University
of
the
Philippines
College
of
Law
Law
101:
Obligations
and
Contracts
Course
Outline♦
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
Contact
Information:
Course
Schedule:
[email protected]
+639178871555
Mondays
and
Fridays,
6:30
p.m.
to
9:00
p.m.
Room
200
(Padilla
Room)
Attendance
Requirement:
College
of
Law
rules
on
attendance
shall
be
strictly
applied.
Students
may
only
be
absent
for
any
cause
for
a
maximum
of
8
sessions.
Assessment:
(1)
Class
participation
30%
(2)
Midterm
examination
20%
(3)
Final
Exam
50%
Prescribed
Textbook:
Tolentino,
Civil
Code
of
the
Philippines,
Vol.
IV
INTRODUCTION
A. Course
Overview
B. Common
Law
Tradition
and
the
Civil
Law
Tradition
Agabin,
P.A.,
Mestizo:
The
Story
of
the
Philippine
Legal
System
(2011),
Chapter
7,
pp.
169216
PART
ONE:
OBLIGATIONS
A. General
Provisions
1. Definition
(Article
1156,
Civil
Code)
2. Elements
a. Active
Subject
b. Passive
Subject
c. Object
or
Prestation
d. Efficient
Cause
or
Juridical
Tie
Based
on
the
Course
Outline
of
Prof.
Eduardo
Labitag.
♦
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
3. Natural
Obligations
a. Definition
(Art.
1423,
CC)
b. Examples
(Articles
1424
to
1430)
c. Difference
between
Natural
and
Civil
Obligation
(Art.
1423)
d. Distinguished
from
moral
obligations
Villaroel
v.
Estrada,
71
Phil.
140
(1940)
Fisher
v.
Robb,
69
Phil
101
(1939)
e. Conversion
to
Civil
Obligation
• by
novation
• by
ratification
4. Sources
of
Obligations
(Art.
1157)
a. Law
(Art.
1158)
b. Contracts
(Art.
1159,
1305)
c. Quasi‐contracts
(Art.
1160,
2142)
• Kinds:
i. Negotiorum
gestio
(Art.
2144)
ii. Solutio
indebiti
(Art.
2154)
iii. Others
(Art.
2164
to
2175)
d. Delicts
or
Crime
(Art.
1161)
e. Quasi‐delicts
(Art.
1162,
2176)
• Distinction
between
crimes
and
quasi‐delicts
• Vicarious
liability
(Art.
2180,
Art.
218‐219,
Family
Code)
• Civil
liability
arising
from
crime
(Art.
1161;
Rule
111,
Revised
Rules
of
Criminal
Procedure)
Barredo
v.
Garcia,
73
Phil
607
(1942)
Mendoza
v.
Arrieta,
91
SCRA
113
(1975)
5. Classification
of
Obligations
a. Pure
and
Conditional
Obligations
(Art.
1179‐1192)
b. With
a
Period
or
a
Term
(Art.
1193‐1198)
c. Alternative
and
Facultative
(Art.
1199‐1206)
d. Joint
and
Solidary
(Art.
1207‐1222)
e. Divisible
and
Indivisible
(Art.
1223‐1225)
f. With
a
Penal
Clause
(Art.
1226‐1230)
B. Nature
and
Effects
of
Obligations
1. Kinds
of
Prestation
2
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
a. To
give
specific
thing
• to
preserve
the
thing
(Art.
1163)
• to
deliver
the
accessions
and
accessories
(Art
1166)
• to
deliver
the
fruits
(Art.
1164,
par.
1)
• to
deliver
the
thing
itself
(Art.
1244)
ii. generic
thing
(Art.
1246)
b. To
do
(Art.
1244)
c. Not
to
do
(Art.
1244)
2. Breach
of
Obligation
a. Concept
Song
Fo
v.
Hawaiian
Philippines,
47
Phil.
821
(1928)
Velarde
et
al.
v.
Court
of
Appeals,
361
SCRA
56
(2001)
Angeles
v.
Calasanz,
135
SCRA
323
(1985)
Delta
Motor
Corporation
v.
Genuino,
170
SCRA
29
(1989)
Vermen
Realty
v.
Court
of
Appeals,
224
SCRA
549
(1993)
b. Modes
of
Breach
• Delay
or
mora
(Art.
1169)
i. mora
solvendi
Cetus
Development
v.
