OBLIGATIONS AND CONTRACTS 1

Civil Law

TITLE 1 – OBLIGATIONS  Unauthorized management

 Arises whenever a person voluntarily takes charge of the agency or
Article 1156. An obligation is a juridical necessity to give, to do or not to do. management of another’s abandoned business or property without
the latter’s authority
CHAPTER 1 – General Provisions Solutio indebiti
(Articles 1156 – 1162)  Undue payment
 Arises when a person unduly delivers a thing through mistake to
ELEMENTS OF AN OBLIGATION another who has no right to demand it (must not be through liberality
1. Vinculum Juris & Causa (juridical tie, efficient cause): that which or some other cause)
binds or connects the parties to the obligation Others
2. Active subject (obligee/creditor): one in whose favor the  Articles 2164 – 2175
obligation is constituted
a. Obligee if obligation to do 4) DELICTS (Obligation ex maleficio or ex delicto)
b. Creditor if obligation to give
3. Passive subject (obligor/debtor): one who has the duty of giving, RPC: Article 100. Every person criminally liable for a felony is also civilly liable.
doing or not doing
4. Prestation (object): the conduct which has to be observed by the Extent of Civil Liability
deptor/obligor As governed by the RPC and Civil Code:
1. Restitution
Requisites of Prestation 2. Reparation for damage caused
1. It must be licit 3. Indemnity for consequential damages
2. It must be possible, juridically and physically
3. It must be determinate or determinable Enforcement of Civil Liability
4. It must have a pecuniary value 1. Independent: Criminal and civil action arising from the same
offense may be instituted separately
Article 1157. Obligations arise from: 2. Suspended: However, after criminal action has been commenced,
(1) Law; prosecution for civil action is suspended in whatever stage it may
(2) Contracts; be found, until final judgment in the criminal proceeding is
(3) Quasi-contracts; rendered.
(4) Act of omissions punished by law; and 3. Impliedly instituted: Civil action is impliedly instituted with the
(5) Quasi-delicts. criminal action when:
 Offended party expressly waives the civil action or
SOURCES OF OBLIGATIONS reserves the right to institute a separate civil action; or
 The law provides for an independent civil action
1)LAW (Obligation ex lege) Barredo v. Garcia (1942): The same negligent act may give rise to an action
based on delict or quasi-delict and the injured party is free to choose which
Article 1158. Obligation derived from law are not presumed. Only those remedy to enforce.
expressly determined in this Code or in special laws are demandable, and shall
be regulated by the precepts of the law which established them; and as to Mendoza v. Arrieta (1979): If the civil action is based on quasi-delict, there is
what has not been foreseen, by the provisions of this Book. no need to reserve the right to file a civil action in the criminal case.

2) CONTRACTS (Obligation ex contractu) Effect of Acquittal in Criminal Cases

 Due to reasonable doubt: no civil liability
Article 1159. Obligations arising from contracts have the force of law  Due to exempting circumstances: there is civil liability
between the contracting parties and should be complied with in good faith.  Due to preponderance of evidence: there is civil liability

 Neither party may unilaterally evade his obligation in the contract, General Rule: If you commit a crime, you are both criminally and civilly liable.
unless: the contract authorizes it or the other party assents. (Ius chinile –
strict compliance) Exception: If there is no private party offended
 Parties may freely enter into any stipulations, provided they are not
contrary to law, morals, good customs, public order or public policy. (Ius Crimes WITHOUT Civil Liability
gentium – good faith) 1. Contempt
3) QUASI-CONTRACTS (Obligation ex quasi-contractu) 2. Insults to persons in authority
3. Gambling
Article 2142. Certain lawful, voluntary and unilateral acts give rise to the 4. Violations of traffic regulations (de Leon, 2003)
juridical relation of quasi-contracts to the end that no one shall be unjustly
enriched or benefitted at the expense of another. 5. QUASI-DELICTS (Obligation ex quasi-delicto or ex quasi maleficio)

 Lawful: distinguishes from crimes
 Voluntary: distinguishes from quasi-delicts, which are based on
fault and negligence
 Unilateral: distinguishes from a contract which is based on
agreement
Article 2176. Whoever by act or omission causes damage to another, there
being fault of negligence, is obliged to pay for the damage done. Such fault of
negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict…
Quasi-delicts are voluntary acts or omissions with fault or negligence causing
damage to another; not a crime nor a contract.

Kinds of Quasi-contract ELEMENTS of Quasi-delicts

Negotiorum gestio 1. There must be an act or omission
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Civil Law

2. There must be fault or negligence attributable to the person

charged Article 1164. The creditor has a right to the fruits of the thing from the time
3. There must be damage or injury the obligation to deliver it arises. However, he shall acquire no real right over
4. There must be a direct relation of cause and effect between the act it until the same has been delivered to him.
arising from fault or negligence and the damage or injury
(proximate cause) Personal Right
5. There is no pre-existing contractual relation between the parties  Vested before delivery
QUASI-DELICT CRIME  A right enforceable only against the debtor
Private right, against the individual Public right; against the State  Right of the creditor to demand from the debtor, the fulfillment of
Redressed by compensation or Redressed by punishment (fine, a prestation to give, to do or not to do
indemnification (reparation of imprisonment, or both) Real Right
injury suffered by individual)  Vested after delivery
Exists in any act or omission Exists when there are penal laws  A right enforceable against the world
wherein fault or negligence clearly penalizing such crime  Right pertaining to a person over a specific thing, without a passive
intervenes subject individually determined against whom such right may be
Civil Liability Criminal and Civil Liability personally enforced
Criminal intent is not necessary Criminal intent is necessary
Gives rise to liability for damages to There are crimes for which no civil 3. To deliver is accessions and accessories
the injured party liability arises
Preponderance of evidence Proof of guilt, beyond reasonable Article 1166. The obligation to give a determinate thing includes that of
doubt delivering all its accessions and accessories, even though they may not have
Can be compromised Can never be compromised been mentioned.

