PRIMARY CLASSIFICATIONS OF b.

Resolutory-the happening
OBLIGATIONS extinguishes the
1. PURE AND CONDITIONAL obligation.
OBLIGATIONS 2. As to form
a. Express-the condition is
Pure obligation- not subject to any clearly stated
condition b. Implied-the condition is
-No specific date is mentioned for its merely inferred.
fulfillment 3. As to possibility
-Immediately demandable. a. Possible-the condition
can legally and physically
Conditional obligation- consequences be fulfilled.
are subject to the fulfillment of a b. Impossible-the condition
condition. cannot be physically or
legally fulfilled.
Condition-future and uncertain event 4. As to cause or origin
-the effectivity and extinguishment of a. Protestative-the
an obligation subject to it depends. condition depends upon
the will of one of the
Characteristics of a condition: contracting parties.
1. Future and uncertain- b. Casual-the condition
2. Past but unknown depends upon the chance
3. It must not be impossible. or upon the will of a
third person.
Two principle kinds of conditions c. Mixed-the condition
1. Suspensive- condition depends partly upon
precedent or antecedent chance and partly upon
-fulfillment of which will the will of the third
give rise to the obligation. person.
2. Resolutory- condition 5. As to mode
subsequent a. Positive-the condition
-fulfillment of which will consists in the
extinguish an obligation performance of an act
already existing. b. Negative-the condition
consists in the omission
Period-is a future and certain event of an act.
upon the arrival of which the 6. As to numbers
obligation subject to it either arrises a. Conjunctive-there are
or is extinguished. several conditions and all
must be fulfilled
Duration of period is up to the debtor: b. Disjunctive-there are
1. The debtor promises to pay several conditions and
when his means permit him to only one or some of them
do so must be fulfilled.
2. Other cases where the debtor 7. As to divisibility
binds himself to pay. a. The condition is
Classifications of conditions: susceptible of partial
1. As to effect performance.
a. Suspensive-happening b. Indivisible-the condition
gives rise to the is not susceptible of
obligation. partial performance.

Potestative Condition-a condition
suspensive in nature and which
depends upon the sole will of one of
the contracting parties.
Where suspensive condition depends
upon the will of the debtor:
1. Conditional obligation void-
where the potestative condition
depends solely upon the will of
the debtor, the conditional
obligation shall be void because
its validity and compliance is left
to the will of the debtor and
cannot be easily demanded.
Ex. I will pay you if I want; I
will pay you after I recover
what X owes.
2. Only the condition void- the
condition is imposed not on the
birth of the obligation but on its
fulfillment.
If the condition depends exclusively
upon the will of the creditor, the
obligation is valid.
Impossible conditions
1. Physically impossible
conditions- when they cannot
exist or cannot be done.
2. Legally impossible conditions-
when they are contrary to law,
morals, good customs, public
order, or public policy.
Effects of impossible conditions:
1. Conditional obligation void-
impossible conditions annul the
obligation which depends upon
them. Both the obligation and
the condition are void.
2. Conditional obligation valid- if
the condition is negative, that
is, not to do an impossible
thing, it is disregarded and the
obligation is rendered pure and
valid.
3. Only the affected obligation
void- if the obligation is
divisible, the part thereof not
affected by the impossible
condition shall be valid.
4. Only the condition void- if the
obligation is a pre-existing
obligation, and, therefore does
not depend upon the
fulfillment of the condition
which is impossible, for its
existence, only the condition is
void.
2.OBLIGATIONS WITH A PERIOD -is one
whose effects or consequences are
subjected in one way or another to the
expiration or arrival of said period or
term.
Period vs Condition
1. As to fulfillment-a period
is a certain event which
must happen sooner or
later at a date known
beforehand, or at a
certain time which
cannot be determined,
while a condition is an
uncertain event.
2. As to time-a period
refers to the future only
while a condition refers
to future and past
events.
3. As to influence on the
obligation-a period
merely fixes the time for
the efficacy of the
obligation; a condition
causes an obligation to
either arise or to cease.
4. As to effect, when left to
debtor’s will-a period
empowers the court to
fix the duration thereof;
a condition that is
dependent of the will of
the debtor invalidates
the obligation.
