Obligations and Contracts Part 1: A Review Guide
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- Опубліковано 7 вер 2024
- If you are a Bar Reviewee, a law student, an undergrad business law student, or someone who just wants to know more about the Law on Obligations, this video is for you. Also, try to answer the exercises at the end of the video. Please like, subscribe and share!
Try lang kog answer sa second exercise, Atty. First Question: Compensation is defined by law to have taken place when two persons, in their own right, are creditors and debtors of each other. Second Question: XYZ bank was correct in applying compensation because both of them are bound by each other as principal and creditor of each other at the same time. According to the law on banking, Juliu is the creditor of XYZ Bank who agrees to refund the same amount deposited by Juliu or any part thereof upon demand. On the other hand, by virtue of the housing loan applied by Juliu, XYZ Bank became his creditor. As both debts are due, liquidated, and demandable, Juliu's consent is no longer required. Compensation, therefore, is correctly applied here. (waaahhhh...ambot nalang!) Oblicon for a dummy like me kaayo ni nga lecture. Big help kaayo! Salamat sa simplified lecture, Atty. Al.
1. Under Article 1157 of the New Civil Code, the sources of obligation are the following: (a) law; (b) contracts; (c) quasi-contracts; (d) acts or omisions punished by law; and (e) quasi-delicts.
In the given case, Atty. Campos have no right to attend the board meeting of ABC Corporation as he was no longer a member of ABC Corporation's Board of Directors. Under the law, only members of the Board of Directors of a corporation and its competent officers have the right to attend in a board meeting. Consequently, ABC Corporation does not have the obligation to allow Atty. Campos to attend in its board meeting.
2. Compensation is the extinguishment in the concurrent amount of the obligation of those persons who are reciprocally debtors and creditors of each other.
In the given cse, XYZ Bank is correct in applying compensation or set-off. The case presented the existence of a legal compensation which takes place by operation of law even against the will of the interested parties and from the moment there exists a reciprocal concurrence of debts and all the requisites given by the law are present.
Here, Julius and XYZ Bank are bound principally and at the same time they are a principal creditor of each other having been decided by the Supreme Court that the relation of the bank with its depositor is akin to that of the debtor-creditor relationship, the bank being the debtor and the depositor being the creditor of the bank. Also, both debts consists in a sum of money that is both due and demandable and that over neither between Julius and XYZ Bank there be any retention or controversy commenced by third persons and communicated in due time to the debtor.
Hence, legal compensation is proper.
3. Dacion en pago is a special mode of payment whereby the debtor offers another thing to the creditor who accepts it as equivalent of paymentof an outstanding obligation.
Chinabank is correct in invoking the warranty of hidden defects. Under the New Civil Code provisions on obligations and contracts, dacion en pago really partakes of the nature of sale, that is, the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor's debt. Meanwhile, under the law on sales, buyer is protected from any breach of warranty against hidden defects. Therefore, Chinabank is correct in invoking the warranty against hidden defects.
Clear, concise and to the point. Thank you very much, Atty. Jumrani! Can you also do Remedial Law as well as Taxation Law? You are a versatile speaker and lecturer. Thanks.
Art 1278, NCC, “ Compensation shall take place when two persons, in their own right, are creditors and debtors of each other.”
Yes, XYZ bank is correct in applying compensation or set-off.
Julius and the bank are in their own right, creditors and debtors of each other and the obligations are due and demandable.
The deposit made by Julius is governed by the contract of loan and the bank is considered a debtor with respect to such deposit. Julius is also a debtor of the bank because of the loan extended by the said bank to him.
Hence, compensation or set-off is in order.
1.
a) Under the Civil Code, obligation may arise from Law, Contracts, Quasi-contracts, Acts or omissions punished by law and Quasi-delicts.
b) Atty Campos does not have the right to attend the board meeting and also the new board does not have the obligation to allow Atty. Campos to attend the board meeting due to lack of juridical tie.
Jurisprudence dictates that one of the elements of a valid obligation is the juridical tie which binds the parties to an obligation.
In the case at bar, there is no juridical tie that binds Atty Campos to attend the meeting since he is no longer part of the board. While his former arrangement to the old board does not bind the new reorganized board since the parties involved are already different thus it does not bind the new board.
