Professional Documents
Culture Documents
I. OBLIGATIONS
Requisites of Natural :
A. IN GENERAL
1.
2.
1. DEFINITION:
AS
TO
BASIS
&
Examples of natural s:
3. PRESCRIPTION OF ACTIONS
Art. 1424. When a right to sue upon a civil obligation has lapsed by
extinctive prescription, the obligor who voluntarily performs the
contract cannot recover what he has delivered or the value of the
service he has rendered.
Art. 1425. When w/o the knowledge or against the will of the debtor,
a third person pays a debt w/c the obligor is not legally bound to pay
bec. the action thereon has prescribed, but the debtor later
voluntarily reimburses the third person, the obligor cannot recover
what he has paid.
Article 1144. The following actions must be brought within ten years
from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment. (n)
Article 1145. The following actions must be commenced within six
years:
(1) Upon an oral contract;
(2) Upon a quasi-contract. (n)
Art. 1960. If the borrower pays interest when there has been no
stipulation therefor, the provisions of this Code concerning solutio
indebiti, or natural obligations, shall be applied, as the case may be.
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authorize the retention of what has been delivered or rendered by
reason thereof".
DBP V. CONFESOR
DOCTRINE: The right to prescription may be waived or renounced.
Art. 1112 - Persons with capacity to alienate property may renounce
prescription already obtained, but not the right to prescribe in the
future. Prescription is deemed to have been tacitly renounced when
the renunciation results from acts which imply the abandonment of
the right acquired.
Article 1147. The following actions must be filed within one year:
(1) For forcible entry and detainer;
(2) For defamation. (n)
Article 1149. All other actions whose periods are not fixed in this
Code or in other laws must be brought within five years from the
time the right of action accrues. (n)
Article 1150. The time for prescription for all kinds of actions, when
there is no special provision which ordains otherwise, shall be
counted from the day they may be brought. (1969)
(4) Vinculum juris - the legal tie, whereby upon default or refusal of
the debtor to perform, the creditor can go to court.
Article 1151. The time for the prescription of actions which have for
their object the enforcement of obligations to pay principal with
interest or annuity runs from the last payment of the annuity or of the
interest. (1970a)
Article 1154. The period during which the obligee was prevented by
a fortuitous event from enforcing his right is not reckoned against
him. (n)
B. SOURCES OF CIVIL s
1. LAW:
VILLAROEL V. ESTRADA
DOCTRINE: The rule that a new promise to pay a debt must be
made by the same person obligated or otherwise legally authorized by
it, is not applicable to this case since there was voluntarily
assumption of the obligation
ANSAY V. CA
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2. CONTRACTS:
3. QUASI-CONTRACTS:
b. Solutio indebiti
c. Other Quasi-contracts
TITLE V - Civil Liability, RPC: CHAPTER ONE Persons Civilly Liable for Felonies
Q: HOW MANY?
Article 100. Civil liability of a person guilty of felony. Every person criminally liable for a felony is also civilly
liable.
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QUASI DELICT
it is subsidiary (imputed)
Diligence of good father of the
family may be set up by the ER as
a defense
DELICT
ERs liability is primary in RPC
In RPC, such defense of GFF is
not available
KINDS OF NEGLIGENCE:
(1) Culpa aquiliana, also known as culpa extracontractual, or negligence as a source of ,
QUASI-DELICT;
Governed by Arts. 2176-2194
NO contractual relation at all
PERSONS
LIABLE:
LIABILITY, 2180)
1.
2.
3.
4.
5.
6.
father / mother
guardians
owners/managers
employers
the State
teachers
Balane:
The Code Commission did not choose to use tort. This is
bec. tort does not exactly have the same meaning as quasi-delict. Tort
[BROADER] covers intentional torts w/c in quasi-delict is
considered as civil liability arising fr. acts or omissions punishable by
law. There are some QD w/c are not covered by tort. Dean Bocobo
suggested the ancient term culpa aquiliana. But this did not merit the
approval of the Code Commission.
(IMPUTED/vicarious
ELEMENTS:
(1) A duty on the part of the defendant to protect
the plaintiff from the injury of which the latter
complains;
(2) A failure to perform that duty, and
(3) An injury to the plaintiff through such failure.
TEST OF NEGLIGENCE: Would a prudent man, in the
position of the person on who negligence is attributed,
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1.
Intentional Torts
a. tortfeasor desires to cause the consequences
of his act, or
b. tortfeasor believes that the consequences are
substantially certain to result from it
c. ex. Art. 26, 32 & 33 (CC)
2.
Negligent Torts:
a. tortfeasors conduct merely creates a
forseeable risk of harm which may or may
not occur
b. Art. 2176 (CC)
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3.
Quantum of
Evidence
Compromise
CANGCO VS. MANILA RAILROAD CO. [38 P 768] Balane: There are two important principles that we learn fr. this case:
Nature of Act
Gives rise to
As to nature of
Right violated
Is a Wrong
against
Criminal
Intent
Legal Basis for
liability
Liability for
Damages
Form
of
Redress
NEGLIGENCE
Culpa
mere want of care
or diligence, not
voluntary act or
omission
the want or care or
diligence
QUASI-DELICT
private right
CRIME
public right
the individual
the State
not needed
Necessary
Broad
there
are
crimes
without civil liability
punishment/fine/impris
onment
can be compromised
beyond
reasonable
doubt
criminal liability can
never be compromised
A: If you look at Art. 2176, you get the impression that if there is a
contract bet. the parties, they cannot be liable for quasi-delict on an area
covered by the contract. The case of Cangco has not really resolve this
controversy.
FRAUD
dolo
involves willfulness
or deliberate intent
to cause damage or
injury to another
the act itself
n/compensation
preponderance
Balane:
Kinds of performance.-5
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1.
2.
3.
2.
3.
Balane:
REAL :
a. DETERMINATE particularly designated from a particular
class;
PRINCIPAL to give (to deliver) a determinate thing;
ACCESSORY exists even when not expressly
stipulated;
A. In obligations to give
1. A determinate thing
a. Specific performance
b. Equivalent performance
2. A generic thing, all remedies are available
C. Obligation not to do
1. substitute performance
2. equivalent performance.
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Kinds of Fruits;
1) CIVIL derived by virtue of juridical relation
2) Natural spontaneous products of the soil and the young and
other products of animals;
3) Industrial produced by lands of any kind through cultivation or
labor or by reason of human labor.
a. PURE
Mixed Condition is one w/c depends partly upon the will of one of
the parties & partly on either chance or the will of a third person.
Q: What if the condition is suspensive, potestative & depends
solely on the will of the creditor, is the conditional obligation valid?
b. CONDITIONAL
1.
7
Impossible in fact
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2.
Article 1185. The condition that some event will not happen
at a determinate time shall render the obligation effective
from the moment the time indicated has elapsed, or if it has
become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed
fulfilled at such time as may have probably been
contemplated, bearing in mind the nature of the obligation.
1.
2.
3.
Tolentino:
In contracts, an impossible condition annuls the contract.
In gratuitous dispositions, the impossible condition is
simply disregarded.
Balane:
This article refers to suspensive condition.
Paras:
The debtor may recover what during the same time he has paid by
mistake in case of a suspensive condition.
Balane: This article refers to suspensive conditions.
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bring action is to file a suit. But the creditor is not restricted to filing
a suit.
The proper verb is not "bring" but "take." For example, in a
sale of land subject to suspensive condition, the creditor should have
the suspensive condition annotated on the title of the land. This is not
bringing an appropriate action but taking an appropriate action.
Balane:
A term is a future and certain event upon w/c the
demandability (or extinguishment) of an obligation depends.
Tolentino: Period must be (1) future (2) certain and (3) possible.
A term can either be:
Article 1189. When the conditions have been imposed with the
intention of suspending the efficacy of an obligation to give, the
following rules shall be observed in case of the improvement, loss or
deterioration of the thing during the pendency of the condition:
(1) If the thing is lost without the fault of the debtor, the
obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor, he
shall be obliged to pay damages; it is understood that the
thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or it
cannot be recovered;
(3) When the thing deteriorates without the fault of the
debtor, the impairment is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the
creditor may choose between the rescission of the
obligation and its fulfillment, with indemnity for damages
in either case;
(5) If the thing is improved by its nature, or by time, the
improvement shall inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall
have no other right than that granted to the usufructuary.
(1122)
suspensive term (ex die -- fr. the day) or one the arrival of
w/c will make the obligation demandable;
2.
resolutory term (in die -- into the day) or one the arrival of
w/c will extinguish the obligation. The period after which the
performance must terminate.
Or,
1. original period
2. grace period, extension fixed by parties
Or
Effect of Period: with term are demandable only when day fixed
for performance arrive; Rt. Of Axn arises only when date fixed
arrives;
Article 1190. When the conditions have for their purpose the
extinguishment of an obligation to give, the parties, upon the
fulfillment of said conditions, shall return to each other what
they have received.
Tolentino:
xxx
Futurity & uncertainty must concur as
characteristics of the event.
1.
As to fulfillment
9
CONDITION
uncertain event
TERM / PERIOD
an event that must
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As to influence on
the obligation
Effect
As to time
necessarily
come,
whether on a date
known before hand
or at a time w/c
cannot
be
predetermined
has no effect upon
the existence of
obligations, but only
their demandability
or performance
NO retroactive effect,
except when there is
a special agreement
always refer to the
future
If the term is for the benefit of the creditor The creditor can
demand performance anytime; but the debtor cannot insist on payment
bef. the period.
If the term is for the benefit of the debtor The creditor cannot
demand performance anytime; but the debtor can insist on performance
anytime.
As to will of debtor
Balane:
Mistaken Premature Delivery This article assumes 2 things:
(1) the delivery was by mistake;
(2) the mistake was discovered bef. the term arrives.
The courts shall also fix the duration of the period when it
depends upon the will of the debtor.
Article 1687. If the period for the lease has not been fixed, it is
understood to be fr. year to year, if the rent agreed upon is annual; fr.
month to month, if it is monthly; fr. week to week, if the rent is weekly;
& fr. day to day, if the rent is to be paid daily. xxx
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DOCTRINE: A lease to an alien for a reasonable period is valid.
Art. 1606 in pacto de retro sale where the period is not specified by the
parties:
Art. 1197. Xxx The courts shall also fix the duration of the period
when it depends upon the will of the debtor.
Art. 1191. Xxx the court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period.
Art. 1687. xxx However, even though a monthly rent is paid, & no
period for the lease has been set, the courts may fix a longer term for
the lease after the lessee has occupied the premises for over one year.
If the rent is weekly, the courts may likewise determine a longer period
after the lessee has been in possession for over six months. In case of
daily rent, the courts may also fix a longer period after the lessee has
stayed in the place for over one month.
Art. 1180. When the debtor binds himself to pay when his means
permit him to do so, the obligation shall be deemed to be one w/ a
period, subject to the provisions of article 1197.
CASE: Where obligation does not fix a period; When fixing a period
is mere formality
is converted to a pure
CHAVEZ V. GONZALES [32 SCRA 547] Def. virtually admitted non-performance by returning the typewriter he
was obliged to repair in a non-working condition, w/ essential parts,
missing. Plaintiff had the thing fixed by another and later demanded fr.
Def. payment of actual, compensatory, temperate and moral damages.
ISSUE: WON Def. may not be held liable b/c did not contain a
period.
HELD: He cannot invoke Art. 1197 of the NCC. The time for
compliance having evidently expired, & there being a breach of
contract by non-performance, it was academic for the pltff. to have first
petitioned the court to fix a period for the performance of the contract
before filing his complaint in this case. The fixing of a period would
thus be a mere formality & would serve no purpose than to delay.
2.
OBLIGATIONS ACCORDING TO PLURALITY OF
OBJECTS:
A. Simple
B. Multiple
ELEIZEUI V. LAWN TENNIS CLUB [2 P309] DOCTRINE: The term of a lease whose termination is expressly left
to the will of the lessee must be fixed by the courts according to the
character & conditions of the mutual undertakings, in an action
brought for that purpose xxx.
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Articles 1202 to 1205 talk of the loss of some of the prestations before
performance.
1. If the choice is debtor's
a. When only one prestation is left (whether or not the rest of the
prestations have been lost through fortuitous event or through the fault
of the debtor), the debtor may perform the one that is left.-- Art. 1202.
Art. 1202. The debtor shall lose the right of choice when among the
prestations whereby he is alternatively bound, only one is practicable.
Alternative Obligations
Art. 1203. If through the creditor's acts the debtor cannot make a
choice according to the terms of the obligation, the latter may rescind
the contract w/ damages.
Art. 1200. The right of choice belongs to the debtor, unless it has been
expressly granted to the creditor.
The debtor shall have no right to choose those prestations
w/c are impossible, unlawful or w/c could not have been the object of
the obligation.
