OBLI Chapter 3 - Different Kinds of Obligation.pdf

BOOK IV, TITLE I: OBLIGATIONS Chapter 3: Different Kinds of Obligations INTRODUCTION • Chapter 3 discusses the different types of obligations • There are 10 types covered by Chapter 3 • However, these ARE NOT EXCLUSIVE. OBLIGATION BASED ON Pure Future event that the obligation is attached to Conditional Term Alternative (Relate to Number of prestations; Compound and complex Ordinarily there is only and simple) one but here, there is two or more. Facultative Joint Number of parties involved in the Solidary obligation Divisible Susceptible of partial fulfillment or not Indivisible With a Penal Clause Particular penalty for the breach of obligation; if not done, then the penalty is laid down PURE AND CONDITIONAL OBLIGATIONS Art. 1179: Pure Obligations Article 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once. Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event. (1113) • This is immediately demandable • As soon as the obligation is constituted, it becames due and demandable. • Constitution is simultaneous with its enforcement • Characterized by IMMEDIATE DEMANDABILITY

Obligations that are immediately demandable: a. Art. 1179 (1)- Pure Obligations b. Art. 1179 (2) – Resolutory Condition c. Art. 1193 (2) – Obligation with a resolutory term d. Art. 1183 (2) – Obligation with a condition – not to do an impossible thing

ISSUE : WHAT IS IMMEDIATE? When will the debtor incur default? • I’ll give you 50,000 pesos ; enforce immediately but WHEN? o SC: of course it is not LITERALLY enforceable at the same time from it’s constitution; debtor should be given A REASONABLE PERIOD to deliver. o It would depend on PRESTATION, COMPLEXITY, AND LEVEL OF PERFORMANCE. • What is reasonable? o A week - reasonable – will not accrue a debtor in default

CONDITIONAL OBLIGATIONS: if the obligation is subject to a future event – it is with a term/period and condition *ONLY FUTURE EVENTS CONDITIONAL TERM Uncertain future event; CERTAIN to happen it may or may not happen On the FULFILLMENT of On the ARRIVAL of the the obligation obligation Certainty –that it will happen • Getting married – condition • Arrival of a particular day (March 15) – arrival of a FUTURE event – term or period • Life of a person – certain; not certain when it will be gone = CONDITION • Your passing the bar, unfortunately is a CONDITION Past event as conditional: • Rizal example in Jurado book • Not the past, it is actually a FUTURE EVENT = EVENT OF DISCOVERY -- a condition that may or may not be fulfilled • How to know the DISCOVERY be a condition or term? o Certain to prove a past fact = term

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o Uncertain because what may come out is different = condition • Marcos declares MARTIAL LAW on Sept. 21, 1972 – TERM – just show proof that it is true Two ways that the obligation be affected by a future event: 1. SUSPENSIVE CONDITION • the vinculum DOES NOT EXIST YET • existence is suspended until fulfillment • suspends the conception of the obligation • ties does not exist yet • NO RIGHT TO THE PROPERTY YET • Art. 1164 does not apply here 2. RESOLUTORY CONDITION (Art. 1179 (2)) • A future event will EXTINGUISH the obligation • Immediately demandable • “You can use my condo UNTIL YOU PASS THE BAR” * No obligation exists yet in condition or term the moment constituted; no tie yet; tie is established when the condition or term has arrived Art. 1164 will apply if DAY IS CERTAIN. Eg: on March 14 ; suspensive term -tie is certain 1.1 SUSPENSIVE TERM (Art. 1164 applies) • Ties is already created before the arrival of term • Only personal right; no real right yet • Establish cause of action for the existence of the tie • Tie is established with the constitution; • It is only the enforcement that is suspended ;pending arrival of the term 2.1 RESOLUTORY TERM • Immediately demandable ART. 1180 : MEANS PERMIT HIM TO DO SO

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Pulubi falls in love with you example It is a period The period shall be fixed by ART. 1197 : Judicial Period Joanna borrows money from Julienne example. Julienne must have a remedy.

Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall also fix the duration of the period when it depends upon the will of the debtor. In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them. (1128a)

3 TYPES OF CONDITIONS ON HOW THEY ARE FULFILLED: 1. Potestative (Art. 1182) Article 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this Code. (1115)

Solely dependent on ONE OF THE WILL OF THE PARTIES (either creditor or debtor) 2. Casual • Based on a condition of the WILL OF A THIRD PARTY Eg: I will give you 50 000 pesos if Dean Jara decides to sing • Based on CHANCE Eg: I will give you 10,000 pesos if I win the lottery • PARTIAL (not mixed) – based on a 3rd person and lottery 3. MIXED * Why is it very important? • Art. 1182 – when the obligation is with a condition solely dependent on the will of the debtor, IT IS VOID. o Even if the condition is fulfilled, it is still void. Article 1180. When the debtor binds himself to pay when his * Why is it void? means permit him to do so, the obligation shall be deemed to • The debtor WILL NEVER FULFILL A be one with a period, subject to the provisions of article 1197. CONDITION that will create the (n) obligation • It would seem like it is a condition • Not enforceable; not existing because one’s means to permit him to • This is a provision that applies only if the fulfill the obligation is UNCERTAIN. 2 JTVS | Obligations & Contracts | 1M | Dean Ulan Sarmiento •

POTESTATIVE IS SUSPENSIVE CONDITION • If it is dependent on the will of the debtor but RESOLUTORY, Art. 1182 will not apply ; the debtor is interested to fulfill the condition until the extinguishment – still a valid obligation. • There is no debtor na matino who would want to impose a burden upon him If potestative is to determine the enforcement of the obligation with a judicial term – where condition may ask for a judicial period – there is a pre-existing obligation. Eg: umutang ako, sir pay me na lang if you sing (this may be set aside) and ask ART. 1197 FOR A JUDICIAL PERIOD. TOLENTINO’S OPINION 1. Solely on the will of the creditor –VALID 2. PURE POTESTATIVE – void a. Fulfilled by the sheer manifestation of the willingness of the debtor to fulfill the condition b. Simple potestative- not only entail the manifestation of the debtor but also OTHER EVENTS – no longer in the WILL POWER OF THE DEBTOR. • For Jurado and Caguioa, already in a mixed obli NOTE: Osmena v. Rama Case EXAMPLE: • I will pay you 50,000 when Dean Jara and Dean Ulan runs around San Beda in their underwear • If only Dean Jara, obligation not fulfilled • Dean will prevent the fulfillment – deemed fulfilled by virtue of CONSTRUCTIVE FULFILLMENT ART. 1186: CONSTRUCTIVE FULFILLMENT Article 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. (1119)

• Condition is deemd fulfilled • Jet & Jette answers in recit – need to qualify REQUISITES: 1. If the debtor prevents the fulfillment of the obligation 2. If he actually prevents it 3. He did it to AVOID the obligation Cases: • Catungal v. Rodriguez

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Javier v. CA International hotel Corp v. Joaquin

ART. 1183 : IMPOSSIBLE CONDITIONS

Article 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid. The condition not to do an impossible thing shall be considered as not having been agreed upon. (1116a)

Obligation is void Not only physically impossible, but also not contrary to good customs or public policy or law EXCEPTIONS: 1. In cases of pre-existing obligations – the condition is not valid, not the obligation 2. Remunerative donations 3. Divisible obligations of prestations a. Only the portion affected impossible is VOID Art. 1183(2) • Immediately demandable • Not to do an impossible thing • Becomes a PURE OBLIGATION ART. 1184/5: POSITIVE & NEGATIVE CONDITIONS 1. Positive Conditions – in rel to. Art. 1188 and 1165(3) • Fulfillment by DOING AN ACT • 2 instances – legally extinguished • getting married 2. Negative Conditions • Fulfill by AVOIDING the act • NOT getting married * May ask to fulfill the obligation: 1. If X does NOT A marry in 2016 Without waiting, C may enforce the obligation if it is impossible – A dies – really cannot marry – condition fulfilled This is DIFFERENT FROM NEGATIVE OBLIGATIONS ; this type can incur DELAY because this is only a condition EXAMPLE:

