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Obligations and Contracts: San Beda College of Law

This document provides an overview of obligations and contracts under civil law, including the key elements and types of obligations, quasi-contracts, and quasi-delicts. It discusses the nature of obligations as either personal or real, and the rights of creditors. It also summarizes the principle of balancing equities as applied in actions for specific performance of contracts.

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Kezia Escario
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© © All Rights Reserved
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0% found this document useful (0 votes)
138 views

Obligations and Contracts: San Beda College of Law

This document provides an overview of obligations and contracts under civil law, including the key elements and types of obligations, quasi-contracts, and quasi-delicts. It discusses the nature of obligations as either personal or real, and the rights of creditors. It also summarizes the principle of balancing equities as applied in actions for specific performance of contracts.

Uploaded by

Kezia Escario
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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San Beda College of Law 85

MEMORY AID IN CIVIL LAW

OBLIGATIONS AND CONTRACTS


principle that no one shall
be unjustly enriched or
I. OBLIGATIONS benefited at the expense of
another.
OBLIGATION
Principal Kinds of Quasi-contracts:
 A juridical necessity to give, to
do, or not to do (Article 1156), 1. Negotiorum gestio - arises
one impressed with the whenever a person voluntarily
character of enforceability. takes charge of the agency or
management of the business
or property of another without
 Requisites:
any power or authority from
a. juridical or legal tie or
the latter.
efficient
2. Solutio indebiti - arises
cause whenever a person unduly
b. active subject (obligee or delivers a thing
creditor)
c. passive subject (obligor or through mistake to another who has
debtor) no right to demand it.
d. fact, prestation or service
constituting the object of QUASI-DELICTS
the  An act or omission by a person
obligat (tortfeasor) which causes damage
ion  to another giving rise to an
Requis obligation to pay for the damage
ites: done, there being fault or
i) it must be licit negligence but there is no pre-
ii) it must be possible, existing contractual relation
physically & juridically between the parties (Article
iii) it must be determinate 2176).
or
determinable  Requisites:
iv) it must have a possible 1. There must be an act or
equivalent in money omission;
2. There must be fault
or negligence;
1. Law 3. There must be damage
2. Contracts caused to the plaintiff;
3. Quasi-contracts 4. There must be a direct
4. Delicts relation of cause and effect
5. Quasi-delicts between the act or omission
and the damage; and
QUASI-CONTRACTS 5. There is no pre-existing
 Those juridical relations contractual relation between
arising from lawful, the parties.
voluntary and unilateral
acts, by virtue of which the NOTES:
parties become bound to  The same negligent act or
each other, based on the omission causing damage may
86 2005 CENTRALIZED BAR OPERATIONS

produce civil liability arising from fulfillment of a whom such right


crime under Art. 100 of the RPC prestation to give, may be personally
or create an action for quasi- to do or not to do. enforced
delict under Article 2176.
RIGHTS OF A CREDITOR
 While it is true that in order that
a person may be liable for Determinate Generic
quasidelicts, there must be no 1. compel specific 1. ask for
preexisting contractual performance performance of the
relationship between the parties, obligation
yet, “the act that breaks the 2. recover 2. ask that the
contract may also be a tort.” damages in case of obligation be
(Air France vs. breach of the complied with at
obligation, the expense of the
Carrascoso, 18 SCRA 155).
exclusive or in debtor
addition to
Nature of Obligations specific
1. Personal Obligations - obligations performance
to do 3. entitlement to 3. recover damages
a. Positive – obligation to do fruits, interests in case of breach
b. Negative – obligation not to from the time the of the
do obligation to obligation
2. Real Obligations - obligations to deliver arises.
give
a. Determinate or specific – object Principle of Balancing of Equities as
is particularly designated or Applied in Actions for Specific
physically segregated from all other Performance
of the same class  In decreeing specific performance,

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflict of Laws)

b. Generic – object is equity requires not only that the


designated merely by its contract be just and equitable in
class or genus its provisions, but that the
c. Limited generic thing – when consequences of specific
the generic objects are performance likewise be
confined to a particular equitable and just. The general
class, e.g. an obligation to rule is that this equitable relief
deliver one of my horses will not be granted
(Tolentino, Volume IV, p. if, under the circumstances of
91). the case, the result of the
specific performance of the
PERSONAL vs. REAL RIGHT contract would be harsh,
inequitable, oppressive or result
Personal Real
in an unconscionable advantage
1. jus ad rem, a 1. jus in re, a right to the plaintiff. The courts may
right enforceable enforceable
adjust the rights of the parties in
only against a against the whole
accordance with the
definite person or world
group of persons
circumstances obtaining at the
time of rendition of judgment,
2. right pertaining 2. right pertaining
when these are significantly
to the person to to a person over a
demand from specific thing,
different from those existing at
another, as a without a passive the time of generation of those
definite passive subject individually rights. (Agcaoili vs. GSIS, G.R.
subject, the determined against No. 30056, August 30,

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 87

MEMORY AID IN CIVIL LAW


1988) in character, in which case, even
if it is possible for the obligee to
OBLIGATIONS OF THE DEBTOR ask that the act be undone at the
Determinate Generic expense of the obligor,
1. deliver the 1. deliver the consequences contrary to the
thing which he has thing which is object of the obligation will have
obligated himself to neither of been produced which are
give superior nor permanent in character
2. take care inferior quality 2. Where it would be physically or
of the thing with the 2. pay
legally impossible to undo what
proper diligence of damages in case
a good father of a of breach of the has been undone because of the
family obligation by very nature of the act itself or
3. deliver all reason of delay, because of a provision of law, or
accessions and fraud, because of conflicting rights of
accessories of the negligence or 3rd persons NOTE: In either case,
thing even though contravention of the remedy is to ask for
they may not have the tenor
damages.
thereof
been mentioned 4.
pay damages in case BREACH OF OBLIGATIONS
of breach of the
1. Voluntary - debtor, in the
obligation by reason
performance of the obligation, is
of delay, fraud,
negligence or guilty of:
contravention of the a. default (mora)
tenor thereof b. fraud (dolo)
c. negligence (culpa)
EFFECTS OF BREACH d. contravention of the tenor
of the obligation
Positive Personal Negative Personal
NOTE: debtor is liable for damages
Obligations Obligations
The creditor can: If the obligor does
what has been
2. Involuntary - debtor is unable to
1. have the
obligation forbidden him, the comply with his obligation
performed or creditor can: because of fortuitous event
executed at the 1. have it undone NOTE: debtor is not liable for
expense of the at the expense of damages
obligor (except the obligor; and 2.
in cases where ask for damages
DEFAULT or DELAY
the
personal  Non-fulfillment of the obligation
qualifications of the with respect to time  Requisites:
debtor are taken 1. Obligation is demandable and
into account in already liquidated
which case the only
2. The debtor delays performance
remedy is an action
for damages) 3. The creditor requires
2. ask that performance judicially or extra-
what has judicially
been poorly done be
undone
3. recover damages
because of breach of
the obligation  3 Kinds:
1. Mora solvendi - delay of the
Cases where the remedy granted debtor to perform his obligation.
under Article 1168 is not available: It may be:
1. Where the effects of the act a. Ex re – obligation is to give
which is forbidden, are definite b. Ex persona – obligation is to do

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

2. Mora accipiendi - delay of the NOTE: Future fraud cannot be


creditor to accept the delivery of waived because it would result to
the thing w/c is the object of the illusory obligation.
obligation
3. Compensatio morae - delay of Incidental Causal Fraud/dolo
the parties or obligors in Fraud/dolo causante
reciprocal incidente (Article 1338)
obligation (Article 1170)

1. Present during 1. Present during the


There must be a the performance time of birth or
demand (judicial or extra-judicial) of a pre-existing perfection of the
before delay may be incurred. obligation obligation

1. obligation or law expressly so 2. Purpose is to 2. Purpose is to


declares evade the normal secure the consent of
fulfillment of the the other to enter
2. time is of the essence of the
obligation into a contract
contract
3. demand is useless as when
3. Results in the 3. Results in the
obligor has rendered beyond
non-fulfillment or vitiation of consent
his power to perform
breach of the
4. there is acknowledgment of obligation
default
4. Gives rise to a 4. Gives rise to a
NOTES: right of the creditor right of an innocent
 There can be delay only in to recover damages party to annul the
from the debtor contract
positive obligations (to give/to
do). There can be no delay in
negative obligations (not to
give/not to do). NEGLIGENCE