Court
of
Appeals,
176
SCRA
72
(1989)
Aerospace
Chemical
Industries
v.
Court
of
Appeals,
315
SCRA
92
(1999)
Santos
Ventura
Hocorma
Foundation
v.
Santos,
441
SCRA
472
(2004)
Vazquez
v.
Ayala
Corporation,
443
SCRA
231(2004)
Abella
v.
Francisco,
55
SCRA
447
(1931)
dela
Cruz
v.
Legaspi,
98
SCRA
43
(1955)
ii. mora
accipiendi
(See
also
1268)
Villaroel
v.
Manila
Motor
Co.,
Inc.,
104
Phil.
926
(1958)
iii. compensation
morae
Central
Bank
v.
Court
of
Appeals,
139
SCRA
46
(1985)
• Fraud
or
dolo
(Art.
1171)
dolo
incidente
and
dolo
causante
Woodhouse
v.
Halili,
93
Phil.
526
(1953)
Geraldez
v.
Court
of
Appeals
(1994)
i.
3
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
Negligence
(Art.
1172,
1173)
culpa
v.
dolo
culpa
aquiliano
v.
culpa
contractual
standard
of
care
required
Gutierrez
v.
Gutierrez,
56
Phil.
177
(1932)
Vasquez
v.
Borja,
74
Phil.
560
(1944)
de
Guia
v.
Manila
Electric
Corporation,
40
Phil
706
(1920)
US
v.
Barias,
23
Phil
434
(1912)
Sarmiento
v.
Spouses
Cabrido,
401
SCRA
122
(2003)
Crisostomo
v.
Court
of
Appeals,
409
SCRA
528
(2003)
• Contravention
of
the
tenor
(Art.
1172)
Chavez
v.
Gonzales,
32
SCRA
547
(1970)
Telefast
v.
Castro,
158
SCRA
445
(1988)
Arrieta
v.
NARIC,
10
SCRA
79
(1964)
Magat
v.
Medialdea,
206
Phil
341
(1983)
c. Remedies
in
case
of
breach
i. Performance
• Specific
performance
(Art.
1165;
Section
10,
Rule
39,
Rules
of
Court)
• Substituted
performance
‐ in
an
obligation
to
give
generic
thing
(Art.
1165,
par.
2)
‐ undoing
of
poor
work
in
an
obligation
to
do
(Art.
1167)
Chavez
v.
Gonzales,
supra
Tanguilig
v.
Court
of
Appeals,
266
SCRA
78
(1997)
‐ undoing
in
an
obligation
not
to
do
(Art
1168)
ii. Rescission
(Art.
1191‐1192)
iii. Damages
(Art.
1170)
d. Subsidiary
Remedies
of
Creditor
i. Accion
Subrogatoria
(Art.
1177)
ii. Accion
Pauliana
(Art.
1177;
1381,
par.
3)
Khe
Hong
Cheng
v.
Court
of
Appeals,
355
SCRA
701
(2001)
Siguan
v.
Lim,
318
SCRA
725
(1999)
iii. Other
Specific
Remedies
(Art.
1652,
1729,
1608,
1893)
•
4
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
e. Fortuitous
Event
(Art.
1174)
i. Effect:
Extinguishment
of
Liability
ii. Exceptions
to
Extinguishment
(Art.
1174,
1165
par.
3,
552,
1942,
1979,
2001,
2147)
Juan
Nakpil
&
Sons
v.
Court
of
Appeals,
144
SCRA
597
(1986)
Republic
v.
Luzon
Stevedoring
Co.,
21
SCRA
279
(1967)
Dioquino
v.
Laureano,
33
SCRA
65
(1970)
Austria
v.
Court
of
Appeals,
39
SCRA
527
(1971)
National
Power
Corporation
v.
Court
of
Appeals,
161
SCRA
334
(1988)
Yobido
v.
Court
of
Appeals,
281
SCRA
1
(1997)
BacolodMurcia
Milling
v.
Court
of
Appeals,
182
SCRA
24
Philcomsat
v.
Globe
Telecom,
430
SCRA
(2004)
f. Usurious
Transactions
(Art.
1175,
1413,
1961)
PD
858;
PD
1685
Central
Bank
Circular
416
Monetary
Board
Circular
No.
905;
No.
2209
Eastern
Shipping
Lines
v.
