1.

Q: Demand is necessary to make an

obligation due.
A: False. Demand is not necessary to make an
obligation due but to set the other party in delay
and to effectively toll applicable prescriptive
periods.
As to when an obligation becomes due is not
dependent on the existence of demand in a pure
obligation. Every obligation the performance of
which does not depend on a future or
uncertain event, or a past event unknown to
the parties, is demandable at once. The same is
true in obligations with resolutory condition or a
resolutory period, without prejudice to the effects
of the happening of the condition or the arrival
of the period.
Also, in a reciprocal and simultaneous obligation,
from the moment one of the parties fulfil his
obligation, the other party must be ready to comply
with what is incumbent upon him, or else delay will set
in without the necessity of a demand. However, in a
reciprocal obligation which is not simultaneous,
demand is generally necessary, again not to make the
obligation due but for delay to set in upon the party
who is not able to comply in the proper manner with
what is incumbent upon him.
Further, demand is made only upon the obligation
becoming due. A demand made upon an obligation
that is not yet due and demandable will not set the
other party in delay. Thus, demand is futile.
There are other instances when demand is
not necessary as to when the obligation
becomes due, as in: (1) when the law or the
obligation expressly so declares, as for
example, in a pure obligation and those subject
to a resolutory condition or period, which are
due and demandable at once; (2) when from
the nature and circumstances of the obligation
it appears that the designation of the time of
fulfilment is the controlling motive of the
establishment of the contract; and (3) when
demand would be useless, as when the obligor
has rendered it beyond his power to perform.
2. The arrival of a period or the
happening of a condition gives rise to an
obligation.
False.
This statement is true only as regards
obligations subject to a suspensive condition or
suspensive period, wherein the efficacy of the
obligation is suspended until the happening of the
suspensive condition or the arrival of the suspensive
period.
First, there could be an obligation which is not
dependent upon any future or uncertain event. A pure
obligation is demandable at once upon constitution.
The same is true in obligations subject to a
resolutory condition or resolutory period,
without prejudice to the effects of the happening of the
condition or the arrival of the period, which
extinguishes the obligation.

3. No person shall be responsible for those

events which could not be foreseen, or which
though foreseen, were inevitable.
False. This statement is generally true, but the
civil code admits of exceptions.
First, in an obligation to give, the statement is
true only when what is to be delivered is a determinate
thing. If it was a generic thing, the obligation will not
necessarily be extinguished by the happening of a
fortuitous event, because of the principle that genus
never perishes.
The exceptions to this rule as provided by the
civil code include, when the parties expressly so
stipulates the person to be responsible even for
fortuitous events; or when the law so provides; or
when the nature of the obligation requires the
assumption of risks; or when the obligor is in delay
upon the happening of the fortuitous event; or when he
has promised to deliver the same thing to two or more
persons who do not have the same interest, then the
statement will not necessarily be true anymore.
4. The value of the currency at the time of the
constitution of the obligation shall be the
basis of payment in case of extraordinary
inflation or deflation.
False. This statement will only be true as
regards obligations arising from contracts, in case an
extraordinary inflation or deflation of the
currency stipulated should supervene. The same
provision already has an exception, where the
parties agree on the contrary. The provision
speaks of parties and of agreement, thereby
presupposing that a contract was entered into between
them. In obligations arising from law, quasi-contracts,
delicts and quasi-delicts, the applicable law or statutes
should govern.
Part Four:

1. C is correct. The obligation of C here is joint

and the debts of A, B, C are distinct from one another.
Under the Civil Code, there is solidary
liability only when the obligation expressly so
states, or when the law or the nature of the
obligation requires solidarity. If such does not
appear, the credit or debt shall be presumed to
be divided into as many equal shares as there
are creditors or debtors, the credits or debts
being considered distinct from one another.
Since the parties here did not agree that the
liability of A, B and C shall be solidary, and neither
does the law nor the nature of the obligation requires it
to be, the obligation of A, B and C for the payment of
telephone bills shall be joint and the division equal.
Thus, C can only be held liable for one-third of the
total debt, which is 10K out of 30K.
2. Y Bank is correct. There has been in this case
legal compensation of the debt of X to Y Bank.
Under the Civil Code, for there to be legal
compensation, the following requisites must
concur: a) that each of the obligors be bound
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principally and that they be in their own right

debtors and creditors of each other; b) 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 quality, if the latter
has been stated; c) that both debts be due; d)
that they be liquidated and demandable; and e)
that over neither of them there be any
retention or controversy commenced by third
persons and communicated in due time to the
obligor; and that the f) that compensation is
not prohibited by law.
In the instant case, X alleges that compensation is
improper because one of the debts arises from a
deposit. The provisions of the civil code on deposit
prohibit the depositary from setting up legal
compensation. This contention does not apply in this
case.
The code also provides that deposit of money in a
bank shall be governed by the contract of loan. The
relationship between the bank and depositor is that of
a creditor-debtor, with the bank being the debtor and
the depositor being the creditor to the extent of the
amount deposited. As such, compensation will not be
precluded by the law on deposit because Y bank is not
a depositary. Conversely, with the other contract of
loan wherein the Bank is the creditor and X is debtor,
this makes them mutual creditors and debtors of each
other principally and in their own right. The first
requisite satisfied.
Since all the requisites for compensation are
present, it is safe to conclude that compensation took
place by operation of law, and the debt must be
extinguished to the extent of PhP 800,000.