 In reciprocal obligations one  Omission of that diligence which


is required by the nature of the
party incurs in delay from the
obligation and corresponds with
moment the other party fulfills
the circumstances of the
his obligation, while he himself
persons, of the time and of the
does not comply or is not ready
place
to comply in a proper manner
with what is incumbent upon NOTE: Negligence can be waived
him. The general rule is that unless the nature of the obligation or
fulfillment by both parties should public policy requires extraordinary
be simultaneous except when diligence as in common carrier.
different dates for the
performance of obligation is Diligence Required
fixed by the parties. 1. That agreed upon by the parties
2. In the absence of stipulation,
 Demand is still necessary if their that required by law in the
respective obligations are to be particular case
performed on separate dates 3. If both the contract and law are
silent, diligence of a good father
FRAUD of a family
 Deliberate and intentional
evasion of the fulfillment of an Concept of Diligence of Good Father
obligation of a Family

 That reasonable diligence which


an ordinary prudent person

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 89

MEMORY AID IN CIVIL LAW


would have done under the same NOTE: It must not only be the
circumstances proximate cause but it must be
Test of Negligence  The test of the ONLY and SOLE CAUSE.
negligence can be determined by
this standard: If the defendant, in
committing or causing the
negligent act, had GENERAL RULE: No liability in case
used reasonable care and of fortuitous event.
vigilance which a man of ordinary EXCEPTIONS:
prudence would have employed 1 When expressly declared by
under the same situation, he is not law NOTE: e.g.
guilty of negligence. Otherwise, he Article 552(2),
is guilty. 1165(3), 1268, 1942, 2147,
2148 and 2159 of the Civil
Doctrine of Res Ipsa Loquitur as Code.
Applied in Negligence Cases  The 2 When expressly declared by
thing or transaction speaks for itself stipulation or contract
3 When the nature of the
 When the thing which caused obligation requires the
injury, without fault of the
assumption of risk
injured person, is under the
4 When the obligor is in default
exclusive control of the
or has promised to deliver
defendant and the injury is such
the same thing to 2 or more
as in the ordinary course of
persons who do not have the
things does not occur if he having
same interest [Article
such control use proper care, it
1165(3)].
affords reasonable evidence, in
the absence of explanation from
EFFECT OF FORTUITOUS EVENT
the defendant, that the injury
arose from defendant’s want of Determinate Generic
care (Africa vs. Caltex, 16 SCRA Obligation Obligation
448 and Republic vs. obligation is obligation is not
Luzon Stevedoring, 21 SCRA 279). extinguished extinguished based
on the rule that a
genus never perishes
FORTUITOUS EVENT  An event (genus nunquam
which could not be foreseen or which peruit)
though foreseen was inevitable.

 Requisites:
1. cause is independent of the will PRINCIPLE UNDER ARTICLE 1176 
of the debtor Before the presumption that a prior
2. the event must be unforeseeable installment had been paid may arise,
or unavoidable the receipt must specify the
3. occurrence must be such as to installment for which payment is
render it impossible for the made.
debtor to fulfill his obligation in
a normal manner  REMEDIES OF CREDITOR
4. debtor must be free from any TO
participation in PROTECT CREDIT:
5. the aggravation of the injury 1. Exhaustion of debtor’s property
resulting to the creditor (Lasam 2. Accion subrogatoria - to be
vs. Smith, 45 Phil. 657) subrogated to all the rights and
actions of the debtor save those
which are inherent in his person.

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

3. Accion pauliana - impugn all the chance and/or the will of a third
acts w/c the debtor may have person
done to defraud them. 6. Possible - condition is capable of
NOTE: 2nd & 3rd remedies are realization according to nature,
subsidiary to the first law, public policy and good
customs
Rights acquired 7. Impossible - condition is not
by virtue of an obligation are capable of realization according
transmissible in character to nature, law, public policy and
good customs
8. Positive - condition involves the
performance of an act
9. Negative - condition involves the
omission of an act
1. When they are not
10. Divisible - condition is
transmissible by their very
susceptible of partial realization
nature e.g. purely personal
11. Indivisible - condition is not
right
susceptible of partial realization
2. When there is a stipulation of 12. Conjunctive - where there are
the parties that they are not several conditions, all of which
transmissible must be realized
3. Not transmissible by 13. Alternative - where there are
operation of law several conditions but only one
must be realized
PURE OBLIGATION
 One whose effectivity or Rule in Potestative Conditions
extinguishment does not depend a. If the fulfillment of the
upon the fulfillment or potestative condition depends
nonfulfillment of a condition or upon the sole will of the
upon the expiration of a term or debtor, the condition as well
period and is demandable at as the obligation itself is void.
once. It renders the obligation
illusory.
CONDITIONAL OBLIGATION (Applicable only to a
 One whose effectivity is suspensive condition and to an
subordinated to the fulfillment or obligation which depends for
non-fulfillment of a future AND its perfection upon the
uncertain fact or event fulfillment of the potestative
condition and not to a pre-
Kinds of conditions: existing obligation.)
1. Suspensive - fulfillment of the b. If the fulfillment depends
condition results in the exclusively upon the will of
acquisition of rights arising out of the creditor, both the
the obligation condition and obligation is
2. Resolutory - fulfillment of the valid.
condition results in the NOTE: In case of simple
extinguishments of rights arising potestative condition, e.g. right
out of the obligation of first refusal, such condition is
3. Potestative - fulfillment of the valid.
condition depends upon the will
of a party to the obligation Rule in Impossible Conditions
4. Casual - fulfillment of the
They shall annul
condition depends upon chance
the obligation which depends upon
and/or upon the will of a third
them.
person
5. Mixed - fulfillment of the
condition depends partly upon 1. pre-existing obligation

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 91

MEMORY AID IN CIVIL LAW


2. if obligation is divisible virtue of the obligation is subject
3. in simple or renumeratory to a threat of extinction.
donations 2. If condition is not fulfilled, rights
4. in testamentary dispositions are consolidated; they become
5. in case of conditions not to do an absolute.
impossible thing 3. Upon fulfillment of the
condition, the parties shall
Effects of Suspensive Condition return to each other what they
1. Before fulfillment of the received including the
condition, the demandability as fruits
well as the acquisition or
effectivity of the rights arising SUMMARY:
from the obligation is suspended SUSPENSIVE RESOLUTORY
2. After the fulfillment of the CONDITION CONDITION
condition, the obligation arises
1.if fulfilled, 1. if fulfilled,
or becomes effective obligation arises obligation is
3. The effects of a conditional or becomes extinguished
obligation to give, once the effective
condition has been fulfilled, shall 2.if not fulfilled, no 2. if not fulfilled,
retroact to the day of the juridical relation juridical
is created relation is
constitution of the obligation
3.rights are not yet consolidated
4. When the obligation imposes acquired, but 3. rights are
reciprocal prestations upon the there is hope or already
parties, the fruits & interests expectancy that acquired, but
shall they will soon be subject to the
be deemed to have been acquired threat or danger
mutually compensated of extinction
5. If the obligation is unilateral, the
debtor shall appropriate the
fruits & interests received, Effects of Loss, Deterioration and
unless from the nature & Improvement in real obligations
circumstances it should be (during
inferred that the intention of the the pendency of the condition)
persons constituting the same
was different
1. Loss
6. In obligations to do or not to do,
a. without debtor’s fault -
the court shall determine the
obligation is extinguished
retroactive effect or the
b. with debtor’s fault - debtor
conditions that has
pays
been complied with
damages
Constructive fulfillment of
2. Deterioration
Suspensive Condition
a. without debtor’s fault -
 The condition shall be deemed impairment to be borne by
fulfilled when the obligor actually the creditor
prevented the obligee from b. with debtor’s fault - creditor
complying with the condition and may choose between the
such prevention must have been rescission of the obligation
voluntary and willful in character. and its fulfillment with
indemnity for
Effects of Resolutory Condition damages in either case
1. Before the fulfillment of the
condition, the right which the 3. Improvement
creditor has already acquired by

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

a. by the thing’s nature or by nothing in the law which


time - improvement shall prohibits the parties from
inure to the benefit of the entering into an agreement that
creditor violation of the terms of the
b. at the debtor’s expense - contract would cause its
debtor shall have no other cancellation without court
right than intervention. Said stipulation is
that granted to a in the nature of facultative
usufructuary resolutory condition (Angeles vs.
Calasanz, 135 SCRA 323).
NOTE: Applies only to determinate  Rescission will be ordered only
things where the breach is substantial
as to defeat the object of the
A Thing is Lost when it: parties in entering into the
1. perishes agreement.
2. goes out of commerce
3. disappears in such a way that its  The injured party may choose
existence is unknown or it cannot between fulfillment and
be recovered rescission of the obligations, with
the payment of damages in
RECIPROCAL OBLIGATIONS either case. These remedies are
alternative, not cumulative.
Those which are created or
However, should fulfillment
established at the same time, out of
become impossible, the injured
the same cause, and which result in
party may also seek rescission.
mutual relationships of creditor &
debtor  The right to rescind belongs
between the parties exclusively to the injured party.

