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OBLIGATIONS and CONTRACTS REVIEWER

From the book of Jurado and Tolentino

Atty. Castillo

BOOK IV OBLIGATIONS AND CONTRACTS

Title. I. - OBLIGATIONS

CHAPTER 1

GENERAL PROVISIONS Art. 1156. An obligation is a juridical necessity to give to do or not to do.

!nly covers civil obligations !bligation is a juridical necessity to com"ly #ith a "restation $ %anche& 'oman(s Classic )efinition !bligation is a legal relation established bet#een one "erson and another #hereby the latter is bound to the fulfillment of a "restation

#hich the former may demand of him 2 Kinds ! O"li#ati n$

o Ci%il O"li#ati n - has a binding force in la#* gives the obligee or creditor the right of enforcing it against the obligor or debtor in a court of justice +Art. 1156,

- based on a "ositive la#* enforceable on court(s justiceo Nat&'al O"li#ati n ( one #hich can not be enforced by action but #hich is binding on the "arty #ho makes it in

conscience and according to the natural la#.- based on e-uity and natural la#* not enforceable on court(s justice

Re)&isite ! O"li#ati ns *+,$o A &'idi al ' le#al tie/ #hich binds the "arties to the obligation and #hich may arise from either bilateral or unilateral

acts of "ersonso An a ti%e s&" e t kno#n as the oblige or creditor #ho can demand the fulfillment of the obligationo A 0assi%e s&" e t kno#n as the obligor or debtor #hom the obligation i s juridically demandableo The !a t/ 0'estati n ' se'%i e #hich constitutes the object of the obligation

The ! ' $ sometimes added but not considered essential. +e . Contracts,- obligations arising from la# -uasi/contracts acts or omissions "unished by la# and

-uasi/delicts don not re-uire any form Classi!i ati n ! O"li#ati ns$

o 0ure and conditional +Arts. 11 2 $ 1123,o 4ith a "eriod +Arts. 112 $ 112 ,o Alternative and Facultative +Arts. 1122 $ 1376,o Joint and %olidary +Arts. 137 $ 1333,o )ivisible and 8ndivisible +Arts. 133 $ 1335,o

4ith a 0enal Clause +Arts. 1336 $ 13 7, Classi!i ati n ! O"li#ati ns a 'din# t San e3 R ano As t &'idi al )&alit4$

Nat&'al ( #hen the obligation is in accordance #ith natural la#.Ci%il ( #hen the obligation is in accordance #ith 0ositive la#.5i6ed ( both natural and "ositive la#

o As t 0a'ties$7nilate'al and Bilate'al

7nilate'al ( only one "arty is bound Bilate'al ( both "arties are mutually and reci"rocally bound

Indi%id&al and lle ti%e Indi%id&al ( one obligor C lle ti%e ( several obligors

- 8 int ( each obligor is liable only for his "ro"ortionate share- S lida'4 ( each obligor may be held liable for the entire obligation

o As t " e t$Dete' inate and Gene'i

Dete' inate ( the object is s"ecific Gene'i ( object is designated by class or genus

Si 0le and 5&lti0le Si 0le ( only one undertaking 5&lti0le ( several undertakings

- C n &n ti%e ( all undertakings are demandable at the same time- Dist'i"&ti%e ( only one undertaking out of several is demandable

Alte'nati%e ( obligor is allo#ed to choose out of several obligations #hichmay be due and demandable

Made by: Roselle Casiguran Page 1


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9a &ltati%e - obligor is allo#ed to substitute another obligation for one#hich is due and demandable

P siti%e and ne#ati%e P siti%e ( obligor is obliged to give or do something Ne#ati%e ( obligor must refrain from giving or doing something

Real and Pe's nal Real ( obligation consists in giving something Pe's nal ( obligation is doing 9 not doing

P ssi"le and I 0 ssi"le P ssi"le ( ca"able of fulfillment I 0 ssi"le ( not

Di%isi"le and indi%isi"le Di%isi"le ( obligation is susce"tible of "artial "erformance Indi%isi"le ( not

P'in i0al and A ess '4 P'in i0al ( main undertaking A ess '4 ( merely an undertaking to guarantee the fulfillment of the "rinci"al obligation

o As t 0e'!e ti n and e6tin#&is entP&'e ( #hen the obligation is not subject to any condition or term and is immediately demandableC nditi nal ( subject to condition

S&s0ensi%e ( the ha""ening or fulfillment of the condition results in the birth of the obligation Res l&t '4 ( the h9f results in the e tinguishment of the obligation

Wit a te' ! 0e'i d *a 0la3 , S&s0ensi%e ' !' a da4 e'tain( the obligation is demandable only u"on the e "iration of the

term Res l&t '4 ' t a da4 e'tain ( the obligation terminates u"on the e "iration of the term

Art. 115 . !bligations arise from:

+1, ;a#*

+3, Contract s*

+ ,


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As a rule contracts are "erfected by mere nsent. *C nsens&al C nt'a ts,

Real C nt'a ts - "erfected by the delivery of the object of obligation +e . de"osit "ledge commodatum,

O"li#ati n a4 eit e' "e Re i0' al ' &nilate'al.

o Re i0' al O. ( mutually or reci"rocally obliged to do or give something

o 7nilate'al O. $ only one "arty is obliged

Art. 1167. !bligations derived from -uasi/contracts shall be subject to the "rovisions of Cha"ter 1 Title B88 of this >ook. +n,

:&asi- nt'a ts ( are those juridical relations arising from la#ful voluntary and unilateral acts based on the "rinci"le that no oneshall be unjustly enriched or benefited at the e "ense of another.

o 87RIDICAL RELATIONS*8R,$

Ne# ti '& #esti ( a J' #hich arises #henever a "erson voluntarily takes charge of the agency or management of the business or "ro"erty of another #ithout any "o#er or authority from the latter. e shall beobliged to continue such agency or management until the termination of the affair and its incidents.

S l&ti inde"iti ( is a J' #hich arises #henever a "erson unduly delivers a thing through mistake to another #ho has no right to demand it.

Art. 1161. Civil obligations arising from criminal offenses shall be governed by the "enal la#s subject to the "rovisions of Article 31 and of the "ertinent "rovisions of Cha"ter 3 0reliminary Title on uman 'elations and of Title B888 of this >ook regulating damages. +1723a,

@very "erson liable for a felony is also civilly liable.

3 as"ects of crime: criminal and civil

En! ' e ent ! Ci%il Lia"ilit4$

o Instit&ti n ! 'i inal and i%il a ti ns ( #hen criminal action is instituted the civil action is im"liedly instituted #iththe criminal action unless the offended "arty e "ressly #aives the civil action or reserves his right to institute it se"arately

o Inde0endent Ci%il A ti n ( may be brought by the injured "arty during the "endency of the criminal case that is entirelyse"arate and distinct from the criminal action "rovided the right is reserved. 8t only re-uires "re"onderance of evidence

o Ot e' i%il a ti ns a'isin# !' !!enses ( in all cases not included in the "receding section the follo#ing rules shall beobserved:

Criminal and civil arising from the same offense may be instituted se"arately but after the criminal action has been commenced the civil action can not be instituted until the final judgment has been rendered in the criminal

After a criminal action has been commenced civil #ill be sto""ed and sus"ended until the final judgment in the criminal has been rendered



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@ tinction of the "enal action does not carry #ith it the civil unless the e tinction "roceeds from thefinal judgment that the civil might arise did not e ist.

o 8&d# ent in i%il a ti n n t a "a' ( absolve in civil does not carry #ith it the criminal

o S&s0ensi n "4 'eas n ! 0'e- &di ial )&esti n

E!!e t ! A )&ittal

o I! a )&ittal is "ased n is #&ilt n t 0' %en "e4 nd 'eas na"le d &"t ( civil action to recover damages may beinstituted that re-uires only "re"onderance of evidence.

o I! a )&ittal is "ases n t e #' &nd t at e did n t it t e !!ense a'#ed ( civil action no longer "ossible

E!!e t ! 9ail&'e t a;e Rese'%ati n ( an inde"endent civil action may be brought by the injured "arty during the "endency of thecriminal case provided that the right is reserved as required in the preceding section.

Art. 1163. !bligations derived from -uasi/delicts shall be governed by the "rovisions of Cha"ter 3 Title B88 of this >ook and by s"ecial la#s.+172 a,

:&asi-deli ts ( refers to all of those obligations #hich do not arise from la# contracts -uasi/contracts or criminal offense.

