OBLIGATIONS - sense of gratitude

Chapter 1 Negotiorum Gestio - voluntary management of abandoned property

Art. 1156 – Art. 1162 - officious manager has right to
I. OBLIGATIONS (CO, NO) reimbursement
1) Kinds of Obligation d) Delict/crime (Art. 1161)- criminal liability (vs. people of the Philippines)
a) Civil (1156-1304)- a JURIDICAL NECESSITY TO GIVE, TO DO or NOT TO – source of civil liability
DO - imprisonment
- creditor has right of action to enforce performance - civil liabilities: (R, R, I)
- creditor has right to file a case in court/to sue  Restitution - return the
b) Natural (1423-1430)- no right of action/file a case in court thing
- voluntary fulfillment/performance  Reparation - pay the value
 benefited person has right of retention what has of the thing
been paid or delivered  Indemnification - pay damages
- NOT based on POSITIVE LAW e) Quasi-delict (Art. 1162) - cause damage without intention
- based on EQUITY & NATURAL LAW - without contract
2) 4 Elements of Obligation (AS, PS, P, JT) - damage done not intentional but due to NEGLIGENCE
- active subject - creditor/obligee - pay damages
- passive subject - debtor/obligor - ex: CULPA AQUILIANA
- prestation - the conduct to be observed in the performance of the Obligation is from the Latin word obligatio, which means tying or binding. Example, is a
obligation contract of marriage, the spouses are bound by their contract and in the Philippines,
 to give - real (thing) there is no divorce yet. The symbolic binding in marriage is the cord that is placed during
 to do - Personal(ac - positive the ceremony.
 not to do - t or - negative By juridical necessity, the party who has the right to enforce the obligation can go to
- juridical tie/vinculum jurisservice)
- reason why obligation exists court in order either to enforce specific performance (if the obligation is specific) or
3) Sources of Obligation (L, C, QC, D, QD) Art. 1157 damages in the form of money if the obligation is generic or and obligation to do or not
a) Law (Art. 1158) - cannot be presumed, always w/basis to do.
- non-performance or erroneous/wrong performance of
an obligation prescribed by law (taxes, licenses) An obligation is a juridical necessity to :
b) Contract (Art. 1159)- with meeting of the minds GIVE - a real obligation
- have the force of law b/w contracting parties TO DO - a positive personal obligation
- should be complied w/ in good faith NOT TO DO - a negative personal obligation
c) Quasi-contract - no pre-existing contract (SI, NG) ‌Examples of obligation to give are :
(Art. 1160) - he who is benefited by the act of another MUST PAY ‌1. To give a cellphone
to prevent unjust enrichment 2. To give the amount of 500 pesos
Solutio indebeti - return what is not due to you 3. To give a book
So, in an obligation to give, a THING must be given (di pwede ug to GIVE LOVE) kay dili Active subject - landlord/landlady
na thing. Passive subject - boarder
‌Examples of obligation to do are : Object - Money
‌1. To repair the cellphone. Juridical or legal tie - contract ( bisag way gipirmahan, naa nay contract)
2. To build a house. 3. The obligation not to smoke in public places :
3. To sing a song. Active subject - government
So, in an obligation to do, an act should be done (de pwede to TO HEAL A BROKEN Passive subjects - all people
HEART kay it could not be done physically. Prestation - not to smoke in public places
Examples of obligation not to do are: Juridical or legal tie - Law ( naay balaod nga dili mag smoke sa public places)
‌1. No smoking It is important that all of the requisites must be present in order that their is an
2. No entry. obligation.
3. No littering (taka takag labay ug basura)
‌So, in an obligation not to do, an act should not be done, opposite sa obligation to do. Sources of obligations (the juridical or legal tie or vinculum juris):
1. Law - the specific provision of law must be pointed out in order that the obligation
‌Note: There is no obligation not to give coz it is already included in obligation not to do.
can be demanded. We should obey the law, otherwise, we can be held liable, DURA
LEX, SED LEX ( the law maybe hard or harsh, but is the law, ex. ECQ). There are
Elements of an obligation :
1. Active Subject - the creditor or obligee (sajop ag handouts) or the person who can obligations that are imposed by law, like payment of taxes.
2. Contract - a meeting of minds (kasabutan) between two persons, which have the
demand for the fulfillment of the obligation or the person who has the right ( maoy
maningil) effect of law between the parties. Since you were a child, you have been entering
contracts, considering that as a general rule, contracts can be entered into orally.
‌2. Passive subject - the debtor or obligor or the person upon whom the obligation can
be demanded, the one who has the liability (maoy utangan ug sa binisaya pa) ex. buy school supplies, pay the fare of bus, tricycle, buy junk food (undangi na, saging
ug camote kauna). So if there is a contract, there is an obligation.
‌3. Object or prestation - the THING to be delivered in an obligation to give or the ACT
to be done in an obligation to do and the ACT NOT TO BE DONE in an obligation not to 3. Quasi-Contracts (like contracts) - unlike contracts, there is no meeting of minds in
Quasi-Contract, ( sa binisaya pa, murag naay contract, pero wa diay), however, in order
do.
‌4. Juridical or legal tie or vinculum juris - the reason that binds the parties to the to prevent unjust enrichment the party is allowed to recover his lost.
Two kinds of quasi-contract :
obligation. To determine the juridical tie, we will refer to the Sources of Obligation
later. a. Solution indebiti - undue payment (sa binisaya pa, nakadawat kag kwarta or
butang nga di angay madawat nimu). ex. excess change given by bus conductor (sobra
‌
Examples of the elements of obligation : ag sukli), you are liable to return the said excess change, pwede ka ikiha ana ug di minu
e uli.
1. The obligation of the student to pay the tuition fees.
Active subject - UB b. Netotiorum Gestio - unauthorized management (hilabtanon kintahay, hehe).
ex. your uncle did not pay the real property taxes for his land and you voluntarily pay
Passive subject - Student
Object - Money (bajad tuition baja) the same even if you are not authorized, you can demand for reimbursement.
4. Crimes or Delicts - crimes punishable by law carries with it two penalties/liabilites :
Juridical or legal tie - Contract ( pag enroll ninjo sa UB, ning sud na mog contract ana.
2. The obligation to pay the rental of the boarding house : a. criminal liability
 b. civil liability extra judicial (out of court)
Criminal liability is the imprisonment of the offender judicial (inside court)
Civil liability is the money that the offender will be ordered to pay the victim • After Delivery - Real - ownership
Memorize the civil liabilities in the handouts. ii. Generic or Indeterminate Thing
In order that a crime is considered to have been committed these should be present:  Many of the same kind
1. Intelligence - knows what is right or wrong  Belongs to a group or class
2. Freedom - no other person forced the offender to commit the crime  Cannot be lost
3. Intent - there must be the intention to commit the crime ex. mag shabu, mang  Rights of person who paid:
rape, mangawat • Ask another person to deliver at the expense of the debtor
So an insane person will not commit a crime. • File a case in court
5. Quasi-Delicts - like crimes considering that although there is Intelligence and the object is specific if it can be identified with particularity and there is no other object
Freedom, there is no intent to commit the crime. (WA TU-JOA). that can replace the same.
 ‌There is no intent but there is FAULT OR NEGLIGENCE (nag danghag)
ex. a yamaha motorcycle with plate no. 1025, the object is specific because there is no
 ‌The offender (ag nakasa) is liable for damages (money)
other motorcycle with plate no. 1025
‌
NOTE : WHEN WE WILL TALK ABOUT DAMAGES IN LAW 1, THAT MEANS TO PAY A SUM so if we will say, an iphone, a samsung galaxy tab, a black pilot .05 pen, etc., we are
OF MONEY referring to generic objects.

OBLIGATIONS how will we make the objects specific?

