OBLIGATION

I. Elements
A. Juridical Tie - binds the parties to the obligation
B. Subject
1. Active/ Creditor
2. Passive/ Debtor
C. Object
1. Specific/ Determinate
2. Generic/ Indeterminate
II. Prestations
A. To give
1. Specific thing
a. Debtor's Obligation
i. Perform obligation
ii. Take care thing DOGFF
iii. Deliver
I) Accessions
II) Accessories
iv. Pay damages
b. Creditor's Rights
i. Specific performance
ii. Fruits
iii. Absolute fulfillment in case of fraud
iv. Rescission
v. Damages
2. Determinate thing
a. Debtor's Obligation
i. Deliver thing
ii. Pay damages
b. Creditor's Rights
i. Substituted performance
B. To do - in case of non performance of debtor,
creditor has the right to
1. Ask for performance
2. Rescission
3. Damages
C. Not to do - in case debtor did the forbidden,
creditor has the right to
1. Rescission
2. Damages
III. Breaches of obligation
A. Kinds
1. Failure to perform
2. Default/ Delay/ Mora
a. Kinds
i. Solvendi - delay of debtor to perform
I) Ex re - when obligation is to give
II) Ex persona - obligation is to do
ii. Accipendi - delay of creditor to accept delivery
 Requisites
I) debtor performed obligation
II) Refusal without just cause
iii. Compensation Morae - in reciprocal obligations
b. No demand, no delay; except when
i. Expressly Declared
ii. Designation is a controlling motive
iii. Demand is useless
3. Fraud/ Dolo
a. Classification
i. Causante - casual
ii. Incidente - incidental
b. Remedy - damages paid by gulity party
c. Can not be waived
4. Negligence/ Culpa
a. Kinds
i. Civil
I) Contractual - debtor's fault
II) Aquiliana - failure to observe diligence
ii. Criminal
b. Effect: becomes demandable
5. Contravention of tenor of obigation
B. Remedies
1. Specific Performance
2. Rescission
3. Damages
a. Moral - sleepless nights
b. Exemplary - example
c. Nominal - right is violated
d. Temperate - pecuniary loss
e. Actual
f. Liquidated - Agreed upon
4. Subsidairy remedies
a. Accion subrogatora - go after debtors of debtor
b. Accion pauliana - rescission done by court
c. Accion Directa - specific cases
IV. Kinds of obligation
A. Primary
1. As to condition
a. Pure
b. Conditional
i. As to form
I) Express
II) Implied
ii. As to effect
I) Resolutory
II) Suspensive
iii. As to origin
I) Protestative
II) Casual
 III) Mixed
iv. As to possibility
I) Possible
II) Impossible
v. As to move
I) Positive
II) Negative
vi. As to divisibility
I) Divisible
II) Indivisible
vii. As to numbers
I) Conjunctive
II) Alternative
2. As to Period
a. Suspensive
b. Resolutory
3. As to number of prestations
a. Alternative
b. Facultative
4. As to number of parties
a. Joint
b. Solidary
i. Passive
ii. Active
iii. Mixed
5. As to divisibility
a. Divisible
b. Indivisible
6. Obligation with penal clause
a. Legal
b. Conventional
c. Subsidiary
d. Joint
B. Secondary
1. As to source
a. Legal
b. Conventional
c. Penal
2. As to subject matter
a. Real
b. Personal
3. As to parties
a. Unilateral
b. Bilateral
4. As to object
a. Determinate
b. Indeterminate
5. As to the right to enforce performance
a. Civil
b. Natural
V. Extinguishment of obligation
A. Payment
Important concepts:
1. Dacion en pago - payment in kind
2. Application of payment - allocation of payment to:
a. same creditor
b. multiple debts of same kind
c. all debts must be due
3. Tender of Payment - manifestation of debtor to pay
4. Consignation - deposit of object to court in case
creditor refuses tender
B. Loss of Determinate thing due - must be:
1. No debtor's fault
2. No delay
C. Remission/ Condonation - forgive debt
1. Requisites:
a. Gratuitous
b. Accepted by debtor
c. Obligation is demandable
d. Parties have capacity *deprives right to donation/ inheritance
e. Not inofficious*
f. Comply to forms of donation
2. Implied when:
a. Document evidenceing debt is in possession of debtor
b. Accessoy obligation of pledge is in possession of debtor
D. Merger/ Confusion - debtor and creditor is the same
E. Compensation - offset of debts
1. Kinds
a. As to amount
i. Total
ii. Partial
b. As to Cause/ Origin
i. Legal
ii. Voluntary/ Conventional
iii. Judicial
iv. Facultative
2. Cannot be compensated when:
a. Debt arises from:
i.Depositorum
ii. Obligation of a depositary
iii. Bailee in commodatum
b. Creditor has claim for support due by gratuitous title
c. Debt is for a penal offense
F. Novation - change in contract
1. As to object
a. Real Objective
b. Personal/ Subjective
i. Substitution
I) Expromision - no consent of debtor
II) Subrogation - different creditor
 2. As to form
a. Implied