8t may be defined as the fault or negligence of a "erson #ho by his acts or omission connected or unconnected #ith but inde"endentfrom any contractual relation causes damage to another "erson. +T!'T,

PERSONS LIABLE

o Father in case of death or inca"acity the mother in regards to minor #ho live in their com"any

o Duardians $ minors9 inca"acitated "ersons

o !#ners and managers of an establishment or industry $ em"loyees in connection #ith their function

o @m"loyer #ith res"ect to their em"loyees and household although not engaged in a business or industry

o %tate #hen it acts through a s"ecial agent* but not #hen the damage has been caused by the officials to #hom the taskdone "ro"erly "ertains

o Teachers or heads of establishments of arts and t rade $ "u"ils9students9a""rentices in their custody

)@F@E%@: diligence of a good father

Re)&isites ! Lia"ilit4$

o The fault or negligence of the defendant

o The damage suffered or incurred by the "laintiff

o The relation of cause and effect bet#een the fault or negligence of the defendant and the damage incurred by the "laintiff



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o

CRI5ES :7ASI-DELICTS

Affect the "ublic interests* #rong against the state 0rivate concerns* #rong against the individual

Criminal 8ntent is necessary Criminal intent not necessary

0ena l Code "unishes or corrects the criminal act Civi l code by means of indemnification re"aration

Eot as broad as -uasi delicts only if there is a la# covering them 8ncludes all acts in #hich any kind of fault or negligenceintervenes

Duilty beyond reasonable doubt 0re"onderance of @vidence

Can never be com"romised Can be com"romised

Kinds ! Ne#li#en e$

o C&l0a A)&iliana ( or cul"a e tra/contractual* negligence as a source of obligation* a -uasi/delict

o C&l0a C nt'a t&al ( negligence in the "erformance of a contract

o C&l0a C'i inal ( criminal negligence

C7LPA A:7ILANA C7LPA CONTRACT7AL

Doverned by Arts. 31 6/312= Doverned by arts. 11 2 et se-uel

Eegligence as a source of obligation Eegligence in the "erformance of a contract



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Fault or negligence #hich constitutes an inde"endent source ofobligation bet#een "arties not "reviously bound

Fault or negligence of the debtor as an incident in the fulfillmentof an e isting obligation

Eegligence of the defendant should be the "ro imate cause ofdamage if liability is attached

CHAPTER 2NAT7RE AND E99ECT O9 OBLIGATIONS

Art. 116 . @very "erson obliged to give something is also obliged to take care of it #ith the "ro"er diligence of a good father of a family unlessthe la# or the sti"ulation of the "arties re-uires another standard of care .

'eal obligation

Art. 116=. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. o#ever he shall ac-uire no real rightover it until the same has been delivered to him. +1725,

Art. 1165. 4hen #hat is to be delivered is a determinate thing the creditor in addition to the right granted him by Article 11 7 may com"el thedebtor to make the delivery.

8f the thing is indeterminate or generic he may ask that the obligation be com"lied #ith at the e "ense of the debtor.

8f the obligor delays or has "romised to deliver the same thing to t#o or more "ersons #ho do not have the same interest he shall be res"onsiblefor any fortuitous event until he has effected the delivery. +1726,

Art. 1166. The obligation to give a determinate thing includes that of delivering all its accessions and accessories even though they may not have been mentioned. +172 a,

O"li#ati ns t #i%e$

o )eterminate $ object is "articularly designated or "hysically segregated from all others of the same class. +jack(s horse,

o 8ndeterminate or Deneric $ designated by class or genus +any horse,

Nat&'e ! 'i# t ! 'edit '$

o 8n case of obligation arising from the la# -uasi/contracts criminal offenses and -uasi/delicts the obligation to deliver arises fro the time designated by the "rovisions of the civil or of s"ecial la#s

o !bligation arising from contracts the obligation to deliver arises as a general rule from the moment of the "erfection of the contracts



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o 8f the obligation is subject to a s&s0ensi%e nditi n/ the obligation to deliver the thing as #ell as the fruits shall arise fromthe moment of the fulfillment of the condition

o 8f subject to s&s0ensi%e te' ' 0e'i d/ the obligation to deliver arises only u"on the e "iration of the designated term or "eriod

Pe's nal 'i# t ( a right "ertaining to a "erson to demand from another as a definite "assive subject the fulfillment of a "restation togive to do or not to do. 8t is a &s ad 'e a right enforceable only against a definite "erson or grou" of "ersons.

Real 'i# t ( right "ertaining to a "erson over a s"ecific thing #ithout a "assive subject individually determined against #hom suchright may be "ersonally enforced. !nce a thing and the fruits are delivered he ac-uires a real right enforceable against the #hole#orld.

Ri# ts ! 'edit ' in dete' inate "li#ati ns$

o To com"el s"ecific "erformance $ art. 1165

o To recover damages for breach of the obligation $ through delay fraud negligence or contravention of the tenor thereof $ art. 11 7

Ri# ts ! 'edit ' in #ene'i "li#ati ns$

o To ask for "erformance of the obligation

o To ask that the obligation be com"lied #ith at the e "ense of the debtor

o To recover damages for breach of the obligation $ art. 11 7

O"li#ati ns ! de"t ' in de' inate "li#ati ns$

o To "erform the obligation s"ecifically

o To take care of the thing #ith the "ro"er diligence of a good father of a family

Art. 116 a""lies only to determinate obligations

3 e ce"tions:

The la# re-uires another standard of care

8f the "arties sti"ulated another standard of care

To deliver all accessions and accessories of the thing eventhough they may not have been mentioned

A essi ns $ all of those things #hich are "roduced by thing #hich is the object of the obligation as#ell as all of those #hich are naturally or artificially attached thereto.

A ess 'ies ( those things #hich have for their object the embellishment use or "reservation of another thing #hich is more im"ortant and to #hich they are not incor"orated or attached.

o To be liable for damages in case of breach of the obligation by reason of delay fraud negligence or contravention of thetenor thereof.



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)eterminate thing only$ liability does not arise if the breach is due to a fortuitous event. Deneric thing never "erish.

O"li#ati ns ! de"t ' in #ene'i "li#ati ns$

o To deliver a thing #hich is neither of su"erior nor inferior -uality.

o To be liable for damages in case of breach of the obligation by reason of delay fraud negligence or contravention of thetenor thereof

Art. 116 . 8f a "erson obliged to do something fails to do it the same shall be e ecuted at his cost.

This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore it may be decreed that #hathas been "oorly done be undone. +172 ,

!bligations to do $ the oblige does not "ossess the "o#er to com"el the obligor to com"ly #ith his obligations. The la# recogni&es theindividual(s freedom to do or not to do.

The first "aragra"h granted a remedy to the obligee to have the obligation "erformed or e ecuted at the e "ense of the obligor.

8f contravention of the tenor the follo#ing rights are available to the obligee:

1. To have the obligation "erformed or e ecuted at the e "ense of the obligor.

2. To ask #hat has been "oorly done to be undone


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Art. 1162. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or e trajudicially demands from themthe fulfillment of their obligation.

o#ever the demand by the creditor shall not be necessary in order that delay may e ist:

+1, 4hen the obligation or the la# e "ressly so declare* or

+3, 4hen from the nature and the circumstances of the obligation it a""ears that the designation of the time #hen the thing is to bedelivered or the service is to be rendered #as a controlling motive for the establishment of the contract* or

+ , 4hen demand #ould be useless as #hen the obligor has rendered it beyond his "o#er to "erform.

8n reci"rocal obligations neither "arty incurs in delay if the other does not com"ly or is not ready to com"ly in a "ro"er manner #ith #hat isincumbent u"on him. From the moment one of the "arties fulfills his obligation delay by the other begins. +1177a,

Art. 11 7. Those #ho in the "erformance of their obligations are guilty of fraud negligence or delay and those #ho in any manner contravenethe tenor thereof are liable for damages. +1171,

Art. 11 1. 'es"onsibility arising from fraud is demandable in all obligations. Any #aiver of an action for future fraud is void. +1173a,

Art. 11 3. 'es"onsibility arising from negligence in the "erformance of every kind of obligation is also demandable but such liability may beregulated by the courts according to the circumstances. +117 ,

Art. 11 . The fault or negligence of the obligor consists in the omission of that diligence #hich is re-uired by the nature of the obligation andcorres"onds #ith the circumstances of the "ersons of the time and of the "lace. 4hen negligence sho#s bad faith the "rovisions of Articles 11 1and 3371 "aragra"h 3 shall a""ly.

8f the la# or contract does not state the diligence #hich is to be observed in the "erformance that #hich is e "ected of a good father of a familyshall be re-uired. +117=a,

B'ea ! O"li#ati n$

o V l&nta'4 ( Art 11 7

o In% l&nta'4 ( arises because of fortuitous events

V l&nta'4 B'ea T ' De!a&lt ' 5 'a ( signifies the idea of delay in the fulfillment of an obligation #ith res"ect to time.

o < ;inds$

5 'a S l%endi ( delay of the obligor or debtor to "erform his obligations

5 'a A i0iendi ( delay of the oblige to acce"t the delivery of the thing #hich is the object of the obligation

C 0ensati 5 'ae ( delay of the "arties or obligors in reci"rocal obligations.

o De!a&lt in P siti%e O"li#ati ns ( obligation to give or to do

)emand may be judicial or e trajudicial

8&di ial ( if the creditor files a com"laint for the fulfillment of the obligation



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E6t'a-8&di ial ( if the creditor demands fulfillment either orally or in #riting

o W en de and is n t ne essa'4$ * delayed already no need to demand,

4hen the obligation or the la# e "ressly so declares

4hen from the nature and the circumstances of the obligation it a""ears that the designation of the time #henthe thing is to be delivered or the service is to be rendered #as a controlling motive for the establishment of thecontract.

4hen demand #ould be useless as #hen the obligor has rendered it beyond his "o#er to "erform.

De!a&lt in Ne#ati%e O"li#ati ns$

o Eo "ossible delay

De!a&lt in Re i0' al O"li#ati ns

o The general rule is that fulfillment by both "arties should be simultaneous or at the same time.

o !ne "arty incurs a delay from the moment the other "arty fulfills his obligation.

