Beruflich Dokumente
Kultur Dokumente
Jocs Dilag
Reviewer for Civil Law - Oblicon
Kinds of Prestations
Obligations 1. To Give
2. To Do
3. Not To Do
Chapter 1:
General Provisions Distinction between Natural and Civil Obligations
Natural Civil
As to basis Equity and Natural Law Positive Law
Concept As to Not court action, but Court action or coercive
Article 1156 enforceability good conscience of power of the law
An obligation is a juridical necessity to give, to do or not to do. debtor
Sources of Obligations
Other Definitions Article 1157
- An obligation is a juridical relation whereby a person (creditor) Obligations arise from:
may demand from another (debtor) the observance of a
(1) Law;
determinate conduct (behaviour) and in case of non-observance,
(2) Contracts;
may obtain satisfaction from the assets of the latter (Arias Ramos) (3) Quasi-contracts;
- An obligation is a juridical relation whereby a person should
(4) Acts or omissions punished by law; and
engage, or refrain from engaging, in a certain activity for the
(5) Quasi-delicts.
satisfaction of the private interest of another, who, in case of
non-fulfillment of such duty, may obtain from the patrimony of
the former, through a proper judicial proceeding, the very Law
prestation due or in default thereof, the economic value that it Article 1158
represents (Diaz Pairo)
Obligations derived from law are not presumed. Only those
expressly determined in this Code or in special laws are
Elements
demandable, and shall be regulated by the precepts of the law which
1. Active Subject (Obligee, Creditor)
establishes them; and as to what has not been foreseen, by the
2. Passive Subject (Obligor, Debtor)
3. Prestation or Object (Conduct of Debtor) provisions of this Book.
4. Efficient Cause / Juridical Tie / Vinculum Juris
- Does not require the concurrence of the creditors and debtors
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || General Provisions || Sources of Obligations Contracts
Kinds of Quasi-Contracts
Contracts 1. Negotiorum Gestio
2. Solutio Indebiti
Article 1159
3. Other Quasi-contracts
Obligations arising from contracts have the force of law between the Negotiorum Gestio (Officious Management)
contracting parties and should be complied with in good faith.
Article 2144
- Meeting of the minds of 2 or more persons, whereby one binds Whoever voluntarily takes charge of the agency or management
himself with respect to the other to give something or render of the business or property of another, without any power from the
some service Art. 1305 latter, is obliged to continue the same until the termination of the
- Principle of autonomy of will affair and its incidents, or to require the person concerned to
substitute him, if the owner is in a position to do so. This juridical
Quasi-Contracts relation does not arise in either of these instances:
Article 1160 (1) When the property or business is not neglected or
Obligations derived from quasi-contracts shall be subject to the abandoned;
(2) If in fact the manager has been tacitly authorized by maythe
provisions of Chapter 1, Title XVII, of this Book.
owner.
Article 2142 In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404
Certain lawful, voluntary and unilateral acts give rise to the juridical regarding unauthorized contracts shall govern.
relation of quasi-contract to the end that no one shall be unjustly
enriched or benefited at the expense of another. In the second case, the rules on agency in Title X of this Book shall be
- No previous relations/agreements exist applicable.
- The relation is created by the lawful, voluntary and unilateral
acts of one to another Solutio Indebiti (Mistake in Delivery)
ESSENCE:
Article 2154
- To avoid unjust enrichment
If something is received when there is no right to demand it, and
it was unduly delivered through mistake, the obligation to return it
arises.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || General Provisions || Sources of Obligations Quasi-Contracts
Article 2170
When by accident or other fortuitous event, movables separately
pertaining to two or more persons are commingled or confused, the
rules on co-ownership shall be applicable.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || General Provisions || Sources of Obligations
Paying taxes of another - Based on the principle of equity, where one should be responsible
for any damages caused by the abuse of his/her rights
Article 2175
Any person who is constrained to pay the taxes of another shall be
Kinds of Negligence
entitled to reimbursement from the latter.
1. Culpa Aquiliana (Quasi-Delict)
2. Culpa Contractual (Contractual Negligence)
3. Culpa Criminal (Criminal Negligence)
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || General Provisions || Sources of Obligations Quasi-Delicts
Culpa Aquiliana Culpa Contractual The father and, in case of his death or incapacity, the mother, are
Negligence as source of obligation Negligence in the performance responsible for the damages caused by the minor children who live in
of contract their company.
No previous relations Existence of an obligation
Plaintiff must prove the existence of Law presumes the negligence Guardians are liable for damages caused by the minors or
the negligent act from the non-performance incapacitated persons who are under their authority and live in their
company.
Quasi-delicts v. Crimes
Quasi-Delict Crime
The owners and managers of an establishment or enterprise are
Nature of Private rights; wrong Public rights; wrong
likewise responsible for damages caused by their employees in the
Right against the individual against the state
service of the branches in which the latter are employed or on the
Condition of Criminal intent Criminal intent
occasion of their functions.
Mind unnecessary necessary
Legal Basis Actionable as long as Need to have a penal
Employers shall be liable for the damages caused by their employees
there is fault/negligence statute
and household helpers acting within the scope of their assigned tasks,
Liability for Damages to the injured Not all have civil
even though the former are not engaged in any business or industry.
Damages party liabilities
Forms of Indemnification to the Indemnification + Fines The State is responsible in like manner when it acts through a special
Redress injured party or Imprisonment agent; but not when the damage has been caused by the official to
Amount of Preponderance of Beyond reasonable whom the task done properly pertains, in which case what is provided
evidence evidence doubt in Article 2176 shall be applicable.
Compromise Can be compromised Cannot be
compromised Lastly, teachers or heads of establishments of arts and trades shall
be liable for damages caused by their pupils and students or
Liability for fault of others apprentices, so long as they remain in their custody.
Article 2180
The obligation imposed by Article 2176 is demandable not only for The responsibility treated of in this article shall cease when the
one's own acts or omissions, but also for those of persons for whom persons herein mentioned prove that they observed all the
one is responsible. diligence of a good father of a family to prevent damage.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || General Provisions || Classifications of Obligations Primary Classification under the Civil Code
Accessions Accessories
Chapter 2: Items or structure that are Necessary parts required for the
Nature and Effects of Obligations naturally/artificially incorporated Completeness, Use or Perfection
with the principal object [ CUP ] of the principal object
To deliver the fruits
Kinds of Prestation
Obligation to Give Article 1164
The creditor has a right to the fruits of the thing from the time the
A Specific Thing obligation to deliver it arises. However, he shall acquire no real right
Duties of the Obligor over it until the same has been delivered to him.
To deliver the thing itself
Article 1163 Civil fruits are the rents of buildings, the price of leases of lands and
Every person obliged to give something is also obliged to take care other property and the amount of perpetual or life annuities or other
of it with the proper diligence of a good father of a family, unless similar income.
the law or the stipulation of the parties requires another standard of
Kinds of Fruits
care.
1. Natural
o Produce of the object without intervention of man
o Eggs, potato, milk, apple
To deliver the accessions and accessories
2. Industrial
Article 1166 o Goods through cultivation by man
The obligation to give a determinate thing includes that of delivering o Meat, vegetable crops
3. Civil
all its accessions and accessories, even though they may not have
o Produced by operation of law, by reason of a juridical act
been mentioned.
o Rent, interest, dividends, etc.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Breach of Obligation Obligation To Do and Not To Do
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Breach of Obligation Modes of Breach
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Breach of Obligation Modes of Breach
Article 1169
(1) When the obligation or the law expressly so declare; or
Those obliged to deliver or to do something incur in delay from the
(2) When from the nature and the circumstances of the
time the obligee judicially or extrajudicially demands from them the
obligation it appears that the designation of the time when
the thing is to be delivered or the service is to be rendered fulfillment of their obligation.
was a controlling motive for the establishment of the
contract; or However, the demand by the creditor shall not be necessary in
(3) When demand would be useless, as when the obligor has order that delay may exist:
rendered it beyond his power to perform. (1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the
In reciprocal obligations, neither party incurs in delay if the other obligation it appears that the designation of the time when
does not comply or is not ready to comply in a proper manner with the thing is to be delivered or the service is to be rendered
what is incumbent upon him. From the moment one of the parties was a controlling motive for the establishment of the
fulfills his obligation, delay by the other begins. contract; or
(3) When demand would be useless, as when the obligor has
- Failure to perform an obligation in due time rendered it beyond his power to perform.
o The period provided by law or stipulated in the contract
- Law, Stipulation, Motive and Impossibility are the exceptions to
o This is either through malice or negligence
the demand rule [ LIMS ]
Kinds of Delay
When will the effects of mora Cease?