Court
of
Appeals,
234
SCRA
781
(1994)
Crismina
Garments
v.
Court
of
Appeals,
304
SCRA
356
(1999)
Keng
Hua
Products
v.
Court
of
Appeals,
286
SCRA
257
(1998)
Security
Bank
v.
Regional
Trial
Court
Makati,
263
SCRA
453
(1996)
Almeda
v.
Court
of
Appeals,
256
SCRA
292
(1996)
Angel
Warehousing
v.
Chelsea,
23
SCRA
19
(1968)
First
Metro
Investment
v.
Este
del
Sol,
369
SCRA
(2001)
C. Different
Kinds
of
Obligations
1. Pure
and
Conditional
Obligations
• Pure
Obligations
(Art.
1179,
par.
1)
• Conditional
Obligations
(Art.
1181)
‐ Concept
‐ Condition
v.
Period
or
Term
Gaite
v.
Fonacier,
2
SCRA
830
(1961)
Gonzales
v.
Heirs
of
Tomas
and
Paula
Cruz,
314
SCRA
585
(1999)
•
Kinds
of
Conditions
a. As
to
the
effect
on
the
obligation
(Art
1181)
Gonzales
v.
Heirs
of
Tomas
and
Paula
Cruz,
supra.
5
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
i.
Suspensive
Condition
or
Condition
precedent
• Retroactive
effect
when
condition
is
fulfilled
(Art.
1187)
Coronel
v.
Court
of
Appeals
and
Alcaraz,
263
SCRA
15
(1996)
Rights
of
the
creditor
and
debtor
before
fulfillment
of
the
condition
(Art.
1188)
ii. Resolutory
Condition
or
Condition
subsequent
•
Parks
v.
Province
of
Tarlac,
49
Phil.
142
(1927)
Central
Philippine
University
v.
Court
of
Appeals,
245
SCRA
511
(1995)
Quijada
v.
Court
of
Appeals,
299
SCRA
695
(1998)
b. As
to
the
cause
or
origin
(Art
1182)
i. Potestative
• Effect
of
fulfillment
of
condition
depends
solely
on
the
will
of
the
debtor
• Debtor’s
promise
to
pay
when
he
can
is
not
a
condition
(Art
1180)
Lao
Lim
v.
Court
of
Appeals,
191
SCRA
150
(1990)
ii. Causal
Naga
Telephone
Co.
v.
Court
of
Appeals,
230
SCRA
351
(1994)
iii. Mixed
Osmena
v.
Rama,
14
Phil.
99
(1909)
Hermosa
v.
Longora,
93
Phil.
971
(1953)
Taylor
v.
Uy
Tieng
Piao,
43
Phil.
873
(1922)
Smith
Bell
v.
Matti,
44
Phil.
875
(1922)
Rustan
Pulp
and
Paper
Mills,
214
SCRA
665
(1993)
Romero
v.
Court
of
Appeals,
250
SCRA
250
SCRA
223
(1995)
•
c. As
to
possibility
(Art.
1183)
Roman
Catholic
Archdiocese
of
Manila
v.
Court
of
Appeals,
198
SCRA
300
(1991)
d. As
to
mode:
positive
or
negative
(Art.
1184‐1185)
Rules
in
case
of
loss,
deterioration
or
improvement
pending
the
happening
of
the
condition
(Art.
1189
–
1190)
6
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
Heirs
of
Timoteo
Moreno
v.
Mactan
Cebu
International
Airport
Authority,
413
SCRA
502
(2003)
a. Definition
of
loss,
deterioration
and
improvement
b. Effect
of
loss
or
deterioration
• Without
debtor’s
fault
• With
debtor’s
fault
c. Effect
of
improvement
• By
nature
or
time
• Due
to
debtor’s
effort
and
expense
• Effect
of
prevention
of
the
fulfillment
of
the
condition
by
the
obligor
(Art
1186)
Taylor
v.
Uy
Tieng
Piao,
supra.
Herrera
v.
Leviste,
135
SCRA
129
(1985)
2. Reciprocal
Obligations
(Art.
1191‐1192)
a. Concept
b. Alternative
remedies
of
injured
parties
on
case
of
breach
i. action
for
specific
performance
• effect
when
fulfillment
no
longer
possible
ii. action
for
rescission
• requisites
• how
made
• effects
Song
Fo
v.