b. Expressed
3. As to Extent
a. Total/ Extinctive
b. Partial
G. Annulment - rendering contract as void
H. Rescission - unmaking/ unwinding of obligation/ contract
I. Lapse of resolutory condition/ period
J. Prescription - lapse of time
VI. Sources of Obligation
A. Law
B. Delict - acts or omissions punishable by law
C. Quasi-delict - characteristics
1. One causes damage to another
2. No existing contract between parties
D. Quasi-contract - unjust enrichment
1. Solution indebiti
a. Something is received
b. No right to demand it
c. Unduly delivered by mistake
2. Negotiorum gestio
a. Another party takes charge of one's business
b Without any power from the latter
E. CONTRACT
1. Essential Elements
a. Consent
i. Requisite
I) Offer is certain
II) Acceptance is unqalified
ii. Vices of consent
I) Mistake
II) Fraud
III) Violence
IV) Intimidation
V) Undue Influence
b. Object
i. Within commerce of men
ii. Transmissible
iii. Not contrary to law, morals, customs, etc
iv. Not impossible
v. Determinate as to its kind
c. Cause
i. Existent
ii. Lawful
iii. True
2. Stages
a. Preparation/ Negotiation - stipulation
b. Perfection/ Birth - there is consent
c. Consummation/ Implementation
 d. Termination
3. Principles
a. Liberty
b. Mutuality
c. Relativity
d. Consensuality
e. Obligaory force of contract
f. Compliance in good faith
4. Kinds of contracts
a. As to perfection
i. Consensual - perfected by mere consent
ii. Real - perfected by delivery
I) Deposit
II) Pledge
III) Commodatum
i. Formal
I) Donation above 5K - in writing
II) Donation of immovable property - public instrument
III) Contribution of immovable property in partnership - public instrument
IV) Antichresis - in writing
V) Agency to sell real property - in writing
VI) Charging of interest - in writing
VII) Limitation of liability in loss/ destruction - in writing
VIII) Chattel mortgage - recorded in chattel mortgage register
IX) Sale/ Transfer of Large Cattle (2 yr/o) - register to municipal
b. As to dependence
i. Principal
ii. Accessory
iii. Preparatory - another contract is anticipated
c. As to cause
i. Onerous - cost exceeds benefit
ii. Renumeratory - cost= benefit
iii. Gratuitous - only cost, no benefit
d. As to designation
i. Nominate - has name
ii. Innominate
I) Do ut des - I give that you may give
II) Do ut facias - I give tht you may do
III) Facio ut des - I do that you may give
IV) Facio ut facias - I do that you may do
e. As to fulfilment/risk
i. Commutative - give=receive (eg sale, purchase)
ii. Aleatory - dependent on circumstances (eg hedging)
f. As to parties obliged
i. Unilateral
ii. Bilateral
5. Defective contracts
a. Rescissible contract
i. Effect - Valid until rescinded
ii. Rescissible contracts in law
 I) Ward, represented by guardian, suffers loss more than 1/4 of object
II) Absentees, represented by agents, suffers loss more than 1/4 of object
III) In fraud of creditor where creditor cannot collect claims due
IV) Sale of things under litigation w/o knowledge of litigants
V) Payments made by insolvent debtor when debt is not yet due
iii. Remedy
I) Rescission
II) Annullment - if cannot be rescinded
iv. Cure
I) Prescription - 4 yrs with no rescission
II) Ratification - but no need
b. Voidable contract
i. Effect - Valid until annulled
ii. Voidable contract in law
I) One party is incapable of consent
A) Minor
B) Unconscious
C) Disabled
II) Consent is vitiated
iii. Remedy: Annullment
iv. Cure
I) Prescription - 4 yrs with no annullment
II) Ratification
c. Unenforceable contract
i. Effect - inoperative unless ratified
ii. Unenforceable contract in law
I) Unauthorized contracts - those entered in the name of others w/o authority
II) Does not comply Statute of Fraud
A) Long-term contracts
B) Guarantee
C) Promise to marry
D) Sale of more than 500 php
E) Long-term lease/ Sale of real property
F) Representation to credit of a 3rd person
III) Both parties incapable of consent
iii. Remedy
I) Non consummation of obligation
II) Rescission - if obligation is consummated
III) Annulment
iv. Cure
I) Ratification - by consummation/ failure to give remedy
II) Acknowledgement - acceptance of benefits/ defects
d. Void Contracts
i. No legal effect
ii. Void contract in law
I) Absolutely simulated
II) Impossible
III) Object is outside commerce of man
IV) Cause/ object is non-existent
V) Casue/ object/ purpose is contrary to law, morals, etc
 VI) Intention cannot be ascertained
VII) Object that is expressly prohibited by law
iii. Remedy: Declaration of nullity
iv. No cure