“Father, not my will, but Yours be done.

” - Luke 22:42

ex benefited at the expense of another

quasi-contrac - Two common types:
tu) A. Negotiorum gestio
-​ Voluntary management without
OBLIGATIONS IN GENERAL
knowledge/consent of another
-​ Requisites: (1) neglected/abandoned;
GOVERNING LAW (2) no consent/authority
●​ R.A. No. 386 → Civil Code of the Philippines -​ Obligation of the owner: liable for
●​ Book IV Obligations and Contracts obligations incurred
○​ Title I: Obligations -​ Obligations of the officious manager: (1)
○​ Title II: Contracts continue until termination; (2) diligence
of a good father of a family and pay
damages for his fault; (3) if he delegates
OBLIGATION to another → liable for the acts of that
●​ Juridical necessity to give, to do or not to do person; (4) liable for any FE → risky
●​ Juridical necessity operations, preferred own interest, fails
○​ There is a need to perform as it can result to court action to return business, assumed in bad
○​ Court action: creditor → court → debtor faith; (5) liable for FE (except if it’s to
●​ Types of obligations: save from imminent danger) →
manifestly unfit to manage, prevented a
○​ Real → to give
more competent person to manage
○​ Personal → to do (positive), not to do (negative) -​ Multiple OMs: Generally liable solidarily
●​ Form of obligation unless management was done under
○​ No form required → may be oral, writing, or mix of both imminent danger → makes it joint
B. Solutio indebiti
KINDS OF OBLIGATIONS (AS TO BASIS AND -​ Something is received when there is no
right to demand and it was delivered
ENFORCEABILITY)
through mistake
CIVIL - Give a right of action to compel their -​ Requisites: (1) no right to receive the
performance thing; (2) delivered through mistake
- Based on positive law -​ Multiple payees: liable solidarily for the
- Has juridical necessity return of the payment received

NATURAL - Based on equity and conscience QUASI- - Also known as culpa aquiliana or torts or
- Do not grant a right of action to enforce DELICTS civil negligence
performance (Obligations - By act or omission causes damage to
- After voluntary fulfillment, authorizes the ex another
retention of what has been delivered or rendered quasi-delicto - Has fault or negligence and no pre-existing
- No juridical necessity or ex contractual relation between the parties
quasi-malefic - No imprisonment, only liable to pay
io) damages
ESSENTIAL ELEMENTS OF OBLIGATION → ABSENCE OF - Requisites:
ONE MEANS NO OBLIGATION 1.​ Act or omission
2.​ Causes damage to another person
ACTIVE - Creditor/obligee 3.​ Fault/negligence
SUBJECT - Compels 4.​ Causal connection
5.​ No pre-existing contractual relation
PASSIVE - Debtor/obligor between the parties
SUBJECT - Required to fulfill - Vicarious liability:
1.​ Minor children who live in company →
PRESTATION - Promise or particular conduct to be (1) father; (2) mother
performed in the obligation 2.​ Minors and incapacitated → guardians
- Requisites: (1) possible; (2) determinate or 3.​ Employees (branches/functions) →
determinable; (3) has equivalent in money owners and managers
4.​ Employees and household helpers →
LEGAL TIE - Vinculum juris/juridical tie/efficient cause employers
- Reason why the obligation exists 5.​ Special agent → the State
6.​ Pupils/students → teachers or heads
- Defense: Proof that they observed the
TRANSMISSIBILITY OF OBLIGATIONS diligence of a good father of a family to
●​ GR: All rights acquired in obligations are transmissible prevent damage
●​ XPN: Nature is not transmissible, stipulation, law - For employer: Prove due diligence in
selection and supervision of employee (not
available in crimes)