E!!e t ! De!a&lt ( liability for damages a crime or a -uasi/delict

V l&nta'4 B'ea t ' 9'a&d ' D l ( fraud or dolo consists in the conscious and intentional "ro"osition to evade the normalfulfillment of an obligation

o Ci%il 9'a&d lassi!i ati n$

o 9'a&d ' D l in t e 0e' ! ' an e ! an "li#ati n

0resent only during the "erformance of a "re/e isting obligation

@m"loyed for the "ur"ose of evading the fulfillment of an obligation

'esults in the nonfulfillment of the obligation

Dive rise to recover damages

o 9'a&d ' D l in t e nstit&ti n ' esta"lis ent ! an "li#ati n.

0resent only at the time of the birth of the obligation.

0ur"ose of securing the consent of the other "arty to enter into the contract.

'eason for the other "arty u"on #hom it is em"loyed for entering into the contract results in the vitiation of hisconsent

Dive rise to ask for the annulment of the fraud contract

E!!e t ! 9'a&d ( liable for damages.



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N n-=ai%e' ! 9&t&'e 9'a&d *A't. 11>1,

V l&nta'4 B'ea t ' Ne#li#en e ' C&l0a ( negligence is the absence of due care re-uired by the nature of the obligation.

Kinds ! Ne#li#en e$

C'i inal Ne#li#en e

Ci%il Ne#li#en e$ *A't. 11>


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E!!e t ! Bad 9ait ( can be held liable for all damages #hich may be reasonably attributed to the non"erformance of the obligation.

E!!e t ! C nt'a"&t '4 Ne#li#en e ( the effect is to reduce or mitigate #hich he can recover from the obligor.

Ot e' i' & stan es = i an iti#ate t e da a#es in t e ! ll =in# instan es$

o 0laintiff itself contravened the terms of the contract

o 0laintiff has derived some benefit as the result of the contract

o 8n cases #here e em"lary damages are to be a#arded #here the defendant acted u"on the advice of the counsel

o 4here the loss #ould resulted in any event

o "on the filing of the action the defendant has lessen the "laintiff(s loss or injury.

V l&nta'4 B'ea t ' C nt'a%enti n ! Ten ' ! O"li#ati n

Art. 11 =. @ ce"t in cases e "ressly s"ecified by the la# or #hen it is other#ise declared by sti"ulation or #hen the nature of the obligationre-uires the assum"tion of risk no "erson shall be res"onsible for those events #hich could not be foreseen or #hich though foreseen #ereinevitable. +1175a,

9 't&it &s e%ent ( an event #hich could not be foreseen or #hich though foreseen #as inevitable. +acts of Dod,

9 ' e 5a e&'e ( events #hich arise from legitimate or illegitimate acts of "ersons other than the obligor +commotions riots #ars,+acts of ?an,

E!!e t &0 n "li#ati n - #hen failure to com"ly #ith the obligation due to fortuitous event $ general rule $ e em"ted from liability.

Onl4 t dete' inate "li#ati ns n t t #ene'i nes

Essential C nditi ns$

1. @vent must be inde"endent of the #ill of the obligor

2. @vent must be unforeseeable or inevitable.


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o 4here the nature of the obligation re-uires the assum"tion of risk

Art. 11 5. surious transactions shall be governed by s"ecial la#s. +n,

sury may be defined as contracting for or receiving something in e cess of the amount allo#ed by la# for the loan or forbearance of money goods or chettells.

% 'G ;A4 or Act. Eo. 3655

Art. 11 6. The recei"t of the "rinci"al by the creditor #ithout reservation #ith res"ect to the interest shall give rise to the "resum"tion that saidinterest has been "aid.

The recei"t of a later installment of a debt #ithout reservation as to "rior installments shall like#ise raise the "resum"tion that suchinstallments have been "aid. +1117a,

8f the debt "roduces interest "ayment of the "rinci"al shall not be deemed have been made until the interest have been covered.

Art. 11 . The creditors after having "ursued the "ro"erty in "ossession of the debtor to satisfy their claims may e ercise all the rights and bringall the actions of the latter for the same "ur"ose save those #hich are inherent in his "erson* they may also im"ugn the acts #hich the debtor mayhave done to defraud them. +1111,

Re edies ! C'edit ' t P' te t C'edit

o To e haust the "ro"erty in "ossession of the debtor

o To be subrogated to all of the rights and actions of the debtor save those #hich are inherent in his "erson

o To im"ugn all of the acts #hich the debtor may have done to defraud him

E6 a&sti n ! de"t '@s 0' 0e't4 ( the "rinci"al remedy of the creditor. The debtor is liable #ith all his "ro"erty "resent and futurefor the fulfillment of his obligation subject to the e em"tions "rovided by la#.

A i n S&"' #at 'ia ( the debtor may defeat the right of the creditor by mere inaction or omission. The la# e "ressly grants to thecreditor the right to e ercise all of the rights and bring all of the actions #hich the debtor may have against third "ersons.

o CONDITIONS t a%ail ! t is 'e ed4$

The debtor to #hom the right or action "ro"erly "ertains must be indebted to the creditor

The latter must be "rejudiced by the inaction or failure of the debtor to "roceed against the rd "erson

The creditor must have first "ursued or e hausted all of the "ro"erties of the debtor #hich are not e em"tedfrom e ecution

8n accion subrogatoria the creditor merely acts in the name and for the account of the debtor after e hausting all the assets of thelatter.



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'ights #hich are "urely "ersonal in nature cannot be #ithin the sco"e of this remedy

A i n Pa&liana ( right available to the creditor by virtue of #hich he can secure the rescission of any act of the debtor #hich is infraud and to the "rejudice of his rights as a creditor. %ubsidiary in nature.

Art. 11 . %ubject to the la#s all rights ac-uired in virtue of an obligation are transmissible if there has been no sti"ulation to the contrary.+1113,

E6 e0ti ns t t e t'ans issi"ilit4 ! 'i# ts$

o Eot transmissible by their very nature +"urely "ersonal right,

o 4here there is a sti"ulation of the "arties that they are not transmissible.

o They are not transmissible by o"eration of la#.

CHAPTER y novation.

!ther causes of e tinguishment of obligations such as annulment rescission fulfillment of a resolutory condition and "rescri"tion are governedelse#here in this Code. +1156a,

5 des ! E6tin#&is in# O"li#ati ns ( there are 17 modes #hich are enumerated above T e'e a'e t e's s& as$1. 'enunciation or #aiver by the oblige or creditor 3. Com"romise

. @ "iration of the resolutory term or "eriod=. death of one of the contracting "arties in "urely "ersonal obligations

5. #ill of one of the contracting "arties in certain contracts6. the agreement of both contracting "arties or #hat is sometimes kno#n as mutual assent or dissent

SECTION 1. - Pa4 ent ' Pe'! ' an e

Art. 13 3. 0ayment means not only the delivery of money but also the "erformance in any other manner of an obligation. +n,

C n e0t ! Pa4 ent ' Pe'! ' an e ( different acce"tations B' adest sense ( it consists in the fulfillment of the obligation either voluntarily or involuntarily including its e tinguishment by any

means or mode #hatsoever Li ited sense ( it consists in the normal and voluntary fulfillment of the obligation by the reali&ation of the "ur"ose for #hich it #as

constituted.



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5 'e Li ited sense ( it consists in the fulfillment of the obligation by the delivery of a sum of money The civil code has ado"ted the second $ "ayment means not only the delivery of money but also the "erformance in any other manner

of an obligation.

Art. 13 . A debt shall not be understood to have been "aid unless the thing or service in #hich the obligation consists has been com"letelydelivered or rendered as the case may be. +115 ,

Art. 13 =. 8f the obligation has been substantially "erformed in good faith the obligor may recover as though there had been a strict and com"letefulfillment less damages suffered by the obligee. +n,

Art. 13 5. 4hen the obligee acce"ts the "erformance kno#ing its incom"leteness or irregularity and #ithout e "ressing any "rotest or objectionthe obligation is deemed fully com"lied #ith. +n,

O"li#ati n t #i%e ( understood to have been "aid #hen the debtor or obligor has com"letely delivered the thing #hich he hadobligated himself to deliver O"li#ati n t d ( to have been "erformed #hen the obligor has com"letely rendered the service #hich he had obligated himself torender O"li#ati n n t t d ( com"lied #ith #hen the obligor has com"letely refrained from doing #hich he had obligated himself not todo.

E?CEPTIONS$1. 4hen the obligation has been substantially "erformed in good faith. There is less damages that has been suffered by the obligee. This

condition affords a just com"ensation for the relative breach committed by the obligor.3. 4hen the obligee acce"ts the "erformance kno#ing in its incom"leteness or irregularity and #ithout e "ressing any "rotest or

objection. This rule is based on the "rinci"le of esto""el

Art. 13 6. The creditor is not bound to acce"t "ayment or "erformance by a third "erson #ho has no interest in the fulfillment of the obligationunless there is a sti"ulation to the contrary.4hoever "ays for another may demand from the debtor #hat he has "aid e ce"t that if he "aid #ithout the kno#ledge or against the #ill of thedebtor he can recover only insofar as the "ayment has been beneficial to the debtor. +115 a,Art. 13 . 4hoever "ays on behalf of the debtor #ithout the kno#ledge or against the #ill of the latter cannot com"el the creditor to subrogatehim in his rights such as those arising from a mortgage guaranty or "enalty. +1152a,

Art. 13 . 0ayment made by a third "erson #ho does not intend to be reimbursed by the debtor is deemed to be a donation #hich re-uires thedebtorKs consent. >ut the "ayment is in any case valid as to the creditor #ho has acce"ted it. +n,

Pe's ns = a4 0a4 "li#ati n$*1, the debtor himself or his legal re"resentative*2, any third "ersonThe effect in both cases #hen the "ayment is effected in accordance #ith the re-uisites "rescribed by la# is the e tinguishment of theobligation.0ayment by a rd "erson #hether he has an interest in the obligation or not and #hether the "ayment #as made #ith the kno#ledgeand consent of the debtor or not may "ay the obligation.These rules ho#ever cannot be a""lied to the case of a rd "erson #ho "ays the redem"tion "rice in sales #ith right of re"urchase(pacto de retro). This is so because the vendor a retro is not a debtor #ithin the meaning of the la#.The creditor is not bound as a #ene'al '&le to acce"t "ayment or "erformance by a rd "erson. '@A%!E%: creditor should have a rightto insist on the liability of the debtor or he may dislike or distrust a rd "erson the creditor may not desire to have any businessdealings #ith a rd "erson etc.E6 e0ti ns$1. 4hen it is made by a rd "erson #ho has an interest in the fulfillment of the obligation such a joint debtor guarantor or surety.2. 4hen there is a sti"ulation to the contrary. 8n this case the creditor is deemed to have #aived his right to refuse to deal #ithstrangers to the obligation.

