CIVIL LAW REVIEW 2 – Pros. Felipe Macaldo Jr.
Prepared by: Rhea Sindol & Cynee Del Oeste
CHAPTER 1 : OBLIGATIONS
a. General Provisions
1. Obligations
Article 1156. An obligation is a juridical necessity to give, to do or not to do.
Elements of an obligation:
a. The vinculum juris or juridical tie- essentially binds the parties to the obligation.
b. The active subject
c. The passive subject
d. The object or prestation- object of an obligation (to do or not to do, or to give
2. Sources of Obligations
Article 1157. Obligations arise from:
(1) Law;
(2) Contracts;
-meeting of the minds between 2 persons whereby one binds himself, with respect to the
other, to give something or to tender some service (art. 1305)
(3) Quasi-contracts;
-judicial relations arising from lawful, voluntary, and unilateral acts by virtue of which the
other, based on the principle that no one shall be unjustly enriched or benefited
at the expense of another
NEGOTIORUM GESTIO- voluntary administration of the property, business or
affairs of another, without his consent or authority, that creates an obligation for
reimbursement for the necessary expenses the gestor had spent
SOLUTION INDEBITI-If something is received when there is no right to demand
it, and it was unduly delivered through mistake, the obligation to return it arises
(art. 2154); payment by mistake
(4) Acts or omissions punished by law; and
DELICT- civil obligations arising from criminal offense shall be governed by penal
laws (art. 1161)
(5) Quasi-delicts.
Article 2176. whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this Chapter.
Requisites of quasi-delict:
1. Damage suffered by the plaintiff;
2. Fault or negligence of the defendant; and
3. Casual connection between the fault or negligence of defendant and the
damge incurred by the plaintiff.
NEGLIGENCE-failure to observe for the protection of the interest of another
person that parties become bound to each
degree of care, precaution, and vigilance which the circumstances justly demand,
whereby such other person suffers injury
PROXIMATE CAUSE-cause which in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result would not
have occurred
RES IPSA LOQUITUR-principle that the occurrence of an accident implies negligence
Requisites:
1. The event is of a kind which does not ordinarily occur unless someone is negligent;
2. The cause of the injury was under the exclusive control of the person in charge; and
3. The injury suffered must not have been due to any voluntary action or contribution on
the part of the person injured
b. Nature and Effect of Obligations
3. Kinds of Prestations
[1] TO GIVE. The prestation to give is a real obligation. It is the obligation to deliver either [a]
a specific or determinate thing, or [b] a generic or indeterminate thing.
[2] TO DO. The prestation to do is a positive personal obligation. It includes all kinds of work
or service.
[3] NOT TO DO. The prestation not to do is a negative personal obligation. It refers to the
duty to abstain from doing an act and includes the obligation not to give.
4. Breach of Obligation
Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence,
or delay, and those who in any manner contravene the tenor thereof, are liable for damages.
-diligence of a good father of a family
Remedies for the plaintiff
The plaintiff can file a case and ask for damages for any harm or injury that they may have
sustained as a consequence of the breach in the other party’s contractual obligations.
Remedies for the defendant
To escape liability, the defendant must show proof that they have exercised due diligence, or
that their non-performance is due to a fortuitous event.
5. Fortuitous Event (Force Majeure)
-an occurrence or happening which could not be foreseen, or even if foreseen, is inevitable
(art. 1174)
REQUISITES:
1. Cause of breach is independent of the will of the debtor;
2. The event is unforeseeable or unavoidable;
3. Occurrence renders it absolutely impossible for the debtor to fulfil his obligation in a
normal manner – impossibility must be absolute not partial, otherwise not force majeure;
and
4. Debtor is free from any participation in the aggravation of the injury to the creditor.
NOTE: The fortuitous event must not only be the proximate cause, but it must also be the
only and sole cause. Contributory negligence of the debtor renders him liable despite the
fortuitous event. If the negligence was the proximate cause, the obligation is not extinguished.