1. Mora Solvendi Delay by Debtor
- By the creditors will (waiver, remission, extension, etc.)
2. Mora Accipiendi Delay by Creditor
- By mora of creditor (compensation morae)
- By concession of law (moratorium)
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Remedies of Creditor in Case of Breach Action for Performance
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Remedies of Creditor in Case of Breach Action for Damages
Action for Substituted Performance or Undoing Poor Work (To Do) Action for Damages
Article 1167 Article 1170
If a person obliged to do something fails to do it, the same shall be Those who in the performance of their obligations are guilty of
executed at his cost. fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.
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 Action for Rescission
has been poorly done be undone. Article 1191
EXCEPTION: The power to rescind obligations is implied in reciprocal ones, in
- If there is imposition of personal force, coercion or involuntary case one of the obligors should not comply with what is incumbent
servitude / imprisonment of debtor -> No action anymore upon him.
EXCEPTION:
The court shall decree the rescission claimed, unless there be just
- If the act done is impossible to undo, then only an action for
cause authorizing the fixing of a period.
damages can be instituted
Exception:
- Action for rescission is only available to reciprocal obligations
Article 772
- Not absolute, not permitted in casual/slight breach, may only be
claimed in substantial breach (S ONG F O V . H AWAIIAN P HILIPPINES ) Only those who at the time of the donor's death have a right to
- Judicial approval is required to produce the legal effect of the legitime and their heirs and successors in interest may ask for
rescission the reduction of inofficious donations.
o UNLESS both parties agree to a rescission
Those referred to in the preceding paragraph cannot renounce their
Subsidiary Remedies of Creditor
right during the lifetime of the donor, either by express
Accion Subragatoria
declaration, or by consenting to the donation.
Article 1177
The creditors, after having pursued the property in possession of The donees, devisees and legatees, who are not entitled to the
the debtor to satisfy their claims, may exercise all the rights and bring legitime and the creditors of the deceased can neither ask for the
all the actions of the latter for the same purpose, save those which reduction nor avail themselves thereof.
are inherent in his person; they may also impugn the acts which
the debtor may have done to defraud them. 1. Inherent rights of the debtor
a. Right to existence
- The debtor of my debtor is my debtor b. Rights or relations of a public character
- Primary action of a creditor to protect his interest over the c. Rights of an honorary character
fulfillment of the obligation. d. Non-patrimonial rights like actions arising from family
- Only to the extent of the amount of credit; any extra amount relations
would be given back to the debtor 2. Mere options or powers of the debtor
a. Right to exercise legal redemption
b. Revocation of stipulation pour autrui
Requisites of Accion Subragatoria 3. Property exempt from execution
1. Creditor has an Interest in the rights of the debtor because of
the latters insolvency Effects of Accion Subragatoria
2. Malicious/Negligent Inaction by the debtor in the exercise of 1. Creditor may sue in the name of the debtor
his rights 2. The action is subject to all defences available to the debtor
3. Credit must be Due and demandable. 3. The creditor may apply the proceeds of the actions to the credit,
4. Exhaustion of the assets in the hands of the debtor but must return all the excess to the debtor
[ DIEE ]
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Subsidiary Remedies of Creditor Accion Pauliana
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Concept of Fortuitous Event
Extinguishment of Liability
Article 1893
In the cases mentioned in Nos. 1 and 2 of the preceding article, the Article 1165 (3)
principal may furthermore bring an action against the substitute If the obligor delays, or has promised to deliver the same thing to two
with respect to the obligations which the latter has contracted under or more persons who do not have the same interest, he shall be
the substitution responsible for any fortuitous event until he has effected the
delivery.
Article 1942
Concept of Fortuitous Event
- These are either Acts of God or Acts of Man The bailee is liable for the loss of the thing, even if it should be
- These events would be a justification for the non-compliance or through a fortuitous event:
delay in the performance of an obligation (1) If he devotes the thing to any purpose different from that
- Casus fortuito = general term for which it has been loaned;
- Force majeure = Acts of God (2) If he keeps it longer than the period stipulated, or after the
accomplishment of the use for which the commodatum has
Requisites of the applicability of Fortuitous Event been constituted;
(3) If the thing loaned has been delivered with appraisal of its
1. Must be Independent of human will
value, unless there is a stipulation exemption the bailee from
2. Either Impossible to be seen or if not, Unavoidable
responsibility in case of a fortuitous event;
3. Must render the debtor Impossible to fulfil the obligation
(4) If he lends or leases the thing to a third person, who is not
normally
a member of his household;
4. There is No concurrent fault or aggravation by the debtor
(5) If, being able to save either the thing borrowed or his own
[ III N ]
thing, he chose to save the latter.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Usurious Transactions Presidential Decrees
Article 1979
Usurious Transactions
The depositary is liable for the loss of the thing through a fortuitous Article 1175
event: Usurious transactions shall be governed by special laws.
(1) If it is so stipulated;
(2) If he uses the thing without the depositor's permission; Article 1961
(3) If he delays its return; Usurious contracts shall be governed by the Usury Law and other
(4) If he allows others to use it, even though he himself may special laws, so far as they are not inconsistent with this Code.
have been authorized to use the same.
Article 1413
Article 2001 Interest paid in excess of the interest allowed by the usury laws
The act of a thief or robber, who has entered the hotel is not may be recovered by the debtor, with interest thereon from the date
deemed force majeure, unless it is done with the use of arms or of the payment.
through an irresistible force.
- Usury is the act of contracting to earn more than what is allowed
by law, usually in the form of interest in the forbearance of
Article 2147
money, good or chattels
The officious manager shall be liable for any fortuitous event:
(1) If he undertakes risky operations which the owner was not
accustomed to embark upon;
Presidential Decrees
(2) If he has preferred his own interest to that of the owner; PD 858
(3) If he fails to return the property or business after demand by The Monetary Board is hereby authorized to prescribe the maximum rate
the owner; or rates of interest for the loan or renewal thereof or the forbearance of
(4) If he assumed the management in bad faith. any money, goods or credits, and to change such rate of rates whenever
warranted by prevailing economic and social conditions.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Nature and Effects of Obligations || Usurious Transactions Central Bank Circulars
Central Bank Circulars Two Concepts on Payment of Interest (from Sir Labitag)
CBC 416 Interest for the Use or Loan/Forbearance of money, goods or credit
Removed loans to exporters to the extent guaranteed by the Guarantee There is No stipulation No interest
Fund for Small and Medium Enterprises (GFSME) from the list of 0% risk There is stipulation, but No Rate 12% per annum (MB 905)
weighted assets There is Stipulation and Rate No ceiling rate (MB 905)
Monetary Board Circular Lifting the Interest Rate Ceiling Interest as damages from breach or default in payment of loan or
MB 905 (1982) forbearance of money, goods or credit
SECTION 2.The rate of interest for the loan or forbearance of any money, There is No stipulation 12% per annum from date of
goods or credits and the rate allowed in judgments, in the absence of judicial/extrajudicial demand
express contract as to such rate of interest, shall continue to be twelve There is Stipulation and Rate 12% interest on the Loan +
per cent (12%) per annum. Stipulated Interest from date of
judgement
SECTION 26.Subsection 4303Q.1 to 4303Q.9 of the Manual of
Regulations are hereby amended to read as follows: Interest in obligations NOT consisting of forbearance of money,
Subsection 4303Q.2. Loans. The rate of interest, including goods or credit
commissions, premiums, fees and other charges, on loan transactions, There is No stipulation 6% per annum from date of
regardless of maturity and whether secured or unsecured, shall not be judicial/extrajudicial demand
subject to any ceiling prescribed under or pursuant to the Usury Law, There is Stipulation and Rate Interest agreed upon
as amended.
All money judgement shall earn 12% from finality of judgement
Article 2209
until full payment, as they are considered as forbearance of credit
If the obligation consists in the payment of a sum of money, and the
(E ASTERN S HIPPING L INES V . CA )
debtor incurs in delay, the indemnity for damages, there being no
stipulation to the contrary, shall be the payment of the interest
agreed upon, and in the absence of stipulation, the legal interest,
which is six per cent per annum.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Fulfillment of Obligations Payment
Condition Period/Term
Future and Uncertain Future and Certain
Determines the existence of an Determines the demandability of
obligation an obligation
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Pure and Conditional Obligations Conditional Obligations
Kinds of Condition
Article 1188
As to Effect of on Obligation
The creditor may, before the fulfillment of the condition, bring the
Suspensive Condition
appropriate actions for the preservation of his right.