Requisites of Liability (DWD)
1. Wrongful act or omission by fault of negligence
2. Damage or injury proven by the person claiming recovery
3. Direct causal connection between the fault or negligence and the
damage or injury
Negligence: failure to observe for the protection of interests of another
person, that degree of care, precaution and vigilance which the circumstances
justly demand, whereby such other person suffers injury. (US v. Barrias, 23
Phil. 434 [1912])
 Accessories: those joined to or included with the principal for the
latter’s completion, better use, perfection or enjoyment
 Accessions: additions to or improvement upon a thing, either naturally
or artificially
4. To deliver the thing itself
5. To pay damages in case of breach of the obligation by reason of delay,
fraud, negligence or contravention of the tenor of the obligation.
In an obligation to give a GENERIC THING:

1. To deliver the thing which is neither of superior nor inferior quality

CHAPTER 2 – Nature & Effects of Obligations
(Articles 1163 – 1178)
NATURE OF OBLIGATIONS (Kinds of prestation)
1. Personal Obligation: obligation to do or not to do; where the
subject matter is an act to be done of not to be done
a. Positive – obligation to do
b. Negative – obligation not to do
2. Real Obligation: obligation to give; where the subject matter is a
thing which the obligor must deliver to the oblige
a. Determinate/specific – object is particularly
designated or physically segregated from all other
things of the same class
b. Generic – object is designated by its class or genus
c. Limited Generic – generic objects confined to a
particular class
DUTIES OF THE DEBTOR
In an obligation to give a DETERMINATE THING:
1. To preserve or take care of the thing due with the diligence of a good father
of a family
2. To pay damages in case of breach of the obligation by reason of delay,
fraud, negligence or contravention of the tenor of the obligation.
In an obligation TO DO
1. To do it
2. To shoulder the cost of having someone else do it
3. To undo what has been poorly done
To pay for damages in case of breach
Article 1167. If a person obliged to do something fails to do it, the same shall
be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of
the obligation. Furthermore, it may be decreed that what has been poorly
done be undone.
In an obligation NOT TO DO
1. Not to do what should be done
2. To shoulder the cost of undoing what should have been done
3. To pay for damages in case of breach

Article 1163. Every person obliged to give something is also obliged to take
care of it with the proper diligence of a good father of a family, unless the law
of the stipulation of the parties requires another standard of care.
RIGHTS OF THE CREDITOR
 Diligence of a good father of a family: ordinary care or that diligence
which an average or reasonably prudent person would exercise over his 1. To compel performance.
own property

2. To deliver the fruits of the the thing

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Civil Law

Article 1165. When what is to be delivered is a determinate thing, the  Past fraud can be subject of a valid waiver by the aggrieved party (de
creditor, in addition to the right granted him by Article 1170, may compel the Leon, 2003)
debtor to make delivery.
Remedies of Defrauded Party
2. To recover damages in case of breach of the obligation, exclusive or in  Insist on specific performance
addition to specific performance  Resolve contract
 Claim damages, in either case
3. Entitlement to fruits and interests from the time the obligation to deliver
arises (determinate thing) NEGLIGENCE or FAULT (culpa)

4. To ask that the obligation be complied with by a third person at the expense Article 1173. The fault or negligence of the obligor consists in the omission of
of the debtor (generic thing) that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the
5. To ask to undo what should not be done place. When negligence shows bad faith, the provisions of Articles 1171 and
2201 paragraph 2 shall apply.
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. If the law or contract does not state diligence which is to be observed in the
performance, that which expected of a good father of a family shall be
6. To recover damages, where it would be physically or legally impossible to required.
undo what has been undone, because of the very nature of the act itself, rights
acquired by the third persons who acted in good faith, when the effects of the FRAUD NEGLIGENCE
acts prohibited are definite in character and will not cease even if the thing There is deliberate intention to There is no deliberate intention to
prohibited be undone. cause damage cause damage
Liability cannot be mitigated Liability may be mitigated
Remedies of the Creditor for Non-performance Waiver for future fraud is void Waiver for future negligence may
be allowed in certain cases
Article 1165. When what to be delivered is a determinate thing, the creditor,  Gross: can NEVER be excused in
in addition to the right granted him by Article 1170, may compel the debtor to advance; amounts to wanton
make delivery. attitude; rules on fraud shall
apply
If the thing is indeterminate or generic, he may ask that the obligation be  Simple: may be excused in
complied with at the expense of the debtor… certain cases

1. Specific performance: performance by the debtor of the Kinds of negligence

prestation itself 1. Quasi-delict (Culpa aquiliana/culpa extra contractual): source of
2. Substitute performance: someone else performs or something obligation
else is performed at the expense of the debtor  Negligence is substantive and independent
3. Equivalent performance: damages  There may or may not be a pre-existing contractual
obligation
BREACH OF OBLIGATIONS  The source of obligation is the negligence itself
 Negligence must be proven
Article 1170. Those who in the performance of their obligations are guilty of  Diligence in the selection and supervision of the employees
fraud, negligence, or delay, and those who in any manner contravene the is a defence
tenor thereof, are liable for damages. 2. Contractual Negligence (Culpa contractual): negligence in the
performance of a contract
1. Voluntary: debtor in the performance of the obligation is guilty of  Negligence merely an incident of performance of an
fraud, negligence, delay or contravention of tenor of the obligation obligation
 Debtor is liable for damages  There is a pre-existing contractual relation
 Source of obligation is the breach of the contractual
2. Involuntary: due to a fortuitous event obligation
 Debtor is not liable for damages  Proof of existence of the contract and its breach is prima
facie sufficient to warrant recovery
Types of Breach  Diligence in the selection and supervision of the employees
 Substantial Breach: total breach; amounts to non-performance is not available as defense
 Slight/Casual Breach: partial breach; obligation is partially performed; 3. Culpa Criminal: wrong or negligence in the commission of a crime
gives rise to liability for damages only.
Mandarin Villa Inc. v. CA (1996): Test of Negligence: Did the defendant in
FRAUD (dolo) doing the alleged negligent act use the reasonable care and caution which an
 It is the deliberate or intentional evasion of the normal fulfillment of an ordinary and prudent person would have used In the same situation? If not,
obligation (Manresa) then he is guilty of negligence.

Types of Fraud  Negligence can be waived except in cases where the nature of the
1. Causal Fraud (Dolo Causante): fraud employed in the execution of obligation or public policy requires another standard of care
the contract  EXCEPTION: nature of obligation of a common carrier
2. Incidental Fraud (Dolo Incidente): fraud in performance of
obligation already existing because of a contract Extent of Damages to be Awarded

 Any waiver of action for future fraud is void.

