Specific v.

Generic Thing

1. Specific is designated or physically segregated from others of the same class.

2. Generic refers to a class or genus and cannot be determined with particularity.

Duties of debtor in delivery of generic thing

a. To deliver a thing which must neither be of superior nor inferior quality (1246)

b. To pay damages in case of breach (1170)

Duties of debtor in delivery of specific thing

a. To deliver the thing which he has obligated himself to give

b. To take care of the thing with the proper diligence of a good father of a family

- The ordinary care that an average or reasonably prudent

- Person exercises over his property

Another standard of care may be required by law or by stipulation of the parties

3. To deliver all the accessions and accessories

4. To pay damages in case of breach

Remedies of Creditors in breach of obligation

1. to Give Determinate Thing

a. To compel specific performance

b. To recover damages

2. to Give Indeterminate Thing

a. To ask for performance of the obligation

b. To ask that obligation be complied with by another at expense of debtor

c. To recover damages

3. to Do

a. To have the obligation performed at debtors expense

 b. To recover damages

4. Not to Do

a. Undone at his expense

b. To recover damages

Rules on Fruits

1. Kinds of fruits

a. Natural product of the soil, young and other products of animals

b. Industrial produced thru cultivation or labor

c. Civil derived by juridical relations

2. Creditor has rights to the fruits from the time the obligation to deliver arises

3. Real rights acquired only when delivered to him

a. Real rights - right over a specific thing without and passive subject, directed against the whole
word.

b. Personal rights right to demand from another debtor the fulfillment of the latters obligation.

Accessions and accessories

Accessions fruits of a thing or additions to or improvement upon a thing

Accessories joined to or included with the principal thing for better use or completion.

1. Even if not mentioned, accessories follow the principal

2. But obligation to deliver accessions or accessories does not include the principal

Legal Delay

1. From the time oblige judicially or extra- judicially demand fulfillment; not mere notice

2. No demand from creditor necessary in following cases:

a. When obligation or law expressly so declares

b. Time is of the essence (controlling motive)

c. When demand would be useless

3. In reciprocal obligation, from the moment one party fulfills his obligation, delay by the other begins.
 4. Kinds of Delay

a. Mora solvendi delay on the part of debtor

b. Mora acccipiendi delay of creditor

c. Compensatio more delay in reciprocal obligation

5. Effects of Delay

a. Liable for interest and damages

b. Liable even for fortuitous event when the obligation is to deliver a determinate thing

Fortuitous Events

1.1. Any event which cannot be foreseen or which though foresee

is inevitable, independent of the will or from aggravation of the debtor, render impossible the
fulfillment of obligation

2.2. No person shall be responsible for fortuitous events except:

a.a. Where expressly specified by law or stipulated in contract

b.b. When nature of the obligation requires assumption of risk

c.c. When debtor incurs delay

d.d. When debtor promises to deliver same thing to two or more persons

e.e. When obligation to deliver arises from criminal offense

f.f. When obligation is generic

Fraud (deceit or dolo) Deliberate or intentional evasion of the normal fulfillment of an obligation;

1.1. Dolo incidente (Incidental Fraud) committed in the performance of pre-existing obligation,
remedy is damages

2.2. Dolo causante (Causal Fraud) Fraud employed at the time of the execution of a contract in
order to secure consent remedy is annulment because of vitiation of consent

3.3. Demandable in all obligations

4.4. Waiver of future fraud is void

Negligence (culpa) Omission of that diligence which is required by the nature of the obligation, but no
malice

1.1. Culpa contractual Negligence in the performance of contractual obligation,

 a. Pre-existing contract
b. Liable for damages based on breach of contract

c. Proof of contract and breach is enough for recovery of damage

d. Negligence of employee conclusive presumption of employers negligence

e. Proof of due diligence in the selection of employee not a defense

2. Culpa aquiliana Negligence between parties not so related by any pre-existing contract,

a. Obligation for damages based on quasi delict

b. No pre-existing contract

c. Negligence must be proved for recovery of damage

d. Negligence of employee prima facie presumption of employers negligence

e. Due diligence in the selection and supervision of employ is a valid defense

3. Can be regulated by the Court depending on circumstance

4. Waiver of future negligence allowed

Presumptions

1. Receipt of principal without reservation as to

2. Receipt of later installment of debt without reservation of prior ones = presumption that prior
ones paid

Remedies to satisfy claim

1. Exhaust property of debtor

2. Subrogated to rights and actions of debtors, except those inherent to person

3. Impugn all of acts by debtor done to defraud

Creditor

II. Different Kinds of Obligations

Pure and Conditional Obligations

 1. Pure Obligation One whos effectively or extinguishments
does not depend upon the fulfillment or non-fulfillment of a condition or upon the expiration of a term
or period. Characterized by Immediate Demand ability.

