OBLIGATIONS NOTES

OBLIGATIONS
1. What is an obligation?
-An obligation is the juridical necessity to give, to do, or not to do.
2. What are the sources of obligations?
-They are :
a. law
b. contracts
c. quasi-contracts
d. acts or omissions punished by law
e. quasi-delicts
3. What are the basic distinctions between civil and natural obligations?
- They are:
a. Civil obligations derived their binding force from positive law; while natural
obligations derived their binding force from equity and justice.
b. Civil obligations can be enforced by court action; while natural obligations cannot
be enforced by court action but depends exclusively upon the good conscience of the
debtor.
4. What is the degree of diligence required of a person in the performance of an
obligation?
-Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law or the stipulation of the parties requires
another standard of care. Hence, a common carrier has to exercise extraordinary diligence in the
performance of its duty to carry goods or utmost diligence in the transport of persons.
5. What are the remedies of an aggrieved party in case one of the parties fails to
comply with his obligation?
- They are:
a. specific performance to obtain compliance
b. rescission
c. damages, exclusively or in addition to either or both of the two other remedies
6. When can be considered in default in the payment of obligation?
-A person can be in default in payment of obligation when there is demand.
7. as a rule before delay may be incurred, there must be demand. What are the
exceptions to the rule?
-They are:
a. when the obligation or the law expressly so declares
b. when time is of the essence
c. when demand is useless as when the obligor has rendered it beyond his power to
perform
d. when there is acknowledgement of default
8. Who may be liable for damages?
- Those who, in the performance of their obligations, are guilty of:
a. fraud
b. negligence
c. delay
d and those in any manner, contravene the tenor thereof
9. As a rule, no one is liable in cases of fortuitous event. Are there any exceptions?
- Yes, as when:
a. the law stipulates
b. the contract specifies
c. there is delay
d. there is assumption of risk
e. when the obligor promises to deliver to two or more persons who do not have the
same interest
10. What are the requisites of a fortuitous event?

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- They are:
a. the cause of the breach of the obligation must be independent of the will of the
debtor
b. the event must be either unforeseeable or unavoidable
c. the event must be such as to render it impossible for the debtor to fulfil his
obligation in a normal
manner
d. the debtor must be free from any participation in or aggravation of injury to the
creditor.
11. What are the kinds of obligations?
- The kinds of obligations are:
a. pure and conditional
b. obligations with a period
c. alternative and facultative
d. joint and solidary
e. divisible and indivisible
f. obligations with a penal clause
12. Define Pure and conditional obligations; suspensive and resolutory condition.
- a. Pure obligations are those which are demandable at once. There are no conditions
imposed, except if they are resolutory.
b. Conditional obligations are those where the acquisition of right or extinguishment or
loss of those already acquired shall depend upon the happening of an event which constitutes
the condition.
c. Resolutory is on which is demandable at once, but the happening of an event would
extinguish the obligation.
d. Suspensive is one where the happening of an event gives rise to an obligation.
13. What is the effect of the fulfilment of a condition in an obligation to give? Explain.
- The effects o f a conditional obligation to give once the condition has been fulfilled, shall
retroact to the day of the constitution of the obligation. The principle of retroactivity applies only
to consensual contracts. In real contracts, there is immediate delivery. In consensual ones,
delivery may be done on another day.
14. What is the effect if in an obligation, impossible condition, etc. are imposed?
- 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, the part thereof which is not affected by the impossible or unlawful condition shall be
valid.
15. What rules shall be followed in case of improvement, loss, or deterioration of the
thing during the pendency of a condition in an obligation to give?
- When the condition 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:
a. if the thing is lost without the fault of the debtor, the obligation shall be extinguished
b. if the thing is lost through the fault of the debtor, he shall be obliged to pay for
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.
c. when the thing deteriorates without the fault of the debtor, impairment is to be borne
by the creditor
d. 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
e. if the thing is improved by its nature, or by time, the improvement shall inure to the
benefit of the creditor
f. if it is improved at the expense of the debtor, he shall have no other right than that
granted to the usufructuary.
16. What is the effect if there is breach of contract committed by both parties?
- 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.