Chapter 2 the obligation should be to deliver the only iphone of Huan
Art. 1163 – Art. 1178 a samsung galaxy tab with serial no. 5894628635
1) Prestations (OBLIGATIONS) (TG, TD, NTD) the black pilot pen that chenee is using now
a) To Give (Real Obligation) (S,G)
so ug specific, usa ra jud, wa nay lain. That is why one of the duties of the debtor if the
i. Specific or Determinate Thing obligation is specific is to deliver the thing itself, dili pwede ug lain nga butang, whether
 only one inferior or superior, di jud pwede, it should be the thing itself considering that the thing
 ONLY SPECIFIC THING CAN BE LOST has been identified with particularlity.
 Creditor may compel debtor to deliver KASABOT?
 Debtor must take care of the thing before delivery. HOW? Now, why is it important that you should be able to identify the obligation whether it is
specific or generic? The main reason is the obligation of the debtor if the object is
• Stipulation
specific is different if it is generic.
• Law
• Deligence of a good father of the family
So if the obligation is an obligation to give, a thing must be given and that thing may
 Includes delivery of accessions & accessories unless stipulated either be specific or generic. If the thing is specific, then the thing itself should be
 Excludes fruits that arise before maturity
delivered. We will take up the duties of the debtor if the obligation is specific.
 Rights of person who paid: 1. Take care of the thing with the diligence of a good father of a family:
• Before Delivery - Personal - to demand delivery
 This diligence is also known as ordinary diligence, if the parties did not agree on If the obligation is generic and the generic thing is lost on the way for its
the degree of diligence required, then it would be ordinary diligence or the diligence of delivery, the obligation is not extinguish.
a good father of a family. What will a good father of a family do: example : naa moy utang sa injohang friend nga P500, while on your way to the
a. provide the basic needs of the family boarding house of your friend to pay your obligation bringing with you the P500, you
b. provide education were being held up by armed men and the P500 as well as your other stuff were taken.
c. protect the family Is your obligation to pay P500 extinguish by fortuitous event?
So, pending the delivery of the thing due, the debtor should take care of the thing, answer : no because P500 is generic, you can still look for another P500 pesos, daghan
otherwise, in case of lost or deterioration of thing, the debtor can be held liable for pang P500 makit an nimu.
damages (monetary) 3. Deliver the fruits of the thing
example: all of you are cats and you are named based on your given names. If In the law on obligations, there are three kinds of fruits :
there is an obligation to deliver a cat, the obligation is generic (bisan unsa nga cat e  Natural fruits - spontaneous product of the soil or the your and other products
deliver), but if there is an obligation to deliver a cat named Arlene Anne, then the of animals
obligation is specific. It should only be arlene anne which should be delivered on due  Industrial fruits - product of the soil due to the industries of man
date. So pending the arrival of the due date, the debtor should take care Arlene Anne  Civil fruits - result of a juridical relation (usually contracts)
(the cat) with the diligence of a good father of a family. Determine the kind of fruits of the following :
If the obligation is to deliver a cat (generic), it could not be determined which a. puppy - natural, young of animals
cat should be delivered, so the debtor can deliver any cat as long as it is neither of b. dividend income - civil fruit, result of a juridical relation
superior nor of inferior quality. So in the meantime, there is no cat to take care of. c. mango fruit in mango plantation - industrial, through the industries of man
d. mahogany three in an idle land - natural, spontaneous product of the soil, idle land
‌
e. eggs of a chicken - natural, other products of animals
The diligence required for obligations generally is ordinary diligence or care.
For the delivery of goods, it is extra-ordinary diligence Question : How to determine the ownership of the fruits?
For the delivery of persons, it is utmost diligence (the highest degree of care) Answer : Refer to the date of delivery of the principal thing due.
fruits before due date - debtor is owner
2. Deliver the thing itself fruits on due date and thereafter - creditor is the owner, however the creditor
Considering that the object has already been identified with particularity, then it will only have personal right (can go against the debtor only) before delivery and a real
should be the thing itself which should be delivered. right (can go against anybody) after delivery.
In our example, it should be Arlene Anne (AA na lang ha para mubo ra). Dili Example : Dean is obligation to deliver the specific cat AA to Huan on May 6,
pwede ug si ug si Jonie Ann ur si Cecille Joy e deliver. Si AA ra jud and no other. 2020. If AA delivered 2 kittens on the evening of May 5, 2020 and another 3 kittens on
If the obligation is generic, then bisan kinsa maoy pwede e deliver, basta neither the early dawn of May 6, 2020, who are the owners of the kittens?
of superior nor of inferior quality. Answer : For the kittens born on the evening of May 5, 2020, it is Dean, the
That is why in the rule on fortuitous event, if the specific thing is lost due to a debtor because the due date to deliver AA is on May 6, 2020, the kittens were born
fortuitous event, the obligation is extinguish, because the thing itself is already lost. The before the due date.
debtor is not obliged to deliver another thing because the obligation is to deliver the
thing itself.
 For the kittens born on the dawn of May 6, 2020, it is Huan (the creditory) who  Liquidating - agreed before hand by the parties in a contract. So sa liquidating
is the owner, because the 3 kittens (fruits) were born on the date that AA is to be damages, naay written contract, then the parties agreed that in case of non
delivered. performance on due date, the debtor shall be liable for additional liquidating
However, the right of Huan before AA and the 3 kittens are delivered is merely a damages.
personal right, meaning, huan can go against Dean only. So, if dean will delever AA and If the obligation is generic, the debtor is bound to deliver an object which is neither of
all of the kittens to Hubert on May 6, 2020, Huan cannot go against Hubert, his right of superior nor of inferior quality and answer for damages in case of breach.
action for damages is only against Dean (personal right) IF THE OBLIGATION IS GENERIC, the action for specific performance cannot be availed
By the time that AA and the 3 kittens will be delivered to Huan, the right of huan of coz' there will be an unending debate as to what specific object should be delivered,
will now become a real right. If Hubert will claim ownership over AA and the kittens GENERIC BAJA, that is why nga action for DAMAGES maoy e file, naa gihapoy liability.
which are already in the hands of Huan, the latter can go against Hubert. IF THE OBLIGATION IS SPECIFIC, the creditor can go to court a file an action for specific
4. Deliver accessions and accessories. performance considering that the object has already been identified with particularly
accessions - fruits of a thing or additions to or improvements upon a thing (nahibaw an na ug unsa jud nga butang ag due)
accessories - things joined to or included with the principal thing for the latter's use, or
completion. What is the remedy if the obligation is an obligation TO DO?
Example : If you will buy a cellphone, will you pay for the charger and headset? 1. Ask the debtor to perform the act.
Answer : No, because they are accessories, free na na, apil na e deliver. 2. If he refuses, he cannot be compelled (otherwise there will be involuntary servitude
If you will buy a motorcycle, apil na ag tools, key and other accessories, di na ka which is unconstitutional), but the act may be don by another person and the debtor
mo bayad ug dugang para ana. will be ordered to pay the person who performed the act. (Art 166)
If you purchased a parcel of land and after payment, the seller who is the
previous owner of land cut down the trees, because according to him, the object of your What is the remedy in obligations NOT TO DO and the obligor performed the act?
contract is only for the sale of the land. Is the seller correct? ‌ It shall be undone at his expense.
Answer : No, the trees are accessions of the land. Example : there is an obligation not to put a gate in the road right of way, but a
So, for accessions and accessories, you can demand for its delivery together with the neighbor violated the obligation by placing a gate in the road right of way. The remedy
principal thing. here would be first to ask the neighbor to destroy the gate, if he refuses, then other
5. Answer for damages in case of breach (or violation of the obligation) persons will be hired to destroy the gate and charge the expenses to the neighbor (it
Kinds of Damages (MENTAL): shall be undone at his expense Art. 1167)
 Moral - if there is physical and mental suffering (gilibak ka, pwede mo claim) Instances wherein the debtor can be held liable for damages (MENTAL) :
Exemplary - to set an example (maka ligis ug taw, pwede pabayaron ani to set 1. Default or Legal Delay
an example nga dapat mag amping) 2. Fraud or Dolo
 Nominal - to vindicate a right that has been violated (naay nang squat sa land 3. Negligence of Culpa
ninjo, pwede pa bayaron ani kay injong katungod gi tamakan) 4. Contravention of the Terms of the obligation
 Temperate - to be awarded if the actual damages cannot be ascertained ‌
 Actual - the actual loss (with receipts ug naa) like value sa cellphone nga 1. LEGAL DELAY OR DEFAULT
gikawat, value sa libro nga gi sunog, etc. Kinds of Delay :
1. Ordinary Delay - the debtor is not yet liable
2. Legal Delay or Default - the debtor is now liable even if the thing due is lost due to a  When the law provides - example, payment of taxes, automatic default as
fortuitous event. provided for by law if not paid on due date.
How will place the debtor in default?  When time is of the essence - time is the controlling motive in entering into
Ans.: A demand should be made, whether judicially (court action) or extra judicially (oral the obligation.
or written demand) example : mag party ag summer class sa law 1 kay naay nag birthday (wa pay ECQ OR
RULE : NO DEMAND : NO DEFAULT GCQ) and nag order of food sa Chao King nga ipa deliver sa D-103 at 6 pm on May 7,
What is the importance of placing the debtor in DEFAULT? 2020. Ning abot na lag 11 pm, way delivery. In this case, automatic nga default na kay
1. In order that he will be liable for damages. needed ag food at 6pm on May 7, 2020.
2. In order that he will be liable even if the thing due is lost due to a fortuitous event. ‌other examples - wedding dress nga dili ma deliver on the date of wedding, automatic
Example : Dean is obligated to deliver AA to Huan on May 6, 2020. Until today, default na
Dean has not yet delivered AA to Huan. - video coverage para kasal, wa mo tungha ag videographer, automatic
1. Can Dean be held liable for damages? default.
Answer : No, because Dean is not yet in default of legal delay, no demand has been  When demand would be useless.
made by Huan yet. Dean is still in ordinary delay, hence he cannot be held liable for Toa na ni Hubert si AA, didto ge deliver hi Dean. Maka deliver pa ba si Dean ni Huan?
damages. Dili na, so bisan pag mo demand si Huan, useless ra gihapon, automatic default na.
2. If AA was lost due to fortuitous event this morning, is Dean liable?  Performance of one party in a reciprocal obligation.
Ans.: No, because Dean is not yet in Default and the general rule is that : loss of a You purchased an iphone for 10 K, the iphone was already delivered to you, but you
specific thing due to a fortuitous event, extinguishes the obligation. have not yet paid the same. You are automatically in default here, demand is no longer
3. If Huan made a demand for Dean to deliver this morning, but Dean, still did not necessary.
deliver AA, then beginning the time that the demand was made, Dean is already in ‌Reciprocal obligation - both parties are liable.
Default, hence, he can now be held liable for damages. 2. FRAUD or DOLO - intentional evasion of the normal fulfillment of the obligation
4. If after Huan made a demand to Dean, AA was stolen, is the obligation of Dean (TINUJUAN JUD)
extinguish by fortuitous event? Kinds of Fraud :
Ans.: No, because even if the specific thing is lost due to a fortuitous event, the a.Causal Fraud or dolo causante - fraud was committed at the time the
obligation is not extinguish if the debtor is already in default. agreement was entered into. Consent here is vitiated considering that it was
given because of the fraud or misrepresentation of the other party. Ug ning
What are the kinds of default? tug-an pa daan sa tinuod, di unto mo sud sa obligation ag pikas party.
1. Mora solvendi - debtor fails to deliver even if demand has been made Ex. an offer was made for the delivery of 5 brand new iphone 10, however, in reality the
2. Mora accipiendi - creditor refuses to accept the specific thing delivered (gusto ug mas debtor do not have any brand new iphones. On due date, 5 refurbished iphone 10 were
nice) delivered. The remedy of the creditor here is to file for annulment of the obligation or
3. Compensatio Morae - debtor and creditor both did not perform the obligation contract because of fraud.
Rule: NO DEMAND : NO DEFAULT b. Incidental Fraud of dolo incidente - fraud was committed in the
EXCEPTIONS: performance of the obligation. This is the fraud that the debtor can be held
 When the obligation provides - pwede sa written agreement nga mag sabot liable for damages.
daan nga automatic default ug di mo perform on due date.
S‌ ame example above, but the seller in truth has brand new iphone 10,m however, on war, Typhoon, volcanic eruption, etc.
due date, the seller/debtor delivered 4 brand new iphone 10 and 1 refurbished. The ‌
fraud here is in the performance of the obligation, hence the debtor/seller can be held What might happen if there is a fortuitous event?
liable for damages. Ans. : The thing due may be lost because of the fortuitous event.