Art. 1204. The creditor shall have a right to indemnity for damages
when, through the fault of the debtor, all the things w/c are alternatively
the object of the obligation have been lost, or the compliance of the
obligation has become impossible.
The indemnity shall be fixed taking as a basis the value of the last thing
w/c disappeared, or that of the service w/c last became impossible.
Damages other than the value of the last thing or service may also be
awarded.
Balane:
Q: To whom does the right of choice belong?
A: General rule: To the debtor (Art. 1200.)
d. If some things are lost through the debtor's fault, the debtor can still
choose fr. those remaining.
f. If all prestations but one are lost through fortuitous event, & the
remaining prestation was lost through the debtor's fault, the latter is
liable to indemnify the creditor for damages.
g. If all but one are lost through the fault of the debtor & the last one
was lost through fortuitous event, the obligation is extinguished.
Art. 1205. When the choice has been expressly given to the creditor,
the obligation shall cease to be alternative fr. the day when the selection
has been communicated to the debtor.
Until then the responsibility of the debtor shall be governed by the
following rules:
Art. 1201. The choice shall produce no effect except fr. the time it has
been communicated.
Balane:
Requirement of Communication of choice If the choice belongs to
the creditor, of course, he has to communicate his choice to the debtor.
The debtor is not a prophet.
BUT how can the creditor impugn it if the choice belongs to the debtor.
The better reason would be to give the creditor a chance to prepare for
the performance.
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b. If one or some are lost through the debtor's fault, the creditor has
choice fr. the remainder or the value of the things lost plus damages.-Art. 1205 (2), supra.
c. If all are lost through the debtor's fault, the choice of the creditor
shall fall upon the price of any of them, w/ indemnity for damages.-Art. 1205 (3), supra.
d. If some are lost through the creditor's fault, the creditor may choose
fr. the remainder.
e. If all are lost through fortuitous event, the obligation is
extinguished.
a. JOINT OBLIGATIONS
Art. 1206. When only one prestation has been agreed upon, but the
obligor may render another in substitution, the obligation is called
facultative.
The loss or deterioration of the thing intended as a substitute,
through the negligence of the obligor, does not render him liable. But
once the substitution has been made, the obligor is liable for the loss of
the substitute on account of his delay, negligence or fraud.
Alternative
there are various
prestations all of w/c
constitute parts of the
obligation
the nullity of one
prestation does not
invalidate the
obligation, w/c is still
in force w/ respect to
those w/c have no
vice
As to nullity
As to choice
As to effect of loss
2)
Facultative
only ONE principal
prestation constitutes
the obligation, the
accessory being only
a means to facilitate
payment.
the nullity of the
principal prestation
invalidates the
obligation & the
creditor cannot
demand the substitute
even when this is
valid
only the debtor can
choose the substitute
prestation.
the impossibility of
the principal
prestation is
sufficient to
extinguish the
obligation, even if the
substitute is possible
3)
termed
Tolentino:
Balane:
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Art. 1208. If fr. the law, or the nature or the wording of the obligations
to w/c the preceding article refers the contrary does not appear, 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 fr. one another, subject to the Rules of Court governing the
multiplicity of suits.
b. SOLIDARY OBLIGATIONS
Balane:
A solidary obligation is one in w/c the debtor is liable for
the entire obligation or each creditor is entitled to demand the whole
obligation. If there is only one obligation, it is a solidary obligation.
(5)
Tolentino:
2.
3.
4.
5.
6.
Each creditor may renounce his right even against the will of
the debtor, & the latter need not thereafter pay the obligation
to the former.
Active Solidarity
Art. 1211. Solidarity may exist although the creditors & the debtors
may not be bound in the same manner & by the same periods &
conditions.
Art. 1207. The concurrence of two or more creditors or of two or more
debtors in one & 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 w/ the prestation. There is solidary liability
only when the obligation expressly so states, or when the law or the
nature of the obligation requires solidarity.
Balane:
(2)
(3)
14
2.
3.
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4.
5.
All the debtors are liable for the loss of the thing due, even if
such loss is caused by the fault of only one of them, or by
fortuitous event after one of the debtors has incurred in
delay;
6.
MALAYAN INSURANCE V. CA [165 S 536] Art. 1212. Each one of the solidary creditors may do whatever may be
useful to the others, but not anything w/c may be prejudicial to the
latter.
Acts beneficial: each solidary debtor may,
interrupt prescription,
constitute a debtor in default,
bring suit so that may produce interest
Acts prejudicial: solidary creditor cannot do anything prejudicial to
the others, like remission, novation, compensation, merger or confusion
but such provision in 1212 conflicts w/ 1215;
Tolentino:
Harmonize 1212 & 1215 by such acts of
extinguishment, whc is prejudicial to co-creditors, will be valid so as to
extinguish the claim vs. debtors, but not w/respect to the rts.of cocreditors whc subsists and may be enforced vs such creditor who
performed the act alone.
Balane:
There is an apparent conflict bet. Art. 1212 & 1215. Art.
1212 states that the agency extends only to things w/c will
benefit all co-creditors. But not anything w/c is prejudicial to
the latter. In Art. 1215, he can do an acts prejudicial to the
other creditors, like remission for instance.
Art. 1213. A solidary creditor cannot assign his rights w/o the consent
of the others.
Art. 1214. The debtor may pay any one of the solidary creditors; but if
any demand, judicial or extrajudicial, has been made by one of them,
payment should be made to him.
Tolentino: Mutual agency whc is the essence of active solidarity,
implies mutual confidence, thus one creditor cannot assign/transfer his
rts to another w/o consent of the others.
A solidary creditor who assigns his rts w/o the consent of his
co-creditors shall answer subsidiarily for any prejudice
caused by the assignee in connection w/ d credit assigned.
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they demand at d same time, or collectively, debtor may choose to
whom to pay.
Other Instances:
Debtor upon whom demand was made pays to a creditor other
than the one who made the demand in violation of Art. 1214
This is considered payment to a third person (Art. 1241, par.
2) & the debtor can still be made to pay the debt. The only
concession given to the debtor is that he is allowed to deduct the
share of the receiving creditor fr. the total amount due even if he
paid the entire amount due to that creditor.
Art. 1216. The creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously. The demand made
against one of them shall not be an obstacle to those w/c may
subsequently be directed against the others, so long as the debt has not
been fully collected.
Tolentino warns that to make the debtors pay for the whole amount to
the demanding creditor even if partial payment has already been
made to another creditor might amount to unjust enrichment. This
rule/restriction has already been scrapped in some modern civil
codes allowing freedom of choice to the debtor even after
demand.
Q: There are three creditors A, B & C & there are three debtors X,
Y & Z. A makes a demand on Y. X pays B.
A: This is not covered by Art. 1214.
Art. 1215. Novation, compensation, confusion or remission of the
debt, made by any of the solidary creditors or w/ any of the solidary
debtors, shall extinguish the obligation, w/o prejudice to the provisions
of article 1219.
The creditor who may have executed any of these acts, as well as he
who collects the debt, shall be liable to the others for the share in the
obligation corresponding to them.
Art. 1219. The remission made by the creditor of the share w/c affects
one of the solidary debtors does not release the latter fr. his
responsibility towards the co-debtors, in case the debt had been totally
paid by anyone of them before the remission was effected.
Art. 1915. If two or more persons have appointed an agent for a
common transaction or undertaking, they shall be solidarily liable to the
agent for all the consequences of the agency.
Tolentino:
Novation A solidary debtor binds himself alone, assumes the debt,
releases the other debtors. But this debtor cannot bind himself to a new
debt w/o the consent of others.
Extent of Liability
Liability
Effects of Extension
of time granted by
creditor
PASSIVE
SOLIDARITY
Solidary debtors
whole
Primary
solidary remains
SURETY
solidary guaranty
only to the extent of
contract
stipulations/as
expressed
Subsidiary
releases the surety
If creditor makes the novation w/one debtor and does not secure
consent of other debtors, the latter is released. The new contract binds
only the debtor who secured the novation.
Mere extension of time given by creditor to a solidary debtor does not
release others from the no novation here.
[PNB V. INDEPENDENT PLANTERS [122 SCRA 113] Held: It is crystal clear that Art. 1216 is the applicable provision in this
matter. Said provision gives the creditor the SUBSTANTIVE right to
proceed against anyone of the solidary debtors or some or all of them
simultaneously. The choice is undoubtedly left to the solidary creditor
to determine against whom he will enforce collection. In case of the
death of the solidary debtors, he (the creditor) may, if he so chooses,
proceed against the surviving solidary debtors w/o necessity of filing a
claim in the estate of the deceased debtors. It is not mandatory for him
to have the case dismissed against the surviving debtors & file its
claim in the estate of the deceased solidary debtor.
Rules of Procedure cannot prevail over substantive law.-If Sec. 6, Rule 86, ROC were applied literally, Art. 1216 would, in
effect, be repealed since under the ROC, petitioner has no choice but to
proceed against the estate of Manuel Barredo only. Obviously, this
provision diminishes the Bank's right under the NCC to proceed against
any one, some or all of the solidary debtors. Such a construction is not
sanctioned by the principle xxx that a substantive law cannot be
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amended by a procedural law. Otherwise stated, Sec. 6 of Rule 86
cannot be made to prevail over Art. 1216, the former being merely
procedural, while the latter, substantive.
Distinctions
Extension of Time
given by creditor
Passive Solidarity
Solidary debtor is
liable for his own
& that of his codebtors
Primary liability
does not release a
solidary
debtor
(novation)
Suretyship
liable only as to his
own
Subsidiary liability
releases a solidary
guarantor or surety
(extinguishment)
Art. 1221. If the thing has been lost or if the prestation has become
impossible w/o the fault of the solidary debtors, the obligation shall be
extinguished.
If there was fault on the part of any one of them, all shall be
responsible to the creditor, for the price & the payment of damages &
interest, w/o prejudice to their action against the guilty or negligent
debtor.
If through a fortuitous event, the thing is lost or the
performance has become impossible after one of the solidary debtors
has incurred in delay through the judicial or extrajudicial demand upon
him by the creditor, the provisions of the preceding paragraph shall
apply.
Art. 1895. If solidarity has been agreed upon, each of the agents is
responsible for the non-fulfillment of the agency, & for the fault or
negligence of his fellow agents, except in the latter case when the
fellow agents acted beyond the scope of their authority.
Art. 1219. The remission made by the creditor of the share w/c affects
one of the solidary debtors does not release the latter fr. his
responsibility towards the co-debtors, in case the debt has been totally
paid by anyone of them before the remission was effected.
Art. 1222. A solidary debtor may, in actions filed by the creditor, avail
himself of all defenses w/c are derived fr. the nature of the obligation &
of those w/c are personal to him, or pertain to his own share. With
respect to those w/c personally belong to the others, he may avail
himself thereof only as regards that part of the debt for w/c the latter are
responsible.
Thus, if one debtor pays, he cannot reimburse fr his codebtors b/c his action will not revive the inexistent ;
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shoulder the whole amount, his co-debtors will pay him their
equivalent share in the original . Guilty debtor shoulders
the amount of damages though.
Tolentino:
Balane:
Three Defenses of Solidary Debtor:
1.
2.
3.
1.
2.
3.
c. DISJUNCTIVE OBLIGATION
Disjunctive : not covered by NCC; there are 2 or more creditors and
2 or more debtors but they are named disjunctively as debtors and
creditors in the alternative.
* rules on solidary s must apply b/c if rules on alternative s will
be applied then the debtor will generally be given the choice to whom
shall he give payment.
a. DIVISIBLE OBLIGATIONS
Art. 1223. The divisibility or indivisibility of the things that are the
object of obligations in w/c there is only one debtor & only one creditor
does not alter or modify the provisions of Chapter 2 of this Title
(Nature & Effect of Obligations).
Balane:
Or thing is indivisible but performance is divisible, i.e. stageby-stage construction of a public road where obligor may
deliver every 15% of work done and collect its proportionate
cost from govt agency concerned, performance bonds here
may also be termed as such.
Divisible obligation is one susceptible of partial performance.
An indivisible obligation is one that must be performed in one
act.
Solidarity
Refers to vinculum, and
principally to the subjects of
Requires plurality of subjects
Solidarity remains even in case of
Why? Bec. the law provides so: Unless there is an express stipulation
to that effect, the creditor cannot be compelled partially to receive the
prestations in w/c the obligation consists. Neither may the debtor be
required to make partial payments. xxx (Art. 1248, par. 1.)
18
Indivisibility
refers to the prestation or the
object of the
plurality not reqd
when is converted to liability
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for damages, the indivisibility
ceases to exist, each debtor
becomes liable for his part of
indemnity
indivisibility affects the heirs of a
decedent debtor, they remain to
be bound to perform the same
prestation
In indivisible , partial performance is equal to nonperformance. Thus, partial payment based on quantum meruit is
not availed. (Arts. 1233 and 1248 forbids partial fulfillment)
Work half done is worst than work undone!