CRIME - Also known as delict

SOURCES OF OBLIGATIONS (Obligations - Punishable by law
ex maleficio - Criminally liable for felony → civilly liable
SOURCES OF OBLIGATION or ex delicto) - Civil liabilities from crime:
1.​ Restitution → restoration
LAW - Not presumed 2.​ Reparation for damage caused →
(Obligations - Only those expressly determined in Civil includes price and sentimental value
ex lege) Code/special laws → demandable and 3.​ Indemnification for consequential
regulated by the precepts of law damage → includes those suffered by
family or third persons
CONTRACTS - Have the force of law and should be - Proof necessary:
(Obligations complied with in good faith a.​ Criminal liability → proof beyond
ex contractu) - Not above the law reasonable doubt
b.​ Civil liability → preponderance of
QUASI- - Arises from certain lawful, voluntary, and evidence
CONTRACTS unilateral acts - Persons exempt from criminal liability:
(Obligations - No one may be unjustly enriched or 1.​ Imbecile or insane
“Father, not my will, but Yours be done.” - Luke 22:42
○​ Accessories → used for the embellishment, use or their
2.​ Under 18 years of age
3.​ Acts under compulsion of irresistible preservation of another thing or more importance; without
force these, the thing can no longer function
4.​ Acts under impulse of an uncontrollable ●​ To pay damages in case of breach
fear of equal or greater injury
- Persons exempt from both civil and criminal B. OBLIGATIONS IN OBLIGATIONS TO GIVE A GENERIC
liability: THING
1.​ Acts in self-defense
●​ To deliver a thing which must be neither superior nor inferior
2.​ Acts in the performance of
duties/obligations ○​ Only the quality agreed upon
3.​ Woman suffering from battered woman ●​ To pay damages in case of breach of the obligation
syndrome
REMEDIES
A.​ Remedies for breach of obligations to give a determinate thing
MULTIPLE SOURCES OF OBLIGATIONS
B.​ Remedies for breach of obligations to give a generic thing
●​ Single act can be the source of multiple sources of obligation
C.​ Remedies for breach of obligations to do
●​ Crimes are either caused by:
D.​ Remedies for breach of obligations not to do
○​ Dolo → intentional
E.​ Remedies for breach of reciprocal obligations
○​ Culpa → negligence
F.​ Damages
●​ Double recovery not allowed
G.​ Remedies of a judgment creditor in a specific action suit
○​ A person cannot recover damages twice for the same act
○​ Only get the higher amount
A. REMEDIES FOR BREACH OF OBLIGATIONS TO GIVE A
●​ Contracts
DETERMINATE THING
○​ GR: Contract → No quasi-delict
●​ To ask for specific performance + damages
○​ XPN: Breach of contract is caused by quasi-delict →
●​ To ask for rescission + damages → cancellation
there is quasi-delict
●​ To ask for damages alone
●​ Doctrine of Vicarious Liability
○​ Culpa aquiliana → direct, primary, vicarious
B. REMEDIES FOR BREACH OF OBLIGATIONS TO GIVE A
GENERIC THING
●​ To ask for delivery of the thing + damages
●​ To ask that the obligation be complied with at the expense of
NATURE AND EFFECT OF OBLIGATIONS
the debtor + damages
●​ To ask for damages alone
KINDS OF THING OR OBJECT
DETERMINATE or - Individualized and can be C. REMEDIES FOR BREACH OF OBLIGATIONS TO DO
SPECIFIC THING identified/distinguished from others of its ●​ To ask that the obligation will be executed at the cost of the
kind debtor + damages
●​ To ask for damages alone
GENERIC or - Only indicated by its kind, without being
INDETERMINATE designated and distinguished from others ●​ Applicable also if it is in contravention to the tenor of the
THING of the same kind obligation
●​ However, if poorly done → be undone at the expense of
debtor + damages
OBLIGATIONS
●​ Only substitute performance is available → could violate the
A.​ Obligations in obligations to give a determinate thing
constitutional prohibition against involuntary servitude
B.​ Obligations in obligations to give a generic thing
D. REMEDIES FOR BREACH OF OBLIGATIONS NOT TO DO
A. OBLIGATIONS IN OBLIGATIONS TO GIVE A DETERMINATE
●​ To have it undone at the expense of the debtor + damages
THING
●​ To ask for damages alone, if it cannot be undone
●​ To deliver the thing itself → actual or constructive
●​ To take care of the thing with the proper diligence of good
E. REMEDIES FOR RECIPROCAL OBLIGATIONS
father of a family (bonus pater familia), unless there is
●​ Reciprocal obligation → Arises from the same cause
stipulation or law requires another standard of care
●​ Each party is a debtor and creditor of the other, such that the
○​ Lower standard → VOID
obligation of one is dependent upon the obligation of the other
●​ To deliver the fruits of the thing from the time the obligation to
●​ Primary remedy: Rescission/resolution
deliver it arises
○​ The cause of action is substantial or fundamental breach
○​ Creditor will not acquire real rights over the fruits until it is
or non-compliance
delivered to him
○​ Available when a party is ready to comply and other is not
○​ Kinds of rights:
●​ GR: May ask for exact fulfillment + damages, but cannot ask
■​ Personal → right that can be exercised only against
for rescission after initial selection
a specific person (thereby prohibiting an action to
○​ If exact fulfillment → impossible → may ask for rescission
recover possession, only action for damages)
○​ If elected rescission + damages first → cannot ask for
■​ Real → can be exercised against the whole world
exact fulfillment of obligation
○​ Kinds of fruits:
■​ Natural → spontaneous products of soil, the young,
F. DAMAGES
and other products of animals
●​ Action for damages may be demanded in case of
■​ Industrial → produced by lands of any kind through
non-fulfillment of obligations
cultivation or labor
●​ Kinds:
■​ Civil → results of civilization or fruit arising out of
○​ Moral
juridical relations or contracts
○​ Exemplary
●​ To deliver all accessions and accessories
○​ Nominal
○​ Accessions → produced by a thing, or incorporated or
○​ Temperate