Hawaiian
Philippines,
47
Phil.
821
(1925)
Boysaw
v.
Interphil
Promotions,
148
SCRA
365
(1987)
University
of
the
Philippines
v.
de
los
Angeles,
35
SCRA
365
(1989)
De
Erquiaga
v.
Court
of
Appeals,
178
SCRA
1
(1989)
Angeles
v.
Calasanz,
135
SCRA
323
(1985)
James
G.
Ong
v.
Court
of
Appeals,
310
SCRA
1
(1999)
Iringan
v.
Court
of
Appeals,
366
SCRA
41
(2001)
Visayan
Saw
Mill
v.
Court
of
Appeals
and
RJ
Trading,
219
SCRA
378
(1993)
Deiparine
v.
Court
of
Appeals
and
Trinidad,
221
SCRA
503
(2003)
Grace
Park
Engineering
Co.
Inc.
v.
Dimaporo,
107
SCRA
266
(1981)
Roque
v.
Lapuz,
96
SCRA
741(1980)
Suria
v.
Intermediate
Appellate
Court,
151
SCRA
661
(1987)
• Read:
Art
1786,
1788,
1484‐86,
Republic
Act
No.
6552
7
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
3. Obligations
with
a
Period
(Art.
1193,
1180)
a. Compare
Period/Term
v.
Condition
b. Kinds
of
Period
i. As
to
effect
• Suspensive
(Art
1193,
par.
1)
• Resolutory
(Art
1193,
par.
2)
ii. As
to
expression
• Express
• Implied
iii. As
to
definiteness
• Definite
• Indefinite
iv. As
to
source
• Voluntary
• Legal
• Judicial
c. Rules
in
case
of
loss,
deterioration
or
improvement
before
arrival
of
the
period
(Art.
1194
and
1189)
d. Effect
of
Payment
in
Advance
(Art.
1195;
1197,
par.
3)
e. Benefit
of
Period
(Art
1196)
i. For
whose
benefit
• Creditor
• Debtor
• Both
ii. Effects
iii. Presumption
(Art.
1196)
Lachica
v.
Araneta,
47
Official
Gazette
No.
11,
5699
(1949)
Ponce
de
Leon
v.
Syjuco,
90
Phil
311
(1951)
Buce
v.
Court
of
Appeals,
332
SCRA
151
(2000)
iv. When
debtor
loses
right
to
make
use
of
period
(Art.
1198)
f. When
Court
May
Fix
A
Period
i. Period
is
implied
ii. Period
depends
on
sole
will
of
the
debtor
Araneta
v.
Philippine
Sugar
Estate
Development
Co.,
20
SCRA
330
(1967)
Central
Philippine
University
v.
Court
of
Appeals,
supra.
Deudor
v.
J.M.
Tuason,
2
SCRA
129
(1961)
8
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
4. Alternative
Obligations
a. Concept
(Art.
1199)
b. Right
of
Choice
(Art.
1200)
c. Effect
of
Notice
of
Choice
d. When
Notice
Produces
Effect
(Art.
1201)
e. Effect
of
loss
or
impossibility
of
one
or
all
prestations
(Art.
1202
to
1205)
f. Facultative
Obligation
(Art.
1206)
i. Concept
ii. Distinguished
from
Alternative
Obligations
iii. Effect
of
Substitution
5. Joint
and
Solidary
Obligations
a. Joint
Obligations
i. Concept
• Requisites
• Words
used
to
indicate
joint
obligations
ii. Presumption
(Art.
1207,
1208)
iii. Effects
(Art.
1207,
1208)
• Extent
of
liability
of
debtor
• Extent
of
right
of
creditor
• In
case
of
novations,
compensation,
confusion
(Art
1277)
or
remission
b. Solidary
Obligations
i. Concept
• Requisites
• Words
used
to
indicate
solidary
obligations
ii. Kinds
• As
to
source
(Art.
1208)
o Legal
(Art.
1915,
1945,
2194,
Art
119
of
the
RPC)
o Conventional
o Real
• As
to
parties
bound
o Active
o Passive
o Mixed
• As
to
uniformity
o Uniform
o Varied/non‐uniform
(Art.
1211)
9
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
Ynchausti
v.
Yulo,
34
Phil.
978
(1916)
Inciong
v.
Court
of
Appeals,
257
SCRA
578
(1996)
RCBC
v.