- A condition precedent on the existence of an obligation
- The effectiveness of the obligation and the acquisition of the
creditors rights depend upon the fulfillment of the condition The debtor may recover what during the same time he has paid by
mistake in case of a suspensive condition.
Resolutory Condition
Suspensive Resolutory
- A condition subsequent to the existence of an obligation
Fulfillment Obligation arises Obligation is extinguished
- The obligation is immediately effective but is subject to
extinguishment upon fulfillment of the condition Non- No Obligation Obligation continues
fulfillment
Article 1187 Pendency No Obligation Obligation is effective
The effects of a conditional obligation to give, once the condition
has been fulfilled, shall retroact to the day of the constitution of the As to the Cause/Origin
obligation. Nevertheless, when the obligation imposes reciprocal
Article 1182
prestations upon the parties, the fruits and interests during the
When the fulfillment of the condition depends upon the sole will of
pendency of the condition shall be deemed to have been
the debtor, the conditional obligation shall be void. If it depends
mutually compensated. If the obligation is unilateral, the debtor
upon chance or upon the will of a third person, the obligation shall
shall appropriate the fruits and interests received, unless from the
take effect in conformity with the provisions of this Code.
nature and circumstances of the obligation it should be inferred that
the intention of the person constituting the same was different. - Potestative Depending on the sole will of a party
- Casual Depending upon chance or a will of a stranger
In obligations to do and not to do, the courts shall determine, in - Mixed Partly will of a party and partly chance/will of a
stranger
each case, the retroactive effect of the condition that has been
complied with.
Suspensive Resolutory
Potestative (Creditor) VALID VALID
Potestative (Debtor) VOID VALID
- A potestative (debtor) resolutory condition is valid, as the
obligation is already effective
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Pure and Conditional Obligations Conditional Obligations
As to Possibility As to Mode
- Possible Positive
- Impossible
Article 1184
The condition that some event happen at a determinate time shall
Article 1183 extinguish the obligation as soon as the time expires or if it has
Impossible conditions, those contrary to good customs or public become indubitable that the event will not take place.
policy and those prohibited by law shall annul the obligation which
depends upon them. If the obligation is divisible, that part thereof
which is not affected by the impossible or unlawful condition shall Negative
be valid. Article 1185
The condition that some event will not happen at a determinate
The condition not to do an impossible thing shall be considered as time shall render the obligation effective from the moment the time
not having been agreed upon. indicated has elapsed, or if it has become evident that the event
cannot occur.
Type of Impossibility
- Physical (contrary to law of nature)
- Juridical (contrary to law, morals, good customs, etc.) If no time has been fixed, the condition shall be deemed fulfilled at
such time as may have probably been contemplated, bearing in
Effects of Impossibility mind the nature of the obligation.
GENERAL RULE (ANNULS BOTH THE OBLIGATION AND CONDITION:
- POSITIVE and SUSPENSIVE conditions only. Loss, Deterioration and Improvement
Loss
EXCEPTIONS (CONVERTS TO A PURE OBLIGATION): - Perishes
- Negative conditions (Not to do - Goes out of commerce
- Simple, remuneratory and testamentary donations and - Disappears in such a way that its existence is unknown or is
dispositions Art. 727 and 873 unrecoverable
Deterioration
*These are impossibility that existed at the time of making of the - Any reduction/impairment in the substance/value of a thing that
contract. Impossibility arising after is covered by Art. 1266 does not result to a loss.
Improvement
- Anything added, incorporated or attached to a thing.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Pure and Conditional Obligations Conditional Obligations
Rules in case of Loss, Deterioration, Improvement Rules in case of Loss, Deterioration, Improvement
(Pending the happening of a Suspensive Condition) (Pending the happening of a Resolutory Condition)
- Only applicable to the delivery of specific things, not to generic Effect of Prevention of the Fulfillment of the Condition by the
things Obligor
- If the suspensive condition never happens, the creditor does not
Article 1186
obtain any cause of action to demand any of the above
The condition shall be deemed fulfilled when the obligor voluntarily
prevents its fulfillment.
Loss, deterioration and Improvement in Obligations To Do
- To be determined by the courts - Only applies to Suspensive conditions that do not depend upon
chance
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Reciprocal Obligations Concept
Unilateral Obligations
Other cases where it resolution may not be granted
- Resolution must be expressed in the contract
- If the courts find just cause to fix a period
Bilateral/Reciprocal Obligations
o Delay but there is possibility of fulfillment, unless time is
- Can be either expressed or implied of the essence
BREACH is a tacit resolutory condition - Contract of life annuities
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Reciprocal Obligations Differences of Arts. 1191 & 1380
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Obligation with a Period Period or Term
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Obligation with a Period Kinds of Period/Term
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Obligation with a Period Benefit of a Period
In every case, the courts shall determine such period as may under
the circumstances have been probably contemplated by the parties.
Once fixed by the courts, the period cannot be changed by them.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Alternative Obligations Concept
The debtor shall have no right to choose those prestations which Effect of Loss or Impossibility of one or all prestations
are impossible, unlawful or which could not have been the object Article 1202
of the obligation. The debtor shall lose the right of choice when among the prestations
whereby he is alternatively bound, only one is practicable.
GENERAL RULE:
- Debtor has the right of choice
o But if the debtor does not choose a prestation, the
creditor can sue him to make a choice Article 1203
EXCEPT: If through the creditor's acts the debtor cannot make a choice
- If they stipulate for the creditor or a third party to choose according to the terms of the obligation, the latter may rescind the
contract with damages.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Alternative Obligations
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Joint and Solidary Obligations Joint Obligations
In case of:
Effects
Novation: Affects only the share of the joint co-debtor in
Article 1277 whom the novation is created
Confusion does not extinguish a joint obligation except as regards Compensation: Affects only the share of the joint co-debtor in
the share corresponding to the creditor or debtor in whom the two whom the compensation takes place
characters concur. Confusion: Confusion does not extinguish a joint obligation
except as regards the share corresponding to the
Extent of liability of debtor
creditor or debtor in whom the two characters
1. Only with respect to his particular share in the debt
2. Vices of each obligation arising from the personal defect of a concur.
particular debtor or creditor does not affect the obligation or Remission: Benefits only the joint co-debtor in whom the
rights of the others remission is granted, obligation extinguished
3. The insolvency of a debtor does not increase the responsibility of
his co-debtors nor does it authorize a creditor demand anything
from his co-creditors
4. JOINT DIVISIBLE OBLIGATION: defense of res judicata is not
extended from one debtor to another
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Joint and Solidary Obligations Solidary Obligations
As to Parties bound
1. Active (Creditors)
Article 1215
2. Passive (Debtors)
3. Mixed Novation, compensation, confusion or remission of the debt,
made by any of the solidary creditors or with any of the solidary
As to Uniformity debtors, shall extinguish the obligation, without prejudice to the
1. Uniform Same terms/conditions for all provisions of Article 1219.
2. Varied / Non-Uniform Different terms/conditions
The creditor who may have executed any of these acts, as well as
Article 1211
he who collects the debt, shall be liable to the others for the share in
Solidarity may exist although the creditors and the debtors may
the obligation corresponding to them.
not be bound in the same manner and by the same periods and
conditions.
Article 1216
The creditor may proceed against any one of the solidary debtors
Effects
or some or all of them simultaneously. The demand made against
Solidary Creditor in relation to:
one of them shall not be an obstacle to those which may subsequently
> Common Debtor
be directed against the others, so long as the debt has not been
Article 1214 fully collected.
The debtor may pay any one of the solidary creditors; but if any
demand, judicial or extrajudicial, has been made by one of them,
> Solidary Co-Creditors
payment should be made to him.
Article 1212
Article 1217 (1) Each one of the solidary creditors may do whatever may be
Payment made by one of the solidary debtors extinguishes the useful to the others, but not anything which may be prejudicial to the
obligation. If two or more solidary debtors offer to pay, the creditor latter.
may choose which offer to accept.