TACIT RESOLUTORY CONDITION OBLIGATION WITH A PERIOD


 Those whose demandability or
with what is incumbent upon him, extinguishment is subject to the
there is a right on the part of the expiration of a term or period 
other to rescind the obligation. Requisites:
1. future
2. certain
3. possible, legally and physically

CLASSIFICATION OF TERM OR
PERIOD
RIGHT TO RESCIND (ART 1191) 1. a. suspensive (ex die) – obligation
becomes demandable only upon
The right to
arrival of a day certain
rescind needs judicial approval.
b.resolutory (in diem) – arrival
1. If there is an express of day certain terminates
stipulation of automatic the obligation
rescission
2. a. legal – granted by law
2. When the debtor voluntarily
b. conventional – stipulated by
returned the thing
parties
c. judicial – fixed by courts
NOTES:
3. a. definite – date/time is know
 Article 1191 refers to judicial beforehand
rescission. It does not apply if b. indefinite – the date/time of
there is an express stipulation to day
rescind, in which case such certain is unknown
stipulation must prevail. There is

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 93

MEMORY AID IN CIVIL LAW


TERM CONDITION NOTE: The only action that can be
1. interval of time 1. fact or event w/c maintained is an action to ask the
w/c is future & is future and court to fix the duration of the term
certain uncertain or period. The fulfillment of the
2. interval of time 2. future and obligation itself cannot be demanded
w/c must uncertain fact or until after the court has fixed the
necessarily come, event w/c may or period for compliance therewith, and
although it may may not happen such period has arrived. However,
not be known when such technicality need not be
3.exerts an 3. exerts an adhered to when a prior and separate
influence upon the influence upon the action would be a mere formality and
time of very existence of the would serve no other purpose than to
demandability or obligation itself delay (Borromeo vs. CA, 47 SCRA 65).
extinguishment of
an obligation Reason for Fixing the Period (ART
4. does not have 4. has retroactive 1197)
any retroactive effect  There can be no possibility of any
effect unless there breach of contract or failure to
is an agreement to perform the obligation unless the
the contrary period is fixed by courts.
5. when it is left 5. when it is left
exclusively to the exclusively to the will
When debtor loses right to make
will of the debtor, of the debtor, the
very existence of the use of period: (IGIVA)
the existence of
obligation is affected 1. when after the obligation has
the obligation is
not affected been contracted, he becomes
insolvent, unless he gives
guaranties or securities for the
When a period is debt (the insolvency need not
designated for the performance or be judicially declared)
fulfillment of an obligation, it is 2. when he does not furnish to the
presumed to have been established creditor the guaranties or
for the benefit of both creditor and securities he promised
debtor. 3. when by his own act he has
When it appears from impaired said guaranties or
the tenor of the obligation or other securities after their
circumstances that the period has establishment, and when
been established in favor of one or of through fortuitous event they
the other. disappear, unless he gives new
ones equally satisfactory when
When court may fix period: debtor violates any
1. if the obligation does not fix a undertaking, in consideration of
period, but from its nature and which the creditor agreed to
circumstances it can be inferred the period or
that a period was intended by 4. when debtor attempts to
the parties abscond
2. if the duration of the period
depends upon the will of the FACULTATIVE ALTERNATIVE
debtor; and Obligations Obligations
3. If the debtor binds himself when
his means permit him to do so 1. comprehends 1. comprehends
(Article only one object or several objects or
1180) prestation which is prestations which are
due, but it may be due but may be
complied with by complied with by the
the delivery of delivery or

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS
another object or performance of only obligation by delivering that
performance of one of them which the creditor should
another prestation choose from among the
in substitution remainder, or that which
remains if only 1 subsists
2. fortuitous loss 2. fortuitous loss of b. If the loss of 1 of the things
extinguishes the all prestations will occurs through the fault of
obligation extinguish the the debtor, the creditor may
obligation claim any of those
subsisting, or the price of
3. culpable loss 3. culpable loss of that which, through the
obliges the debtor any object due will fault of the former, has
to deliver give disappeared with a right to
substitute rise to liability to damages
prestation without debtor
liability to debtor c. If all the things are lost
through the fault of the
debtor, the choice by the
creditor shall fall upon the
4. choice pertains 4. choice may pertain
price of any 1 of them,
only to debtor to creditor or even
third person
also with indemnity for damages

JOINT AND SOLIDARY


NOTES: OBLIGATIONS
 In alternative obligations, choice Obligation is
takes effect only upon presumed joint if there is
communication of the choice to the concurrence of two or more debtors
other party and from such time the and/or creditors.
obligation ceases to be alternative.
 The debtor cannot choose those 1. when expressly stated that
prestations or undertakings which are there is solidarity
impossible, unlawful or w/c could 2. when the law requires
not have been the object of the solidarity
obligation. 3. when the nature of
the obligation requires
EFFECT OF LOSS OF OBJECT OF solidarity
OBLIGATION:
1. If right of choice belongs to JOINT DIVISIBLE OBLIGATIONS
debtor  Each creditor can demand for the
a. If through a fortuitous event payment of his proportionate
- debtor cannot be held share of the credit, while each
liable for damages debtor can be held liable only for
b. If 1 or more but not all of the payment of his proportionate
the things are lost or one or share of the debt.
some but not all of the  A joint creditor cannot act in
prestations cannot be representation of the other
performed due to the fault creditors while a joint debtor
of the debtor, creditor cannot be compelled to answer
cannot hold the debtor for the acts or liability of the
liable for damages because other debtors.
the debtor can still comply
with his obligation. JOINT INDIVISIBLE OBLIGATIONS
2. If right of choice belongs to the 1. If there are 2 or more debtors,
creditor the fulfillment of or compliance
a. If 1 of the things is lost with the obligation requires the
through a fortuitous event, concurrence of all the debtors,
the debtor shall perform the although each for his own share.

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 95

MEMORY AID IN CIVIL LAW


Consequently, the obligation can obligation to render an
be enforced only by proceeding accounting of his acts to such
against all of the debtors. creditors
2. If there are 2 or more creditors,  creates a relationship of mutual
the concurrence or collective act agency among solidary creditors
of all the creditors, although 2. Passive solidarity
each for his own share, is also  solidarity of debtors
necessary for the enforcement of  liability of each debtor for the
the obligation. payment of the entire obligation,
with the consequent right to
Effect of breach – If one of the joint demand reimbursement from the
debtors fails to comply with his others for their corresponding
undertaking, the obligation can no shares once payment has been
longer be fulfilled or performed. made
Consequently, it is converted into 3. Mixed solidarity
one of indemnity for damages.  solidarity among creditors
Innocent joint debtors shall not and debtors
contribute to the indemnity beyond Effect of Assignment by Solidary
their corresponding share of the Creditor Without Consent of Others
obligation.
1. assignee is co-creditor – no
violation of Article 1213 because
Effect of insolvency of a debtor – If there can be no invasion of the
one of the joint debtors should be personal or
insolvent, the others shall not be
confidential relationship
liable for his share.
2. assignee is third person –
cocreditors and debtors are not
INDIVISIBILITY SOLIDARITY bound
1. refers to the 1. refers to the by the assignment
prestation which legal tie or vinculum
constitutes the juris & consequently Effect of Novation upon Solidary
object of the to the subjects or
Obligation
obligation parties of the
obligation 1. If the novation is prejudicial, the
solidary creditor who effected
2. plurality of 2. plurality of
the novation shall reimburse the
subjects is not subjects is
required indispensable others for damages incurred by
them
3. in case of breach, 3. when there is
obligation is liability on the part 2. If it is beneficial and the creditor
converted into 1 of of the debtors who effected the novation is able
indemnity for because of the to secure performance of the
damages because of breach, the obligation, such creditor shall be
solidarity among the liable to the others for the share
breach, indivisibility
debtors remains
of the obligation is which corresponds to them, not
terminated only in the obligation, but also in
the benefits
3. If the novation is effected by
KINDS OF SOLIDARITY substituting another person in
1. Active solidarity place of the debtor, the solidary
 solidarity of creditors creditor who effected the
 each creditor is empowered to novation is liable for the acts of
exercise against the debtor not the new debtor in case the is
only the rights which correspond deficiency in performance or in
to him, but also all the rights case damages are incurred by the
which correspond to the other other solidary creditors as a
creditors, with the consequent result of the substitution.