3. a) A may be compelled to pay PhP 200,000,

which is the total debt remaining minus the effective
condonation of Cs share.
Under the Civil Code, in the absence of
stipulation as to division of shares, the debt
shall be divided into as many equal shares as
there are debtors. Hence, A, B and C is liable for
PhP 100,000 each among themselves.
The
condonation by the creditor of C's share in the
obligation resulted to the extinguishment of that part
only of the obligation, leaving the balance of PhP
200,000 in force.
Since the obligation of A, B and C is solidary, the
creditor may demand from any of the solidary debtors
entire compliance with the obligation which in this
case pertains to the balance of PhP 200,000. If A pays,
he may demand reimbursement of P 100K from B only
since the share of C has been remitted.
b) The creditor may compel A to pay the entire
obligation even if C became insolvent.
A, B and C are solidary debtors. In the case of a
solidary obligation, each one of the solidary
debtors is bound to render entire compliance
with the obligation. The creditor may proceed
against any one of the solidary debtors or some
or all of them simultaneously. Demand against
one of them, if the latter becomes insolvent,

will not be an obstacle to subsequently demand

from any of the others as long as the debt has
not been fully collected yet.
In the event A makes payment, he may compel
reimbursement from B of PhP 150,000. In solidary
obligation, when one of the solidary debtors
cannot reimburse because he is insolvent, his
share shall be borne by all the debtors, equally
in the absence of stipulation as to any other mode of
proportional division. Hence, A and B will share in the
P 100K of C, which will be an additional PhP 50,000 to
his P 100K part of the debt.

4. X is not correct.
The civil code declares a conditional
obligation void when its fulfilment depends
upon the sole will of the debtor. But the same
provision makes this obligation effective when
its fulfilment also depends upon chance or
upon the will of a third person.
First, this is a reciprocal obligation, thus Y here is
not necessarily the debtor. His passing the bar
eventually will give rise to the obligation of X to deliver
the car.
But, if passing the bar examination in this case is
the first condition that has to be fulfilled, and is
potestative, still it does not depend upon the sole will
of Y. It is well known that passing the bar is highly
subjected to chance and the will of the examiner/s.
Hence, even if we say that passing the bar is a
potestative condition, it will not render the obligation
void since it does not depend upon the sole will of the
debtor but also of a third person. And the fulfilment of
the obligation to deliver the car after Y does pass the
bar, will be dependent upon the readiness of X to
deliver.
{addition:
if before the results were
released X sold the car (determinate) to B,
who would have better right?}
It depends. If B is considered a purchaser in good
faith and for value, who does not know of the
agreement between X and Y, the title of the car not
being annotated as encumbered, then B who is now in
possession of the car has all the rights to it. The
remedy of Y is to sue X for damages.
The happening of the condition, the passing of Y
in the Bar, retroacts to the day of the constitution of
the obligation. Thus, Y was the owner of the car when
it was sold to B by X. X is bound to pay damages to Y
as to the value of the car. No issue as to fruits and
interests because this is a reciprocal obligation, they
are deemed mutually compensated during the
pendency of the condition.

5. a) As a third person who pays with the

knowledge and consent of the debtor, T may claim
from D the amount by which he pays, which was PhP
50,000.
This notwithstanding that the payment
benefitted D only in the extent of PhP 40,000, as he
paid the first instalment already. In addition, T may
compel the creditor C to subrogate him in Cs rights.
2

Hence, in the event D is unable to pay T, T may

foreclose the chattel mortgage or Ds car.
The remedy of D is to recover the excess PhP
10,000 payment from the creditor C under the
principle that no one should unjustly enrich himself at
the expense of another. (6)
b) The obligation in the instant case is an
alternative obligation since Aaron is alternatively
bound to render different prestations.
In alternative obligations, the performance
of one is sufficient compliance. In determining
which prestation to deliver however, the right
of choice belongs to the debtor, unless
expressly granted to the creditor.
In the instant case, since there is no express grant
of the right to choose to Benjamin, the right of choice

belongs to Aaron. The remedy of Aaron depends on

whether he has already communicated his choice to
Benjamin at the time the watch was destroyed due to
Benjamins fault. If the watch was destroyed before
the choice was communicated to Benjamin, Aaron may
still choose to deliver the specific ring or the specific
necklace. However, if because of the destruction of the
watch, he is unable to make a choice according to the
terms of the obligation, Aaron may choose to rescind
the same with damages.
If, however, Benjamins destruction was after
Aaron has already chosen to deliver the watch, it is
submitted that the obligation is extinguished. If,
however, Aaron chose the other prestations, he shall be
obliged to deliver it to Benjamin without prejudice to
Benjamins liability for the destruction of the watch.
(7)