Since the lack of juridical tie between Atty Campos and the new board, Atty Campos does not have the right and the board does not have the obligation to allow him to attend the board meeting.
2.
a) Compensation is a mode of extinguishing an obligation when the parties, who in their own right are reciprocally debtors and creditors of each other.
b)XYZ bank is not correct because only one debt is due. The Supreme Court in its various rulings enumerated the following requisites of a valid compensation:
Both parties must be mutually creditors and debtors in their own right and as principals;
Both debts must consist in sum of money or if consumable, of the same kind or quality;
Both debts are due;
Both debts are liquidated and demandable;
Neither debt must be retained in a controversy commenced by third person and communicated with debtor (neither debt is garnished); and
Compensation must not be prohibited by law.
Since only one debt is due, compensation is not proper. Therefore, XYZ’s bank erred in applying compensation in the said case.
3.
a) Dacion en pago as a mode of extinguishment of an obligation is special form of payment whereby another thing is alienated by the debtor to the creditor who accepts it as equivalent of payment of an existing debt in money.
b) Yes, Chinabank is correct in invoking warranty against hidden defects. Under the law, dacion en pago is governed by the law on sales.
Applying the law on sales, Chinabank in this case is the buyer of the salon equiptments while Norma’s salon becomes the seller thereof. And under the law on sales, warranty against hidden defects may be validly raised by the buyer in case of breach. Therefore, Chinabank is correct in invoking such defense.
Exercise #1
The sources of obligations are as follows, (a) Obligations, (b) Quasi - Contracts, (c) Delicts, and (d) Quasi - Delicts.
No, Atty. Campos does not have the right to attend the said Board Meeting.
The ABC Board cannot compel Atty Campos to attend the said meeting.
In this case, there is no juridical tie between the Board and with Atty. Campos. The Corporation Code provides that only the duly elected Board of Directors may attend such meetings.
Exercise #2
The New Civil Code (NCC) provides that compensation is a mode of extinguishment of obligation. There is simultaneous balancing or weighting of two obligations of two persons who are reciprocally debtors and creditors of each other. It extinguishes to the extent in which the amount of one is covered by that of the other.
The compensation in Julius' case is absent.
In this case, the debts are not yet liquidated and due. There is no clear relationship as well between XYZ and Julius as debtors and creditors. Hence, compensation does not apply
Exercise #3
The New Civil Code defines that Dacion en Pago is the transmission of the ownership of a thing by the debtor to the creditor at an accepted equivalent of the performance of an obligation
Yes, ChinaBank is correct.
The New Civil Code provides that Dacion en Pago is the transmission of ownership of the thing by the debtor to the creditor in the acceptable and equivalent value of the obligation's performance.
In this case, all elements are present between Norma’s Salona and with ChinaBank. The said warranty is a form of proper and legal sale between the two parties.
NORBERTO S. REANZARES
Answers to Exercises:
1. The sources of obligation are: (1) Law, (2) Contract, (3) Quasi-Contract, (4) Quasi-Delict, (5) Delict
Atty. Campos has the right to attend the board meeting and the board has no obligation to allow him to attend the board meeting. Atty. Campos's right to attend the board meeting was only by acquiescence of the previous board and not because he had a legal right, it is so because he was not a member of the Board. Consequently, the new board can legally prevent him from attending the Board Meeting.
2. Compensation shall takes place when two persons, in their own right, are creditors and debtors of each other.
Yes, XYZ Bank is correct. When XYZ Bank accepted the savings account of Julius, it became the debtor of the latter while Julius became its creditor. When Julius applied for housing loan which it granted, the former becomes the debtor of XYZ Bank, hence Julius and XYZ are mutually creditors and debtors of each other. Hence, the act of XYZ Bank in applying Julius savings deposit to the balance of his housing ban is correct.
3. Dacion en Pago is whereby the property is alienated to the creditor in satisfaction of a debt in money, and shall be governed by the law.