Court
of
Appeals,
178
SCRA
739
(1989)
Lafarge
Cement
Phil.
V.
Continental
Cement,
443
SCRA
522
(2004)
iii. Effects
• Solidary
creditor
in
relation
to:
o common
debtor
right
to
demand
(Art.
1214‐1216;
1217,
par.
1)
in
case
of
novation,
compensation,
confusion,
remission
by
a
creditor
(Art.
1215,
par.
1)
o solidary
co‐creditors
in
case
of
novation,
compensation,
confusion,
remission
by
a
co‐creditor
(Art
1215,
par.
2)
prejudicial
acts
prohibited
(Art.
1212)
assignment
of
rights
not
allowed
(Art.
1213)
• Solidary
debtor
in
relation
to:
o common
creditor
obligation
to
perform
(Art.
1207)
in
case
of
novation,
compensation,
confusion,
remission
by
a
creditor
(Art.
1215,
par.
1)
o solidary
co‐debtor
in
case
of
payment
by
a
co‐debtor
(Art.
1217‐1220)
in
case
of
fortuitous
event
(Art.
1221)
Jaucian
v.
Querol,
38
Phil.
718
(1918)
Rehabilitation
Finance
Corporation
v.
Court
of
Appeals,
Official
Gazette
No.
6,
p.
2467
Quiombing
v.
Court
of
Appeals,
189
SCRA
325
(1990)
Inciong
v.
Court
of
Appeals,
257
SCRA
578
(1996)
iv.
Defenses
Available
to
a
Solidary
Debtor
Against
the
Creditor
(Art.
1222)
• Types
o those
derived
from
the
nature
of
the
obligations
o personal
defenses
o defenses
pertaining
to
his
shares
o those
personally
belonging
to
the
other
co‐debtors
• Effects
Ynchausti
v.
Yulo,
supra.
Alipio
v.
Court
of
Appeals,
341
SCRA
441
(2000)
10
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
c. Joint
Indivisible
Obligations
i. Concept
• Distinguished
from
joint
obligations
• Distinguished
from
solidary
obligations
ii. Indivisibility
distinguished
from
solidarity
(Art.
1210)
iii. Effects
(Art.
1209,
1224)
6. Divisible
and
Indivisible
Obligations
a. Divisible
Obligations
i. Concept
ii. Effects
(Art.
1223,
1233)
b. Indivisible
Obligations
i. Concept:
distinguished
from
solidary
obligations
ii. Kinds
• Natural
(Art.
1225,
par.
1)
• Legal
(Art.
1225,
par.
3)
• Conventional
(Art.
1225,
par.
3)
iii. Presumptions
of
divisibility
and
indivisibility
(Art.
1225)
iv. Divisibility
and
indivisibility
in
obligations
not
to
do
(Art.
1225,
par.3
)
v. Effects
(Art.
1223,
1223,
1224)
vi. Cessation
of
Indivisibility
7. Obligations
with
a
Penal
Clause
a. Concept
• Principal
v.
Accessory
Obligation
• Distinguished
from
conditional
obligations
• Distinguished
from
alternative
obligations
• Distinguished
from
facultative
obligations
• Distinguished
from
guaranty
11
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
b. Kinds
of
Penal
Clause
• As
to
effect
o Subsidiary
o Complimentary
• As
to
source
o Conventional
o Legal
• As
to
purpose
o Punitive
o Reparatory
c. Demandability
of
Penalty
(Art.
1226,
par.
2)
d. Effects
of
Penal
Clause:
General
Rule
and
Exceptions
• Substitute
for
indemnity
for
damages
and
payment
of
interest
(Art.
1226)
Makati
Development
Corp.
v.
Empire
Insurance
Co.
20
SCRA
557
(1967)
Tan
v.
Court
of
Appeals,
367
SCRA
571
(2001)
Country
Bankers
Insurance
v.
Court
of
Appeals,
201
SCRA
458
(1991)
• •
Not
exempt
debtor
from
performance
(Art.
1227)
Creditor
cannot
demand
both
performance
and
penalty
at
the
same
time
(Art.
1227)
• Creditor
cannot
collect
other
damages
in
addition
to
penalty
(Art.
1226)
e. When
penalty
shall
be
equitably
reduced
(Art.