3. NEGLIGENCE or CULPA - (ka danghag) RULE IN CASE THERE IS A FORTUITOUS EVENT :

Kinds of negligence : “LOSS OF A SPECIFIC THING DUE TO A FORTUITOUS EVENT, EXTINGUISHES THE
 Contractual negligence or Culpa Contractual - there is pre-existing OBLIGATION"
contractual relation between the parties. So the rule will only apply if the obligation is specific and the lost occurred without fault
Example : Bus na disgrasya, mga pasahero maka demand ug damages based on culpa on the part of the debtor.
contractual kay wa sila mo abot sa place of destination safelyl
Gapada ag ginikanan ug bugas ug buwad gikag ubay. Pag claim sa studyante sa EXCEPTIONS:
bus driver and conductor, gi ingnan sijang nawa. Liable sila due to contractual 1. When the debtor is guilty of DEFAULT, FRAUD, NEGLIGENCE or CONTRAVENTION OF
negligence. How about if the bus driver and helper will claim that the rice and dried THE TERMS OF THE OBLIGATION
fish were stolen, hence, the same were lost due to a fortuitous event, is their obligation 2. IF THE LAW PROVIDES
extinguish? 3. When the debtor promise to deliver the same thing to two or more persons who do
Ans. : No, because their obligation requires the assumption of risk (exception to not have the same interest.
the rule on fortuitous event. 4. When the obligation requires the assumption of risk (bus driver and helper)
 Criminal Negligence or Culpa Criminal - the negligent act resulted in a 5. When declared by stipulation (apil na sa kasabutan nila nga liable lang gihapon bisag
criminal offense. mawa ag butang due to a fortuitous event)
If the passengers above suffered injuries, they can file damages based on culpa criminal. 6. When the obligation is generic - GENUS NUNQUAM PERIT (generic object does not
Ex. : A person hit by a vehicle suffered injuries can claim damages based on culpa perish) - di mahurot ag generic object.
criminal.
 Civil negligence or culpa aquillana - this is QUASI-DELICT or TORTS, which in Kinds of presumption:
itself is a source of an obligation. 1. Conclusive - final na jud na, di na ka pwede mo question pa ana. Like the
So a person who is walking in the road is hit by a vehicle can claim damages based on presumption that all of us knows the CURFEW during ECQ and GCQ, conclusive na, ug
culpa quillana and culpa criminal if he suffered injuries, but he cannot claim damages mo violate ka, liable ka.
based on culpa contractual because there is no pre-existing contractual relation 2. Disputable or rebuttable - evidence may be presented to dispute or question the
between the parties. oblgation.
ex. payment of loan with interest - the payment received should be applied to
FORTUITOUS EVENT - any event which cannot be foreseen of if it can be foreseen, it the interest due before the principal loan, otherwise, presumed nga na bayaran na ag
cannot be avoided. It may be acts of man or acts of God. interest. The presumption however is disputable, pwede pag mo present ug proof nga
Events which cannot be foreseen : in truth, na bayaran na jud ag interest.
Robbery, theft, swindling, Earthquake, Tornado, Lightning, Flash Flood, etc. ex. you acquired a motorcycle payable on installment basis - you did not pay
Events which can be foreseen but cannot be avoided : the installment due for March and April, pagka May, ning bayad kag for 1 month, the
payment should be applied for the month of March, otherwise ug sa month of May e Ans. If the obligation is subject to a condition, it is not yet sure whether the
apply, the presumption is na bayaran na ag March ug April condition will happen or not, WA PAY SIGURO mahitabo ba, furture and uncertain baja.
Mao nang a condition is subject to a further and uncertain event. Event nga wa pa
Kinds of obligations : mahitabo, unja wa pa juy siguro mahitabo ba.
1. Pure - is not subject to a condition or period, hence demandable at once. ‌ Whereas if the obligation is subject to a period. Future but certain event,
ex. I obligate myself to give P100 to you. (This is pure because there is no condition meaning that although wa pa mo abot, siguro jud nga mo abot, mao nang we use the
and there is no period). word, ARRIVAL.
2. Conditional - Subject to a future and uncertain event. The following obligations are pure (no condition, no period):
Kinds of condition: 1. payable today
 Suspensive condition - the happening of the condition will give rise to the 2. payable at once
effectivity and demandability of the obligation. 3. payable upon demand
ex. I will give you P500 by the time that you will become a CPA. (This is conditional 4. I obligate myself to give you P 100. (no condition, no period, ma demand dretso)
because the obligation is subject to a future and uncertain event.) Examples of Conditional obligations : future and uncertain
 Resolutory - the happening of the condition will put an end to the obligation 1. payable upon passing the CPA
which is already in existence. 2 payable upon graduating in college
ex. Your seaman brother obligated himself to give you the amount of P3,000 per month 3. payable by the time that Arlene Anne will reach 30 years old (Wa pay siguro kaabot
until you will graduate in college. ( In this obligation, your brother is immediately liable ba sijag 30)
to give to you the amount of P3,000, but he will stop giving P 3,000 by the time that you Examples of obligations with a period: future but certain
will graduate in college. 1. Payable upon the death of GMA
3. With a Period - subject to a future but certain event. 2. Payable upon the lifting of GCQ (ma lift ra man jud na, wa pa lang hibaw-e when)
Kinds of Period : 3. Payable by the time that mayon volcano will erupt
 Ex Die (suspensive period ) - the arrival of the period will give rise to the 4. Payable on December 25, 2020
DEMANDABILITY of the obligation which is already in existence. SO, sa pure, wa nay hasol, demand na dretso
ex. You will be given a brand new iphone on December 25, 2020. ( There is already an sa condition, wa pay siguro mahitabo ba
existing obligation, however, its demandability is suspended until the arrival of sa period, sure jud mahitabo, bisag wa hibaw-e anus-a, pero mahitabo jud
December 25, 2020)
 In Diem (resolutory period ) - the arrival of the period of which will put an Three obligations that can be demanded at once:
end to an existing obligaiton 1. Pure
ex. You will be given the amount of P3, 000 per month until March 2023. (The 2. Subject to a resolutory condition
obligation is demandable at once but will surely end on March 2023) 3. Subject to a resolutory period
NOTE: in an obligation with a condition whether suspensive or resolutory, we use the
word HAPPENING, whereas if the obligation is subject to a period, we use the word Kinds of conditions as to cause or origin
ARRIVAL. Why? 1. Potestative obligation - happening depends upon one party
Depends on the debtor - the obligation is null and void
 ex. I will give you P500 if i feel like it (way claru jud, ug ganahan ra ag debtor payable if you will be able to jump from the 3rd floor of diamond building to the
mohatag sija, so this obligation is not demandable, it is not valid) ground without any injury.
Depends on the creditor - valid What if nahimo jud na nimu? Rule : dili lang gihapon liable ag debtor kay wa may
ex. I will give you P500 by the time that you will become a CPA. (ag obligation in the first place, null and void baja. pero ug negative lagi, valid and
creditor/studyante maningkamot ma CPA, para ma liable ag debtor) demandable at once
‌ 2. Legally impossible - the condition is contrary to
SO, if the obligation depends upon the sole will of the debtor the obligation is a. Law - ex. payable if you will kill Juan Ponce Enrile
potestative, but is null and void. payable if you will be able to rob a bank
if the obligation depends upon the sole will of the creditor, it is still potestative and payable if you will deliver shabu
perfectly valid payable if you will celebrate your fiesta with many visitors during this GCQ
2. Casual - depends upon chance or upon the will of a third person. What if nahimo ag condition? - Not liable gihapon, the condition is null and void.
ex. I will give you 1% of the winnings if i will win in the lotto games. (the obligation basta null and void gani, wa jud na jamo, bisag unsaon pa.
is valid, it depends upon chance) b. Morals - ex. payable if you will render sexual favors
I will give you P 500 by the time that Pretty Edulan will become a lawyer. ( the payable if you will live as a concubine (baje)/paramour (laki)
obligation is valid, it depends upon the will of a third person So, a prostitute cannot demand payment after performing the act. unsay buhaton
So ag answer sa quiz, pareha nga casual. sa prostitute? Pay now, service later (ug masakpan, both the prostitute and the other
3. Mixed, depends partly upon chance and partly upon the will of a third person. party shall be prosecuted)
I will give you a new car by the time that Gloria Araneta will marry. (ajaw banha c. Good Customs - supak sa atong maajo nga custombre
hap) - The obligation is valid, it depends partly upon chance and upon the will of a third ex. payable if you will spit at your grand mother
person. payable if you will not talk with your parents
Ug buhaton jud na sa debtor, dili liable ag creditor.
Impossible Conditions: d. Public Order - makasamok sa atong maajong pamujo
Rule: if subject to a positive impossible condition - null and void. ex. payable if you will see to it that no vehicle can pass in front of the UB main gate
ex. I will give you P500 if you will be able to fly on your own self. (how about ug for 30 minutes. Ug nahimu nimu na, di gihapon liable ag debtor.
makalupad jud ka? full moon ra ba ron? - still null and void, there is no obligation at all) e. Public Policy - Vote buying is contrary to law and contrary to public policy
If subject to a negative impossible condition - valid
ex. I will give you P500 if you cannot fly on your own - obligation is valid and is Rules in case of loss, deterioration or improvement of the thing pending the
considered a pure obligation which can be demanded at once. ( sure man jud pud nga happening of the suspensive condition or arrival of the suspensive period:
di ka maka lupad sa imuha rang kaugalingon) 1. Lost without debtor's fault (refers to specific things only) - obligation is extinguish.
‌ The rule on fortuitous event will apply. (Extinguish gani, mawa na ag obligation)
Kinds of impossible conditions: 2. Lost due to debtor's fault - debtor liable for damages, even if the thing was lost due
1. Physically impossible - in the nature of things di jud pwede. to a fortuitous event. basta gani due to debtor's fault, liable jud na, ajaw nag tagda
ex. payable if you can carry a 10 wheeler truck nang fortuitous event.
payable if you will be able to swim underwater on your own from Tagb to Cebu
Kinds of Loss :
 a) Physical - thing perishes, like the houses that were swept away during typhoon      In Mutuum - the thing that  is due is not the thing itself, but a thing which is of the
yolanda, nangawa jud ag mga houses. same kind and quality. This is still a unilateral obligation, ag nang huwam ray naay
b) Legal loss - legal sa una, karon dili na. liability.
ex. Before the ECQ, there was an obligation to accept tourists in the hotel.      ex.  you will borrow P 500.  You have the obligation to pay P500 but it is not the same
During ECQ, dili na pwede, the object of the obligation is legally loss. P500 bill that you borrowed, different nag serial number.
