud can be a subject of VALID waiver because the waiver is considered as an act of generosity on the part of the victim. Negligence is a question which must necessarily depend upon the circumstances of each particular case (art. 1173) Validity of Waiver of action arising from negligence

If the party is a common carrier, such waiver is void When negligence shows bad faith, its fraud; any waiver for future negligence is therefore VOID. Kinds of Negligence according to source of obligation 1. Contractual Negligence culpa contractual;NOT A SOURCE OF OBLIGATION; negligence in contracts resulting in their breach; merely makes the debtor liable for damages in view of his negligence in the fulfillment of a pre-existing obligation (arts. 1170, 1172) 2. Civil Negligence culpa aquiliana; source of an obligation; also called tort or quasi-delict 3. Criminal Negligence culpa criminal; negligence resulting in the commission of a crime * What is prohibited under article 2177 of the Civil Code is to recover twice for the same negligent act If the creditor was the immediate cause of injury, he cannot recover damages. If it was only CONTRIBUTORY, he MAY recover damages, but the courts shall mitigate the damages to be awarded ( arts. 2214,2215) Negligence failure to observe for the protection of the interests of another person. Whereby such other person suffers injury. Negligence is a question of fact; its existence being dependent upon the particular circumstances of each case Measure of Liabiity for damages (article 2201) In contracts and quasi-contracts, damages for obligor who acted in good faith shall be those that are NATURAL and PROBABLE consequences and which the parties have/could have FORSEEN. In case of fraud or malice, the obligor is liable for ALL DAMAGES Kinds of Diligence required (article 1173) 1. Agreed upon 2. Required by law 3. Diligence expected of a good father of a family

Fortuitous event- any event which cannot be foreseen or inevitable; may either be an act of man or of God 1. Acts of man- an event independent of the will of the obligor but not of other human wills 2. Acts of God- majeure; events which are totally independent will of every human being *Both exempt an obligor from a liability; BOTH are independent of the will of the obligor Kinds of Fortuitous events 1. Ordinary Fortuitous Events- common and can be reasonably foreseen; eg. rain 2. Extra-ordinary Fortuitous Events- uncommon; could not have reasonably foreseen; eg.fire,war Requisites of a Fortuitous Event Independent of the debtors will (human will) Could not be foreseen or inevitable Impossible for the debtor to comply No concurrent negligence on part of the debtor

Rules as to liability in case of Fortuitous event 1. Debtor is guilty of fraud, negligence, delay, or contravention of the tenor of the obligation 2. Debtor promised to deliver a specific thing to 2 or more persons who do not have same interest 3. Obligation to deliver a specific thing arises from a crime 4. Thing to be delivered is generic 5. Declared by stipulation (rest upon freedom of contract) 6. Nature of obligation requires the assumption of risk; eg. insurance Simple loan or mutuum- contract whereby one of the parties delivers to another, money, or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid Usury- contracting for or receiving interest in excess of the amount allowed by law for the loan or use of money, goods, chattels, or credits Requisites for recovery of interest

1. Payment of interest must be expressly stipulated (art. 1956) 2. Agreement must be in writing 3. Interest must be lawful (art. 1957) *The rate of interest or load that may be charged or collected shall not be subject to any ceiling prescribed under the Usury Law; PARTIES ARE NOW FREE TO STIPULATE ANY AMOUNT OF INTEREST * Usury is now legally non-existent Presumption- the inference of a fact not actually known arising from its usual connection with another which is known or proved 2 kinds of presumption 1. Conclusive Presumption- cannot be contradicted; eg. everyone is presumed to know the law 2. Disputable (rebuttable) presumption- can be contradicted by presenting proof to the contrary All rights acquired in virtue of an obligation are generally TRANSMISSIBLE (art.1311) Exceptions: Prohibited by law 1. By contract of partnership (art. 1767) 2. By contract of agency person binds himself to render some service or to do something in behalf of another with consent (art. 1868) 3. By contract of commodatum one of the parties delivers to another something not consumable to be used for certain time and return it (art. 1933) Prohibited by stipulation of parties such stipulation must be CLEARLY PROVED Obligation that does not depend on future or uncertain event is demandable at once. Pure Obligation- not subject to any condition; no specific date specified for its fulfillment