Article 1213
A solidary creditor cannot assign his rights without the consent of
the others.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Joint and Solidary Obligations Solidary Obligations
Article 1222 Source Arises from the nature of Arises from the nature of the
the prestation (not capable tie among debtors/creditors
A solidary debtor may, in actions filed by the creditor, avail himself
of partial performance) (defines the extent of liability)
of all defenses which are derived from the nature of the
Parties Can happen between one Must have at least 2 debtors
obligation and of those which are personal to him, or pertain to
his own share. With respect to those which personally belong to the debtor and creditor or creditors
others, he may avail himself thereof only as regards that part of the Effects Breach by debtor does not Breach by one affects
debt for which the latter are responsible. affect co-debtors everyone
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Divisible and Indivisible Obligations Divisible Obligations
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Obligations with a Penal Clause Concepts
Cessation of Indivisibility
1. Natural Indivisibility Obligations with a Penal Clause Facultative Obligation
o Will only turn into a divisible obligation if it is converted Payment of penalty in lieu of the Power of the debtor to choose is
into an obligation to pay damages principal = only by express absolute
2. Conventional/Legal Indivisibility
stipulation
o Contract is novated
o Death of the debtor/creditor (as it gets divided to the Creditor may demand both Creditor can never demand both
heirs) obligations in case of stipulation prestations
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Different Kinds of Obligations || Obligations with a Penal Clause Demandability of Penalty
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Modes of Extinguishment
Chapter 4: [ PP II TPC ]
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Payment or Performance Requisites of a Valid Payment
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.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Payment or Performance Requisites of a Valid Payment
Article 1234
If the obligation has been substantially performed in good faith,
the obligor may recover as though there had been a strict and
complete fulfilment, less damages suffered by the obligee.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Payment or Performance Application of Payments
Article 1251
If the debtor accepts from the creditor a receipt in which an
Payment shall be made in the place designated in the obligation.
application of the payment is made, the former cannot complain of
the same, unless there is a cause for invalidating the contract.
There being no express stipulation and if the undertaking is to deliver
a determinate thing, the payment shall be made wherever the
Concept
thing might be at the moment the obligation was constituted.
Designation of payment by a debtor to a creditor, where the former has
several obligations of the same kind
In any other case the place of payment shall be the domicile of the
debtor.
Requisites of Application of Payment
If the debtor changes his domicile in bad faith or after he has incurred 1. Same creditor and debtor
in delay, the additional expenses shall be borne by him. 2. Several debts owed
3. Debts are Due
These provisions are without prejudice to venue under the Rules of 4. Debts are of the same Kind
Court. 5. Payment is Not sufficient to cover all the debts
[ SS DKN ]
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Payment or Performance Dation in Payment
Effects of Cession/Assignment
1. Debtor is released from the indebtedness only up to the amount Dation in Payment Cession / Assignment
of the proceeds of the sale There is transfer of ownership Only possession and
a. Unless the contrary is stipulated administration + authority to sell
2. Creditors do not own the properties May totally extinguish the debt Only to the extent of the price
a. They merely have the right to sell/liquidate obtained
3. Creditor will collect credits in the order of preference agreed Specific properties All properties
upon Any number of creditors Needs 2 or more creditors
a. By default, order as established by law. Does not presupposes Presupposes insolvency
Dation in Payment insolvency
(dacion en pago / datio in solutum) Novatory Not novatory
(changes the payment from
Article 1245
money to property)
Dation in payment, whereby property is alienated to the creditor
in satisfaction of a debt in money, shall be governed by the law of
Requisites of Dation in Payment:
sales.
1.Dation will not prejudice other creditors
2.Consent of creditor
3.Debtor is not declared judicially Insolvent
Concept 4.Not a Pactum commissorium (a stipulation when the property
is used as a security, where there is automatic appropriation by
- A special kind of payment, where instead of money, property is
the creditor in case debtor fails to pay)
given
[ DC I P ]
- Onerous in nature, as the creditor still needs to liquidate said
property in order to get the money
- Lacks the Identity element of payment Effects of Dation in Payment:
o Not the exact thing intended as payment 1. Obligation is extinguished
2. Dation is governed by the law of sales
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Payment or Performance Tender of Payment and Consignation
Tender of Payment and Consignation When Tender & Refusal is not required - Art. 1256
1. When the creditor is absent or unknown, or does not appear at
Tender of Payment the place of payment;
Concept 2. When he is incapacitated to receive the payment at the time it
- Act of offering payment by the debtor to a creditor, coupled is due;
with demand from creditor, in order to satisfy the obligation 3. When, without just cause, he refuses to give a receipt;
o Refusal without just cause gives rise to the opportunity 4. When two or more persons claim the same right to collect;
to consign payment 5. When the title of the obligation has been lost.
o Desire to comply with the obligation must be present
- Preparatory act to consignation Two Notice Requirements
- Extinguishment of obligation only happens after proper 1st Notice:
consignation
Article 1257 (1)
Requisites of Tender of Payment: In order that the consignation of the thing due may release the
1. Made in lawful currency obligor, it must first be announced to the persons interested in the
2. Should include interest fulfillment of the obligation.
3. Must be unconditional
- PURPOSE: To give creditors a chance to reconsider and accept
Consignation payment
- Act of depositing the thing due by the debtor whenever the - CONTENTS:
creditor cannot accept or refuses to accept payment - Fact and date of tender and undue refusal
- The thing deposited must be at the disposal of judicial authorities - Intention to make deposit
- PURPOSE: To avoid delay (mora) - Date and Hour to make the deposit
- The Court where the deposit will be made
Requisites of Consignation: - Must be given to all interested parties
1. There is a Debt due
2. Consignation was made because of a Legal cause 2nd Notice:
a. Creditor did not accept without just cause
Article 1258 (2)
b. Creditor cannot accept payments
3. Prior Notice of Consignation (1st Notice) The consignation having been made, the interested parties shall
4. Actual deposit / Consignation with Judicial authorities also be notified thereof.
5. Subsequent Notice of Consignation (2nd Notice) - PURPOSE: So that the creditor knows if he/she can already claim
[ DL 1C2 ] the item consigned to avoid deterioration of the thing
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Loss or Impossibility Loss of the Thing Due
Effects of Consignation
Expenses of Consignation
Article 1259 Article 1260 (1)
The expenses of consignation, when properly made, shall be charged Once the consignation has been duly made, the debtor may ask the
against the creditor. judge to order the cancellation of the obligation.
1. Obligation is extinguished AND debtor is liberated
- Creditor/Court accepts consignation Loss or Impossibility
2. The debtor is released in the same manner as if he had Loss of the Thing Due
performed the obligation at the time of consignation,
because this produces the effect of a valid payment. Concept
3. The accrual of interest on the obligation is suspended from the
moment of the consignation. Article 1189 (2)
4. The deteriorations/loss of a thing/amount consigned If the thing is lost through the fault of the debtor, he shall be obliged
occurring without fault of the debtor must be borne by the to pay damages; it is understood that the thing is lost when it:
creditor, because the risks of the thing are transferred to the - Perishes
creditor from the moment of deposit. - Goes out of commerce
5. Any increment or increase in value of the thing after the - Disappears in such a way that its existence is unknown
consignation inures to the benefit of the creditor. - Cannot be recovered;
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Loss or Impossibility Loss of the Thing Due
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Loss or Impossibility Impossibility
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Condonation or Remission Concept
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Confusion or Merger of Rights Concept
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Compensation Legal Compensation
As to Origin
1. Legal 1. Principal debtor and creditor
2. Conventional a. Must be principal creditor/debtor and not just a
- Parties may agree to the compensation of the debts guarantor, guardian, trustee or agent
which are not yet due Art. 1282 2. Both debts must be of the Same kind
- The requisites for compensation need not apply a. Either both are sums of money, or same kind of thing
3. Judicial (with same amount, if quantifiable)
- Also called as set-off, must be pleaded and only b. If quality was included, then both should be of the same
effective by decision of the Court quality
4. Facultative 3. Debts are Due
- When one of the parties can choose to claim a. A thing is due when a suspensive condition or a period
compensation or to object to it has been satisfied
b. In pure obligations, a thing is due after the obligation
Legal Compensation was constituted
4. Debts are Liquidated and Demandable
Requisites of Legal Compensation: a. Liquidated = existence and amount are determinable
b. Demandable = enforceable in court
Article 1279 c. Not all debts that are Due are Demandable (e.g.
