Taleon Notes Oblicon

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

First Meeting OBLICON

1. Can parties stipulate terms and conditions in a contract which is contrary to law, public order or public policy?

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In relation to Article 5 of the Civil Code. Acts contrary to the provisions of mandatory and prohibitory laws are void unless the law itself authorizes their validity.

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Thus, if the laws are not mandatory or prohibitory (directory, etc.) then the contracting parties may stipulate terms and conditions which are contrary to law (as long as they are not mandatory or prohibitory), public order or public policy

2. Differences: liability of the employer under quasi-delicts and culpa criminal. Legal Basis: Quasi Delict: Article 2176 of the Civil Code Criminal Offense: Article 103 of the RPC a. Quasi delict: direct and primary (solidary) Criminal offenses: subsidiary

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In criminal offense, it is necessary that the assets of the accused or the employee has been exhausted before the employer may be held liable in case of such insolvency while in quasi delict, it is not necessary that the assets of the employee must be exhausted because he is directly and primarily liable

b. Quasi delict: not necessary that the employer is engaged in a trade or industry Criminal Offense: it is necessary that the employer is engaged in trade or industry

c. Quasi delict: •

observance of due diligence of a father of a family in the SELECTION and SUPERVISION of the employee is a defense which may exempt the employer from civil liability Criminal offense:

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observance of due diligence of a father of a family is not a defense to exempt the employer from the civil liability

3. If Christian Grey is acquitted in a criminal case, may a civil case still be filed against him? 4. What is Article 100 of the RPC? Article 100: Every person criminally liable for a felony is also civilly liable. -talks about the dual aspect of a criminal offense (the criminal and civil aspect)

5. What are the exempting circumstances? Article 12: The following are the exempt from criminal liability:

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

1. An imbecile or an insane person, unless the latter has acted during a lucid interval. 2. A minor. 3. Any person who while performing an act with due care, causes an injury by mere accident without fault or intention of causing it 4. Any person who acts under the compulsion of an irresistible force. 5. Any person who acts under the impulse of an uncontrollable fear. 6. Any person who fails to perform an act required by law, when prevented by some lawful or insuperable cause.

6. Difference between justifying and exempting circumstance Justifying circumstances- there is no criminal because there is NO CRIME. Exempting circumstances- There IS a crime but there is NO CRIMINAL. * nos. 5 and 6 is in relation with civil liability or when is an offender exempt from civil liability if the above circumstances are present.

7. Who are subsidiary liable in Article 103? (tanong kay Pau) Article 103: The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties. 8. What does civil liability includes?

Legal Basis: Artice 104 of the RPC states: 1. Restitution- in theft, the culprit is duty-bound to return the property stolen 2. Reparation - in case of inability to return the property stolen, the culprit must pay the value of the property stolen, or the damages caused 3. Indemnification- for consequential damages- the loss of his salary or earning. 9. What are the requisites of a contract? a. Consent of the parties b. Object of the contract c. Cause for the establishment of the contract 10. When is a contract perfected? Legal Basis: 1. Article 1315: Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. 2. Article 1316: Real contracts, such as deposit, pledge and commodatum, are not perfected until the delivery of the object of the obligation. 11. What are the 2 kinds of contracts? 1. Consensual contract •

perfected by mere agreement of the parties e.g. sale, lease.

2. Real contracts •

those which require not only the consent of the parties for their perfection , but also the delivery of the object by one party to the other.

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

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Commodatum, deposit, pledge

12. What are the classifications of Obligations under RPC? (tanong kay Radz) 1. Pure and Conditional 2. With a Period 3. Alternative and Facultative 4. Joint and Solidary 5. Divisible and Indivisible 6. With a Penal Clause 13. Quasi-contracts: In negotiorum gestio, who is obligated? Who is the obligee? 14. What the owner incurs loss during the management of the property? 15. What is a solutio indebiti? •

Juridical relation which arises whenever a person unduly delivers a thing through mistake to another who has no right to demand it.

16. What is a right? Source: Makati Stock Exchange vs. Campos Right- a claim or title to an interest in anything whatsoever that is enforceable by law.