Ri# ts ! allantyne %. #as not a""lied because it assumes that there #as only one rate of e-uivalence throughout the islands #hen it is a#ell/kno#n fact that the conversion rate changed from "lace to "lace.

A""lication of the >%: +re-uisites, 1. the obligation should have been contracted during the Ja"anese occu"ation 3. it could have been "aid during the Ja"anese occu"ation

. it could have been "aid #ith Ja"anese military notes.

Art. 1351. 0ayment shall be made in the "lace designated in the obligation.There being no e "ress sti"ulation and if the undertaking is to deliver a determinate thing the "ayment shall be made #herever the thing might beat the moment the obligation #as constituted.8n any other case the "lace of "ayment shall be the domicile of the debtor.8f the debtor changes his domicile in bad faith or after he has incurred in delay the additional e "enses shall be borne by him.These "rovisions are #ithout "rejudice to venue under the 'ules of Court. +11 1a,

Pla e ! Pa4 ent ( if there is no e "ress designation or sti"ulation in the obligation #ith res"ect to the "lace #here "ayment shall bemade the follo#ing rules are a""licable:

1. 8f the obligation is to deliver a determinate thing the "ayment shall be made at the "lace #here the thing might be at the time theobligation #as constituted

2. 8f any other case the "ayment shall be made at the domicile of the debtor. This rule is intended to govern unilateral obligations.'eci"rocal obligations are governed by s"ecial rules. As a corollary if the debtor changes his domicile in bad faith or after he hasincurred in delay it is logical that additional e "enses shall be borne by him.

S7BSECTION 1. - A00li ati n ! Pa4 ents

Art. 1353. e #ho has various debts of the same kind in favor of one and the same creditor may declare at the time of making the "ayment to#hich of them the same must be a""lied. nless the "arties so sti"ulate or #hen the a""lication of "ayment is made by the "arty for #hose

benefit the term has been constituted a""lication shall not be made as to debts #hich are not yet due.8f the debtor acce"ts from the creditor a recei"t in #hich an a""lication of the "ayment is made the former cannot com"lain of the same unlessthere is a cause for invalidating the contract. +11 3a,

A00li ati n ! 0a4 ent ( defined as the designation of the debt to #hich the "ayment must be a""lied #hen the debtor has severalobligations of the same king in favor of the same creditor.

Re)&isites$ 1. T e'e &st "e nl4 ne de"t ' and nl4 ne 'edit ' $ the re-uirement that there must be only one debtor does not militate

against the "ossibility of e tending the rules on a""lication of "ayment to solidary obligations because the solidary debtor #ho "aidmay have obligations other than the solidary obligation in favor of the creditor to #hom "ayment is made. Eeither does there-uirement that there must be only one creditor militate against e tending the rules on a""lication of "ayment to a case in #hich a

"erson is indebted at the same time in se"arate and demandable sums to a "artnershi" and to the managing "artner of the "artnershi" 8t is a""arent that the rule stated in the second "aragra"h of the above article constitutes an e ce"tion to the rule that in a""lications of

"ayment it is essential that there must be only one creditor since it is a #ell/kno#n "rinci"le that a "artnershi" has a juridical "ersonality #hich is se"arate and distinct from that of each of the "artners.

2. T e'e &st "e t= ' 'e de"ts ! t e sa e ;in# ( the rules on a""lication of "ayment cannot a""ly to a guarantor or surety#hose liability is e tended or confined only to a "articular obligation

8t is also essential that each of the debt must be identical or homogenous s"ecie There is a case in #hich even if some of the obligations are not of identical s"ecie at the time of their constitution yet a""lication of

"ayment is "ossible if at the time the designation or a""lication is made such obligations had already been converted into obligationsto indemnify #ith damages by reason of breach or nonfulfillment


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1. #hen there is a sti"ulation to the contrary 3. the a""lication of "ayment is made by the "arty for #hose benefit the term or "eriod has been constituted The second e ce"tion must al#ays be understood in relation to the "rovision of Art. 1126. Thus if from the tenor of the obligation

#hich is not yet due or from other circumstances it should a""ear that the term or "eriod is for the benefit of the debtor +or thecreditor in a "ro"er case, and there other obligations of the said debtor in favor of the same creditor #hich are already due the

"ayment made may be a""lied by the said debtor to the obligation #hich is not yet due. +. T e a &nt 0aid "4 t e de"t ' &st n t "e s&!!i ient t %e' t e t tal a &nt ! all t e de"ts ( the re-uirement that the

amount "aid by the debtor must not be sufficient to cover the total amount of all the debts is indis"ensable because other#ise there#ould be no necessity of designation the debt or debts to #hich the "ayment shall be a""lied.

Ri# t ! De"t ' t 5a;e A00li ati n ( the right to designate the debt to #hich the "ayment shall be a""lied belongs "rimarily to thedebtor. 8t must be noted ho#ever that the right is available to him only a t the time #hen "ayment #as made

E6 e0ti ns ( 8f the debtor does not avail himself of the right to designate the debt to #hich the "ayment shall be a""lied andsubse-uently he acce"ts from the creditor a recei"t in #hich an a""lication of "ayment is made the former cannot com"lain of thesame unless there is a cause for invalidating the contract. A""lication of "ayment by the debtor is therefore the general rule #hilea""lication of "ayment by the creditor is the e ce"tion.

Conse-uently the debtor may either acce"t or reject the a""lication. !nce the recei"t is acce"ted the a""lication of "ayment made insuch recei"t can no longer be im"ugned unless there is a cause such as mistake force intimidation undue influence or fraud #hich#ill invalidate the a""lication.

Ti e = en 'i# t is e6e' ised ( the right to make an a""lication of "ayment must be e ercised at the time "ayment is made. 8f he failsto e ercise the right the initiative is taken a#ay from him and such a""lication may then be made by the creditor #ho may e ercisethe right even after the delivery of the recei"t ackno#ledging "ayment "rovided of course that such a""lication is a""roved by thedebtor.

Art. 135 . 8f the debt "roduces interest "ayment of the "rinci"al shall not be deemed to have been made until the interests have been covered.+11 ,

The court held that the above "rovision a""lies only in the absence of a verbal or #ritten agreement to the contrary* in other #ords itis merely directory and not mandatory

Art. 135=. 4hen the "ayment cannot be a""lied in accordance #ith the "receding rules or if a""lication can not be inferred from other circumstances the debt #hich is most onerous to the debtor among those due shall be deemed to have been satisfied.8f the debts due are of the same nature and burden the "ayment shall be a""lied to all of them "ro"ortionately. +11 =a,

These rules stated in Art. 135= are a""licable only #hen "ayment cannot be a""lied in accordance #ith the rules "reviously stated or

if the a""lication cannot be inferred from other circumstances W en de"ts a'e n t ! sa e "&'den ( #hen the debts due are not of the same burden the rule is that the debt #hich is most onerousto the debtor shall be deemed to have been satisfied. The follo#ing rules may be stated:

1. 4hen there are various debts #hich are due and they #ere incurred at different dates the oldest are more onerous to the debtor thanthe most recent ones

2. 4hen one debt bears interest and the other does not even if the latter #as incurred at an earlier date the first is more onerous to thedebtor. As bet#een t#o debts #hich bear interest the debt #ith a higher rate of interest is more onerous to the debtor


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1. "lurality of debts 3. "artial or relative insolvency of the debtor . acce"tance of the cession by the creditors 8n case the creditors do not acce"t the cession or assignment a similar result may be obtained by "roceeding in accordance #ith the

8nsolvency ;a#. Kinds$ 1. Contractual $ cession referred to in Art. 1355 2. Judicial $ cession #hich is regulated by the 8nsolvency ;a# and #hich may be voluntary or involuntary. DISTING7ISHED 9RO5 DATION IN PA 5ENT

)acion en "ago CessionAs to number of "arties There may be only one creditor 0lurality of creditors is essentialAs to financial condition of "arties The debtor s not necessarily in state of financial

difficultyThe debtor is in a state of "artial or relativeinsolvency.

