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Kinds of Conditions WHEN PERFORMED Suspensive Give rise to obligation Resolutory Extinguishes obligation Return to each other what was received WHOM/WHERE IT DEPENDS Potestative Depends upon the will of the parties Causal Depends upon chance Mixed Partly upon will and partly upon chance CAPACITY TO BE PERF. IN PARTS Divisible Can be performed in parts Indivisible Ø be performed in parts # TO BE PERF. WHEN THERE ARE SEVERAL Conjunctive All must be performed Alternative Only one must be performed AS TO NATURE Positive Act / to do Negative Omission / not to do HOW IT IS MADE KNOWN TO THE OTHER PARTY Express State Implied Merely inferred WHETHER IT CAN BE FULFILLED* Possible Can be fulfilled Impossible Physically impossible Legally impossible Effect of Fulfillment* GR Retroact to the day of constitution of the obligation Fruits / Interests Reciprocal Obligation Deemed mutually compensated Unilateral Obligation Debtor entitled to fruits Period / Prescription Counted fr. the time the condition was fulfilled; unless the contrary Delivery of Specific or Determinate Thing (w/ Suspensive Condi) LOSS w/o fault of debtor Obli. is extinguished w/ fault of debtor Debtor is liable for damages DETERIORATION w/o fault of debtor Creditor bears impairment w/ fault of debtor Exact fulfillment, ask for damages Rescission & damages IMPROVEMENT By nature / time Improvement inured to creditor @ exp. of the debtor Debtor has no right except usufruct Kinds of Periods AS TO EFFECT Ex Die Period w/ suspensive effect In Diem Period w/ resolutory effect DEFINITE Specific date; Eg. Jan 31, 2025 INDEFINITE Certain but unknown; Eg. Death LEGAL Imposed by Law; Eg. Deadline for filing of tax returns VOLUNTARY Agreed by parties aka “conventional period’ JUDICIAL Fixed by courts Courts Fix the Period Art. 1191 Seller is ready to deliver but buyer is not ready to pay the price Art. 1197 When the period is intended but obligation did not fix a period When period depends upon will of the debtor Benefit of the Period GR: BOTH Debtor Ø be made to pay before the period Creditor Ø be made to accept payment before the period XPN: FAVORS ONE Depends upon tenor of obligation E.g. payable is to debtor, and collectible is to creditor DEBTOR LOSES RIGHT TO MAKE USE OF THE PERIOD (INFILVA) Insolvent; Unless there is guaranty / security of debt Guaranty / security is Ø furnished Guaranty / Security is impaired by his own acts Guaranty / Security is lost due to fortuitous event, unless he delivers new ones equally satisfactory When undertaking is violated If debtor attempts to abscond Alternative Obligations RIGHT OF CHOICE GR Debtor XPN Expressly granted to the creditor Given to a 3rd party NATURE Debtor’s right of choice is limited (Ø choose impossible / unlawful prestation) Choice is communicated; “concentration” Choice Ø be part of one and part of another If only one choice remains, debtor loses the right of choice Right of choice Debtor Creditor Lost ALL Lost SOME Lost ALL Lost SOME Fortuitous event Extinguished Deliver remaining Extinguished Demand from remaining Fault of debtor Value of last thing + Damages Deliver remaining Value of any thing + Damages Price of lost thing + damages; demand from remaining + Damages Fault of creditor - Rescission + Damages; Perform + Damages - - Facultative Obligation NATURE Debtor always has the right to substitute BEFORE SUBSTITUTION Lost Principal Extinguished Lost Substitute Ø extinguished AFTER SUBSTITUTION Lost Principal Ø Extinguished Lost Substitute Extinguished Rules on Enforcement of Solidary Obligations 1 Debtor may pay any creditor; XPN: If one creditor demands → payment is made to him for the entire amount 2 Novation, compensation, confusion, remission made by any creditor. Obligation is extinguished. ▪ Said creditor is liable to other creditors by way of reimbursement. ▪ If a debtor paid the liability before the same was extinguished by remission, heirs to receive reimbursement from co- debtor. ▪ Whole obligation is extinguished by way of novation, confusion, or compensation, debtor is reimbursed by co- debtors 3 Avail of total defenses such as: ▪ Payment by another co-debtor ▪ Contract is void ▪ Prescribed obligation ▪ Minority 4 If two or more debtors offer to pay → creditor may choose. 