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

4. If the novation is effected by the obligation, his character as a


subrogating a third person in the solidary debtor is not affected.
rights of the solidary creditor
responsible for the novation, the Effect of Payment by Solidary
relation between the other Debtor
creditors not substituted and the 1. Whole or partial extinguishment
debtor or debtors is maintained. of debt
2. Right to recover against co-
Effect of Compensation and debtor
Confusion upon Solidary Obligation 3. Right to recover interest from
1. If the confusion or compensation time the obligation becomes due
is partial, the rules regarding
application of payment shall Effect of Loss or Impossibility of
apply. This is without prejudice Performance
to the right of other creditors 1. If it is not due to the fault of the
who have not caused the solidary debtors, the obligation is
confusion or compensation to be extinguished.
reimbursed to the extent that
2. If the loss or impossibility is due
their rights are diminished or
to the fault of one of the solidary
affected.
debtors or due to a fortuitous
2. If the confusion or compensation
event after one of the solidary
is total, the obligation is
debtors had already incurred in
extinguished, what is left is the
delay, the obligation is converted
ensuing liability
into an obligation of indemnity
for reimbursement within each
for damages but the solidary
group:
character of the obligation
a. The creditor causing the remains.
confusion or compensation is
obliged to reimburse the
other creditors
b. The debtors benefited by
Defenses available to a Solidary
the extinguishments of the
Debtor
obligation are obliged to
1. Defenses derived from the very
reimburse the debtor who
nature of the obligation
made the confusion or
compensation possible. 2. Defenses personal to him or
pertaining to his own share
Effect of Remission upon Solidary 3. Defenses personal to the others,
Obligation but only as regards that part of
the debt
1. If the remission covers the entire
for w/c the latter are responsible
obligation, the obligation is
totally extinguished and the
entire juridical relation among DIVISIBLE OBLIGATIONS
the debtors is extinguished all  Those which have as their object a
together. prestation which is susceptible of
2. If the remission is for the benefit partial performance without the
of one of the debtors and it essence of obligation changed.
covers his entire share in the
obligation, he is completely INDIVISIBLE OBLIGATIONS
released from the  Prestation is not susceptible of
creditors but is still bound to his partial performance, otherwise,
codebtors. the essence of the obligation will
3. If the remission is for the benefit be changed
of one of the debtors and it
covers only a part of his share in NOTES:
 Divisibility or indivisibility of the
obligation refers to the

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 97

MEMORY AID IN CIVIL LAW


performance of the prestation substitute for damages in case of
and not to the thing which is the breach.
object thereof.
 Intention of parties should be 1. when there is a stipulation to
taken into account to determine the contrary;
whether obligation is divisible or 2. when the debtor is sued for
not. refusal to pay the agreed
penalty; and
The creditor 3. when debtor is guilty of
cannot be compelled partially to fraud
receive the prestation in which the
obligation consists; neither may the NOTE: Article 1228 does not
debtor be required to make partial apply to these exceptions; there
payments. must be proof of actual damages.

1. When the obligation NOTES:


expressly stipulates the  The debtor cannot exempt
contrary;
himself from the performance of
2. When the different the principal obligation by paying
prestations constituting the the stipulated penalty unless
objects of the obligation are when the right has been
subject to different terms expressly reserved for him.
and conditions; and
3. When the obligation is in part  The creditor cannot demand the
liquidated and in part fulfillment of the principal
unliquidated. obligation and the satisfaction of
the stipulated penalty at the
OBLIGATIONS WITH A PENAL same time unless the right has
CLAUSE been clearly granted him.
 One to which an accessory
undertaking is attached for the When penalty may be reduced
purpose of insuring its 1. If the principal obligation has
performance by virtue of which been partly complied with;
the obligor is bound to pay a 2. If the principal obligation has
stipulated indemnity or perform been irregularly complied with;
a stipulated prestation in case of and 3. If the penalty is iniquitous
breach. or unconscionable even if there
has been no performance.
 Purpose of Penalty:
1. To insure the performance of MODES OF EXTINGUISHMENT OF
the obligation;
OBLIGATION (LFC3NARP2)
2. to liquidate the amount of
S
damages to be awarded to
1. loss of the thing due
the injured party in case of
2. fulfillment of resolutory
breach of the principal
condition
obligation (compensatory);
and 3. compensation
4. condonation or remission of the
3. in certain exceptional cases,
debt
to punish the obligor in case
5. confusion or merger of rights of
of breach of the principal
the creditor and debtor
obligation (punitive).
6. novation
7. annulment
ULE: The penalty fixed 8. rescission
by the parties is a compensation or 9. prescription

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

10. payment or performance 1. If payment was made with


knowledge and consent of
Payment or Performance the debtor:
 Means not only the delivery of a. can recover entire
money but also the performance, amount paid
in any other manner, of an b. can be subrogated to
obligation. all the rights of the
creditor.
Integrity of Payment 2. If payment was made without
A debt shall not be knowledge or against the will
understood to have been paid unless of the debtor, he can recover
the thing or service in which the only insofar as the payment
obligation consists has been has been beneficial to the
completely delivered or rendered, as debtor.
the case may be.
To whom payment must be made:
1. The person in whose favor the
1. When the obligation has been
obligation has been constituted;
substantially performed in good
2. His successor in interest; or 3.
faith;
Any person authorized to
2. When the obligee accepts
receive it.
performance, knowing its
incompleteness or irregularity &
w/out expressing any protest or If payment is made
objection; to a person other than those
3. When there is an express enumerated, it shall not be valid.
stipulation; and
4. When the debt is in part 1. Payment made to a 3rd
liquidated and in part person, provided that it has
unliquidated. redounded to the benefit of
the creditor. Such benefit to
Identity of Payment the creditor is presumed in
 requires that the very thing, the following cases:
service or forbearance, as the • If after the payment,
object of the prestation, must be the third person
performed or acquires the creditor’s
observed rights;
• If the creditor ratifies
Persons who may pay the the payment to the
obligation: third person;
1. the debtor himself or his legal • If by the creditor’s
representative conduct, the debtor has
2. any third person been led to believe that
the third person had
Creditor is not authority to receive the
bound to accept payment or payment.
performance by a third person. 2. Payment made to the
possessor of the credit,
provided that it was made in
1. when made by a third person
good faith.
who has an interest in the
fulfillment of the obligation;
2. when there is a stipulation to Obligation to Deliver a Generic
the contrary. Thing
 If the quality and circumstances
Rights of 3rd person who paid the have not been stated, the
obligation: creditor cannot demand a thing
of superior quality; neither can

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 99

MEMORY AID IN CIVIL LAW


the debtor deliver a thing of a. The decrease in the value of
inferior quality. the currency could not have
been reasonably foreseen
by the parties or
beyond their contemplation
Rules in Monetary Obligations: at the time the obligation was
1. Payment in cash - must be made established ;
in the currency stipulated; if it is b. There must be a declaration of
not possible to deliver such such extraordinary inflation
currency, then in the currency or
which is legal tender in the
Philippines.
2. Payment in check or other
negotiable instrument - not deflation by the Bangko
considered payment; not Sentral. Without such
considered legal tender and may declaration, the creditors
be refused by the creditor. It cannot demand an increase,
shall only produce the effect of and debtors a decrease, of
payment: what is due to or from them.
a. when it has been cashed or (Ramos vs. CA, 275 SCRA 167
b. when it has been impaired and Mobil Oil Phils. vs.
through the fault of the CA, 180 SCRA 651)
creditor.
Place of payment
LEGAL TENDER 1. Place stipulated by the parties.
 Such currency which may be used 2. No stipulation and the obligation
for the payment of all debts, is to deliver a determinate thing,
whether private or public. The payment shall be made at the
kind of currency which a debtor place where the thing might be
can legally compel a creditor to at the time the obligation was
accept in payment of a debt in constituted.
money when tendered by the 3. In any other case, the payment
debtor in the right amount. shall be made at the domicile of
 Legal tender of the Philippines the debtor.
would be all notes and coins
issued by the Central Bank. Special Forms of Payment:
 Section 52, R.A. No. 7653 a. Application of payment
1. 25c and above, legal tender b. Dation in Payment
up to P50 c. Payment by Cession
2. 10c and below, legal tender d. Tender of payment
up to P20 and
Consignation
Extraordinary inflation or deflation
 unusual or beyond the common a. Application of Payment
fluctuation in the value of  Designation of the debt to which
currency, which the parties could the payment must be applied
not have reasonably foreseen or when the debtor has several
which was manifestly beyond obligations of the same kind in
their contemplation at the time favor of the same creditor.
the obligation was established.  Requisites:
 Applies only to a. there must be only 1 debtor
contractual obligations & only 1 creditor;
 Requisites: b. there must be 2 or more
debts of the same kind;

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

c. all of the debts must be due;  Debtor abandons all of his


except: if there’s stipulation property for the benefit of his
to the contrary; or creditors in order that from the
application of payment is proceeds thereof, the latter may
made by the party for whose obtain payment of their credits.
benefit the term has been  Requisites:
constituted; and a. plurality of debts
d. amount paid by the debtor b. partial or relative insolvency
must not be sufficient to of the debtor
cover the total amount of all c. acceptance of the cession by
the debts. the
creditors
The right to
designate the debt to which the
payment shall be applied primarily
belongs to the debtor.
If the debtor does not
avail of such right and he accepts
from the creditor a
receipt in which the
application is made.