c) Civil loss - nahagbong imung earings while nag whale watching sa Lila. Kahibaw 2. Bilateral - both parties have an oblgation
ka asa dapita pero di na nimu makit-an     a. Reciprocal - simultaneous performance of the obligation.
3. Thing deteriorates without debtor's fault - impairment shall be borne by the creditor.         ex.  contract of sale or mopalit kag red horse - buyer will pay and seller will give the
ex. Your brother obligated himself to give to you his motorcycle by the time that you ice cold red horse, ahem.
will graduate in college. Unja 10 years ka nag skwela before naka graduate. Na maot na     b. Non - reciprocal - not simultaneous performance of the obligation.
jud ag motor due to wear and tear and without fault of your brother. so Ikaw nga         Namaylo ug money imung friend nimu unja nang huwam kag book sa imung friend.
creditor maoy mo shoulder sa deterioration. Although kamong duha naay obligation, pero lain lain ag injong obligation .  
4. the thing deteriorates through debtor's fault
Two remedies ( Pili ra kag usa ani) : Rule : If one party cannot perform in a reciprocal obligation, the other party cannot be
a. Fulfillment with damages - ipadajon gihapon and additionally pabayaron ug kwarta compelled to perform. 
as damages How about if both parties committed a breach in a reciprocal obligation.  (Naka violate
b. Rescission with damages - e cancel ag obligation then pabayaron ug damages silang duha) :
5. The thing is improved by nature or time - creditor is the owner of improvement    The liability of the first infractor shall be equitably reduced or tempered.  If wa
ex. You will be given a specific parcel of land by the time you will graduate in college. mahibaw-e kinsay ning violate ug una, extinguish ag obligation, each party will bear his
Ug daghan ng mga hardwood nanubo sa land, you will be the owner of the trees also. own damages.
Your ownership of the land and the trees will retroact as of the date of the obligation.
(ikaw tag ija sa land ug improvements beginning the time the obligation was entered Obligations with a Period 
into, not during the time that the condition happened) There should be a day certain - a day which will necessarily arrive, even though it may
6. Improved at the expense of the debtor - pwede ra mogamit ag debtor until such time not be known when.  Pareha anang death of a person, mo abot jud na, mao nga period
nga mo abot na ag time of delivery, mao nay gitawag of usufruct. na sija.  
In a contract of usufruct a person is allowed to use and enjoy the property (and its
income) belonging to another subject to the condition that he will return the same on Computation of Period:
the agreed time. Year - 12 calendar months
Month - 30 days unless the name of the month is specifically stated
Kinds of obligations according to the person obliged: Day - 24 hours Night - sunset to sunrise
1. Unilateral - only one party is liable How to Count the Period :  EXCLUDE THE FIRST DAY, INCLUDE THE LAST DAY
    ex. the obligation to return a borrowed book. ( Ag borrower ray naay obligation). This EX. Ten days from May 8, 2020. so way labot sa ihap ag May 8, mag start na ka sa
contract is a contract of commodatum.  Ug unsay gihuwaman, mao jud gihapong May 9, so ag tenth day is May 18, 2020. apil ug ihap ag last day which is May 18.
butanga e uli.
For whose benefit is the period?
Ans.  For both the debtor and the creditor.  The debtor cannot be compelled to make Inig action ug sibat sa debot, paninglon na dretso, di na mag huwat sa period kay kinsa
payment before the arrival of the period, neither can the creditor be allowed to demand pa may paninglan ug wa na ag debtor.
payment before the arrival of the period.  Except if the period is for the benefit of one
person only, like in a contract of commodatum. Kinds of obligation according to object :
1. Simple - only one prestation and only one is due
How about if the period is not clear?  ex. delivery of a specific iphone
2. Compound - two or more prestations
Ans.  The parties can go to court under Art, 1197, for the court to fix the proper period.
a. Conjuctive or conjoint - several prestations and all are due.
Once the court have fixed the period, it can no longer be changed by the parties. ex. Chenee is obligated to deliver to Anie Rose a specific iphone AND a paricular
Ex. The debtor binds himself to pay by the time that he has money.  This obligation is galaxy tab AND a specific laptop. ( kinahanglan, tanan e deliver on due date, ug naay di
with a period under Art. 1180. ma deliver, liable si Chenee for damages).
       Murag subject sa condition ni nga obligation kay ug maka kwarta na ag debtor, anha b.. Distributive - one or more but not all of the prestations are due.
na sija bajad, but Art. 1180 is clear nga the obligation is one with a period. 1. Alternative - several prestations but the performance of one is sufficent.
ex. Chenee is obligated to deliver to Anie Rose a specific iphone OR a paricular
galaxy tab OR a specific laptop. - In this oblgation Chenee is obligated to deliver, any one
Unja anus-a man ag period ani?  Anus-a man maka afford ag debtor?
of the agreed objects and as a rule, Chenee (the debtor has the right of choice).
Ans. The creditor will go to court and have the court fix the period.
2. Facultative obligation - only one object is due, but the debtor may give
RULE : THE PERIOD SHOULD BE RESPECTED.  THE DEBTOR CANNOT BE HELD LIABLE another as a substitute. This is always a simple obligation, however, the debtor,
BEFORE THE ARRIVAL OF THE PERIOD, EXCEPT (Art. 1198) : Chenee may deliver another as a substitute.
1. Na insolvent ag debtor after the obligation has been entered into.  Di na maghuwat ex. Chenee is obligated to deliver to Anie Rose a specific iphone or as a
ag creditor ug due date, otherwise, wa nay mahabilin nga properties sa debtor. substitute, she may deliver a particular galaxy tab.
The right to make the substitution always belongs to the DEBTOR, it cannot be
2. The debtor did not deliver the promised security or guarantee.  
delegated to the creditor.
Ex.  The debtor borrowed money payable on June 30, 2020 and he promised to deliver RULES IN AN ALTERNATIVE OBLIGATION (the right of choice belongs to the debtor):
his iphone as collateral.  If the debtor did not deliver his iphone, the creditor can Ex. Chenee is obligated to deliver to Anie Rose (AR) a specific iphone OR a paricular
immediately demand for the payment of the obligation without waiting for June 30, galaxy tab OR a specific laptop.
2020.
3. The securities of guaranties were impaired or loss even by fortuitous event. 1. The general rule is that the right of choice belongs to the Debtor (Chenee in our
example).
Ex. The collateral is the motorcycle, however, they agreed that the debtor is still allowed
The alternative obligation will ultimately become a simple obligation by the time that
to use the motorcycle, unja, nabangga ag debtor, naguba ag motor, so the creditor can
the choice is made and communicated to the Creditor. So if Chenee will inform AR that
immediately demand payment of the obligaiton. she will deliver the specific iphone, then the obligation will now become a simple
4. The debtor violates any undertaking. obligation, that is the delivery of the specific iphone. (Forget the galaxy tab and laptop)
Ex.  The debtor agreed that the creditor is allowed to use a portion of his land as right of On due date, Chenee may deliver any of the above things to AR if no choice was
way to the creditor.  Ug koralon gani sa debtor ag land nga di na maka agi ag creditor, communicated to AR and that is sufficient to extinguish the obligation.
pwede paninglon dretso sa creditor ag obligation without waiting for the period.
2. All objects were lost due to a fortuitous event - obligation is extinguish (all are
specific objects) in accordance with the rule on fortuitous event.
5. When the debtor attempts to absond (MO SIBAT)
 Ex. The specific iphone and the particular galaxy tab were lost due to a fortuitous
3. Only one object is practicable - the obligation automatically becomes a simple a event and only the specific laptop remains. - the obligation here becomes a simple
obligation, that is the delivery of the remaining object. obligation, that is the delivery of the specific laptop.
ex. The specific iphone was lost due to a fortuitous event and the particular galaxy tab
was intentionally destroyed by Chenee. The remaining object is the specific laptop. So If the specific iphone was lost due to a fortuitous event , the particular galaxy tab
the obligation is to deliver the laptop (a simple obligation). was intentionally destroyed by Chenee and what remains is the specific laptop. - The
obligation is not automatically become a simple obligation considering that the right of
4. All objects were intentionally destroyed by the debtor - the debtor is liable for choice belongs to AR. - AR will have the right to choose whether he will demand for
damages. the delivery of the specific laptop (the remaining object) or for the value of the
Ex. All objects were intentionally destroyed by Chenee (gisapot kay wa jud maka particular galaxy tab which was intentionally destroyed by Chenee. ( Si Chenee mag
uyab), then Chenee shall be liable for damages. boot, pero way labot ag nawa due to a fortuitous event).
How will you determine the damages payable by Chenee?
Ans. It will be the value of the last thing that was lost due to the fault of Chenee. 3. All objects were intentionally destroyed by the debtor (the right of choice belongs to
AR) - the debtor is liable for damages.
Ex. Chenee is obligated to deliver to Anie Rose (AR) a specific iphone OR a paricular Ex. All objects were intentionally destroyed by Chenee (gisapot kay wa jud maka
galaxy tab OR a specific laptop on May 11, 2020. On May 8, the specific iphone was uyab), then Chenee shall be liable for damages.
thrown to the swimming pool by Chenee and on May 9, the particular galaxy tab was How will you determine the damages payable by Chenee?
smashed with a hammer by Chenee (sadista), and on May 10, the specific laptop was Ans. It will be the value of ANY OF THE THINGS that were lost due to the fault of
burned by Chenee. What will be the liability of Chenee? Chenee.
Ans. The value of the specific laptop, the last thing that was lost due to the fault of ‌
Chenee. (peace chen) Ex. Chenee is obligated to deliver to Anie Rose (AR) a specific iphone OR a paricular
galaxy tab OR a specific laptop on May 11, 2020. On May 8, the specific iphone was
RULES IN AN ALTERNATIVE OBLIGATION IF THE RIGHT OF CHOICE BELONGS TO THE thrown to the swimming pool by Chenee and on May 9, the particular galaxy tab was
CREDITOR : smashed with a hammer by Chenee (sadista), and on May 10, the specific laptop was
burned by Chenee. What will be the liability of Chenee?
When will the right of choice belong to the creditor?
Ans. If it is EXPRESSLY GRANTED to the creditor. Art. 1200 Ans. It depends upon AR. It will be the value of any of the objects that were lost due
to the fault of Chenee. It is AR who was the right of choice, so sija maoy mag boot.
Ex. Chenee is obligated to deliver to Anie Rose (AR) a specific iphone OR a paricular
galaxy tab OR a specific laptop and the right of choice belongs to AR. - In this NOTE : IF ALL OBJECTS WERE LOST DUE TO THE FAULT OF THE DEBTOR :
obligation, it will now be AR who will inform Chenee the object that is to be delivered
in order that the obligation will become a simple obligation. ( Na bali). DEBTOR HAS THE RIGHT OF CHOICE - liable for the value of the last object lost