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Civil Law
 Bad Faith: debtor is liable for all damages which can be reasonably
attributed to the non-performance of the obligation. Any waiver or
renunciation made in anticipation of such liability is null and void.
 Good faith: debtor is liable only for the natural and probably
consequences of the breach of obligation and fortuitous events
Effects of Contributory Negligence of the Creditor
 Reduces or mitigates the recoverable damages
 UNLESS, the negligent act or omission of the creditor is the
proximate cause of the event which led to the damage or injury
complained of, he cannot recover.
DELAY or DEFAULT (mora)
 It is the failure to perform an obligation on time which constitutes
breach of the obligation (de Leon, 2003)
1. Ordinary Delay: failure to perform an obligation on time
2. Legal Delay/Default: failure to perform an obligation on time
which failure constitutes a breach of obligation (De Leon, 2003)
Requisites of Delay
1. Obligation must be due, demandable and liquidated
2. Debtor fails to perform his positive obligation on the date agreed upon
3. A demand (not merely a reminder or notice), judicial or extra-judicial,
made by the creditor upon the debtor to fulfill, perform or comply with
his obligation otherwise, he will be in default;
4. Failure of the debtor to comply with such demand.
Kinds of Delay
1. Mora Solvendi: default on the part of the debtor
 Mora solvendi ex re: default in real obligations
 Mora solvendi ex persona: default in personal obligations
 REQUISITES:
a. The obligation must be due, enforceable and already
liquidated of determinate in amount;
b. There must be non-performance; and
c. There must be a demand, unless demand is not
required.
 General Rule: Those obliged to deliver or to do something incur in
delay from the time the oblige judicially or extra-judicially
demands from them the fulfillment of their obligation
 Exceptions (no demand necessary):
o When the obligation or the law expressly so declare; or
o When from the nature and 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; or
o When demand would be useless, as when the obligor
has rendered it beyond his power to perform
 EFFECTS
o Debtor is guilty of breach of the obligation
o Liability: if obligation to pay money – must pay interest. If
no extra-judicial demand, interest runs from the filing of the
complaint. In other obligations, pay damages.
o Obligations to deliver a determinate thing, liable for
fortuitous events. If debtor can prove that loss would have
resulted even if he had not been in default, the court may
equitably mitigate the damages
o Resolution
 Mora solvendi cannot occur in:
o Negative obligations: delay is impossible (De Leon,
2003)
o Natural obligations (Tolentino, 1987)
2. Mora Accipiendi: default on the part of the creditor when he
unjustifiably refuses to accept the performance of his obligation.
 REQUISITES:
a. Offer of performance by the debtor
4
b. Offer must be to comply with the prestation as it should
be performed
c. Creditor refuses the performance without just cause
 EFFECTS:
o Responsibility of debtor is limited to fraud and gross
negligence
o Debtor is exempted from risk of loss of thing; creditor
bears risk of loss
o Expense by debtor for preservation of thing after delay
is chargeable to creditor
o If obligation bears interest, debtor does not have to pay
from time of delay
o Creditor liable for damages
o Debtor may relieve himself of obligation by consigning
the thing
3. Compensatio Morae: both parties are in default (in reciprocal
obligations0; there is no actionable default on the part of both parties
 Rule in Reciprocal Obligations: In reciprocal obligations, neither party
incurs in delay if the other does not comply in a proper manner with
what is incumbent upon him. From the moment one of the parties
fulfills his obligation, delay by the other begins.
 Performance must be simultaneous, UNLESS different dates for the
performance of the obligation were fixed by the parties.
RULES ON MORA, DELAY OR DEFAULT
Unilateral Obligations
 General Rule:
o “No demand, no delay.”
o The mere expiration of the period fixed by the parties is
not enough in order that the debtor may incur delay.
 Exceptions:
o The obligation or law provides
o Time is of the essence
o Demand is useless
o Debtor acknowledges that he is in default
Reciprocal Obligations
 General Rule:
o Delay occurs from the moment one party fulfills his
undertaking, while the other does not comply of or not
ready to comply in a proper manner with what is
incumbent upon him
o No delay if neither party performs his undertaking
 Exception:
o Different dates for the performance of respective
obligations are fixed by the parties
Cessation of the Effects of Mora:
 Renunciation (express or implied)
 Prescription
CONTRAVENTION OF THE TENOR
 It is the violation of the terms and conditions stipulated in the
obligation, which must not be due to a fortuitous event (De Leon, 2003)
 “In any manner contravenes the tenor” means any illicit act, which
impairs the strict and faithful fulfillment of the obligation, or every kind
of defective performance (Tolentino, 1987)
FORTUITOUS EVENT (Force majure)
Article 1174. Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which, though foreseen, were
inevitable.
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A. Act of God: an accident, due directly or exclusively to natural causes  General Rule: Contracts are binding only between the parties thereto,
without human intervention, which by no amount of foresight, pains or and their heirs, assignees, and the estate.
care, reasonably to have been expected, could have been prevented
 UNLESS:
B. Act of Man: force majeure is a superior or irresistible force which is 1. Accion Subrogatoria: right of creditor to exercise all of the rights
essentially an act of man; includes unavoidable accidents, even if there and bring all of the actions which his debtor may have against
has been an intervention of human element, provided that no fault or third persons; Novation by change of debtor
negligence can be imputed to the debtor  Requisites
a. Debtor to whom the right of action properly pertains
Rule on Fortuitous Event: must be indebted to the creditor
 General Rule: No liability for fortuitous event b. The debt is due and demandable
 Exceptions: c. The creditor must be prejudiced by the failure of the
1. When expressly declared by law (bad faith, subject matter is debtor to collect his own debt from third persons
generic, debtor is in delay) either through malice or negligence
2. When expressly declared by stipulation or contract d. The debtor’s assets are insufficient (debtor is
3. When nature of obligation requires assumption of risk insolvent)
4. When the obligor is in default or has promised to deliver the same e. The right of action is not purely personal to the debtor
thing to two or more persons who do not have the same interest
5. When the debtor is guilty of concurrent ot contributory negligence 2. Accion Pauliana: Rescission, which involves the right of the
6. The thing is lost due to the obligor’s fraud, negligence, delay or creditor to attack or impugn by means of a rescissory action any
contravention of the tenor of obligation act of the debtor which is in fraud and to the prejudice of his rights
7. The obligation to deliver a specific thing arises from a crime as creditor
8. The object is a generic thing  Requisites: CASAL
a. There is a credit in favor of plaintiff prior to alienation
EFFECT of Fortuitous Event b. The debtor has performed a subsequent contract
 Determinate: obligation is extinguished conveying a patrimonial benefit to third persons
 Generic: obligation is not extinguished based on the rule that c. The creditor has no other legal remedy to satisfy his
genus never perishes (genus nunquam peruit) claim
d. The debtor’s acts are fraudulent to the prejudice of
Requisites for Exemption the creditor
1. The event must be independent of the debtor’s will e. The third person who received the property is an
2. The event must be unforeseeable or inevitable accomplice in the fraud
3. The event renders it impossible for debtor to fulfill his obligation in
a normal manner Accion Subragotaria Accion Pauliniana
4. The debtor must be free from any participation in the aggravation Not necessary that creditor’s Credit must exist before the
of the injury to the creditor claim is prior to the acquisition if fraudulent act
5. It must be the only and sole cause, not merely a proximate cause the right by the debtor
No need for fraudulent intent Fraudulent intent is required if
REMEDIES TO CREDITORS the contract rescinded is
onerous
Article 1170. Those who in the performance of their obligations are guilty of No period for prescription Prescribes in four years from the
fraud, negligence or delay and those who in any manner contravene the tenor discovery of the fraud
thereof, are liable for damages.
3. Accion Directa: the right of lessor to go directly to a sub-lessee
Transmissibility of Rights for unpaid rents of the lessee

