University of Caloocan City

College of Liberal Arts and Sciences

BACHELOR OF ARTS MAJOR IN POLITICAL SCIENCE

COURSE SYLLABUS

COLLEGE : College of Liberal Arts and Sciences

DEPARTMENT : Pyschology and Behavioural Science Department
COURSE NAME : Law of Obligations and Contracts
COURSE CODE :
CREDIT UNITS : 3 units
PREREQUISITE : None

COURSE DESCRIPTION

This is a study of the Philippine law on obligations and contracts. The first part of the course deals with obligations, specifically its nature and effect, the
various kinds of obligations and its mode of extinguishment. The second part is a study of the Philippine law on contracts, its essential requisites, the forms of
contract, the rules of interpretation of contract and the various kinds of defective contracts under Philippine Law.

The Philippine law on obligations and contracts is primarily based on the provisions of Book IV of the Civil Code of the Philippines.

The course also includes a study of Natural Obligations under Title III, Book IV and Estoppel
under Title IV, Book IV, also of the Civil Code of the Philippines.

COURSE EXPECTED OUTCOMES (CEO)

At the end of the semester the students are expected:

1. To gain knowledge of the legal provisions governing business transaction in general, and the law on obligations and contracts in particular;
2. To prepare the students for advance studies on business law;
3. To develop analytical skills of applying the law on obligations and contracts on certain situations or business transactions.

1
COURSE OUTLINE WITH TIME FRAME

Duration Topic
a) University Policies, Rules and Regulations
b) Course Description
c) Grading System
Week 1 (3 Hours)
d) Course Outline
e) Classroom rules and regulations
f) Orientation and discussion about the course
Week 2 (3 hours) I. Concept
A. Definition
B. Elements
C. Distinction between Natural and Civil Obligations

Week 3 (3 hours)
II. Sources of Obligations
A. Law
B. Contracts
C. Quasi-Contracts
D. Acts/omissions punished by law- Art. 1161
E. Quasi-Delicts-Art. 1162, 2176

Week 4 (3 hours) III. Classification of Obligations 3 hours

A. Primary Classifications under the Civil Code
1. Pure and Conditional ( Arts. 1179-1192)
2. With a Period or term (Arts. 1193-1198)
3. Alternative and Facultative (Arts. 1199-1206)
4. Joint and Solidary (Arts. 1207-1222)
5. Divisible and Indivisible (Arts. 1223-1225)
6. With a Penal Clause( Arts. 1226-1230)

2
Week 5 (3 hours) B. Secondary Classifications.
1. Legal ( Art. 1158); Conventional ( Art. 1159); Penal ( Art. 1161)
2. Real (to give) and Personal(to do or not to do)
3. Determinate and Generic (as to subject matter)
4. Positive (to give, to do) and Negative (not to give, not to do)
5. Unilateral and Bilateral
6. Individual and Collective
7. Accessory and Principal
8. As to object or prestation:
 Simple/Multiple
 Conjunctive/Distributive
 Alternative/Facultative

9. Possible and Impossible

Week 6 (3 hours) Extinguishment of Obligations (Art. 1231, NCC)—Cause of Extinguishment not under Art. 1231.
1. Payment or performance (Art. 1232-1254)
a. Payment by Cession (Art. 1255)
b. Tender of payment and consignation (Arts. 1256-1261, NCC)
2. Loss of the thing due (arts. 1262-1269, NCC)
3. Condonation or remission of debt (Arts. 1270-1274)
4. Confusion or merger of rights (Arts. 1275-1277, NCC)
5. Compensation (Arts. 1278-1304, NCC)
6. Novation (Arts. 1291-1304, NCC)

Week 7 (3 hours) Natural Obligations

Week 8 (3 hours)