1. If all objects were lost due to fortuitous event (right of choice belongs to AR). - CREDITOR HAS THE RIGHT OF CHOICE - The creditor have the right to choose the value
obligation is extinguish. of any of the things that were lost due to the fault of the debtor (pwede ug value sa
specific iphone pilion, the first object the was intentionally destroyed)
2. If only one object is practicable (right of choice belongs to AR) - the obligation will
not automatically become a simple obligation. Kinds of obligations according to the number of parties :

1. Individual obligation - one debtor or one creditor

 ex. Huan is obligation to deliver a specific car to Dean on May 12, 2020. (usa ra ka Ans. P600. As joint creditors, each of them are only entitled to her share ( P1,200/2).
debtor, usa ra pud ka creditor) Reynard on the other hand can demand reimbursement from Angelica and Cecille Joy
for their share of P 200 each ( P,200 / 3 ). Ma. Sheryl may collect her share from
2. Collective obligation - two or more debtors and/or two or more credtiors Reynard also because the debtors are solidary debtors.
a. Joint obligation - to each his own. the obligation of the debtors is separate and
distinct from each other or the right of the creditors is separate and distinct from each 5. Reynard, Angelica and Cecille Joy (Debtors) are liable to Ma. Margeorie and Ma.
other. Sheryl (Creditors) in the amount of P 1,200. The debtors are joint debtors, while the
b. Solidary obligation - all for one, one for all - the entire obligation can be demanded creditors are solidary creditors. On due date how much can Ma. Sheryl demand from
from any one of the debtors or may be demanded by any one of the creditors. Angeiica?
Ans. P400 the obligation of Angelica as a joint debtor ( P1,200 / 3 ) and Angelica is not
How will you know that the obligation is solidary? liable for the shares of Reynard and Cecille Joy.
Ans. It must be expressly provided for in the obligation.
6. Reynard, Angelica and Cecille Joy (Debtors) are liable to Ma. Margeorie and Ma.
Sheryl (Creditors) in the amount of P 1,200. The debtors are joint debtors and the
creditors are also joint creditors. On due date how much can Ma. Margeorie can
Illustrations : demand from Reynard?
Ans. P 200 only. As Joint debors, each one of them is liable for P 400 ( P1,200 / 3) and
1. Marlon and Johnny Gie are obligated in the amount of P600 to Dimple which is the P 400 liability for each debtor is payable to Ma. Margeorie and Ma. Sheryl, so each
payable on May 11, 2020. The obligation is joint. How much can Dimple demand from one of the creditors is entitled to P 200 only ( P 400 / 2 )
Marlon on due date?
Ans. P 300 (P600/2) and Marlon is not liable for the share of Johnny Gie even if Johnny Divisible and Indivisible Obligations :
Gie is insolvent. Divisible - Capable of partial performance, ex. construct a house (anam anam ug gama)
Indivisible - Not capable of partial performance, ex. delivery of a specific iphone ( di
2. Marlon and Johnny Gie are obligated in the amount of P600 to Dimple which is pwede ug anam anam ug deliver)
payable on May 11, 2020. The obligation is solidary. How much can Dimple demand
from Marlon on due date? Obligations with a Penal Clause :
Ans. The entire amount of P 600, however, Marlon can demand reimbursement from Principal obligation - can stand on its own and does not depend upon another obligation
Johnny Gie for his share of P300. If Johnny Gie is already insolvent, Marlon will assume for its validity and existence. ex. mutuum (mang huwam ug kwarta)
all of the liability.
Accesory obligation - depends upon another obligation for its validity and existence.
3. Marlon and Johnny Gie are obligated in the amount of P600 to Dimple which is ex. mang prenda ug iphone kay mang huwam ug kwarta.
payable on May 11, 2020. The obligation is silent whether it is joint or solidary. How The principal obligation here is mutuum (simple loan), while the accessory
much can Dimple demand from Marlon on due date? obligation is the contract of pledge (prenda ug iphone). Dili ka mang prenda ug dili ka
Ans. P300 only, the presumption is that the obligation is only joint. mo huwam ug kwarta, so a contract of pledge (prenda) is an accessory obligation in a
contract of loan.
4. Reynard, Angelica and Cecille Joy (Debtors) are liable to Ma. Margeorie and Ma.
Sheryl (Creditors) in the amount of P 1,200. The debtors are solidary debtors, while the Penal Clause - an accessory undertaking to assume greater liability in case of breach.
creditors are joint creditors. On due date how much can Ma. Margeorie can demand (this is a form of liquidated damages). ex. Ug di maka bayad on due date, naay penaldy
from Reynard? nga 5% per month. - the penalty here is demandable because of the penal clause and
the obligation is an obligation with a penal clause.
 c. If the creditor accepted the payment or performance knowing that it is incomplete or
Proof is no longer necessary in order that the penalty can be demanded in case of non irregular, the obligation is extinguished.
performance on due date. Q. What should the creditor do in order that the obligation will not be extinguished?
Ans. The creditor must protest or object.
Rule : If the principal obligation is null and void, the accessory is also null and void. If it
d. Who can compel the creditor to accept payment of the obligation? (kinsay maka
is only the accessory which is null and void, the principal obligation remains to be valid
and demandable. pugos sa creditor ug dawat sa gi hatod nga bayad)
Ans. 1. The debtor
Modes of Extinguishing an Obligation (PLCCCN) : (Mawa na ag obligation) 2. Person interested in the obligation (guarantor or owner of the property used
1. Payment or Performance as collateral)
2. Loss of the thing due (only if the object is specific and no fault on the part of the 3. A person authorized to make payment as agreed by the creditor and the
debtor) debtor.
3. Condonation or Remission ‌
4. Confusion or merger of the rights of creditor and debtor So a person, other than those mentioned above cannot compel the creditor to accept
5. Compensation the payment delivered and the creditor will not be in mora accipiendi. (Nganu man pud
6. Novation nga di man modawat ag creditor? Ans. Aron mo daghan pa ag bayronong interest ug
Other causes : loan ag contract)
7. Annulment e. Person to Whom Payment shall be made : (Kinsay angay hatagan sa bayad):
8. Rescission 1. Creditor or oblige
9. Fulfillment of resolutory condition/period 2. Successor in interest (mga anak ug patay nag ginikanan nga creditor or ag taw nga
10. prescription gipasahan sa collectahonon)
1. PAYMENT OR PERFORMANCE 3. Any person authorized to receive it. (gihatagan ug authority to receive payment)
Payment – means delivery of money, property or performance in any other manner of So, if your payment is delivered to a person other than the above named persons,
the obligation. payment is not valid and will not extinguish the obligation, except if:
Ex. Deliver P10,000 cash as payment of a loan. a. after the payment, the third person acquires the creditor’s rights
Return the borrowed book on the Law on Obligations and Contracts. (subrogation)
Cut the hair of a customer. b. the creditor ratifies the payment to the third person.
Rule on payment in order that the obligation will be extinguished: c. the creditor is in estoppel‌
a. In order that the obligation will be extinguished, payment should be complete. f. If there is no stiputation (condition or requirement in the agreement), the debtor will
Ex. Huan is obligated to Dean in the amount of P 5,000 cash payable on May 12, pay the extrajudicial expenses needed in the payment of the obligation.
2020. On due date, Huan delivered P3,000 only. Is the obligation of Huan extinguished? Ex. Ipada sa Palawan pawnshop ag payment sa utang, it will be the debtor who will
Ans. No, payment is not complete. pay for the fee charged by Palawan pawnshop, if there is no agreement to the contrary.
b. If the obligation has been substantially performed in good faith, payment will g. Payment of debts in money shall be made in the currency stipulated, if none, then it
extinguish the obligation, less damages. will be the legal tender of the Philippines.
 Legal tender –The currency which a debtor can legally compel the creditor to accept Second Rule : If Huan failed to designate the obligation to be paid, then it will be
in payment of a debt. The legal tender in the Philippines are the notes and coins issued Dean in his receipt, who will designate the obligation/s in which the P 90,000 will be
by the Banko Sentral ng Pilipinas ( the Philippine Peso). applied.
P1, P5 and P 10 coins are legal tender up to P1,000 only Third Rule : If both Huan and Dean failed to designate the obligations paid, then
1 centavo, 5 centavos, 10 centavos and 25 centavos are legal tender up to P 100 only the payment will be applied first to the most burdensome obligation which is the
Peso Bills (papel) – are legal tender up to whatever amount. P60,000 with collateral –car., then the remaining P 30,000 payment to the obligation
with interest. The remaining balance of obligation will be P 10,000 with interest and P
SPECIAL MODES OF PAYMENT: 20,000 with no interest and no collateral.
1. Dation in payment If all of the debts are of the same nature and burden, the payment shall be
2. Application of Payments applied proportionately (if 1st and 2nd rule cannot be applied):
3. Payment by Cession Ex. The following are the obligations of Huan to Dean, all with interest (no