Conditional Obligation one whose consequences are subject in one way or another to the fulfillment of a condition Condition- a future and uncertain event, upon the happening of which, the effectivity or extinguishment of an obligation subject to it depends. Characteristics of a condition 1. Future AND uncertain 2. Past but unknown If future event, its very occurrent and the time of such occurrence must be UNCERTAIN. *A Condition must not be impossible (see art.1183) 2 principal kinds of condition 1. Suspensive Condition- condition precedent or antecedent; fulfillment of which will give rise to an obligation; demandability of obligation is suspended until the happening of the uncertain event which constitutes the condition 2. Resolutory condition- condition subsequent; fulfillment of which will extinguish an obligation already existing; eg. allowance until graduate Suspensive Arises Does not appear Mere hope Resolutory Extinguished Is Consolidated

If fulfilled, obligation If not fulfilled, the tie of law Until fulfilled, its existence is

Effects flow, but theres possibility of termination Both bear an influence on the existence of the obligation. When obligation is demandable at once 1. When pure (1179, par. 1) 2. Subject to a resolutory condition (1179, 2) 3. Subject to resolutory period (1193, par.2) Past event unknown to parties The demandability of an obligation subject to a condition depends upon whether the event will happen or not.

Where duration of period depends upon the will of debtor Period- future and CERTAIN event upon the arrival of which the obligation subject to it arises or is extinguished 1. Debtor promises to pay when his means permit him to do so 2. Other cases; eg. little by little, as soon as possible Effect of happening of condition 1. Acquisition of rights obligations subject to SUSPENSIVE condition, acquisition depends upon the happening of the event which constitutes the condition Its efficacy or obligatory force is subordinate to the happening of a future AND uncertain event 2. Loss of rights already acquired- obligations subject to resolutory condition, the happening of the event which constitutes the condition produces the extinguishment of loss of rights already acquired; eg. right to receive allowance (already acquired) is extinguished once condition is fulfilled SEE PAGE 85 for Classification of Conditions Protestative condition- suspensive in nature; depends upon the sole will of one of the contracting parties Where SUSPENSIVE condition depends upon the will of DEBTOR 1. Conditional obligation VOID-because its validity and compliance is left to the will of the debtor (art. 1308), and it cannot be easily demanded. In order not to be liable, debtor will not just fulfill the condition (art. 1156) 2. Only the condition is void- If the obligation is a pre-existing one, only the condition is void Condition is imposed on its fulfillment Where SUSPENSIVE condition depends upon the will of CREDITOR Solely will of creditor= obligation is valid

Where RESOLUTORY condition depends upon the will of DEBTOR Obligation is valid if condition is resolutory in nature Debtor is naturally interested in its fulfillment Casual Condition If suspensive condition depends upon chance or valid upon the will of 3rd person. Obligation subject to it is valid. Mixed Condition Both conditions must take place in order that the obligation will rise Where SUSPENSIVE condition depends PARTLY upon the will of DEBTOR -same if depends entirely on the will of debtor The condition not to do an impossible thing shall be considered as not having been agreed upon Article 1183- suspensive condition; applies to cases where the impossibility already existed at the the the obligation was constituted Article 1266- impossibility after the creation of obligatio 2 kinds of impossible obligations 1. Physically impossible conditions- in nature of things, cannot exist or cannot be done 2. Legally impossible conditions- contrary to law, morals, good customs, public order or policy Effect of impossible conditions 1. Conditional obligation void impossible conditions ANNUL the obligation which depends upon them 2. Conditional obligations valid- If the conditions is not to do and impossible thing, it is disregarded and the obligation is rendered PURE AND VALID. 3. Only the affected obligation void- the part not affected by impossible condition is valid; eg. I will give you 10 if you sell my land and a car if you kill pedro

4. Only the condition void- if the obligations is a pre-existing obligation, and does not depend upon the fulfillment of the impossible condition Article 1184- Positive (suspensive) condition The happening of an event at a determinate time

Obligation is extinguished as soon as: 1. Time expires without the event taking place 2. As soon as it has become seen that the event WILL NOT take place although the time specified has not expired Article 1185 negative condition will not happen at determinate time

1. In obligations to give Demandable upon the fulfillment of condition Effects shall retroact to the day when the obligation was constituted because the condition was only an accidental element of a contract As if B was entitled to land beginning 1st day obligation was constituted 2. In obligations to do or not to do NO FIXED RULE IS PROVIDED Retroactive effects as to fruits and interests in obligations to give In reciprocal obligations- there is no retroactivity because the fruits are deemed to have been mutually compensated In unilateral obligations- there is usually no retroactive effect because of gratuitous (no charge); debtor receives nothing from creditor; fruits belong to debtor Article 1188- the creditor may , before the fulfillment of obligation, bring the appropriate actions to preserve his right. Debtor may recover what he has paid by mistake prior to the happening of the suspensive condition Article 1189- see book Kinds of Loss (in civil law) 1. Physical loss- thing perishes; eg. burned house 2. Legal loss- thing goes out of commerce or becomes illegal 3. Civil loss- thing disappears or cannot be recovered (existence is unknown and known) Rules in case of loss, deterioration or improvement of thing during pendency of suspensive condition See notes* Improvement of thing by nature or by time: Usfruct- right to enjoy the use and fruits of a thing belonging to another (art. 562)