Legal Application of Payment


(ART1254)
1. If neither the debtor nor the
creditor makes any application of
payment, or if it cannot be
inferred from other
circumstances, the debt which is
most onerous to the debtor,
among those which are due, shall
be deemed to have been
satisfied.
2. If the debts due are of the same
nature and burden, payment
shall be applied to all of them
proportionately.

b. Dation in Payment (DACION EN


PAGO)
 Delivery and transmission of
ownership of a thing by the
debtor to the creditor as an
accepted equivalent of the
performance of the obligation.
 Requisites:
a. existence of a money
obligation
b. alienation to the creditor of
a property by the debtor
with the consent of the
former
c. satisfaction of the money
obligation of the debtor

c. Payment by Cession

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer
Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 101

MEMORY AID IN CIVIL LAW


DATION IN PAYMENT BY
PAYMENT CESSION

1. one creditor 1. plurality of


creditors

2. not necessarily 2. debtor must be


in state of financial partially or
difficulty relatively insolvent

3. thing delivered 3. universality of


is considered as property of debtor is
equivalent of what is ceded
performance

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

4. payment 4. merely releases  Effects of consignation:


extinguishes debtor for net 1. If the creditor accepts the thing
obligation to the proceeds of things or amount deposited without
extent of the value ceded or assigned,
unless there is
contesting the validity or
of the
contrary intention efficacy of the consignation, the
thing
delivered as agreed obligation is extinguished.
upon, proved or 2. If the creditor contests the
implied from the validity or efficacy of the
conduct of consignation or if the creditor is
the not interested or unknown or is
creditor absent, the result is a litigation.
If the debtor complied with all
d. Tender of Payment and the requisites, the obligation is
Consignation Tender of extinguished.
Payment
 Manifestation of he debtor to the Consignation shall
creditor of his decision to comply produce effects of payment only if there
immediately with his obligation. is a valid tender of payment.
 It is the preparatory act and
extrajudicial in character. 1. creditor is absent or unknown, or
does not appear at the place of
Consignation payment
 Deposit of the object of the 2. creditor incapacitated to receive
obligation in a competent court in payment at the time it is due
accordance with the rules prescribed 3. when two or more persons claim the
by law, after the tender of payment right to collect
has been refused or because of
4. when the title of the obligation has
circumstances which render direct
been lost
payment to the creditor impossible
5. when without just cause creditor
or inadvisable.
refuses to give a receipt
 It is the principal act and judicial in
character.
NOTES:
 Special Requisites:  It is the consignation which
a. The debt sought to be paid must constitutes a form of payment and
be due; must follow, supplement or complete
b. There must be a valid and the tender of payment in order to
unconditional tender of payment discharge the obligation.  A valid
or any of the causes stated by tender of payment has the effect of
law for effective consignation exempting the debtor from payment
without previous tender of of interest and/or damages.
payment exists;
c. The consignation of the thing due  If tender is made by means of a
must first be announced to the check, such tender is valid because it
persons interested in the is an exercise of a right. Article 1249
fulfillment of the obligation; is not applicable.
d. Consignation shall be made by
depositing the things due at the LOSS OF THE THING DUE
disposal of judicial authority; and In Determinate Obligations to Give
e. The consignation having been
made, the interested parties Obligation is
shall also be notified thereof. extinguished.

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


CMaricel
IVIL LAW COMMITTEE
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 103

MEMORY AID IN CIVIL LAW

 Requisites: obligor may also be released


1. The thing which is lost is therefrom, in whole or in part.
determinate;  Requisites:
2. The thing is lost without the fault 1. The event or change
of the debtor; and in circumstances could
3. The thing is lost before the not have been foreseen at the
debtor has incurred in delay. time of the execution of the
contract;
2. It makes the performance of the
1. when by law, obligor is liable contract extremely difficult but
even for fortuitous event; not impossible;
2. when by stipulation, obligor is 3. The event must not be due to the
liable even for fortuitous event; act of any of the parties; and
4. The contract is for a future
3. when the nature of the
prestation.
obligation requires the
assumption of risk;
4. when the loss of the thing is due Principle of Subjective Impossibility
partly to the fault of the debtor;  When there is no physical or legal
5. when the loss of the thing occurs loss but the thing object of the
after the debtor incurred in obligation belongs to another, the
delay; performance by the debtor of the
obligation undoubtedly becomes
6. when the debtor promised to
impossible. Failure of performance is
deliver the same thing to two or
imputable to the debtor. Thus, the
more persons who do not have
debtor must indemnify the creditor
the same interest; and
for the damages suffered by the
7. when the debt of a certain and latter. (Tolentino, Volume IV, p.
determinate thing proceeds from 336)
a criminal offense
Effect of Loss on Reciprocal Obligations
In Generic Obligations to Give  First view (Tolentino, Volume IV, pp.
337-338) – If an obligation is extinguished
Obligation is not by the loss of the thing or impossibility of
extinguished because the genus of a thing performance through fortuitous events,
cannot perish. the counter-prestation is also
In case of extinguished. The debtor is released from
generic obligations whose object is a liability but he cannot demand the
particular class or group with prestation which has been stipulated for
specific or determinate qualities his benefit. He who gives nothing has no
(Limited Generic reason to demand anything.
Obligations)
 Second View (JBL Reyes) – The loss or
In Obligations to Do impossibility of performance must be
due to the fault of the debtor. In this
Obligation is extinguished when case, the injured party may ask for
prestation becomes legally or physically rescission under Article 1191 plus
impossible. damages. If the loss or impossibility
was due to a fortuitous event, the
Effect of Relative Impossibility or other party is still obliged to give the
Doctrine of Unforeseen Events (ART prestation due to the other.
1267)
 When the service has become CONDONATION OR REMISSION OF THE
difficult as to be manifestly beyond DEBT
the contemplation of the parties, the

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

 An act of pure liberality by virtue of d. both debts must be liquidated &


which the obligee, without receiving demandable;
any price or equivalent, renounces e. there must be no retention or
the enforcement of the obligation, as controversy commenced by 3rd
a result of which it is extinguished in persons over either of the debts
its entirety or in that part or aspect & communicated in due time to
of the same to which the remission the debtor; and
refers. f. compensation must not be
 It is the gratuitous abandonment by prohibited by law.
the creditor of his right. 
Requisites: Compensation Confusion
a. It must be gratuitous 1. two persons 1. one person
b. It must be accepted by the who are mutual where qualities of
debtor debtors and debtor and creditor
c. The obligation must creditors of each are merged
be demandable other
2. there must be 2. only one
NOTE: Express condonation or at least two obligation
remission must comply with the obligations
formalities of donation.
Compensation Payment
CONFUSION OR MERGER OF RIGHTS 1. The requisites prescribe by law for
 Merger of the characters of the compensation are different from those
creditor and the debtor in one and prescribed by law for payment.
the same person by virtue of which 2. Takes effect by 2. Takes effect by
the obligation is extinguished. operation of law act of the parties
 Requisites: 3. Capacity to 3. Capacity to give
a. that the characters of creditor & give and to and to acquire is
debtor must be in the same acquire is not essential
person; necessary
b. that it must take place in the 4. As a rule, it is 4. As a rule,
person of either the principal partial complete and
creditor or the principal debtor; indivisible
and
c. it must be complete & definite
Compensation Counterclaim
COMPENSATION
 Extinguishment in the concurrent 1. Requires 2 1. Not necessary
amount of the obligation of those debts must consist
persons who are reciprocally debtors in money or if
and creditors of each other. fungibles, same
kind and quality
 Requisites:
a. there must be 2 parties, who, in
their own right, are principal 2. Both debts 2. Does not require
creditors & principal debtors of must be that debts be
liquidated liquidated
each other (except in case of
guarantor, Article 1280);
b. both debts must consist in 3. Need not be 3. Must be pleaded
money, or if the things due are pleaded to be effectual
fungibles, they must be of the
same kind & quality;
c. both debts must be due; Kinds of Compensation

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


CMaricel
IVIL LAW COMMITTEE
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 105