Exceptions:
Art. 1612. If several persons, jointly & in the same contract, should
sell an undivided immovable w/ a right of repurchase, none of them
may exercise this right for more than his respective share.
The same rule shall apply if the person who sold an
immovable alone has left several heirs, in w/c case each of the latter
may only redeem the part w/c he may have acquired.
Consideration
ENTIRE
single
Prestation/s
When a part is illegal
One void undertaking
whole
unenforceable
void
must be in writing
Art. 1613. In the case of the preceding article, the vendee may demand
of all the vendors or co-heirs that they come to an agreement upon the
repurchase of the whole thing sold; and should they fail to do so, the
vendee cannot be compelled to consent to a partial redemption.
SEVERABLE
apportioned
(expressly/implied)
several, distinct,
separate items
partly enforceable
Art. 1583. Unless otherwise agreed, the buyer of goods is not bound to
accept delivery thereof by installments.
Where there is a contract of sale of goods to be delivered by
stated installments, w/c are to be separately paid for, & the seller makes
defective deliveries in respect of one or more installments, or the buyer
neglects or refuses w/o just cause to take delivery of or pay for one or
more installments, it depends in each case on the terms of the contract
& the circumstances of the case, whether the breach of contract is so
material as to justify the injured party in refusing to proceed further &
suing for damages for breach of the entire contract, or whether the
breach is severable, giving rise to a claim for compensation but not to a
right to treat the whole contract as broken.
b. INDIVISIBLE OBLIGATIONS
Art. 1209. If the division is impossible, the right of the creditors may
be prejudiced only by their collective acts, & the debt can be enforced
only by proceeding against all the debtors. If one of the latter should be
insolvent, the others shall not be liable for his share.
Art. 1210. The indivisibility of an obligation does not necessarily give
rise to solidarity. Nor does solidarity of itself imply indivisibility.
Art. 1714. If the contractor agrees to produce the work fr. material
furnished by him, he shall deliver the thing produced to the employer &
transfer dominion over the thing. This contract shall be governed by the
following articles as well as by the pertinent provisions on warranty of
19
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title & against hidden defects & the payment of price in a contract of
sale.
c. JOINT INDIVISIBLE
(Tolentino) Penal Clause.-- A penal clause is an accessory
undertaking to assume greater liability in case of breach. The purpose
is to strengthen the coercive force of the obligation. When a penal
clause is present, damages do not have to be proved.
SOLIDARITY
Refers
to
the
prestation, whc is not
capable of partial
performance
Effects
to
creditors
Joint
Effects
debtors
joint
Notice the word clearly (not explicitly) w/c means that the
right can be clearly granted by implication.
to
PAMINTUAN V. CA [94 S 556] ISSUE:WON the Co. is entitled only to liquidated damages as
appearing in the contract of sale?
We hold that appellant's contention cannot be sustained bec. the second
sentence of Art. 1226 itself provides that "nevertheless, damages
shall be paid if the obligor xxx is guilty of fraud in the fulfillment of
the obligation." xxx The trial court & the CA found that Pamintuan
was guilty of fraud bec. he did not make a complete delivery of the
plastic sheeting & he overpriced the same. xxx
20
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debtor. Even if there has been no performance, the penalty may also be
reduced by the courts if it is iniquitous or unconscionable.
Art. 1230. The nullity of the penal clause does not carry w/ it that of
the principal obligation.
The nullity of the principal obligation carries w/ it that of the
penal clause.
Art. 1227. The debtor cannot exempt himself fr. the performance of
the obligation by paying the penalty, save in the case where his right
has been expressly reserved for him. Neither can the creditor demand
the fulfillment of the obligation & the satisfaction of the penalty at the
same time, unless this right has been clearly granted him. However, if
after the creditor has decided to require the fulfillment of the obligation,
the performance thereof should become impossible w/o his fault, the
penalty may be enforced.
HELD: Art. 1152 of the OCC permits the agreement upon a penalty
apart fr. the interest. Should there be such an agreement, the penalty
xxx does not include the interest, & as such the two are different &
distinct things w/c may be demanded separately. The penalty is not to
be added to the interest for the determination of whether the interest
exceeds the rate fixed by law, since said rate was fixed only for the
interest.
Art. 1200. The right of choice belongs to the debtor, unless it has been
expressly granted to the creditor.
The debtor shall have no right to choose those prestations
w/c are impossible, unlawful or w/c could not have been the object of
the obligation.
ALTERNATIVE
2 or more s are due but
performance of 1 is enough
Impossibility of one of s, the
other/s subsists
Debtor can choose whc prestation
to fulfill
W/PENAL CLAUSE
theres only 1 principal , only in
case of non-performance shall the
penal clause be enforceable
impossibility of principal , penal
clause extinguished
debtor cannot choose to pay
penalty to avoid performance,
unless expressed
X obliged to deliver a horse to Y.
if he fails he will pay him P500
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When demand would be useless, as when the obligor has rendered it
beyond his power to perform.-- Example is the case of Chavez
v. Gonzales, infra.
Art. 1227. The debtor cannot exempt himself fr. the performance of
the obligation by paying the penalty, save in the case where this right
has been expressly reserved for him. Neither can the creditor demand
the fulfillment of the obligation & the satisfaction of the penalty at the
same time, unless this right has been clearly granted him. However, if
after the creditor has decided to require the fulfillment of the obligation,
the performance thereof should become impossible w/o his fault, the
penalty may be enforced.
FACULTATIVE
Debtor has power to make
substitution
Creditor cannot demand both
prestations
w/ PENAL CLAUSE
GR, none; except when expressed
GUARANTY
Is a by whc virtue, a 3rd person
(guarantor) obliged himself to
fulfill prestation in lieu of
debtors non-performance
Intended to insure performance of
principal
Accessory & subsidiary
Principal debtor cannot be
guarantor
Subsists even when principal is
voidable or unenforceable
w/ PENAL CLAUSE
to pay penalty is different fr the
principal , but also paid in lieu
of debtors non-performance
MANNER OF BREACH
(1) Fraud
Art. 1171. Responsibility arising fr. fraud is demandable in all
obligations. Any waiver of an action for future fraud is void.
Exceptions:
When the obligation or the law expressly so declare.-- when the
contract says that w/o the necessity of demand, default sets in
upon the failure of the obligor to perform on due date. There must
be something in the contract w/c explicitly states that the demand
is not necessary in order that delay may set in.
When fr. the nature & the circumstances of the obligation it appears
that the designation of the time when the thing is to be delivered
or the service is to be rendered was a controlling motive for the
establishment of the contract.
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Fraud as used in Art. 1170 is different fr. fraud as a cause for vitiation
of consent in contracts (more properly called deceit w/c prevents the
contract fr. arising; this is found in Art. 1380, et seq.)
Art. 1165. xxx. If the obligor delays, or has promised to deliver the
same thing to two or more persons who do not have the same interest,
he shall be responsible for any fortuitous event until he has effected the
delivery.
Article 1786.
Every partner is a debtor of the
partnership for whatever he may have promised to
contribute thereto.
He shall also be bound for warranty in case of eviction with
regard to specific and determinate things which he may
have contributed to the partnership, in the same cases and
in the same manner as the vendor is bound with respect to
the vendee. He shall also be liable for the fruits thereof
from the time they should have been delivered, without the
need of any demand.
Article 1788.
A partner who has undertaken to
contribute a sum of money and fails to do so becomes a
debtor for the interest and damages from the time he should
have complied with his obligation.
The same rule applies to any amount he may have taken
from the partnership coffers, and his liability shall begin
from the time he converted the amount to his own use.
Article 1896. The agent owes interest on the sums he has applied to his
own use from the day on which he did so, and on those which he still
owes after the extinguishment of the agency.
Article 1942.
The bailee is liable for the loss of the
thing, even if it should be through a fortuitous event:
(1) If he devotes the thing to any purpose different from
that for which it has been loaned;
(2) If he keeps it longer than the period stipulated, or after
the accomplishment of the use for which the commodatum
has been constituted;
(3) If the thing loaned has been delivered with appraisal of
its value, unless there is a stipulation exempting the bailee
from responsibility in case of a fortuitous event;
(4) If he lends or leases the thing to a third person, who is
not a member of his household;
(5) If, being able to save either the thing borrowed or his own thing, he
chose to save the latter. (OBLIGATIONS OF THE BAILEE)
Effects of Negligence:
1. Creditor may insist on performance, specific or substitute
(Art. 1233.)
2. Creditor may resolve/ rescind (Art. 1191.)
3. Damages in either case (Art. 1170.)
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be iniquitous such that he would be liable only for the cost of that
telegram paid for 30 yrs ago.
parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall
be responsible for all damages w/c may be reasonably attributed to the
non-performance of the obligation.
Balane:
General Rule: The happening of a fortuitous event exonerates the
debtor fr. liability.
CASE DOCTRINE:
One who assumes a contractual obligation & fails to
perform the same on account of his inability to meet certain bank
requirements w/c inability he knew & was aware of when he entered
into the contract, should be held liable in damages for breach of
contract.
IN Depositary
Art. 1979. The depositary is liable for the loss of the thing through a
fortuitous event:
(1) If it is so stipulated;
(2) If he uses the thing w/o the depositor's permission;
(3) If he delays its return;
(4) If he allows others to use it, even though he himself may have been
authorized to use the same.
ISSUE;WON there was here breach of contract, and WON only actual
damages are due?
YES, Art. 1170, ALSO Art. 2176 applied.
Bailee in Commodatum
This liability is not limited to actual or quantified damages. To
sustain petitioners contention and award actual damages only would
24
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Art. 1942. The bailee is liable for the loss of the thing, even if it should
be through a fortuitous event:
(1) If he devotes the thing to any purpose different fr. that for w/c it has
been loaned;
(2) If he keeps it longer than the period stipulated, or after the
accomplishment of the use for w/c the commodatum has been
constituted;
If the thing loaned has been delivered w/ appraisal of its value, unless
there is a stipulation exempting the bailee fr. responsibility in case of a
fortuitous event;
If he lends or leases the thing to a third person, who is not a member of
his household;
(5) If, being able to save either the thing borrowed or his own thing, he
chooses to save the latter.
Common Carrier
Art. 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the willful acts or negligence of other
passengers or of strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
(2) when it is otherwise declared by stipulation (1174)
Express agreement
Art. 1306. The contracting parties may establish such
stipulations, clauses, terms & conditions as they may deem
convenient, provided they are not contrary to law, morals,
good customs, public order, or public policy.
In Negotiorum Gestio
(3) when the nature of the requires the assumption of risks
Art. 2147. The officious manager shall be liable for any fortuitous
event:
(1) If he undertakes risky operations w/c the owner was not accustomed
to embark upon;
(2) If he has preferred his own interest to that of the owner;
(3) If he fails to return the property or business after demand by the
owner;
(4) If he assumed the management in bad faith.
Aleatory Contract
Art. 2010. By an aleatory contract, one of the parties or both
reciprocally bind themselves to give or to do something in
consideration of what the other shall give or do upon the happening of
an event w/c is uncertain, or w/c is to occur at an indeterminate time.
Art. 1175. Usurious transactions shall be governed by special laws.
Tolentino:
Art. 2148. Except when the management was assumed to save the
property or business fr. imminent danger, the officious manager shall
be liable for fortuitous events:
(1) If he is manifestly unfit to carry on the management;
(2) If by his intervention he prevented a more competent person fr.
taking up the management.
Balane: Some of the elements were present in this case. What was
absent was the last element.
NPC VS. CA [161 S 334] - NPC cannot escape liability bec. its
negligence was the proximate cause of the loss & damage even
though the typhoon was an act of God.
To be exempt fr. liability for loss bec. of an act of God, he must be
free fr. any previous negligence or misconduct by w/c the loss or
damage may have been occasioned.
Lessee
Art. 1648. Every lease of real estate may be recorded in the Registry of
Property. Unless a lease is recorded, it shall not be binding upon third
persons.
Art. 1671. If the lessee continues enjoying the thing after the expiration
of the contract, over the lessor's objection, the former shall be subject to
the responsibilities of a possessor in bad faith.
Art. 552. xxx.
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2.
3.
The injured party may choose between the fulfillment and the
rescission of the obligation, with the payment of damages in
either case. He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just
cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third
persons who have acquired the thing, in accordance with articles
1385 and 1388 and the Mortgage Law.
Article 302. Neither the right to receive legal support nor any
money or property obtained as such support or any pension or
gratuity from the government is subject to attachment or
execution. (Support)
Article 1708. The laborer's wages shall not be subject to
execution or attachment, except for debts incurred for food,
shelter, clothing and medical attendance. (Contract Labor)
FAMILY CODE:
Art. 153. The family home is deemed constituted on a house and
lot from the time it is occupied as a family residence. From the
time of its constitution and so long as any of its beneficiaries
actually resides therein, the family home continues to be such and
is exempt from execution, forced sale or attachment except as
hereinafter provided and to the extent of the value allowed by
law.