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17. What is a day certain?
- A day certain is understood to be that which must necessarily come, although it may not
be known when.
18. What is the remedy of the parties to a contract if the period has not been fixed?
- If the obligation doesnt fix a period, but from its nature and 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, under circumstances, have been
probably contemplated by the parties. Once fixed by the courts, the period cannot be changed
by them.
19. When shall a debtor lose the right to make use f the period?
- The debtor shall lose every right to make us of the period:
a. when after the obligation has been contracted, he becomes insolvent, unless he
gives a guaranty or security for the debt
b. when he does not furnish to the creditor the guaranties or securities which he has
promised
c. when, by his own facts, 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. when the debtor violates any undertaking, in consideration of which the creditor
agreed to the period
e. when the debtor attempts to abscond.
20. When is an obligation alternative; facultative?
- a. It is alternative if he is bound alternatively by different prestations but shall completely
perform one of them.
b. it is facultative when only one prestation has been agreed upon, but the obligor may
render another in substitution.
21. Who has the right of choice in an alternative obligations?
- the right of choice belongs to the debtor, unless it has been expressly granted to the
creditor.
22. When shall the choice become effective?
- It shall become effective from the time it is communicated.
23. The choice has been given to the creditor and the same has been communicated.
What rules shall be observed in case of loss of the thing?
- When the choice has been expressly given to the creditor, the obligation shall cease to
be alternative from the day when the selection has been communicated to the debtor.
Until then the responsibility of the debtor shall govern by the ff rules:
a. if one of the things is lost through a fortuitous event, he shall perform the
obligation by delivering that which the creditor should choose from among the remainder,
or that which remains if only one subsist.
b. if the loss of one of the things occurs through the fault of the debtor, the creditor
may claim any of those subsisting or the price of that which, through the fault of the
debtor, has disappeared, with a right to damages
c. If all of the things are lost through the fault of the debtor, the choice by the
creditor shall fall upon the price of any one of them, also with the indemnity for damages.
24. When is there a solidary obligation?
- A solidary obligation exists when:
a. the obligation states so
b. when the law requires solidary
c. when the nature of the obligation requires solidary
25. State the basic rules in case an obligation is joint.
- the basic rules in case an obligation is joint are:
a. the demand for the fulfilment made by the creditor upon one of the debtors does
not place the other debtors in default.

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b. the interruption of the prescriptive period with respect to one debtor does not
affect the rights of the others.
c. the defense of one debtor is not valid defense of the others.
26. State the rules in case there is payment by one of the solidary debtors.
- Payment made by one of the solidary debtors extinguishes the obligation. He who made
the payment may claiim from his co-debtors only the share which corresponds to each, with the
interest for the payment already made. If payment is made bfore the debt is due, no interest for
the intervening period may be demanded.
27. State the rules in case of obligation with a penal clause.
-a. in obligations with a penal clause, the penalty shall substitute the imdemnity 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
if fraud in the fulfilment of the obligation. The penalty may be enforced only when it is
demandable in accordance with the provisions of this code.
b. 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 fulfilment 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 fulfilment of the obligation, the performance thereof should become impossible
without his fault, the penalty may be enforced.
c. proof of damages suffered by the creditor is not necessary in order that the penalty
may be demanded.
28. What is the purpose of the penalty clause?
- the penalty clause in an obligation is designed to ensure performance of the obligation.
29. State the rules in case the principal obligation or the penal clause is void.
- The nullity of the penal clause doesnt carry with it that of the principal obligation. The
nullity of the principal obligation carries with it that the penal clause.
30. How are obligations extinguished?
Obligations are extinguished:
a. by payment or performance
b. by loss of the thing due
c. by condonation or remission of debt
d. by confusion or merger of the rights of the creditor and debtor
e. by compensation
f. novation
other causes of extnguishment of obligations such as annulment, rescission, fulfilment of a
resolutory condition and prescription, are governed elsewhere in this Code.
31. May a third person pay the obligation of another?
-As a rule, no. Under the law, the third person cannot ordinarily pay for the obligation of a
party in a contract. His is based on the principle that there is no privity of contract between the
third person and a party to a contract. The exceptions are:
a. when there is a stipulation allowing it.
b. when the third person has interest as co-debtor or guarantor.
32. State the rules when a third person pays obligation of another.
a. if payment was made with the knowledge of the debtor, the third person can ask for
reimbursement. Aside from that, he can be subrogated to such rights as guaranty, penalty clause
or mortgage.
b. if the payment was made without the knowledge of the debtor, there can be right of
reimbursement to the extent of the benefit in favour of debtor.
c. If payment is made by a third person who did not intend to be bound, it is deemed a
donation which needs the consent of the debtor because nobody can be compelled to accept the
liberality of another.
33. To whom should the payment be made?
- payment must be made to:
a. the person in whose behalf the obligation was constituted
b. person authorized to receive