It is converted into a monetary obligation for damages.
Effect of fortuitous event
1.On determinate obligation - The obligation is extinguished.
2. On generic obligation - The obligation is not extinguished
6. Remedies to Creditors
In case of breach of obligation, the following are the remedies available:
1. Specific performance, or substituted performance by a third person in case of an
obligation to deliver a generic thing, and in obligations to do, unless it is a purely personal
act;
2. Rescission (or resolution in obligations);
3.Damages, in any case; or
4. Subsidiary remedies of creditors:
a. Accion subrogatoria-An action whereby the creditor, whose claim has not been fully
satisfied, may go after the defendant debtor's debtor (third person). (NCC Art. 1177)
b. Accion pauliana-An action where the creditor files in court for the rescission of acts or
contracts entered into by the debtor designed to defraud the former. (NCC, Art 1177)
c. Accion directa-The right of a person to go directly against another who is not privy to the
contract.
7. Usurious Transactions and Rules on Interest
Article 1175. Usurious transactions shall be governed by special laws. (n)
Article 1176. The receipt of the principal by the creditor without reservation with respect to the
interest, shall give rise to the presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior installments, shall
likewise raise the presumption that such installments have been paid.
c. Different Kinds of Obligations
8. Pure and Conditional Obligations
PURE OBLIGATION-an unqualified obligation which is demandable immediately; obligation
whose performance does not depend upon a future or uncertain event, or past event
unknown to parties (art. 1179)
CONDITIONAL OBLIGATION-the performance depends upon a future or uncertain event or
upon past event unknown to the parties
RESOLUTORY CONDITION-once the condition is established and acknowledged, the right
immediately exist and therefore the obligation concomitant to the right can be demanded at
once; CONDITION SUBSEQUENT
SUSPENSIVE CONDITION-not demandable at once; can be demanded only upon the
happening of the future or unkown event or a past event unkown to the parties, which
constitutes the conditions, gives rise to the performance of the obligation; CONDITION
PRECEDENT
9. Reciprocal Obligations
RECIPROCAL OBLIGATIONS- those which arise from the same cause and in which each
party is both a debtor and a creditor of the other, such that the obligation of one is dependent
upon the obligation of the other
RESCISSION-abrogate the contract from the beginning and to restore the parties to their
relative positions as if no contract has been made; is to declare the contract void at its
inception and to put an end to it though it never was; creates the obligation to return the
things which were the object of the contract (art. 1385)
10. Obligations with a Period
Article 1193. Obligations for whose fulfillment a day certain has been fixed, shall be
demandable only when that day comes.
Obligations with a resolutory period take effect at once, but terminate upon arrival of the day
certain.
A day certain is understood to be that which must necessarily come, although it may not be
known when.
If the uncertainty consists in whether the day will come or not, the obligation is conditional,
and it shall be regulated by the rules of the preceding Section.
Term or or period
A certain length of time which determines the effectivity or the extinguishment of the
obligations.
Requisites of a valid period or term
1. Future;
2. Certain; and
3. Possible, legally, and physically.
Day certain”
It is understood to be that which must necessarily come, although it may not be known
when.
Article 1196. Whenever in an obligation a period is designated, it is presumed to have been
established for the benefit of both the creditor and the debtor, unless from the tenor of the
same or other circumstances it should appear that the period has been established in favor
of one or of the other.
Instances where the court may fix the period
1. If the obligation does not fix a period, but from its nature and circumstances it can be
inferred that a period was intended by the parties;
2. If the duration of the period depends upon the will of the debtor;
3. In case of reciprocal obligations, when there is a just cause for fixing the period; or
4. If the debtor binds himself when his means permit him to do so.
11. Alternative and Facultative Obligations
ARTICLE 1199. A person alternatively bound by different prestations shall completely perform
one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
Article 1206. When only one prestation has been agreed upon, but the obligor may render
another in substitution, the obligation is called facultative.
