Obligations

By : HONEYLORE A. GOMBA
LAW ON OBLIGATIONS

GENERAL PROVISIONS

NATURE AND EFFECT OF

OBLIGATIONS

DIFFERENT KINDS OF
OBLIGATIONS

EXTINGUISHMENT OF
General Provisions

Article 1156. An obligation is a juridical necessity to

give, to do or not to do.

Article 1157. Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
Elements of an obligation

The elements of an obligation:

1) The vinculum juris or juridical tie;

2) The object; and

3) The subject-persons. (The Wellex Group, Inc. v. U-Land Airlines, Co.,

Ltd., G.R. No. 167519, 14 January 2015, Per Leonen, J.)

DEBTOR – passive subject

CREDITOR – active subject

Law are rules of conduct
, just obligatory , laid
down by legitimate
powers for common
observance and benefit .
Article 1158. Obligations derived from law are not presumed. Only those
expressly determined in this Code or in special laws are demandable, and
shall be regulated by the precepts of the law which establishes them; and as
to what has not been foreseen, by the provisions of this Book.

>When obligations are not expressly provided bylaw, they cannot be

presumed to exist – thus makingthe not demandable nor enforceable.When
the act itself is the source of the obligation and not the law.

>The law merely acknowledges the existence of an obligation generated by

an act;It constitutes a contract, quasi-contract, delict or quasi-
delict;Its only purpose is to regulate the obligation which did not
arise from the law.
NATURE AND EFFECT OF OBLIGATIONS

ARTICLE 1163.“Every person obliged to give something

is also obliged to take care of it with the proper diligence
of a good father of a family, unless the law or the
stipulation of the parties requires another standard of
care.
1.M-ORAL
2.E-XEMPLARY
3.N-OMINAL
4.T-EMPERATE
5.A-CTUAL
6.L-IQUIDATING
GROUNDS FOR LIABILITY TO PAY DAMAGES :

1. FRAUD ( DOLO )
( CAUSAL FRAUD , INCIDENTAL FRAUD )

2. NEGLIGENCE ( CULPA )

3. DELAY ( MORA )

4. CONTRAVENTION OF TENOR
ARTICLE 1164.“The creditor has a right to the fruits of the thing from
the time the obligation to deliver it arises. However, he shall
acquire no real right over it until the same has been delivered to
him .

FRUITS –

NATURAL FRUITS

INDUSTRIAL FRUITS

CIVIL FRUITS
ARTICLE 1165.“When what is to be delivered is a determinate thing, the
creditor, in addition to the right granted him by Article 1170, may compel the
debtor to make the delivery. If the thing is indeterminate or generic, he may
ask that the obligation be complied with at the expense of the debtor. If the
obligor delays, or has promised to deliver the same thing to two or more
persons who do not have the same interest, he shall beresponsible for fortuitous
event until he has effected the delivery.
OBLIGATIONS TO GIVE A DETERMINATE THING : ( REAL OBLIGATION
SPECIFIC OBLIGATION )

1. To take care of the thing ( Diligence of a good father of a family )

2. To deliver the thing
3. To deliver the fruits

> natural , industrial or civil fruits

4.To deliver the ( accession and accessories ) even if not mentioned

 Accession – everything produced by a thing or is attached to the
soil
 ( alluvium )

 Accessories – ( ACCESSORY FOLLOWS THE PRINCIPAL )

 REMEDIES OF THE
CREDITOR

1. If debtor fails to deliver determinate thing 1.compel delivery

2. to demand
damages
2. If debtor fails to perform to deliver a generic 1.ask that the obligation be complied with at the expense of the
thing debtor
2.to demand damages
3. If debtor fails to perform obligation to do

in contravention of the 1. have it executed at the expense of

tenor debtor
2.to demand for damages

1.have it undone at the expense of

if poorly done debtor
2.to demand for damages
4. If debtor performs what has been forbidden 1.have it undone at the expense of the
him debtor
2.demand for damages
KINDS OF OBLIGATIONS :