attached thereto, either naturally or artificially; the thing
○​ Actual
can still function without these
○​ Liquidated
“Father, not my will, but Yours be done.” - Luke 22:42
G. REMEDIES OF A JUDGMENT CREDITOR IN A SPECIFIC ●​ If negligence was the cause of the injury → no recovery for
ACTION SUIT damages
●​ Judgment creditor → one who has successfully obtained a ●​ If negligence was only contributory → he may recover
favorable judgment in a civil action damages, but the courts can mitigate or reduce the same
●​ To levy by attachment and execution upon all the property of
the debtor C. DELAY, DEFAULT, OR MORA
●​ To exercise all rights and actions of the debtor, except those ●​ Non-fulfillment of the obligation with respect to time
which are inherently personal to him → accion subrogatoria ●​ Would constitute a breach of contract
○​ Requisites: (1) debtor’s assets are insufficient; (2) creditor ●​ Types of delay:
must have pursued all properties subject to execution; (3) ○​ Ordinary delay → did not perform on time
right of action must not be purely persona; and (4) must ○​ Legal delay → did not perform on time causing breach of
be indebted to the creditor obligations
●​ To ask for the rescission of the contracts made by the debtor ●​ Requisites of legal delay:
in fraud of creditor’s rights → accion pauliana ○​ Obligation is due and demandable
○​ Requisites: (1) plaintiff asking for rescission has a credit ○​ Debtor did not perform the obligation on time
prior to the alienation, although demandable later; (2) ○​ There is demand coming from the creditor
debtor has made a subsequent contract conveying a ○​ Despite demand (extrajudicial or judicial), debtor still did
patrimonial benefit to a third person; (3) credit has no not do
other legal remedy; (4) act being impugned is fraudulent; ●​ Demand cannot be assumed
and (5) third person who received the property conveyed, ○​ GR: For delay to happen, there must be demand
if by onerous title, has been an accomplice in the fraud ○​ XPN: (1) law so provides; (2) obligation so provides; (3)
●​ To file an action for damages against the third person who time is of the essence; (4) demand would be useless; (5)
acquired the property of debtor in bad faith reciprocal obligations → one is willing, one is not
●​ Kinds:
SPECIFIC CIRCUMSTANCES AFFECTING OBLIGATIONS IN ○​ Mora solvendi
GENERAL ○​ Mora accipiendi
A.​ Fraud ○​ Compensatio morae
B.​ Negligence
C.​ Delay MORA SOLVENDI
D.​ Any other manner of contravention (violatio) ●​ Delay on the part of debtor
E.​ Fortuitous event ●​ Mora solvendi ex re → real obligations
●​ Mora solvendi ex persona → personal obligations
A. FRAUD/DOLO ●​ Requisites:
●​ Deliberate and intentional evasion of the normal fulfillment of ○​ Obligation must be liquidated, due, and demandable
obligations ○​ Debtor is guilty of nonperformance
●​ Responsibility arising from fraud is demandable in all ○​ There was demand → judicially or extrajudicially
obligations ●​ Effects:
●​ Kinds of fraud: ○​ Creditor may ask for damages
○​ Dolo causante / causal fraud ○​ Debtor is liable → even if due to fortuitous event
■​ Fraud in obtaining consent ○​ Debtor shall bear the risk of loss of the determinate thing
■​ Voidable, annulment is the remedy
■​ Valid until annulled MORA ACCIPIENDI
○​ Dolo incidente / incidental fraud ●​ Delay on the part of the creditor
■​ Fraud in performing a contract ●​ Requisites:
■​ Does not affect validity of obligation ○​ Offer of performance by debtor
■​ Proper remedy is damages ○​ Refusal of the creditor to accept without first cause
●​ Waiver ●​ Effects:
○​ Future fraud ○​ Creditor shall bear the risk of loss of the thing
■​ Cannot be renounced → advance renunciation of the ○​ All expenses for the preservation of the thing after the
creditor would practically leave the obligation without delay shall be borne by the creditor
effect ○​ Creditor is liable for damages
○​ Past fraud
■​ Can be renounced COMPENSATIO MORAE
●​ Delay by both parties
B. NEGLIGENCE/FAULT/CULPA ●​ Effects → delay on both parties will be compensated:
●​ Failure to observe for protection of the interests of another ○​ Specific circumstances wherein the debtor can be held
person and suffers injury liable to pay damages
●​ Degree of care required:
○​ As a rule: (1) required by law; or (2) stipulation D. ANY OTHER MATTER OF CONTRAVENTION (VIOLATIO)
■​ Examples of required by law: contract of common ●​ Illicit act which impairs the strict and faithful fulfillment of the
carrier, contract of necessary deposit, and banks → obligation or every kind of defective performance
extraordinary diligence ●​ Violation of the terms and conditions of obligation or defects in
○​ In the absence of the two: diligence of a good father of a the performance of the obligation
family
●​ Kinds of negligence: E. FORTUITOUS EVENT
○​ Culpa contractual/contractual negligence → in the ●​ Excuse for non-performance
performance of a contractual obligation ●​ Not foreseeable or avoidable
○​ Culpa aquiliana/civil negligence/quasi-delict → ●​ Elements:
committed independent of contract and w/o criminal intent ○​ Cause is independent of human will
○​ Culpa criminal/criminal negligence → results in the ○​ Impossible to foresee or impossible to avoid
commission of a crime/delict ○​ Must render it impossible for the debtor to fulfill
obligations in a normal manner
“Father, not my will, but Yours be done.” - Luke 22:42
○​ Debtor must be free from any participation in the ●​ Resolutory condition
aggravation of injury or loss ○​ Obligation is extinguished
●​ GR: No person shall be responsible for FE ○​ Parties should return or restore to each other what they
●​ XPN: have received including fruits and interest
○​ Declared by stipulation
○​ Nature requires assumption of risk RULES AS TO IMPROVEMENT, LOSS, OR DETERIORATION
○​ Expressly specified by law
LOSS
○​ When negligence, delay, or fraud concurred with FE
W/o fault of the Obligation is extinguished
debtor