Obligation shall become effective and binding the moment 1. the time indicated has elapsed without the event taking place 2. the moment it has become evident that the event cannot occur although the time indicated has not elapsed * if no time is fixed, circumstances shall be considered to arrive at the intention of the parties Article 1186- Conditions are fulfilled when obligor voluntarily prevents the fulfillment Constructive fulfillment of suspensive condition 3 requisites: 1. Condition is suspensive 2. Obligor actually prevents fulfillment 3. Voluntary act Constructive fulfillment of resolutory condition -with respect to the debtor who is bound to return what he has received upon fulfillment of the condition Retroactive effects of fulfillment of suspensive condition ( 1187)

Article 1190When the condition is an extinguishment, the fulfillment should return to each other what they have received. Effects of fulfillment of resolutory condition 1. In obligations to give a. Effect of the fulfillment is RETROACTIVE (return to the status quo) b. If the thing to be returned is with a third person who did not act in bad faith, remedy of the party entitled to restitution is against the other c. Obligation of mutual restitution is absolute (also applies to fruits and interests) d. In obligations to give subject to suspensive condition, retroactivity admits EXCEPTIONS if obligation is bilateral or unilateral. *suspensive condition->birth of obligation *Resolutory condition-> extinguishment of obligation 2. In obligations to do or not to do -courts shall determine retroactive effect -court may even disallow retroactivity Applicability of Article 1189 to party with obligation to return The happening of a resolutory condition has the same effect on the creditor as the happening of a suspensive condition has on the debtor (OBLIGATION RISES) Article 1191 Kinds of obligation according to the person obliged Unilateral- one party is obliged to comply with a prestation Bilateral- both parties are mutually bound to each other; debtors and creditors of each other; may be reciprocal or non-reciprocal 1. Reciprocal obligations- arise from the SAME cause; performance of one is designed to be the equivalent and the condition for the performance of the other

2. Non-reciprocal obligations- do not impose simultaneous and correlative performance on both parties; obligations are not dependent upon each other Remedies in reciprocal obligations 1. Choice of remedies a. Performance of obligations with damages b. Rescission of obligation with damages 2. Remedy of rescission for non-compliance -granted for breach by the other contracting party that violates the reciprocity between them Court may grant guilty party term for performance Court shall decree rescission claimed, unless there is just cause for granting a term for the fulfillment of the obligation by the party in default Exception only applies: guilty party is willing to comply but needs time to do so Remedies are alternative -not cumulative; choose only one, not both (recission OR fulfillment) *Exception: when fulfillment is impossible Limitations on right to demand rescission The right to rescind by the injured party is not absolute 1. Resort to the courts Article 1191 gives judicial rescission (granted by court) 2. Power of the court to fix period -court has discretionary power to allow period of there is just cause for giving time to debtor 3. Right of 3rd person -if in the hands of 3rd person who acted in good faith, rescission is not available as remedy 4. Substantial violation *General rule: Rescission will not be granted for slight breaches of contract -law is not concerned with trifles 5. Waiver of right Rescission without previous judicial decree

1. Where automatic rescission expressly stipulated *If such stipulation even without judicial intervention or permission, right to rescind is not implied but expressly recognized by parties *There must be at least a written notice sent to the other party informing him of the rescission. -The extra Judicial rescission has legal effect where such party does not oppose it 2. Where contract still executory -No performance yet by both parties but one is ready and willing to comply and other is not -THEN, willing party may RESCIND the contract WITHOUT a previous judicial decree of rescessio -stipulation is not necessary Article 1192 Where both parties are guilty of breach 1. First Infractor known -Liability of first infractor should be equitably reduced 2. First Infractor cannot be determined -Contract shall be deemed EXTINGUISHED and each shall bear his own damages -in effect, court shall not provide remedy to either parties

Fulfillment

Time Influence on the obligation Effect (when left to debtors will)