In order that compensation may be proper, it is necessary: Prescribed debts)
(1) That each one of the obligors be bound Principally, and that 5. Should Not be subject of retention/controversy by third
he be at the same time a principal creditor of the other; persons
(2) That both debts consist in a sum of money, or if the things a. Must not have been waived
due are consumable, they be of the Same kind, and also of b. Must be communicated in due time to debtor
the same quality if the latter has been stated;
(3) That the two debts be Due; Exception to Paragraph (1)
(4) That they be Liquidated and demandable;
Article 1280
(5) That over Neither of them there be any retention or
Notwithstanding the provisions of the preceding article, the
controversy, commenced by third persons and
communicated in due time to the debtor. guarantor may set up compensation as regards what the creditor
may owe the principal debtor.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Compensation When Compensation is not allowed
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Novation Effect of the Status of the Original/New Obligation
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Obligations || Extinguishment of Obligations || Novation Subjective / Personal Novation
Article 1304
Conventional Subrogation Assignment of Credit A creditor, to whom partial payment has been made, may exercise
Debtors Consent Necessary Debtors Consent Not his right for the remainder, and he shall be preferred to the person
Necessary who has been subrogated in his place in virtue of the partial payment
Extinguished the old obligation Right is preserved and only of the same credit.
and gives rise to a new one transferred to another person
- Obligation is not yet extinguished until paid
Nullity of an old obligation may be Nullity is not remedied
cured by a new valid obligation
2. Legal Subrogation
- Not presumed, unless in cases enumerated in the Civil
Code
When is Legal Subrogation presumed?
a. When a creditor pays another creditor who is preferred
even without the knowledge of the debtor
b. When a third person, not interested in the obligation, pays
with the express/tacit approval of the debtor
c. When a third person, interested in the fulfilment of the
obligation, pays even without the knowledge of the debtor,
without prejudice to the effects of confusion
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || General Provisions || Definition 1. Obligatory Force
Characteristics
Contracts 1.
2.
Obligatory Force
Mutuality
3. Relativity
Chapter 1: 4. Consensuality
5. Freedom
General Provisions
Definition 1. Obligatory Force
Article 1305
Article 1159
A contract is a meeting of minds between two persons whereby one
Obligations arising from contracts have the force of law between the
binds himself, with respect to the other, to give something or to
contracting parties and should be complied with in good faith.
render some service.
Force of Law
- It may be to create, modify or extinguish a juridical relation - a party is bound by the stipulations in the contract, given that
between parties these are not contrary to law
- Obligations arising from contracts have the force of law - a party may not remove himself from the fulfilment of the
between the contracting parties contract without the consent of the other party
- the Court may not relieve any party from the contract unless
provided by law or in the stipulation
Elements - Even if the contract is foolish, unwise or disastrous, it still must be
1. Essential elements upheld if entered into with all the required legal formalities and
- Without which, there can be no contract with full awareness.
a. Consent
b. Object
c. Causa 2. Mutuality
2. Natural elements Article 1308
- Presumed to exist unless the contrary is stipulated The contract must bind both contracting parties; its validity or
3. Accidental elements
compliance cannot be left to the will of one of them.
- Will only exist when they are stipulated
- Also the fixing of the price can never be left to the discretion of
the contracting parties
- Acceptance by the other is required to perfect the sale
Art. 1473
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || General Provisions || Characteristics
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || General Provisions || Parties 5. Freedom
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || General Provisions || Parties What they may not stipulate
b. Pactum leonina
Article 1782
Persons who are prohibited from giving each other any donation or Article 1799
advantage cannot enter into universal partnership. A stipulation which excludes one or more partners from any share in
the profits or losses is void.
Article 87 Family Code
- One party bearing a lions share of the profits/losses
Every donation or grant of gratuitous advantage, direct or indirect,
between the spouses during the marriage shall be void, except c. Pactum de non alienado
moderate gifts which the spouses may give each other on the
Article 2130
occasion of any family rejoicing. The prohibition shall also apply to
A stipulation forbidding the owner from alienating the immovable
persons living together as husband and wife without a valid marriage.
mortgaged shall be void.
The husband and the wife cannot sell property to each other,
2. Contrary to morals
except:
- Universal or community notion of right and wrong
(1) When a separation of property was agreed upon in the 3. Contrary to good customs
marriage settlements; or - Societal understanding of what they want or do not want
(2) When there has been a judicial separation or property under 4. Contrary to public order
Article 191. - Consideration of the public weal, peace, safety and
health of the community
What they may not stipulate 5. Contrary to public policy
1. Contrary to Law - A contract is contrary to public policy if it has a tendency
a. Pactum commissorium to injure the public, is against the public good, or
Article 2088 contravenes some established interest of society, or
tends clearly to undermine the security of tenure
The creditor cannot appropriate the things given by way of pledge or
(G ABRIEL V . M ONTE DE P IEDAD )
mortgage, or dispose of them. Any stipulation to the contrary is
null and void.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || General Provisions || Classification According to Subject Matter
According to Cause
1. Onerous
2. Gratuitous / Lucrative
According to Risk
1. Commutative
2. Aleatory
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || General Provisions || Stages of Contracts Stipulations in favor of third persons (stipulation pour autrui)
Stages of Contracts -
Stranger needs to communicate his acceptance to the obligor
1. Preparation before its revocation
- Negotiation period, ending at the time when the parties - Must be conferred clearly and deliberately
agree - A mere incidental benefit/interest is not sufficient
2. Perfection - The stipulation in favour of the stranger must only be a part of
- Starts when the parties agree or give their consent to the the contract
details / terms - No relation of agency exists between any of the parties and the
3. Consummation stranger (Manresa)
- A contract is consummated when all the obligations Requisites of a stipulation pour autrui
therein are complied with, or when certain conditions 1. The stipulation is only party of the contract
give rise to its death 2. The favorable stipulation is not conditioned or compensated by
any kind of obligation
Differences between a contract, perfected promise and 3. Neither contracting parties have legal representation nor
an imperfect promise (policitation) authorization of the third person
Contract Perfect Imperfect 4. Benefit was clearly and deliberately conferred
Consent is given An offer but lacking A mere invitation to 5. Third person communicated his acceptance before revocation
6. Possession of the object of the contract by third persons
by both parties consent (terms are clear) offer (advertisement)
Article 1312
With respect to third persons In contracts creating real rights, third persons who come into
Stipulations in favor of third persons (stipulation pour possession of the object of the contract are bound thereby, subject
autrui) to the provisions of the Mortgage Law and the Land Registration
Laws.
Article 1311 (2)
If a contract should contain some stipulation in favor of a third
person, he may demand its fulfillment provided he communicated
his acceptance to the obligor before its revocation. A mere
incidental benefit or interest of a person is not sufficient. The
contracting parties must have clearly and deliberately conferred a
favor upon a third person.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Essential Requisites of Contracts || Interference by Third Persons Creditors of the Contracting parties
Requisites of Acceptance
Circumstances when offer becomes ineffective 1. Unqualified and Unconditional
1. Upon rejection by the offeree - Must conform with the terms of the offer
2. Upon incapacity by either parties 2. Communicated to the offeror and learned by him
a. Death
b. Civil interdiction Kinds of Acceptance
c. Insanity 1. Qualified
d. Insolvency - Counteroffer or Conditional Acceptance
3. Upon counter-offer (qualified / conditional acceptance) 2. Express
4. Upon lapse of the time stated in the offer 3. Implied
5. Upon revocation of the offer before learning of the acceptance - By executing an act that is required by the offer that
6. Upon supervening illegality before acceptance would signify acceptance
Article 1325
Unless it appears otherwise, business advertisements of things for
sale are not definite offers, but mere invitations to make an offer.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Essential Requisites of Contracts || Consent Requisites of Consent
Contract of Option
Article 1319 (2)
- A kind of preparatory contract, where the offeror grants the
Acceptance made by letter or telegram does not bind the offeror
offeree the power to decide whether or not to accept the offer to
except from the time it came to his knowledge. The contract, in
enter into a principal contract, within a particular period and
such a case, is presumed to have been entered into in the place manner of acceptance.
where the offer was made. - Consideration is important only insofar as the ability of the
offeror to withdraw the offer
Theories when a contract is perfected
1. Manifestation Theory 2. Necessary legal capacities of the parties
- The contract is perfected from the moment the Who cannot give consent?
acceptance is declared or made
Article 1244 (1)
2. Expedition Theory
- The contract is perfected from the moment the offeree The following cannot give consent to a contract:
transmits the notification of acceptance to the offeror (1) Unemancipated minors;
3. Reception Theory (2) Insane or demented persons, and deaf-mutes who do not
- The contract is perfected from the moment that the know how to write.
notification of acceptance is in the hands of the offeror
4. Cognition Theory
Article 1329
- The contract is perfected from the moment the
The incapacity declared in Article 1327 is subject to the modifications
acceptance comes to the knowledge of the offeror.