No, the China Bank is not correct. When it accepted the items, it could have easily recognized if those items are defective or not. Hence, its defense if hidden defect cannot be accepted because the defense of hidden defect only applies on sales of animals.
i had to look for a different source of lecture regarding this particular subject, and I knew then and there that Atty. Al Jumrani's lectures on ObliCon would really help me understand this subject more than ever. Thanks po Atty.! P.S. mas happy ka tanawon karon than this video 🙂
Haha. Hi Michelle. Kita na diay ka nako ron? Basig tungod ra sa bad lighting mao nang murag dili ko happy tanawon sa video. Haha. Anyway, thank you for the kind words 😍
@@TheHowsofLaw I wish to see you anytime soon, God willing ma lawyer ko. I only see you sa imo online lectures, po Atty., and you are such a vibe and an inspiration po.❤️
Paul Benjamin B. Rosario
Exercise # 1
The Civil Code enumerated the sources of obligation as the following:
1. Law;
2. Contracts;
3. Quasi-contract;
4. Acts or omissions punished by law; and
5. Quasi-delicts.
Atty. Campos do not have the right to attend the meeting.
Under the Civil Code, one of the sources of obligation is a contract.
In this case, the corporation and its board may not allow Atty. Campos to attend corporate meetings since they did not execute a contract with the latter allowing him to attend the same.
Exercise #2
The Civil Code defines compensation as the extinguishment of obligation between two persons who, in their own rights, are creditors and debtors of each other.
Compensation is absent in the case of Julius.
The Civil Code provides that compensation takes place between two persons who, in their own right, are creditors and debtors of each other.
In this case, Julius and the bank are not creditors and debtors of each other, thus, compensation will not apply.
Exercise #3
The Civil Code defines dacion in pago as payment of an obligation wherein property is alienated to the creditor in satisfaction of a debt in money.
Chinabank is correct.
The Civil Code provides that dation in payment is governed by the law on sales.
In this case, dation in payment was made by Chinabank's debtor, hence the provision on hidden defects under the law on salea will govern.
Very useful for our midterms this week. Thank you Atty!
Good luck to your exams! 🙏
Art 1157, NCC: sources of obligations: law, contracts, quasi-contracts, acts or omissions punished by law; and quasi-delicts.
Yes, atty Campos has a right and ABC Board has the obligation to allow him to attend the board meeting. The basis of the right and obligation is the Revised Corporation Code.
Makimkim, Michael M.
1. Laws, contracts, quasi-contracts, delicts and quasi-delicts are the sources of obligation.
2. No, Atty. Campos may is not allowed to attend the board meeting because he already sold his majority share and he was no longer permitted and recognized by the new set of directors.
3. Compensation or set-off is the extinguishment of the amount of the obligation of those persons who are debtors and creditors of each other.
4. No, the bank is not correct in using the savings account of Julius as payment for the housing loan in the absence of the consent of the latter. The contract of deposit and the housing loan is different from each other, the default in one contract may not be automatically compensated by the other.
5. Dacion en pago is a mode of extinguishing an obligation wherein the property of the debtor will be alienated in favor of the creditor as payment of the existing obligation, provided the same was consented by the creditor.
6. Yes, the bank may proceed against the salon because the chairs/seats that were given to them as payment does not satisfy the existing obligation for being defective.
1. a. Sources of obligation are: law, contacts, quasi-contacts, quasi-delicts and delict.
b. Atty. Campos has no right, and the ABC Corporation's Board has no obligation to allow him, to attend the board meeting because Atty. Campos was no longer a member of the board. He was only allowed by the previous Chairman of the board to attend the meeting due to his significant contributions to the company but not an obligation on the part of the Company.
2. a. Compensation or set-off is the extinguishment in the concurrent amount of the obligation of those persons who are reciprocally debtors and creditors of each other. It shall take place when two persons are, in their own right, creditors and debtors of each other.
b. Yes, XYZ Bank is correct in applying compensation or set-off. Bank deposit is considered a loan where the bank is the debtor, hence it can be subject to compensation. The bank is the creditor in the housing loan.
3. a. Dation in payment is where property is alienated to the creditor in satisfaction of a debt in money, shall be governed by the law on sales.
b. Yes, Chinabank is correct in invoking the warranty against hidden defects. As stated above, the dacion en pago shall be governed by the law on sales, thus, it shall be subject to the warranties on hidden defects.