5. As to retroactivity of
effects-unless there is an
agreement to the
contrary, the arrival of a
period does not have any
retroactive effect; the
happening of a condition
has.

A period must be possible. If the period
is impossible, the obligation is
void.
Kinds of period or term:
1. According to effect
a. Suspensive period (ex
die)- the obligation
begins only from a day
certain upon the arrival
of the period.
b. Resolutory period (in
diem)- the obligation is
valid up to a day certain
and terminates upon
arrival of the period.
2. According to source
a. Legal period-when it is
provided for by laws;
b. Conventional or
voluntary period-when it
is agreed to by the
parties.
c. Judicial period-when it is
fixed by the court.
3. According to definiteness
a. Definite period- when it
is fixed or it is known
when it will come
b. Indefinite period-when it
is not fixed or it is not
known when it will come.
3. ALTERNATIVE OBLIGATION- is one
wherein various prestations are
due but the performance of one of
them is sufficient as determined by
the choice which, as a general
rule, belongs to the debtor.
Kinds of obligation according to
object:
1. Simple obligation-one where
there is only one prestation.
2. Compound obligation-one
where there are two or more
prestations. It may be:
a. Conjuctive obligation-one
where there are several
prestations and all of
them are due;
b. Distributive obligation-
one where two or more
of the prestations is due.
i. Alternative
obligation-one where
several prestations
are due but the
performance of one
is sufficient.
ii. Facultative
obligation- one
where only one
prestation is due but
the debtor may
substitute another.
Facultative Obligation
Effects of Loss
1. Before substitution- if
the principal thing is
lost through a
fortuitous event, the
obligation is
extinguished;
otherwise, the debtor
is liable for damages.
2. After substitution-if
the principal thing is
lost, the debtor is not
liable whatever may
be the cause of the
loss, because it is no
longer due.
4. JOINT AND SOLIDARY
OBLIGATIONS
Joint Obligation- is a collective
obligation where the whole
obligation is to be paid or
fulfilled proportionately by the
different debtors and/or is to
be demanded proportionately
by the different creditors.
Solidary Obligation- is a collective
obligation where each one of
the debtors is bound to render
and/or each one of the
creditors has a right to demand
from any of the debtors, entire
compliance with the prestation.
Kinds of Solidarity
1. According to the parties bound:
a. Passive Solidarity-
solidarity on the part of
the debtors, where any
one of them can be made
liable for the fulfillment
of the entire obligation. It
is in the nature of a
mutual guaranty.
b. Active Solidarity-
solidarity on the part of
the creditors, where any
one of them can demand
the fulfillment of the
entire obligation. Its
mutual representation
among the solitary
creditors is an essential
feature and grants them
powers to exercise the
rights of others in the
same manner as their
other rights.
c. Mixed Solidarity-
solidarity on the part of
the debtors and creditors,
where each one of the
debtors is liable to
render, and each one of
the creditors has a right
to demand entire
compliance with the
obligations.
2. According to source
a. Conventional
Solidarity- where
solidarity is agreed
upon by the parties. If
nothing is mentioned in
the contract relating to
solidarity, the
obligation is only joint.
b. Legal solidarity-where
solidarity is imposed by
the law.
c. Real solidarity- where
solidarity is imposed by
the nature of the
obligation.
5. DIVISIBLE AND INDIVISIBLE
OBLIGATIONS
Divisible Obligation- is one the object
of which, in its delivery or
performance, is capable of partial
fulfillment.
Indivisible Obligations- is one the
object of which, in its delivery or
performance, is not capable of
partial fulfillment.
6. OBLIGATIONS WITH A PENAL
CLAUSE
Principal Obligations- is one which
can stand by itself ad does not
depend for its validity and
existence upon another obligation.
Accessory Obligation- is one which is
attached to a principal obligation
and therefore cannot stand alone.
Obligation with a Penal Clause- is one
which contains an accessory
undertaking to pay a previously
stipulated indemnity in case of
breach of the principal prestation,
intended primarily to induce its
fulfillment.
Penal Clause- an accessory
undertaking attached to an
obligation to assume greater
liability in case of breach.
Purposes of Penal Clause
1. Insure their performance by
creating an effective deterrent
against breach, making the
consequences of such breach as
onerous as it may be. This is the
general purpose of a penal
clause.