2. Conditional Obligation Effectively is subordinated the fulfillment or non-fulfillment of a future or

uncertain fact or event

Future and uncertain event or Past event and unknown to the parties

a.a. Suspensive vs. Resolutory

In suspensive condition, fulfillment give rise to an obligation acquisition of rights

In resolutory condition, fulfillment extinguishes obligation loss of rights acquired

b.b. Casual, Potestative, Mixed

Casual Depends on chance or will of third party (Valid)

Potestative Depends on the will of one of the contracting parties

If suspensive condition depends on will of debtor, the obligation is void

If resolutory condition depends on will of debtor, the obligation is valid

If depends on will of creditor, it is valid.

Mixed Depends partly upon the will of a party and partly upon chance or third party
(Valid)

c.c. Impossible Conditions

- - Physically impossible or legally impossible

- - If to do, whole obligation is void

- - If not to do, obligation is valid, as if not written

- - If divisible, part not affected by impossible condition is valid.

d.d. Positive v. Negative

i.i. Positive Condition (event will happen)extinguished:

As soon as time expires without the event taking place

As soon as it becomes indubitable that the event will not take place

ii.ii. Negative Condition (event will not happen) effective:

As soon as time expired without event taking place

As soon as it becomes evident the event cannot occur

 e.e. Reciprocal v. Unilateral

i.i. If reciprocal, the fruits are deemed mutually compensated

ii.ii. If unilateral, fruits and interest belongs to debtor

3. Condition deemed fulfilled when obligor prevents its fulfillment

4. Creditor may before the fulfillment of the condition bring appropriate actions for the preservation of
the rights.

5. Debtor may recover what he has paid by mistake before the fulfillment of condition.

6. Effects of the fulfillment of a condition retroacts to the day of the constitution of the obligation.

7. Rule on loss or deterioration, improvements before the fulfillment of condition

Lost when perished, go out of commerce, or disappear in such a way that its existence unknown or
cannot be recovered

a.a. If without the fault of debtor, the obligation is extinguished

b.b. If lost thru fault of debtor, obliged to pay damages

c.c. when deteriorate without fault of debtor, creditor bores the impairment

d.d. When deteriorate with fault of debtor, creditor may rescind or fulfillment with damages

e.e. When improved by nature, or by time, inure to the benefit of creditor

f.f. When improved by debtor, no right to be indemnified, but may remove such improvement,
or set off against damage

8. Remedies in reciprocal obligation

a.a. Specific Performance or Rescission

b.b. With damages in either case

c.c. Alternative remedy not cumulative can choose one but not both

d.d. After action for specific performance impossible, option for rescission

e.e. Injured party must resort to judicial rescission,

i.i. Except where automatic rescission expressly stipulated

ii.ii. Or where there is no performance yet

 f.f. Power of the court to fix period

g.g. Subject to right of good faith third party

h.h. Substantial breach not slight breach

i.i. Where both parties have breach, liability of first infractor equitably tempered; where first
infractor not know, both parties bear own damages

Obligations with a Period

Demandability or extinguishments subject to expiration of a term or period

2.2. Term or period future and certain event

3.3. Rules on loss, deterioration, improvements of conditional obligation applicable

4.4. If paid or delivered before period arrives, debtor may recover the thing, with fruits and interests.

5.5. Established for the benefit of both debtor and creditor, unless otherwise stated

6.6. Court may fix period

a.a. If obligation does not fix a period

b.b. Depends on will of debtor

When means permit not condition, but period

Period fixed by court cannot be changed

7.7. Debtor loses right to make use of the period

a.a. Debtor becomes insolvent, unless he gives guaranty or security

b.b. When debtor does not furnish guaranties or securities promised

c.c. When guaranties or securities impaired or disappear

d.d. When debtor violates an undertaking

e.e. When debtor attempts to abscond

Alternative Obligations

Alternative several objects or prestations but performance of one sufficient

Facultative One object or prestation but debtor may substitute.