17. What is an obligation according to JBL Reyes in the case of Makati Stock Exchange? (tanong kay Radz) Source: Makati Stock Exchange vs. Campos

Obligation- is a juridical relation whereby a person (called the creditor) may demand from another (called the debtor) the observance of the determinative conduct (the giving, doing or not doing) and in case of breach, may demand satisfaction from the assets of the latter. 18. When does an obligation arise from law and when can you say that it arises from a contract, quasi-contract , criminal offense and quasi delict? (tanong kay marj) •

It arise from law when the law establishes the obligation and the act or condition which predicates the obligation is nothing more than a factor in determining the moment it becomes demandable.

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It arises from contract, quasi-contract, quasi-delict or criminal offense when the law merely recognizes or acknowledges the existence of an obligation generated by an act which may constitute a contract, quasi-contract, quasi-delict or criminal offense and the purpose is merely to regulate such obligation.

CASES: Makati stock exchange vs. Campos (tanong ni shinji) -

Issue is whether or not Campos has the right to participate in the allocation of IPO’s

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No because his alleged right is based on customs or practice which is not one of the 5 sources of obligations stipulated by the civil code and a custom is not a source of right that is demandable and enforceable by law

Liga vs. Allegro -

A contract has a force of law between the contracting parties and should be complied with in good faith.

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

Tips: If the prof ask you a YES or NO question, ask yourself whether the question can be qualified. If it is answerable by yes or no then start with “MISS I QUALIFY MY ANSWER… or MISS IT DEPENDS, IF…” IN EXAMS, it is better if you will write the legal reason first before saying yes or no… answer the yes or no in the concluding part of your answer so that at least the prof will be able to read your reason and might give you extra points instead na if mali na ang yes or no mo sa first part din a niya babasahin ang reasons…

Second Meeting Merge Class (Nov. 26, 2012) 1. What is a Determinate object? -

2. Differentiate Generic and Determinate thing. 3. What are the obligations of the Debtor if the object is Determinate. 4. 5. What is Article 1169? When does the Obligor incur Delay? -

Article 1169: Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.

6. What are the other things an obligor is obliged to deliver? -

Article 1166: The obligation to give a determinate thing includes that of delivering all

its accessions and accessories, even though they may not have been mentioned.

7. What is accession? What is an accessory? Accession- all those things which are produced by the thing which is the object of the obligation as well as all of those which are naturally or artificially attached Accessory- all those things which have for their object the embellishment, use or preservation of another thing which is more important and to which they are not incorporated or attached. It is merely convenient for the perfection of another thing. 8. How can you say that it is the proper diligence of a good father of a family? -

9. Obligation to deliver a 2012 white Toyota Corolla: determinate or generic? -It is a determinate object. Usually, to turn the example above (Toyota car) into a determinate object, the serial number [?] of the car will determine its individuality amongst its class.

10. What are the obligations of the Debtor if the object is generic? Determinate thing? The following are the obligations of the debtor if the object is generic: 1. To deliver a thing which is neither of superior nor inferior quality 2. Liable for damages in case of breach of obligation •

Liability subsist even if thing is lost through fortuitous event because the genus of a thing can never perish (genus nunquam peruit)

The following are the obligations of the debtor if the object is determinate: 1. To perform the obligation specifically

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

2. To take care of the thing with the proper diligence of a good father of a family 3. Deliver all the accessions and accessories of the thing 4. Liable for damages in case of breach of obligation by reason of delay, fraud, negligence and contravention of tenor

11. Rights of the creditor? Rights of creditor for Determinate Obligations: 1. Compel specific performance Legal Basis: Article 1165: When what is to be delivered is a determinate thing, the creditor in addition to the right granted him by Article 1170, may compel the debtor to make the delivery. •

Article 1224: Debtor cannot compel creditor to accept different one

2. Recover damages for breach of obligation •

Legal Basis: as stated in Article 1165 “right granted him by Article 1170”

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Article 1170: Those who in the performance of their obligation are guilty of fraud, negligence or delay and those who in any manner contravene the tenor thereof, are liable for damages.