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D agreed to sell a blue car to C if X gets married. D also agreed to sell the blue car to A if Y gets married. There is no tie yet until the fulfillment of the condition. In order to protect the rights of C, C should have the registration of the car annotated that it is subject to a conditional obligation – it is a public notice. So between A and C, C has the better right. This is by virtue of Art. 1188. The obligation will only exist if X gets married; if in that period, X does not marry – the obligation will not exist. If it does not exist, D or A may ask for the deletion of the annotation of C in the title. If C secures Art. 1188, A will now be in bad faith since he is notified in advance by the annotation.

Article 1188. The creditor may, before the fulfillment of the condition, bring the appropriate actions for the preservation of his right. The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition. (1121a)

If the car is LOST through a fortuitous event, Art. 1165(3) DOES not apply because THERE IS NO EXISTING OBLIGATION OR TIE to A – may apply to a term Art. 1188 tells the creditor that if you want to assure the prestation, take action to protect your rights IN CASE Art.1165(3) happens. Very important to annotate However, if it is a PERIOD, there is no need for Art. 1188 because THERE IS ALREADY A TIE EXISTING; Art. 1164 – only a personal right to the tie Example : wait for 2016 – no longer need to wait if it shows that A CANNOT NEVER EVER GET MARRIED—it is indubitable For as long as X may be able to marry, the annotation of C CANNOT BE DELETED. However, if X dies, it is indubitable. May ask for the deletion. ART. 1187 ( read on your own; wala raw kwenta LOL) • In relation to Art. 1164 • Retroactive effect – more on a RESOLUTION

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of conflicting claims of both parties in good faith Two conflicting claims of rights – double sale Art. 1165 (3) Who would have a better claim in the property? This provision is to determine whose right becomes enforceable first

EXAMPLE: 1) D agrees to sell a specific thing to C on February 20 if X marries. On March 30, X marries. Rights did not exist until X marries On the other hand, D agrees to sell the SAME thing to C1 on March 4 if A marries. A gets married on March 10. Thus, C1 HAS THE BETTER RIGHT. With respect to art. 1187 2) D agrees to sell a specifc thing to C to be delivered on March 5 ( in good faith). D THEREAFTER agrees to sell the SAME specific thing to C1 to be delivered on March 2 in good faith. C HAS A BETTER RIGHT BECAUSE THIS IS AN OBLIGATION WITH A TERM. – the tie is established from the constitution of the obligation .No need to wait; tie is already established. Art. 1188 : RESOLUTION Article 1188. The creditor may, before the fulfillment of the condition, bring the appropriate actions for the preservation of his right. The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition. (1121a)

This does not apply to obligations in period because creditor already has a right from the constitution of the obligation; no need to wait Art. 1189: Effect of Loss, Impairment, or Deterioration •

Article 1189. When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration of the thing during the pendency of the condition: (1) If the thing is lost without the fault of the debtor, the

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obligation shall be extinguished; (2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered; (3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor; (4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the obligation and its fulfillment, with indemnity for damages in either case; (5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor; (6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary. (1122)

*Same as Art. 1194 APPLIES TO: 1. Suspensive term/condition & resolutory condition/term (thing with the creditor ; apply to whoever is in position) 2. Applies only TO GIVE; not to do or not to do 3. Obligation to give a specific or determinate thing; not an indeterminate or generic thing 4. Pending fulfillment of a condition NOTE: never use Art. 1189 if the thing is generic LOSS (Art. 1189(1,2) ) 1. Perishes/ disappears 2. Cannot be found or determined – may still exist but impossible to retrieve 3. Goes out the commerce of man – no longer susceptible of private transactions; not subject to obligations; EG: expropriations, contraband –NOW LOST DETERIORATION (Art. 1189(3,4)) • Value or use of the thing is substantially affected • If without fault, can compel creditor to accept • If with fault, creditor has the option to 1)no longer accept and ask for damages and 2) still enforce the obligation and ask for damages