1229)
f. Nullity
of
Principal
Obligation
of
Penal
Clause
(Art.
1230)
D. Extinguishment
of
Obligations
(Art.
1231)
1. Payment
or
Performance
(Art.
1232)
a. Concept
(Art.
1232)
b. Requisites
i. Who
can
pay
• General
Rule
• Exceptions:
12
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
o third
person
who
is
an
interested
party;
effects
(Art.
1302[3])
o third
person
who
is
not
an
interested
party
but
with
the
consent
of
debtor
(Art.
1302[2],
1236,
par.
1)
o third
person
who
is
not
an
interested
party
and
without
the
consent
of
the
debtor,
without
the
knowledge
or
against
the
will
of
the
debtor
(Art.
1236,
par.
2;
Art.
1237,
1236,
par.
1)
•
o third
person
who
does
not
intend
to
be
reimbursed
(Art
1238)
in
an
obligation
to
give
(Art.
1239,
1427)
in
case
of
active
solidarity
(Art.
1214)
ii. To
whom
payment
can
be
made
• General
rule
(Art.
1240)
• Exceptions:
•
o incapacitated
person
(Art.
1241,
par.
1)
o third
person
(Art.
1241,
par.
2)
o when
proof
of
benefit
not
required
(Art.
1241,
par.
3;
Art.
1242)
o in
case
of
active
solidarity
(Art.
1214)
iii. What
is
to
be
paid
(Identity)
• General
Rule
• Specific
cases:
o To
give
a
specific
thing
(Art.
1244)
o To
give
a
generic
thing
(Art.
1246)
o To
pay
money
(Art.
1249,
1250;
R.A.
529,
R.A.
4100,
R.A.
8183)
Arrieta
v.
NARIC,
supra
Kalalo
v.
Luz,
34
SCRA
377
(1970)
St.
Paul
Fire
and
Marine
Insurance
v.
Macondray,
70
SCRA
122
(1976)
Papa
v.
A.V.
Valencia,
284
SCRA
643
(1998)
Philippine
Airlines
v.
Court
of
Appeals,
181
SCRA
557
(1990)
13
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
Payment
of
Interest
(Art.
1956)
iv. How
payment
is
to
be
made
(Integrity)
• General
Rule
(Art.
1233)
o Partial
payment
is
not
allowed;
exceptions
(Art.
1248)
• Substantial
performance
in
good
faith
(Art.
1234)
• Estoppel
(Art.
1235)
• Presumptions
in
payment
of
interests
and
installments
(Art.
1176)
v. When
is
payment
to
be
made
• General
Rule
(Art
1169)
• No
demand,
no
delay;
Exceptions
vi. Where
payment
is
to
made
• Place
expressly
designated
(Art.
1251,
par.
1)
• When
place
of
payment
is
not
expressly
designated
(Art.
1251,
paragraphs
2
to
4)
vii. Who
pays
for
expenses
for
making
payment
(Art.
1247)
c. Application
of
Payments
i. Concept
(Art.
1252)
Reparations
Commission
v.
Universal
Deep
Fishing,
83
SCRA
764
(1978)
Paculdo
v.
Regalado,
345
SCRA
134
(2000)
•
ii.
Requisites
iii. Rules
in
Application
of
Payments
(Art.
1252‐1253)
• If
rules
are
not
applicable
or
cannot
be
inferred
(Art.
1254)
• Meaning
of
the
“most
onerous
debtor”
d. Payment
by
Cession
i. Concept
(Art.
1255)
ii. Requisites
iii. Effects
iv. Compared
to
Assignment
of
Receivables
e. Dation
in
Payment
14
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
i.
Concept
(Art.
1245)
• Distinguished
from
Payment
by
Cession
Development
Bank
of
the
Philippines
v.
Court
of
Appeals,
284
SCRA
14
(1998)
ii. Requisites
iii. Effects
Filinvest
Credit
Corporation
v.
Philippine
Acetylene,
111
SCRA
421(1982)
f. Tender
of
Payment
and
Consignation
i. Tender
of
Payment
• Concept
• Requisites
ii. Consignation
• Concept
and
Purpose
• Requisites
o When
tender
and
refusal
not
required
(Art.
1256,
par.
2)
o Two
notice
requirement
(Art.
1257,
par.
1;
Art.
1258,
par.
2);
Effects
of
non‐compliance
• Effects
(Art.