The loss or deterioration of the thing intended as a substitute, through the negligence of the
obligor, does not render him liable. But once the substitution has been made, the obligor is liable
for the loss of the substitute on account of his delay, negligence or fraud.
ALTERNATIVE OBLIGATION-it is an obligation where the debtor is alternatively bound by
different prestations, but the complete performance of one is sufficient to extinguish the
obligation.
FACULTATIVE OBLIGATION-it is an obligation where the debtor, who has a reserved right to
choose another prestation or thing, is bound to perform one of the several prestations due or to
deliver a thing as a substitute for the principal
CONJUNCTIVE OBLIGATION-an obligation where the debtor has to perform several prestations;
it is extinguished only by the performance of all of them.
12. Joint and Solidary Obligations
JOINT OBLIGATIONS- One where the credit or debt shall be presumed to be divided into as
many equal shares as there are creditors or debtors, the credits or debts being considered
distinct from one another. (NCC, Art. 1208) Each debtor is liable only for a proportionate part of
the debt and each creditor to his proportionate share to the credit. Other terms for joint
obligations are: a. joint simply; b. mancomunada; or c. pro rata.
SOLIDARY OBLIGATIONS-It is where each of the debtors obliges to pay the entire obligation,
while each one of the creditors has the right to demand from any of the debtors, the payment
or fulfillment of the entire obligation. (NCC, Art. 1207; Pineda, 2000) Other terms for solidary
obligations are: a. Joint solidarily; b. Jointly and severally; or c. In solidum.
13. Effects of Prejudicial and Beneficial Acts (Art.1212)
Article 1212. Each one of the solidary creditors may do whatever may be useful to the others,
but not anything which may be prejudicial to the latter.
14. Divisible and Indivisible Obligations
DIVISIBLE OBLIGATIONS- Those which have as their object a prestation which is susceptible
of partial performance with the essence of the obligation being changed. An obligation the
object of which, in its delivery or performance, is capable of partial performance.
INDIVISIBLE OBLIGATIONS- Those which have as their object a prestation which is not
susceptible of partial performance, because otherwise the essence of the obligation will be
changed. The obligation is clearly indivisible because the performance of the contract
cannot be done in parts; otherwise, the value of what is transferred is diminished.
(Nazareno v. CA, G.R. No. 138942, October 18, 2000) Those where the prestation cannot be
performed by parts without altering its essence.
15. Obligations with a Penal Clause
An obligation with a penal clause is one with an accessory undertaking by virtue of which
the obligor assumes a greater liability in case of breach of the obligations.
PENAL CLAUSE- A coercive means to obtain from debtor compliance. It is an accessory
undertaking to assume greater liability in case of breach. The penalty is generally a sum of
money. But it can also be any other thing stipulated by the parties, including an act or
abstention.
d. Extinguishment of Obligations
Article 1231. Obligations are extinguished:
(1) By payment or performance;
(2) By the loss of the thing due;
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor and debtor;
(5) By compensation;
(6) By novation.
Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a
resolutory condition, and prescription, are governed elsewhere in this Code.
16. Payment or Performance
Payment is the fulfillment of the obligation by the realization of the purposes for which it
was constituted. (Jurado, 2010) (1998, 2009 Bar)
Payment is defined as not only the delivery of money but also the performance, in any other
manner, of an obligation. It is the satisfaction or fulfillment of a prestation that is due,
resulting in the extinguishment of the obligation of the debtor. (Pineda)
Payment may consist not only in the delivery of money but also the giving of a thing (other
than money), the doing of an act, or not doing of an act. (art. 1232)
SUBSTANTIAL PERFORMANCE DOCTRINE
It provides the rule that if a good faith attempt to perform does not precisely meet the
terms of an agreement or statutory requirements, the performance will still be considered
complete if the essential purpose is accomplished. (Black's Law Dictionary, 2009)
Requisites
1 Attempt in good faith to comply with obligation;
2. Slight deviation from the obligation; and the omission or defect of the performance is
technical and unimportant; and does not pervade the whole, or is not material that the
object which the parties intended to accomplish is not attained.
