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Regulatory Framework for Business Transactions > Law on Obligations > Flashcards

Law on Obligations Flashcards

1
Q

Obligations defined

A

A juridical necessity to give to do or not to do

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2
Q

Kinds of Obligations as to Basis and Enforceability

A
  1. Civil- derive their binding force from positive law or substantive law
  2. Natural- not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance
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3
Q

Examples of Natural Obligatin

A
  1. Third person pays a debt which the obligor is not legally bound to pay because it has prescribed, but voluntary reimburses the third person, obligor can no longer recover what he has paid.
  2. After an action to enforce a civil obligation has failed the defendant voluntarily performs the obligation, he cannot demand the return what he has delivered or the payment of the service he has rendered
  3. When an heir voluntarily pays a debt of the decedent exceeding the value of the property which he received, the payment is valid and cannot be rescinded by the payer
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4
Q

Essential Elements of the Obligation

A
  1. Active Subject (Creditor/Obligee)
  2. Passive Subject (Debtor/Obligor)
    3.Object (Prestation)
  3. Efficient Cause (Vinculum Juris/Juridical Tie)
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5
Q

Transmissibility of Obligation

A

General rule: All rights acquired in virtue of an obligation are transmissible
Exceptions:
1. When the nature of obligation is not transmissible
2. By Stipulation
3. By provisions of the law

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6
Q

Sources of Obligation

A
  1. Law
  2. Contracts
  3. Quasi Contracts
  4. Delicts
  5. Quasi Delicts
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7
Q

Are obligations from the law presumed

A

FALSE- Obligations derived from law are never presumed

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8
Q

Examples of Nominate Quasi-Contracts

A
  1. Negotorium Gestio- voluntary management of the property or affairs of another without the knowledge or consent of the latter
  2. Solutio Indebiti- Relation when something is received when there is no right to demand it and it was unduly delivere.
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9
Q

When does Negotorium Gestio not arise

A
  1. When the manager was tacitly authorized; and
  2. The property was not neglected or abandoned
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10
Q

Obligations of the owner in Negotorium Gestio

A
  1. He shall reimburse the manager of all necessary and useful expenses and for damages the latter that may have suffered in performance of duties.
    2.The same obligation when the manager had for its purposes the prevention of imminent and manifest loss although no benefit may have been arrived.
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11
Q

Obligations of the manager in Negotorium Gestio

A
  1. Obliged to continue to the management of property until the termination of the affair and its incidents
  2. Perform all duties with all the diligence of a good father of a family.
  3. If he delegates his duties to another, he shall be liable for the acts of the delegate
  4. Responsibility of two or more managers shall be solidary
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12
Q

Examples of Solutio Indebiti.

A
  1. Funeral expenses are borne by a third person, he shall be reimbursed by those obliged to give support.
  2. A stranger gives support to a child of another person without the knowledge of those obliged to give support
  3. A person save a property of another person during fire, flood, and other calamity without the knowledge of the owner
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13
Q

Proof necessary for Criminal Liability

A

Proof beyond reasonable doubt

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14
Q

Proof Necessary for Civil Liability

A

Preponderance of evidence

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15
Q

Is due diligence an available defense against the employer’s subsidiary liability arising from delict or crime

A

No, however he can use this defense vicarious liability arising from quasi delict

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16
Q

Concurrent obligations in an obligation to give a determinate thing

A
  1. Take care of thing with proper diligence of a good father of a family
  2. To deliver the fruits from the time the obligation to deliver it arises
  3. To deliver all the accessions and accessories
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17
Q

Kinds of Fruits

A
  1. Natural- Spontaneous products of the soil
  2. Industrial- produced by lands of any kind through cultivation or labor
  3. Civil- arises from civilization or result of juridical relations or contracts
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18
Q

Accessions vs Accessories

A

Accessions- include everything which is produced by a thing or which is incorporated or attached thereto, either naturally or artificially
Accessories- destined for embellishment, use, or their preservation of another thing or more importance

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19
Q

Remedies for breach of obligation to give

A
  1. Determinate thing- Specific performance only
  2. Generic thing- Specific performance or substitute perfrmance
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20
Q

Remedies for breach of obligation to do

A

Substitute performance only, since forcing the obligor to comply would violate constitutional prohibition of involuntary servitude