5 Debtor who paid → may claim share of co-debtors with interest 6 If one debtor is insolvent → all co-debtors including payor will share in the reimbursement in proportion to debt. 7 If demand is made to one debtor → creditor may still demand payment from other debtors. 8 If debtor pays after obligation has prescribed or become illegal → he is not entitled to claim reimbursement; Solidarity may exist even if liability of debtors are not in the same manner Rules on Enforcement of Joint Obligations 1 The debts/credits → independent of each other, 2 The vices of each obligation arising from the personal defect of a particular debtor or creditor → Ø affect the obligation or rights of the others; 3 The demand by one creditor upon one debtor → produces the effects of default only with respect to the creditor who demanded & the debtor on whom the demand was made, but Ø with respect to the others, 4 Interruption of prescription (judicial demand of one creditor) upon a debtor → Ø benefit the other creditors nor interrupt the prescription as to other debtors. Partial payment or acknowledgement made by one of several joint debtors → Ø stop the running of the statute of limitations as to the others: 5 Insolvency of a debtor → Ø increase the responsibility of co-debtors nor creditor entitled to demand fr. co-debtors Presumptions in In/Divisibility Divisible Indivisible Certain # of days worked Definite Things Metrical Units Ø susceptible of partial performance Susceptible of partial performance Law or the intention of parties treats it as indivisible Installments Indivisibility JOINT INDIVISIBLE Right of creditors should be collective Debt is enforced by proceeding against all debtors If 1 debtor is insolvent, others are not liable for his share → convert obli. into monetary 1 debtor did not comply Debtor Ø ready to comply: Share + Damages Debtor ready to comply: Share only Ø is ready to comply → claim share + damages from all debtors SOLIDARY INDIVISIBLE 1 is not ready to comply → ready debtor = liable for damages Innocent debtor → claim reimbursement from co-debtors Reduction of Penalty by the Court 1 Principal Obligation has been partly or irregularly complied with 2 Penalty is iniquitous or unconscionable NATURE & EFFECTS AND REMEDIES IN CASE OF BREACH Concurrent Obligations give generic thing No concurrent obligation give determinate / specific thing Take care of the thing w/ proper diligence of a good father of a family To deliver fruits (no real right) Natural: Products of the soil & animals Industrial: Fr. human intervention; labor Civil: Fr. judicial relation of parties; rentals To deliver all Accessories: Incl. w/ principals Accessions: Additions & improvements

Application of Payments REQUISITES Only one debtor Several Debts Debts are of the same kind Only one and same creditor LIMITATIONS Creditor Ø be compelled to accept partial payment Debtor Ø apply payment to principal if int. is unpaid Debt must be liquidated, unless otherwise agreed When period has Ø arrived, the period being in favor of the creditor When there is an agreement which debt is paid first NO DESIGNATION (DEBTOR) Creditor will choose reflected in the receipt NO DESIGNATION (DEBTOR & CREDITOR) Same nature & burden Add proportionately Different Nature & Burden Most onerous debt Cession of Assignment ▪ Debtor delivers → all creditors ALL his properties ▪ Purpose: selling & applying proceeds to obligations ▪ Properties exempt from execution: Ø covered by cession; XPN: debtor waives exemption Kinds of Cession VOLUNTARY Only up to proceeds 1 Stipulation 2. Preference of Credits JUDICIAL Under FRIA Advantage: discharges debtor of his debts; obli are extinguishes Dacion en Pago vs. Cession or Assignment DACION EN PAGO (ART 1245) CESSION OR ASSIGNMENT (ART 1255) Substitute of performance / obligation Substitute of performance / obligation Ownership transferred to creditor No such transfer Totally extinguished (if agreed upon or silence) Only up to proceeds (unless otherwise stipulated) No plurality of creditors Plurality of creditors Specific thing All properties (except: exempt from execution) May be made by solvent debtor Supposes financial difficulty of debtor Tender of Payment and Consignation TENDER OF PAYMENT Preparatory act Ø extinguish the obligation CONSIGNATION Thing is deposited in