1260,
par
1)
o Withdrawal
by
debtor
before
acceptance
by
creditor
or
approval
of
court
(Art.
1260,
par.
2)
o Withdrawal
by
debtor
after
proper
consignation
(Art.
1261)
With
creditor
approval
Without
creditor
approval
• Expenses
of
Consignation
De
Guzman
v.
Court
of
Appeals,
137
SCRA
730
(1985)
TLG
International
Continental
Enterprising,
Inc.
v.
Flores,
47
SCRA
437
(1972)
McLaughlin
v.
Court
of
Appeals,
144
SCRA
693
(1986)
Soco
v.
Militante,
123
SCRA
160
(1983)
Sotto
v.
Mijares,
28
SCRA
17
(1969)
Reisenbeck
v.
Court
of
Appeals,
209
SCRA
657
(1992)
Rural
Bank
of
Caloocan
v.
Court
of
Appeals,
104
SCRA
151
(1981)
Licuanan
v.
Diaz,
175
SCRA
530
(1989)
Chan
v.
Court
of
Appeals,
230
SCRA
685
(1994)
Meat
Packing
Corp.
v.
Sandiganbayan,
359
SCRA
409
(2001)
15
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
2. Loss
or
Impossibility
a. Loss
of
the
Thing
Due
i. Concept
(Art.
1189,
par.
2)
ii. Kinds
• Total
• Partial
iii. Requisites
(Art.
1262)
iv. Presumption
(Art.
1266,
1267)
v.
Effects
• In
an
obligation
to
give
a
specific
thing
(Art.
1262,
1268)
• In
an
obligation
to
give
a
generic
thing
(Art.
1263)
• In
case
of
partial
loss
(Art
1264)
• Action
against
third
persons
(Art.
1269)
b. Impossibility
of
Performance
i. Concept
(Art.
1266,
1267)
ii. Kinds
• Total
• Partial
iii. Requisites
(Art.
1266)
iv. Effects
• In
obligations
to
do
(Art.
1266‐1267;
Art.
1262,
par.
2)
• Impossibility
distinguished
from
difficulty
•
In
case
of
partial
impossibility
(art.
1264)
Occeña
v.
Court
of
Appeals,
73
SCRA
637
(1976)
Naga
Telephone
Company
v.
Court
of
Appeals,
230
SCRA
351
(1994)
PNCC
v.
Court
of
Appeals,
272
SCRA
183
(1997)
16
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
3. Condonation
or
Remission
a. Concept
b. Kinds
• Total
or
partial
• Express
or
implied
(Art.
1270,
par.
1)
c. Requisites
(Art.
1270,
par.
2)
Yam
v.
Court
of
Appeals,
303
SCRA
1
(1999)
d. Presumptions
(Art.
1271‐1271;
1274)
e. Effects
• In
general
• In
case
of
joint
or
solidary
obligations
f. Governing
Rules
(Art.
1270)
g. Renunciation
of
Principal
or
Accessory
Obligation
(Art.
1273)
4. Confusion
or
Merger
a. Concept
b. Requisites
c. Effects
• In
general
(Art.
1275)
• In
case
of
joint
or
solidary
obligations
(Art.
1277)
d. Confusion
in
Principal
or
Accessory
Obligations
(Art.
1276)
5. Compensation
a. Concept
(Art.
1278);
distinguished
from
Confusion
b. Kinds
i. ii. iii. iv. v.
Total
or
Partial
Legal
Conventional
(Art.
1279,
Art.
1282)
Judicial
(Art.
1283)
Facultative
17
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
c. Legal
Compensation
i.
Requisites
(Art.
1279‐1280):
Due
distinguished
from
demandable
Gantion
v.
Court
of
Appeals,
28
SCRA
235
(1969)
Bank
of
the
Philippine
Islands
v.
Reyes,
255
SCRA
571
(1996)
Philippine
National
Bank
v.
Sapphire
Shipping,
259
SCRA
174
(1996)
CKH
Industrial
Development
v.
Court
of
Appeals,
272
SCRA
333
(1997)
Mirasol
v.
Court
of
Appeals,
351
SCRA
44
(2001)
Associated
Bank
v.
Tan,
446
SCRA
282
(2004)
Villanueva
v.
Tantuico,
182
SCRA
263
(1990)
Perez
v.