IMPROVEMENT (Art. 1189(5,6)) If only pending, may use that improvement. USUFRUCT Art. 1190 Article 1190. When the conditions have for their purpose the extinguishment of an obligation to give, the parties, upon the fulfillment of said conditions, shall return to each other what they have received. In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding article shall be applied to the party who is bound to return. As for the obligations to do and not to do, the provisions of the second paragraph of article 1187 shall be observed as regards the effect of the extinguishment of the obligation. (1123)

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SEBTC v. CA Naga Tel. Co v. CA Catungal v. Rodriguez

ART. 1191: TACIT RESOLUTORY CONDITION Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law. (1124)

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Reciprocal obligations – parties are debtors and creditors to each other Rescission- SHOULD BE RESOLUTION o Wrong use – not rescissible contract contemplated in Art. 1354 o Action for a resolution Example: contract of SALE 5

TACIT • Implied in all reciprocal obligations • Need not express • One of the parties do not fulfill the obligation that is incumbment upon him Eg: S did not sell the car to B. B will not pay 500,000 to S. • S – fulfillment of a condition with a resolutory effect – to rescind • S does not deliver – releases B from the tie- it is extinguished Q: Does B have a right to extrajudicially resove the tie? No need judicial? YES. AUTO. CAN BE DONE WITHOUT COURT DECLARATION. However, Art. 1191 (3): • Court needs to declare • Even if resolutory condition, Court may STILL GRANT the prayer to resolve the contract. • Court is NOT BOUND to grant the prayer to release a party in the tie. If the BREACH IS NOT SUBSTANTIAL, it may be insignificant – no breach. TOLENTINO: • If there is no performance, wholly or partially, resolution may be done extrajudicially Art. 1191,par. 1 – IF WALA PANG NAGAGAWA • If there is performance, wholly or partially, NEED A JUDICIAL DECLARATION. *The Courts may still deny the extrajudicial rescission and fix the period especially when there is a small breach compared to the totality NEED TO BE A SUBSTANTIAL BREACH. Only a substantial breach would justify the grant of prayer. SC: need a judicial declaration – partially or wholly performance incumbent upon the parties INSTANCES WHEN ART. 1197 APPLIES: 1. Art. 1180 – when his means permit him to fulfill the obligation 2. Art. 1191 – The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. 3. If the obligation does not fix a period, but from its nature and the circumstances it can

be inferred that a period was intended 4. When it depends upon the will of the debtor 5. Such period as may under the circumstances have been properly contemplated by the parties Art. 1192: BREACH OF PARTIES Article 1192. In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages. (n)

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Once the period is gone, oyu start to worry. Period is very important.

Art. 1195: SOLUTIO INDEBITI Article 1195. Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or believing that the obligation has become due and demandable, may be recovered, with the fruits and interests. (1126a)

ART. 1196 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. (1127)

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Presumption on WHOSE benefit is fixed Usually, period is for the benefit of the debtor; because the creditor cannot enforce the obligation until the DATE

NOTE: Benefit of BOTH creditor and debtor; if C cannot enforce the obligation to D, D can neither compel C to accept the payment; whether expressly or impliedly stated PAYMENT

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Not only for the interest of banks Tax avoidance – legal way of avoiding tax liability If Bank allows to let you pay, Bank needs to 6

report the interest for the year; bigger interests ART. 1197 Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall also fix the duration of the period when it depends upon the will of the debtor. In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them. (1128a)

ART. 1198 : Instances where debtor loses right to make use of the period Article 1198. The debtor shall lose every right to make use of the period: (1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the

• Based on the number of prestations • The number needed to be fulfilled Simple Alternative Ø just one Ø you give one object COMPOUND/COMPLEX ALTERNATIVE Required to fulfill ALL in Several prestations; but order to extinguish the only need to fulfill one – obligation or none but NOT AT ALL “I give you my house EXTINGUISH THE and my car” à both OBLIGATION needed to be fulfilled Facultative • There is a prestation but allows SUBSTITUTION Art. 1200: RIGHT OF CHOOSE Article 1200. The right of choice belongs to the debtor, unless it has been expressly granted to the creditor. The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not have been the object of the obligation. (1132)

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(2) When he does not furnish to the creditor the guaranties or securities which he has promised; (3) When by his own acts he has impaired said guaranties or securities after their establishment, and when through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;

D – C

(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period; (5) When the debtor attempts to abscond. (1129a)

SECTION 3: ALTERNATIVE OBLIGATIONS ART. 1199: ALTERNATIVE 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. (1131)

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General rule: choice is with the debtor Exceptions to the rule: o Creditor may choose o Given to a 3rd person ( need an express declaration) o In the absence of delegation, it belongs to the debtor.