DACION EN PAGO-The delivery and transmission of ownership of a thing by the debtor to
the creditor as an accepted equivalent of the performance of the obligation. The property
given may consist not only of a thing but also of a real right.
17. Loss or Impossibility
Loss here is not contemplated in its strict and legal meaning and is not limited to obligations
to give, but extends to those which are personal, embracing, therefore, all causes which
may render impossible the performance of the prestation. In some Codes, this is designated
as impossibility of performance.
Article 1262. An obligation which consists in the delivery of a determinate thing shall be
extinguished if it should be lost or destroyed without the fault of the debtor, and before he has
incurred in delay.
When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the thing
does not extinguish the obligation, and he shall be responsible for damages. The same rule
applies when the nature of the obligation requires the assumption of risk.
18. Condonation or Remission of the Debt
An act of liberality by virtue of which the creditor, 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 condonation or remission refers.
Requisites of condonation:
1. Must be Gratuitous;
2. Acceptance by the debtor;
3. Must not be Jnofficious;
4. Formalities provided by law on Donations must be complied with if condonation is
express; and
5. An Existing demandable debt at the time the remission is made.
19. Confusion or Merger of Rights
There is confusion when there is a meeting in one person of the qualities of a creditor and
debtor of the same obligation.
Requisites of confusion or merger of rights
1. It must take place between the creditor and the principal debtor (NCC, Art 1276);
2. The very same obligation must be involved (for if the debtor acquires rights from the
creditor, but not the particular obligation in question, there will be no merger);
3. The confusion must be total or as regards with the entire obligation.
20. Compensation
It is a mode of extinguishing obligations that take place when two persons, in their own
right, are creditors and debtors of each other. (NCC, Art. 1278) It is the offsetting of the
respective obligation of two persons who stand as principal creditors and debtors of each
other, with the effect of extinguishing their obligations to their concurrent amount.
Requisites:
For the compensation to be proper, it is necessary that (NCC, Art. 1279):
1. Each one of the obligors must be bound principally, and that he be at the same time a
principal creditor of the other exceptBuarantor who may set up compensation as regards
what the creditor may owe the principal (NCC, Articles. 1279-1280);
2. Both debts consist in sum of money, or if the things due are consumable, they be of the
same kind and also of the same quality if the latter has been stated;
3. Both debts are due;
4. Both debts are liquidated and demandable;
5. Neither debt must be retained in a controversy commenced by third person and
communicated in due time to the debtor (neither debt is garnished) (NCC, Art. 1279); and
6. Compensation must not be prohibited by law. (NCC, Art. 1290)
Effects of compensation:
1. Both debts are extinguished;
2. Interests stop accruing on the extinguished obligation or the part extinguished;
3. The period of prescription stops with respect to the obligation or part extinguished; and
4. All accessory obligations of the principal obligation which has been extinguished are also
extinguished.
21. Novation
It is the substitution or change of an obligation by another, resulting in its extinguishment or
modification, either by changing the object or principal conditions, or by substituting
another in the place of the debtor or by subrogating a third person to the rights of the
creditor.
Requisites of novation
1. Valid Qld obligation; XPNs: a. When the annulment may be claimed only by the debtor
and he consented to the novation; and b. When ratification validates acts which are
voidable.
2. Intent to extinguish or to modify the old obligation;
3. Capacity and consent of all the parties to the new obligation [except in case of
expromission where the old debtor does not participate);
4. Substantial difference of the old and new obligation - on every point incompatible with
each other (implied novation); and
5. Valid New obligation.
Presumption of novation Novation is never presumed; it must be proven as a fact either by:
1. Explicit declaration - If it be so declared in unequivocal terms; or
2. Material incompatibility - That the old and the new obligations be on every point
incompatible with each other. (NCC, Art. 1292)
Subrogation-It is the active subjective novation characterized by the transfer to a third
person of all rights appertaining to the creditor in the transaction concerned including the
right to proceed against the guarantors or possessors of mortgages and similar others
subject to any applicable legal provision or any stipulation agreed upon by the parties in
conventional subrogation.