1. PURE AND CONDITIONAL

2. WITH A PERIOD

3. ALTERNATIVE and FACULTATIVE

4. JOINT AND SOLIDARY

5. DIVISIBLE AND INDIVISIBLE

6. WITH A PENAL CLAUSE

CONDITIONS : ( future + uncertain event )

1. Suspensive ,Resolutory

2. Potestative , Casual , Mixed

Potestative ( debtor ) if suspensive ( condition ) ,void obligation not

demandable
Potestative ( debtor ) if resolutory ( condition ) valid obligation ,
demandable
Potestative ( creditor ) suspensive or resolutory , valid obligation ,
demandable

Casual ( upon chance or will of third person ) – obligation is valid

Mixed ( partly by chance , partly by will of one of the parties ) obligation is

valid

3. Possible and Impossible ( not to do an impossible thing is demandable at

once )
4. Positive and Negative
5. Divisible and Indivisible
JOINT AND SOLIDARY OBLIGATION ( OCCURRENCE OF TWO OR MORE
DEBTORS OR CREDITORS )

JOINT OBLIGATIONS

Each debtor is liable only to a proportionate part of the debt , and each
creditor is entitled only to a proportionate part of the credit .

EXAMPLE : A and B are indebted to X FOR PHP 10,000.

A owes X and Y 8,000

SOLIDARY OBLIGATIONS each debtor is liable for the whole obligation, and
each creditor is entitled to demand payment of the whole obligation
1. Passive solidarity = DEBTORS

A and B indebted to X for php 10,000.00 = x can demand payment

of 10k from either A or B.

2. Active Solidarity = CREDITORS

A owes X and Y , solidary creditors Php 8,000.00 = either x and y

may demand payment of 8k from A .

3. MIXED SOLIDARITY = creditors and debtors

A and B solidary debtors owes C and D solidary creditors the

amount of Php 20,000.00
Other terms for solidary obligation

1.Jointly and Severally

2. In Solidum
3. Mancomunada Solidaria
4. Juntos o separadamente
5. Individually and Collectively

Other terms for joint obligation

1. Proportionately
2. Pro rata
3. Mancomunada
4. Mancomunada Simple
EXTINGUISHMENT OF OBLIGATIONS :

1.PAYMENT OR PERFORMANCE
2.LOSS OF THE THING DUE
3.CONDONATION OR REMISSION OF
DEBT
4.CONFUSION OR MERGER
5.COMPENSATION
6.NOVATION
1. PAYMENT –

> KINDS ( NORMAL and ABNORMAL )

HOW MADE :

MONETARY – DELIVERY OF MONEY

TO GIVE – DELIVERY OF THE THING
TO DO – PERFORMANCE OF THE PERSONAL UNDERTAKING
NOT TO DO – IN NOT DOING THE ACT

TO WHOM PAYMENT MUST BE MADE

2. The person whose favour the obligation has been constituted;
3. The creditor’s successor;
4. 3. Any person authorized to receive it.
ART. 1249 The payment of debts in money shall
be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency
which is legal tender in the Philippines. The delivery
of promissory notes payable to order, or bills of
exchange or other mercantile documents shall
produce the effect of payment only when they have
been cashed, or when through the fault of the creditor
they have been impaired. In the meantime, the
action derived from the original obligation shall be
held in abeyance
LEGAL TENDER Any currency which
may be used for the payment of all
debts, whether public or private. Its
significance is manifested by the
fact that it is such which the debtor
may compel a creditor to accept in
payment of the deb
SPECIAL FORMS OF PAYMENT :

1.Dacion en Pago
2.Application of Payment
3.Cession
4.Consignation
2. LOSS OF THE THING DUE- ( DETERMINATE THING )

LOSS OF THE THING DUE The thing which constitutes the object of the obligation
1. Perishes;
2. Goes out of the commerce of man;
3. Disappears in such a way that its existence is unknown or it cannot be
recovered. It means impossibility of compliance with the obligation through
any cause (see Art. 1266). It extends to both obligations to give and obligations to
do.
3. CESSION OR ASSIGNMENT - A special form of payment whereby the
debtor abandons all of his property for the benefit of his creditors in
order that from the proceeds thereof the latter may obtain payment of their
credits.