As to object 4hat is delivered by the debtor is merely a thing to be considered as the e-uivalent of the "erformanceof the obligation

4hat is ceded by the debtor is the universalityof all of his "ro"erty

As to effect The "ayment e tinguishes the obligation to thee tent of the value of the thing delivered either as

agreed u"on or as may be "roved unless the silenceof the "arties signifies that they consider thedelivery of the thing as the e-uivalent of the

"erformance of the obligation

The effect is merely to release the debtor for the net "roceeds of the things ceded or

assigned unless there is a contrary intention

E!!e t ( in the absence of a contrary sti"ulation the assignment or abandonment by the debtor of all of his "ro"erty to the creditors shallonly release him from res"onsibility for the net "roceeds of the "ro"erty assigned. Conse-uently the e tinguishment of his obligations#ill only be "artial

8t must also be noted that the assignment does not transfer the o#nershi" of the things or objects to the creditors. 4hat is transmitted to thelatter is only the "ossession of such things or objects including their administration so that they can "roceed #ith the sa le and from the

"roceeds thereof their res"ective credits are then "aid

S7BSECTION


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Gene'al Re)&isites ( refers to those re-uisites #hich #e have already taken u" in connection #ith "ayment in general +Arts. 13 3/1351, such as the "erson #ho "ays the "erson to #hom "ayment is made the object of the obligation #hich must be "aid or

"erformed and the time #hen "ayment or "erformance becomes demandable. S0e ial Re)&isites ( refers to the five re-uirements #hich are "rescribed by Arts. 1356 to Art. 135 of the Civil Code. %ince

consignation is a s"ecial form of "ayment it i s but logical in order that it #ill "roduce all the effects of "ayment that it must conformnot only #ith all of the s"ecial re-uirements "rescribed by la# but also #ith all of the re-uisites of Art. 135

The consignation shall be ineffectual if it is not made in consonance #ith the "rovisions #hich regulate "ayment. S0e ial Re)&isites ! C nsi#nati n$ 1. That there is a debt due 2. That the consignation has been made either because the creditor to #hom tender of "ayment #as made refused to acce"t the

"ayment #ithout just cause or because any of the causes stated by la# for effective consignation #ithout "revious tender of "aymente ists //// in order that the consignation #ill be effective the general rule is that there must have been a tender of "ayment made bythe debtor to the c reditor.

o Re)&i'e ents$o 1. That the tender of "ayment must have been made "rior to the consignationo 3. That it must have been unconditionalo . That the creditor must have refused to acce"t the "ayment #ithout just cause. $ it is not necessary for the court #here the

thing or the amount is de"osited to determine #hether the refusal of the creditor to acce"t the same #as #ith or #ithout a just cause. The mere refusal of the creditor to acce"t the tender of "ayment #ill be sufficient.

o E6 e0ti ns ( there are five e ce"tions to the rule that in order that the consignation shall "roduce the effects of "ayment itis essential that there must be a "revious tender of "ayment.

o T e4 a'e$o 1. 4hen the creditor is absent or unkno#n or does not a""ear at the "lace of "aymento 3. 4hen he is inca"acitated to receive the "ayment at the time it is dueo . 4hen #ithout just cause he refuses to give a recei"to =. 4hen t#o or more "ersons claim the right to collecto 5. 4hen the title of the obligation has been losto E!!e t ! Valid Tende' ! Pa4 ent ( #hen a valid tender of "ayment is made the obligation is not e tinguished unless it

is com"lete by consignation. o#ever it has the effect of e em"ting the debtor from "ayment of interest and9or damages.


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%econd: #hen the creditor contests the efficacy or validity of the consignation and the court finally decides that it has been "ro"erlymade or cancels the obligation at the instance of the debtor in accordance #ith the "rovision of the first "aragra"h of Art. 1367.

Art. 1367. !nce the consignation has been duly made the debtor may ask the judge to order the cancellation of the obligation.>efore the creditor has acce"ted the consignation or before a judicial declaration that the consignation has been "ro"erly made the debtor may#ithdra# the thing or the sum de"osited allo#ing the obligation to remain in force. +11 7,

Art. 1361. 8f the consignation having been made the creditor should authori&e the debtor to #ithdra# the same he shall lose every "reference#hich he may have over the thing. The co/debtors guarantors and sureties shall be released. +11 1a,

E!!e t ! C nsi#nati n$ 1. 8f the creditor acce"ts the thing or amount de"osited #ithout contesting the validity or efficacy of the consignation it is logical that

the obligation is cancelled or e tinguished 2. 8f the creditor contests the validity or efficacy of the consignation the result is a litigation. The same is true if the creditor is not

interested or is not kno#n or is absent. The result is also a litigation. 8f during the trial on the merits of the case the "laintiff/debtor isable to establish that all of the re-uisites of a valid and effective consignation had been com"lied #ith the obligation is e tinguishedor cancelled.

E!!e t ! Wit d'a=al

@ffect of a #ithdra#al by the debtor of the object or amount de"osited #hen made before the creditor has acce"ted the consignation or before a judicial declaration that the consignation has been "ro"erly made /// the obligation remains in force @ffect of a #ithdra#al made #ith the consent of the creditor $ the creditor loses every "reference #hich he may have over the thing.

%olidary co/debtors guarantors and sureties ho#ever shall be released.

SECTION 2. - L ss ! t e T in# D&e

L ss ! t e t in# d&e ( that the thing #hich constitutes the object of the obligation "erishes or goes out of the commerce of man or disa""ears in such a #ay that its e istence is unkno#n or it cannot be recovered.

8t means im"ossibility of com"liance #ith the obligation through any cause Him"ossibility of "erformanceI

Art. 1363. An obligation #hich consists in the delivery of a determinate thing shall be e tinguished if it should be lost or destroyed #ithout thefault of the debtor and before he has incurred in delay.4hen by la# or sti"ulation the obligor is liable even for fortuitous events the loss of the thing does not e tinguish the obligation and he shall beres"onsible for damages. The same rule a""lies #hen the nature of the obligation re-uires the assum"tion of risk. +11 3a,

An obligation to give a determinate thing #ill be e tinguished if the thing should be lost or destroyed #ithout the fault of the debtor and before he has incurred in delay

Follo#ing re-uisites: 1. The thing #hich is lost must be determinate 3. The thing is lost #ithout any fault of the debtor. 8f the thing is lost through the fault of the debtor the obligation is not e tinguished*

it is sim"ly converted into an obligation to indemnify the creditor for damages . The thing is lost before the debtor has incurred in delay. 8f the thing is lost after the debtor has already incurred in delay the rule is

that such debtor can still be held liable for indemnity for damages E!!e t ! 9 't&it &s E%ent ( if the thing #hich constitutes the object of the obligation is lost or destroyed through a fortuitous event

the debtor cannot be held res"onsible. The obligation is e tinguished. E6 e0ti ns t t e '&le t at t e de"t ' ann t "e eld lia"le i! t e t in# = i nstit&tes t e " e t ! t e "li#ati n is l st '

dest' 4ed t ' a ! 't&it &s e%ent$1. 4hen by la# the debtor is liable even for fortuitous events3. 4hen by sti"ulation of the "arties the debtor is liable even for fortuitous events

. 4hen the nature of the obligation re-uires the assum"tion of risk

=. 4hen the loss of the thing is due "artly to the fault of the debtor 5. 4hen the loss of the thing occurs after the debtor has incurred in delay6. 4hen the debtor "romised to deliver the same thing to t#o or more "ersons #ho do not have the same interest

. 4hen the obligation to deliver arises from a criminal offense

. 4hen the obligation is generic

Art. 136 . 8n an obligation to deliver a generic thing the loss or destruction of anything of the same kind does not e tinguish the obligation. +n,

E!!e t ! L ss in Gene'i O"li#ati n t Gi%e ( the loss or destruction of anything of same kin even #ithout the debtor(s fault and before he has incurred in delay #ill not have the effect of e tinguishing the obligation.

Denus of a thing can never "erish



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There is a sort of e ce"tion to the rule in the case of a generic obligation #hose object is a "articular class or grou" #ith s"ecific or determine -ualities such as the cattle or horses of a certain ranch or the sugar in a certain #arehouse

Art. 136=. The courts shall determine #hether under the circumstances the "artial loss of the object of the obligation is so im"ortant as toe tinguish the obligation. +n,

E!!e t ! Pa'tial L ss ( shall de"end u"on the sound discretion of the court

Art. 1365. 4henever the thing is lost in the "ossession of the debtor it shall be "resumed that the loss #as due to his fault unless there is "roof tothe contrary and #ithout "rejudice to the "rovisions of article 1165. This "resum"tion does not a""ly in case of earth-uake flood storm or other natural calamity. +11 a,

R&le i! t in# is in De"t '@s P ssessi n ( the obligation is not e tinguished* in other #ords the debtor is still liable to the creditor for damages. Therefore the burden of "roof of absence of fault corres"onds to the debtor. This must be #ithout "rejudice to the rule sta tedin the rd "aragra"h of Art. 1165 to the effect that if the obligor delays or has "romised to deliver the same thing to t#o or more

"ersons #ho do not have the same interest he shall be res"onsible for any fortuitous event until he has effect the delivery The "resum"tion does not a""ly in case of earth-uake flood storm or other natural calamity

Art. 1366. The debtor in obligations to do shall also be released #hen the "restation becomes legally or "hysically im"ossible #ithout the fault of the obligor. +11 =a,

E!!e t ! I 0 ssi"ilit4 ! Pe'! ' an e in O"li#ati ns t d ( the above article is a""licable only to obligations to do asdistinguished from Art. 1363 #hich is a""licable only to obligations to give.

The "restation constituting the object of the obligation must have become legally or "hysically im"ossible of com"liance #ithout thefault of the obligor and before he has incurred in delay* other#ise the obligation shall be converted into one of indemnity for damages.