1.1. Must completely perform one of them

2.2. Right of choice to debtor, unless expressly granted to creditor

Except those impossible, unlawful, which could not have been the object of the obligation or only one
prestation is practicable

3.3. Choice no effect until communicated, irrevocable once communicated

4.4. Debtor may rescind the contract with damages if thru creditors acts debtor cannot make a choice

5.5. If lost due to fortuitous event,

a.a. If two or objects remain, the obligation subsists

b.b. If only one object remain, it becomes simple obligation

c.c. If none remains, obligation is extinguished

6.6. If lost due to fault of debtor,

When right of choice belongs to debtor

a.a. If 2 or more objects remain, debtor can choose from remaining, not liable for damages

b.b. If only one remain, simple obligation to deliver remaining

c.c. If none remains, debtor indemnify damages based on value of last object

When right of choice belongs to creditor

a.a. If alternative object still remain, creditor can choose the one lost and ask value of object
lost and damages; if creditor choose the remaining object, debtor cannot be liable for damages

b.b. If none remains, debtor to indemnify for damages based on the price of the object chosen by
the creditor plus consequential damages

7.7. Facultative Obligation

a.a. Right of choice only to debtor

b.b. If lost before substitution, debtor not liable.

c.c. Debtor liable for loss due to his fault once substitution has been made

d.d. If after substitution, it is lost thru fortuitous even obligation extinguished, debtor not liable

Joint and Solitary Obligations

Joint Obligation Each of creditor has right to demand, and

each debtor is bound to rendercompliance, with his proportionate part of the prestation

a.a. Default rule is obligation is JOINT

b.b. Joint creditor cannot act in representation of the other creditors

c.c. Joint debtor cannot be compelled to answer for liability of other debtors
d.d. Jointly, We promise to pay, Pro rata, proportionately

Solidary Obligation Each creditor has a right to demand, and each debtor is bound to render
compliance, with the entire prestation; but as to co-debtor he is liable only for his share

a.a. Instances when obligation is solidary:

i.i. When obligation expressly states so

ii.ii. When law requires solidarity:

1.1. If 2 or more heirs take possession of estate

2.2. Partners in partnership

3.3. If principal allowed agent to act as though he has full power

4.4. If 2 or more appointed an agent for common undertaking

or transaction

5.5. 2 or more bailees to whom a thing is loaned

6.6. 2 or more officious managers, unless management was assumed to save thing from
imminent danger

7.7. 2 or more persons liable for quasi-delict

8.8. 2 or more payees when there has been payment of what is not due

9.9. Principal, accomplices, and accessories of a felony.

iii.iii. When nature of obligation requires solidarity

1.1. Ex. Accident fr Kabit system

b.b. Solidarily, Jointly and severally, insolidum, together and/or separately, I promise to pay

c.c. Creditors and debtors need not be bound in the same manner and by the same periods and
conditions

d.d. Not same as indivisible obligation

i.i. Solidary refers to vinculum; Indivisibility refers to prestation

ii.ii. Solidary requires plurality of subjects

iii.iii. In solidary, all debtors liable for breach of obligation; I indivisibility, only debtor
guilty of breach of obligation is liable for damage

iv.iv. In indivisible obligation, other debtors not liable for insolvency; if solidary debtor
becomes insolvent, the co- debtors bore his debt in proportion

e.e. Solidary creditors may do whatever may be useful to other but not anything which may be
prejudicial to the others
 f.f. A solidary creditor cannot assign his rights without the consent of the others, except if to co-
creditors

g.g. Debtor must pay to the creditor who made demand, if none demanded, then he may pay any one
of the solidary creditor

h.h. Novation, compensation, confusion or remission of a solidary creditor shall extinguish

the obligation but the creditor who did these acts shall be liable to the other creditors

i.i. No re-imbursement if payment made after obligation prescribe or illegal

j.j. Remission of the whole obligation obtainedby a solidary debtor does not entitle him to
reimbursement from his co-debtors

k.k. Defenses available to solidary debtors

i.i. Derived from nature of obligation

-- Payment, fraud, prescription, remission, illegality, non-performance of condition

ii.ii. Personal to the debtor

-- Insanity, incapacity, mistake, violence, minority

iii.iii. Personal to the other solidary debtors

-- Partial defense

Obligations with a Penal Cause

With accessory undertaking in case of breach of obligation

a.a. To insure performance

b.b. To liquidate the amount of damage to be awarded

c.c. To punish the obligor in case of breach

2.2. No need to prove actual damage

3.3. Shall substitute for damages and interest, except

a.a. When there is stipulation to the contrary

b.b. When obligor is sued for refusal to pay agreed penalty

c.c. When obligor is guilty of fraud

4.4. When court may reduce penalty

a.a. If principal obligation partly complied with

b.b. If principal obligation irregularly complied with

c.c. If penalty is iniquitous or unconscionable

Modes of Extinguishing Obligations

1. Payment or performance

2. Loss of the thing due

3. Condonation or remission

4. Confusion or merger of the rights of creditor and debtor

5. Compensation

6. Novation

7. Death of a party in personal obligation

8. Annulment or Rescission of contract

9. Arrival of Resolutory period or fulfillment of resolutory condition

10. Impossibility of fulfillment

11. Prescription

I. Payment

General Provisions Payment

(i) Complete Delivery of money, performance of obligation

(ii) If substantially performed in good faith, obligor may recover as thought

here had been complete fulfillment less damages

(iii) Third party cannot compel creditor to accept payment or performance, except

a.a. When there is stipulation to the contrary

b.b. When third person has an interest in the fulfillment of obligation

(iv) Rights available to third party who pays:

a.a. If payment made with the consent of the debtor

i.i. Recover from debtor the entire amount

ii.ii. Subrogated to all the rights of creditor

b.b. If payment made without the knowledge or against the will

of debtor, he can recover only insofar as payment has been beneficial to the debtor