NOTE : What is transferred in cession, unlike dacion en pago which

transfers ownership, is the management and/or administration of the property
in order to sell the thing of the debtor for the fulfillment of obligation.
ART. 1258 Consignation shall be made by depositing the things
due at the disposal of judicial authority, before whom the tender of
payment shall be proved, in a proper case, and the announcement of
the consignation in other cases. The consignation having been
made, the interested parties shall be notified thereo
TENDER OF PAYMENT It consists in the manifestation made by the debtor
to the creditor of his intention to comply immediately with his obligation.
Even if it is valid, it does not by itself produce legal payment,
unless it is completed by consignation. It is the act, on the part of
the part of the debtor, of offering to the creditor the thing or amount
due. It is an act preparatory to consignation, which is the principal,
and from which are derived the immediate consequences which the
debtor desires or seeks to obtain
CONDONATION It is an act of liberality by virtue of which
the obligee, without receiving any price or equivalent,
renounces the enforcement of the obligation, as a result
of which it is extinguished in its entirety or in that part or
aspect of the same to which the remission refers. It is the
gratuitous abandonment by the creditor of his right.

REQUISITES [GAD-PIC]

1. Must be gratuitous;
2. The obligor must accept the same;
3. Obligation must be due;
4. Parties must be capacitated;
5. Must not be inofficious;
6. If made expressly, it must comply with the forms of
donation.
4. CONFUSION It is the merger of the character of the creditor and debtor in
one and the same person by virtue of which the obligation is extinguished. It
is the meeting in one and the same person of the qualities of creditor and debtor
with respect to one and the same obligation.

REASON OR BASIS FOR CONFUSION Obligation is presumed extinguished for if

a debtor is his own creditor, enforcement of the obligation becomes absurd
since a person cannot claim payment from himself. Furthermore, the
purposes of the obligation are deemed realized.
5.COMPENSATION From the Latin word cum ponder, which means “to weigh
together.” It is a mode of extinguishing in their concurrent amount those
obligations of persons who in their own right are creditors and debtors of
each other. It is a figurative operation of weighing two obligations simultaneously in
order to extinguish them to the extent in which the amount of one is covered
by the amount of the other.

Illustration: A owes B the amount of P5M. B owes A the amount of P4M. Both debts
are due and payable today. Here the compensation takes place partially to the
concurrent amount of P4M. So, A shall be liable to B for only P1M. If the two debts
are of the same amount, there is total compensation (see Art. 1281
NOVATION The substitution or change of an obligation by
another, which extinguishes or modifies the first, either changing
its object or principal condition, or substituting another in place of
the debtor, or subrogating a third person in the right of the creditor.
The total or partial extinction of an obligation through the creation of
a new one which substitutes it.

TWO-FOLD PURPOSE 1. Extinguishment of the old obligation; 2.

Giving birth to a new obligation to take the place of the old.

REQUISITES [PAVE - C]
1. Previous valid obligation;
2. Agreement of the parties to a new obligation, intent to novate or
animus novandi;
3. Validity of the new obligation;
4. Extinguishment of the old obligation;
5. Capacity of the contracting parties to the new contract
SUBROGATION It is the substitution of one person in the place of another with
reference to a lawful claim or right, so that he who is substituted succeeds to the
right of the other in relation to a debt or claim, including its remedies and
securities. It places the party subrogated in the shoes of the creditor, and he
may use all means which the creditor could employ to force payment.

KINDS OF SUBROGATION

1. Conventional or Voluntary – when it takes place by express agreement of

the original parties and the third person (see Art. 1301);

2. Legal – when it takes place without agreement but by operation of law (see
Art. 1302)