2. To substitute a penalty for the
indemnity for damages and the
payment of interests in case of
non-compliance; or to punish the
 debtor for the non-fulfillment or
violation of his obligation.
In the first case, the
purpose is reparation. The
latter’s purpose is punishment.
Kinds of Penal Clause
1. As to its origin
a. Legal Penal Clause- when it
is provided by law
b. Conventional Penal Clause-
when it is provided for by
stipulation of the parties.
2. As to its purpose
a. Compensatory penal clause-
when the penalty takes the
place of damages
b. Punitive penal clause- when
the penalty is imposed
merely as punishment for
breach.
3. As to its demandability or effect
a. Subsidiary or alternative
penal clause- when only the
penalty can be enforced.
b. Joint or cumulative penal
clause- when both the
principal obligation and the
penal clause can be
enforced.
EXTINGUISHMENT OF OBLIGATIONS
(Mnemonics: PaLoReMeCoNo)
Other causes: annulment, rescission,
fulfillment of a resolutory condition,
and prescription.
1. Payment or Performance
- in ordinary parlance, payment
refers only to the delivery of money.
- consists of not only in the delivery
of money but also the giving of the
thing, the doing of an act, or not doing
of an act.
Debt is considered paid unless the thing
or service in which the obligation
consists has been completely delivered
or rendered, as the case may be.
If the obligation is substantially
performed in good faith, then the
obligation can be extinguished as
though there had been a strict and
complete fulfillment, less damages
suffered by the oblige.
Good faith is always presumed in the
absence of proof to the contrary.
When the obligee accepts the
performance, knowing its
incompleteness or irregularity, and
without expressing any protest or
objections, the obligation is deemed
fully complied with.
The creditor is not bound to accept
payment or performance by a third
person who has no interest in the
fulfillment of the obligation, unless
there is a stipulation to the contrary.
Whoever pays for another may
demand from the debtor what he has
paid, except that if he paid without the
knowledge or against the will of the
debtor, he can only recover only
insofar as the payment has been
beneficial to the debtor.
Creditors are bound to accept
payment or performance from the
following:
1. The debtor
2. Any person interested in the
obligation
3. A third person who has no interest
in the obligation when there is
stipulation that he can make
payment.
Dacion en Pago or Dation in Payment
- A special form of payment which is
the conveyance of ownership of a
thing as an accepted equivalent of
performance.
- An act of novation.
Payment by Cession
- A special form of payment where
it is the assignment or
abandonment of all the properties
of the debtor for the benefit of his
creditors in order that the latter
may sell the same and apply the
 proceeds thereof to the
satisfaction of their credits. It is
not an act of novation.
- Requisites:
o There must be two or more
creditors
o The debtor must be
(partially) insolvent.
o The assignment must involve
all the properties of the
debtors.
o The cession must be
accepted by the creditors.
Tender of Payment and Consignation
If the creditor to whom tender of
payment has been refused without just
cause to accept it, the debtor shall be
released from responsibility by the
consignation of the thing or sum due.
Consignation alone shall produce the
same effect in the following cases:
a. When the creditor is absent or
unknown, does not appear at the place
of payment.
b. When he is incapacitated to
receive the payment at the time it was
due.
c. When, without just cause, he
refuses to give a receipt.
d. When two or more persons claim
the same right to collect.
e. When the title of the obligation
has been lost.
- Tender of payment is the act, on
the part of the debtor or offering
to the creditor the thing or
amount due. The debtor must
show that he has in his possession
the thing or money to be delivered
at the time of the offer.
- Consignation is the act of
depositing the thing or amount
due with the proper court when
the creditor does not desire or
cannot receive it, after complying
with the formalities required by
law.
- Requisites of a valid consignation:
o Existence of a valid debt
which is due.
o Tender of payment by the
debtor and refusal without
justifiable reason by the
creditor to accept it.
o Previous notice of
consignation to persons
interested in the fulfillment
of the obligation
o Consignation of the thing or
sum due.
o Subsequent notice of
consignation made to the
interesting parties.
2. Loss of the Thing Due
- a 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.
-loss of a generic thing is impossible.
- Requisites:
o The obligation is to deliver
a specific or determinate
thing;
o The loss of the thing occurs
without the fault of the
debtor;
o The debtor is not guilty of
delay.