Week 9 MIDTERM EXAM

Weeks 10 to 12 (9 hours) A. Measures of Relationship/Association
1. Pearson r (Raw-Score Deviation Method)
2. Coefficient of Determination
3. Spearman  (Rank-Correlation Method)
4. Guttman’s Coefficient of Predictability
3
Weeks 13 and 14 (6 hours) B. Simple Linear Regression
1. Error of Prediction
2. Graph of Simple Linear Regression Equation
3. Coefficient of non-determination
4. Index of Forecasting Efficiency
Weeks 15 to 17 (9 hours) C. Sampling Distributions
1. Normal Distribution
2. The Normal Curve
3. Areas Under The Normal Curve
4. z-score Transformation
5. t-distribution
6. Chi-square ( 2 ) Goodness of Fit
Week 18 FINAL EXAM

Teaching and
Desired Learning Textbooks/ Assessment Resource Time
Course Content/ Subject Matter Learning
Outcomes(DLO) References Tasks(AT’s) Materials Table
Activities(TLA’s)
Basic Concepts Introductory Lecture Method Seat Work chalk board 3 hrs
Demonstrate of the basic 1. Definitions Statistics (7th Board Work visual aids
terms, concepts, and a. Branches of Statistics edition) by Quizzes calculator
procedure in statistics b. Data Mann
c. Types of Data (Constant &
Identify the types of data, Variables) Elementary
determine the level of d. Continuous and Discrete Statistics by
measurement of data and Variables Basilia Ebora
identify the kinds of e. Quantitative and Qualitative Blay
variables. Variables
f. Levels or Scales of Elementary
Measurement of Data Statistics (A
g. Population and Sample step by step
h. Parameter and Estimate Approach) 3rd
Sampling Methods/Techniques edition, by Allan
Calculate sample size from 1. Slovin’s Formula G. Bluman
a given population and use 2. Probability Sampling
appropriate sampling a. Simple Random Sampling Introduction to

4
method for desired sample b. Systematic Random Sampling Probability and
size. c. Stratified Sampling Statistics (13th
d. Cluster Sampling edition) by
e. Area Sampling Mendenhall,
3. Non-Probability Sampling Beaver &
a. Convenience Sampling Beaver
b. Purposive Sampling
c. Quota Sampling Probability and
Gather, organize, and Statistics for Lecture Method Seat Work chalk board 6 hrs
present data through Data Presentation Engineers and Board Work visual aids
appropriate tables and 1. Textual Scientists (7th Quizzes calculator
graphs. 2. Tabular edition) meter stick
a. The stem-and-leaf display ruler
b. Ungrouped Frequency
Distribution
c. Grouped Frequency Distribution
d. Relative and Percentage
Frequency Distribution
e. Cumulative Frequency
Distribution
3. Graphical
a. Histogram
b. Frequency Polygon
c. Cumulative Frequency Polygon
d. Bar Graph
e. Pie Chart
Compute the mean, median Measures of Central Tendency/Location Lecture Method Seat Work chalk board 6 hrs
and mode of ungrouped and 1. Mean of Ungrouped and Grouped Board Work calculator
grouped data Data Quizzes meter stick
2. Median of Ungrouped and Grouped ruler
Data
3. Mode of Ungrouped and Grouped
Data
Compute the range, Measures of Variability/Dispersion Lecture Method Seat Work chalk board 9 hrs
variance, standard deviation 1. Absolute Measures of Variation Board Work calculator
and its interpretation, a. Range Quizzes
deciles, quartiles, and b. Variance and Standard
percentiles, average/mean Deviation
5
deviation, coefficient of c. Quartile Deviation
variation, standard, d. Decile Deviation
skewness and kurtosis. e. Average or Mean Deviation
2. Measures of Relative Variation
a. Coefficient of Variation
b. Standard Score
3. Skewness
4. Kurtosis
MIDTERM EXAMINATION
Compute the Pearson r , Measures of Relationship/Association Lecture Method Seat Work chalk board 9 hrs
coefficient of determination, 1. Pearson r (Raw-Score Deviation Board Work visual aids
Spearman  and Guttman’s Method) Quizzes calculator
Coefficient of Predictability. 2. Coefficient of Determination
3. Spearman  (Rank-Correlation
Method)
4. Guttman’s Coefficient of
Predictability
compute the Pearson r , Simple Linear Regression Lecture Method Seat Work chalk board 6 hrs
coefficient of determination, 1. Error of Prediction Board Work visual aids
Spearman  and Guttman’s 2. Graph of Simple Linear Regression Quizzes calculator
Coefficient of Predictability. Equation graphing
3. Coefficient of non-determination board
4. Index of Forecasting Efficiency graphing
paper
meter stick
Learn the concepts and Sampling Distributions Lecture Method Seat Work chalk board 9 hrs
procedures of normal 1. Normal Distribution Board Work visual aids
distribution and normal 2. The Normal Curve Quizzes calculator
curve. 3. Areas Under The Normal Curve meter stick
4. z-score Transformation
Compute the areas under 5. t-distribution
the normal curve and values 6. Chi-square ( 2 ) Goodness of Fit
of z-score transformation, t-
distribution and Chi-square
( 2 ) Goodness of Fit
FINAL EXAMINATION
GRADING SYSTEM:
6
 Class Standing (Quizzes, Assignment, Seat works, Board works) ……………………………………..………………………………………………....50%
Major Examination (Midterm, Final Examination)……………………………………………………………………………………….……………………..50%