MEMORY AID IN CIVIL LAW

1. Legal – takes effect by operation a. a previous valid obligation;


of law b. agreement of the parties to the
2. Voluntary – agreed upon by the new obligation;
parties c. extinguishment of the old
3. Judicial – takes effect by judicial obligation; and
decree d. validity of the new obligation.
4. Facultative – when it can be
claimed by one of the parties Kinds:
who, however, has the right to 1. As to its essence
object to it a. Objective/Real - refers to the
change either in the cause,
Debts not subject to Compensation: object or principal conditions of
1. debts arising from contracts of the obligations
deposit b. Subjective/Personal - refers to
2. debts arising from contracts of the substitution of the person of
commodatum the debtor or to the subrogation
3. claims for support due by of a 3rd person in the rights of
gratuitous title the creditor
4. obligations arising from criminal c. Mixed
offenses 2. As to its form/constitution
5. certain obligations in favor of a. Express - when it is declared in
government unequivocal terms that the old
NOTE: Taxes are not subject to set-off or obligation is extinguished by a
legal compensation because the new one w/c substitutes the
government & taxpayers are not mutually same.
creditors & debtors of each other b. Implied - when the old & new
(Francia vs. IAC, 162 SCRA 753). obligation are incompatible w/
each other on every point.
Facultative Compensation
 This is compensation which can be Test of Incompatibility
set up only at the option of a  Whether or not the old and new
creditor, when legal compensation obligations can stand together, each
cannot take place because of want of having its own independent
some legal requisites for the benefit existence. If they can stand together,
of the creditor. The latter can there is no incompatibility;
renounce his right to oppose the consequently, there is no novation. If
compensation and he himself can set they cannot stand together, there is
it up. It differs from conventional incompatibility; consequently, there
compensation because it is unilateral is novation.
while the latter depends upon the
agreement of both parties. Forms of Substitution of Debtors:
(Tolentino, Volume IV, p. 367) 1. Expromision - effected with the
consent of the creditor at the
NOVATION instance of the new debtor even
 Substitution or change of an without the consent or even against
obligation by another, resulting in its the will of the old debtor.
extinguishment or modification, Requisites:
either by changing its object or a. Initiative for substitution must
principal conditions, or by emanate from the new debtor
substituting another in place of the b. Consent of the creditor to the
debtor, or by subrogating a third substitution
person in the rights of the creditor. 2. Delegacion - effected with the
 Requisites: consent of the creditor at the

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

instance of the old debtor, with the


concurrence of the new debtor.  Kinds of Subrogation
Requisites: 1. Conventional – takes place by
a. Initiative for substitution must agreement of the parties; this kind of
emanate from the old debtor subrogation requires the intervention
b. Consent of the new debtor and consent of 3 persons: the original
c. Acceptance by the creditor creditor, the new creditor and the
debtor.
Effect of insolvency of new debtor 2. Legal – takes place without
1. Expromision – the new debtor’s agreement but by operation of law
insolvency or nonfulfillment of the because of certain acts (Article
obligation shall not revive the 1302).
original debtor’s liability to the
creditor whether the substitution is Legal subrogation
effected with or without the cannot be presumed.
knowledge or against the will of the
original debtor. 1. Creditor pays another creditor who is
2. Delegacion – the creditor can sue the preferred, without debtor’s
old debtor only when the knowledge;
insolvency was prior to the
2. A third person not interested in the
delegation and publicly known or
obligation pays with the express or
when the old debtor knew of such
tacit approval of the debtor; or
insolvency at the time he delegated
the obligation. 3. Even without debtor’s knowledge, a
person interested in the fulfillment
NOTE: A change in the incidental of the obligation pays without
elements of, or an addition of such prejudice to the effects of confusion
elements to an obligation, unless as to the latter’s share.
otherwise expressed by the parties, will
not result in its extinguishment. II. CONTRACTS

CONVENTIONAL ASSIGNMENT OF CONTRACT


SUBROGATION RIGHTS  A contract is a meeting of minds
between two persons whereby one
1. governed by Arts. 1. governed by Arts. binds himself, with respect to the
1300 to 1304 1624 to 1627 other, to give something or to render
some service (Article 1305).
2. debtor’s consent 2. debtor’s consent
is required is not required  Elements
1. Essential – those without which there
3. extinguishes 3. transmission of can be no contract. a. Consent
the obligation and right of the creditor b. Object or Subject Matter
gives rise to a new to third person c. Cause or Consideration
one without modifying 2. Natural – those derived from the
or extinguishing the nature of the contract and ordinarily
obligation accompany the same.
3. Accidental – those which exist only
4. defects and 4. defects and vices when the parties expressly provide
vices in the old in the old obligation for them for the purpose of limiting
obligation are cured are not cured or modifying the normal effects of
5. takes effect 5. as far as the the contract.
upon moment of debtor is concerned,
novation or takes effect upon Nominate contracts
subrogation notification

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


CMaricel
IVIL LAW COMMITTEE
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 107

MEMORY AID IN CIVIL LAW

 Those which have their own the obligor


distinctive individuality and are before its
regulated by special provisions of revocation;
law. d. the favorable stipulation
Innominate contracts should not be
 Those which lack individuality and conditioned or
are not regulated by special compensated by any kind
provisions of law. of obligation whatever;
 Regulated by the stipulations of the and
parties, by the general provisions of e. neither of the
the Civil Code on obligations and contracting parties bears
contracts, by rule governing the most the legal representative
analogous nominate contracts and by or authorization of the
the customs of the place. third person.
 Kinds:
a. Do ut des - I give that you give Test of Beneficial Stipulation – the
b. Do ut facias - I give that you do fairest test to determine whether the
c. Facio ut des - I do that you give interest of a 3rd person in a contract is a
d. Facio ut facias - I do that you do stipulation pour atrui or merely an
NOTE: According to some incidental interest is to rely upon the
authorities. do ut des in no longer an intention of the parties as disclosed by
innominate contract. It has already their contract. Determine whether the
been given a name of its own, i.e. contracting parties desired to tender him
barter or exchange (Article 1638). such an interest (Uy Tam vs. Leonard, 30
Phil. 471).
Characteristics of Contracts: (ROMA)
1. Relativity (ART 1311)
2. When a third person induces a
2. Obligatory Force and Consensuality
party to violate contract
(ART 1315)
(ART1314)
3. Mutuality (ART 1308)
 Requisites:
4. Autonomy (ART 1306)
a. Existence of a valid contract;
Relativity
b. knowledge of contract by
Contracts take effect third person; and
only between parties, their assigns and c. interference by third person
heirs. without legal justification or
excuse.
1. Stipulation pour atrui - 3. Third persons who come into
stipulation in favor of a third possession of the object of the
person. contract creating real rights
 Requisites: 4. Contracts entered into in fraud
a. the stipulation must be a of creditors
part, not the whole of
the contract; Mutuality
b. the contracting parties  The contract must bind both parties;
must have clearly and its validity or compliance must not
deliberately conferred a be left to the will of one of them.
favor upon a third (ART 1308)
person, not a mere  The contract cannot have any
incidental benefit or stipulation authorizing one of the
interest; contracting parties (a) to determine
c. the third person must whether or not the contract shall be
have communicated his valid, or (b) to determine whether or
acceptance to not the contract shall be fulfilled.

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

Autonomy
 The parties are free to stipulate
anything they deem convenient
provided that they are not contrary
to law, morals, good customs, public
order and public policy. (ART 1306)

Consensuality
 Contracts are perfected by mere
consent and from that moment, the
parties are bound not only to the
fulfillment of what has been
expressly stipulated but also to all
consequences which, according to
their nature may be in keeping with
good faith, usage and law.

CONSENT
 Manifested by the concurrence of the
offer and acceptance upon the thing
and the cause which are to
constitute the contract.
 Requisites:
a. Legal capacity of the contracting
parties
b. Manifestation of the conformity
of the contracting parties
c. The parties’ conformity to the
object, cause, the terms and
conditions of the contract must
be intelligent, spontaneous and
free from all vices of consent
d. The said conformity must be real
and not simulated or fictitious

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 109

MEMORY AID IN CIVIL LAW

Offer element (i.e., donation of real


 A proposal made by one party to property).
another to enter into a contract.  An offer made inter praesentes must
 It must be certain or definite, be accepted IMMEDIATELY. If the
complete and intentional. parties intended that there should be
an express acceptance, the contract
NOTE: Offer/proposal may be withdrawn will be perfected only upon
so long as the offeror has no knowledge knowledge by the offeror of the
of acceptance by offeree. express acceptance by the offeree of
Acceptance the offer. An acceptance which is
 Manifestation by the offeree of his not made in the manner prescribed
assent to the terms of the offer. by the offeror is NOT EFFECTIVE BUT
 It must me absolute. A COUNTER-OFFER which the offeror
 A qualified acceptance constitutes may accept or reject. (Malbarosa vs.
counter-offer. CA, et al., G.R. # 125761, April 30,
2003)
NOTE: Acceptance may be revoked  Contracts under the Civil Code
before it comes to the knowledge of the generally adhere to the Cognition
offeror. Theory (contract is perfected from
the moment the acceptance comes
Amplified Acceptance to the knowledge of the offeror),
 Under certain circumstances, a mere while transactions under the Code of
amplification on the offer must be Commerce use the Manifestation
understood as an acceptance of the Theory (it is perfected from the
original offer, plus a new offer which moment the acceptance is declared
is contained in the amplification. or made).
(Tolentino, Volume IV, p. 452)
Rule on Complex offers PERSONS INCAPACITATED
1. Offers are interrelated – contract is TO GIVE CONSENT:
perfected if all the offers are 1. Minors EXCEPTIONS:
accepted. • Contracts where the minor is
2. Offers are not interrelated – single estopped to raise minority as a
acceptance of each offer results in a defense through his own
perfected contract unless the offeror misrepresentation
has made it clear that one is • Contracts for necessaries
dependent upon the other and • Contracts by guardians or legal
acceptance of both is necessary. representatives
• Voluntary fulfillment of a natural
NOTES: obligation provided that the
 Consensual contracts are perfected minor is between 18-21 years of
from the moment there is a age
manifestation of concurrence • Contracts of life, health or
between the offer and the accident insurance taken on the
acceptance regarding the object and life of the minor
the cause. 2. Insane or demented persons, unless
 Real contracts like deposit, pledge the contract was entered into during
and commodatum requires delivery a lucid interval
of object for perfection. 3. Deaf-mutes who do not know how to
 Solemn contracts are those which read and write
requires compliance with certain
formalities prescribed by law, such Effect of Misrepresentation of Age by
prescribed form being an essential the Minor

