PURE OBLIGATION A pure obligation is one whose performance is not subject to any condition or period.

WHAT OBLIGATIONS ARE DEMANDABLE AT ONCE? 1) Pure obligations; 2) Obligations with a resolutory condition; 3) Obligations with a resolutory period; 4) Obligations with a condition NOT TO DO AN IMPOSSIBLE THING. CONDITION A) FUTURE AND UNCERTAIN; OR, B) PAST EVENT UNKNOWN TO THE PARTIES SUSPENSIVE CONDITION one that the fulfillment of which will give rise to the obligation. The demandability of the obligation is suspended until the happening of the condition; RESOLUTORY CONDITIONone that the fulfillment of which will extinguish an obligation already existing; PERIOD A) FUTURE AND CERTAIN, upon the arrival of which the obligation subject to it either arises or is extinguished. Would apply to payments: - little by little, as soon as possible, from time to time, as soon as I have the money, at any time I have the money

THE EFFECTS OF SUSPENSIVE and RESOLUTORY CONDITIONS If the suspensive condition is fulfilled, the obligation arises or becomes effective; if the resolutory condition is fulfilled, the obligation is extinguished. If the suspensive condition is not fulfilled, the juridical relation is consolidated. In other words, in the suspensive condition, rights are not acquired, but there is hope and expectancy that will be soon acquired; in case of resolutory condition, rights are already acquired but subject to the threat of extinction. POTESTATIVE CONDITIONone that depends upon the exclusive will of the parties. Article 1182- wherein the obligation and the condition are VOID; Applies only to suspensive conditions and the condition depends upon the exclusive will of the DEBTOR; If resolutory, even if it depends on the sole will of the debtor, it will still be valid. Examples: - I will give you my car next year if I like? void - I will give you my car provided if I will take it back, you have to return it? valid - I will give you my car next year if you like? valid

LEGAL EFFECT ON OBLIGATIONS SUBJECT TO IMPOSSIBLE CONDITIONS OR THOSE CONDITIONS CONTRARY TO LAW, GOOD CUSTOMS OR PUBLIC POLICY The condition shall annul the obligation which depends upon them. But if the obligation is divisible, that part thereof which is not affected by the impossible or unlawful conditions shall be deemed valid. Condition not to do an impossible thing (example: not to bring a dead man back to life)shall be considered as not agreed upon and the obligation shall be deemed pure and demandable at once. SAMPLE PROBLEM Article 1185 X has promised Y P100,000 if the latter should not marry Z in the year 2013. What happens if by January 1, 2014, Y is still single? The obligation becomes effective. What happens if before December 31, 2013, Z dies? The obligation also becomes effective because it has become evident that the event cannot occur.

SAMPLE PROBLEM Article 1184 X has promised Z P100,000 if the latter would marry Y in the year 2013. What happens if by January 1, 2014, Y is still single? According to Article 1184: obligation is extinguished. BUT, to be more accurate: obligation does not arise, because an obligation that has not arisen, in the first place, cannot be extinguished. Take note: the sample problem is an obligation subject to a suspensive condition, and as such, if the suspensive condition does not happen, there shall be no obligation to speak of. What happens if before December 31, 2013, Y dies? The obligation likewise does not arise. CONSTRUCTIVE FULFILLMENT OF CONDITION- Article 1186 The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. X has promised Z P100,000 if the latter would marry Y in the year 2013. When X induced Y to marry him before year 2013, obligation of X to Z becomes effective because he voluntarily prevented the fulfillment of the condition- the condition being if Z would be able to marry Y in the year 2013. LOSS, DETERIORATION AND IMPROVEMENT- Article 1189 TN: This applies only to obligations to give a SPECIFIC/DETERMINATE thing and that the obligation is subject to a SUSPENSIVE CONDITION. LOSS - without the fault of the debtor obligation shall be extinguished; - through the fault of the debtor debtor is obliged to pay damages. DETERIORATION - without the fault of the debtor impairments to be borne by the creditor; - through the fault of the debtor creditor may choose rescission (cancelation of the obligation) or fulfillment, with damages in either case. IMPROVEMENT - if improved by nature or by time improvement to inure to the benefit of creditor; - if improved at the expense of the debtor debtor will have the rights of a usufructuary (i.e. debtor shall have the right to remove the improvements introduced by him provided it shall cause no damage to the property subject matter of the obligation).

LEGAL EFFECTS ON THE OBLIGATION TO GIVE UPON FULFILLMENT OF THE RESOLUTORY CONDITION-Article 1190 Extinguishment of the obligation; Mutual restitution; Rules on loss, deterioration and improvement to apply (Article 1189); Fruits or interest received should be returned. SOME LIMITATIONS AND CHARACTERISTICS ON THE RIGHT TO DEMAND RESCISSION- Article 1191 It exists only in reciprocal obligations It can only be demanded if the plaintiff (the party asking for the rescission) is willing and able to comply with his own obligation and the other is not The right to rescind does not need judicial approval unless there has been delivery. In the latter case, judicial approval, is required unless the party against whom the rescission is being asked for voluntarily surrenders the thing delivered to him. Such as in the case of a sale, when purchase money was already given but the thing being sold has not yet been delivered. The right to rescind, which needs judicial approval, is not absolute but discretionary on the part of the court; hence, not available or shall not be decreed: (i) in trivial or slight breaches; (ii) if there is a just cause for fixing the period; or, (iii) if the property is in possession of a third person who is in good faith. TN: The right to rescind under Art 1191 is implied or presumed. Though, parties may stipulate for automatic rescission (i.e. without need of judicial approval even if there has already been a delivery), but it is not the rescission as provided under this provision.