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o Prestations: horse, dog, cat, mouse (all part of the obligation) o D needs to fulfill one if ALTERNATIVE Alternative Obligations may be subject to terms & conditions

Is the right ABSOLUTE? •

No. There are limitations ; debtor should not go against creditor

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LIMITATIONS: 1. Contrary to law, morals, good customs, public policy, and public order 2. Impossible (1200(2) 3. Not contemplated to be the object of the obligation – never contemplated to be part of the obligation a. Never contemplated to be a part b. Not yet due and demandable (may be subject to terms and conditions) 4. Those due and demandable but enforcement is dependent on the creditor; when the period fixed is solely for the benefit of the creditor o only due and demandable insofar as D is concerned o may be declined by C because there is a period solely for his benefit 5. Debot cannot choose part of one prestation and part of another > Article 1248. Unless there is an express stipulation to that effect, the creditor cannot be compelled partially to receive the prestations in which the obligation consists. Neither may the debtor be required to make partial payments.

However, when the debt is in part liquidated and in part unliquidated, the creditor may demand and the debtor may effect the payment of the former without waiting for the liquidation of the latter. (1169a)

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If the creditor has the right to choose, these limits should also be known

Art. 1201: COMMUNICATION Article 1201. The choice shall produce no effect except from the time it has been communicated. (1133)

To whom should it be communicated? • •

Be given by the person who had the right to choose , either debtor or creditor IF a 3rd person ,3rd person must communicate to debtor and creditor

effected, the alternative obligation is extinguished and is CONVERTED into a simple obligation that is enforceable. •

If there is no communication, there is no cause of action to compel the delivery

1987 Bar Question: Is it possible for the debtor to incur delay in: 1. Personal Negative obligations (No) 2. Obligation with negative conditions (YES) 3. Alternative obligations (NO) a. Not enforceable UNTIL choice is made Is the creditor under the mercy of the debtor? What is the legal remedy if the debtor intentionally incurs delay communication to the creditor? The right to choose is actually AN OBLIGATION TO CHOOSE. • Presupposes a choice • RIGHT is an option to assert or not to assert it • There is freedom to choose and not to choose • It is not a right rather it is an OBLIGATION TO DO- TO CHOOSE AND COMMUNICATE Thus, remedy if debtor delays in choosing and communicating, Art. 1167 – fail to do – execute at his own cost Rights & Duties if all / some are lost: It depends: 1. Whether or not the loss of the the thing due took place AFTER the communication 2. To whose right is choosing? Who had the right to choose? Art. 1202: Only one is practicable Article 1202. The debtor shall lose the right of choice when among the prestations whereby he is alternatively bound, only one is practicable. (1134)

IMPORTANCE: as soon as communication is JTVS | Obligations & Contracts | 1M | Dean Ulan Sarmiento

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If the right belongs to D – not cummincate yet, if the horse or dog is lost regardless of how, it becomes a simple obligation, D is 8