4. Tender of Payment or consignation collateral) :
‌ Feb. 2, 2020, P 20,000, due on May 5, 2020
1. Dation in payment or Dacion in Pago – the obligation is to pay a sum of money, March 5, 2020, P 40,000, due on May 10, 2020
however, a thing is delivered (and accepted) by the creditor as payment of the April 17, 2020, P 60,000, due on May 12, 2020
obligation. Today, Huan delivered to Dean the amount of P90,000 as payment of his
Ex. Huan is obligated to Dean in the amount of P 40,000 cash. On due date, obligations (Kuwangan).
Huan did not have any money, so he offered to Dean his Camera as payment of his The payment shall be applied as follows :
obligation. If Dean will accept the Camera as payment of the obligation of P 40,000 Feb. 2 obligation – P20,000 / P120,000 x P 90,000 = P 15,000
cash, then the obligation is extinguish. March 5 obligation – P40,000 / P120,000 x P90,000 = P 30,000
This is a special mode of payment because the thing delivered is not the thing April 17 obligation – P60,000 / P120,000 x P90,000 = P 45,000
that is due. You should remember that in the payment of the obligation, the thing that Note : if the debt produces interest, payment should be applied first to the interest. (Di
is to be delivered must be the thing that is due. ( mao nga special mode of payment at maka pugos ag debtor nga ag principal unahon). Remember that if payment is applied
dation in payment) to the principal, there is a disputable presumption that the interest has already been
2. Application of Payments – the designation of the debt to which should be applied the paid.
payment made by a debtor who has various debts of the same kind in favor of one and This is a special mode of payment because the obligations which were paid will be
the same creditor. extinguished up to the actual payment applied. (bisag di complete, ma extinguish sija)
Ex. The following are the obligations of Huan to Dean : 3. Payment by Cession
Feb. 2, 2020, P 20,000 – no interest, no collateral due on May 5, 2020 Requisites :
March 5, 2020, P 40,000 with interest – due on May 10, 2020 a. Two or more creditors (Daghang gi utangan)
April 17, 2020, P 60,000 with collateral – car – due on May 12, 2020 b. Debtor must be (partially) insolvent ( Naa pay asset pero kuwang para e bayad sa
Today, Huan delivered to Dean the amount of P90,000 as payment of his tanang utang)
obligations (Kuwangan). c. Involves all properties of the debtor
First Rule : Huan should designate as what obligation will the P 90,000 be d. Cession is accepted by the creditors.
applied first. Ex. AA has the following obligations :
 P 20,000 payable to MY, P 30,000 payable to JL, P 50,000 payable to CJ 5. Ask the judge to order the cancellation of the obligation. There should be a Court
All obligations are already due and demandable and the remaining assets of AA Order that the obligation is already cancelled (extinguished).
are valued at P60,000 (partially insolvent) which is insufficient to pay all of her Note : The steps must be observed in order that the obligation will be extinguished by
obligations. AA cede all of her assets to the creditors who accepted the cession. How Tender of Payment and Consignation.
will the payment be applied? Q. Who will bear the expenses of consignation if properly made?
Ans. To MY – 2/10 x P 60,000 = P 12,000 To JL – 3/10 x P 60,000 = P 18,000 Ans. The creditor. Art. 1259
To CJ – 5/10 of ½ of P 60,000 = P 30,000 RULE : NO PRIOR TENDER : NO CONSIGNATION
The above obligations are extinguish as an exception to the rule that payment Exceptions : (Wa nay tender, dretso nag consign sa court)
must be complete in order to extinguish the obligation. (mao ni nga special mode of 1. The creditor is absent or unknown, or does not appear in the place of payment.
payment ni) (wa dinha ag creditor or wa motungha, wa hibaw-e ug asa na)
How about the balance? If you will not consign your payment in court, the obligation will remain to be valid
Ans. AA is still liable for the balance of the obligation: and enforceable and it the obligation is with interest, additional interest will be charged
To MY = P 8,000 To JL = P 12,000 To CJ = P 20,000 until payment is made.
4. Tender of Payment and Consignation ‌
Tender of Payment – offer of payment by the debtor to the creditor 2. Creditor is incapacitated to receive payment at the time it is due.
Consignation – act of depositing the amount or thing due with the proper court If na buang ag creditor sa due date, ajaw na e offer nija, dretso nag consign. Payment
when the creditor refuses to accept payment when tendered by the debtor. made to an incapacitated person will only extinguish the obligation if the incapacitated
RULE : NO PRIOR TENDER : NO CONSIGNATION person has been benefited out of the payment made or he kept the payment.
So it is important that a prior tender of payment should be made, before 3. Without cause, the creditor refuses to issue a receipt.
consignation can be made in court. Mo ingun rag creditor nga ibilin lang nang payment sa ijang secretary sa office
This is a special mode of payment because the amount or thing due (dili pwede (person authorized to accept payment), then, unja na lang resibo. Consign the payment
services) is delivered to the court and not to the creditor or any person authorized to in court directly.
receive payment. 4. Two or more persons claim the right to collect.
‌ Namatay ag parents sa boarding house nimu, then 4 ka anak nag ijahay ug paningil sa
Steps in the extinguishment of the obligation through tender of payment and rental. You consign your payment in court without making a prior tender.
consignation 5. Title of the obligation is lost.
1. Tender (Offer) the payment to the creditor. You signed a Promissory Note (PN) during the time that you contracted the obligation,
2. If the creditor refuses to accept the payment made, inform all persons interested subject to the condition that the said PN will be returned to you upon payment of you
in the obligation (guarantors, owner of the collateral, solidary debtors, solidary debt. If on due date, the PN is lost, consign your payment directly to court without any
creditors, ect.) that the amount or thing due will be consigned (deposited) in court. prior tender.
3. Actual deposit of the amount or thing due in court ( this is consignation ) and the Modes of Extinguishing an Obligation (PLCCCN) : (Mawa na ag obligation)
court will issue a receipt.
4. Inform again all persons interested in the obligation that the amount or thing due 1. Payment or Performance
2. Loss of the thing due (only if the object is specific and no fault on the part of the
has already been consigned ( deposited ) in court. Attached a copy of the receipt issued
debtor)
by the Court.
3. Condonation or Remission
4. Confusion or merger of the rights of creditor and debtor Art. 1267. Service becomes so difficult as to be manifestly beyond the contemplation of
5. Compensation the parties, obligation is extinguished.
6. Novation Ex. An obligation to build a house in the riverbank. Subsequently, the land in which the
house is to be built was washed away during a flash flood caused by a strong typhoon. –
2. Loss of the thing due (only if the object is specific and no fault on the part of the The obligation is extinguished.
debtor)
3. Condonation or Remission (gi kwits ag obligation, gratis na lang, kasuway na mo tanan
Requisites in order that the obligation will be extinguished in obligations to give: ani)
1. specific or determinate object - essentially gratuitous and needs the acceptance of the debtor.
2. loss is without fault of the debtor
Ex. Utangan si Huan ni Dean in the amount of P 5,000 payable on May 15, 2020. Today
Loss will not extinguish the obligation (bisan pag mawa ag specific object, naa gihapoy Dean informed Huan that the obligation is condoned, (di na pabayaran ni Huan ag
obligation which is converted into money): utang. Kinahanglan mosugot si Huan nga di na sija mo bayad), otherwise, the obligation
1. Debtor is guilty of default, fraud, negligence or contravention of the terms of the will not be extinguished.
obligation
2. The law provides There is no condonation if the debtor performed an act, and in consideration thereof,
3. Stipulation (conditions and requirements) of the parties provides the obligation is cancelled. The amount of the obligation is considered as an income of
4. Nature of the obligation requires the assumption of risk the debtor, subject to tax. (kinahanglan wa juy gibuhat, then gi condone ag obligation).
5. Obligation to deliver arises from a crime ( e uli ag kinawat nga cellphone, di ma
extinguish bisag masunog ug apil ag cellphone sa house sa thief. pabayaron ug kwarta Rule : If a private document evidencing the obligation is in the hands of the debtor even
depende ug pilay price sa cp) if the debtor has not yet paid the obligation, then the presumption (disputable) is that
6. Debtor promised to deliver to two or more persons who do not have the same the obligation is condoned and the private document is presumed to have been
interest voluntarily delivered by the creditor. ( wa mawa ag document or wa kawata sa debtor).
7. Generic object
Rule : The condonation or remission or renunciation of the principal obligation, carries
Q. Who shall determine whether the partial loss will extinguish the obligation? with it all of the accessories, under the principle that the accessory follows the principal.
A. The courts (judge) Art. 1264 Art. 1273