Article 1168. When the obligation consists in not doing, and the
obligor does what has been forbidden him, it shall also be undone
at his expense.
Article 1170. Those who in the performance of their obligations
are guilty of fraud, negligence, or delay, and those who in any
manner contravene the tenor thereof, are liable for damages.
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The judgment obligor's family home as provided by law, or
the homestead in which he resides, and land necessarily
used in connection therewith;
Ordinary tools and implements personally used by him in
his trade, employment, or livelihood;
Three horses, or three cows, or three carabaos, or other
beasts of burden, such as the judgment obligor may select
necessarily used by him in his ordinary occupation;
His necessary clothing and articles for ordinary personal
use, excluding jewelry;
Household furniture and utensils necessary for
housekeeping, and used for that purpose by the judgment
obligor and his family, such as the judgment obligor may
select, of a value not exceeding one hundred thousand
pesos;
Provisions for individual or family use sufficient for four
months;
The professional libraries and equipment of judges,
lawyers, physicians, pharmacists, dentists, engineers,
surveyors, clergymen, teachers, and other professionals, not
exceeding three hundred thousand pesos in value;
One fishing boat and accessories not exceeding the total
value of one hundred thousand pesos owned by a fisherman
and by the lawful use of which he earns his livelihood;
So much of the salaries, wages, or earnings of the judgment
obligor for his personal services within the four months
preceding the levy as are necessary for the support of his
family;
Lettered gravestones;
Monies, benefits, privileges, or annuities accruing or in any
manner growing out of any life insurance;
The right to receive legal support, or money or property
obtained as such support, or any pension or gratuity from
the Government;
Properties specially exempted by law.
2.
3.
Balane:
Q: Against what can the obligee demand performance?
If number one is not enough, the creditor goes to any claims w/c the
debtor may have against third persons. This is called accion
subrogatoria, wherein the creditor is subrogated in the rights of
the debtor.
Personal rts. Of debtor:
1. Rt. to subsistence, support he receives exempt
2. Public rts;
3. Rts. Pertaining to honor
4. Rt. to use remaining powers available to him, e.g. SPA
of agency or deposit; administrator; to accept a
5. Non-patrimonial rts estab. Status, legit or illegit child;
annulment of marriage, legal sep., those arising fr, PFR;
6. Personal rts. Arising fr. Patrimonial source, e.g. to
revoke a donation d/t ingratitude, to demand exclusion
of an unworthy heir;
Tolentino:
RE 1165 REMEDIES OF CREDITOR: For failure of debtor to
comply,
1. SPECIFIC PERFORMANCE, to obtain compliance of
the prestations, whether determinate or generic; this action
implies a contractual relation;
2. TO RESCIND OR RESOLVE THE
3. AN ACTION FOR DAMAGES exclusively or in
addition to 1 & 2.
Constitutional prohibition vs. imprisonment for debt applies,
except in subsidiary imprisonment when civil liability arising from
crime is not paid; or in contempt;
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Art. 1170. Those who in the performance of their obligation are guilty
of fraud, negligence or delay, & those who in any manner contravene
the tenor thereof, are liable for damages.
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Axn for Rsn may be brought by:
(1) the person injured by the Rescue K,
(2) heirs of this person, &
(3) their Crs by virtue of rt granted under Art. 1177.
Issues:
W/N Tolentino can compel specific performance.
W/N Tolentinos liability to pay the P17,000 covered by the
promissory note subsists.
When K cant be rescinded bec. 3rd p. is in GF, the party who caused
the loss is liable for the damages
Badges of fraud, & Art. 1387: Presumptions. May be rebutted by
satisfactory & convincing evidence.
Art. 1388: Cr. With axn only v. subsequence transferees only when an
axn lies v. 1st transferee. If 1st Tfee in GF, no liability. If 1st Tfee in
BF, the rescissible char. Of 2nd alienation depends upon how 2nd Tfee
acquired the thing.
Art. 1191. The power to rescind obs. Is implied in reciprocal ones, in
case on of the obligors should not comply w/ what is incumbent upon
him.
The injured party may choose between the fulfillment & the rescission
of the ds., w/ the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The ct. shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be w/o prejudice to the rts of third persons who
have acquired the thing, in accordance w/ Arts. 1385 & 1388 & the
Mortgage Law.
--CASES:
Tolentino:
Similarities between Rsn under Art. 1191 & Art. 1380+:
(1) both presuppose s validly entered into & existing, &
(2) both require mutual restitution when declared proper.
Differences:
(1) Rsn under 1191 may be demanded only by party to the , under
1380+ by 3rd p. prejudiced by the ;
(2) Rsn under 1191 may be denied when there is sufficient reason to
justify extension of time to perform, under 1380+ such reason does
NOT affect rt. to ask for Rsn;
(3) Non-perf. is the only grd. for Rsn under 1191, while there are
various reasons of equity as grds. under 1191 applies only to recip. ds.
where one party has not performed, while under 1380(+) may be
unilateral or reciprocal & even when has been fulfilled.
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ART. 1383. The action for rescission is subsidiary; it
cannot be instituted except when the party suffering
damage has no other legal means to obtain reparation for
the same.
I concur with the opinion penned by Mr. Justice Fred Ruiz Castro,
but I would like to add that the argument of petitioner, that the
rescission demanded by the respondent-appellee, Magdalo
Francisco, should be denied because under Article 1383, NCC
rescission can not be demanded except when the party suffering
damage has no other legal means to obtain reparation, is predicated
on a failure to distinguish between a rescission for breach of contract
under Article 1191 of the Civil Code and a rescission by reason of
lesion or economic prejudice, under Article 1381, et seq.
amdcm
Upon the other hand, where, as in this case, the petitioner cancelled
the contract, advised the respondent that he has been relieved of his
obligations thereunder, and led said respondent to believe it so and
act upon such belief, the petitioner may not be allowed, in the
language of section 333 of the Code of Civil Procedure (now section
68 (a) of Rule 123 of the New Rules of Court), in any litigation the
course of litigation or in dealings in nais, be permitted to repudiate
his representations, or occupy inconsistent positions, or, in the letter
of the Scotch law, to "approbate and reprobate."
ISSUE: whether petitioner U.P. can treat its contract with ALUMCO
rescinded, and may disregard the same before any judicial
pronouncement to that effect.
In other words, the party who deems the contract violated may
consider it resolved or rescinded, and act accordingly, without
previous court action, but it proceeds at its own risk. For it is only
the final judgment of the corresponding court that will conclusively
and finally settle whether the action taken was or was not correct in
law. But the law definitely does not require that the contracting party
who believes itself injured must first file suit and wait for a judgment
before taking extrajudicial steps to protect its interest. Otherwise, the
party injured by the other's breach will have to passively sit and
watch its damages accumulate during the pendency of the suit until
the final judgment of rescission is rendered when the law itself
requires that he should exercise due diligence to minimize its own
damages (Civil Code, Article 2203).
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by the CFI of its original jurisdiction to try the case on the
merits. 4
BOYSAW VS INTERPHIL
The power to rescind obligations is implied, in
reciprocal ones, in case one of the obligors should not comply
with what is incumbent upon him. [Part 1, Art. 1191, Civil Code].
There is no doubt that the contract in question gave rise to
reciprocal obligations. "Reciprocal obligations are those which
arise from the same cause, and in which each party is a debtor
and a creditor of the other, such that the obligation of one is
dependent upon the obligation of the other. They are to be
performed simultaneously, so that the performance of one is
conditioned upon the simultaneous fulfillment of the other"
[Tolentino]
The power to rescind is given to the injured party.
"Where the plaintiff is the party who did not perform the undertaking
which he was bound by the terms of the agreement to perform 4 he is
not entitled to insist upon the performance of the contract by the
defendant, or recover damages by reason of his own breach " [Seva
vs. Alfredo Berwin 48 Phil. 581].
Another violation of the contract in question was the
assignment and transfer, first to J. Amado Araneta, and subsequently,
to appellant Yulo, Jr., of the managerial rights over Boysaw without
the knowledge or consent of Interphil. The assignments, from
Ketchum to Araneta, and from Araneta to Yulo, were in fact
novations of the original contract which, to be valid, should have
been consented to by Interphil.
However, even in the cited cases, there was at least a written notice
sent to the defaulter informing him of the rescission. As stressed in
University of the Philippines vs. Walfrido de los Angeles the act of a
party in treating a contract as cancelled should be made known
to the other.
ANGELES VS CALASANZ
ISSUE: WON the contract to sell has been automatically and validly
cancelled by the defendants-appellants
HELD: The right to rescind the contract for non-performance of one
of its stipulations, therefore, is not absolute. In Universal Food Corp.
v. Court of Appeals (33 SCRA 1) the Court stated that
The general rule is that rescission of a contract will not be
permitted for a slight or casual breach, but only for such
substantial and fundamental breach as would defeat the
very object of the parties in making the agreement. (Song
Fo & Co. v. Hawaiian-Philippine Co., 47 Phil. 821, 827)
The question of whether a breach of a contract is
substantial depends upon the attendant circumstances.
The breach of the contract adverted to by the defendantsappellants is so slight and casual when we consider that apart from
the initial downpayment of P392.00 the plaintiffs-appellees had
already paid the monthly installments for a period of almost nine (9)
years. In other words, in only a short time, the entire obligation
would have been paid.
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recent bout. That the appellees had the justification to renegotiate the
original contract, particularly the fight date is undeniable from the
facts aforestated. Under the circumstances, the appellees' desire to
postpone the fight date could neither be unlawful nor unreasonable.
We uphold the appellees' contention that since all the rights
on the matter rested with the appellees, and appellants' claims, if any,
to the enforcement of the contract hung entirely upon the former's
pleasure and sufferance, the GAB did not act arbitrarily in acceding
to the appellee's request to reset the fight date to November 4, 1961.
It must be noted that appellant Yulo had earlier agreed to abide by the
GAB ruling.
1.
2.
3.
Compromise
4.
5.
6.
7.
8.
9.
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(1) Identity, of the prestation, & the very thing or service due must
be delivered or released;
(2) its integrity prestation must be fulfilled completely
Held:
When RFC turned down the request of Saura, the negotiations which
had been going on for the implementation of the loan agreement
reached an impasse. Saura, Inc. obviously was in no position to
comply with RFC's conditions. So instead of doing so and insisting
that the loan be released as agreed upon, Saura, Inc. asked that the
mortgage be cancelled, which was done by RFC. The action thus
taken by both parties was in the nature of mutual desistance - what
Manresa terms as "mutuo disenso" - which is a mode of
extinguishing obligations. It is a concept that derives from the
principle that since mutual agreement can create a contract,
mutual disagreement by the parties can cause its extinguishment.
Extinguishment of s by mutual desistance Where after approval
of his loan, the borrower, instead of insisting for its release, asked that
the mortgage given as security be cancelled & the creditor acceded
thereto, the action taken by both parties was in the nature of mutual
desistance - what Manresa terms "mutuo disenso" - w/c is a mode of
extinguishing obligations. It is a concept that derives fr. the principle
that since mutual agreement can create a contract, mutual disagreement
by the parties can cause its extinguishment.
For BALANE:
Art. 1233 states these requisites of payment
I.
Re: The prestation
1. Identity
2. Integrity
3. Indivisibility
II.
III.
Discussion:
I. With respect to prestation:
1. Identity
A. PAYMENT OR PERFORMANCE
CONCEPT OF PAYMENT
Art. 1232. Payment means not only the delivery of money but also the
performance, in any other manner, of an obligation.
payment shd be made by the debtor to the creditor at the right time
and place.
KINDS:
1. NORMAL when Db voluntarily performs
2. ABNORMAL when Db is forced by judicial proceeding
Balane:
amdcm
b. With the creditor's consent -- Anyone.
This is a departure fr. the rule in the Old Civil Code w/c
did not require consent on the part of the creditor.
c. Effect of payment by a third person:
1.
2.
This rule has never been used. It was only during the Japanese
occupation that there was a recognition of extraordinary inflation
in this country.
1.
2.
3.
4.
5.
In all these five (5) cases, it is required that the debt should not have
been garnished. (Art. 1243.)
III. With respect to the time & place of payment:
Balane:
** Payment or Performance are used interchangeably.
But technically, payment is used in obligations to give whereas
performance is used in obligations to do. Payment/ performance is the
paradigmatic mode of extinguishment of an obligation. It is the only
normal way of extinguishing an obligation.
Art. 1234. If the obligation has been substantially performed in good
faith, the obligor may recover as though there had been a strict &
complete fulfillment, less damages suffered by the obligee.