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

 Misrepresentation by minors with into it against his wishes and desires or


regard to their age when entering even against his better judgment.
into a contract shall bind them in the Contracts are also valid even though
sense that they are estopped they are entered into by one of the
subsequently from impugning the parties without hope of advantage or
validity of the contract on the ground profit. (Martinez vs. Hongkong and
of minority. It is necessary that the Shanghai Bank, 15 Phil. 252)
misrepresentation must be active Simulation of Contracts
(e.g. when minors specifically stated 1. Absolute – when the contracting
in a contract that they were of age), parties do not intend to be bound by
not merely constructive. the contract at all. Thus, an
absolutely simulated contract is
VICES OF CONSENT (VIMFU) VOID.
1. Violence - when in order to wrest 2. Relative – when the contracting
consent, serious or irresistible force parties conceal their true
is employed. agreement. A relatively simulate
2. Intimidation - when 1 of the contract binds the parties to their
contracting parties is compelled by a real agreement, when it does not
reasonable & well-grounded fear of prejudice a 3rd person and is not
an imminent & grave evil upon his intended for any purpose contrary to
person or property, or upon the law, morals, good customs, public
person or property of his spouse, order or public policy.
descendants or ascendants, to give
his consent. OBJECT
3. Mistake - should refer to the  The thing, right or service which is
substance of the thing which is the the subject matter of the obligation
object of the contract, or to those arising from the contract.
conditions which have principally  Requisites:
moved one or both parties to enter a. It must be w/in the commerce of
into the contact.  Must be mistake man
of fact and not of law, except under b. It must be licit or not contrary
Article 1334. law, morals, good customs,
 Requisites under Article 1334: public order or public policy
a. Mistake must be with respect c. It must be possible
to the legal effect of an d. It must be determinate as to its
agreement kind
b. Mistake must be mutual
c. Real purpose of the parties Things which Cannot be the Object of
must have been frustrated. Contract
4. Fraud - when, through insidious 1. Things which are outside the
words or machinations of 1 of the commerce of men
contracting parties, the other is 2. Intransmissible rights
induced to enter into a contract 3. Future inheritance, except in
which, without them, he would not cases expressly authorized by law
have agreed to. 4. Services which are contrary to
5. Undue influence - when a person law, morals, good customs,
takes improper advantage of his public order or public policy
power over the will of another, 5. Impossible things or services
depriving the latter of a reasonable 6. Objects which are not possible of
freedom of choice. determination as to their kind

Reluctant Consent  A contract is valid CAUSE


even though one of the parties entered

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 111

MEMORY AID IN CIVIL LAW

 The immediate, direct and most FORM OF CONTRACTS


proximate reason which explains and Contracts shall be
justifies the creation of obligation. obligatory, in whatever form they may
 Requisites have been entered into, provided all the
a. Cause should be in existence at essential requisites for their validity are
the time of the celebration of present.
the contract
b. Cause should be licit or lawful 1. When the law requires that a
c. Cause should be true contract be in some form in order
that it may be valid
 Rules:
1. In onerous contracts, the cause is
understood to be, for each
contracting party, the prestation of
promise of a thing or service by the
other.
2. In remuneratory contracts, the
2. When the law requires that a
service or benefit w/c is
contract be in some form in order
remunerated.
that it may be enforceable
3. In contracts of pure beneficence,
the mere liberality of the donor or
benefactor. NOTES:
4. In accessory contracts (mortgage or
pledge), the cause is identical with  Parties may compel each other to
the cause of the principal contract, comply with the form required once the
that is, the loan from which it contract has been perfected. (Article
derives its life and existence. 1357)  Contracts under Art 1358 which
are required to be in some specific form
is only for the convenience of parties and
CAUSE EFFECT
does not affect its validity and
the contract confers
enforceability as between them.
1. Absence of cause no right and produces
no legal effect
RA 8792 (E- COMMERCE ACT) provides
does not render the
that the formal requirements to make
2. Failure of cause contract void
contracts effective as against third
the contract is null persons and to establish the existence of
3. Illegality of cause and void a contract are deemed complied with
the contract is void, provided that the electronic document is
4. Falsity of cause unless the parties unaltered and can be authenticated as to
show that there is be usable for future reference.
another cause which
is true and lawful
REFORMATION OF INSTRUMENTS 
does not invalidate
Requisites:
5. Lesion the contract, unless
(a) there is fraud, a. meeting of the minds to the
mistake or undue contract
influence; or (b) when b. true intention is not expressed in
the parties intended a the instrument by reason of
donation or some mistake, accident, relative
other
contract simulation, fraud, or inequitable
conduct
c. clear and convincing proof of
mistake, accident, relative
simulation, fraud, or inequitable
conduct

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

prejudice may be rescinded in cases


Instances when there can be no established by law.
reformation:
1. Simple unconditional donations What contracts are rescissible
inter vivos; 1. those entered into by guardians
2. Wills; where the ward suffers lesion of
3. When the agreement is void; more than ¼ of the value of the
things which are objects thereof;
When one of the parties has brought an 2. those agreed upon in representation
action to enforce the instrument, no of absentees, if the latter suffer
subsequent reformation can be asked.
COMPARATIVE TABLE OF DEFECTIVE CONTRACTS

VOID VOIDABLE RESCISSIBLE UNENFORCEABLE

1. Defect is caused Defect is caused by vice Defect is caused by Defect is caused by


by lack of essential of consent injury/ damage either lack of form,
elements or illegality to one of the parties of authority, or capacity
to a 3rd person of both parties not
cured by prescription

2. Do not, as a Valid and enforceable Valid and enforceable Cannot be enforced


general rule produce until they are annulled until they are rescinded by a proper action in
any legal effect by a competent court by a competent court court

3. Action for the Action for annulment or Action for rescission may Corresponding action
declaration or nullity defense of annulability prescribe for recovery, if there
or inexistence or may prescribe was total or partial
defense of nullity or performance of the
inexistence does not unenforceable
prescribe contract under No. 1
or 3 of Article 1403
may prescribe

4. Not cured by Cured by prescription Cured by prescription Not cured by


prescription prescription

5. Cannot be ratified Can be ratified Need not be ratified Can be ratified

6. Assailed not only Assailed only by a Assailed not only by a Assailed only by a
by a contracting contracting party contracting party but contracting party
party but even by a even by a third person
third person whose who is prejudiced or
interest is directly damaged by the
contract
affected

7. Assailed directly or Assailed directly or Assailed directly only Assailed directly or


collaterally collaterally collaterally

lesion by more than ¼ of the value of


RESCISSIBLE CONTRACTS the things which are subject thereof;
 Contracts validly agreed upon but, by 3. those undertaken in fraud of
reason of lesion or economic creditors when the latter cannot in

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 113

MEMORY AID IN CIVIL LAW

any manner claim what are due 7. Failure of the vendee to take
them; exclusive possession of all the
property
4. those which refer to things under
litigation if they have been entered
into by the defendant without the Rescission in Rescission Proper
knowledge and approval of the Article 1191 in Article 1381
litigants and the court; 1. It is a principal 1. It is a subsidiary
5. all other contracts especially action retaliatory in remedy.
declared by law to be subject to character.
rescission; and 2. The only ground is 2. There are 5
6. payments made in a state of non-performance of grounds to rescind.
insolvency on account of obligations one’s obligation/s or Non-performance by
not yet enforceable what is incumbent the other party is not
upon him. important.
 Requisites: 3. It applies only to 3. It applies to both
a. the contract must be rescissible reciprocal obligation unilateral and
reciprocal
b. the party asking for rescission
obligations.
must have no other legal means
4. Only a party to the 4. Even a 3rd person
c. to obtain reparation for the
contract may demand who is prejudiced by
damages suffered by him the contract may
fulfillment or seek
d. the person demanding rescission the rescission of the demand the
must be able to return whatever contract. rescission of the
he may be obliged to restore if contract.
rescission is granted 5. Court may fix a 5. Court cannot grant
e. the things w/c are the object of period or grant extension of time for
extension of time for fulfillment of the
the contract must not have
the fulfillment of the obligation.
passed legally to the possession
of a 3rd person acting in good obligation.
faith 6. Its purpose is to 6. Its purpose is to
f. the action for rescission must be cancel the contract. seek reparation for
brought w/in the prescriptive the damage or injury
caused, thus allowing
period of 4 years
partial rescission of
the contract.