CONTRACTS
e. General Provisions
1. Classification of Contracts
2. Elements of Contracts
3. Stages of Contracts
4. Charactertics of Contracts
f. Essential Requisites
5. Consent
6. Object
7. Cause
g. Forms of Contracts
8. Rules
9. Kinds of Formalities
h. Reformation of Contracts
i. Interpretation of Contracts
j. Defective Contracts
10. Rescissible Contracts (Arts. 1380-1389)
11. Voidable Contracts (Arts. 1390-1402)
12. Unenforceable Contracts (Arts. 1403-1408)
13. Void or Inexistent Contracts (Arts. 1409-1422)
CHAPTER 2 : SALES
a. Contract of Sale
1. Definition (Art 1458, CC)
2. Elements
3. Stages
4. Kinds of Sale
5. Form
6. Sale Distinguished From Other Contracts
b. Obligations of the Seller and Buyer
7. Obligations of the Seller
8. Obligations of the Buyer
c. Double Sales
9. General Rule
10. Requisites
11. Rules Governing Sale of Movables, Immovables and Unregistered Lands
d. Risk of Loss
12. General Rule
13. Exceptions
e. Documents of Title
14. In General
15. Negotiable Documents of Title
16. Non-Negotiable Documents of Title
f. Remedies of the Seller and Buyer
17. General Remedies (Art. 1191, CC)
18. Remedies of the Seller
19. Remedies of the Buyer
g. Extinguishment of Sale
20. In General
21. Conventional Redemption.
22. Equitable Mortgage
23. Legal Redemption
h. Philippine Bulk Sales Law (Act 3952)