obliged to deliver the cat. Art. 1203: Choice is rendered impossible

D – C Prestation: Car Sub: horse Ø If alternative, even if the car is lost, the Article 1203. If through the creditor's acts the debtor cannot make a choice according to the terms of the obligation, the obligation is not extinguished because of latter may rescind the contract with damages. (n) nature Ø If facultative, if the car is lost, horse is not a • Horse is lost by C ; may cancel ; the nature part of prestation UNTIL it replaces the of the obligation has changed. D may cancel prestation and make C liable • If all lost, if due to a FORTITOUS EVENT, JOINT & SOLIDARY OBLIGATIONS even if because of the debtor – no liability Classification: number of parties General rule: only two parties; a creditor and a Art. 1204: Effect of Loss of Obli/ choice of debtor debtor Ø If two or more parties, two or more Article 1204. The creditor shall have a right to indemnity for creditors, two or more debtors – basta damages when, through the fault of the debtor, all the things which are alternatively the object of the obligation have been lampas two lost, or the compliance of the obligation has become Ø Determine if JOINT or SOLIDARY impossible. Ø There is a concurrence of more than 2 The indemnity shall be fixed taking as a basis the value of the parites last thing which disappeared, or that of the service which last became impossible. *LEGEND: • If not because of a fortuitous event lost D1,D2,D3 -- JOINT because of debtor, action for damages D1-D2-D3 -- Solidary arises based on the last existing prestation JOINT – more presumed SOLIDARY (instances when solidarity is presumed) ART. 1206: FACULTATIVE 1. Expressly stipulated Article 1206. When only one prestation has been agreed 2. Law requires solidarity (support of mother upon, but the obligor may render another in substitution, the and father to child in Family Code) obligation is called facultative. 3. Nature of obligation (vicarious obligations; The loss or deterioration of the thing intended as a substitute, related to quasi-delicts) 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, • Whether Joint or Solidary, they really are negligence or fraud. (n) several obligations clung together- separate with each other contract – will carry as • Almost similar as alternative many obligations in one parties • Substitute is NOT A PART of the prestation • Basketball example: first 5- alternative, JOINT substitutes- bench- facultative 1. Joint Divisible Obligations • Many are due but may be substituted o To determinte obligation if divisible NOTE: substitution NEEDS TO REPLACE the or indivisible, only criterion is nature prestation to be enforceable o If it can be divided, it is divisible CHOICE: by law, belongs to the DEBTOR ; no o If cannot be divided, it is indivisible delegation to creditor or 3rd party 2. Joint Indivisible OBligations Ø IF choice is given to the creditor, it is alternative. *Segway to DIVISIBLE & INDIVISIBLE OBLI 9 JTVS | Obligations & Contracts | 1M | Dean Ulan Sarmiento

DIVISIBLE & INDIVISIBLE OBLIGATIONS • Whether or not the obligation is sucpetible of partial fulfillment • It is always presumed INDIVISIBLE – even if by nature of the obligation is divisible, always presumed INDIVISIBLE. • Susceptible of partial performance IS NOT ONLY factor to determine if it is divisible or indivisible.

When divisibility is presumed: 1. Stipulated by the parties 2. Law requires so 3. Nature of the obligation requires divisibility. Article 1248. Unless there is an express stipulation to that effect, the creditor cannot be compelled partially to receive the prestations in which the obligation consists. Neither may the debtor be required to make partial payments. However, when the debt is in part liquidated and in part unliquidated, the creditor may demand and the debtor may effect the payment of the former without waiting for the liquidation of the latter. (1169a)

*Back to Join & Solidary D – C1, C2, C3 Debt: 900,000 pesos Ø unless otherwise stipulated, presumption is equal ; proportionate – depends on the express stipulation Ø No matter how joint, it is still distinct from each other Ø D may get from C1; C1 may get from D only his share. D1,D2,D3 – C Debt: 900,000 pesos D3: 300,000 (his share) Ø C cannot sue D1 because of the delay of D3 D1,D2,D3 – C1,C2,C3 Debt: 900,000 pesos There are 9 obligations (3 creditors times 3 debtors) Demandable/May be demanded by C/D= 100,000 pesos Article 1209. If the division is impossible, the right of the

creditors may be prejudiced only by their collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the others shall not be liable for his share. (1139)