Rule : Whenever the thing is lost in the possession of the debtor, the presumption is Ex. Huan is obligated to Dean in the amount of P10,000 and as collateral,
that the loss was due to the fault of the debtor, but there is no presumption if the loss Huan delivered his iphone in pledge (prenda) to Dean. If Dean will condone the
occurred during a natural calamity. Art. 1265 principal loan of Huan (dili na pabayaron si Huan), then the principal obligation of loan
in the amount of P10,000 is extinguish, as well as the accessory obligation of pledge
Art. 1266. In obligations to do, the obligation is lost if the prestation (act) becomes (makuha na dretso ni Huan ag iphone).
legally or physically impossible.
Ex. Obligation to sing, but before due date the debtor has an operation on his throat Rule : The condonation or remission or renunciation of the accessory obligation, does
which cannot be healed on the date of performance. The obligation is physically not include the principal obligation. Art. 1273 and Art. 1274
impossible, so it is extinguished.
Obligation to transport passengers from Bohol to Cebu on April 1, 2020. The
obligation is legally impossible, so it is extinguished.
Ex. Huan is obligated to Dean in the amount of P10,000 and as collateral, Huan delivered Q. If you will not demand payment from the owner of the BH on Feb. 20 and at the end
his iphone in pledge to Dean. Even if Huan has not yet paid his obligation, Dean returned of the month, the owner will collect your monthly rental. Can you be compelled to pay
the iphone to Huan. Is the entire obligation extinguish? your rental?
Ans. No, only the obligation of pledge (prenda) which is an accessory obligation is Ans. No, your obligation is extinguish by legal compensation.
extinguish. The principal obligation of loan (mutuum) of P10,000 remains to be valid and
demandable. Note : If you will agree with the owner of the BH on Feb. 20 that you will no longer
collect the P1,000 because it will be charged to your monthly rental (due on Feb. 28),
4. Confusion or merger of the rights of creditor and debtor. (Confusion = maka libog) then that will be voluntary compensation which will still extinguish the obligation.
- meeting in one person of the qualities of creditor and debtor with respect to
the same obligation. If your monthly rental is P1,500, at the end of the month, you can only claim
partial compensation up to P1,000 and you will have to pay the balance of P500.
Ex. In consideration of his loan, Huan executed a Promissory Note (PN) payable
to Dean in the amount P 5,000.00. The PN is negotiable ( can be used just like money). Instances wherein legal compensation is not allowed :
Dean purchased office supplies amounting to P5,000 from Karen delivering the PN as his 1. One of the debts arises from a depositum
payment. Karen then paid her obligation to Lalaine in the amount of P 5,000 by Ex. You left your stuff at the deposit counter in the mall. Then you purchased on
delivering the PN. Lalaine thereafter used the PN as payment for her obligation to account from the mall. If your stuff got lost, the mall owner cannot set up legal
Huan in the amount of P5,000 for her pre nup pictorials. What will happen to the compensation (pwede voluntary)
obligation?
Ans. The obligation is extinguish because Huan is the Debtor and Huan is now 2. One of the debts arises from a commodatum.
the credtor. ( si Huan utangan, sija puy maningil sa ijahang utang, so extinguish kay Ex. You borrowed P500 from your friend. Subsequently, your friend borrowed your
maka libog, murag si kim chiu) book. If your book will be lost while in possession of your friend, your friend cannot
claim legal compensation.
5. Compensation ( sa bisaya pa – PAKANG, naka suway na mo ani?)
3. One of the debts arises from a claim for support due by gratuitous title
- Two persons in their own right are creditors and debtors of each other. Ex. You (illegitimate) borrowed money from your father in the amount of P20,000.
Kinds of Compensation : Your father later on cannot set up compensation for his obligation to support you.
1. Voluntary or conventional – to be agreed by the parties over obligations
which are not yet due. 4. One of the debts consists in civil liability arising from a penal offense.
2. Legal – automatic nga ma extinguish, di na pwede maningil. This applies only Ex. CJ owes Reynard the amount of P 5,000 cash. After their class in Law 1
if both obligations are already due and demandable. (classroom), CJ forgot her CP and Reynard found the same but did not give it (crime of
theft) to CJ. Upon being caught, Reynard cannot set up compensation with the
Ex. On February 10, the owner of your boarding house borrowed P 1,000 from you, obligation of CJ because his obligation to return the CP arises from a criminal offense
which is payable on February 20. On due date (February 20) you collected from the (theft).
owner of your boarding house the P 1,000. The owner of your BH told you that her
obligation is extinguish by compensation. Is there legal compensation if your rental in 6. Novation – also known as Modification of the obligation. (Gi usob ag obligation)
the amount of P1,000 will be due only on February 28 ? - an obligation is extinguish through the creation of a new one which
Ans. No, in order that there is legal compensation, both debts must be due and substitutes it. (so, naa gihapoy obligation, pero lain na, gi usob)
demandable. In this case, your obligation is not yet due on Feb. 20, so there is no legal
compensation. Obligations may be modified by :
 1. Changing their object or principal condition.
Ex. Marlon is obligated to deliver to Hariel a specific iphone on May 15, 2020. Today, Ex. Old Debtor (OD) is obligated to Old Creditor (OC) in the amount of P5,000
Marlon and Hariel agreed that instead of the iphone, Marlon will deliver a particular payable on May 15, 2020 and as collateral, OD delivered his iphone to OC. Today,
laptop (para edmodo). In this case, the obligation to deliver the iphone is extinguish, New Debtor (ND) without the knowledge of OD, offered to OC that he will pay the
but there is a new obligation, to deliver a particular laptop. (gi usob ag object). obligation of OD on due date to which OC agreed.