Substantial Performance:
1. an attempt in GF to perform, w/o any willful or intentional
departure fr it
2. deviation fr perf. of must be slight, & omission or defect
must be so technical & unimpt, & must not pervade the
whole, must not be so material to the achievement of the very
purpose of the parties;
3. party claiming substantial perf. must show attempt in GF
amdcm
Art. 1234. If the obligation has been substantially performed in good
faith, the obligor may recover as though there had been a strict &
complete fulfillment, less damages suffered by the obligee.
LEGARDA HERMANOS V. SALDANA [55 S 324] - The Court's
doctrine in J.M. Tuason v. Javier is fully applicable to the present case,
RE Substantial performance of in GF, Art. 1234.
AZCONA V. JAMANDRE [151 S 317] ISSUE: WON the payment of P7000, lacking of 200 fr the agreed
annual rental of 7200, amounts to delay and ground for rescission
HELD: No. the receipt showed full payment as per contract; no
mention of the short of 200; whc means that rental was reduced,
perhaps b/c of the reduction of the 80Ha. By 16Ha. Used by Pet. As
grazing land. But the rest of the subsists.
Tolentino:
Authority to receive: LEGAL or CONVENTIONAL
Legal: conferred by law, such as authority of guardian to inc. creditor
(Cr), or the admr of estate
Art. 1240. Payment shall be made to the person in whose favor the
obligation has been constituted, or his successor in interest, or any
person authorized to receive it.
Tolentino:
1.
2.
3.
4.
36
amdcm
In obligations to do or not to do, an act or forbearance cannot
be substituted by another act or forbearance against the obligee's will.
Tolentino:
Tolentino:
TIBAJIA V. CA (1993)
Art. 1243. Payment made to the creditor by the debtor after the latter
has been judicially ordered to retain the debt shall not be valid.
Tolentino:
Art. 1244. The debtor of a thing cannot compel the creditor to receive
a different one, although the latter may be of the same value as, or more
valuable than that w/c is due.
37
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In the meantime, the action derived from the original obligation shall
be held in abeyance.;
Republic Act 529 does not provide for the rate of exchange for the
payment of obligation incurred after the enactment of said Act. The
logical conclusion, therefore, is that the rate of exchange should
be that prevailing at the time of payment.
This view finds support in the ruling of this Court in the case of
Engel vs. Velasco & Co. where this Court held that even if the
obligation assumed by the defendant was to pay the plaintiff a sum of
money expressed in American currency, the indemnity to be allowed
should be expressed in Philippine currency at the rate of exchange at
the time of judgment rather than at the rate of exchange prevailing on
the date of defendant's breach. This is also the ruling of American
court as follows:
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certifying a check, as regards both parties, is to enable the holder to use
it as money." When the holder procures the check to be certified, "the
check operates as an assignment of a part of the funds to the creditors."
Hence, the exception to the rule enunciated under Sec. 63 of the CB
Act shall apply in this case:
Sec. 63. Legal Character Checks representing deposit do
not have legal tender power and their acceptance in payment
of debts, both pub & priv, is at the option of the Cr.
Provided, however that a check w/c has been cleared &
credited to the account of the creditor shall be equivalent
to a delivery to the creditor in cash in an amount equal to
the amount credited to his account.
ISSUE: WON the subject matter is illegal and against public policy,
thus, doctrine of pari delicto applies.
HELD: WE DISAGREE. It is to be noted that while an agreement
to pay in dollars is declared as null and void and of no effect, what
the law specifically prohibits is payment in currency other than
legal tender. It does not defeat a creditor's claim for payment, as it
specifically provides that "every other domestic obligation ... whether
or not any such provision as to payment is contained therein or made
with respect thereto, shall be discharged upon payment in any coin or
currency which at the time of payment is legal tender for public and
private debts." A contrary rule would allow a person to profit or
enrich himself inequitably at another's expense.
Section 1 of Republic Act No. 529, which was enacted on June 16,
1950:
Section 1. Every provision contained in, or made with respect to, any
domestic obligation to wit, any obligation contracted in the
Philippines which provision purports to give the obligee the right to
require payment in gold or in a particular kind of coin or currency
other than Philippine currency or in an amount of money of the
Philippines measured thereby, be as it is hereby declared against
public policy, and null and void and of no effect and no such
provision shall be contained in, or made with respect to, any
obligation hereafter incurred. The above prohibition shall not apply
to (a) transactions were the funds involved are the proceeds of loans
or investments made directly or indirectly, through bona fide
intermediaries or agents, by foreign governments, their agencies and
instrumentalities, and international financial and banking institutions
so long as the funds are Identifiable, as having emanated from the
sources enumerated above; (b) transactions affecting high priority
economic projects for agricultural industrial and power development
as may be determined by the National Economic Council which are
financed by or through foreign funds; (c) forward exchange
transactions entered into between banks or between banks and
individuals or juridical persons; (d) import-export and other
international banking financial investment and industrial transactions.
With the exception of the cases enumerated in items (a) (b), (c) and
(d) in the foregoing provision, in, which cases the terms of the
parties' agreement shall apply, every other domestic obligation
heretofore or hereafter incurred whether or not any such provision
as to payment is contained therein or made with- respect thereto,
shall be discharged upon payment in any coin or currency which at
the time of payment is legal tender for public and private debts:
Provided, That if the obligation was incurred prior to the
enactment of this Act and required payment in a particular kind
of coin or currency other than Philippine currency, it shall be
discharge in Philippine currency measured at the prevailing rates
of exchange at the time the obligation was incurred, except in
case of a loan made in foreign currency stipulated to be payable
in the currency in which case the rate of exchange prevailing at
the time of the stipulated date of payment shall prevail All coin
and currency, including Central Bank notes, heretofore and
hereafter issued and d by the Government of the Philippines shall
be legal tender for all debts, public and private. (As amended by
RA 4100, Section 1, approved June 19, 1964)
NEW PACIFIC TIMBER V. SENERIS [101 S 686] Where a check is certified by the bank on w/c it is drawn, the
certification is equivalent to acceptance. Said certification "implies
that the check is drawn upon sufficient funds in the hands of the
drawee, that they have been set apart fort its satisfaction, & that
they shall be so applied whenever the check is presented for
payment. It is an understanding that the check is good then, & shall
continue to be good, & this agreement is as binding on the bank as its
notes in circulation, a certificate of deposit payable to the order of the
depositor, or any other obligation it can assume. The object of
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Besides, there is no showing that the factual assumption of said article
has come into existence.
[Balane]
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buying the thing or property of the debtor, payment for w/c is to be
charged against the debtor's debt.
[Tolentino]
Art. 1253. If the debt produces interest, payment of the principal shall
not be deemed to have been made until the interests have been covered.
Art. 1254. When the payment cannot be applied in accordance w/ the
preceding rules, or if application can not be inferred fr. other
circumstances, the debt w/c is most onerous to the debtor, among those
due, shall be deemed to have been satisfied.
If the debts due are of the same nature & burden, the
payment shall be applied to all of them proportionately.
[Baviera]
The ff. Are the rules for applicn of pmts:
1 - The first choice belongs to the Db
2 - If the Db did not choose, the Cr may choose, w/c he will manifest in
a receipt.
3 - If neither specified the applicn, pmt shall be made to the most
onerous debt.
Payment by Cession
Application of Payment
[Balane]
[Balane]
Application of payment (Imputacion in Spanish) is the
designation of a debt w/c is being paid by the debtor who has several
obligations of the same kind in favor of the creditor to whom the
payment is made.
Rules where the amount sent by the debtor to the creditor is less
than all that is due:
No.1:
Q: Why is payment by cession a special form of payment?-A: Bec. there is no completeness of performance (re: integrity.)
In most cases, there will be a balance due.
Q: Difference between dacion en pago & payment by cession:
No.2:
Debtor may apply the amount (an obvious limitation bec. of
the principles of indivisibility & integrity) where there would be partial
payment.
No.3:
No.4:
Q; What are the rules to determine w/c is the most onerous debt?
A: (1252)
1. If one is interest paying & the other is not, the debt w/c is
interest paying is more onerous.
2.
If one is a secured debt & the other is not, the secured debt is
more onerous
3.
If both are interest free, one is older than the first, the newer
one is more onerous bec. prescription will take longer w/
respect to the newer debt.
Art. 1255. The debtor may cede or assign his property to his creditors
in payment of his debts. This cession, unless there is stipulation to the
contrary, shall only release the debtor fr. responsibility for the net
proceeds of the thing assigned. The agreements w/c, on the effect of
the cession, are made between the debtor & his creditors shall be
governed by special laws.
Art. 1252. He who has various debts of the same kind in favor of one
& the same creditor, may declare at the time of making the payment, to
w/c of them the same must be applied. Unless the parties so stipulate,
or when the application of payment is made by the party for whose
benefit the term has been constituted, application shall not be made as
to debts w/c are not yet due.
If the debtor accepts fr. the creditor a receipt in w/c an
application of the payment is made, the former cannot complain of the
same, unless there is a cause for invalidating the contract.
Art. 1256. If the creditor to whom tender of payment has been made
refuses w/o just cause to accept it, the debtor shall be released fr.
responsibility by the consignation of the thing or sum due.
Consignation alone shall produce the same effect in the following
cases:
When the creditor is absent or unknown, or does not appear at the place
of payment;
When he is incapacitated to receive the payment at the time it is due;
41
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When, w/o just cause, he refuses to give a receipt;
When two or more persons claim the same right to collect;
When the title of the obligation has been lost.
1.
2.
3.
4.
5.
[Balane]
Subsection 3.-- Tender of Payment & Consignation
The title of the subsection is wrong. It should have been
Consignation only bec. that is the special mode of payment & not the
tender of payment.
Art. 1257. In order that the consignation of the thing due may release
the obligor, it must first be announced to the persons interested in the
fulfillment of the obligation.
The consignation shall be ineffectual if it is not made strictly
in consonance w/ the provisions w/c regulate payment.
Art. 1258. Consignation shall be made by depositing the things due at
the disposal of judicial authority, before whom the tender of payment
shall be proved, in a proper case, & the announcement of the
consignation in other cases.
The consignation having been made, the interested parties
shall also be notified thereof.
Consignation Defined:
[Tolentino]
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IMMACULATA V. NAVARRO [160 S 211] - We hereby grant
said alternative cause of action or prayer. While the sale was originally
executed in Dec. 1969, it was only on Feb. 3, 1974 when, as prayed for
by prvt. res, & as ordered by the court a quo, a deed of conveyance was
formally executed. Since the offer to redeem was made on 3/24/75,
this was clearly w/in the 5-yr. period of legal redemption allowed by
the Public Land Act.
[Tolentino]
Effects of Consignation:
SC:
1.
2.
3.
4.
Art. 1261. If, the consignation having been made, the creditor should
authorize the debtor to w/draw the same, he shall lose every preference
w/c he may have over the thing. The co-debtors, guarantors & sureties
shall be released.
Art. 1262 is the same as fortuitous event in Art. 1174. The effect is
the same:
The is extinguished if the is to deliver a determinate thing. If
the is to deliver a generic thing, the is not extinguished.
[Baviera]
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termination of the treaty. This principle of international law has spilled
over into Civil law.
Art. 1170. Those who in the performance of their obligations are guilty
of fraud, negligence, or delay, & those who in any manner contravene
the tenor thereof are liable for damages.
Art. 1266. The debtor in obligations to do shall also be released when
the prestation becomes legally or physically impossible w/o the fault of
the obligor.
[Balane]
2.
3.
4.
The event or change could not have been foreseen at the time
of the execution of the contract;
The event or change makes the performance extremely
difficult but not impossible;
The event must not be due to an act of either party;
The contract is for a future prestation. If the contract is of
immediate fulfillment, the gross inequality of the reciprocal
prestation may involve lesion or want of cause.
In the case of Naga, the court did not consider the 4th element as an
element.
HELD: Art. 1266, NCC does not apply to a surety upon a bail bond
Art. 1266 does not apply to a surety upon a bail bond, as said Art.
speaks of a relation bet. a debtor & creditor, w/c does not exist in the
case of a surety upon a bail bond, on one hand, & the State, on the
other. For while sureties upon a bail bond (or recognizance) can
discharge themselves fr. liability by surrendering their principal,
sureties on ordinary bonds or commercial contracts, as a general rule,
can only be released by payment of the debt or performance of the
act stipulated.
NOTES:
Balane: The Court went too far in this case. It even went to the extent
of stipulating for the parties in the name of equity.
amdcm
Art. 1268. When the debt of a thing certain & determinate proceeds fr.
a criminal offense, the debtor shall not be exempted fr. the payment of
its price, whatever may be the cause for the loss, unless the thing
having been offered by him to the person who should receive it, the
latter refused w/o justification to accept it.
Art. 1269. The obligation having been extinguished by the loss of the
thing, the creditor shall have all the rights of action w/c the debtor may
have against third persons by reason of the loss.