Horse X is worth 900,000 Pesos D1,D2,D3 – C1,C2,C3 Prestation: Live HORSE – indivisible Ø All must enforce & all must accept Ø If one of the debtors refuses for any cause, there is no performance ; joint indivisible obligation is extinguished and now a Joint Divisible obligation with 900,000 pesos. Ø If C refuses to accept, not insist on accepting, joint indivisible obligation is extinguished and joint divisible obligation is created – the debtor may force to accept the properties Ø If c1, refuses without just cause, liability for damages SOLIDARY • Presume joint over solidary because in a joint obligation – it is less burdensome than solidary • May pananagutan sila sa isat isa • Debtors are liable to each other; creditors are agents to each other • Hiwahiwalay pa rin – different now is you can compel ANY of the creditors for ALL 3 Types of Solidary Obligations: 1. PASSIVE SOLIDARY • Two or more debtors solidary bond • D1-D2-D3 – C o Prestation: 900,000 NOW: C may go to ANY of the Debtors; C may collect the WHOLE of 900,000 from D1 2. ACTIVE SOLIDARY • Debtor owes several creditors • D – C1-C2-C3 o C1 may compel to pay all of the shares from D 3. MIXED SOLIDARY

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2 or more creditors and debtors D1-D2-D3 – C1-C2-C3 o Prestation: 900,000 NOTE: Confusing; it does not mean that because there are solidary debtors, the creditors are likewise solidary.NO! Not always solidary creditors and solidary debtors ( in the absence of express and nature) D1—D2—D3 – C1,C2,C3 CLAIM ONLY: 300,000 PESOS from any of the debtors– FROM ANY OF the debtors; not extend to creditors because the creditors are joint. NOTE: Solidary obligations with different terms D1-D2-D3 – C1 ( term: jan. 15,2017) , C2 (Condition: x dies), C3 (Condition: b marries) • still solidary—it remains • prestation:900,000 • •

Article 1211. Solidarity may exist although the creditors and the debtors may not be bound in the same manner and by the same periods and conditions. (1140)

If on January 15,2017, X is still alive, and B is not yet married: 1. How much may be enforced? 900,000 – D1-D2-D3 – due to C Look kung kanino nakalagay ang term. 2. As against who? ANSWER: As against any debtor because it is solidary. Answer to # 1: If on January 15,2017, D1 is already due; C1 may only ask from D1. If it is attacked to C1 – on Jan. 15 , 2016- D1-D2-D3may give the share that belongs to C1 D2 may be held liable for his obligation; can C3 collect if it belongs to C1? Yes. Because C3 is an agent of C1 Answer to #2: Two terms, one condition

In the term, a juridical tie is already created. In a condition, the tie is created upon the fulfillment of the condition. The obligation of the debtor to creditor- may only be enforced when the condition is fulfilled; there is no juridical tie yet. D may not be obliged to pay for C3 because the condition has not yet been fulfilled C1 and C2 – may be enforced because their tie already exists To whom shall payment be made? If C1 demands, they may only deliver it to C1. The law encourages the right of the debtor to whom payment shall be made; creditor also given the right to choose. Article 1214. The debtor may pay any one of the solidary creditors; but if any demand, judicial or extrajudicial, has been made by one of them, payment should be made to him. (1142a) Article 1216. The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected. (1144a)

NOTE: The right of the creditor to choose IS GREATER THAN that of the right of the debtor to choose • If debtor does not comply and PAYS ANOTHER CREDITOR, rather than to C1 who demanded it- it is an improper payment to an improper party – IT WILL NOT EXTINGUISH THE LIABILITY • If C1 demands from D1 – D1 is macho, C1 is gay and C3 is sexy. D1 wants to pay C3 because Sexy • C1 was the first to demand. D1 pays C3? Valid? NO. • Once one of the creditors collect from debtors, C1 is now obliged to distribute the share of c2 and c3; C1 NOW A DEBTOR – JOINT—WITH C2 AND C3 – however, may

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only demand a proportion of the share. C3 may collect from C1. D1 paid all; there is now a new obligation. D1 has the right to be reimbursed from D2 and D3 – it is not a joint obligation to their proportionate shares If D1 pays C2, because C1 was the first to demand and C1 does not distirubute, it is no longer the concern of the debtor becaue the obligation has been extinguished.