The right to rescind may be waived, expressly or impliedly

INAPPLICABILITY OF 1191 Sales of real property by installments because it is the Maceda Law (RA 6552) that governs Sales of personal property by installments because it is the Recto Law which applies (1484 to 1486) Contracts of partnership Automatic rescission clause- parties expressly agree on automatic rescission without judicial intervention - Article 1191 will not apply when the parties made a stipulation providing for an automatic rescission of the contract in case of violation of the terms thereof without need for judicial intervention or permission, because if such is the case, it is not anymore implied rescission (as contemplated by Article 1191) rather an express or stipulated right to rescind. Thus, the rule under Article 1191 does not apply. What governs the rescission is the stipulation of the parties. RESCISSION/RESOLUTION (ART. 1191) Principal action Ground: Substantial breach RESCISSION (ART. 1381) Subsidiary action 5 grounds enumerated in the law; non-performance by the other party is not important Applies only to reciprocal obligations Applies to both unilateral and reciprocal obligations Only a party to the contract may demand Even a third person who is prejudiced may demand fulfillment or seek rescission the rescission of the contract Court may fix the period or grant an extension of Court cannot grant extension of time for fulfillment time for the fulfillment of the obligation of the obligation Purpose: to cancel the contract Purpose: to seek reparation for the damage or injury caused thus allowing partial rescission of the contract ALTERNATIVE OBLIGATIONS Concept: debtor is alternatively bound by different prestations but the complete performance of one of them extinguishes the obligation. While there are several prestations, only one is due. X promised to give Y his car or his house or P1M cash. In this alternative obligation, X is not bound to deliver all of those. The delivery of one is enough to extinguish his obligation. The general rule is that the right of choice belongs to the DEBTOR unless said right has been EXPRESSLY granted to the creditor. IMPLIED GRANT of the said right to the creditor is not allowed. If it does not appear on the agreement as to who has the right of choice, it shall be the debtor who can choose the prestation. (Article 1200) If only one is practicable such as when all the rest of the choices are lost (even if they are lost through the debtors fault), the right of choice is lost. The obligation becomes simple. (Article 1202) TN: this rule applies only when the right of choice belongs to the debtor; otherwise, Article 1205 applies where whether debtor is in fault or not matters. The choice shall produce no effect except from the time it has been communicated to the other party (verbal or in writing) > communication converts the obligation into a simple obligation (Article 1201) If all things are lost through the fault of the debtorthe debtor is liable for damages to be based on the value of the last thing which disappeared, or that of the service which last became impossible. (Article 1204) i) Applies only when the right to choose the prestation to be fulfilled belongs to the debtor. If it belongs to the creditor, Article 1205 applies ii) When only one or some of the prestations are lost or becomes impossible, the creditor cannot claim indemnity for damages because the debtor may still perform any of the

remaining alternative prestations. All the prestations must have been rendered impossible due to debtors fault for this Article to apply If the right of choice is expressly granted to the creditor: (Article 1205) i) If only one of the things is lost without fault of the debtor, the debtor shall deliver what the creditor has chosen from among the remainder; if only one remains, he shall deliver this to the creditor; ii) If one of the things is lost through debtors fault, the creditor may choose any one of the remainders, OR he may choose the price or value of the one which was lost, with damages; iii) If all the things are lost through debtors fault, creditor may choose the price or value of any one of those things, with damages iv) QUESTION: what if all are lost through fortuitous event without fault of debtor? Right of choice belongs to DR Without fault With fault Dr may choose Dr may choose from the remainder from the remainder Right of choice belongs to CR Without fault With fault Dr shall deliver Cr may choose any what the cr may of the remainders, choose from the OR he may choose remainder the price or value of the one which was lost, with damages in either case Obligation Cr may choose the becomes simple. last one remaining, Dr shall deliver the OR he may choose last one remaining the price or value of any one which was lost, with damages in either case The law is silent: Cr may choose the logically, value of any one of obligation is those things, with extinguished damages

If only one is lost

If all is lost except Obligation becomes simple. one Dr shall deliver the last one remaining

Obligation becomes simple. Dr shall deliver the last one remaining

If all is lost

Obligation extinguished

is Dr shall pay damages based on the value of the last one lost

FACULTATIVE OBLIGATIONS Concept: debtor is obliged to perform only one prestation, but he is allowed to perform or deliver another one IN SUBSTITUTION thereof. X promised to deliver to Y his car. As a substitute, X may deliver his house.