Art. 1942. The bailee is liable for the loss of the thing, even if it should
be through a fortuitous event:
If he devotes the thing to any purpose different fr. that for w/c it has
been loaned;
If he keeps it longer than the period stipulated, or after the
accomplishment of the use for w/c the commodatum has been
constituted;
If the thing loaned has been delivered w/ appraisal of its value, unless
there is a stipulation exempting the bailee fr. responsibility in case of a
fortuitous event;
If he lends or leases the thing to a third person, who is not a member of
his household;
If, being able to save either the thing borrowed or his own thing, he
chooses to save the latter.
Art. 1979. The depositary is liable for the loss of the thing through a
fortuitous event:
(1) If it is so stipulated;
(2) If he uses the thing w/o the depositor's permission;
(3) If he delays its return;
(4) If he allows others to use it, even though he himself may have been
authorized to use the same.
[Tolentino]
When Db tenders pmt & Cr refuses to accept w/o just cause, Db has 2
alternatives: (1) to consign or
(2) to just keep the thing in his possn, w/ the oblig to use due
diligence, subj to the gen rules of s, but no longer to the spec liab
under Article 1268.
ART. 1189, 1174, 1165, 1268, 1942, 1979, 2159:
Art. 1189. When the conditions have been imposed w/ the intention of
suspending the efficacy of an obligation to give, the following rules
shall be observed in case of the improvement, loss or deterioration of
the thing during the pendency of the condition.
If the thing is lost w/o the fault of the debtor, the obligation shall be
extinguished;
If the thing is lost through the fault of the debtor, he shall be obliged to
pay damages; it is understood that the thing is lost when it perishes, or
goes out of commerce, or disappears in such a way that its existence is
unknown or it cannot be recovered;
When the thing deteriorates w/o the fault of the debtor, the impairment
is to be borne by the creditor;
If it deteriorates through the fault of the debtor, the creditor may choose
between the rescission of the obligation & its fulfillment, w/ indemnity
for damages in either case:
If the thing is improved by its nature, or by time, the improvement shall
inure to the benefit of the creditor;
If it is improved at the expense of the debtor, he shall have no other
right than that granted to the usufructuary.
[Balane]
There are three requisites in order for Art. 1189 to apply-1. There is loss, deterioration or improvement before the
happening of the condition.
2. There is an obligation to deliver a determinate thing (on the
part of the debtor)
3. The condition happens.
In Negotiorum Gestio
Art. 2147. The officious manager shall be liable for any fortuitous
event:
(1) If he undertakes risky operations w/c the owner was not accustomed
to embark upon;
(2) If he has preferred his own interest to that of the owner;
(3) If he fails to return the property or business after demand by the
owner;
(4) If he assumed the management in bad faith.
amdcm
1.
2.
3.
4.
Art. 750. The donation may comprehend all the present property of the
donor, or part thereof, provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself, & of all relatives
who, at the time of the acceptance of the donation are by law entitled to
be supported by the donor. Without such reservation, the donation shall
be reduced on petition of any person affected.
Art. 748. The donation of a movable may be made orally or in writing.
An oral donation requires the simultaneous delivery of the
thing or of the document representing the right donated.
If the value of the personal property donated exceeds five
thousand pesos, the donation & the acceptance shall be made in
writing. Otherwise, the donation shall be void.
FORMS of Condonation:
a. By a Will
Presumption IN Condonation:
b. By Agreement
Art. 1270. Condonation or remission is essentially gratuitous, &
requires the acceptance by the obligor. It may be made expressly or
impliedly.
One & the other kind shall be subject to the rules w/c govern
inofficious donations. Express condonation shall, furthermore, comply
w/ the forms of donation.
Art. 746. Acceptance must be made during the lifetime of the donor &
of the donee.
Art. 752. The provision of article 750 notw/standing, no person may
give or receive, by way of donation, more than he may give or receive
by will.
The donation shall be inofficious in all that it may exceed this
limitation.
Art. 1272. Whenever the private document in w/c the debt appears is
found in the possession of the debtor, it shall be presumed that the
creditor delivered it voluntarily, unless the contrary is proved.
Rule 131, Sec. 5 (b), (j), (k), Rules of Court, Disputable presumptions.- The following presumptions are satisfactory if uncontradicted, but
may be contradicted & overcome by other evidence:
46
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xxx
(b) That an unlawful act was done w/ an unlawful intent;
xxx
(j) That a person found in possession of a thing taken in the doing of a
wrongful act is the taker & doer of the whole act; otherwise, that things
w/c a person possesses, or exercises acts of ownership over, are owned
by him;
(k) That a person in possession of an order on himself for the payment
of money, or the delivery of anything, has paid the money or delivered
the thing accordingly;
xxx
Art. 2080. The guarantors, even though they be solidary, are released
fr. their obligation whenever by some act of the creditor they cannot be
subrogated to the rights, mortgages, & preferences of the latter.
(Provisions Common to Pledge & Mortgage)
Art. 2085. The following requisites are essential to the contracts of
pledge & mortgage:
(1) That they be constituted to secure the fulfillment of a principal
obligation;
xxx
Art. 1274. It is presumed that the accessory obligation of pledge has
been remitted when the thing pledged, after its delivery to the creditor,
is found in the possession of the debtor, or of a third person who owns
the thing.
[Balane]
The accesory obligation of pledge is extinguished bec. pledge is a
possessory lien.
VELASCO V. MASA
[Balane]
Rationale You become your own creditor or you become your own
debtor. So how can you sue yourself.
Art. 1273. The renunciation of the principal debt shall extinguish the
accessory obligations; but the waiver of the latter shall leave the former
in force.
Art. 2076. The obligation of the guarantor is extinguished at the same
time as that of the debtor, & for the same causes as all other
obligations.
a. Principal Parties
Art. 1276. Merger w/c takes place in the person of the principal debtor
or creditor benefits the guarantors. Confusion w/c takes place in the
person of any of the latter does not extinguish the obligation.
[Tolentino]
47
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Extinguishment of the principal oblig through confusion
releases the guarantors, whose oblig is merely accessory
When merger takes place in the person of the guarantor,
oblig is NOT extinguished.
price of the thing or of the value of the service in w/c the obligation
consists.
5. COMPENSATION
b. Among guarantors
Art. 1278. Compensation shall take place when two persons, in their
own right, are creditors & debtors of each other.
[Balane]
c. Joint Obligations
CASES:
Art. 1277. Confusion does not extinguish a joint obligation except as
regards the share corresponding to the creditor or debtor in whom the
two characters concur.
GAN TION vs. CA [28 S 235, 1969] Award of attys fees is proper
subject of legal compensation.
ISSUE: WON there was legal compensation bet. Pet Gan Tion and
resp. Ong Wan Sieng.
d. Solidary Obligations
HELD: Yes. The award of attys fees is in favor of litigant not of his
counsel, thus litigant is judgment Cr who may enforce judgment by
execution. Such is credit therefore whc can be proper subject of legal
compensation.
e. Indivisible Obligations
Art. 1209. If the division is impossible, the right of the creditors may
be prejudiced only by their collective acts, & the debt can be enforced
only by proceeding against all the debtors. If one of the latter should be
insolvent, the others shall not be liable for his share.
Art. 1224. A joint indivisible gives rise to indemnity for damages fr.
the time anyone of the debtors does no comply w/ his undertaking. The
debtors who may have been ready to fulfill their promises shall not
contribute to the indemnity beyond the corresponding portion of the
48
amdcm
(2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, & also of the same quality if the
latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated & demandable;
(5) That over neither of them there by any retention or controversy,
commenced by third persons & communicated in due time to the
debtor.
[Balane]
2.
3.
4.
(additional
amdcm
(5) That over neither of them there by any retention or controversy,
commenced by third persons & communicated in due time to the
debtor.
Art. 1282. The parties may agree upon the compensation of debts w/c
are not yet due.
[Tolentino]
1. Voluntary Compensation is not limited to obligations w/c
are not yet due. The parties may compensate by agreement
any obligations, in w/c the objective requisites provided for
legal compensation are not present. xx
2.
Art. 1283. If one of the parties to a suit over an obligation has a claim
for damages against the other, the former may set it off by proving his
right to said damages & the amount thereof.
Art. 1287. Compensation shall not be proper when one of the debts
arises fr. a depositum or fr. the obligations of a depositary or of a bailee
in commodatum.
Neither can compensation be set up against a creditor who
has a claim for support due by gratuitous title, w/o prejudice to the
provisions of paragraph 2 of article 301.
Art. 301. The right to receive support cannot be renounced; nor can it
be transmitted to a third person. Neither can it be compensated w/ what
the recipient owes the obligor.
However, support in arrears may be compensated &
renounced, & the right to demand the same may be transmitted by
onerous or gratuitous title.
[Baviera] Note that Art. 301 of the NCC is not found in FC.
[Balane]
[Balane]
Rules:
Assignment w/ the debtor's consent Debtor cannot set up
compensation at all unless the right is reserved.
Assignment w/ the debtor's knowledge but w/o his consent
The debtor can set up compensation w/ a credit already
existing at the time of the assignment.
Art. 1284. When one or both debts are rescissible or voidable, they
may be compensated against each other before they are judicially
rescinded or avoided.
6. NOVATION
Art. 1291. Obligations may be modified by:
(1) Changing their object or principal conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the creditor.
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[TOLENTINO]
2.
3.
4.
5.
Requisites of Novation:
1.
2.
3.
4.
5.
CASES:
1.
[TOLENTINO]
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essential that the old debtor be released fr. the obligation, & the third
person or new debtor take the place in the new relation. IF the old
debtor is not released, no novation occurs & the third person who has
assumed the obligation of the debtor becomes merely a co-debtor or
surety or a co-surety.
52
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those w/c are inherent in his person; they may also impugn the acts w/c
the debtor may have done to defraud them.
(Conventional Redemption)
Art. 1610. The creditors of the vendor cannot make use of the right of
redemption against the vendee, until after they have exhausted the
property of the vendor.
Art. 1729. Those who put their labor upon or furnish materials for a
piece of work undertaken by the contractor have an action against the
owner up to the amount owing fr. the latter to the contractor at the time
the claim is made. However, the following shall not prejudice the
laborers, employees & furnishers of materials:
(1) Payments made by the owner to the contractor before they are due;
(2) Renunciation by the contractor of any amount due him fr. the
owner.
Effect of insolvency of new debtor-Article 1294. If the substitution is w/o the knowledge or against the
will of the debtor, the debtors insolvency or non-fulfillment of the
obligation shall not give rise to any liability on the part of the original
debtor.
Art. 1295. The insolvency of the new debtor, who has been proposed
by the original debtor & accepted by the creditor, shall not revive the
action of the latter against the original obligor, except when said
insolvency was already existing & of public knowledge, or known to
the debtor, when he delegated his debt.
2. Change of Principal Condition or Object
3. Subrogation/Subjective Novation
a. In case of active subjective novation
2. Effect:
Art. 1304. A creditor, to whom partial payment has been made, may
exercise his right for the remainder, & he shall be preferred to the
person who has been subrogated in his place in virtue of the partial
payment of the same credit.
Art. 1303. Subrogation transfers to the person subrogated the credit w/
all the rights thereto appertaining, either against the debtor or against
third persons, be they guarantors or possessors of mortgages, subject to
stipulation in a conventional subrogation.
KINDS OF NOVATION:
a. Legal
Art. 1302. It is presumed that there is legal subrogation:
(1) When a creditor pays another creditor who is preferred, even w/o
the debtor's knowledge;
(2) When a third person, not interested in the obligation, pays w/ the
express or tacit approval of the debtor;
(3) When, even w/o the knowledge of the debtor, a person interested in
the fulfillment of the obligation pays, w/o prejudice to the effects of
confusion as to the latter's share;
Art. 1177. The creditors, after having pursued the property in
possession of the debtor to satisfy their claims, may exercise all the
rights & bring all the actions of the latter for the same purpose, save
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Exception: In an active subjective novation, the guarantors, pledgors,
mortgagors are not released.
RODRIGUEZ V. REYES
II. CONTRACTS
(Read Arts. 1305-1422)
A. IN GENERAL
[Balane]
Passive Subjective Novation-- Articles 1293 & 1295
1. DEFINITION
Article 1305. A contract is a meeting of minds between
two persons whereby one binds himself, with respect to
the other, to give something or to render some service.
Balane: thinks that the definition in Art. 1305 is inaccurate. The
term persons should be substituted by the term parties. Also,
contracts may be multilateral; there can be more than 2 parties
involved (i.e. partnership).
Effect of Novation
Art. 1296.
When the principal obligation is extinguished in
consequence of a novation, accessory obligations may subsist only
insofar as they may benefit third persons who did not give their
consent.
[Balane]
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been authorized to lend money at interest, he cannot borrow it
without the consent of the principal.