Art. 1216 • IF D1 does not may C1, but pays C3 – C3 takes it away and does not pay C1 and C2 – the debtor may still be liable because D1 did not pay to the proper party; it should have been paid to C1 IMPORTANT: know how to pay • If D1 pays in full, D1 has the right to collect from D2 and D3 the shares. If D3 is insolvent, may only go to D2; if the inability of D3 is insolvency, D1 and D2 will pay the share – based on the principal obligation ( if no stipulation as to the share, presumed equal). Thus: 450,000 pesos. 1:1 share • Only because of INSOLVENCY

provisions of article 1219. The creditor who may have executed any of these acts, as well as he who collects the debt, shall be liable to the others for the share in the obligation corresponding to them. (1143)

C1, C2, C3 – are mutual agents of each other One of the solidary creditors cannot assign his right without the consent of others (Article 1213. A solidary creditor cannot assign his rights without the consent of the others. (n) )

the remission of debt – the obligation is extinguished—not void Effect of obligation of creditor to debtor = C & D extinguish obligation

> this is because of mutual confidence. If C1 wants to transfer it to A, C2 and C3 need to know and give consent otherwise it is void. EXCEPTIONS:

Article 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept. He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each. (1145a)

ART. 1212

ART. 1215

Provision: 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. (1141a)

Provision: Novation, compensation, confusion or remission of the debt, made by any of the solidary creditors or with any of the solidary debtors, shall extinguish the obligation, without prejudice to the



C assigns to other creditors without consent= VALID; this is because C2 and C3 are co-agents Although it recognizes the rights of the creditor, it is only those that are beneficial; if detrimental it is VOID.

Refers extinguishment

Does not affect obligation of C1 to distirubte to C2 and C3 ; face the consequences as though he collected the amount.



to



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Beneficial act: • IF C1 exerts effort to any debtor to pay the amount Detrimental Act: • C1 (gay) tells D1 (macho) to give “hilig ko” . D1 consents it. Pinatawad= remission of debt • If c2 and c3 has nothing to do with the condonation of the TOTAL obligation, not know or they know but objected. Art. 1212 it is VOID May D1 who was responsible for the remission of debt, who beneifited D2 and D3 reiumbers? NO. *Read on our own Article 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept.

He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each. (1145a) Article 1218. Payment by a solidary debtor shall not entitle him to reimbursement from his co-debtors if such payment is made after the obligation has prescribed or become illegal. (n)

• •

Because solidary, debtor liable to each creditor Debtor may use as defense to the others the defense of other solidary debtors in that amount

2. General

“In solidum” – solidary “joint & severally liable” – solidary *Study well on our own Article 1219. The remission made by the creditor of the share which affects one of the solidary debtors does not release the latter from his responsibility towards the co-debtors, in case the debt had been totally paid by anyone of them before the remission was effected. (1146a) Article 1220. The remission of the whole obligation, obtained by one of the solidary debtors, does not entitle him to reimbursement from his co-debtors. (n)

OBLIGATION WITH A PENAL CLAUSE Purposes: 1. in order to strengthen the coercive power of the obligation 2. to provide for a liquidated and a predetermined penalty in case of breach Art. 1226(1): Effect of Penalty Article 1226. In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation. The penalty may be enforced only when it is demandable in accordance with the provisions of this Code. (1152a)

• substitutes the indemnity for damages DEFENSES: • penal clause may be enforced 1. Personal • may still ask for damages? • Evade paying show debtor to whom General rule: C can no longer enforce another that defense perpetrates amount aside from the stipulated penal clause • Defense that only a minor. • D3 is a minor – the other debtors Exception to the rule: Art. 1226 may use that defense but only with respect to his share JTVS | Obligations & Contracts | 1M | Dean Ulan Sarmiento

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Art. 1227: Limitation upon the Right of the debtor Article 1227. The debtor cannot exempt himself from the performance of the obligation by paying the penalty, save in the case where this right has been expressly reserved for him. Neither can the creditor demand the fulfillment of the obligation and the satisfaction of the penalty at the same time, unless this right has been clearly granted him. However, if after the creditor has decided to require the fulfillment of the obligation, the performance thereof should become impossible without his fault, the penalty may be enforced. (1153a)



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