Article 1178. Subject to the laws, all rights acquired in virtue of an obligation 4. The right of laborers or persons who furnish materials for a piece
are transmissible, if there has been no stipulation to the contrary. of work undertaken by a contractor to go directly to the owner for
any unpaid claim due to the contractor
 Rights acquired by virtue of an obligation are transmissible in
character, UNLESS prohibited by: 5. The right of vendor against every possessor whose right is derived
o Their very nture from the vendee
o Stipulation of the parties
o Operation of law 6. The right of a principal against a substitution appropriated by an
agent

Siguan v. Lim (1999): Petitioner cannot invoke the credit of a different creditor
PRIMARY REMEDIES (PRESS) to justify the rescission of the subject deed of donation, because the only
1. Specific Performance: performance by the debtor of the creditor who may benefit from the rescission is the creditor who brought the
prestation itself action; those who are strangers to the action cannot benefit from its effects.
2. Substituted Performance: someone else performs or something
else is performed at the debtor’s expense USURIOUS TRANSACTIONS AND RULES ON INTEREST
3. Equivalent Performance: right to claim damages (in either
performance or rescission) USURY: stipulation of interest rates higher than the ceiling provided by the
4. Purse the Leviable: to attach the properties of the debtor, except law.
those exempt by law from execution
INTEREST:
SUBSIDIARY REMEDIES OF THE CREDITOR
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Article 1176. The receipt of the principal by the creditor without reservation Article 1181. In conditional obligations, the acquisition of rights, as well as the
with respect to the interest, shall give rise to the presumption that said extinguishment or loss of those already acquired, shall depend upon the
interest has been paid. happening of the event which constitutes the condition.

The receipt of a later installment of a debt without reservation as to prior  Condition: future and uncertain event or a past event unknown to the
installments, shall likewise raise the presumption that such installments have parties
been paid. Effects of Conditions

Determination of Interests 1. SUSPENSIVE: CONDITION happening of condition gives rise to

Eastern Shipping Lines v. CA (1961) obligation
 What is acquired by the oblige upon the constitution of the
Stage 1 obligation is mere hope or expectancy, but is protected by law.
For loan or forbearance of NOT for loan or forbearance of  Effects:
money, goods or credit, the money, goods or credit, the a. Effectivity retroacts to the day of the constitution of the
interest rate is 12% interest rate is 6% obligation
b. No retroactivity with reference to fruits or interest and
a) Interest = interest rate a) If date of demand is certain, prescription
stipulated in writing + 12% legal compute from the date when c. Creditor may preserve rights
interest, computed from date of demand is made (judicial or d. Debtor: recovery of payment by mistake or even
judicial demand (filing of extra-judicial) without mistake
complaint)
Before Fulfillment After Fulfillment
b) If there is no stipulated b) If date of demand is NOT The demandability and The obligation arises or becomes
interest, the interest rate is 12% certain, compute from date of acquisition or effectivity of the effective. The obligor can be
computed from the date of trial court decision (judicial rights arising from the obligation compelled to comply with what is
default or demand (judicial or demand) is suspended. Anything paid by incumbent upon him.
extra-judicial) mistake during such time may be
Stage 2 recovered
Add 12% interest from finality of SC decision until fully paid (equivalent to
a forbearance of credit) Doctrine of Constructive Fulfillment of Suspensive Conditions:

Article 1186. The condition shall be deemed fulfilled when the obligor
CHAPTER 3 – Different Kinds of Obligations voluntarily prevents its fulfillment.
(Articles 1179 – 1230)
 The condition shall be deemed fulfilled when the obligor actually
PRIMARY CLASSIFICATIONS OF OBLIGATIONS prevented the oblige from complying with the condition, and that such
1. Demandability prevention must have been voluntary or willful in character.
a. Pure
 Applicable to suspensive conditions and not to resolutory
b. Conditional
conditions
c. With a period
 The article can have no application to an external contingency
2. Plurality of Object
which is lawfully within the control of the obligor
a. Simple
 The mere intention of the debtor to prevent, without actually
b. Alternative
preventing fulfillment is not sufficient. Constructive fulfillment will
c. Facultative
not hold when the debtor acts pursuant to a right.
3. Plurality of Subject
 There is constructive fulfillment:
a. Simple
o Intent of the obligor to prevent fulfillment;
b. Joint
o Actual prevention of compliance
c. Solidary
4. Performance
Principle of Retroactivity in Suspensive Conditions:
a. Divisible
b. Indivisible
5. Sanctions of Breach Article 1187. The effects of a conditional obligation to give, once the
a. With a penal clause condition has been fulfilled, shall retroact to the day of the constitution of the
b. Without a penal clause obligation. Nevertheless, when the obligation imposes reciprocal prestations
upon the parties, the fruits and interests during the pendency of the condition
shall be deemed to have been mutually compensated. If the obligation is
unilateral, the debtor shall appropriate the fruits and interests received,
Section 1 - PURE AND CONDITIONAL OBLIGATIONS unless from the nature and circumstances of the obligation it should be
inferred that the intention of the person constituting the same was different.
Pure Obligation:
In obligations to do and not to do, the courts shall determine, in each case,
the retroactive effect of the condition that has been complied with.
Article 1179. Par. 1. Every obligation whose performance does not depend
upon a future or uncertain event, or upon a past even unknown to the parties,
is demandable at once.  Once the condition is fulfilled, its effects must logically retroact to the
moment when the essential elements, which gave birth to the
Conditional Obligation: obligation have taken place.