8n addition the im"ossibility must have occurred after the constitution of the obligation* other#ise if it #as "resent before theobligation #as constituted there #ould be an obligation #hich #ould be ineffective from it s ince"tion

8t may arise from the la# although "hysically it may be "ossible of "erformance or it may arise from a fact #hich renders "erformance im"ossible although no la# is violated. 8n both cases the obligor is released from his obligation.

The first *le#al i 0 ssi"ilit4, may be direct #hen the la# "rohibits the "erformance or e ecution of the #ork agreed u"on as #hereit is immoral or dangerous* or it may be direct as #here the la# im"oses duties of a su"erior character u"on the obligor #hich areincom"atible #ith the #ork agreed u"on although the latter may be "erfectly licit as #here the obligor is drafted for military serviceor for a civil function

The second *0 4si al i 0 ssi"ilit4, arises "rinci"ally from the death of the obligor #hen the act to be "erformed re-uires his "ersonal -ualifications or from the death of the oblige #hen the act can be of "ossible benefit only to him

8n both the obligation and the right are intransmissable and are e tinguished by the mere fact of death E!!e t ( the obligor is released from the obligation. E!!e t in "li#ati n n t t d ( the code only s"eaks of legal and "hysical im"ossibility #ith res"ect to obligation to do because it is

very seldom that im"ossibility of "erformance may arise in obligations not to do

Art. 136 . 4hen the service has become so difficult as to be manifestly beyond the contem"lation of the "arties the obligor may also be releasedtherefrom in #hole or in "art. +n,

E!!e t ! 'elati%e I 0 ssi"ilit4 ( #hen the service has become so difficult as to be manifestly beyond the contem"lation of the "arties the court should be authori&ed to release the obligor in #hole or in "art.

Art. 136 . 4hen the debt of a thing certain and determinate "roceeds from a criminal offense the debtor shall not be e em"ted from the "aymentof its "rice #hatever may be the cause for the loss unless the thing having been offered by him to the "erson #ho should receive it the latter refused #ithout justification to acce"t it. +11 5,

R&le i! "li#ati n a'ises !' 'i inal !!ense ( the rule stated in Art. 136 is a""licable not only to the case #here there is anobligation of restitution of a certain and determinate thing on the "art of the "erson criminally liable as "rovided for in the 0enal Code

but also to the case #here such obligation arises by virtue of re"aration or indemnification. The rule is a""licable not only to the "ersons #ho are "rinci"ally liable but also to those #ho are subsidiarily liable. The only case #here he is relieved of the severity of the "rece"t is #hen he had offered the thing to the oblige and the latter had

refused to acce"t it #ithout justification The offer referred to in this article should not be confused #ith consignation inasmuch as the latter refers only to the "ayment of the

obligation #hile the former refers to the e tinguishment of the obligation through loss by a fortuitous event. 8n consignation the offer is but a ste" to the "ayment* it is essential that the creditor should refuse to acce"t the thing #ithout

justification in order that the debtor may be released from liability in case of loss through a fortuitous event. 4hen the offer is made by the debtor and the creditor refuses to acce"t it #ithout justification he may choose either of t#o courses:



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+1, he may make a consignation of the thing and thereby com"letely relieve himself of further liability +3, he may kee" the thing in his "ossession the obligation shall still subsist but #ith this difference $ that if the thing is lost through a

fortuitous event Arts. 1363 and 1365 and not Art. 136 shall govern Art. 136 can have no a""lication to those cases #here an offer is not "ossible since such offer by the debtor is an essential re-uisite.

Art. 1362. The obligation having been e tinguished by the loss of the thing the creditor shall have all the rights of action #hich the debtor mayhave against third "ersons by reason of the loss. +11 6,

E!!e t ! E6tin#&is ent ! O"li#ati n ( the obligation is e tinguished by the loss of the thing all of the rights of action #hich thedebtor may have against rd "erson by reason of the loss are transmitted by o"eration of la# to the creditor.

%uch transmission is made from the moment of the e tinguishment of the obligation.

SECTION + . The donee must acce"t the donation "ersonally or through an authori&ed "erson #ith a s"ecial "o#er for the "ur"ose or #ith a general and sufficient "o#er* other#ise the donation shall be void. +6 7,



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o A't. >+ . Acce"tance must be made during the lifetime of the donor and of the donee. +n, E6tent ! Re issi n s all "e # %e'ned "4 t e '&les 'e#a'din# in !!i i &s d nati ns$

o A't. > . The donations may comprehend all the present property of the donor, or part thereof, provided he reserves, in full o nership or in usufruct, sufficient means for the support of himself, and of all relatives ho, at the time of the acceptanceof the donation, are by la entitled to be supported by the donor. !ithout such reservation, the donation shall be reduced in petition of any person affected. ("#$a)

o A't. > 1. %onations cannot comprehend future property. &y future property is understood anything hich the donor cannot dispose of at the time of the donation.

o Art. 752. The provisions of 'rticle * not ithstanding, no person may give or receive, by ay of donation, more than hemay give or receive by ill.The donation shall be inofficious in all that it may exceed this limitation. ("#")

o A't. >>1. %onations hich in accordance ith the provisions of 'rticle +, are inofficious, bearing in mind the estimated net value of the donor s property at the time of his death, shall be reduced ith regard to the excess- but this reduction

shall not prevent the donations from ta ing effect during the life of the donor, nor shall it bar the donee from appropriating the fruits.

/or the reduction of donations the provisions of this 0hapter and of 'rticles 122 and 12+ of this 0ode shall govern. Conse-uently if the estate of the creditor consist of creditors and there is a remission or condonation of all of such credits it is

evident that there #ould be a violation of the rule stated in Art. 57 of the code in #hich case the remedy "rovided for in the saidarticle #ould be available. 8f the remission com"rehends future debts it is also evident that it shall be void not only because it lacks

the re-uisite of demandability but also because it is contrary to the "rece"t contained in Art. 51 that donations cannot com"rehendfuture "ro"erty. And finally if the remission is inofficious in accordance #ith the general "rece"t contained in Art. 53 the remedy

"rovided for in Art. 1 by virtue of #hich the com"ulsory heirs of the creditor/donor can "roceed against the debtor/donee for thereduction or even su""ression of the remission #ould also be available.

9 ' ! E60'ess Re issi n ( must com"ly #ith the forms of donations. This rule is of course logical considering the fact that theremission or condonation of a debt is in reality a donation

o A't. >+ . The donation of a movable may be made orally or in riting. 'n oral donation requires the simultaneous delivery of the thing or of the document representing the right donated. 3f the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be madein riting, other ise, the donation shall be void. ("#+a)

o A't. >+ . 3n order that the donation of an immovable may be valid, it must be made in a public document, specify ing therein the property donated and the value of the charges hich the donee must satisfy.The acceptance may be made in the same deed of donation or in a separate public document, but it shall not ta e effect unless it is done during the lifetime of the donor.

3f the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments. ("##)

8t must also be noted that #ith res"ect to e "ress remission of an obligation to give "ersonal "ro"erty acce"tance by the debtor may beim"lied or tacit "rovided that the value of the debt #hich is condoned is not more than 5777. 8t must also be noted that the fact that the obligation #hich is condoned a""ears in a "ublic document does not necessarily mean that

the remission must also be embodied in a document of the same character. 9 ' ! i 0lied 'e issi n ( e am"les are those regulated by Arts. 13 1 to 13 = of the Code Assuming that the remission is e "ressly made but it failed to com"ly #ith the forms "rescribed by Art. = or =2 it cannot "ro"erly

take effect as an e "ress remission. 8t cannot be enforced as tacit remission because the "ur"ose of the last sentence of Art. 13 7#ould be defeated. ence an e "ress remission #hich is formally defective cannot affect the obligee or creditor unless ne# or other acts from #hich remission may be deduced should confirm the "ur"ose e "ressed in the former.

TOLENTINO$ A t ! C'edit ' ( to condone is an act of liberality by virtue of #hich the creditor renounces the right to enforce theobligation contracted in his favor. To condone is to forgive or remit a debt

The court cannot #aive the "ayment of interest agreed u"on by the "arties. The arguments of a debtor may a""eal to the sentiments of generosity of the creditor for him to condone the "ayment of interest* but they are not sufficient to authori&e the courts to e em"t thedebtor from the obligation of "aying them. There is no la# #hich condones "ayment of interest. There is no la# #hich condones

"ayment of interest. 'e"ublic Act. Eo. 371 $ condones the "ayment of interest of obligations contracted in favor of the government and of cor"orations

ca"itali&ed by it only indicated that the "arty #ho can condone is the creditor +the Dov(t in this case, and not the courts of justice. 7nilate'al Ren&n iati n ( remission re-uires acce"tance by the obligor. >ut there is nothing that can "revent a creditor from making

a unilateral renunciation of his right abandoning his credit and thereby e tinguishing it.