KINDS OF CIVIL OBLIGATIONS With fault of the Debtor is liable for damages
debtor
CLASSIFICATIONS OF OBLIGATIONS
A.​ Pure and conditional DETERIORATION
B.​ With a period or term
W/o fault of the Impairment is borne by the creditor
C.​ Alternative, conjunctive, and facultative debtor
D.​ Joint and solidary
E.​ Divisible and indivisible With fault of the Creditor can either:
F.​ With a penal clause debtor 1. Exact fulfillment and ask for damages
2. Ask for rescission and damages
A. PURE AND CONDITIONAL
●​ Pure obligation IMPROVEMENT
○​ One without a condition or term
By nature or Improvement will inure to the benefit of the
○​ Demandable at once
time creditor
●​ Conditional obligation
○​ There is a condition imposed on its performance At the expense Debtor shall have no right than that granted
○​ Condition → future and uncertain event of the debtor to a usufructuary (ie. he may remove the
improvement if it will not cause damage)
KINDS OF CONDITIONS
SUSPENSIVE Fulfillment will give rise to an obligation B. WITH A PERIOD OR TERM
●​ Period
RESOLUTORY Fulfillment will extinguish an obligation ○​ Certain length of time which determines the effectivity or
the extinguishment of an obligation
POTESTATIVE Fulfillment depends upon the will of one of ○​ Day certain will necessarily come whether the parties like
the contracting parties it or not
○​ Presumed benefit of both creditor and debtor in the
CASUAL Depends upon chance/will of a third person
absence of contrary agreement
MIXED Depends partly upon chance and partly upon ●​ Types of period:
the will of a third person ○​ Suspensive period or ex die → upon arrival, obligation
becomes demandable
CONJUNCTIVE All must be performed ○​ Resolutory period or in diem → upon arrival, obligation
is extinguished
ALTERNATIVE Only one must be performed ○​ Conventional or voluntary → fixed by parties
○​ Legal → fixed by law
POSSIBLE Can be fulfilled
○​ Judicial → fixed by the court
IMPOSSIBLE Physically or legally impossible
CONDITION VS. PERIOD
POSITIVE Performance of an act CONDITION PERIOD