1. The sources of obligation are as follows: Law, Contract, Quasi-Contract, Delict and Quasi-Delict
2. No, Atty. Campos does not have a right and the Corporation is not obliged to allow him to attend the board there is no law or any source of obligation that will show that an unelected stockholder is entitled to join the Board meeting. In the given facts, Atty. Campos was not elected as a member of the Board of Directors of the Corporation and was only tolerated by the previous chairman because of Atty. Campos' contributions to the company.
3. Compensation or set-off as a mode of extinguishing obligations is when there are two obligations between two persons who are in their own right are creditors and debtors of each other.
4. Yes, XYZ Bank is correct in applying compensation or set-off because both Julius and the Bank are the debtors and creditors of each other. Jurisprudence provides that Bank has a creditor-debtor relationship with its depositor. Hence, the bank was correct in applying compensation in Julius' indebtedness.
5.Dacion en Pago as a mode extinguishing obligation is an alienation of a property to satisfy a debt in money.
6. Yes, Chinabank is correct in invoking warranty against hidden defects because under the law, Dacion en Pago is governed by the Law on Sales. Since warranty against hidden defects is a warranty in the law of sales, it is also a warranty in Dacion en Pago transactions. Hence, Chinabank is correct.
1A The sources of obigation are law, contract, quasi-contract, acts or omissions punishable by law and quasi-delict.
1B The Board of ABC Corp has no obligation to allow Atty. Campos to attend the stockholder's meeting. His agreement between the former Chair has been extinguished upon the reorganiztion of the Board.
2A Compensation is a mode of extinguishing to the concurrent amount, the obligations of those persons who in their own right are reciprocally debtors and creditors of each other.
2B XYZ Bank is not correct in applying compensation because the same was not consented by the depositor. The requisites of compensation were not complied with.
3A Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.
3B Chinabank is not correct because there is no contract of sale between the parties.
Diampuan
The source of obligation arises, from the contract between the former Board of Director of the Company and Atty. Campos. The fact of giving Atty. Campos the right to attend the Board Meeting because of his contribution to the company is duly permitted by the former Chairman of the board until a new Board have decided not to permit him attend the subsequent board meeting.
In the case at bar, Atty Campos does not have any right to attend the Board Meeting because the law or the Corporation Code so provides that only duly elected Board of Directors may attend such meetings.
Therefor, Atty. Campos may not have the right to attend the board meeting because of operation of law.
For the second problem, the compensation or set off in extinguishing the obligation in the case at bar is when, there are two (2) parties who are both creditors and debtors of each other. Julius, being the creditor-depositor of XYZ bank and the bank for awarding housing loan to Julius, as well as being its debtor over his deposited money.
In the case at bar, XYZ Bank is not correct in applying the said set-off because the law prohibits garnishment of a depositors money without the written approval of the Court.
XYZ Bank's act is not lawful.
For the third problem, Dacion en pago means, the debtor pays in kind and therefor cedes or assigns properties to his creditors for payment of his debt.
China Bank may not be correct in invoking the warranty for the hidden defects, because the party is not buyer and seller of each other in the said contract.
Therefors, Norma Salon, may be freed from its obligations.
Francisco M. Ramos, UE Manila
Thank You Idol Atty. 🥰
Big Help ito sa Exam namin 😁
1. a. The following are sources of obligations: (1) Law; (2) Contracts; (3) Quasi-Contracts; (4) Quasi- Delict; and (4) Quasi Delicts.
b. Atty. Campos cannot compel the Board of ABC Corporation to permit him to attend meeting because practice or custom is not a source of a legally demandable or enforceable right, and an obligation imposed on a person, and the corresponding right granted to another, must be rooted in at least one of the five sources of obligations provided under Article 1157.
2. a. Compensation is a mode of extinguishing of obligation of persons who in their own right are reciprocally debtors and creditors of each other.
b. The Bank is correct in applying compensation. The deposit made by Julius with the bank is governed by contract of loan and the bank is the debtor. Julius is also the debtor of the bank with respect to the housing loan extended to Julius. Since, Julius had already defaulted from payment of his loan, his liability is already due and demandable.