Period Certain event; or time which cannot be determined Future

Condition Uncertain event

Merely fixes the time Empowers the court to fix the duration hereof ( art. 1197 par.2) Retroactivity of NONE (unless there effects is an agreement) Kind of period of term According to effect

Future or past event unknown to parties Causes it to arise or cease Invalidates the obligation (art. 1182)

HAS

1. Suspensive condition- eg. die; Obligation begins only from a day certain upon the arrival of a period (art. 1193, par. 1) 2. Resolutory period Obligation is valid up to a day certain and terminates upon arrival of the period. According to source: 1. Legal period provided by laws 2. Conventional or voluntary period- agreed to by the parties (art. 1196) 3. Judicial period- fixed by the court (art. 1197) According to definiteness 1. Definite Period-fixed or known (art. 1193 par. 3) 2. Indefinite period-Not fixed; not known *when not fixed but intended, courts are usually empowered by law to fix the same (art. 1197) Article 1194-article 1189 applies Article 1195 Payment before arrival of period

Section 2: Obligations with a PERIOD Article 1193 Obligation with a period- effects or consequences are subjected in one way or another to the expiration or arrival of said period or term Period- Future and certain event upon the arrival of which the obligation subject to it either arises or is terminated; necessarily comes but may not be known when Period and Condition distinguished SIMILARITIES: both POSSIBLE If impossible, the obligation is void

-only applies to obligations to give; allows the recovery of what has been paid by mistake before the fulfillment of a suspensive condition ( similar to article 1188, par.2) Debtor presumed aware of period

Obligor may no longer recover the thing or money once the period has arrived but he can recover fruits or interests thereof from the date of premature performance to the date of maturity of obligation -Debtor can only recover interest if debt has already matured -Neither can there be a right to deliver if debtor had knowledge of the period; solution indebto will not apply No recovery in personal obligation -because it is physically impossible to recover services rendered and he cannot recover what he has not done Article 1196 -period is established for the benefit of both the creditor and the debtor Presumption as to benefit of period -Debtor may not fulfill the obligation neither may the creditor demand its fulfillment without the consent of the other EXCEPTIONS to the general rule -The benefit of the period may be the subject of express stipulation of the parties 1. Term is for the benefit of the DEBTOR ALONE -he cannot be compelled to pay prematurely but he can. 2. Term is for the benefit of the CREDITOR -he may demand fulfillment even before the arrival of the terms but the debtor cannot require him to accept payment before the expiration of the stipulated period *Debtor cannot shorten the period without the consent of the creditor *There must be a STIPULATION granting the benefit of the term to only the creditor Computation of term or period 1. Administrative Code of 1987 Legal Periods- 12 calendar months, unless it refers to specific calendar month, which it shall

be computed according to the number of days the specific month contains 2. Calendar month- month designated in the calendar without regard (irrelevant)to the number of days it contain Article 1197 -judicial period Court generally without power to fix period -Courts have no right to make contracts for the parties; they are not authorized to fix a period *Contract is the law between the parties and its terms cannot be changed by the court (art. 1159) EXCEPTIONS to the general rule *court merely enforces or carries out the intention of the parties; it does not modify the same 1. No period is fixed but a period was intended 2. Duration of the period depends upon the will of the debtor (art. 1180) -court must fix to forestall the possibility that the obligation may never be fulfilled Legal effect where suspensive period/condition depends upon will of debtor 1. Existence of the obligation is not affected although the period depends upon the sole will of the debtor -ONLY the performance with respect to time that is left to the will of the debtor 2. The conditional obligation is VOID (art. 1182) -it is actually the fulfillment of the obligation that is depends upon will of debtor (1308) Period Fixed Cannot be changed by the courts 1. If there is already a period agreed upon, the court cannot fix another period 2. The moment parties give their consent to the period fixed by the court, said period acquires the nature of the contract *The parties may modify the term by a new agreement

Article 1198 When obligation can be demanded before lapse of period *based on fact that debtor might not be able to comply with his obligation 1. When debtor becomes insolvent -Insolvency need not be judicially declared -must occur after the obligation has been contracted 2. When debtor does no furnish guaranties or securities promised -fails to furnish said securities 3. When guaranties or securities given have been impaired or have disappeared *in case of fortuitous event, it is required that the security must disappear *if security deteriorates as to become illusory, it must be deemed to have disappeared *Failure of debtor to renew the bond or replace with an equivalent guarantee upon expiration will give the creditor RIGHT TO DEMAND. 4. When the debtor violates an undertaking 5. When debtor attempts to abscond *sign of bad faith *mere attempt or intent to escape is sufficient