2. Substituting the person of the debtor (substitution – alisdan ag debtor) In this case, even if the substitution is without the knowledge of OD, the obligation of
OD is still extinguished and a new obligation is created, the obligation of ND to OC
a. Delegacion – with the consent/knowledge or upon the instance of the original
debtor (OD) Q. How about if ND is insolvent and was not able to pay OC, can OD be still held liable?
Ex. Old Debtor (OD) is obligated to Old Creditor (OC) in the amount of P5,000 Ans. No, whether OD was aware about the insolvency or not, his obligation is already
payable on May 15, 2020 and as collateral, OD delivered his iphone to OC. Today, OD extinguish, anyway he did not know about the substitution.
offered to OC that it will New Debtor (ND) who will pay his obligation, to which OC
gave his consent. Q. If on due date ND paid the amount of P5,000 to OC, what will be the rights of ND?
In this case, the obligation to OD to OC is extinguish, but there is new Ans. ND can only demand payment of P5,000 from OD. ND cannot demand for the
obligation, the obligation of ND to OC. possession of the iphone because in expromision, there is no legal subrogation.

Q. How about if ND is insolvent and was not able to pay OC, can OD be still held liable? Q. How about if OD have already paid P1,000, but ND was not aware about it and ND
Ans. No, because the obligation of OD is already extinguish, however, if OD knew paid P5,000 to OC, how much can ND demand from OD?
beforehand that ND is insolvent at the time of delegacion, then OD shall be liable. Ans. ND can demand the amount of P4,000 only, the amount that OD was benefited.

Q. How about if ND became insolvent only after the delegacion, can OC go against OD? Q. How about the P1,000 advance payment?
Ans. No. the obligation of OD is already extinguish and the subsequent insolvency of ND Ans. ND can claim the same from OC under the principle of solution indebiti.
shall not revived the obligation.

Q. If on due date ND paid the amount of P5,000 to OC, what will be the rights of ND? Rule : how about if ND does not intend to e reimburse?
Ans. ND will be subrogated to all of the rights of OC, hence ND can demand for the Ans. it will be treated as a donation.
possession of the iphone until such time that he will be paid by OD. In this case, ND will c. Changing the person of the Creditor – Subrogation (all rights the old creditor will be
become the New Creditor (NC) - so from ND TO NC. This is a case of LEGAL transferred to the new creditor)
SUBROGATION.
Kinds of Subrogation :
Q. How about if OD have already paid P1,000, but ND was not informed about the 1. Conventional – with the consent of all parties.
advance payment and ND paid P5,000 to OC, how much can ND demand from OD?
Ans. The entire amount of P5,000, it is the fault of OD in not informing ND about the Ex. Old Debtor (OD) is obligated to Old Creditor (OC) in the amount of P5,000
advance payment. payable on May 15, 2020 and as collateral, OD delivered his iphone to OC. Today OD
and OC agreed that the obligation will be paid to New Creditor (NC) on due date, to
Q. How about the P1,000 advance payment? which NC also agreed.
Ans. OD can claim the same from OC under the principle of solution indebiti.

b. Expromision - without the consent/knowledge of the original debtor (OD)

 In this case, the obligation of OD to OC is extinguish, but there is a new
obligation created, the obligation of OD to NC and NC can demand for the possession of
the iphone.

2. Legal Subrogation – provided by law (automatic ni)

Instances :
a. Creditor pays another creditor who is preferred even without debtor’s consent
Ex. Marlon is the debtor of the following creditors :
AA, P 50,000 cash with interest, payable on June 5, 2020
CJ, P 100,000 cash with collateral truck, payable on August 3, 2020
CA, P 200,000 cash with collateral land, payable today

In this case, AA may pay the obligation of Marlon to CA today even if Marlon did
not give his consent. After paying the obligation of Marlon to CA, AA will acquire all of
the rights of CA, so the total collectible obligation of AA will now be P250,000 with
collateral land.
b. A third person not interested (not a guarantor) in the obligation pays with the
consent of the debtor ( DELEGACION )

c. A person interested (guarantor, solidary debtor, co-maker) in the fulfillment of

the obligation pays the obligation even without the consent of the debtor.
Reason : The guarantor, solidary debtor or co-maker will ultimately become liable
if the debtor will not pay.