BADGES OF FRAUD:
VOIDABLE CONTRACTS
1. Consideration of the conveyance
 Those in which all of the essential
is inadequate or fictitious;
elements for validity are present,
2. Transfer was made by a debtor
although the element of consent is
after a suit has been begun and
vitiated either by lack of capacity of
while it is pending against him;
one of the contracting parties or by
3. Sale upon credit by an insolvent
VIMFU.
debtor;
4. Evidence of indebtedness or What contracts are voidable
complete insolvency
1. Those where one of the parties is
5. Transfer of all his property by a
incapable of giving consent to a
debtor when he is financially
contract
embarrassed or insolvent;
2. Those where the consent is vitiated
6. Transfer made between father &
by mistake, violence, intimidation,
son, where there is present any
of the above circumstances undue influence or fraud

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

Causes of extinction of action to annul: 1. those entered into in the name of


1. PRESCRIPTION another by one without or acting in
 the action must be commenced within excess of authority;
4 years from: 2. those where both parties are
a. the time the incapacity ends; incapable of giving consent; and
b. the time the violence, 3. those which do not comply with the
intimidation or undue Statute of Frauds
influence ends; or
c. the time the mistake or fraud Agreements within the scope of the
is discovered. Statute of Frauds (EXCLUSIVE LIST):
NOTE: Discovery of fraud must be 1. Agreements not to be performed
reckoned to have taken place from within one year from the making
the time the document was thereof;
registered in the office of the 2. Special promise to answer for the
register of deeds. Registration debt, default or miscarriage of
constitutes constructive notice to the another;
whole world. (Carantes vs. CA, NOTE: This does not refer to the original
76 SCRA 514) or independent promise of the debtor
to his own creditor. It refers rather
2. RATIFICATION  to a collateral promise.
Requisites: 3. Agreement in consideration of
a. there must be knowledge of marriage other than a mutual
the reason which renders promise to marry;
the contract voidable 4. Agreement for the sale of goods, etc.
b. such reason must have at a price not less than P500.00;
ceased and 5. Contracts of lease for a period longer
than one year;
c. the injured party must have
6. Agreements for the sale of real
executed an act
property or interest therein; and
which expressly
7. Representation as to the credit of a
or impliedly conveys
third person.
an intention to
waive his right
NOTES:
3. By loss of the thing which
is the object of the
contract through fraud or
 The contracts/agreements under the
Statute of Frauds require that the
fault of the person who is
same be evidenced by some note,
entitled to annul the
memorandum or writing, subscribed
contract.
by the party charged or by his agent,
otherwise, the said contracts shall be
NOTE: If the object is lost through
fortuitous event, the contract can still unenforceable.  The statute of frauds
be annulled, but the person obliged to applies only to executory contracts, not
return the same can be held liable only to those that are partially or completely
for the value of the thing at the time of fulfilled.
the loss, but without interest thereon.
Ratification of contracts in violation of
UNENFORCEABLE CONTRACTS the Statute of Frauds
 Those which cannot be enforced by 1. Failure to object to the presentation
proper action in court unless they are of oral evidence to prove such
ratified contracts
2. Acceptance of benefits under these
What contracts are unenforceable contracts

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 115

MEMORY AID IN CIVIL LAW

VOID CONTRACTS accomplished, or before any


 Those where all of the requisites of a damage has been caused to a 3rd
contract are present but the cause, person.
object or purpose is contrary to law, 3. Payment of money or delivery of
morals, good customs, public order property made by an
or public policy, or contract itself is incapacitated person
prohibited or declared void by law. 4. Agreement or contract which is
not illegal per se & the
What contracts are void prohibition is designed for the
1. Those whose cause, object or protection of the plaintiff
purpose is contrary to law, morals 5. Payment of any amount in excess
good customs, public order or public of the maximum price of any
policy; article or commodity fixed by
law or regulation by competent
2. Those whose object is outside the
authority.
commerce of men;
6. Contract whereby a laborer
3. Those which contemplate an
undertakes to work longer than
impossible service;
the maximum # of hours fixed by
4. Those where the intention of the
law.
parties relative to the principal
7. Contract whereby a laborer
object of the contract cannot be
accepts a wage lower than the
ascertained; and
minimum wage fixed by law.
5. Those expressly prohibited or 8. One who lost in gambling
declared void by law. because of fraudulent schemes
practiced on him is allowed to
INEXISTENT CONTRACTS recover his losses [(Art. 315, 3
 Those where one or some or all of the (b), RPC] even if gambling is a
requisites essential for the validity of prohibited one.
a contract are absolutely lacking.
Rules when only one of the parties is at
What contracts are inexistent fault:
1. Those which are 1. Executed Contracts:
absolutely simulated or a. Guilty party is barred from
fictitious; and recovering what he has given to
2. Those whose cause or object did not the other party is barred from
exist at the time of the transaction. recovering what he has given to
the other party by reason of the
NOTE: The principle of In Pari Delicto is contract.
applicable only to void contracts and not b. Innocent party may demand for
as to inexistent contracts. the return for the return of what
Principle of In Pari Delicto he has given.
RAL RULE: When the defect of a 2. Executory Contracts - Neither of the
void contract consists in the illegality of contracting parties can demand for
the cause or object of the contract and the fulfillment of any obligation
both of the parties are at fault or in pari from the contract nor may be
delicto, the law refuses them every compelled to comply with such
remedy and leaves them where they are. obligation

1. Payment of usurious interest NATURAL OBLIGATIONS


2. Payment of money or delivery of  They are real obligations to which
property for an illegal purpose, the law denies an action, but which
where the party who paid or the debtor may perform voluntarily.
delivered repudiates the contract  It is patrimonial, and presupposes a
before the purpose has been prestation.

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
86 2005 CENTRALIZED BAR OPERATIONS

 The binding tie of these obligations is 7. Payment of legacy after will have
in the conscience of man, for under been declared void.
the law, they do not have the
necessary efficacy to give rise to an ESTOPPEL
action.  A condition or state by virtue of
which an admission or representation
Examples of natural is rendered conclusive upon the
obligations enumerated under the Civil person making it and cannot be
Code: denied or disproved as against the
1. Performance after the civil obligation person relying thereon.
has prescribed;  Kinds:
2. Reimbursement of a third person for 1. Estoppel in Pais (by conduct)
a debt that has prescribed; a. Estoppel by silence
3. Restitution by minor after annulment b. Estoppel by
of contract; acceptance of
4. Delivery by minor of money or benefits
fungible thing in fulfillment of 2. Technical Estoppel
obligation; a. Estoppel by deed
5. Performance after action to enforce b. Estoppel by record
civil obligation has failed; c. Estoppel by judgment
6. Payment by heir of debt exceeding d. Estoppel by laches
value of property inherited; and

LACHES or “STALE DEMANDS” LACHES PRESCRIPTION


 Failure or neglect, for
an unreasonable and unexplained 1. concerned with 1. concerned with
length of time, to do that which, by effect of delay fact of delay
exercising due diligence, could or should
have been done earlier; it is negligence or 2. question of 2. question or
omission to assert a right within inequity of matter of time
reasonable time, warranting a permitting the claim
presumption that the party entitled to to be enforced
assert it either has abandoned it or
declined to assert it.
3. not statutory 3. statutory

 Elements:
4. applies in equity 4. applies at law
a. Conduct on part
of the
defendant, or of one under 5. not based on a 5. based on a fixed
fixed time time
whom he claims, giving rise
to
the situation of which complaint

is made and for which the complaint


seeks a remedy
b. Delay in asserting
the complainant’s
rights, the
complainant having
knowledge or notice, of the
defendant’s conduct and
having been
afforded the opportunity to

2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS


Maricel Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads), Jennifer Ang(VC-
Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres (VC-Logistics). Jonathan
Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald Padilla (Civil Law), Charmaine Torres (Taxation Law),
Mark David Martinez (Criminal Law), Garny Luisa Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal
Ethics)
San Beda College of Law 117

MEMORY AID IN CIVIL LAW

institute a suit
c. Lack of knowledge or notice
on the part of the defendant
that the complainant would
assert the right on which he
bases his suit
d. Injury to the defendant in
the event relief is accorded
tot the complainant, or the
suit in not
held to be barred

CIVIL LAW COMMITTEE


CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
 SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)

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