NEGATIVE Omission of an act Uncertain event Must necessarily come

EFFECTS OF FULFILLMENT Gives rise/extinguishes an No effect upon the existence

obligation of an obligation but only its
●​ GR: Shall retroact on the day the obligation is constituted
demandability or performance
●​ XPN: Suspensive condition
○​ Unilateral obligation → fruits and interest shall insure to Past event and unknown to Future
the benefit of the debtor, unless there is stipulation to the parties
contrary
○​ Reciprocal obligation → fruits and interests during the
BENEFIT OF THE PERIOD
pendency of the condition shall be deemed to have been
●​ GR: Presumed to be for the benefit of both debtor and creditor
mutually compensated
●​ XPN: From the tenor of the obligation that the period has
●​ XPN: Period of prescription → counted still from the time
been established in favor of one or the other
the condition was fulfilled
●​ Consequences of GR:
●​ Condition where obligation is treated as one with a period
○​ Debtor cannot be made to pay before the period
○​ When debtor binds himself to pay when his means permit
○​ Creditor cannot be made to accept payment before the
him to do so → obligation shall be deemed as one with a
period
period (instead of conditional)
●​ Debtor’s loss of benefit of the period → debtor loses when:
●​ Suspensive condition with a deadline
○​ Debtor becomes insolvent, unless he gives a
○​ Shall extinguish the obligation as soon as the time
guaranty/security
expires or it has become indubitable that the event will
○​ Debtor does not furnish to the creditor the
not take place
guaranties/securities which he has promised
“Father, not my will, but Yours be done.” - Luke 22:42
○​ When by his own acts the guaranties/securities has D. JOINT OBLIGATION VS. SOLIDARY OBLIGATION
impaired, and when through a FE they disappear, unless ●​ Credit or debt shall be presumed to be divided into as many
he immediately gives new ones satisfactory shares as there are creditors or debtors
○​ Debtor violates any undertaking ●​ Credits or debts being considered distinct from one another
○​ Debtor attempts to abscond unless the law or the wording of the obligation provides
otherwise
C. ALTERNATIVE VS. CONJUNCTIVE VS. FACULTATIVE ●​ Joint obligation
○​ Each debtor → liable only for a proportionate part of the
ALTERNATIVE CONJUNCTIVE
debt
- Usually uses the word “or” - Usually uses the word “and” ○​ Each creditor → entitled only to a proportionate share of
- Performance of one of the - All the prestations must be the credit
prestations fulfills obligation complied with to fulfill ●​ Solidary obligation
○​ Each debtor → liable for the entire obligation
○​ Each creditor → entitled to demand the whole obligation
RULES
●​ Indivisibility does not imply solidarity, solidarity does not imply
●​ Where several objects are due, fulfillment of one is sufficient
indivisibility
●​ Right of choice → generally belongs to the debtor, except:
●​ Synonyms:
○​ Expressly granted to the creditor; or
○​ Joint → prorata, proportionate, mancomunada,
○​ Given to a third party
mancomunada simple
●​ Debtor’s right of choice → limited → cannot choose any
○​ Solidary → in solidum, jointly and severally, individually
prestation that is impossible or unlawful
and collectively, mancomunada solidaria, “I promise to
●​ Must be communicated to take effect → concentration
pay” signed by more than one individual
●​ Choice cannot be part of one and part of another
●​ When from all the choices, only one is practicable → debtor
E. DIVISIBLE VS. INDIVISIBLE OBLIGATION
shall lose the right of choice
●​ Divisible obligation
○​ Obligation would be to deliver that which remains
○​ Susceptible of partial performance
●​ Effect of loss → check tables below
○​ Debtor → can legally perform by parts
○​ Creditor → cannot demand a single performance of the
RIGHT OF CHOICE BELONGS TO DEBTOR:
entire obligation
ALL THINGS WERE LOST ●​ Indivisible obligation
○​ Not susceptible of partial performance
Fortuitous event Extinguished ○​ Law or contract provides that it is indivisible
●​ Joint indivisible obligation
Fault of debtor Value of the last + damages
○​ Gives rise to indemnity for damages from the time
anyone of the debtors does not comply with his
SOME THINGS WERE LOST
undertaking
FE/fault of debtor Deliver remaining ○​ Debtor who’s ready → shall not contribute to the
indemnity beyond the corresponding portion of the price
Fault of creditor → debtor Rescission + damages; or ●​ Obligations to give definite things and not susceptible of
cannot make a choice Perform + damages partial performance → deemed indivisible
●​ Obligation is number of days of work, by metrical units, or
RIGHT OF CHOICE BELONGS TO CREDITOR: analogous things and nature is susceptible of partial
performance → shall be divisible
ALL THINGS WERE LOST ●​ Even if physically divisible → obligation is indivisible if
provided by law or intended of the parties
Fortuitous event Extinguished
F. OBLIGATION WITH A PENAL CLAUSE
Fault of debtor Value of any + damages
●​ Penal clause
SOME THINGS WERE LOST ○​ Accessory undertaking to assume greater liability in case
of breach
Fortuitous event Demand from remaining ●​ GR: Penalty shall substitute the indemnity for damages and
the payment of interest in case of noncompliance, if there is
Fault of debtor Price of that which was lost + damages; or no stipulation to the contrary
Demand from remaining + damages ●​ XPNs:
○​ Stipulation to the contrary
FACULTATIVE ○​ Debtor refuses to pay the penalty
●​ When only one prestation has been agreed upon, but the ○​ Debtor is guilty of fraud in the fulfillment of the obligation
obligor may render another in substitution ●​ Nullity of the penal clause → does not carry with it that of
●​ Right to substitute → always with the debtor the principal obligation
●​ Effect of loss: ○​ Nullity of the principal obligation → carries with it that of
the penal clause
Loss of Obligation