FACULTATIVE OBLIGATION One thing is principally due and the one to be given generally; however, the other (substitute) may be given in lieu thereof. The nullity of the principal carries with it the nullity of the accessory or substitute The impossibility of the principal carries with it the impossibility of the accessory or substitute. If it is impossible to give the principal, the substitute need not be given; if it is impossible to give the substitute, the principal must be given JOINT AND SOLIDARY OBLIGATIONS

ALTERNATIVE OBLIGATION Various things are due but the giving of one is sufficient If some of the prestations are illegal and the others are valid, the obligation remains If it is impossible to give all except one, the last one must be given

Article 1207: NON-PRESUMPTION OF SOLIDARITY. The law presumes JOINT OBLIGATION.

The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestations. There is solidary liability ONLY:

A. when the obligation expressly so states; (conventional) B. when the law provides for solidarity; (legal) C. the nature of the obligation requires solidarity. (real)
JOINT OBLIGATION The credit or debt shall be presumed to be DIVIDED into as many equal shares as there are creditors or debtors, the credits or debts being considered distinct from one another. Sample A, B, C and D are joint debtors. E is the creditor. The obligation is the payment of the sum of P200,000. How much can E demand from each one of them?

Only P50,000

Suppose that aside from E, F is likewise a creditor. How much can each of the creditors demand from each of the debtors?

Only P25,000

JOINT OBLIGATIONS- OTHER TERMS USED

Mancomunada Mancomunada simple Proportionate Prorata Divided distinctly Equally divided Aliquotly divided Pro rate Mancomandamente Separately we promise to pay (signed by two or more persons)

SOLIDARY OBLIGATIONS One in which each debtor is liable for the entire obligation and each of the creditors is entitled to demand satisfaction of the whole obligation from any and all of the debtors.
SOLIDARY OBLIGATIONS- OTHER TERMS USED

Joint and several In solidum Mancomunada solidaria Juntos o separadamente Individually and collectively each will pay the whole amount Individually and jointly I promise to pay (signed by two or more signatories)

PRESUMPTION: Presumption is that the liability of two or more persons is generally joint with solidarity serving as the exception. Why? Solidarity is burdensome, increase in responsibilities and liabilities. LAW PROVIDES FOR SOLIDARITY:

 Obligations arising from torts or quasi-delict; Obligations arising from contracts involving of two or more officious managers (Art.2146); Legal obligations of devisees and legatees (Art. 927); Liabilities of principals, accomplices and accessories of a felony (Art. 110 RPC); Bailees in commodatum (Art. 1945); Agents and principals liability (Art. 1911); Liabilities of partners arising from crime to quasi-delicts (Art. 1822, 1823, 1824); Responsibility of two or more payees in solution indebiti where there has been payment of what is not due (Art. 2128); Owner and driver in motor mishap (Art. 2138); Non-payment of wages of the employees of the contractor and subcontractor (Arts. 104, 107, 108, New Labor Code); Liability of architect and contractor for the collapse of building. JOINT INDIVISIBLE OBLIGATION Article 1209 One where the parties are merely proportionately liable but the subject matter (or object) thereof is not physically divisible into parts. INDIVISIBILITY 1. Arises from the nature of the thing/ prestation 2. Can exist between one debtor and one creditor 3. Non-performance of the obligation converts it into an obligation to pay with damages 4. There must be collective acts on the part of the creditors against all debtors 5. Each debtor is not liable for breach of the obligation by his co-debtor SOLIDARITY 1. Arises from the tie that binds the parties 2. Requires at least 2 debtors or 2 creditors 3. Non-performance in solidarity does not change the nature of the obligation 4. Each creditor may demand the whole prestation from each debtor 5. Each debtor is liable to the creditors for the breach of the obligation of the co-debtors

WHAT IS THE RIGHT OF THE SOLIDARY DEBTOR WHO MAKES PAYMENT? The paying debtor may demand from his co-debtors reimbursement plus interest. However, if the payment is made before the date is due, he is not entitled to interest for the intervening period. Also, when his payment is made after the obligation has prescribed or becomes illegal, he is not entitled to any reimbursement. OBLIGATIONS WITH A PENAL CLAUSE Penal Clause It is an accessory undertaking attached to an obligation to assume greater liability in case of breach. Only one thing is due which the creditor may demand. The debtor cannot choose to pay the penalty in lieu of performance, except when expressly granted to him (Art. 1227) SUMMARY ON RULES ON PENAL CLAUSES: 1. Penalty substitutes for damages and interests (Art. 1226); 2. Penalty and interests enforceable = agreement. If there is an agreement that the penalty does not include the interest, the two are different things which may be demanded separately (Art. 1226); 3. PENALTY, INTEREST, DAMAGES -if there is an agreement/ convention; -debtor refuses to pay penalty; -debtor guilty of fraud in the fulfillment of the obligation (Art. 1226) 4. Penalty may be reduced if iniquitous/unconscionable or in case of partial/irregular fulfillment (Art. 1229)

5. Nullity of the penal clause does not carry with it the principal obligation. The nullity of the principal obligation carries with it that of the penal clause (Art. 1230)