(Philippines) determined by law, and is understood to be without prejudice to
special disqualifications established in the laws.
Period of Acceptance
- Civil Interdiction only allows transactions inter vivos Art. 34
Article 1324 RPC
When the offeror has allowed the offeree a certain period to accept, - Undischarged Insolvents cannot make payments Sec. 24
Insolvency Law
the offer may be withdrawn at any time before acceptance by
- Husband and Wife cannot donate or sell property to each other
communicating such withdrawal, except when the option is founded
EXCEPT moderate gifts Art. 87 FC
upon a consideration, as something paid or promised. - Those prohibited by law to purchase:
- Guardians WRT property of his ward
- Offer must be accepted within the period, or else, acceptance
- Agents WRT property of the principal
becomes a counter-offer
- Executors and Administrators WRT property under
- If there is no period fixed by the offeror, acceptance should be
administration
made immediately within a reasonable tacit period
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Essential Requisites of Contracts || Consent Requisites of Consent
- Public Officers WRT property of the State under their Kinds of Vices of Consent
administration 1. Mistake or Error
- Justices, judges, prosecutors, clerks of courts, lawyers 2. Violence and Intimidation
WRT property attached or in litigation 3. Undue Influence
Art. 1491 4. Fraud or dolo
5. Misrepresentation
When offer and/or acceptance is made:
- During a lucid interval VALID Mistake or Error
- In a state of drunkenness VOIDABLE
- During a hypnotic spell VOIDABLE Article 1331
In order that mistake may invalidate consent, it should refer to the
Other instances where minors consent is Valid substance of the thing which is the object of the contract, or to
- Contracts for necessaries, enforceable against those who are duty those conditions which have principally moved one or both parties
bound to support the minor to enter into the contract.
- When a minor is in estoppel to urge his minority, through his
misrepresentation, provided the other party is not negligent.
Mistake as to the identity or qualifications of one of the parties will
3. The consent must be intelligent, free, spontaneous and real vitiate consent only when such identity or qualifications have been
the principal cause of the contract.
Article 1330
A contract where consent is given through mistake, violence, A simple mistake of account shall give rise to its correction.
intimidation, undue influence, or fraud is voidable.
- The inadvertent and excusable disregard of a circumstance
material to the contract
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Essential Requisites of Contracts || Consent Requisites of Consent
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Essential Requisites of Contracts || Consent Requisites of Consent
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Essential Requisites of Contracts || Consent Requisites of Consent
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Essential Requisites of Contracts || Cause of Contracts Defective Causes and their Effects
Article 1354
Although the cause is not stated in the contract, it is presumed that
it exists and is lawful, unless the debtor proves the contrary.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Form of Contracts || General Rule: Defective Causes and their Effects
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Form of Contracts || Kinds of Formalities required by Law Defective Causes and their Effects
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Reformation of Instruments || Requisites Defective Causes and their Effects
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Reformation of Instruments || Cases where No Reformation is Allowed Defective Causes and their Effects
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Interpretation of Contracts || Implied Ratification Defective Causes and their Effects
Article 1367
If the words appear to be contrary to the evident intention of the
When one of the parties has brought an action to enforce the
parties, the latter shall prevail over the former.
instrument, he cannot subsequently ask for its reformation.
Procedure of Reformation
Article 1369
The procedure for the reformation of instrument shall be governed
by rules of court to be promulgated by the Supreme Court.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Interpretation of Contracts || How to Determine Intention Doubtful Clauses
- Take note the usage and customs of the place With respect to the party who caused the obscurity
Article 1377
How to Interpret a Contract The interpretation of obscure words or stipulations in a contract shall
Doubtful Clauses not favor the party who caused the obscurity.
When it contains stipulations that admit several meanings
Article 1373 When it is absolutely impossible to settle doubts by the rules above
If some stipulation of any contract should admit of several meanings,
Article 1378
it shall be understood as bearing that import which is most
When it is absolutely impossible to settle doubts by the rules
adequate to render it effectual.
established in the preceding articles, and the doubts refer to
incidental circumstances of a gratuitous contract, the least
When it contains various stipulations, some of which are doubtful transmission of rights and interests shall prevail. If the contract is
onerous, the doubt shall be settled in favor of the greatest
Article 1374
reciprocity of interests.
The various stipulations of a contract shall be interpreted together,
attributing to the doubtful ones that sense which may result from all
If the doubts are cast upon the principal object of the contract in
of them taken jointly.
such a way that it cannot be known what may have been the intention
or will of the parties, the contract shall be null and void.
When it contains words that have different significations
Incidental circumstances
Article 1375 - Gratuitous Contracts
Words which may have different significations shall be understood in o Least transmission of rights and interests
that which is most in keeping with the nature and object of the - Onerous Contracts
o Greatest reciprocity of interests
contract.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Interpretation of Contracts || How to Interpret a Contract Doubtful Clauses
When the doubts are cast upon the principal object so that the Section 14. Peculiar signification of terms. The terms of a writing are
intention cannot be known presumed to have been used in their primary and general acceptation,
- Contract shall be null and void but evidence is admissible to show that they have a local, technical, or
Article 1379 otherwise peculiar signification, and were so used and understood in the
The principles of interpretation stated in Rule 123 of the Rules of particular instance, in which case the agreement must be construed
Court shall likewise be observed in the construction of contracts. accordingly. (12)
Rule 130 (Old Rule 123) Section 15. Written words control printed. When an instrument
4. Interpretation of Documents consists partly of written words and partly of a printed form, and the two
are inconsistent, the former controls the latter. (13)
Section 10. Interpretation of a writing according to its legal meaning.
The language of a writing is to be interpreted according to the legal Section 16. Experts and interpreters to be used in explaining certain
meaning it bears in the place of its execution, unless the parties intended writings. When the characters in which an instrument is written are
otherwise. (8) difficult to be deciphered, or the language is not understood by the
court, the evidence of persons skilled in deciphering the characters, or
Section 11. Instrument construed so as to give effect to all provisions.
In the construction of an instrument, where there are several provisions who understand the language, is admissible to declare the characters or
the meaning of the language. (14)
or particulars, such a construction is, if possible, to be adopted as will
give effect to all. (9) Section 17. Of Two constructions, which preferred. When the terms of
Section 12. Interpretation according to intention; general and particular an agreement have been intended in a different sense by the different
parties to it, that sense is to prevail against either party in which he
provisions. In the construction of an instrument, the intention of the
parties is to be pursued; and when a general and a particular provision supposed the other understood it, and when different constructions of a
are inconsistent, the latter is paramount to the former. So a particular provision are otherwise equally proper, that is to be taken which is the
intent will control a general one that is inconsistent with it. (10) most favorable to the party in whose favor the provision was made. (15)
Section 13. Interpretation according to circumstances. For the proper Section 18. Construction in favor of natural right. When an instrument
construction of an instrument, the circumstances under which it was is equally susceptible of two interpretations, one in favor of natural right
and the other against it, the former is to be adopted. (16)
made, including the situation of the subject thereof and of the parties to
it, may be shown, so that the judge may be placed in the position of
those who language he is to interpret. (11) Section 19. Interpretation according to usage. An instrument may be
construed according to usage, in order to determine its true character.
(17)
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Rescissible Contracts || Kinds of Rescissible Contracts Doubtful Clauses
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Rescissible Contracts || Characteristics of Rescissible Contracts Differences of Arts. 1191 & 1380
1. Contract is Rescissible
Article 1382
Payments made in a state of insolvency for obligations to whose
fulfillment the debtor could not be compelled at the time they were
effected, are also rescissible.