3. a. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.
b. Chinabank is correct in invoking the warranty against hidden defect. Dacion en pago partakes the nature of contract of sale, as result thereof, Norma’s Salon's seats and blowers are covered with warranty against hidden defects and shall be responsible to the Chinabank for defective salon seats and blowers
CORTEZ, ANNA
1.a) The sources of obligations are Law, Contracts, Quasi-contract, Quasi -delicts, and Delicts
1.b) No, Atty Campos does not have the right and the ABC Corporation ‘s Board does not have the obligation to allow him to attend the board meeting .
Under the Law on Corporation, which is a source of obligation, a shareholder has the right to attend regular and special meetings called but does not have a right to attend meetings of the board. Thus, a corporation does not have the obligation to allow such minority stockholder to attend board meetings.
In the present case, ABC Corporation’s board does not have the obligation to allow Atty Campos, being a minority stockholder to attend the board meetings since the law does not provide for such right.
2.a) Compensation is the extinguishment of obligations of those parties who are reciprocally debtors and creditors of each
other.
2.b) XYZ Bank is not correct in applying compensation.
Under the law, there is Compensation when each obligors is bound principally, that both parties are at the same time a principal creditor of the other and that the two debts be due, liquidated and demandable.
In the case at bar, even though there is a debtor-creditor relationship between XYZ Bank and Julius being the depositor, there is no debt that is due and demandable in this type of relationship. Thus, XYZ Bank and Julius are not reciprocally debtors and creditors of each other and compensation or set-off is not applicable.
3.a) Dacion en Pago or Dation in Payment is a mode of extinguishment of obligation whereby there is alienation to the creditor
of the debtor’s property with the consent of the creditor for the satisfaction of the monetary obligation of the debtor.
3.b) Yes, Chinabank is correct in invoking warranty against hidden defects since in dacion en pago, there is alienation of
debtor’s property to creditor and application of the law on sales particularly on warranties is appropriate .
Hello po Atty. My professor who is a judge in my city recommended your lectures. Hehhe I'm already a subscriber before he mentioned and praised your video lectures. 😅
Wow! Thank you! I’m honored. Best regards to Judge and all the best to you future Attorney! 🙏
Very useful lectures. Please, could we also have the answers to the exercises, Sir. Thank you very much
This is a Big Help Atty, thank you and God Bless more Power to your Channel, more Future Videos pls...
You're welcome 😊
1. The sources of obligations are as follows:
a. Law
b. Contracts
c. Quasi-contracts
d. Quasi-delicts
e. Delicts
No, Atty. Campos do not have a right to attend and the ABC Corporation neither has an obligation to allow him to attend the board meeting. There is no juridical tie that binds Atty. Campos and ABC Corportion.
2. Compensation or set off is a mode of extinguishment of an obligation which takes place when two persons are creditors and debtors of each other, in their own right.
No, XYZ Bank is not correct in applying compensation or set off.
In order to have a valid compensation to extinguish an obligation, both parties must be mutually creditor s and debtors in their own right as principals; both debts must be due and demandable; both debts must consist of sum of money, or if consumable, of the same kind or quality; and neither debt must be retained in a controversy commenced by a third person;
In this case, applying the requisites above, there is no valid compensation. XYZ Bank and Julius are not reciprocally creditor and debtor in their own right and not bound to each other.
3. Dacion en pago is a mode of extinguishment of an obligation whereby the debtor alienates in favor of the creditor property to satisfy his monetary debt.
No, Chinabank is not correct in invoking the warranty against hidden defects.
Dacion en pago in this case partakes of and is governed by law on sales. The law on sales pertaining to warranty in hidden defects maybe applied. However, Chinabank can no longer avail of the provision of the warranty on hidden defects because the action is now barred by prescription. The action should have been brought by Chinabank against Norma’s salon after 6 years from the delivery of the things subject of dacion en pago. In this case, 7 months is beyond the prescriptive period.
JUN G. LUMABI
Answers to the exercises:
NO.1:
a. The following are the sources of obligation: (a) law; (b) contracts; (c) quasi-contracts; (d) delicts; and (e) quasi-delicts.
b. No, Atty. Campos have no right to attend the board meeting because his obligation as President and Chairman of the Board
was already ceased. He has no obligation to do or attend the board meeting. Likewise, the corporation has no obligation to allow him in attending the board meeting as there is no contracts between them that was created or agreed upon.