Art. 13 1. The delivery of a "rivate document evidencing a credit made voluntarily by the creditor to the debtor im"lies the renunciation of theaction #hich the former had against the latter.8f in order to nullify this #aiver it should be claimed to be inofficious the debtor and his heirs may u"hold it by "roving that the delivery of thedocument #as made in virtue of "ayment of the debt. +11 ,

Art. 13 3. 4henever the "rivate document in #hich the debt a""ears is found in the "ossession of the debtor it shall be "resumed that thecreditor delivered it voluntarily unless the contrary is "roved. +11 2,



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E!!e t ! deli%e'4 ! e%iden e ! 'edit t de"t ' ( "resum"tion is that he renounce his right of action against the latter for thecollection of the said credit

Re)&isites in 'de' t at t e 0'es& 0ti n =ill a'ise$1. that the document evidencing the credit must have been delivered by the creditor to the debtor 3. that the document must be a "rivate document

. that the delivery must be voluntary 4here the "romissory note evidencing the credit is already in the "ossession of the debtor there arises a dis"utable "resum"tion to the

effect that the creditor must have delivered it voluntarily to him* conse-uently in the absence of "roof to the contrary an im"lied or tacit renunciation of the debt may be "resumed

The heirs may try to im"ugn or nullify the condonation by establishing that it is in inofficious in conformity #ith the remedy #hich isavailable to them under Art. 1 of the Code. 8n such case the 3 nd "aragra"h of Art. 13 1 the debtor or his heirs may u"hold it by

"roving that the delivery of the "rivate document #as made because the debt had already been "aid. This is ridiculous because under this rule #e #ould #itness the absurd s"ectacle of a debtor or his heirs trying to u"hold a "resum"tion of remission #hen it isclaimed that such remission is inofficious by "roving that the debt had already been "aid #hen as a matter of fact it is not.

Pl&'alit4 ! S&" e ts ( #hen the obligation is joint and the "rivate document evidencing a debt is found in the "ossession of one of the debtors the "resum"tion of remission can refer only to the "ortion of the debtor #ho is in "ossession of the instrument* and if thedelivery #as made by only one joint creditor only the share "ertaining to him shall be deemed remitted.

Art. 13 . The renunciation of the "rinci"al debt shall e tinguish the accessory obligations* but the #aiver of the latter shall leave the former in

force. +1127,

Art. 13 =. 8t is "resumed that the accessory obligation of "ledge has been remitted #hen the thing "ledged after its delivery to the creditor isfound in the "ossession of the debtor or of a third "erson #ho o#ns the thing. +1121a,

E!!e t ! Re issi n in Gene'al ( e tinguish the obligation in its entirety or in the "art or as"ect thereof I! t e "li#ati n is int ( the remission can only affect the share of the creditor #ho makes the remission and the corres"onding

share of the debtor in #hose favor the remission is made since the "eculiar feature of this ty"e of obligation is the division of thecredit or of the debt into as many shares as there are creditors or debtors the credits or debts being considered distinct from oneanother

E!!e t &0 n a ess '4 "li#ati n ( under Art. 13 if the remission refers to the "rinci"al obligation all the accessory obligationsare e tinguished since the latter de"end u"on the former for their e istence or efficacy. 8f the remission refers to the accessoryobligation the "rinci"al obligation continues to subsist.

R&le in 0led#e ( Accdg. To Art.. 13 = it is "resumed that the accessory obligation of "ledge has been remitted #hen the thing "ledged after its delivery to the creditor is found in the "ossession of the debtor or of a rd "erson #ho o#ns the thing.

TOLENTINO ( E!!e t ! 'e issi n ! Pled#e ( the remission of the "ledge e tinguishes only the security* it does not affect the "rinci"al obligation #hich remains subsisting.

E?$ if A "ledged his #atch to > as security for an indebtedness of 0177 and subse-uently the #atch is found in his "ossession therearises a "resum"tion of remission of the accessory obligation of "ledge. The debt of 0177 is not affected. > may dis"rove theremission by "roving that he gave the #atch tem"orarily to the debtor to be re"aired or that A #as able to take "ossession thereof #ithout his consent or authority.

SECTION +. - C n!&si n ' 5e'#e' ! Ri# ts

Art. 13 5. The obligation is e tinguished from the time the characters of creditor and debtor are merged in the same "erson.

C n!&si n ( the merger of the characters of credit and debtor in one and the same "erson by virtue of #hich the obligation ise tinguished* it may also be defined as the meeting in one and the same "erson of the -ualities of creditor and debtor #ith res"ect toone and the same obligation

8t #ill necessarily result in the e tinguishment of the obligation because of the im"ossibility of enforcing it since it #ould certainly beabsurd for a "erson to enforce a claim against himself. >esides the "ur"ose or end for #hich the obligation is constituted is reali&ed#hen the -ualities of c reditor and debtor are merged in one and the same "erson.

8t erases the "lurality of subjects of the obligation and e tinguishes the obligation because it is absurd that a "erson should enforce anobligation against himself

TOLENTINO ( Real 'i# ts ( 'eal rights #hich do not involve the relation of debtor and creditor may be e tinguished by theHmergerI of the real right #ith the right of o#nershi"

TOLENTINO ( Re% ati n ! 5e'#e' ( 4hen the act #hich occasions the merger is susce"tible of termination or revocation themerger that has taken "lace is also terminated or revoked and the obligation is recreated in the same condition that it had #hen themerger took "lace.

Re)&isites$1. that the merger of the characters of creditor and debtor must be in the same "erson3. that it must take in the "erson of either the "rinci"al creditor or the "rinci"al debtor



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. that it must be com"lete and definite //// does not mean that the e tinguishment of the obligation should be com"lete or total incharacter* it merely means that #hether the merger refers to the entire or only a "art it must be of such character that there #ill be acom"lete and definite meeting of all the -ualities of creditor and debtor in the obligation or in the "art or as"ect thereof #hich is

affected by the merger Kinds$

As t a&se ' nstit&ti n Inte' %i% s $ #hen it is constituted byagreement of the "arties.

5 'tis a&sa ( #hen it is constituted bysuccession

As t e6tent ' e!!e t T tal ( result to the e tinguishment of theentire obligation

Pa'tial ( results in the e tinguishment of only a "art of the obligation2 ases = e'e t e e6tin#&is ent is e'el40a'tial$1. #hen the confusion or merger refers only toa "art of the obligation3. #hen the obligation is joint

Art. 13 6. ?erger #hich takes "lace in the "erson of the "rinci"al debtor or creditor benefits the guarantors. Confusion #hich takes "lace in the "erson of any of the latter does not e tinguish the obligation. +112 ,

E!!e t &0 n A ess '4 O"li#ati ns ( if the confusion #ill take "lace in the "erson of either the "rinci"al creditor or the "rinci"al

debtor the effect is the e tinguishment not only of the "rinci"al obligation but even of the accessory obligation 8f the confusion or merger #ill take "lace in the "erson of a subsidiary creditor or a subsidiary debtor such as a guarantor it is evident

that there is no e tinguishment of the "rinci"al obligation there #ill be only a substitution of creditor or debtor 8f the characters of debtor and guarantor are merged the creditor can demand the "erformance of the obligation directly from the

guarantor TOLENTINO$ 'elease of Duarantors because the obligation of the guarantor is merely accessory 5e'#e' in G&a'ant ' ( 4hen the merger takes "lace in the "erson of a guarantor the obligation is not e tinguished. Thus if the

guarantor ac-uires the credit his obligation as a guarantor is e tinguished but the "rinci"al obligation subsists and can be enforced byhim against the debtor and the other co/guarantors

5 't#a#ed P' 0e't4 ( 4here the mortgaged "ro"erty belongs to a third "erson /// 4here the mortgage ac-uires o#nershi" of theentire mortgaged "ro"erty the mortgage is e tinguished* but this does not necessarily mean the e tinguishment of the obligationsecured thereby #hich may become an unsecured obligation

Art. 13 . Confusion does not e tinguish a joint obligation e ce"t as regards the share corres"onding to the creditor or debtor in #hom the t#ocharacters concur. +112=,

E!!e t &0 n C lle ti%e O"li#ati n ( this "resum"tion of division is the most essential characteristic of joint obligations. 8t is butlogical that the confusion #hich takes "lace in one of the debtors shall only refer to the share #hich corres"onds to him. Conse-uentlythere is merely a "artial e tinguishment of the debt. The creditor can still "roceed against the other debtors

4ith regard to solidary obligation $ Art. 1315 shall a""ly. The entire obligation is e tinguished #ithout "rejudice to the rights andobligations of the solidary creditors and solidary debtors among themselves.

E!!e t ! Re% ati n ! C n!&si n - if the confusion or merger is constituted by agreement it is evident that it may be revoked bythe "resence of any of the causes for the rescission annulment nullity or ine istence of contracts or by some s"ecial causes such asredem"tion.

8f it is constituted by inheritance it may be revoked by the nullity of the #ill or by subse-uent a""earance of an heir #ith a betterright or by any other cause #hich #ill nullify the merger

8n all of these cases the original obligation as a general rule is recreated in the same form and under the same condition in #hich it#as found before the merger took "lace. Furthermore the "eriod #hich has ela"sed from the moment the merger took "lace until itsrevocation cannot be com"uted in the determination of the "eriod of "rescri"tion because during such "eriod the creditor could not

"ossibly have made a demand for the fulfillment of the obligation.

SECTION . - C 0ensati n

Art. 13 . Com"ensation shall take "lace #hen t#o "ersons in their o#n right are creditors and debtors of each other. +1125,

C 0ensati n ( a mode of e tinguishing in their concurrent amount those obligations of "ersons #ho in their o#n right are creditorsand debtors of each other* it may be defined as a figurative o"eration of #eighing 3 obligations simultaneously in order to e tinguishthem to the e tent in #hich the amount of one is covered by the amount of the other.

TOLENTINO ( Com"ensation is a sort of balancing bet#een t#o obligations. 8t is very similar to "ayment both from the theoretical and the "ractical "oint of vie#. 8n both cases the obligations are e tinguished

because their economic object or "ur"ose is reali&ed. Com"ensation ho#ever "resents a more convenient and less e "ensive methodof effecting the "ayments of t#o obligations. Conse-uently it deserves the name of sim"lified "ayment +"ago abreviado,



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D &"le Ad%anta#e %e' 0a4 ent$1. Facility of "ayment because it takes effect by o"eration of la#3. guaranty for the effectivity of the credit because other#ise if the "arties #ill still have to com"ly #ith the formalities of ordinary

"ayment one can easily be "rejudiced by fraud or insolvency of the other.