BEFORE Principal Extinguished

substitution
Substitute Not extinguished

AFTER Principal Not extinguished

substitution
Substitute Extinguished
“Father, not my will, but Yours be done.” - Luke 22:42
MODES OF EXTINGUISHMENT OF OBLIGATION ●​ Obligations to do or not to do
○​ Cannot be substituted by another act or forbearance
Obligations are extinguished: against the obligee’s will
A.​ By payment or performance;
B.​ By loss of the thing due; LEGAL TENDER
C.​ By condonation or remission of the debt; ●​ Payment which the creditor can be compelled to accept
D.​ By confusion or merger of the rights of creditor and debtor; ●​ Currency notes → no limit
E.​ By compensation; ●​ Coins → subject to the following limits:
F.​ By novation ○​ P1 and above → not exceeding P1,000 (now P2,000)
○​ Below P1 → not exceeding P100 (now P200)
Other causes of extinguishment of obligation: ●​ Negotiable instruments and checks → not considered legal
●​ Fulfillment of a resolutory condition tender and acceptance depends on creditor
●​ Rescission ○​ If accepted → don’t produce the effect of payment until
●​ Annulment encashed or value becomes impaired
●​ Prescription ●​ Extraordinary inflation or deflation → value of the currency
at the time of the establishment of obligation shall be the basis
A. PAYMENT of payment, unless there’s agreement to the contrary
●​ Not only the delivery, but also performance
●​ GR: Payment must be complete PLACE OF PAYMENT
●​ XPN: 1.​ Place designated in the obligation
○​ Substantial compliance in good faith → loss is a damage 2.​ No stipulation and obligation is delivery of a determinate thing
suffered by the creditor → wherever the thing might be at the constitution of obligation
○​ Creditor accepted without protest or rejection 3.​ Domicile of the debtor
●​ If debtor changes domicile in bad faith or after he has
PROVISIONS AS TO THE PAYOR incurred in delay → additional expenses shall be borne
●​ Payment made by debtor by him
○​ Valid payment → creditor cannot refuse to accept
●​ Payment made by a third person SPECIAL FORMS OF PAYMENT
1.​ Dation in payment
With consent of Without
debtor OR with knowledge or 2.​ Application of payments
interest in consent of the 3.​ Cession
fulfillment debtor 4.​ Tender of payment and consignation