2. Party asking for rescission has no other legal means to obtain 4. The object of the contract has not passed legally to the
reparation possession of a 3rd person in good faith
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Rescissible Contracts || Rescission Extent of Rescission
Extent of Rescission
Article 1384 Presumptions based on facts (Badges of Fraud)
Rescission shall be only to the extent necessary to cover the Fraud is shown by: (O RIA V . M AC M ICKING )
damages caused. 1. Fictitious or inadequate consideration
2. Transfer after suit is filed and while it is pending
3. Sale upon credit by an insolvent debtor
4. Proof of large indebtedness or complete insolvency
Presumptions of Fraud 5. Transfer of all or nearly all of the property, especially where the
Article 1387 debtor is financially embarrassed
All contracts by virtue of which the debtor alienates property by 6. Transfer between father and son, where other circumstances
above are also present
gratuitous title are presumed to have been entered into in fraud of
7. Failure of the vendee to take exclusive possession of the property
creditors, when the donor did not reserve sufficient property to
8. Gross disparity between the price and the real value
pay all debts contracted before the donation.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Voidable or Annullable Contracts || Kinds of Voidable/Annullable Contracts Annulment v. Rescission
Chapter 7: Annulment
Annulment v. Rescission
Voidable or Annullable Contracts Voidable Contracts Rescissible Contracts
Kinds of Voidable/Annullable Contracts Intrinsic Defect, where the Extrinsic Defect, where the contract
contract has in itself an produced pecuniary damage to
Article 1390
inefficiency another
The following contracts are voidable or annullable, even though there
Requires ratification to be cured Needs no ratification to be
may have been no damage to the contracting parties:
(1) Those where one of the parties is incapable of giving effective
consent to a contract; Based on a vice of consent w/c The elements of a contract are
(2) Those where the consent is vitiated by mistake, violence, invalidates it complete
intimidation, undue influence or fraud. Annulment is a sanction based Rescission is a remedy based on
These contracts are binding, unless they are annulled by a proper on law equity
action in court. They are susceptible of ratification. Demanded by only the parties May be demanded by a third
to a contract person affected
Annulment v. Nullity Public interest predominates Private interest predominates
Void ab initio Voidable
May be invoked by any person May only be invoked by the party
Grounds for Annulment
interested whose consent was vitiated 1. Incapacity
Cannot be cured Can be cured 2. Vice of Consent
Due to violation of a public policy Due to vice of consent a. Violence
Void from the start Valid until annulled b. Intimidation
c. Undue Influence
d. Mistake
Characteristics of Voidable/Annullable Contracts e. Fraud
1. Their defect consists in the vitiation of consent of one of the [ VIU MF ]
contracting parties
2. They are binding until they are annulled by a competent court
3. They are susceptible of convalidation by ratification or by
prescription
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Voidable or Annullable Contracts || Annulment Who may or may not institute action for annulment
Who may or may not institute action for annulment Effect of Annulment
Article 1397 Article 1398
The action for the annulment of contracts may be instituted by all An obligation having been annulled, the contracting parties shall
who are thereby obliged principally or subsidiarily. However, restore to each other the things which have been the subject matter
persons who are capable cannot allege the incapacity of those with of the contract, with their fruits, and the price with its interest,
whom they contracted; nor can those who exerted intimidation, except in cases provided by law.
violence, or undue influence, or employed fraud, or caused mistake
base their action upon these flaws of the contract. In obligations to render service, the value thereof shall be the basis
for damages.
Who May institute an action
- Party (principal or subsidiary) whose consent was vitiated
Article 1402
As long as one of the contracting parties does not restore what in
Who May Not institute an action
virtue of the decree of annulment he is bound to return, the other
- The party who caused the defect
cannot be compelled to comply with what is incumbent upon him.
- Capable parties cannot allege the incapacity of those with whom
they contracted
- Third person who is a stranger to the contract. UNLESS he can
Mutual Restitution
prove that the contract prejudiced his rights with respect to one
of the contracting parties, he may ask for annulment e.g. GENERAL RULES
guarantors and sureties (S INGSONG V . I SABELA S AWMILL ) If the contract has not yet been performed, the parties are
-
released from their obligations
- Restore to each other the thing with its fruits and the price with
Prescription
interest
Article 1391 EXCEPTIONS
The action for annulment shall be brought within four years. - Principle of unjust enrichment
This period shall begin: o Compensation for services rendered and enjoyed during
-In cases of intimidation, violence or undue influence, from the the validity of the contract
time the defect of the consent ceases.
- In case of mistake or fraud, from the time of the discovery of
the same.
And when the action refers to contracts entered into by minors or
other incapacitated persons, from the time the guardianship ceases.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Voidable or Annullable Contracts || Ratification of Voidable/Annullable Contracts Extinguishment of the Action
Contract is cleansed retroactively from all its defects Characteristics of Unenforceable Contracts
1. They cannot be enforced by a proper action in court
Article 1396 2. They are susceptible of ratification
Ratification cleanses the contract from all its defects from the 3. They cannot be assailed by third persons
moment it was constituted. 4. Defect is not curable by prescription (no prescription)
Unauthorized contracts (d) An agreement for the sale of goods, chattels or things in
action, at a price not less than five hundred pesos, unless the
Article 1404
buyer accept and receive part of such goods and chattels, or
Unauthorized contracts are governed by Article 1317 and the the evidences, or some of them, of such things in action or
principles of agency in Title X of this Book. pay at the time some part of the purchase money; but when
a sale is made by auction and entry is made by the
- The said contract shall not bind the principal Art. 1317
auctioneer in his sales book, at the time of the sale, of the
- The agent shall be liable if the principal does not ratify the
amount and kind of property sold, terms of sale, price,
contract - Art. 1897 and 1898 (Agency)
names of the purchasers and person on whose account the
Contracts covered by the Statute of Frauds sale is made, it is a sufficient memorandum;
- The Statute of Frauds came from Rule 123, Sec. 21 of the old (e) An agreement of the leasing for a longer period than one
Rules of Court year, or for the sale of real property or of an interest therein;
(f) A representation as to the credit of a third person.
Purpose of the Statute
- The Statute of Frauds aims to prevent certain types of contracts
to be proved by parol evidence because of their sensitivity. a) Agreements that are covered by (a) should be wholly executory
- To prevent fraud and perjury through intentional (all parts are still subject to execution; no partial performance
misrepresentations or injustice because of faulty unassisted yet)
memory of witnesses o If there is partial performance, they are then outside the
ambit of the Statute
Article 1403 (2) b) Test: Is there a principal debtor (other than the defendant)
In the following cases an agreement hereafter made shall be liable?
unenforceable by action, unless the same, or some note or o If there is, the statute applies
memorandum, thereof, be in writing, and subscribed by the party o If the credit is given exclusively because of the
defendants promise, the statute cannot be invoked
charged, or by his agent; evidence, therefore, of the agreement
(R EISS V . M EMIJE )
cannot be received without the writing, or a secondary evidence c) Includes marriage settlements and donation propter nuptias
of its contents: d) Things in action = movables but not susceptible of possession
(a) An agreement that by its terms is not to be performed (credits, interest in property, etc.)
within a year from the making thereof; e) Sale of land through an agent is void Art. 1874
(b) A special promise to answer for the debt, default, or
miscarriage of another;
(c) An agreement made in consideration of marriage, other
than a mutual promise to marry;
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Void or Inexistent Contracts || Characteristics of Void/Inexistent Contracts Contracts executed by parties who are both incapable of giving
consent to a contract
When the nullity proceeds from the illegality of the cause or Criminal - No action against each - Innocent party to
Offense other claim what he has
object of the contract, and the act constitutes a criminal offense,
- Both to be prosecuted given
both parties being in pari delicto, they shall have no action against - Innocent party not
Non-Criminal - Neither may recover
each other, and both shall be prosecuted. Moreover, the provisions of - Neither may ask for bound to comply
Offense
the Penal Code relative to the disposal of effects or instruments of a performance
crime shall be applicable to the things or the price of the contract.
Purpose is illegal
This rule shall be applicable when only one of the parties is guilty;
but the innocent one may claim what he has given, and shall not be Article 1414
bound to comply with his promise. When money is paid or property delivered for an illegal purpose,
the contract may be repudiated by one of the parties before the
Article 1412 purpose has been accomplished, or before any damage has been
If the act in which the unlawful or forbidden cause consists does not caused to a third person. In such case, the courts may, if the public
constitute a criminal offense, the following rules shall be observed: interest will thus be subserved, allow the party repudiating the
(1) When the fault is on the part of both contracting parties, contract to recover the money or property.
neither may recover what he has given by virtue of the contract,
or demand the performance of the other's undertaking; Article 1415
(2) When only one of the contracting parties is at fault, he Where one of the parties to an illegal contract is incapable of
cannot recover what he has given by reason of the contract, or giving consent, the courts may, if the interest of justice so demands
ask for the fulfillment of what has been promised him. The allow recovery of money or property delivered by the
other, who is not at fault, may demand the return of what he
incapacitated person.
has given without any obligation to comply his promise.