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34. Under what circumstances, if any, may a debtor compel the creditor to accept a
thing different from that which was agreed upon?
- they are:
a. when the obligation is a facultative obligation, as in a facultative obligation, only
one prestation has been agreed upon but the obligor may render another in substitution of
the same
b. if there is another contract entered into between the parties resulting in dacion
en pago or novation
c. if there is a waiver made by the creditor as when he accepted a thing other than
what was agreed upon. This constitutes estoppel.
35. What are the requirements of a dacion en pago?
- The requirements are:
a. consent of the creditor
b. it must not prejudicial to the other creditor
c. the debtor must not have been declared insolvent by a jusdicial decree
36. When is there dacion in payment?
- there is dacion in payment when the property is alienated to the creditor in satisfaction
of a debt in money.
37. Where should an obligation be paid?
- Payment hshall be made at:
a. the place designated in the obligation
b. place where there was at the moment the obligation was constituted in the
absence of an expressed stipulation and if the undertaking is to deliver a determinate
thing.
c. place of domicile of the debtor.
38. When should the obligation be paid?
- As a rule, the obligation must be pad when the obligation is due.
The effect if there is payment before arrival of the period is that, the obligor can recover
whatever he paid with the fruits and interest, provided the obligor was not aware of the period.
The obligation must be paid when it becomes due and demandable, otherwise the debtor
may suffer the consequences of delay. He may be held liable for damages.
39. What is meant by payment?
- Payment means:
a. the delivery of money
b. the performance in any other manner of an obligation.
40. When shall consignation without tender of payment produce payment?
- Consignation alone shall produce same effect of payment in the following cases:
a. when the creditor is absent or unknown, or does not appear at the place of
payment
b. when he is incapacitated to receive the payment at the time 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.
41. What are the requirements f compensation?
- The requirements are:
a. that each one of the obligors are bound principally and that he be at the same
time a principal creditor of the other.
b. that both debts consist in a sum of money, or if the things due are consumable,
they be of the same kind, and also of the same quality if the latter has been stated
c. the two debts are due
d. that they be liquidated and demandable
e. that over neither of them there be any retention or controversy, commenced by
third person and communicated in due to time to the debtor.
42. May there be compensation of obligations that are not yet due? Why?
- As a rule, no because the obligations must be due and demandable. However, the parties
may agree upon the compensation of debts which are not yet due.

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43. Under what circumstances is compensation proper?
a. Compensation shall not be proper when one of the debts arises from a depositum of
from the obligations arising from depositary or of a bailee in commodatum.
b. Neither can compensation be set up against a creditor who has a claim for support due
by gratuitous title, without prejudice to the provinsion of paragrapgh 2 of Article 301.
c. Neither shall there be compensation if one of the debts consists in civil liability arising
from penal offense.
44. How may obligation be modified?
-Obligations may be modified by:
a. Changing their object or principal conditions
b. substituting the person of the debtor
c. subrogating a third person in the rights of the creditor.
45. State some basic principles in novation.
a. when the principal obligation is extinguished in consequences of novation, accessory
obligations may subsist only insofar as they may benefit third persons who did not give their
consent.
b. if the new obligation is void, the original one shall subsist, unless the parties intended
that the former relation should be extinguished in any event.
c. the novation is void if the original obligation was vod, except when annulment may be
claimed by debtors, or when ratification validates acts which are voidable.
d. if the original obligation was subject to suspensive or resoltory condition the new
obligation shall be under the same condition, unless it is otherwise stipulated.
46. When is there a presumption of legal subrogation?
- It is presumed that there is legal subrogation:
a. when a creditor pays another creditor who is preferred even without the debtors
knowledge
b. when a third person, not interested in the obligation pays without the express or
tacit approval of the debtor.
c. when, even without the knowledge of the debtor , a person interested in the
fulfilment of the obligation pays, without prejudice to the effects of confusion as to latters
share.
47. What are the kinds of novation?
a. objective novation, which is a novation of existing terms and conditions of the contract
b. Subjective novation, which is a novation by the change of debtor or creditor
c. mixed novation which is both objective and subjective.
48. May there be a novation without the consent of the debtor; creditor? Why?
Novation which consists is substituting a new debtor in the place of the original one, may
be made even without the knowledge or against the will of the latter, but not without the consent
of the creditor. Payment by the new debtor gives him the rights mentioned in Article 1236 and
1237. The reason why novation be made without the creditors consent is that, there would be
no privity of contracts if there is none.
49. What is remission?
- It is an act of liberality by virtue of which the oblige, without receiveing any price or
equivalent, renounces the enforcement of the obligation; as a result of which it is extinguished in
its entirety or in that part or aspect of the same to which the remission refers.
50. What re the requisites if remission?
- They are:
a. it must be gratuitous;
b. it must be accepted by the obligor
c. it must be demandable

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