Compel creditor Yes No 1. DATION IN PAYMENT

to accept ●​ Governed by law on sales
●​ Delivery or transmission of ownership of a thing by the debtor
Subrogation to Yes No
to the creditor as an accepted equivalent of the performance
rights of creditor
of obligation (includes rights like usufruct or credit)
Amount of Full reimbursement Beneficial ●​ May be made by a solvent debtor
reimbursement reimbursement* ●​ Requisites:
○​ One debtor and one creditor
*Only to the extent the debtor benefited
○​ One property
●​ Person who has interest in the fulfillment → guarantors,
○​ Acceptance by the creditor
co-debtors, even 3rd party mortgagors
●​ Extent of extinguishment
●​ If the 3rd party doesn’t intend to be reimbursed → DONATION
○​ GR: Value of the thing delivered as agreed upon or as
○​ Necessary that the debtor accept it for validity
may be proved
○​ Debtor did not consent → no valid donation → 3rd party
○​ XPN: Parties considered it as equivalent through an
payor can seek reimbursement from the debtor
express or implied agreement or by silence
○​ In any case → valid payment → obligation extinguished
●​ Capacity and free disposal
2. APPLICATION OF PAYMENTS
○​ Payor should have capacity to alienate and the free
●​ Designation of the debt which is being paid by a debtor who
disposal of the thing due for payment to be effective
has several obligations of the same kind in favor of the
creditor to whom payment is made
PROVISIONS AS TO THE PAYEE
●​ Requisites:
●​ Payment made be made to:
○​ One debtor
○​ Person in whose favor the obligation was constituted
○​ Several debts
○​ His successor in interest
○​ Debts are of the same kind
○​ Any person authorized
○​ Only and and the same creditor
○​ Third party
○​ Payment made by the debtor is not sufficient to pay-off all
■​ GR: Invalid if no interest/authority
the obligations
■​ XPN: If it redounds to the benefit of creditor
●​ Right to apply payment → GR: debtor has the right to apply,
●​ Payment to an incapacitated person
subject to the following limitations:
○​ Valid if the IP kept the thing delivered or insofar it was
○​ Creditor cannot be compelled to accept partial payment
beneficial to him
○​ Debtor cannot apply payment to principal if interest has
not been paid
THING TO BE PAID OR DELIVERED
○​ Debt must be liquidated, except agreed otherwise
●​ Delivery of a specific thing
○​ Cannot be made when the period hasn’t arrived and
○​ Debtor cannot compel the creditor to receive a different
period is in favor of the creditor, unless consented
one → although same of more valuable
○​ When there is agreement to which must be paid first
●​ Delivery of a generic thing
●​ Debtor did not designate → applied to debt chosen by the
○​ Creditor cannot demand a thing of superior quality
creditor, as reflected in the receipt accepted by debtor without
○​ Debtor cannot deliver a thing of inferior quality
protest
○​ Purpose and circumstances shall be considered
“Father, not my will, but Yours be done.” - Luke 22:42
●​ Debtor and creditor did not designate: ○​ Whom impossibility refers → objective or subjective
○​ Different nature and burden → most onerous ○​ Extent → partial or total
○​ Same nature and burden → applied proportionately ○​ Period of impossibility → permanent or temporary
●​ Difficulty of prestation
3. PAYMENT BY CESSION OR ASSIGNMENT ○​ Service has become so difficult → obligor may be
●​ Debtor delivers to all his creditors all his properties for selling released therefrom, in whole or in part
and applying proceeds to settle his obligations to them ○​ Debtor may go to court to release him
○​ Obligation is extinguished insofar as the net proceeds,
unless otherwise stipulated C. CONDONATION/REMISSION OF DEBT
●​ Insolvency of debtor is required ●​ Act of liberality in which without receiving any equivalent, the
●​ Kinds: creditor renounces the obligation in its entirety or in part
○​ Voluntary → extent is only to amount of proceeds ●​ Requisites:
○​ Judicial → under FRIA (court discharges and obligations ○​ Gratuitous
are extinguished) ○​ Accepted by debtor
●​ Properties exempt from execution → generally not covered, ○​ Legal capacity
except debtor waives such exemption ○​ Not inofficious
●​ How proceeds are distributed: ○​ Complies with forms of donation
○​ Stipulation ●​ If not gratuitous, it will be considered:
○​ Preference of credit ○​ Dation in payment → creditor receives a different thing
○​ Novation → subject or conditions should be changed
4. TENDER OF PAYMENT AND CONSIGNATION ○​ Compromise → matter renounced is in litigation
●​ Tender of payment ●​ Kinds of condonation:
○​ Manifestation made by the debtor of his desire to comply ○​ As to form → express or implied
with obligation, with offer of immediate performance ○​ As to extent → total or partial
○​ Preparatory act to consignation ○​ As to manner of remission → inter vivos (lifetime) or
○​ Doesn’t extinguish obligation mortis causa (upon death)
●​ Consignation ●​ Express condonation → in the form of ordinary donations:
○​ Deposit of the object in a competent court, AFTER the ○​ Movable property → if oral, simultaneous delivery; if
tender of payment has been refused or because of value exceeds P5,000, must be in writing
circumstances which render direct payment impossible ○​ Immovable property → public document
○​ Extinguishes the obligation
●​ Applies only to extinguish of obligation, not to exercise a right D. CONFUSION OR MERGER OF RIGHTS
●​ Requisites: ●​ Meeting in one person of the qualities of the creditor and
○​ There is a valid debt that is due and demandable debtor with respect to the same obligation
○​ There has been a valid tender of payment and the ●​ Requisites:
creditor unjustly refuses, or even w/o tender payment if: ○​ Must take place between the creditor and principal debtor
■​ Creditor is absent/unknown ○​ Must involve the very same obligation
■​ Creditor is incapacitated to receive ○​ Must be total
■​ Creditor refuses to give a receipt ●​ Merge between creditor and guarantor → debt remains
■​ Two or more persons claim the same right to collect ○​ Debtor is now liable to the guarantor after the assignment
■​ TItle of obligation has been lost of the creditor to the guarantor
○​ There is previous notice (prior notice, subsequent notice)
○​ Amount/thing due is deposited in court E. COMPENSATION
●​ Withdrawal of the thing deposited ●​ Mode of extinguishment to the concurrent amount, the
○​ As a matter of right obligations of those persons who in their own right, are
■​ Debtor withdraws before acceptance by creditor or reciprocally creditors and debtors of each other
before judicial declaration ●​ Kinds of compensation:
■​ No extinguishment yet → no revival ○​ As to effect/extent → total or partial
○​ After acceptance/declaration ○​ As to origin/cause → legal, facultative, conventional, or
■​ Only with the consent of creditor judicial
■​ Obligation → revived ●​ Requisites:
○​ Each one of the obligors be bound principally, and that he
B. LOSS OF THING/IMPOSSIBILITY OF PERFORMANCE be at the same time a principal creditor of the other
●​ Loss → thing goes out of commerce, perishes, or disappears ○​ Debts consist in a sum of money or consumable things of
and cannot be recovered the same kind and quality
●​ If due to FE → GR: Debtor is not liable for damages; XPN: ○​ Two debts be due
Law, stipulation, nature, obligations from criminal offense ○​ Liquidated and demandable
(unless creditor is in mora accipiendi), obligations to give a ○​ Neither of them there be any retention or controversy
generic thing, except limited generic ●​ Guarantors → May set up compensation
●​ Partial loss → may be determined by court ●​ Rescissible or voidable debts → may be the subject of
○​ Intent of parties → necessarily considered compensation before rescinded or avoided/annulled
○​ Test → if the parties would not have entered the ●​ Assignment of credit → debtor may still invoke
obligation without the thing lost → extinguished compensation as against the debt due to him if:
●​ Presumption of fault ○​ He had no knowledge/consent to the assignment; or
○​ Lost in possession of debtor → presumed that loss was ○​ If with knowledge/consent, reserved his right
due to his fault (does not apply to natural calamities) ●​ When compensation may not be proper
●​ Impossibility of performance ○​ Depositum, bail, support, or civil liability arising from a
○​ Extinguished → impossibility happened DURING the penal offense
existence of the obligation ●​ Several debts susceptible of compensation → rules on the
○​ Void → impossibility arose BEFORE the obligation application of payments shall apply
●​ Types of impossibility: ●​ Legal compensation → extinguishes debts to concurrent
○​ Nature → physical or legal amount, even through creditors and debtors are not aware
“Father, not my will, but Yours be done.” - Luke 22:42
E. NOVATION
and of public
●​ Requisites: knowledge or
○​ Previous valid obligation known to the
○​ Agreement of all parties to a new contract debtor
○​ Extinguishment of old obligation
*Parties → delegante (old debtor), delegado (new debtor),
○​ Validity of the new obligation
delegatorio (creditor)
●​ Kinds of novation
●​ Creditor’s consent → necessary for there to be a novation
○​ As to nature → objective/real, subjective/personal, or
mixed
○​ As to form → express or implied
○​ As to extent → total or partial
●​ Accessory obligations
○​ GR: Extinguished as a consequence of novation
○​ XPN: Insofar as pour atrui is concerned and the third
person who benefits did not give his consent
●​ Conditional obligations
○​ If the original obligation was subject to a
suspensive/resolutory condition → new obligation shall
be under the same, unless otherwise stipulated