C 0ensati n Pa4 entThe re-uisites "rescribed by la# for com"ensation are different from those "rescribed by la# for "aymentTakes effect by o"eration of la# Takes effect by act of the "artiesCa"acity to give and to ac-uire is not necessary Ca"acity to give and to ac-uire is essential in "aymentCom"ensation is as a rule "artial 0ayment is as a rule com"lete and indivisible

C 0ensati n C n!&si nAs to number of "ersons there must be t#o "ersons #ho in their o#nright are creditors and debtors of each other

8n confusion there is only one "erson in #hom is merged the -ualitiesof creditor and debtor

As to number of obligations there must be at least t#o 8n confusion there is only one

C 0ensati n C &nte' lai ' set !! 'e-uires that the t#o debts must consist in money or if the things dueare fungibles they must be of the same king and -uality

Eot necessary

As a general rule re-uires tha t the debts must be li -uida ted )oes not re -uire Eeed not be "leaded ?ust be "leaded to be effectual

Kinds ! C 0ensati n$ As t a&se$1. Le#al ( #hen it takes effect by o"eration of la# from the moment all of the re-uisites are "resent3. V l&nta'4 ( #hen the "arties #ho are mutually creditors and debtors agree to com"ensate their res"ective obligations even though all

of the re-uisites for com"ensation may not then be "resent. Diorgi includes under this class the so/called facultative com"ensation#hich is effected by a "arty #ho is entitled to o""ose the com"ensation because he #ould be "rejudiced thereby.

. 8&di ial ( #hen it takes effect by judicial decree* #here one of the "arties to a suit over an obligation has a claim for damages againstthe other and the former sets it off by "roving his right to said damage and the amount thereof

As t e!!e t$1. T tal ( #hen the debts to be com"ensated are e-ual in amoun3. Pa'tial ( #hen the debts to be com"ensated are not e-ual in amounts TOLENTINO$ 9a &ltati%e C 0ensati n ( this is com"ensation #hich can be set u" only at the o"tion of a creditor #hen legal

com"ensation cannot take "lace because of the #ant of some legal re-uisites for the benefit of the creditor. The latter can renounceshis right to o""ose the com"ensation and he himself can set it u"

E?$ A o#es > an Arabian hose and > o#es A a horse +generic,. There can be no legal com"ensation here because of lack of identityin the -uality of the things due. >ut since > can deliver any horse to A so long as it is not of "oor -uality > can set u" com"ensation*this #ould have the same effect as if > demanded the Arabian horse from A and then delivered it back to A in the "erformance of >(sobligation

The facultative com"ensation is distinguished from conventional com"ensation in that the former is unilateral #hile the latter de"ends u"on the agreement of both "arties

C n%enti nal C 0ensati n ( this is com"ensation by agreement of the "arties even if some re-uisite "rovided by la# should be#anting. 8t is intended to eliminate or overcome obstacles #hich "revent i"so jure e tinguishment of their obligations.

Re)&isites ! C n%enti nal C 0ensati n$ 1. that each of the "arties can dis"ose of the credit he seeks to com"ensate 2. that they agree to the mutual e tinguishment of their credits

Art. 13 2. 8n order that com"ensation may be "ro"er it is necessary: (4567383T58)+1, That each one of the obligors be bound "rinci"ally and that he be at the same time a "rinci"al creditor of the other*+3, 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-uality if the latter has been stated*+ , That the t#o debts be due*+=, That they be li-uidated and demandable*+5, That over neither of them there be any retention or controversy commenced by third "ersons and communicated in due time to thedebtor. +1126,

As t 0a'ties$ 1. that the "arties be mutually creditors and debtors in their o#n right 2. that they must be bound as "rinci"als



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There can be no com"ensation bet#een the obligations of a legal re"resentative guardian or administrator incurred in his "ersonalca"acity and the obligations of rd "ersons to the "erson re"resented #ard or estate under administration although such obligationsmay have been incurred by such rd "ersons #ith the said re"resentative guardian or administrator acting in his legal ca"acity

There can be no com"ensation #hen only one "arty is a "rinci"al creditor in one obligation but is only a surety or guarantor in theother

PROBLE5$ H>I borro#ed from HCI 01 777 "ayable in one year. 4hen HCI #as in the "rovince HC(sI 1 /year o#ld son borro#ed0577 from H>I for his school tuition. o#ever the son s"ent it instead nightclubbing. 4hen the debt to HCI fell due H>I tenderedonly 0577 claiming com"ensation on the 0577 borro#ed by HC(sI son.

ANSWER$ There is no legal com"ensation. nder the Civil Code in order there #ill be a valid and effective com"ensation it isessential that there must be 3 "arties #ho in their o#n right are "rinci"al creditors and "rinci"al debtors of each other. 8n the instantcase HCI cannot be considered as a "arty to the act of his 1 year old son in borro#ing 0577 from H>I* neither did H>I become a

"rinci"al creditor of HC.I Therefore there can be no "artial com"ensation of the 01777 borro#ed by H>I from HCI @ven if the son actually used the money for school tuition there can be no difference in the ans#er because there can still be no legal

com"ensation. The fact that HC(sI son actually used the 0577 for his school tuition did not make HCI a "arty to the contract bet#eenhis son and H>.I Therefore HCI is not the "rinci"al debtor of H>I #ith res"ect to said amount

B &nd as 0'in i0als ( the relation bet#een the "arties must be that of "rinci"al creditor and "rinci"al debtor As t " e ts ( the second re-uisite in order that legal com"ensation shall take "lace is that both debts must consist in a sum of

money or if things due are fungibles they must be of the same kind and also of the same -uality if the latter has been stated. 8t isevident that this re-uisite contem"lates only obligations to give. The reason is that com"ensation is as a general rule not "ossible inobligations to do because of the difference in the res"ective ca"acities of the obligors.

C ns& a"le ( but #hat is actually contem"lated is the #ord fungible C ns& a"les ( those movables #hich cannot be used in a manner a""ro"riate to their nature #ithout being consumed 9&n#i"les ( those #hich may be e changed or com"ensated by another of the same kind and -uality TOLENTINO$ Fungible $ all that is necessary is that the s"ecie of the things is determined. >ut #hen the obligations refer to

determinate or s"ecific things there can be no com"ensation As t at&'it4 ( both debts must be due. Conse-uently natural obligations conditional obligations before the fulfillment of the event

#hich constitutes the condition and obligations #ith a "eriod before the e "iration of the "eriod cannot be com"ensated TOLENTINO$ P'es 'i0ti n ( to determine #hether com"ensation is barred by "rescri"tion of one of the obligations the moment

#hen the t#o credits co/e isted and not #hen the com"ensation is set u" should be considered. 8f at the time t#o debts co/e istneither has "rescribed the "rescri"tion of one after#ards #ill not "revent com"ensation. 8f the re-uisites for com"ensation have co/e isted even if it be only for one day before the "rescri"tion of one of the obligations there #ill be mutual e tinguishment becausethis takes "lace i"so jure.

TOLENTINO$ Res issi"le ' V ida"le De"ts ( before a judicial decree of rescission a rescissible or voidable debt is valid anddemandable* hence it can be com"ensated+Art. 13 =,. >ut the moment it is rescinded or annulled the decree of rescission or nullity is

retroactive and com"ensation can no longer take "lace As t li)&idati n and de anda"ilit4 ( =th re-uisite. ;i-uidated debts are those the amount of #hich may be determined by a sim"learithmetic o"eration. ence if one of the debts or both of them are still unli-uidated there can be no com"ensation. 8f both are

"artially li-uidated com"ensation may take "lace #ith res"ect to the "arts #hich are li-uidated but not #ith res"ect to those #hich areunli-uidated.

8t is evident that in order that the debts to be com"ensated may be considered demandable it is necessary that such debts must be dueand at the same time li-uidated.

As t lai s ! < 'd 0e's ns ( the 5 th re-uisited is that there must be no retention or controversy commenced by rd "ersons andcommunicated in due time to the debtor over either of the debts

Retenti n ( consists in the a""lication of the credit of one of the "arties to the satisfaction of the claims of a rd "erson. 8t is evidentthat in such a case there can be no com"ensation. o#ever if there is an e cess or balance remaining after the a""lication of thecredit com"ensation #ill still take "lace but only to the e tent that the credit is not affected by the retention

C nt' %e's4 ( refers to a case in #hich a rd "erson claims to be the creditor. The "arty interested in the com"ensation and the rd

"erson each claims that he is the real creditor. The effect of such case is a "rovisional sus"ension of the com"ensation. 8f the credit isadjudicated to the former com"ensation takes "lace* if it is adjudicated to the latter com"ensation cannot take "lace.

TOLENTINO$ Pl&'alit4 ! 0'estati n ( #hen one obligation is sim"le such as to deliver 0577 and the other is alternative such as

to "ay 0577 or deliver a horse there can be no legal com"ensation. Eeither can such com"ensation take "lace if one of the obligationis facultative. >ut the mere fact that one obligation has a "enal clause #hile the other has none #ill not "revent legal com"ensation because the "enal clause is a mere guaranty of fulfillment and does

oblicon reviewer final =d

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