 The condition which is imposed is only accidental, not an essential

element of the obligation
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o Applied only to consensual contracts c. The obligation is subject to a suspensive condition

o No application to real contracts which can only be
perfected by delivery.
To Give
If reciprocal, the fruits and interests
shall be deemed to have been
mutually compensated as a matter of
justice and convenience.
If unilateral, the debtor shall
appropriate the fruits and interests
received, unless from the nature and
circumstance it should be inferred that
the intention of the persons
constituting the same was different
To Do/Not to Do
In obligations to do or not to
do, the court shall determine
the retroactive effect of the
condition that has been
complied with.
The power of the court
includes the determination
whether or not there will be
any retroactive effects. This
rule shall likewise apply in
obligations with a resolutory
condition.
d. The condition is fulfilled
e. There is loss, deterioration or improvement of the thing during the
pendency of the happening of the condition
2. RESOLUTORY CONDITION: happening of condition extinguishes
obligation
 Obligation becomes demandable immediately after its
establishment or constitution. The rights are immediately
vested to the creditor, but always subject to the threat or danger
of extinction by the happening of the resolutory condition
(Tolentino, 1987)
 Effects:
a. No retroactive effect
b. Obligation is extinguished
c. Restore to each other what was received plus
interest/fruits

Preservation of Creditor’s Rights: Article 1179. Par. 2. Every obligation which contains a resolutory condition
shall also be demandable, without prejudice to the effects of the happening
Article 1188. The creditor may, before the fulfillment of the condition, bring of the event.
the appropriate actions for the preservation of his right.
Before Fulfillment After Fulfillment
The debtor may recover what during the same time he has paid by mistake in Preservation of creditor’s Whatever may have been paid or
case of a suspensive condition. rights; also applies to delivered by one or both of the parties
obligations with a resolutory upon the constitution of the obligation
 The creditor may, before the fulfillment of the condition, bring the conditions shall have to be returned upon the
appropriate action for the preservation of his rights. fulfillment of the condition. There is no
 However, this does NOT grant any preference of credit but only allows return to the status quo. However, when
the bringing of the proper action for the preservation of the creditor’s condition is not fulfilled, rights are
rights. consolidated and they become absolute
in character
Rules on Loss, Deterioration and Improvements during Pendency of a
Suspensive Condition: 3. POTESTATIVE CONDITION: dependent on sole will of one party.

Article 1189. When the conditions have been imposed with the intention of Article 1182. When the fulfillment of the condition depends upon the sole will
suspending the efficacy of an obligation to give, the following rules shall be of the debtor, the conditional obligation shall be void.
observed in case of the improvement, loss or deterioration of the thing during
the pendency of the condition: If it depends upon chance or upon the will of a third person, the obligation
shall take effect in conformity with the provisions of this Code.
(1) If the thing is lost without the fault of the debtor, the obligation shall be
extinguished; Creditor’s Will Condition and obligation is valid
Debtor’s Will, Suspensive Condition and obligation are void
(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay Condition because to allow such condition
damages; it is understood that the thing is lost when it perishes, or goes would be equivalent to sanctioning
out of commerce, or disappears in such a way that its existence is obligations which are illusory. It
unknown or it cannot be recovered; also constitutes a direct
contravention of the principle of
(3) When the thing deteriorates without the fault of the debtor, the mutuality of contracts
impairment is to be borne by the creditor; Debtor’s Will, Resolutory Condition and obligation is valid
Condition because in such situation, the
(4) If it deteriorates through the fault of the debtor, the creditor may choose position of the debtor is exactly the
between the rescission of the obligation and its fulfillment, with same as the position of the creditor
indemnity for damage in either case; when the condition is suspensive. It
does not render the obligation
(5) If the thing is improved by its nature, or by time, the improvement shall illusory.
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.
Improvement:
 If by nature or time: inures to the benefit of the debtor
 If at the expense of the debtor: debtor’s right is only that of a
usufructuary
Requisites for the Application of Article 1189:
a. The obligation must be a real obligation
b. The object is a specific or determinate thing
4. CASUAL CONDITION: dependent on chance or hazard
 The fulfillment of the condition depends upon chance and/or upon
the will of a third person
Article 1182. When the fulfillment of the condition depends upon the sole will
of the debtor, the conditional obligation shall be void.
If it depends upon chance or upon the will of a third person, the obligation
shall take effect in conformity with the provisions of this Code.
OBLIGATIONS AND CONTRACTS 8
Civil Law

5. MIXED CONDITION: the fulfillment of the condition depends partly
upon the will of a party to the obligation and partly upon chance and/or
will of a third person
Osmeña v. Rama: Defendant executed an endorsement saying that she’ll pay
her debt if the house in which she lives is sold. Such condition depended upon
her exclusive will, thus it is void.
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:
(see table)

Hermosa v. Longara: The condition that payment should be made by Hermosa Without Debtor’s With debtor’s Fault/Act
as soon as he receives funds from the sale of his property in Spain is a mixed Fault
condition. The condition implies that the obligor already decided to sell the Loss Obligation is Obligation is converted
house and all that was needed to make the obligation demandable is that the extinguised into one of indemnity for
sale be consummated and the price thereof remitted to the islands. There damages
were still other conditions that had to concur to effect the sale, mainly that of Deterioration Impairment to be Creditor may choose
the presence of a buyer, ready, able and willing to purchase the property borned by creditor between bringing an
under the conditions set by the intestate. action for rescission of the
obligation ; OR bringing
6. IMPOSSIBLE CONDITION: Conditions which are impossible, contrary an action for specific
to good customs, or public policy and those prohibited by law shall performance with
annul the obligations which depend upon them. damages in either case
Improvement Improvement at the Improvement by the
Article 1183. Impossible conditions, those contrary to good customs or public debtor’s expense, the thing’s nature or by time
policy and those prohibited by law shall annul the obligation which depends debtor shall ONLY shall inure to the benefit
upon them. If the obligation is divisible, that part thereof which is not affected have usufructuary of the creditor
by the impossible or unlawful condition shall be valid. rights

The condition not to do an impossible thing shall be considered as not having LOSS: when the thing perishes, goes out of commerce, or disappears in
been agreed upon. such a way that its existence is unknown or it cannot be recovered

Exceptions: RECIPROCAL OBLIGATIONS

 For pre-existing obligations, only the impossible condition is void
Obligations which are established from same cause, such that one obligation
 For divisible obligations, that part which is not affected by the
is correlative to the other. It results in mutual relationship between the
impossible or unlawful condition shall be valid
creditor and the debtor. It is performed simultaneously, so that the
 If the condition is not to do an impossible thing, it shall be
performance of one is conditioned upon the simultaneous fulfillment of the
considered as not having been agreed upon.
other.
o Consequently, it becomes pure and immediately
demandable
Tacit Resolutory Condition: if one of the parties fail to comply with that is
 If attached to a simple or remuneratory donation, or testamentary
incumbent upon him, there is a right on the part of the other to rescind the
disposition, condition is considered as not imposed while the
obligation. The power to rescind is given to the injured party (Tolentino)
obligation is valid.