(v) To whom payment must be made (1240)

 a.a. To the person in whose favor obligation has been constituted

b.b. His Successor in interest

c.c. Any person authorized to receive it

d.d. Third person provided it has redounded to benefit

of creditor. (1241, 1242)Presumption of benefit in the following case:

If after payment, third person acquires creditors rights

If creditor ratifies payment to third party

If creditors conduct let debtor to believe that the third person had authority to receive payment

e.e. Possessor of the credit

(vi) Payment must be in Legal Tender

a.a. Foreign currency may be used as currency of contract

b.b. Promissory notes, bills of exchange, checks not legal tender. They produce effect of legal
tender only when encashed or impaired thru the fault of creditor

c.c. In case of extraordinary inflation or deflation, the basis is the value of currency at the time
obligation is established. (1250)

Applications of Payments

The right belongs to the debtor, but if he does not exercise it, creditor may do it

2.2. If creditor issues a receipt designating the debt to be applied, debtor can accept or reject

3.3. Where neither debtor nor creditor made a choice, it shall be applied on the debt which is most
onerous

a.a. Older debts more onerous than newer ones

b.b. One bearing interest more onerous than one that is not

c.c. Secured debt more onerous than unsecured

d.d. Debt as principal more onerous than debt as guarantor

e.e. Solidary obligation more onerous than sole debtor

4.4. If similar nature and burden, payment shall be applied proportionately.

Payment by Cession

Assignment or abandonment of all the properties of the debtor for the benefit of his credit or
sin order that the latter may sell same and apply proceeds thereof to
1.1. Cession does not make the creditors owners of the property

2.2. Unless stipulation to contrary, debtor still required to pay balance

3.3. Requires two or morecreditors, debtors insolvent, cessionaccepted by creditors

Dacion en pago

Dation in payment is the transmission of the ownership of a thing by the debtor to the creditor as
an accepted equivalent of the performance of an obligation.

Governed by law on sales

1.1. Difference between Dacion and Cession

a.a. Dacion usually only one creditor

b.b. Dacion does not require insolvency

c.c. Dacion does not involve all the property of debtor

d.d. Dacion makes creditorowner of the property

e.e. Dacion is a novation

Tender of Payment and Consignation

Tender of payment The act of the debtor of offering to the creditor the thing or amount due

Consignation Deposit of the object or the amount due with the proper court after refusal or inability of
the creditor to accept the tender of payment

1. Requisites of Consignation

a.a. Debt Due

b.b. Tender of payment by debtor and refusal by creditor to accept it without justifiable
reason

c.c. Previous notice of the consignation had been given to persons interested in fulfillment of
obligation

d.d. Thing or amount due has been deposited with judicial authority.

e.e. Subsequent notice of consignation to interested parties

2. Exception to requirement for tender of payment:

a.a. When creditor is absent or unknown or does not appear at place of payment
 b.b. When he is incapacitated to receive payment

c.c. When he refuses to give receipt, without just cause

d.d. When two or more persons claim same right to collect

e.e. When title of the obligation has been lost

3. Expenses of consignation for Creditors account

a. If creditor allows debtor to withdraw the consignation, creditor lose preference over the
thing. Co-debtor, guarantors, sureties shall be released.

II. Loss of the Thing Due

(a) Lost when perished, go out of commerce, or disappear in such a way that its existence
unknown or cannot be recovered or becomes legally or physically impossible to perform, or so difficult
as to be manifestly beyond the contemplation of the parties

(b) The obligation to deliver specific thing is extinguished if

1.1. Without the fault of debtor, and

2.2. Debtor not in delay

(c)No person shall be responsible for fortuitous events, except:

1. Where expressly specified by law or stipulated in contract

2. When nature of the obligation requires assumption of risk

3. When debtor is at fault, partly

4. When debtor incurs delay

5. When debtor promises to deliver same thing to two or more persons

6. When obligation to deliver arises from criminal offense

7. When obligation is generic

(d) In case of partial loss the court shall determine whether it is so important as to extinguish the
obligation

(e) In case lost when the thing is in the possession of debtor, presumption is it is his fault

-- Except earthquake, flood, storm or other natural calamity

(f) Creditor shall have right to go against any third person responsible for the loss.