Prepared by:

ROBERT C. TORRECAMPO, REE, MAED (MATH)

Chair, Mathematics Department

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I. Concept 1 hour

A. Definition

B. Elements

C. Distinction between Natural and Civil Obligations

8
II. Sources of Obligations 2 hours

A. Law

B. Contracts

C. Quasi-Contracts

D. Acts/omissions punished by law- Art. 1161

E. Quasi-Delicts-Art. 1162, 2176

Cases:

 Mangonon vs. CA G.R. No. 125041 June 30, 2006

 PSBA vs. Court of Appeals G.R. No. 84698 January 4, 1992

 YHT Realty Corporation vs. Court of Appeals G.R. No. 126780 February 17, 2005

 Manliclic et.al. vs. Calaunan G.R. No. 150157 January 25, 2007

 Barredo v. Garcia 73 Phil. 607

 Mendoza vs. Arrieta 91 SCRA 113

 PSBA vs. CA 205 SCRA 729

 Amadora vs. CA 160 SCRA 315

III. Classification of Obligations 3 hours

A. Primary Classifications under the Civil Code

1. Pure and Conditional ( Arts. 1179-1192)

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2. With a Period or term (Arts. 1193-1198)

3. Alternative and Facultative (Arts. 1199-1206)

4. Joint and Solidary (Arts. 1207-1222)

5. Divisible and Indivisible (Arts. 1223-1225)

6. With a Penal Clause( Arts. 1226-1230)

B. Secondary Classifications.

1. Legal ( Art. 1158); Conventional ( Art. 1159); Penal ( Art. 1161)

2. Real (to give) and Personal(to do or not to do)

3. Determinate and Generic (as to subject matter)

4. Positive (to give, to do) and Negative (not to give, not to do)

5. Unilateral and Bilateral

6. Individual and Collective

7. Accessory and Principal

8. As to object or prestation:

o Simple/Multiple

o Conjunctive/Distributive

o Alternative/Facultative

9. Possible and Impossible

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CHAPTER II – NATURE AND EFFECTS OF OBLIGATIONS

I. Kinds of Prestation 30 mins.

A. Obligation to Give

B. Obligation to do- Art. 1244

C. Obligation not to do-Art. 1244

II. Breach of Obligation 2 hrs. and 30 mins.

A. Concept

Cases:

 Velarde vs. Court of Appeals 361 SCRA 56

 Song Fo vs. Hawaiian Philippines 47 Phil. 821

 Vermen Realty vs. Court of Appeals 224 SCRA 549

B. Modes of Breach- Art. 1170

1. Fraud (dolo)

11
Case:

12
 Woodhouse vs. Halili 93 Phil. 526

2. Negligence-Art. 1172

Cases:

 Gutierrez vs. Gutierrez 56 Phil. 177 (1932)

 Vasquez vs. Borja 74 Phil. 560

 De Guia vs. Manila Electric 40 Phil. 706

 Sarmiento vs. Sps. Cabrido 401 SCRA 122

 Crisostomo vs. CA 409 SCRA 528

 NPC vs. CA 211 SCRA 162

3. Delay

Cases:

 Cetus Development Corp. vs. CA 176 SCRA 72

 Abella vs. Francisco 55 Phil. 447

 Vda. de Villaruel vs. Manila Motor 104 Phil. 926

13
 Central Bank vs. CA 139 SCRA 46

4. Contravention of the tenor

Cases:

 Chavez vs. Gonzales 32 SCRA 547

 Telefast vs. Castro 158 SCRA 445

 Arrieta vs. NARIC 10 SCRA 79

III. Remedies of Creditor in case of Breach 1 hour

A. Action for Performance

Case:

 Tanguilig vs. CA 266 SCRA 78

 Chavez vs. Gonzales 32 SCRA 547

B. Action for damages-Art. 1170

C. Action for rescission-Art. 1191, 1192

IV. Subsidiary Remedies of Creditor 1 hour

A. Accion subrogatoria-Art. 1177

B. Accion Pauliana- Art. 1177, 1381 par. 3

14
Case:

• Khe Hong Cheng vs. CA 355 SCRA 701

• Siguan vs. Lim 318 SCRA 725

C. Other Specific Remedies- Art. 1652, 1729, 1608, 1893

V. Extinguishment of Liability in case of Breach due to fortuitous event 2 hours

A. Concept of Fortuitous Event

B. Requisites

Cases:

 Juan Nakpil & Sons vs. CA 144 SCRA 597

 Republic vs. Luzon Stevedoring Co., 21 SCRA 279

[assumption of risk; exception to non-liability for fortuitous event]

 Dioquino vs. Laureano 33 SCRA 65 [ common carrier]

 Austria vs. CA 39 SCRA 527 [robbery as fortuitous event]

 NPC vs. CA 161 SCRA 334

 Yobido vs. CA 281 SCRA 1

 Phil. Free Press vs. CA G.R. No. 132864 Oct.24,2005

 Phil.Com Satellite Corp. vs. Globe Telecom G.R. No. 147324 May 15, 2004

 Gaisano Cagayan Inc. vs. Insurance Co. of North

15
American 490 SCRA 286 [ obligation to pay money, generic obligation, not extinguish thru fortuitous event]

C. Extinguishment of Liability; Exceptions-

VI. Usurious Transactions 1 hour

A. PD 858; PD 1685

B. Central Bank Circular 416

C. Monetary Board Circular No. 905 lifting interest rate ceiling

Cases:

 Eastern Shipping Lines vs. CA 234 SCRA 781

 Crismina Garments v. CA 304 SCRA 356

 Security Bank vs. RTC of Makati 263 SCRA 453

 Almeda vs. CA 256 SCRA 292

VII. Fulfillment of Obligations 30 mins.

A. Chapter 4, Payment

B. Presumptions in payment of interests and instalments Art. 1176

VIII. Transmissibility of Rights- Art. 1178 30 mins.

16
Case:

 DKC Holdings Corp. vs. CA 329 SCRA 666

CHAPTER III – DIFFERENT KINDS OF OBLIGATIONS

I. Pure and Conditional Obligations 3 hours

A. Pure Obligations-Art. 1179, par.1

B. Conditional Obligations- Art. 1181

1. Condition

a. Concept

b. Condition v. Period/Term

Cases:

 Gaite vs. Fonacier 2 SCRA 830

 Gonzales v. Heirs of Thomas 314 SCRA 585

 Lim vs. CA 263 SCRA 569

2. Kinds of Conditions

a. As to effect on obligation-Art. 1181

i. Suspensive (condition precedent)

o retroactive effect when condition is fulfilled (Art. 1187)

17
o rights of creditor and debtor before fulfilment of condition (Art. 1188)

ii. Resolutory (condition subsequent)

Cases:

 Parks v. Province of Tarlac 49 Phil. 142

 Central Phil. University vs. CA 246 SCRA 511

 Quijada vs. Court of Appeals 299 SCRA 695

b. As to cause or origin- Art. 1182

i. Potestative

o effect if fulfilment of condition depends solely on the will of the debtor

o debtor’s promise to pay when he can is not a conditional obligation- Art. 1180

ii. Casual

iii. Mixed

Cases:

 Osmena vs. Rama 14 Phil. 99

 Hermosa v. Longora 93 Phil. 971

 Rustan Pulp etc. Vs. IAC 214 SCRA 665

c. As to possibility-Art. 1183

i. Possible
18
ii. Impossible

o effect

Case:

 Roman Catholic Arch. Vs. CA 198 SCRA 300

d. As to mode

i. Positive-Art. 1184

ii. Negative-Art. 1185

3. Rules in case of loss, deterioration, or improvement pending happening of the condition- Arts. 1189 and 1190

a. Meaning of loss ( Art. 1189 [2]), deterioration, and improvement

b. Effect of loss or deterioration

i. without debtor’s fault

ii. with debtor’s fault

c. Effect of improvement

i. by nature or time

ii. at the debtor’s expense

4. Effect of prevention of the fulfilment of the condition by the obligor- Art. 1186

Case:

• Herrera vs. Leviste 135 SCRA 129

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C. Reciprocal Obligations- Art. 1191, 1192

1. Concept

2. Alternative remedies of injured party in case of breach

Cases:

 Song Fo vs. Hawaiian-Phil. 47 Phil. 821

 Boysaw v. Interphil Promotions 148 SCRA 365

 U.P. v. De los Angeles 35 SCRA 365

 De Erquiaga v. CA 178 SCRA 1

 Angeles v. Calazanz 135 SCRA 323

 Asuncion v. Evangelista 316 SCRA 848

 Solid Homes vs. Spouses Tan et.al. G.R. No. 145156-57 July 29, 2005

 Pryce Corp. vs. Phil. Amusement Gaming Corp. G.R. No. 157480 May 6, 2005

II. Obligations with a Period 2 hours

A. Period or Term

1. Concept

2. Period/Term vs. Condition

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B. Kinds of Period/Term

1. As to effect

a. Suspensive (ex die)-Art. 1193 (1)

b. Resolutory (in diem)-Art. 1193 (2)

2. As to expression

a. Express

b. Implied

3. As to definiteness

a. Definite

b. Indefinite

4. As to source

a. Voluntary

b. Legal

c. Judicial

C. Rules in case of loss, deterioration, or improvement before arrival of period- Art. 1194, 1189

D. Effect of payment in advance- Art. 1195

E. Benefit of Period

1. For whose benefit

a. Creditor

21
b. Debtor

c. both

2. Effects

3. Presumption- Art. 1196

Cases:

 Lachica vs. Araneta August 4, 1949

 Ponce de Leon v. Syjuco 90 Phil. 311

 Buce vs. CA 332 SCRA 151

4. When debtor loses the right to make use of the period- Art. 1198

F. When Court may fix period- Art. 1197

1. Period is implied

2. Period depends solely on will of debtor

Cases:

 Araneta v. Philippine Sugar Estate Devt. 20 SCRA 330

 CPU vs. CA supra

III. Alternative Obligations 1 hours

A. Concept- Art. 1199

22
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

1. Concept

2. Distinguished from Alternative Obligation

3. Effect of substitution

IV. Joint and Solidary Obligations 3 hours

A. Joint Obligations

1. Concept

2. Presumption- Art. 1207, 1208 3. Effects- Art. 1207, 1208

a. Extent of liability of debtor

b. Extent of right of creditor

c. In case of novation, compensation, confusion (Art.1277), remission

B. Solidary Obligations

1. Concept

a. Requisites

b. words used to indicate solidary obligations

23
2. Kinds

a. As to source- Art. 1208

i. Legal- Art. 1915,1945, 2194; Art. 119 R.P.C.

ii. Conventional

iii. Real

b. As to parties bound

i. Active

ii. Passive

iii. Mixed

c. As to uniformity

i. Uniform

ii. Varied/Non-uniform- Art. 1211

o effects

Case: Ynchausti vs. Yulo 34 Phil. 978

3. Effects

a. Solidary creditor in relation to:

i. common debtor

ii. solidary co-creditor/s

o in case of novation,

o compensation, confusion, Art. 1215, par. 2

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o prejudicial acts prohibited-Art. 1212

o assignment of rights not allowed-Art. 1213

b. Solidary debtor in relation to:

i. common creditor

o obligation to perform-Art. 1207

o in case of novation, compensation, confusion, remission by a creditor-Art.1215, par. 1

ii. solidary co-debtor

o in case of payment by a co- debtor-Art.1217, 1218,1220,1219

o in case of fortuitous event- Art. 1221

Cases:

 Jaucian v. Querol 38 Phil. 718

 RFC v. CA 6 O.G. 2467

 Quiombing v. CA 189 SCRA 325

 Inciong v. CA 257 SCRA 578

4. Defenses available to a solidary debtor against the creditor-Art. 1222

a. Types

i. those derived from the nature of the obligation

25
ii. personal defences

iii. defenses pertaining to his share

iv. those personally belonging to the other co-debtors

b. Effects

Case:

• Alipio vs. Court of Appeals 341 SCRA 441

C. Joint Indivisible Obligations

1. Concept

2. Indivisibility distinguished from solidarity-Art. 1210

3. Effects-Art. 1209

4. liability for damages in case of breach-Art. 1224

V. Divisible and Indivisible Obligations 2 hours

A. Divisible Obligations

1. Concept

2. Effects-Art. 1223, 1233

26
B. Indivisible Obligation

1. Concept

a. Distinguished from solidary obligations

2. Kinds

a. natural-Art. 1225, par.1

b. legal-Art. 1225, par. 3

c. conventional-Art. 1225, par. 3

3. Presumptions

a. of indivisibility-Art. 1225, par. 1

b. of divisibility-Art. 1225, par.2

4. Divisibility and indivisibility of obligations not to do-Art. 1225, par. 3 5. Effects- Art. 1223, 1233, 1224

6. Cessation of indivisibility

VI. Obligations with a Penal Clause 3 hours

A. Concept

1. Principal vs. Accessory Obligation

2. Distinguished from Conditional Obligations

3. Distinguished from Alternative Obligations

4. Distinguished from Facultative Obligations

27
5. Distinguished from Guaranty

B. Kinds of Penal Clause

1. As to effect

a. Subsidiary

b. Complementary

2. As to source

a. Conventional

b. Legal

3. As to purpose

a. Punitive

b. Reparatory

C. Demandability of Penalty-Art. 1226, par. 2

D. Effects of Penal Clause

1. substitute for indemnity for damages and payment of interest

Cases:

 Makati Devt. Corp. vs. Empire Insurance 20 SCRA 557 ( reduction of penalty justified)

 Antonio Tan vs. CA 367 SCRA 571

2. Not exempt debtor from performance-Art. 1227

a. exception- Art. 1227

28
3. Creditor cannot demand both performance and penalty at the same time-Art. 1227

4. Creditor cannot collect other damages in addition to penalty-Art. 1226

a. Exceptions-Art. 1226

E. When penalty shall be equitably reduced-Art. 1229

Case: Macalinao v. BPI G.R. No. 175490 September 17, 2009

F. Nullity of Principal Obligation or Penal Clause

1. Effects-Art. 1230

2. Rationale

CHAPTER IV - EXTINGUISHMENT OF OBLIGATIONS

I. Modes of Extinguishment 30 mins.

A. Payment/Performance

B. Loss/Impossibility

C. Condonation/Remission

D. Confusion/Merger

E. Compensation
29
F. Novation

G. Other Causes

II. Payment or Performance 3 hours

A. Concept- Art. 1232

B. Requisites

1. Who can pay

2. To whom payment may be made

a. in general- Art. 1240

b. incapacitated person-Art. 1241, par. 1

c. third person- Art. 1241, par. 2

i. requisites

ii. when proof of benefit not required-Art. 1241 par. 3, 1242

d. in case of active solidarity-Art. 1214

3. What is to be paid ( “identity”)

a. in general-Art. 1233

Cases:

 Arrieta v. NARIC supra

 Kalalo v. Luz 34 SCRA 377

 St. Paul Fire and Marine vs. Macondray 70 SCRA 122

30
 Papa vs. A.V. Valencia 284 SCRA 643

b. in obligations to:

i. give a specific thing-Art. 1244

ii. give a generic thing-Art. 1246

iii. pay money- Art. 1249, 1250; R.A. 529, R.A. 4100

c. payment of interest-Art. 1956

4. How payment to be made (“integrity”)

a. In general- Art. 1233

o Gen.Rule: Partial payment is not allowed-Art. 1248 Exceptions: Art. 1248

b. substantial performance in good faith-Art. 1234

c. estoppel-Art. 1235

d. presumptions in payment of interests and installments- Art. 1176

5. When payment is to be made

a. In general-Art. 1169

b. See Chapter 2: Delay

6. Where payment is to be made-Art. 1251, par.1

a. if no place is expressly designated- Art. 1251, par. 2 to par. 4

7. Expenses of making payment

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C. Application of Payments

1. Concept- Art. 1252

Cases:

 Reparations Commission vs. Universal Deep Sea Fishing 83 SCRA 764

 Paculdo v. Regalado 345 SCRA 134

2. Requisites

3. Rules in application of payments- Art. 1252,1253

i. If rules inapplicable and application cannot be inferred-Art. 1254

o meaning of “most onerous to debtor”

4. Payment by Cession

i. Concept-Art. 1255

ii. Requisites

iii. Effects

5. Dation in Payment

i. Concept-Art. 1245

o Distinguished from Payment by Cession

Case:

• Development Bank of the Philippines vs. Court of Appeals 284 SCRA 14 (1998)

32
ii. Requisites

iii. Effects

Case:

• Filinvest Credit Corporation vs. Philippine Acetylene 111 SCRA 421

6. Tender of Payment and Consignation

i. Tender of Payment

a. Concept

b. Requisites

ii. Consignation

a. Concept

o Purpose

b. Requisites

b. 1 when tender and refusal not required- Art. 1256, par. 2

Case:

 Co vs. PNB 114 SCRA 842

b. 2 two notice requirement- Art. 1257, par. 1; 1258, par.2

o effects of non-compliance

33
c. Effects- Art. 1260, par. 1

Case:

 Ramos vs. Sarao 451 SCRA 103

d. Withdrawal by debtor before acceptance by creditor or approval by court; effects-Art. 1260, par. 2

e. withdrawal by debtor after proper consignation- Art. 1261

i. with creditor’s approval; effects

ii. without creditor’s approval; effects

f. Expenses for consignation

Cases:

 De Guzman v. CA 137 SCRA 730

 TLG International v. Flores 47 SCRA 437

 McLaughlin v. CA 144 SCRA 693

 Soco v. Militante 123 SCRA 160

 Sotto v. Mijares 28 SCRA 17

III. Loss or Impossibility 2 hours

A. Loss of the Thing Due

1. Concept- Art. 1189 (2)

34
2. Kinds

a. As to extent

i. Total

ii. Partial

3. Requisites- Art. 1262

4. Presumption- Art. 1265, 1165

a. when not applicable

5. Effects

a. in obligation to give a specific thing- Art. 1262, 1268

b. in obligation to give a generic thing-Art. 1263

c. in case of partial loss- Art. 1264

d. action against third persons- Art. 1269

B. Impossibility of Performance

1. Concept- Art. 1266, 1267

2. Kinds

a. As to extent

i. Total

ii. Partial

b. As to source

i. Legal

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ii. Physical

3. Requisites- Art. 1266

4. Effects

a. in obligations to do- Art. 1266, 1267, 1262 par. 2 (by analogy)

i. “impossibility” distinguished from “difficulty”

Cases:

 Occena v. CA 73 SCRA 637

 Naga Telephone Co. v. CA 230 SCRA 351

b. in case of partial impossibility- Art. 1264

IV. Condonation or Remission 1 hour

A. Concept

B. Kinds

1. As to extent

a. Total

b. Partial

2. As to form-Art. 1270 (1)

a. Express

b. Implied
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C. Requisites

a. when formalities required- Art. 1270 par. 2

Case:

 Yam vs. Court of Appeals 303 SCRA 1

D. Presumptions- Arts. 1271, 1272, 1274

E. Effects

1. in general

2. in case of joint or solidary obligations

F. Governing Rules- Art. 1270

G. Renunciation of Principal or Accessory Obligation

1. Effects- Art. 1273

2. Rationale

V. Confusion or Merger of Rights 1 hour

A. Concept

B. Requisites

C. Effects

1. in general- Art. 1275

2. in case of joint ( Art. 1277) or solidary obligations

D. Confusion in Principal or Accessory Obligation- Art. 1276

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VI. Compensation 3 hours

A. Concept- Art. 1278

1. Distinguished from Confusion

B. Kinds

1. As to extent

a. Total

b. Partial

2. As to origin

a. Legal

b. conventional-Art. 1279 inapplicable, 1282

c. judicial-Art. 1283

d. facultative

C. Legal Compensation

1. Requisites- Art. 1279,1280

a. “due” distinguished from “demandable”

Cases:

 Gan Tion v. CA 28 SCRA 235

 BPI v. Reyes 255 SCRA 571

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 PNB v. Sapphire Shipping 259 SCRA 174

 Nisce vs. Equitable PCI Bank G.R. No. 167434 Feb. 19, 2007

2. Effects- Art. 1290, 1289

D. When compensation is not allowed- Art. 1287, 1288

E. Compensation of Debts payable in Different Places-Art. 1286

F. Effect of Nullity of Debts to be Compensated- Art. 1284

G. Effects of Assignment of Credit

1. with consent of debtor-Art. 1285 (1)

2. with knowledge but without consent of debtor-Art. 1285, par. 2

3. without knowledge of debtor-Art. 1285, par. 3

3.1 rationale

VII. Novation 3 hours

A. Concept- Art. 1291

B. Kinds

1. As to form

a. Express

b. implied

2. As to origin

a. Conventional

b. Legal

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3. As to object

a. objective or real

b. subjective or personal

C. Requisites-Art. 1292

Cases:

 Millar vs. CA 38 SCRA 642

 Dormitorio v. Fernandez 72 SCRA 388

 Magdalena Estate v. Rodriguez 18 SCRA 967

 Reyes v. Secretary of Justice 264 SCRA 35

D. Effects

1. in general-Art. 1296

2. when accessory obligation may subsist- Art. 1296

E. Effect of the Status of the Original or New Obligation-

1. nullity or voidability of original obligation-Art. 1298

2. nullity or voibability of new obligation-Art. 1297

F. Objective Novation

1. meaning of “principal conditions”

G. Subjective Novation

1. By change of debtor

a. Expromision

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i. requisites-Art. 1293

ii. effects-Art. 1294

b. Delegacion

i. requisites (vs. Art. 1293)

ii. effects- Art. 1295

Case:

 Garcia vs. Llamas 417 SCRA 2003

 Quinto vs. People 305 SCRA 709

2. By change of creditor: subrogation of a third person in the rights of the creditor- Art. 1300

a. conventional subrogation

i. requisites-Art. 1301

ii. distinguished from Assignment of Credit

iii. effects- Art. 1303, 1304

b. legal subrogation

i. requisites

ii. when presumed- Art. 1302

iii. effects- Art. 1303, 1304

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\

SESSION 2

JULY 4, 2009

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Topics to be discussed:

Introduction to Law

a. Concepts and Definition

b. Kinds, Classification and Divisions

c. State Law

d. Definition: Law on Obligations and Contracts

General provisions on Obligations

1. Definition of Obligation (Art. 1156, NCC)

2. Essential Requisites of Obligation

3. Natural Obligations (Arts. 1423-1430, NCC)

4. Concepts and Sources of Obligations (Arts. 1157-1162, NCC)

4.1 Law (Art. 1158)

4.2 Contracts (Art. 1159)

4.3. Quasi-contracts (Art. 1160, NCC) – Definition; kinds

4.4. Crimes or delict (Art.1161, NCC) – Scope of liability

4.5. Quasi-delict (Art. 1162, NCC)—Definition; Crimes vs. Quasi delict

5. Concepts of obligor and obligee

43