Rights of creditor in Generic Obligations 1. To ask for the performance of the obligation o

Delivery of the thing or object of neither superior nor inferior quality belonging to a class or genus.

2. Ask the obligation be complied with at the expense of such debtor o

Creditor can order he delivery from a third person at the expense of the debtor

3. Recover damages of breach of obligation o

Demand to indemnify for damages

Legal Basis: Article 1165, Par. 2: If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor. 12. What is negligence? Negligence- consist in the omission of diligence which is required by the nature of a particular obligation and corresponds with the circumstances of the persons, of the time and of the place.

13. When does the delay of the delivery of the thing and its fruits arises? Qualify the answer for it: Depend upon the nature of the obligation. If it is derived from law, quasi-contracts, criminal offenses and quasi-delicts, the delivery arises from the time designated by the provisions of the Civil Code or the Special Laws. If it is derived from a contract, then it arises from the moment of the perfection of the contract.

14. What are the remedies of the creditor if there is failure of delivery on the part of the obligor? 1. Exhaust the property in possession of debtor 2. Be subrogated to all the rights and action of the debtors save those which are inherent in his person *subsidiary

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

3. Impugn all the acts which the debtor may have done to defraud him *subsidiary

15. What is Article 1165? Article 1165: When what is to be delivered is a determinate thing, the creditor in addition to the right granted him by Article 1170 , may compel the debtor to make the delivery. If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor. If the obligor delays or has promised to deliver the same thing to two or more persons who do not have the same interest, he shall be responsible for fortuitous event until he has effected the delivery. 16. What are the exceptions of the observance of the diligence of a good father of a family? The exceptions for the observance of DoaGFoaF: 1. If the law requires another standard of care e.g. Common Carrier 2.

Parties stipulate another standard or care

17. What is a common carrier? Article 1732: Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both , by land, water or air, for compensation, offering their services to the public.

Article 1733: Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the

goods and for the safety of the passengers transported by them, according to all the circumstances of each case. 18. Can a party stipulate observance of care that is ordinary or below than that of the standard?

Third Meeting (November 29, 2012) 1. What is a pure condition? Legal Basis: 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. •

One whose effectivity or extinguishment does not depend upon the fulfillment or non-fulfillment of a condition or upon the expiration of a term or a period which as a consequence, is characterized by the quality of immediate demandability.

2. Differentiate: Potestative, Casual and Mixed conditions 7. Potestative •

fulfillment of the condition depends upon the will of a party to the obligation

8. Casual •

Fulfillment depends upon chance and/or will the will of one of the parties of the obligation

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

9. Mixed -

Fulfillment of the condition depends partly upon the will of the party to the obligation and partly upon the chance and/or will of a third person

3. What is Article 1170? Article 1170: those who in the performance of their obligation are guilty of fraud, negligence or delay, or those who contravene the tenor thereof, shall be liable for damages.

4. What is dolo? •

Dolo consist in the conscious and intentional proposition to evade the normal fulfillment of an obligation.

5. What is the distinctive character of a pure obligation? •

The distinctive character of a pure obligation is its immediate demandability.

6. What is a conditional obligation? •

One whose effectivity is subordinated to the fulfillment or non-fulfillment of a future or uncertain fact or event.

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Article 1181:In conditional obligations, the acquisition of rights as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition.

7. Can an action for fraud be waived? •

It depends. If the waiver is for future fraud, then it is void. If the action taken is to

waive an existing fraud, it is valid for it is considered as an act of generosity. •

Article 1171: Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.

8. What is future fraud? Why can’t we waive future fraud?

9. In potestative condition, what is the nature of the obligation? •

Potestative conditions are conditions whose fulfillment depends upon the will of a party to the obligation.

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If it depends upon the will of the creditor; the condition and obligation is valid.

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If it depends upon the will of the debtor; the condition and obligation is void.