TOLENTINO:
1.)
common (communes) those which are present
in all contracts, such as consent, object certain, and
cause;
2.)
special (especiales) are present only in certain
contracts, such as delivery in real contracts, or form in
solemn ones.
3.)
extraordinary (especialissimos) are those
which are peculiar to a specific contract (i.e. price in sales).
(b) NATURAL ELEMENTS
amdcm
RATIO: Freedom of parties to stipulate Parties can not be
coerced to enter into a contract where no agreement is had between
them as to the principal terms and conditions of the contract.
Freedom to stipulate such terms and conditions is of the essence of
our contractual system, and by express provision of the statute, a
contract may be annulled if tainted by violence, intimidation, or
undue influence (Articles 1306, 1336, 1337, CC).
iv. Customs
1370 intention of parties; based on contemporaneous & subseq.
Acts
Q: What may not be SM of of Sale?
A: service
Q: that is perfected at the negotiation stage?
A: Option a preal
Consensuality;
Autonomy;
Mutuality;
Obligatory Force
Relativity
Art. 1306.
The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good
customs, public order or public policy.
CONTRACT OF ADHESION:
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The condition can never depend solely upon the will of the
debtor. If the condition depends solely on the will of the debtor, the
obligation is void (Art. 1182).
ACCELERATION CLAUSE
EX: In of Sale by Installment basis
Upon non-payment of amort., the whole balance will
automatically be due, or rescind.
ESCALATION CLAUSE
Escalator clause
Valid if not potestative solely on the will of one of the
parties (violates mutuality)
EX: of Loan/ of WORK/service/project-independent
ing
RATIO:
Contracts are generally binding
between the parties, their assigns and heirs; however, under Art.
1255 of the Civil Code of Spain, which is applicable in this
instance, pacts, clauses, and conditions which are contrary to
public order are null and void, thus, without any binding effect.
Annotations on title: prohibition to sell property to third
parties whc is indefinite & unlimited as to time, whc shall continue
to be applicable beyond the lifetime of the original parties to the ,
is a nullity.
Redemption:
Right to redeem must be expressly
stipulated in the of sale to have legal existence.
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(3)
or by stip of parties i.e. pacto de retro sale where
only the party may redeem not anyone else
Requisites of SPA:
(1)
stip. in favor of 3P
(2)
stip. shld. be a part, not the whole, of the
(3)
clearly & deliberately conferred by ing parties
(4)
not be conditioned or compensated by any kind of
whatever
(5)
3P must have communicated his acceptance to
obligor before revocation
(6)
neither of the ing parties bears the legal
representation or authorization of the 3P
existence of a valid
knowledge by 3P of s existence
5. RELATIVITY OF CONTRACTS
GEN RULE: The contract is binding only upon the parties and their
successors (Art. 1311).
BAL:
EXCEPTION: 3 parties are affected by the contract in the
following instances and can take appropriate action:
(i) accion pauliana (Art. 1177)
Tol: GR: Rts. & s under a are transmitted to the heirs of the
parties. Heirs cant be considered as 3P, bec. there is privity of
interest bet. them & their predecessor.
Q: Who are bound by s?
A: parties/successors-in-int/ heirs/assigns
A
direct
(not
subrogatory) action by the creditor against his debtors debtor, a
remedy which gives the creditor the prerogative to act in his
own name, such as the actions of the lessor against the sublessee
(Art. 1652);
the laborer of an
independent contractor against the owner/principal ER (Art.
1729);
the
principal
against the subagent (Art. 1893); and
GR: Under the Principle of Privity of s, assigns & heirs are bound
EXC: intransmissible rts or s created by law/ nature / stip
Intransmissible s: those w/c are purely personal, either by
(1)
provision of law, such as in cases of partnership &
agency / usufructuary rts;
(2)
by the very nature of the s arising therefr., such
as those requiring special personal qualifications of the
obligor; of service, det;
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the vendor-a-retro
against the transferee of the vendee (Art. 1608).
amdcm
BANK OF AMERICA vs. IAC
RATIO: Contract between foreign bank & local bank asking the
latter to pay an amount to a beneficiary, is a SPA.
MARIMPERIO vs. CA
VELASCO VS CA, 95 SC 616
RATIO: A party who has not taken part in the cannot sue or be
sued for the performance or cancellation thereof, unless he has a real
interest affected thereby.
RATIO:
CONTRACTS TAKE EFFECT ONLY BET. THE
PARTIES THERETO.
FLORENTINO V. ENCARNACION
RATIO: A stipulation pour autrui is a stipulation in favor of a
third person conferring a clear and deliberate favor upon him, and
which stipulation is merely a part of a contract entered into by the
parties, neither of whom acted as agent of the third person, and
such third person and demand its fulfillment provoked that he
communicates his to the obligor before it is revoked
HELD:
Injunction is the proper remedy to prevent a wrongful
interference with contract by strangers to such contracts where the
legal remedy is insufficient and the resulting injury is irreparable.
EST. OF K.H. HEMADY vs. LUZON SURETY
rights
and
obligations
are
C. CLASSIFICATION OF CONTRACTS
a. preparatory
b. principal
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c. accessory
b. aleatory
2. ACCORDING TO PERFECTION
a. consensual
8) ACCORDING TO NAME
a. nominate
b. innominate
b. Special or formal
i. I do, you do
ii. I do, you give
iii. I give, you do
iv. I give, you give
a. bilateral
b. unilateral
b. right
D. STAGES OF CONTRACTS
1. NEGOTIATION
6) ACCORDING TO CAUSE
a. onerous
CONTRACT OF OPTION:
b. gratuitous
Art. 1324: When the offerer has allowed the offeree a certain period
to accept, the offer may be withdrawn at any time before acceptance
by communicating such withdrawal, except when the option is
founded upon a consideration, as something paid or promised.
7) ACCORDING TO RISK
Art. 1479. A promise to buy & sell a determinate thing for a price
certain is reciprocally demandable.
a. commutative
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An accepted unilateral promise to buy or to sell a determinate thing for
a price certain is binding upon the promissor if the promise is supported
by a consideration distinct fr. the price.
Art. 1616. The vendor cannot avail himself of the right of repurchase
w/o returning to the vend the price of the sale , & in addition:
(1) The expenses of the contract, & any other legitimate payments
made by reason of the sale;
(2) The necessary & useful expenses made on the thing sold.
Baviera:
In an equitable mortgage, the property must still first be
foreclosed before ownership passes to the seller. Distinguished fr. a
pacto de retro sale, where ownership already passes to the buyer upon
perfection of the contract, but if the right to redeem is exercised, then
ownership reverts to the seller.
Bav:
The parties could stipulate otherwise & that the earnest
money will be forfeited, as in the CAB
1324
This is the GENERAL
RULE on CONTRACTS: If
ACCEPTED, the agreement
becomes BINDING (WON
there is a consideration other
than the purchase price)
Paras:
Conventional Redemption
Art. 1601. Conventional redemption shall take place when the vendor
reserves the right to repurchase the thing sold, w/ the obligation to
comply w/ the provisions of Art. 1616 & other stipulations w/c may
have been agreed upon.
Baviera:
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An agreement to repurchase becomes an option to buy when entered
into after the time to redeem stipulated in a pacto de retro sale had
already expired, bec. then the vendee a retro became absolute owner of
the thing sold, & the subsequent grant of the right to repurchase is a
new agreement. But where the period to repurchase has not expired, &
another agreement is entered into granting the vendor a retro the right
to repurchase the object of the contract at any time, the subsequent
agreement is not a promise to sell but is an extension of the period to
redeem, w/c cannot exceed 10 years.
Requisites of Offer:
1.
definite
The offer must be definite, so that upon acceptance, an
agreement can be reached on the whole contract.
2.
complete
The offer must be complete, indicating with sufficient
clearness the kind of contract intended and definitely
stating the essential conditions of the proposed contract as
well as the non-essential ones desired by the offeror.
3.
intentional
An offer without seriousness, made in such manner that
the other party would not fail to notice such lack of
seriousness, is absolutely without juridical effects and
cannot give rise to a contract (i.e. must not be made in jest,
or a prank).
2. PERFECTION
Requisites of Acceptance:
1. unequivocal
2. unconditional
o
If the acceptance is qualified, then that is a
counter-offer.
o
An amplified acceptance may or may not be an
acceptance of the original offer. It depends on the
circumstances.
o
For example, A is selling 1000 kgs. of cement. B
says he wants to buy 2000 kgs of cement. There is no
acceptance of the offer if B will only buy 2000 kgs and
nothing less.
3. PERFORMANCE
4. CONSUMMATION
Manifestation of Acceptance:
o
An acceptance may be express or implied (Art.
1320).
o
Silence is ambiguous. One must look at the
circumstances to determine if the silence is a form of
acceptance.
o
A
and B are own stalls which sell rice. C delivers 1000 kgs of
rice to A every Sunday. If A is not there, C just leaves it to
As assistant. C tries to do business with B. B is not there
though. C leaves rice with Bs assistant. B does not call C.
Both A and B are silent. A acceptance the rice because of
the arrangement. If A did not want to accept the rice, then
A should have called. Bs silence is not acceptance.
amdcm
in Sanchez v. Rigos, the SC said that even if there was no option
contract, B must still communicate the withdrawal of the offer to J.
If B does not communicate his withdrawal, that is tantamount to a
continuing offer. Prof. Balane does not agree with this. According to
him, if there is no valid option contract, there should be no continuing
offer. According to Prof. Balane, the SC should have explained that.
EX: B offers to sell a car to J for P300,000. J needs to think about it,
and so J asks for 30 days. J pays earnest money worth P5,000. J
decides to buy the car within 30 days. The car is not sold to anybody
else. B does not want to sell the car to J. J can sue B for specific
performance compel B to sell him the car.
COGNITION Theory
Acceptance made by letter of telegram does not bind the offer except
from the time it came to his knowledge (Art. 1319, 2nd par).
EX: B offers to sell a car to J for P300,000. J needs to think about it,
and so J asks for 30 days. J pays earnest money worth P5,000. J
decides to buy the car within 30 days. Before J is able to buy the car,
B sells the car to X. J can sue B for damages. J cannot sue for
specific performance since the car has been sold to an innocent
purchaser.
A right of first refusal vs. option contract:
right of first refusal
right to have first opportunity to
purchase or the right to meet any
other offer
not covered by the Civil Code
In Equatorial v. Mayfair the
right of first refusal was violated
when the vendor sold the object
to another person - an action for
specific performance may be
filed.
Art. 1324, CC
In Ang Yu v. CA, the SC said that
an
action
for
specific
performance will not lie against
the promissor.
However, a
complaint under Art. 19 for
damages may be filed if the
actions of the promissor are
whimsical.
option contact
limits the promissors power to
revoke an offer
The basis of the right of first refusal must be the current offer
to sell of the seller or offer to purchase of any prospective
buyer. Only after the optionee fails to exercise its right of
first priority under the SAME terms & w/in the period
contemplated, could the owner validly offer to sell the
property to a 3rd person, again, under the same terms as
offered to the optionee. (PARANAQUE KINGS
ENTERPRISES vs. CA)
SANCHEZ V. RIGOS
It should be noted that:
1. Art. 1324 applies to s in general, whereas the 2nd par of Art.
1479 refers to "sales" in particular, &, more specifically, to an
"accepted unilateral promise to buy or to sell." Art. 1479 is
controlling in the case at bar.
EX: B offers to sell a car to J for P300,000. J needs to think about it,
and so J asks for 30 days. J pays B earnest money worth P5,000.
The payment of P5,000 is a distinct consideration from the price of
the car. This distinct consideration of P5,000 is payment for the 30
days. J is paying for time. The option contract is separate from the
contract of sale. B cannot sell the car to anybody else within that 30
day period.
EX: B offers to sell a car to J for P300,000. J needs to think about it,
and so J asks for 30 days. J does not pay B for time, but B promises
to give J 30 days. In this case there is no option contract. However,
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action for specific performance is allowed in violations of rights of
first refusal but not in the case of option contracts when the object is
sold to another person. Why is the SC giving greater legal effect to a
right of first refusal which is more tentative? Also, where the SC get
these rules since the right of first refusal is not covered by the Civil
Code.
certain obligations, as when the latter arise from his acts or from
property relations, such as easements.
Article 39. The following circumstances, among others, modify or
limit capacity to act: age, insanity, imbecility, the state of being a
deaf-mute, penalty, prodigality, family relations, alienage,
absence, insolvency and trusteeship. The consequences of these
circumstances are governed in this Code, other codes, the Rules of
Court, and in special laws. Capacity to act is not limited on account
of religious belief or political opinion.
