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General Rule
Term is for the benefit of debtor or creditor. (Meaning: The debtor cannot pay
prematurely and the creditor cannot demand prematurely).
This Article applies only where the parties to a contract themselves have fixed a
period, and not to a case where the parties have authorized the Court to fix a
reasonable term.
(b) Term is for the benefit of the creditor alone. (Meaning: Creditor can demand at
any time even before the term expires, and he cannot be compelled to accept
payment from the debtor prior to the stipulated period.
2. Within What Period Must the Action to Fix the Period Be Brought? (Art.
1197 / Comment #5)
Within the proper prescriptive period for specific performance if a period had
been originally fixed, but to be counted from the perfection of the contract. This is
because the right exists by operation of law from the moment of such agreement.
Extrajudicial demand is not therefore essential for the creation of the cause of
action to have the period fixed.
How the Court Fixes the Period? (Art. 1197 / Comment #6)
The Court determines the period by considering the time probably contemplated
by the parties. (Art. 1197). Once the period is fixed by the courts, the period
becomes part of the contract, thus the courts cannot change it. (Ibid.). The same
is true if the period is fixed in a compromise agreement approved by the Court.
This is because the compromise agreement acquires the same force and effect
as the decision. The parties may of course change the period by mutual
agreement, or may even disregard the in which case, the obligation becomes a
pure one, and demandable at once. (See Art. 1197).
4. In alternative obligations, who has the right of choice; when shall the
choice take effect? What are the limitations on a debtors right of choice?
and when shall he lose his right of choice?
As a general rule, the right belongs to the debtor. By way of exception it may
belong to the creditor when such right has expressly been granted to him. (Art.
1200)
(Art. 1201) The choice shall produce no effect except from the time it has been
communicated.
(Art. 1200) The debtor shall have no right to choose those prestations which are:
(a) impossible
(b) unlawful
(c) or which could not have been the object of the obligation.
Art. 1202. The debtor shall lose the right of choice when among the prestations
whereby he is alternatively bound, only one is practicable.
8. A, B, and C are joint debtors of D to the amount of P9, 000.00. How much
can D demand from A? Why? Suppose the debtors are solidary, how much
can D demand from A? Why? Suppose further that B is insolvent, who will
shoulder the share of B? (Art. 1207)
D can demand P3,000.00 from A, because In a joint obligation each obligor
answers only for a part of the whole liability and to each obligee belongs only a
part of the correlative rights. (Joint Obligations)
If the debtors are solidary, D can demand the whole of P9,000.00 from A. A in
turn, after paying D, can ask reimbursement from B and C to the amount of
P3,000.00 each. Because in a solidary or joint and several obligation, the
relationship between the active and the passive subjects is so close that each of
the former or of the latter may demand the fulfillment of or must comply with the
whole obligation. (Solidary Obligations)
10. A and B are solidary debtors of C, D, E, and F, joint creditors to the amount
of P1,000,000. How much can C recover from A?
ANS.: Since C is only a joint creditor, he can only recover his share which is
P250,000 from A, a solidary debtor. (NOTE: Had C been solidary creditor, he
could have recovered P1,000,000 from A; had A been a joint debtor, and C, also
a joint creditor, C could have recovered only P125,000 from A.)
11. What is the nature of the liability of partners? (Art. 1208 / Comment #6)
Liabilities of Partners
(a) If it arises out of a contract, the liability is joint or pro rata.
Exception if the dependents of an employee claim compensation for the
employees death in line of duty.
(b) If it arises out of a crime or a quasi-delict, the liability is solidary (together with
the partnership).
12. Example of a case when solidarity may exist even when the creditors and
the debtors are not bound in the same manner:
A and B solidarily bound themselves to pay a total of P1,000,000 to C, D, and E
subject to the following conditions and terms: Cs share will be due at the end of
the year; D will get his share only if he passes the bar; and E will get his share
only after he (E) has painted the house of X. Here, the obligation is still solidary.
In the example given, when will this solidary obligation be due and
demandable?
ANS.: The obligation is still solidary but Cs share will only be due and
demandable at the end of the year, and E and Ds shares will be due and
demandable only upon the fulfillment of the condition.
Supposing the obligation is to be subject to different terms and conditions, the
following is the solution:
The creditor may recover that part which is pure and unconditional, and should
leave in suspense or pending, the right to demand the payment of the remainder
until the expiration of the term or the fulfillment of the condition. Solidarity is still
preserved by recognizing in the creditor the power, upon the fulfillment of the
condition or the expiration of the term, of claiming from any or all of the debtors,
that part of the obligation effected by these conditions.
13. A and B are solidary debtors of C to the amount of P1, 000.00. The debt
prescribed. But A voluntarily paid C, nevertheless because A felt morally
obliged to pay. (ART 1219 / Comment # 1)
a) May A recover from C what he has paid? Why?
b) May A get any reimbursement from B? Why?
ANS.:
(a) A cannot recover from C what he has paid because it was voluntarily given
after A knew of the prescription of the debt. The law says, when a right to sue
upon a civil obligation has lapsed by extinctive prescription, the obligor cannot
recover what he has delivered or the value of the service he has rendered.