Legal Basis: Article 1182: When the fulfillment of the condition depends upon the will of the debtor, the conditional obligation shall be void. If it depends upon chance or the will of a third person, the obligation shall take effect in conformity with the provisions of this Code. 10. Define condition. •

Condition – a future or uncertain factor event upon which an obligation is subordinated or made to depend.

11. Define suspensive condition. •

Condition precedent; future or uncertain event upon the happening or fulfillment of which rights arising out of the obligation are acquired.

12. What is a term? Differentiate term from a condition. 1. Definition •

Term/period- proof of ascertainment of fact or event will surely come to pass although clearly it may not be known when

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

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Article 1193, Par. 3: A day certain is understood to be that which must necessarily come, although it might not be known when.

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Condition- a future or uncertain factor event upon which an obligation is subordinated or made to depend.

2. As to requisites: •

Term- interval of time which is future or uncertain

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Condition- refers to fact or event which is future and uncertain

3. As to fulfillment •

Term – an interval of time which must necessarily come, although it may not be known when

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Condition- future or uncertain fact or event which may or may not happen

4. As to influence on obligation •

Term- merely exerts an influence upon the time of the demandability or the extinguishment of an obligation

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Condition – exerts an influence upon the very existence of the obligation itself

5. As to retroactivity of effects •

Term – does NOT have retroactive effects unless there is an agreement to the

contrary •

Condition- has retroactive effects

6. As to effect of the will of the debtor •

Term – if left exclusively to the will of the debtor, the existence of the obligation is not affected

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Condition- if left exclusively to the will of the debtor, the very existence of the obligation is effected

13. Promise to pay debt once you receive money: is it a conditional obligation? Pure obligation or an obligation with a period? •

Obligation with Period.

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Legal Basis: Article 1180: When the debtor obliges himself to pay when his means permits him to do so, the obligation is deemed to be oe with a period, subject to the provisions of Article 1197.

14. What is 1197? Article 1197: If the obligation does not fix a period,but from itsnature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall 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. 15. What is Article 1180? Article 1197? Article 1177?

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

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Article 1180: When the debtor obliges himself to pay when his means permits him to do so, the obligation is deemed to be oe with a period, subject to the provisions of Article 1197.

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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 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.

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Article 1177: The creditors, after having pursued the property in possession of the debtor to satisfy their claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are inherent in his person; they may also impugn the acts which the debtor may have done to defraud them.

16. What are specific steps the creditor must do to avail the remedy? 1. Exhaust the possession of the creditors 2. Exercise all the rights and bring all the actions the debtor may have against third persons 3. Impugn all the acts which the debtor may have done to defraud the creditor

17. If the condition is potestative, Is it valid or void?

18. Potestative and resolutory: valid or void?

19. Define: suspensive vs. resolutory *not just the effects…define them

20. Prior to the fulfillment of a suspensive condition, is there right?

21. What is hope and expectancy?

22. Is this hope or expectancy protected by law? how is it protected?

23. What are the rights or the creditor to protect his credit? (Art. 1177)

24. Impossible vs. impossible condition

25. Can the creditor choose any of the remedies? •

NO, the primary remedy is to exhaust the properties of the debtor and the

OBLIGATIONS AND CONTRACTS Atty. Risel Castillo-Taleon Dizon2012

other remedies are subsidiary.

26. What is accion subrogatoria?

27. Can the creditor choose the subsidiary remedies simultaneously or not?

28. What is accion pauliana?

29. Condition vs. Obligation

30. Requisites of Accion subrogatoria?

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actions done by debtor intended to defraud the creditor, the creditor must be prejudiced by the acts of the debtor because accion subrogatoria is just a subsidiary remedy

30. Hypo: Edward is indebted to Jacob, Edward receives allowance from Bella which is not yet collected by the latter. Jacob filed a case,won and executed judgment against Jacob. The payment was not enough, can Jacob pursue accion subrogatoria against Bella? Answer: NO. the right to receive allowance falls under Support, thus it is inherent and personal to Edward.

31. Potestative, Conditional depends upon the will of the debtor? Valid or Void? -

Depends if it is suspensive or resolutory