ADVERTISEMENTS:
Unless it appears otherwise, business advertisements of
things for sale are not definite offers, but mere invitations to make an
offer (Art. 1325)
Simulated Contracts
(4) Where notice has not been given that a sale by auction
is subject to a right to bid on behalf of the seller, it shall not
be lawful for the seller to bid himself or to employ or
induce any person to bid at such sale on his behalf or for
the auctioneer, to employ or induce any person to bid at
such sale on behalf of the seller or knowingly to take any
bid from the seller or any person employed by him. Any
sale contravening this rule may be treated as fraudulent by
the buyer.
Article 1490. The husband and the wife cannot sell property to each
other, except:
EX: X has many creditors, and they are going after Xs car.
X cannot donate his car to Y since the creditors will just
resort to accion pauliana. So, X antedates a contract of
sale, selling his car to Y, except that Xs intention is to
donate his car to Y.
(2) Agents, the property whose administration or sale may have been
intrusted to them, unless the consent of the principal has been given;
(3) Executors and administrators, the property of the estate under
administration;
The law will apply the rules of the true contract and not the
ostensible contract.
(4) Public officers and employees, the property of the State or of any
subdivision thereof, or of any government-owned or controlled
corporation, or institution, the administration of which has been
intrusted to them; this provision shall apply to judges and government
experts who, in any manner whatsoever, take part in the sale;
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lawyers, with respect to the property and rights which may be the
object of any litigation in which they may take part by virtue of their
profession;
Article 1409. The following contracts are inexistent and void from
the beginning:
xxx
These contracts cannot be ratified. Neither can the right to set up the
defense of illegality be waived.
Article 5. Acts executed against the provisions of mandatory or
prohibitory laws shall be void, except when the law itself authorizes
their validity.
Requisites of Object:
1.
the object must be within the commerce of man, either
already existing or in potency (Art. 1347)
2.
the object must be LICIT, or not be contrary to law,
morals, good customs, public policy or public order (Art. 1347)
3.
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4.
the object must be determinate as to its kind and
determinable as to its quantity (Art. 1349)
5.
3. CAUSE of the :
Requisites of Cause:
1. it must exist
2. it must be true
3. it must be licit
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GR: A having the essential requisites of Art. 1318 will be valid as
between the parties whatever the form it may have been entered into;
their validity are present. However, when the law requires that a
contract be in some form in order that it may be valid or enforceable,
or that a contract be proved in a certain way, that requirement is
absolute and indispensable. In such cases, the right of the parties
stated in the following article cannot be exercised. (1278a)
(2) those required to make the effective as against 3rd parties, such
as those mentioned in Arts. 1357 & 1358;
(3) formalities ad probationem those required for the purpose of
proving the existence of a , such as those provided in the SOF
ONG YIU v CA
WELDON v CA
NOTE: Purpose of form in Art. 1358 is to prejudice or to affect third
persons.
TANG v CA
2. SPECIAL FORM
RATIO: Art. 1332. When one of the parties is unable to read, or if the
contract is in a language not understood by him, and mistake or fraud
is alleged, the person enforcing the contract must show that the terms
thereof have been fully explained to the former.
a) for validity
If it not written, the same is void.
Examples are donations (Arts. 748, 749),
antichresis (Art. 2134),
interest in a loan (Art. 1956),
sale of land by an agent (Art. 1874),
contribution of immovables in a partnership (Art. 1773)
LAGUNZAD v GONZALES
RATIO: Duties must comply w/s entered into where provisions
thereof are not contrary to L/M/GC/PO/PP.
F. FORM OF CONTRACTS: 1356-1358
Tolentino:
amdcm
donor to execute a public instrument of donation under Art.
1357.
Tolentino:
Title to immov prop. does not pass fr. the donor to the donee
until & unless:
1.
2.
3.
4.
Art. 2134. The amount of the principal & of the interest shall be
specified in writing; otherwise, the contract of antichresis shall be void.
Tolentino
Art. 1356 provides for TWO CASES where form is absolute &
indispensable, namely:
1)
When the form is essential to the validity of the
2)
When the is unenforceable unless it is in a
certain form, such as those under the Statute of Frauds (SOF)
amdcm
It must appear that the parties intended when they made the
that it should not be performed w/in a year.
Tolentino:
This has been defined as an undertaking by a
person, not before liable, for the purpose of securing or performing
the same duty for w/c the original debtor continues to be liable.
PROMISE IS COLLATERAL
If the promise is collateral to the
agreement of another & the promisor
becomes thereby merely a surety, the
promise falls w/in the SOF & hence, it
should be in writing
Q: An oral K for the sale of land. The buyer suffered damages when
the seller refused to comply w/ his promise even if the buyer offered
to pay. B consigned the payment. So whats up?
A: Acceptance of benefits (even if it was just an earnest
money) takes it away w/in the ambit of the Statute of Frauds.
To allow a K w/c has been partially performed to become
unenforceable would be to allow a party to perpetrate fraud.
[Tolentino]
Rationale of the SOF: Oral contracts lead to fraud in the fulfillment
of obligations, or to false testimony.
Where one party has entirely performed his under an oral
, equity would agree that all evidence be admitted to prove the
alleged agreement. Performance takes it out of the operation of the
statute.
amdcm
3.
the power to administer property, or any other power which
has for its object an act appearing or which should appear in a public
document, or should prejudice a 3rd person
4.
the cession of actions or rights proceeding from an act
appearing in a public document
G. REFORMATION OF CONTRACTS
Annulment
if the minds of the parties did not
meet, or if the consent of either
one was vitiated by violence or
intimidation or mistake or fraud,
so that no real and valid contract
was made
involves a complete nullification
of the contract while reformation
gives life to it upon certain
corrections.
2.
the cession, repudiation or renunciation of hereditary rights
or of those of the conjugal partnership of gains
Requisites of Reformation:
GR: Reformation relates back to, and takes effect from the time of its
original execution, especially as between the parties.
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of the writing, unless it is alleged and proved that the
intention of the parties is otherwise.
DEFECTIVE CONTRACTS:
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amdcm
1.
Rescissible Contracts
Requisites of Rescission:
a) the contact must be a rescissible contract under Art. 1381 or Art.
1382:
Badges of Fraud:
Another example, A is the agent of B. B owns land worth P10 M. C
wants to buy the land. C is willing to pay P 7 M lump sum
payment. D is willing to pay P 10 M but on installments.
ii. those agreed upon in representation of absentees, if the absentee
suffers lesion by more than of the value of things which are the
object thereof (Art. 1381 (2))
1.
2.
3.
4.
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5.
6.
the fact that the transfer is made between father and son
when there are present any of the above circumstances
7.
iv. those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and approval
of the litigants or of competent judicial authority (Art. 1381 (4))
[Tolentino]
Similarities between Rsn under Art. 1191 & Art. 1380+:
Differences:
(1) Rsn under 1191 may be demanded only by party to the , under
1380+ by 3P prejudiced by the ;
(2) Rsn under 1191 may be denied when there is sufficient reason to
justify extension of time to perform, under 1380+ such reason does
NOT affect rt. To ask for Rsn;
(1)
the person asking for rescission must have no
other legal means to obtain reparation for the damages
suffered by him (Art. 1383);
(3) Non-perf. is the only grd. For Rsn under 1191, while there
are various reasons of equity as grds. under 1191 applies only to recip.
ds. where one party has not performed, while under 1380(+) ob. May
be unilateral or reciprocal & even when K has been fulfilled.
(2)
the person demanding rescission must be able
to return whatever he may be obliged to restore if
rescission is granted (Art. 1385, 1st par)
2. VOIDABLE Contracts
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i. unemancipated minors
b) violence
There is violence when in order to wrest consent, serious or
irresistible force is employed (Art. 1335, 1st par).
Violence shall annul the obligation, although it may been employed
by a 3rd person who did not take part in the contract (Art. 1336).
Requisites of Violence:
i. irresistible physical force is employed
ii. the force is the determining cause for giving consent
c) intimidation
There is intimidation when one of the contracting parties is
compelled by a reasonable and well-grounded fear of an imminent
and grave evil upon his person or property, or upon the person or
property of his spouse, descendants or ascendants, to give his consent
(Art. 1335, 2nd par).
Requisites of Intimidation:
ii. insane or demented persons, and deaf mutes who do not know
how to write
a) mistake
In order that mistake may invalidate consent, it should refer to the
substance of the thing which is the object of the contract, or to those
conditions which have principally moved one or both parties to enter
into the contract (Art. 1331, 1st par).
Mistake as to the identity or qualification of one of the parties will
vitiate consent only when such identity or qualifications have been
the principal cause of the contract (Art. 1331, 2nd par).
A simple mistake of account shall give rise to its correction (Art.
1331, 3rd par).
When one of the parties is unable to read, or if the contract is in a
language not understood by him, and mistake or fraud is alleged, the
person enforcing the contract must show that the terms thereof have
been fully explained to the former (Art. 1332).
amdcm
A mere expression of an opinion does not signify fraud, unless made
by an expert and the other party has relied on the formers special
knowledge (Art. 1341).
Intimidation
threatened or impending
Internal
operates upon the will, induces
performance of an act
Influences the mind to choose
bet. two evils
Influences the expression of the
will, inhibits the true intent and
making of manifest something
apparently as that of the person
who consents
intimidation caused the consent
to be given
Threatened act unjust or
unlawful
Threat must be real or serious
producing reasonable and wellgrounded fear
d) undue influence
There is undue influence when a person takes improper advantage of
his power over the will of another, depriving the latter of a reasonable
freedom of choice. The following circumstances shall be considered:
the confidentiality, family, spiritual and other relations between the
parties, or the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or was ignorant or in
financial distress (Art. 1337).
b)
The validity of a voidable contract can only be assailed in
a suit for that purpose (i.e. complaint or counterclaim).
e) Fraud
2.
3.
4.
This
Requisites of Fraud:
fraud is employed by 1 party on the other (Arts. 1342,
1344)
1.
Requisites of Consent
1. it shd be intelligent, with exact notion of
the matter to whc it refers
2. it shd be free
3. it shd be spontaneous
vitiated by
by error or mistake
violence,
intimidation,
or
undue influence
by fraud
amdcm
the contract, with their fruits, and the price with its interest, except in
cases provided by law (Art. 1398, 1st par).
[BAVIERA]
Q: Authority to sell oral but sale is in writing
A: Void.
Commentators have a difference of opinion the right to annul is extinguished unless the plaintiff offers
to pay the value of the object at the time of loss
the plaintiff is entitled to annul without having to pay
anything.
Requisites of Confirmation:
i.
This does not fall squarely under the presumption of fraud bec. there
was a sale before judgment in 1974. If sale was after, presumed to be
fraudulent.
ii.
that the ratification is made with
cause for nullity
knowledge of the
iii.
that at the time the ratification is made, the cause of
nullity has already ceased to exist
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amdcm
Agreements made in consideration of marriage other
than the mutual promise to marry are within the
Statute of Frauds.
The agent, who has entered into the contract in the name of
the purported principal, but without authority from him, is
liable to 3rd persons upon the contract.
Where a contract for the sale of goods at a price not less than
P500 is oral, and there is neither partial payment or delivery,
receipt, and acceptance of the goods, the contract is
unenforceable, and cannot be the basis of an action for the
recovery of the purchase price, or as the basis of an action for
damages for breach of the agreement.
Prof. Balane thinks that this does not belong in the Statute
of Frauds. There is no contract between C and B. B did
not bind himself to pay C. What we have here is an
unenforceable tort.
amdcm
note or memorandum
evidence of the agreement used to show the intention of the
parties
oral evidence to prove a consummated sale of real property allowed by the Statute of Frauds
4. Void Contracts
A void contract is an absolute nullity and produces no effect, as if
it had never been executed or entered into.
The following contracts are inexistent and void from the
beginning (Art. 1409):
Statute Of Frauds
simply provides for the manner in w/c contracts under it
shall be proved
(a)
those whose cause, object or purpose is contrary to law,
morals. Good customs, public order or public policy
(b)
(c)
those whose cause or object did not exist at the time of the
transaction
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amdcm
Balane: Art. 1409 (3) should not be did not exist. Rather, the
correct phrase should be could not come into existence because
there can be a contract over a future thing.
(f) those where the intention of the parties relative to the principal
object of the contract cannot be ascertained
(g) those expressly prohibited or declared void by law
When the agreement is not illegal per se but is merely prohibited, and
the prohibition by law is designed for the protection of the plaintiff,
he may, if public policy is enhanced, recover what he has paid or
delivered (Art. 1416).
When the price of any article or commodity is determined by statute,
or by authority of law, any person paying any amount in excess of the
maximum price allowed may recover such excess (Art. 1417).
When the law fixes, or authorizes the fixing of the maximum number
of hours of labor, and a contract is entered into whereby a laborer
undertakes to work longer than the maximum thus fixed, he may
demand additional compensation for service rendered beyond the
time limit (Art. 1418).
When the law sets or authorizes the setting of a minimum wage for
laborers, and a contract is agreed upon by which a laborer accepts a
lower wage, he shall be entitled to recover the deficiency (Art.
1419).
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