- Loss of thing will not extinguish
liability when:
o The law so provides
o The stipulation so provides.
o The nature of the obligation
requires the assumption of
risk
o The obligation to deliver a
specific thing arises from a
crime.
3. Condonation or Remission of Debt
-is a gratuitous abandonment by
the creditor of his rights against the
debtor. It is a form of donation.
-Requisites:
o Must be gratuitous
o Must be accepted by the
debtor
 o The parties must have - Often called simplified
capacity payment because it provides a
o It must not be inofficious more convenient and less
o It must comply with the expensive effectuation of
forms of donations, if made payments between two persons
expressly. who are reciprocally creditors
- Kinds of Remission and debtors.
o As to its extent - There are two persons involved,
 Complete- it covers the each of whom is a debtor and
entire obligation creditor to each other.
 Partial- it does not - There are two obligations.
cover the entire - There is indirect payment.
obligation. - Kinds of Compensation:
o As to its form o By its effect or extent
 Express- made  Total- both
verbally or in writing obligations are
 Implied- inferred entirely
from conduct. extinguished
o As to its date of effectivity because they are
 Inter vivos- takes the same amount.
effect during the  Partial- when the
lifetime of the donor. two obligations are
 Mortis causa- of different amounts
effective upon the and a balance
death of the donor. remains.

4. Confusion or Merger of Rights o By its cause or origin

- is the meeting in one person of
the qualities of creditor and
debtor with respect to the same
obligation.
- A debtor cannot claim payment
from himself.
-Requisites:
o Must take place between
the principal debt and
creditor
o It must be complere.
- Merger which takes place in the
person of the principal debtor or
creditor benefits the guarantors.
- Confusion which takes place in
the person of any of the latter
does not extinguish the
obligation.
5. Compensation
- Is the extinguishment to the
concurrent amount of the debts
of two persons who, in their
own right, are debtors and
creditors of each other.
 Legal- when it takes
place by operation of
law even without the
knowledge of the
parties.
 Voluntary- when it
takes place by
agreement of the
parties.
 Judicial-When it takes
place by order from a
court in litigation.
 Facultative- when it
can be set up only by
one of the parties.
6. Novation
Obligations may be modified
by:
1. Changing their object or
principal conditions.
2. Substituting the person of
the debtor
3. Subrogating a third
person in the rights of the
creditor.
 - It is the total or partial creditor, or both the
extinction of an obligation parties, are changed.
through the creation of a
new one which substitutes
it. Requisites of novation
Kinds of Novation - A previous valid obligation
- According to origin - Capacity and intention of
o Legal- which takes the parties to modify or
place by operation of extinguish the obligation
law. - The modification or
oConventional- that extinguishment of the
which takes place by obligation
agreement of the - The creation of a new valid
parties obligation
- According to how it is
constituted. Kinds of Personal Novation
o Express- declared in - Substitution-when the
unequivocal terms. person of the debtor is
o Implied- when the old substituted.
and the new - Subrogation- when a third
obligations are person is subrogated in the
essentially rights of the creditor.
incompatible with
each other. Kinds of Substitution
- According to extent or - Expromision- takes place when
effect. a third person of his own
o Total or extinctive- initiative and without the
when the old obligation knowledge or against the will
is completely of the original debtor assumes
extinguished. the latter’s obligation with the
o Partial or consent of the creditor.
modificatory- when - Delegacion- takes place
the old obligation is when the creditor accepts a
merely modified. third person to take place
- According to the subject. of the debtor at the
o Real or objective- when instance of the latter. The
creditor may withjold
the obligation of
approval.
principal conditions of
the obligation are
Subrogation- is the substitution of
changed.
one person (subrogee) in the
o Personal or
place of a creditor (subroger)
subjective-when the
with reference to a lawful claim
person of the debtor
or right, giving the former all the
is substituted and/or
rights of the latter, including the
when a third person is
right to employ all remedies to
subrogated in the
enforce payment.
rights of the creditor.
o Mixed- when the
Kinds of Subrogation
object and or the - Conventional – when it
principal conditions takes place by express
of the obligation and agreement of the original
the debtor or the
 parties, and the third
person.
- Legal- when it takes place
without agreement but by
operation of law.