(Art. 1424, Civil Code).
(NOTE: If payment had been made by A to C, without A knowing that the debt
had prescribed, A can recover from C on the basis of solutio indebiti.)
(b) A cannot get any reimbursement from B because A paid the debt after it had
prescribed. The law says, Payment by a solidary debtor shall not entitle him
to reimbursement from his co-debtors if such payment is made after the
obligation has prescribed or become illegal. (Art. 1218, Civil Code).
14. What is meant by joint indivisible obligation and give its effect of non-
compliance? (ART. 1224)
Joint Indivisible Obligation
(a) Here the object is indivisible and yet the parties are merely bound jointly.
(b) Example: Mila and Ligaya are jointly bound to give a specic car to Jose.
Effect of Non-Compliance
(a) The obligation is converted into a monetary one for indemnity.
(b) Example: Mila and Ligaya promised jointly to give a specic car worth
P2,400,000 to Jose. In the meantime, the car is with Honda Motors Co. Milas
share is, therefore, P1,200,000. If Mila, because of gambling, does not have the
money, but Ligaya has P1,200,000 it is clear that they cannot get the car from
Honda Motors Co. So they also cannot comply with their obligation of delivering
the car to Jose. Here, the obligation to give the car is converted to a monetary
obligation to give P2,400,000 to Jose. Ligaya is not responsible for Milas
insolvency, so she is duty bound to give only P1, 200,000. Mila will be indebted
to Jose for her share of P1, 200,000.
(c) Suppose in the preceding problem, the obligation was SOLIDARY and
INDIVISIBLE, what would be the effect?
ANS.: Jose can demand the whole car or its price of P2, 400,000 from Ligaya
alone, but Ligaya can later recover reimbursement from Mila.
16. What is the general rule on a debtor substituting Penalty for the Principal
Obligation? (ART. 1227)
The general rule is that the debtor is not allowed to just pay the penalty instead of
fullling the obligation. He can only do so if the right has been EXPRESSLY
reserved. The reason is that if he can just pay, fulllment of the obligation will be
considered an alternative one. The word EXPRESSLY means that any implied
reservation is not allowed.
17. What is the effect of nullity of the penal clause or of the principal
obligation?
Effect of Nullity of the Penalty Clause
If the principal obligation is null and void, the penal clause will have no more use
for existence and is therefore also considered null and void. Upon the other
hand, just because the penal clause is not valid, it does not mean that its nullity
will also make the principal obligation null and void. Reason: The principal
obligation can stand alone, and the void penal clause will just be disregarded.
19. Is a creditor bound to accept payment from a third person and if payment is
so received what are the rights of the paying third person? (ART. 1236)
(a) to the person in whose favor the obligation has been constituted (the
creditor);
This refers to the creditors at the time of payment, not the original creditor at
the time the obligation was constituted.
(b) to the successor-in-interest (like the heirs);
(c) to any person authorized to receive it.
The authorization may be by agreement or by law.
If the recipient was not authorized, the payment generally is NOT valid
(without prejudice to Art. 1241 of the New Civil Code)
(b) Yes, C may still recover from A, although originally C did not intend to be
reimbursed. This is so because here there has been no real donation. However,
inasmuch as the payment by C had been effected against the will of A, all that C
can recover from A is to the extent that A has been bene ted by Cs payment to
B in As behalf.
26. Is a debtor allowed to withdraw the thing or sum consigned? Give the
effects of its withdrawal?
The withdrawal by the debtor is a matter of PRIVILEGE.
Effects of its withdrawal:
(a) The obligation remains.
(b) The creditor loses any preference (priority) over the thing.
(c) The co-debtors, guarantors, and sureties are RELEASED (unless they
consented).
NOTE: The co-debtors referred to are the solidary co-debtors, not the joint ones, for
their liabilities are distinct.
NOTE: Regarding the solidary co-debtors, they are released only from the solidarity, not
from their own individual shares, since unlike guarantors or sureties, the solidary co-
debtors are in themselves PRINCIPAL debtors.)
27. A commits the crime of theft and is asked to return the car stolen to its
owner B. If before the car is delivered to B, it is destroyed by fortuitous
event, is As liability extinguished? Why? (ART.1268)
28. Give the reasons Why Dation in Payment Is Governed by the Law of Sales
(ART.1245 / Comment # 4)
30. What are the Special Forms of Payment ? (ART. 1252 / Comment #1)
There are four special forms of payment:
(a) application (or imputation) of payments (Art. 1252, Civil Code);
(b) dation in payment (adjudicacion en pago or datio in solutum) (Art. 1245,
Civil Code);
(c) assignment in favor of creditors (cession) (Art. 1255, Civil Code);
(d) tender of payment and consignation (Arts. 1256-1261, Civil Code).
31. What are the Requisites for Voluntary Assignment? (ART. 1255)
(a) more than one debt;
(b) more than one creditor;
(c) complete or partial insolvency of debtor;
(d) Abandonment of all debtors property not exempt from execution (unless
exemption is validly waived by debtor) in favor of creditors;
(e) acceptance or consent on the part of the creditors (for it cannot be imposed
on an unwilling creditor).
32.