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21
Q

Remedies for breach of obligation not to do

A

Be undone at the expense of the debtor

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22
Q

Kinds of Damages

A
  1. Moral- damages awarded for reason of physical suffering, mental anguish and other similar injuries
  2. Exemplary- damages imposed by way of example or correction for public good
  3. Nominal- adjudicated in order that a right of the plaintiff which has been violated or invaded by the defendant may be vindicated
  4. Temperate- more than nominal but less than compensatory damages
  5. Actual- those pecuniary loses suffered and duly proved by the plaintiff
  6. Liquidated- damages agreed upon by the parties to a contract
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23
Q

Accion Subrogatoria

A

To exercise all rights and actions of the deb tor, except those rights which are inherently personal to him

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24
Q

Requisites of Accion Subrogatoria

A
  1. The debtors assets are insufficient to satisfy the claims against him
    2.The creditor must have pursued all properties of the debtor subject to execution
  2. The right of action must not be personal; and
    4.the debtor whose right of action is exercised must be indebted to the creditor
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25
Q

Accion Pauliana

A

To ask for rescission or cancellation of the contracts made by the debtor in fraud of creditor’s rights

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26
Q

Requisites of Accion Pauliana

A
  1. Plaintiff asking for rescission has a credit prior to the alienation, although demandable later
  2. The debtor has made a subsequent contract conveying a patrimonial benefit to a third person
  3. Creditor has no other legal remedy to satisfy his claim
  4. The act being impugned is fraudulent
  5. Third person who received the property conveyed is an accomplice of the fraud
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27
Q

Kinds of fraud

A
  1. Dolo Causante or Causal Fraud
  2. Dolo Incidente or Incidental Fraud
28
Q

Which is void? Waiver for past fraud or future fraud

A

Waiver for an action of future fraud is void, while waiver for past fraud may be valid on the part of the plaintiff provided public interests arent involved

29
Q

Kinds of Negligence

A
  1. Culpa Contractual (Contractual Negligence)
  2. Culpa Aquilina (Civil Negligence or Quasi Delict)
  3. Culpa Criminal (Criminal Negligence)
30
Q

Negligence on the part of the creditor or injured party

A
  1. If his negligence was immediate and proximate cause, there is no recovery for damages
  2. If his negligence was only contributory, he may still recover the damages but the court will reduce the same
31
Q

Kinds of Delay

A
  1. Mora Solvendi
  2. Mora Accipiendi
  3. Compensatio Morae
32
Q

When is a potestative condition void

A

When dependent solely on the will of the debotr

33
Q

Effect of Impossible Conditions

A

Annul the obligation which depends upon the

34
Q

Types of Impossibility

A
  1. Physical- out of the commerce of men
  2. Legal- Contrary to law, good customs, and public policy
35
Q

What happens when the thing is lost (fault and without fault of the debtor)

A

Without the fault of the debtor- Obligation is extinguished
With the fault of the debtor- Debtor is liable for damages

36
Q

Rules on Deterioration

A

Without the fault of Debtor- Impairment is borne by the creditor
With the fault of the debtor- Creditor can either 1. exact fulfillment; or ask for rescission and damages

37
Q

Rules on Improvement

A

By nature of time- Improvement will inure to the benefit of the creditor
At the expense of the debtor- debtor shall have no other right that that granted to a usufructuary

38
Q

Benefit of the Period

A

Genral Rule: Whenever a period is designated, it is presumed to have been established for both the creditor and the betor

39
Q

When does the debtor loses the benefit of the period

A
  1. He becomes insolvent unless he gives a guaranty or security for the debt.
  2. When he does not furnish to the creditor the guaranties or securities which he has promised
  3. Which by his own acts he has impaired said guaranties after establishment or due to fortuitous events they disappear.
  4. When debtor violates any undertaking
  5. When debtor attempts to abscond
40
Q

Payment made by mistake during pendency of the suspensive condition or period

A
  1. If during the pendency of the suspensive condition, the debtor paid by mistake a sum of money, debtor can recover the sum of money, but interest can be recovered only if the creditor acted in bad faith
  2. If during the pendency of the suspensive period, the debtor paid by mistake a sum of money, debtor can recover the sum of money and interest can also be recovered whether creditor acted in good faith or bad faith.
  3. If during the pendency of suspensive period or condition, a debtor delivered a determinate thing, debtor may file 1. accion reinvidicatoria if creditor has the thing; or 2. action for indemnification for damages
41
Q

Generally to whom does the right of choice belong to in an alternative obligation

A

Generally belongs to the debtor except:
1. When given the creditor
2. When the right of choice is given to a third party