OBJECTIVE OR REAL NOVATION

●​ Change in the object
●​ Change in the principal conditions of the obligation, either
express or implied
○​ Implied novation → requires clear and convincing proof of
complete incompatibility between the two obligations
○​ Test → whether the two obligations can stand together

SUBJECTIVE NOVATION
●​ Changing the subject
●​ Consists of:
1.​ Active (Subrogation)
2.​ Passive (Substitution)

ACTIVE (SUBROGATION) NOVATION

●​ A third person is subrogated to the rights of the creditor
●​ By agreement or express → requires the consent of original
parties and the third person
●​ By law or implied → there is legal subrogation when:
○​ Creditor pays another creditor who is preferred, even
without debtor’s knowledge
○​ Third person, not interested in the obligation, pays with
the express or tacit approval of the debtor
○​ Even without the knowledge of debtor, a person
interested pays, without prejudice to effects of confusion
●​ Effects of subrogation
○​ Transfers to the persons all the rights thereto
appertaining, either against the debtor or against a third
person
●​ Preference of original creditor
○​ A creditor, to whom partial payment has been made, may
exercise his right for the remainder
○​ Shall be preferred to the person who has been
subrogated

PASSIVE (SUBSTITUTION) NOVATION

●​ Third person is substituted to the person of the debtor
●​ Should be clear that the new debtor is in lieu of the old debtor
●​ Kinds of passive novation
Kinds of Passive Extent of Liability of OD in
Novation Reimbursement the case of
insolvency of ND

Expromision → Beneficial OD is no longer

without reimbursement liable
knowledge/consent
of the OD

Delegacion → Full reimbursement GR: No longer

with consent of the liable
original debtor* XPN: OD may be
liable if it was
already existing