court instead of directly paying the creditor Extinguishes the obligation; Ø to exercise a right REQUISITES OF LEGAL TENDER There exist a valid debt that is due There is legal cause to consign (creditor refuses valid tender of payment) Even w/o tender of payment in case of the ff: ▪ Creditor is absent/unknown or Ø appear of place of paym. ▪ When the creditor is incapacitated to receive payment ▪ 2 or more persons claim the right to collect (can file interpleader) ▪ Title of the obligation has been lost There is previous notice to consign to persons having interest in the fulfillment of obligation The amount / thing is deposited in court WITHDRAWAL OF THING DEPOSITED As a matter of right Before acceptance by creditor No revival, obligation is Ø extinguished After acceptance / declaration Only with creditor’s consent There is revival, obligation is already extinguished LOSS OR IMPOSSIBILITY Loss of Thing Due DUE TO FORTUITOUS EVENT GR Debtor not liable for damages XPN When the law so provides When the stipulation so provides Nature requires assumption of risk Obli arising from criminal offense unless creditor is mora accipiendi Obli to give generic thing (XPN: Limited generic) MALFUNCTION OF BREAK SYSTEM Not a fortuitous event, could be prevented by maintenance. ROBBERY & THEFT Liable if there was negligence in its part (pawnshop) PARTIAL LOSS May be determined by court as important to extinguish obligation PRESUMPTION OF FAULT (Debtor’s fault) Does not apply in case of Earthquake Flood Storm Other natural calamities Impossibility TYPES Nature Physical (by reason of its nature) Legal (through some subsequent law) Whom impo. refers Obective (Eg. paint a broken building) Subjective (Eg. C to paint a portrait) Extent Partial Total Period of impossibility Permanent Temporary DIFFICULTY OF PERFORMANCE If difficulty is manifestly beyond contemplation of parties, obligor may be released therefrom, in whole or in part COURT OF ACTION If above difficulty, debtor may go to court to release from obligation RIGHT OF CREDITOR Creditor may go against third persons of debtor by reason of loss EXTINGUISHMENT OF OBLIGATIONS Extinguishment Condonation/ Remission Dacion en Pago Novation Compromise GRATUITOUS Condonation/ Remission Extinguished entirely w/o equivalent NOT GRATUITOUS Dacion en Pago Cr’or receives thing diff. fr. stipulated Novation Subj. of principal condi. are changed Compromise In litigation / dispute Condonation NATURE Acceptance by donee is required Movable Property Oral donation requires simultaneous delivery If value exceeds P5000 acceptance be in writing Immovable property Must be in public document KINDS As to form Express Implied As to Extent Total Partial As to manner Inter vivos Mortis Causa Merger / Confusion DEFN Meeting in one person of the qualities of the creditor and debtor with respect to the same obligation REQS Must take place between the credit and the principal debtor Involves the very same obligation Must be total Compensation DEFN Mode of extinguishment to the concurrent amount; reciprocally creditors and debtors of each other KINDS As to effects / extent Total Partial As to origin / cause Legal: operation of law Facultative: can be claimed by one Conventional: compensate mutual obli. Judicial: decreed by the court REQUISITES (All) Parties must be mutual principal debtors & creditors in their own right Both debts must be due Both debts must be liquidated and demandable In sum of money, or same kind/quality if consumables Claim is clearly demandable (i.e. no controversy) GUARANTORS May set up in regards what creditor may owe principal debtor RESCISSIBLE / VOIDABLE DEBTS May be subject of compensation before rescinded or avoided / annulled ASSIGNMENT OF CREDITS Debtor may still invoke compensation against debts due to him if: ▪ He had no knowledge or did not consent to the assignment ▪ W/ knowledge/consent, but reserved his right to compensation COMPENSATION IS NOT PROPER Depositum: as to the depositary Bail: as to the bailee Support: as to the one giving support (XPN: support in arrears and those contractual in nature) Civil liability from penal offense SEVERAL DEBTS Rules on application of payments shall apply LEGAL COMPENSATION Takes effect by operation of law Extinguishes both debts to concurrent amount HOW IT WILL BE DISTRIBUTED