7. POSITIVE CONDITION: Obligation shall be extinguished as soon as
the time expires or if it becomes indubitable that the event will not take
place.
Article 1184. The condition that some event happen at a determinate time
shall extinguish the obligation as soon as the time expires or if it has become
indubitable that the event will not take place.
8. NEGATIVE CONDITION: Obligation shall be rendered effective from
the moment the time indicated has lapsed, or if it has become evident
that the event will not occur.
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.
Article 1191. 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.
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 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, 1388 and the
Mortgage Law.
 Right to rescind is implied in reciprocal obligations, thus when one
party fails to comply with this obligation under a contract, the other
party has the right to either demand the performance or ask for the
resolution of the contract.
 Based on the breach of faith committed by the person who is supposed
to comply with the obligation as compared to the rescission referred to
in Art. 1308 which involves the damage or lesion, or injury to the
economic interest of a person.

 When no period has been fixed, the intention of the parties is
controlling, and the time shall be which the parties may have
contemplated, taking into account the nature of the obligation.
Effect of Loss, Deterioration and Improvement in Real Obligations
Pending the Condition
Article 1192. In case both parties have committed a breach of the obligation,
the ability of the first infractor shall be equitable tempered by the courts. If it
cannot be determined which of the parties first violated the contract, the
same shall be deemed extinguished, and each shall bear his own damages.
OBLIGATIONS AND CONTRACTS 9
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 Where both parties have committed a breach of obligation, the liability the debtor, unless from the tenor of the same or other circumstances it should
will be shouldered by the first infractor. This shall be determined by the appear that the period has been established in favor of one over the other.
courts. However, if it cannot be determined who was the first infractor,
the contract shall be deemed extinguished and each shall bear his own Presumption: Period in an obligation is presumed to be established for the
damages. benefit of both the creditor and debtor.
UNLESS: if from the tenor of the obligation or other circumstances, it shall
UP v. Delos Angeles (1970): The injured party may extra-judicially rescind the appear that the period has been established in favor of either the creditor
contract on account of the breach of the other party. However, this is without or debtor.
prejudice to the option of the other party to resort to the courts in order to
determine if the rescission made is valid, if not, the party who rescinded the Period for the benefit of either creditor or debtor:
contract will be sentenced to pay damages.
CREDITOR DEBTOR
 Where the other party does not oppose the extra-judicial declaration of Creditor may demand the Debtor may oppose any premature
rescission, such declaration shall produce legal effect. fulfillment or performance of the demand on the part of the oblige
 Effect is retroactive therefore invalidating and unmaking the juridical obligation at any time but the for the performance of the
tie between the contracting parties, leaving this in their status before obligor cannot compel him to obligation, or if he so desires, he
the celebration of the contract. accept payment before the may renounce the benefit of the
expiration of the period period by performing his
Section 2 – OBLIGATIONS WITH A PERIOD obligation in advance

Article 1193. Obligations for whose fulfillment a day certain has been fixed, When court may fix period:
shall be demandable only when that day comes. General Rule: The court is not authorized to fix a period for the parties.

Obligations with a resolutory period take effect at once, but terminate upon Article 1197. If the obligation does not fix a period, but from its nature and
arrival of the day certain. circumstances it can be inferred that a period was intended, the courts may
fix the duration thereof.
A day certain is understood to be that which must necessarily come, although
it may not be known when. The courts shall also fix the duration of the period when it depends upon the
will of the debtor.
If the uncertainty consists in whether the day will come or not, the obligation
is conditional, and it shall be regulated by the rules of the preceding section. In every case, the courts shall determine such period as may under the
Period or Term: Interval of time, which either suspends demandability or circumstances have been probably contemplated by the parties, Once fixed
produces extinguishment. The period must be: future, certain and possible. by the courts, the period cannot be changed by them.
(Tolentino, 1987)
Araneta v. Phil. Sugar Estates, provides:
 Fortuitous event does not interrupt the running of the period. It only First, the Court shall determine:
relieves the contracting parties from the fulfillment of their respective - if the obligation does not fix a period, but from its nature and
obligations during the period. circumstances, it can be inferred that a period was intended
- if the period is void, such as when it depends upon the will of the debtor
Kinds of Period: - if the debtor binds himself when his means permit him to do so
1. Ex Die: period with a suspensive effect. Obligation becomes Second, it must decide what period was “probably contemplated by the
demandable after the elapse of the period. parties”
2. In Diem: period with a resolutory effect. Obligation is demandable  The only action that can be maintained under Art. 1197 is the action to
at once but is extinguished upon the lapse of the period. ask the courts to fix the term within which the debtor must comply with
his obligation. The fulfillment of the obligation itself cannot be
Article 1180. When the debtor binds himself to pay when his means permit demanded until after the court has fixed the period for compliance,
him to do so, the obligation shall be deemed to be one with a period, subject therewith, and such period has arrived.
to the provisions of Article 1197.  Article 1197 does not apply to contract of services and to pure
obligations.
Term/Period Condition  The court, however, to prevent unreasonable interpretations of the
Interval of time which is future and Fact or event which is future and immediate demandability of pure obligation, may fix a reasonable time
certain uncertain in which the debtor may pay.
Must necessarily come, although it May or may not happen
may not be known when When debtor LOSES right to use period:
Exerts an influence upon the time of Exerts an influence upon the very Article 1198: (I GIV A LA)
demandability or extinguishment of existence of the obligation itself 1. Debtor becomes insolvent, unless he gives a guaranty or security for
an obligation his debt, after obligation is contracted
No retroactive effect unless there is Has retroactive effect 2. Debtor fails to furnish the guaranties or securities promised
an agreement to the contrary 3. Debtor by his own acts impaired said guaranties or securities after their
When it is left exclusively to the will of When it is left exclusively to the establishment, and when through a fortuitous event they disappear,
the debtor, the existence of the will of the debtor, the very unless he immediately gives new one equally satisfactory.
obligation is not affected existence of the obligation is 4. Debtor violates any undertaking, in consideration of which the creditor
affected agreed to the period
5. Debtor attempts to abscond
Benefit of the Period 6. By law or stipulation
7. Parties stipulate an accelerated clause
Article 1196. Whenever in an obligation the period is designated, it is
presumed to have been established for the benefit of both the creditor and
OBLIGATIONS AND CONTRACTS 10
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In the cases provided, the obligation becomes due and demandable, even if Effect of LOSS of objects
the period has not yet expired. The obligation is then converted into a pure
obligation (Tolentino, 1987) Article 1204. The creditor shall have a right to indemnity for damages when,
through the fault of the debtor, all the things which are alternatively the
Section 3 – ALTERNATIVE OBLIGATIONS object of the obligation have been lost, or the compliance of the obligation
has become impossible.
ALTERNATIVE OBLIGATIONS
The indemnity shall be fixed taking as a basis the value of the last thing which
Article 1199. A person alternatively bound by different prestations shall disappeared, or that of the service which last became impossible.
completely perform one of them.
Damages other than the value of the last thing or service may also be
The creditor cannot be compelled to receive part of one and part of the other awarded.
undertaking.
Debtor’s Choice:
Alternative Obligation: several prestations are due but the performance of Fortuitous Event Debtor’s Fault
one is sufficient (De Leon, 2003) All Lost Debtor is released Creditor shall have a right to
from the obligation indemnity for damages
Article 1200. The right of choice belongs to the debtor, unless it has been based on the value of the
expressly granted to the creditor. last thing which
disappeared or service
The debtor shall have no right to choose those prestations which are which became impossible
impossible, unlawful or which could not have been the object of the Some Debtor to deliver that Debtor to deliver that which
obligation. which he shall choose the creditor shall choose
from among the from among the remainder
Right of choice: remainder without damages
 Belongs to the debtor One Remains Debtor to deliver that Debtor to deliver that which
 UNLESS: which remains remains
o When expressly granted to the creditor
o When expressly granted to a third person Article 1205. When the choice has been expressly given to the creditor, the
Limitations to the right of choice: obligation shall cease to be alternative from the day when the selection has
1. Impossible prestations been communicated to the debtor.
2. Unlawful prestations
3. Those which could not have been the object of the obligation Until then, the responsibility of the debtor shall be governed by the following
4. Only one prestation is practicable rules:

Article 1202. The debtor shall lose the right of choice when among the (1) If one of the things is lost through a fortuitous event, he shall
prestations whereby he is alternatively bound, only one is practicable. perform the obligation by delivering that which the creditor should choose
from among the remainder, or that which remains if only one subsists;
Article 1201. The choice shall produce no effect except from the time it has
(2) If the loss of one of the things occurs through the fault of the
been communicated.
debtor, the creditor may claim any of those subsisting, or the price of that
which through the fault of the former, has disappeared, with a right to
damages;
(3) If all the things are lost through the fault of the debtor, the
When choice shall produce effect: choice by the creditor shall fall upon the price of any one of them, also with
 Choice shall produce no effect except from the time it has been indemnity for damages
communicated. The effect of the notice is to limit the obligation of the
object or prestation selected. Notice of selection or choice may be in The same rules shall be applied to obligations to do or not to do in case one,
any form provided it is sufficient to make the other party know that the some or all of the prestations should become impossible.
selection has been made. It can be:
o Oral
Creditor’s choice:
o In writing
Fortuitous Event Debtor’s Fault
o Tacit
o Any other equivocal means All Lost Debtor is released from Creditor may claim the
the obligation price/value of any of them
 Choice of the debtor when communicated to the creditor does NOT
with indemnity for
require the latter’s concurrence
damages
Some Debtor shall perform Creditor may claim any of
Article 1203. If through the creditor’s acts the debtor cannot make a choice
the obligation by those subsisting without a
according to the terms of the obligation, the latter may rescind the contract
delivering that which right to damages OR
with damages.
the creditor should price/value of the thing lost
choose from among with right to damages
 When the choice is rendered impossible through the creditor’s fault, the remainder
the debtor may bring an action to rescind the contract with damages One Remains Debtor shall perform Creditor may claim any of
the obligation by those subsisting without a
 Obligation is converted into a simple obligation when: delivering that which right to damages OR
o The person who has the right of choice has the creditor should price/value of the thing lost
communicated his choice choose from among with right to damages
o When only one prestation is practicable the remainder
OBLIGATIONS AND CONTRACTS 11
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REQUISITES for making the choice: Presumption: Obligation is presumed JOINT if there is a concurrence of
1. Made properly so that the creditor or his agent will actually know several creditors, of several debtors, or of several creditors and debtors in one
2. Made with full knowledge that a selection is indeed being made and the same obligation.
3. Made voluntarily and freely
4. Made in due time – before or upon maturity Exceptions:
5. Made to all proper persons 1. When the obligation expressly stated that there is solidarity
6. Made without conditions unless agreed by the creditor 2. When the law requires solidarity
7. May be waived, expressly or impliedly 3. When the nature or condition requires solidarity
4. When nature or condition is imposed upon heirs or legatees, and
FACULTATIVE OBLIGATIONS the testament expressly makes the charge or condition in solidum
5. When the solidary responsibility is imputed by a final judgment
Article 1206. When only one prestation has been agreed upon, but the obligor upon several defendants
may render another in substitution, the obligation is called facultative.
Principal Effects of Joint Liability
The loss or deterioration of the thing intended as a substitute, through the 1. Demand by one creditor upon the debtor produces the effects of
negligence of the obligor, does not render him liable. But once the default only with respect to the creditor who demanded and the debtor
substitution has been made, the obligor is liable for the loss of the substitute to whom the demand was made.
on account of his delay, negligence or fraud. 2. Interruption of prescription by the judicial demand of one creditor upon
a debtor does not benefit the other creditors nor interrupt the
Facultative Obligation: only one prestation has been agreed upon but the prescription as to other debtors
debtor may render another in substitution (De Leon, 2003) 3. Vices of each obligation arising from the personal defect of a particular
debtor or creditor
EFFECT OF LOSS OF SUBSTITUTE 4. Insolvency of a debtor does not increase the responsibility of his co-
debtors, nor does it authorize a creditor to demand anything from his
Before Substitution is Made After Substitution is Made co-debtors
5. Defense of res judicata is not extended from one debtor to another
If due to bad faith or fraud of If on account of the obligor’s
obligor: obligor is liable delay, negligence or fraud:
obligor is liable because once Joint Divisible Obligation
substitution is made, the obligation
If due to the negligence of the is converted into a simple one with Article 1208. If from the law, or the nature or the wording of the obligations
obligor: obligor is not liable the substituted thing as the object to which the preceding article refers the contrary does not appear, the credit
of the obligation. or debt shall be presumed to be divided into as many shares as there are
creditors or debtors, the credits or debts being considered distinct from one
ALTERNATIVE v. FACULTATIVE another, subject to the Rules of Court governing the multiplicity of suits.