24. Purpose
25. Coverage
26. Duty of Seller
27. Effect of non-compliance
CHAPTER 3 : AGENCY
a. Nature, Form, and Kinds of Agency
1. Definition [Art. 1868, CC]
2. Purpose
3. Characteristic
4. Essential Elements
5. Determination of Existence of Agency
6. Agency v Similar Contracts
7. Kinds
b. Obligations of the Agent
8. To Carry Out the Agency
9. To Advance the Necessary Funds [Art.1886, CC]
10. To Act in Accordance with Principal’s Instructions
11. To Prefer Interest of Principal Over Personal Interest
12. To Render Accounts and Deliver Things Received by Virtue of the Agency
13. To Be Responsible for Substitutes
14. To Pay Interest
15. To Answer for His Negligence or Fraud [Art. 1909, CC]
16. Special Obligations of Factor/ Commission Agents
c. Liabilities of the Agent
17. Liability to Third Persons
18. Liability to the Principal
19. Liability of Two or More Agents
d. Obligations of the Principal
20. To Comply with the obligations contracted by the agent
21. To Advance the Necessary Sums and Reimburse the Agent
22. To Indemnify the Agent for Damages
23. To Pay the Agent’s Compensation
24. To Be Solidarily Liable
e. Extinguishment of Agency
25. Expiration of the period for which it was constituted
26. Death, civil interdiction, insanity, insolvency
27. Withdrawal of the agent
28. Accomplishment of the object of the agency
29. Revocation
30. Dissolution of the firm/corp. Which entrusted/accepted the agency
PARTNERSHIP
a. Nature, Creation, Kinds of Partnership
1. Essential Features
2. Characteristics
3. Distinctions
4. Rules to Determine Existence
5. How Partnership is Formed
6. Partnership Term
7. Kinds of Partnerships
b. Obligations of the Partnership/Partners Among Themselves
8. Make Contributions as Promised
9. Manage the Partnership
10. Render Full Information
11. Account for benefits
12. Reimburse expenses
13. Liable for Partnership Contracts
14. Solidarily Liable with Partnership
c. Obligations of the Partnership/Partners as to Third Persons
15. Operate Under a Firm Name (Art. 1815,CC)
16. Bound by Partnership Admission
17. Bound by Notice Partner
18. Liable for Acts of the Partnership.
d. Rights of Partners
19. Share in Losses and Profits
20. Associate Another in His Interest
21. Access to Partnership Books
22. Obtain Formal Account
23. Property Rights
24. Convey Real Property (Art. 1819, CC)
e. Rights of the Partnership
25. Acquire Immovables.
26. Preference of Creditors
f. Dissolution and Winding Up
27. Definitions
28. Causes for Dissolution
29. Consequences of Dissolution
30. Partner’s Liability
g. Rights of Partners Upon Dissolution
31. Right to Wind Up
32. Right to Damages for or to Continue Business on Wrongful Dissolution
33. Right to Lien or Retention, to Stand in Place of Creditor, to be Indemnified
34. Right of Retiring/Deceased Partner (Art. 1841, CC)
35. Right of Account (Art. 1842, CC)
h. Rules on Settlement (Art.1839,CC)
i. Limited Partnership
36. Definition
37. Forming/Amending a Limited Partnership (Art. 1844, CC)
38. Limited Partner
39. General Partner
40. Dissolution
41. Settling Accounts for Dissolution
CHAPTER 4 : CREDIT TRANSACTIONS
a. General Principles
1. Types of Credit Transactions
2. Security
3. Bailment
b. Loan (Arts. 1933-1961, CC)
4. Definition
5. Characteristics of a Loan
6. Kinds of Loan: In General
7. Commodatum
8. Obligations of the Bailee in Commodatum
9. Obligations of the Bailor in Commodatum
10. Mutuum or Simple Loan
11. Interests
12. The Usury Law
c. Deposit
13. Definition
14. Kinds of Deposit
15. Characteristics of Deposit
16. Deposit Distinguished From Mutuum and Commodatum
17. Obligations of the Depositary
18. Obligations of the Depositor
19. Extinguishment of Deposit (Art. 1995)
20. Necessary Deposit
21. Judicial Deposit
d. Guaranty
22. Definition
23. Characteristics
24. Classification
25. Rules Governing Guaranty
26. Guaranty Distinguished from Others
27. The Guarantor (Arts. 2056-2057)
28. Effects of Guaranty
29. Extinguishment of Guaranty
e. Legal and Judicial Bonds
f. Suretyship
g. Pledge, Mortgage, Antichresis
30. Essential Requisites Common to Pledge and Mortgage (Art. 2085)
31. Pledge
32. Mortgage
33. Foreclosure of Mortgage (Art. 2085)
34. Antichresis
35. Chattel Mortgage
h. Concurrence and Preference of Credits
36. General Provisions
37. Classification of Credits
38. Preference of Credits
CHAPTER 5 : TORTS & DAMAGES
a. Introduction, Definitions
1. Tort and Quasi-Delict
2. Damages
b. Concept of Quasi-Delict
3. Elements
4. Distinguished
c. Negligence
5. Concept of Negligence
6. Degrees of Negligence
7. Proof of Negligence
8. Defenses
d. Causation
9. Proximate Cause
10. Remote Cause
11. Res ipsa loquitur
12. Persons Liable
13. The Tortfeasor
14. Vicarious Liability
15. Specific Liability
16. Joint and Solidary Liability
17. Civil Liability Arising From Crime
18. Prescription
e. Tortious Interference With Contract
f. Torts with Independent Civil Action
19. Violation of Civil and Political Rights
20. Defamation, Fraud, Physical Injuries
g. Strict Liability Tort
h. Human Relations Provision
21. Abuse of Rights
22. Acts Contra Bonus Mores
i. Other Torts
23. Dereliction of Duty
24. Illegal Acts
25. Unfair Competition
26. Violation of Human Dignity
j. Damages
27. Definition and Concept
28. Kinds of Damages
29. Graduation of Damages
30. Miscellaneous Rules on Damages