Not illegal per se but prohibited
Article 1416
When the agreement is not illegal per se but is merely prohibited,
and the prohibition by the law is designated for the protection of
the plaintiff, he may, if public policy is thereby enhanced, recover
what he has paid or delivered.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Contracts || Void or Inexistent Contracts || Right to set up defense Amount paid exceeds the maximum allowed by law
Amount paid exceeds the maximum allowed by law Right to set up defense
Article 1417 Article 1409 (2)
When the price of any article or commodity is determined by These contracts cannot be ratified. Neither can the right to set up
statute, or by authority of law, any person paying any amount in the defense of illegality be waived.
excess of the maximum price allowed may recover such excess.
Natural
Natural Obligation Moral Obligation
There is a juridical tie No juridical tie
Performance of debtor is a Act is pure liberality
Obligations
legal fulfillment of obligation
There are positive laws that Morals govern the obligation
still govern them
General Provisions Examples
Definition Article 1424
Article 1423 When a right to sue upon a civil obligation has lapsed by
Obligations are civil or natural. Civil obligations give a right of extinctive prescription, the obligor who voluntarily performs the
action to compel their performance. Natural obligations, not being contract cannot recover what he has delivered or the value of the
based on positive law but on equity and natural law, do not grant a service he has rendered.
right of action to enforce their performance, but after voluntary
fulfillment by the obligor, they authorize the retention of what has Article 1425
been delivered or rendered by reason thereof. Some natural When without the knowledge or against the will of the debtor, a
obligations are set forth in the following articles. third person pays a debt which the obligor is not legally bound to
pay because the action thereon has prescribed, but the debtor later
Requisites of a Natural Obligation
voluntarily reimburses the third person, the obligor cannot recover
1. Juridical tie between two people
what he has paid.
2. The tie is created by equity and natural justice
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Natural Obligations || General Provisions || Conversion to Civil Obligation When the contract is a result of a previous illegal contract
Article 1429
When a testate or intestate heir voluntarily pays a debt of the
decedent exceeding the value of the property which he received
by will or by the law of intestacy from the estate of the deceased, the
payment is valid and cannot be rescinded by the payer.
Article 1430
When a will is declared void because it has not been executed in
accordance with the formalities required by law, but one of the
+intestate heirs, after the settlement of the debts of the deceased,
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Estoppel || General Provisions || Definition When the contract is a result of a previous illegal contract
Estoppel v. Fraud
Definition
Estoppel by Record
Article 1431 - Preclusion to deny the truth of matters set forth in a record,
Through estoppel an admission or representation is rendered whether judicial or legislative, and also to deny the facts
conclusive upon the person making it, and cannot be denied or adjudicated by a court of competent jurisdiction
disproved as against the person relying thereon.
Estoppel by Deed
- Estoppel is a bar that prevents a person from denying or asserting - Bar which precludes on party to a deed (instrument) and his
anything to the contrary, based on law, of what has been privies from asserting as against the other party and his privies
established as the truth either by acts of the person or by any right or title in derogation of the deed, or from denying the
law/judgement truth of any material facts asserted in it
- It aims to prevent the possible damage/injury that the
admission/representation can cause by imposing silence Estoppel in pais
- Based on equity, moral justice and natural rights
- Because of something which he has done or omitted to do, a
Kinds of Estoppel party is denied the right to plead or prove an otherwise important
act
Article 1433
Estoppel may be in pais or by deed.
Estoppel by misrepresentation Art. 1437
1. Technical Estoppel Estoppel by acceptance of benefit Art. 1438
a. By record (Res judicata)
b. By deed Promissory estoppel
2. Equitable estoppel / Estoppel in pais - Am. Jur concept that states that an estoppel may arise from
making of a promise, even though without consideration, if it was
Persons Bound intended that the promise should be relied upon and in fact it
Article 1439 was relied upon, and if a refusal to enforce it would be virtually
Estoppel is effective only as between the parties thereto or their to sanction the perpetuation of fraud or would result in other
successors in interest. injustice.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Estoppel || General Provisions || Cases where Estoppel Applies When the contract is a result of a previous illegal contract
Article 1435
If a person in representation of another sells or alienates a thing, Article 1438
the former cannot subsequently set up his own title as against the One who has allowed another to assume apparent ownership of
buyer or grantee. personal property for the purpose of making any transfer of it,
cannot, if he received the sum for which a pledge has been
Article 1436 constituted, set up his own title to defeat the pledge of the property,
A lessee or a bailee is estopped from asserting title to the thing made by the other to a pledgee who received the same in good faith
leased or received, as against the lessor or bailor. and for value.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Trusts || General Provisions || Definition of Trusts Express Trusts
Kinds of Trusts
Trusts Article 1441
Trusts are either express or implied. Express trusts are created by
Chapter 1: the intention of the trustor or of the parties. Implied trusts come into
being by operation of law.
General Provisions
1. Express Trusts
Definition of Trusts
2. Implied Trusts
- A fiduciary relationship between the trustor and trustee where the
a. Resulting Trusts
latter holds a property with the obligation of dealing with the
Carrying out an actual or presumed intent of the
property to benefit another person.
parties, where the express trust fails
- In trusts, there exist a beneficial title and a legal title
b. Constructive Trusts
Governing Rules Regardless of intention, a trust is created in order
to prevent fraud, oppression or unjust enrichment
Article 1442 of another (e.g. mistake in delivery)
The principles of the general law of trusts, insofar as they are not
in conflict with this Code, the Code of Commerce, the Rules of Court Express Trusts
and special laws are hereby adopted.
Proof Required
Parties to a Trust Article 1443
Article 1440 No express trusts concerning an immovable or any interest
A person who establishes a trust is called the trustor; one in whom therein may be proved by parol evidence.
confidence is reposed as regards property for the benefit of
another person is known as the trustee; and the person for whose Form of Express Trusts
benefit the trust has been created is referred to as the beneficiary.
Article 1444
No particular words are required for the creation of an express
trust, it being sufficient that a trust is clearly intended.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Trusts || General Provisions || Kinds of Trusts Implied Trusts
Article 1450
How Proved If the price of a sale of property is loaned or paid by one person
Article 1457 for the benefit of another and the conveyance is made to the
An implied trust may be proved by oral evidence. lender or payor to secure the payment of the debt, a trust arises
by operation of law in favor of the person to whom the money is
loaned or for whom its is paid. The latter may redeem the property
and compel a conveyance thereof to him.
Article 1451
When land passes by succession to any person and he causes the
legal title to be put in the name of another, a trust is established
by implication of law for the benefit of the true owner.
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Trusts || General Provisions || Kinds of Trusts Implied Trusts
Article 1456
If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust
for the benefit of the person from whom the property comes.
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Defective Contracts Tables || ||
`_______________________________________________________________
OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016
Special Thanks || Bibliography ||
Special Thanks quiz 10 coverage art 1347-1359, 1366-1369, 1403, 1771, 1773, 1874,
2134, 748-749
Bibliography quiz 11 coverage art 1191, 1370-1378, 1380, 1381, 1383-1389
Digests of A2016
quiz 12 coverage art 1390-1394, 1396-1407
Civil Code of the Philippines, 1949
quiz 13 coverage art 1345-1346, 1409-1412, 1414-1430
Reyes, Jose B. L., and Ricardo C. Puno. 1958. An Outline of Philippine
quiz 14 coverage art 1431, 1433-1445, 1448-1457
Civil Law. Quezon City: Central Book Supply, Inc.
Santos, Karichi E. 2009. "Karichi Notes." Quezon City.
Tolentino, Arturo M. 1990. Commentaries and Jurisprudence on the Civil
Code of the Philippines. Manila: Central Book Supply, Inc.
Special Mentions
- Cristobal, Enad, Espaola, Macariola, Marin, Nuez, Sevilla and
Tiangco as copyreaders, additional information and moral
support :)
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OBLIGATIONS and CONTRACTS Reviewer || Prof. J.J. Disini Jocel Isidro S. Dilag || UP Law A-2016