Alternative
Various things are due but
the giving principally of one
is sufficient
If one of the prestations is
illegal, others may be valid
but obligation remains
If it is impossible to give all
except one, the last one must
still be given
Right to choose may be
given either to debtor or
creditor
Facultative
Only one thing is due but a substitute
may be given to render
payment/fulfillment easy
OIf principal obligation is void, there is no
necessity of giving the substitute; nullity
of P carries with it nullity of S
If it is impossible to give the principal, the
substitute does not have to be given; if it
is impossible to give the substitute, the
principal must still be given
The right of choice is given only to the
debtor
Each creditor can demand only for the payment of his proportionate share of
the credit, while each debtor can be liable only for the payment of his
proportionate share of the debit.
1. Credit or debit shall be presumed to be divided into as many equal
shares as there are creditors or debtors.
2. A joint creditor can NOT act in representation of the others, neither can
a joint debtor be compelled to answer for the liability of others
Joint Indivisible Obligation
Article 1209. If the division is impossible, the right of the creditors may be
prejudiced only by their collective acts, and the debt can be enforced only by
processing against all the debtors. If one of the latter should be insolvent, the
others shall not be liable for his share.

Section 4 – JOINT AND SOLIDARY OBLIGATIONS
Article 1207. The concurrence of two or more creditors or of two or more
debtors in one and the same obligation does not imply that each one of the
former has a right to demand, or that each one of the latter is bound to render,
entire compliance with the prestation. There is a solidary liability only when
the obligation expressly so states or when the law or the nature of the
obligation requires solidarity.
A. JOINT OBLIGATIONS
One where a concurrence of several creditors, or of several debtors, or of
several creditors and debtors, by virtue of which, each of the creditors has a
right to demand, and each of the debtors is bound to render compliance with
his proportionate part of the prestation which constitute the object of the
obligation (Obligacion Mancomunada)
No creditor can act in representation of the other; no debtor can be compelled
to answer for the liability of the others.
1. If there are two or more debtors, the fulfillment of or compliance with
the obligation requires the concurrence of all the debtors, although
each for his own share and for the enforcement of the obligation
2. If there are two or more creditors, the concurrence or collective act of
all the creditors, although each for his own share, is also necessary for
the enforcement of the obligation
In case of breach where one of the joint debtors fails to comply with his
undertaking, the obligation can no longer be fulfilled or performed.
Consequently, it is converted into one of indemnity for damages.
In case of insolvency of one of the debtors, the others shall not be liable for
his shares. To hold otherwise would destroy the joint character of the
obligation

Joint Divisible Joint Indivisible

OBLIGATIONS AND CONTRACTS 12
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In case of breach of In case of breach where one of the joint  All the debtors are liable for the loss of the thing due, even if such loss
obligation by one of the debtors fails to comply with his undertaking, is caused by the fault of only one of them and for delay, even if it is
debtors, damages due the obligation can no longer be fulfilled or caused by just one of them
must be borne by him performed. Thus action must be converted  The interruption of prescription as to one debtor affects all the
alone into indemnity for damages. others; but the renunciation by one debtor of prescription already
had does not prejudice the others.
Plurality of Creditors: If one or some of the creditors demands the prestation,  Effects:
the debtor may legally refuse to deliver to them, he can insist that all the o Each debtor may be requested to pay the whole
creditors together receive the thing, and if any of them refuses to join the obligation with the right to recover from co-debtors
others. If any of them refuses to join the others, the debtor may deposit the o Interruption of prescription to one creditor affect all
thing in court by way of consignation (Tolentino) o Interest from delay one one debtor is borne by all

B. SOLIDARY OBLIGATION 3. Mixed: solidarity among creditors and debtors

 Solidarity is not destroyed by the fact that the obligation of each
An obligation where there is concurrence of several creditors, or of several debtor is subject to different conditions or periods. The creditor can
creditors, or of several debtors, by virtue of which, each of the creditors has commence an action against anyone of the debtors for the
the right to demand, and each of the debtors is bound to render, entire compliance with the entire obligation minus the portion or share
compliance with the prestation which constitutes the object of the obligation which corresponds to the debtor affected by the condition or period.
(Obligacion Solidaria)
4. Conventional: agreed upon by the parties
Indivisibility Solidarity
Refers to the prestation which Refers to the legal tie or vinvulum, 5. Legal: imposed by law
constitutes the object of the and consequently to the subjects  Instances where law imposes solidary obligation:
obligation or parties of the obligation o Obligations arising from tort
Plurality of subjects is not required Plurality of subjects is o Obligations arising from quasi-contracts
indispensable o Legal provisions regarding obligation of devisees and legatees
In case of breach, obligation is When there is liability on the part o Liability of principals, accomplices, and accessories of a felony
converted into indemnity for of the debtors because of the o Bailees in commodatum
damages because the indivisibility breach, the solidarity among the  Effects:
of the obligation is terminated debtors remains a) Payment made before debt is due, no interest can be charged,
otherwise – interest can be charged
Article 1211. Solidarity may exist although the creditors and the debtors may b) Insolvency of one – others are liable for share pro-rata
not be bound in the same manner and by the same periods and conditions. c) If different terms and conditions – collect only what is due,
later on collect from any
d) No reimbursement if payment is made after prescription or
 The indivisibility of an obligation does NOT necessarily give rise to
become illegal
solidarity, nor does solidarity itself imply indivisibility
e) Remission made after payment is made – co-debtor still
entitled to reimbursement
Kinds of Solidary Obligations
f) Effect of insolvency or death of co-debtor – still liable for
whole amount
1. Active: solidarity among creditors
g) Fault of any debtor – everyone is responsible – price, damage
 Each creditor has the authority to claim and enforce the rights of all,
and interest
with the resulting obligation of paying everyone of what belongs to
h) Complete/personal defense – total or partial if not personal to
him
him
 Creation of a mutual agency relationship among co-creditors
 Effects:
Effect of LOSS or IMPOSSIBLITY of the prestation:
o The death of one solidary creditor transmits share to
1) If without fault – no liability
heirs (collectively)
2) If with fault – there is liability (also for damage and interest)
o Each creditor represents the other in the act of recovery
3) Loss due to fortuitous events after default – there is liability (because
of payment
of default)
o Credit is divided equally between creditors as among
themselves
Effects of Prejudicial and Beneficial Actd
o Debtor may pay any of the solidary creditors

Article 1213. A solidary creditor cannot assign his rights without the consent
of the others.

Article 1214. The debtor may pay any one of the solidary creditors; but if any
demand, judicial or extrajudicial, has been made by one of the, payment
should be made to him.

2. Passive: solidarity among debtors

 Each debtor can be made to answer for the others, with the right on
the part of the debtor-payor to recover from the others their
respective shares.
 Creation of a mutual guaranty relationship among co-debtors
 The total remission of the debt in favor of a debtor releases all the
debtors
OBLIGATIONS AND CONTRACTS 13
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