42
Q

Effects if ALL things where lost through fortuitous events in Alternative Obligations

A

Right of Choice Debtor- Extinguished
Right of Choice Creditor- Extinguished

43
Q

Effects if ALL things were lost through fault of debtor in Alternative Obligations

A

Right of choice debtor, and debtors fault- Value of the last + damages
Right of choice Creditor, and debtors fault- Value of any + damages

44
Q

Effects if some were lost through fortuitous event in Alternative Obligations

A

Right of choice debtor, and fortuitous event/fault of the debtor- deliver remaining
Right of choice creditor- demand remaining

45
Q

Effects if some were lost and fault of debtor or creditor

A

Right of choice debtor (debtor cannot make a choice)- Rescission + Damages or Perform + Damages
Right of choice creditor, fault of debtor- price of that which was lost + Damages or Demand from remaining + Damages

46
Q

What is a facultative obligation

A

When only one prestation is agreed upon but obligor may render another in substitution. there will always only be one prestation required to be complied with

47
Q

Who has the right to substitute in Facultative obligation

A

Debtor always has the right to substitute and cannot be compelled to make obligation

48
Q

Modes of Extinguishment of Obligation

A
  1. Payment or Performance
  2. Loss of the thing due
  3. Condonation or Remission
  4. Confusion or Merger of the rights of creditor and debot
  5. Compensation
  6. Novation
49
Q

Prescription Period

A

Quasi Contracts- 6 years
Oral Contracts- 6 years
Written Contracts- 10 years
Court Judgement- 10 years
Quasi Delict- 4 years
Libel- 1 year

50
Q

Requisites for Payment or Performance

A
  1. In accordance with the obligation
  2. Person paying and receiving should be in the requisite capacity
  3. Should be made by the debtor to the creditor
  4. Payment should be made at the right time and place
51
Q

Amount of Reimbursment the third person is entitled to upon payment to creditor

A

With consent of debtor/interest in fulfillment of obligation- Full Reimbursement
Without the consent of debtor- Beneficial Reimbursement

52
Q

To whom can payment be made into

A
  1. Person whose favor the obligation has been constituted
  2. Successor in interest
  3. Any person authorized to receive
  4. Third party if it redounds to benefit of the creditor
53
Q

Limit of currencies

A

1 Coins and Above- shall be legal tender in amounts not exceeding 1000
Coins below P1- legal tender not exceeding 100
Bills do not have a limit

54
Q

Rules on Place of payment

A
  1. Place designated in the Obligation
  2. Wherever the thing might be at the moment the obligation was constitued
  3. Domicile of the debtor
55
Q

Dacio en Pago

A

Special mode of payment whereby a property is alienated to the creditor in satisfaction of a debt in money where the money is already due

56
Q

Rules on Application of Payments

A
  1. Creditor cannot be compelled to accept partial payment
  2. Debtor cannot apply payment to principal if interest has not been paid
  3. Debt must be liquidated
  4. Cannot be made when period has not arrived and such period was in the favor of creditor
57
Q

Rules on when no designation

A
  1. If debts are different nature and burden, most onerous one to the debtor
  2. If all same nature, proportionately applied
58
Q

Payment by Cession

A

Special type of payment which involves voluntary abandonment of the universality of property of the debtor for the benefit of the creditors, in order to applied the payment of the credits

59
Q

Tender of Payment and Consignation

A

Tender of payment- manifestation made by debtor to the creditor of his desire to comply with his obligation. Preparatory act to consignation
Consignation- depositing the things due to judicial authority

60
Q

Types of Condonation as to form

A

Express- when made formally; should be made in accordance with forms of ordinary donations
Implied- when it can be inferred from the acts of the parties

61
Q

Merger or Confusion

A

The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person

62
Q

Requisites of Compensation

A
  1. Parties must be principal debtors and creditors on their own right
  2. Both debts must be due
  3. Both debts must be liquidated and demandable
  4. Debts must pertain to sums of money or if consumable must be similar quality
  5. Claim must be demandable
63
Q

When is compensation not proper

A
  1. Depositum as to the depositary
  2. Bail as to the bailee
  3. Support as to the one giving support
  4. Civil liability arising from a penal clause
64
Q

Active Novation (Subrogation)

A

Third person is subrogated to the right of the creditor; either by agreement or by law

65
Q

Passive Novatino

A

Third person is substituted to the person of the debtor. Must be clear to btohr parties the there is a new debtor

Regulatory Framework for Business Transactions (22 decks)

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