Court
of
Appeals,
127
SCRA
636
(1984)
Silahis
Marketing
Corp.
v.
Intermediate
Appellate
Court,
180
SCRA
21
(1989)
Bank
of
the
Philippine
Islands
v.
Court
of
Appeals,
255
SCRA
___
(1996)
ii.
Effects
(Art.
1290,
1289)
d. When
Compensation
is
not
allowed
(Art.
1287‐1288)
e. Compensation
of
Debts
Payable
in
Different
Places
(Art.
1268)
f. Effect
of
Nullity
of
Debts
to
be
Compensated
(Art.
1284)
g. Effects
of
Assignment
of
Credit
i. with
consent
of
debtor
(Art.
1285,
par.
1)
ii. with
knowledge
but
without
consent
of
debtor
(Art.
1285,
par.
2)
iii. without
knowledge
of
debtor
(Art.
1285,
par.
3)
6. Novation
a. Concept
(Art.
1291)
• Change
in
debtor
• Change
in
object
• Change
in
third
person
who
is
subrogated
• Change
in
creditor
with
its
consent
or
at
its
instance
is
not
novation
b. Kinds
i. As
to
form:
express
or
implied
ii. As
to
origin:
conventional
or
legal
iii. As
to
object
• objective
or
real
• subjective
or
personal
• mixed
c. Requisites
(Art.
1292)
18
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
Millar
v.
Court
of
Appeals,
38
SCRA
642
(1971)
Dormitorio
v.
Fernandez,
72
SCRA
388
(1976)
Magdalena
Estate
v.
Rodriguez,
18
SCRA
967
(1966)
Reyes
v.
Secretary
of
Justice,
264
SCRA
35
(1996)
Cochingyan
v.
RB
Surety
and
Insurance,
151
SCRA
339
(1987)
Broadway
Centrum
Condominium
Corporation
v.
Tropical
Hut,
224
SCRA
302
(1993)
Molino
v.
Security
Diners
International,
363
SCRA
358
(2001)
Garcia
v.
Llamas,
417
SCRA
292
(2003)
California
Bus
Lines
v.
State
Investment,
418
SCRA
297
(2003)
Babst
v.
Court
of
Appeals,
350
SCRA
341
(2001)
d. Effects
(Art.
1296)
e. Effects
of
the
Status
of
the
Original
and
New
Obligation
i.
nullity
or
voidability
of
original
obligation
(Art.
1298)
ii.
nullity
or
voidability
of
new
obligation
(Art.
1297)
iii.
suspensive
or
resolutory
condition
or
original
obligation
(Art.
1299)
f. Objective
Novation
g. Subjective
Novation
i. By
change
of
debtor
• Expromision
o Requisites
(Art.
1293)
o Effects
(Art.
1294)
• Delegacion
o Requisites
(Art.
1293)
o Effects
(Art.
1295)
Garcia
v.
Llamas,
417
SCRA
292
(2003)
Quinto
v.
People,
305
SCRA
709
(1999)
ii.
By
change
of
creditor
–
subrogation
of
a
third
person
in
the
rights
of
the
creditor
(Art.
1300)
• Conventional
subrogation
o Requisites
(Art.
1301)
o Distinguished
from
assignment
of
credit
o Effects
(Art.
1303‐1304)
Licaros
v.
Gatmaitan,
(2001)
19
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
•
Legal
Subrogation
o Requisites
o When
presumed
(Art.
1302)
o Effects
(Art.
1303‐1304)
Astro
Electronics
Corp.
v.
Philippine
Export
and
Foreign
Loan
Guarantee
Corporation
(2003)
20
Law
101:
Obligations
and
Contracts
Prof.
Mary
Rose
S.
Tan
Semester
2,
AY
20112012
Active
(Debtor)
Subject
Passive
(Creditor)
Obligations
Elements
Sources
Law;
Contract;
Quasi
Contracts;
Delicts;
Quasi
Delicts
Cause
Generic
Thing
Object
Specimic
Thing
Breach
How
committed
Kinds
Substantial
breach
Casual
or
slight
breach
Fraud
Negligence
Delay
Contraventi on
of
tenor
Mora
solvendi
Mora
accipiendi
Compensati o
morae
Specimic
performanc e
Rescission
Damages
Accion
Subrogatori s
Accion
Pauliana
Subsidiary
Remedies
Remedies
21