NO.2:
a. Compensation or set-off is a mode of extinguishing obligations between a creditor and debtor that are mutually agreed upon
when the debts are due, demandable and fully liquidated.
b. Yes, XYZ Bank was correct in applying compensation or set-off since Julius and the bank are mutually debtor and creditor with each other. Moreover, the obligation of Julius with XYZ Bank was already due and demandable as he was defaulted in paying the loan amount.
Therefore, XYZ Bank is correct.
NO.3:
a. Dacion en pago is a mode of extinguishing an obligation wherein the debtor paid the creditor in kind or by delivering a property other than his money for the payment of his obligation.
b. Yes, Chinabank is correct in invoking the warranty against hidden defects since dacion en pago is applicable on the on sales.
Here, although the alienation of 20 salon seats and 10 hair blowers to Chinabank is with consent, Norma's Salon was acted with injustice, thus, it still be liable to Chinabank.
Dondon D. Samoy:
1. The sources of obligations are:
Laws
Contracts
Quasi Contracts
Delicts
Quasi Delicts
Atty. Campos does not have the right to attend the Board meeting and likewise, the Board does not have the obligation to allow him to attend either. The law is clear, the sources of obligations are: Laws, Contracts, Quasi Contracts, Delicts and Quasi Delicts. In the absence of the above mentioned sources of obligation, Atty. Campos cannot assert his right to attend the Board meeting and the Board is not obligated to allow Atty. Campos to attend either.
2. Compensation is one of the mode of extinguishing an obligation when two persons in their own right are creditor and debtor of one another.
The bank is correct in applying compensation or set off. Under the law compensation takes place when two persons are creditor and debtor of each other in their own right. I the case above, compensation should be allowed since Julius is a debtor of the bank over a loan he took with the bank and likewise, the bank is a debtor of Julius over his savings account with the bank, hence, the bank is correct in applying compensation or set off.
3. Dacion en pago refers to the mode of extinguishing obligation wherein a debtor may cede or assign his property to his creditors in payment of his debt.
Chinabank is not correct when it invoke the warranty against hidden defects since at the time the properties were given to the Chinabank, it knew of the fact that the properties were secondhand and the fact that seven months has already elapsed since it was given to them, hence Chinabank is not correct to invoke the warranty againsthidden defects.
1. a. Under the law, the sources of obligations are law, contracts, quasi-contracts, delicts and quasi-delicts.
B. No, Atty. Campos does not have a right to attend in the Board meeting of ABC Corporation and the latter has no obligation to allow Atty. Campos to attend therein as he is no longer part of the corporation.
2. a. Compensation or set-off as a mode of of extinguishing obligations takes place when two persons in their own right are creditors and debtors of each other.
b. Yes, XYZ Bank was correct in applying compensation or set-off. A bank deposit is a contract of loan where the depositor is the creditor and the bank is the debtor. Julius is also the debtor of the bank with respect to his housing loan. Both are debtors and creditors of each other, thus XYZ was was correct in applying compensation or set-off.
3. a. Dacion en pago as a mode of extinguishing an obligation takes place when the debtor instead of paying in cash, pays in kind to the creditor. The property is alienated to the creditor in satisfaction of a debt in money, and shall be governed by the law on sales.
b. Yes. Chinabank is correct in invoking the warranty against hidden defects because dacion en pago is applicable on sales.
1. The sources of obligations are law, contracts, quasi-contracts, delicts and quasi-delicts.
No, Atty Campos has no right to attend the board meeting as he ceased to be a director of the company. Hence, he cannot assert his right to attend board meeting and may only do do if the new board will allow him.
2. Compensation or set off is a mode of extinguishing to the concurrent amount the obligations of persons who in their own right are reciprocally debtors and creditors of each other.
Yes, The deposits of money in banks is governed by the provision of simple loan. Under the rule, the bank is the debtor while the depositor is the creditor. Julius is also a debtor by said bank because of his loan. The loan of Julius is due and demandable, hence, compensation is allowed by law.
3.Dacion en pago is the delivery a thing by the debtor to the creditor as an equivalent in the performance of the obligation.
Chinabank is not correct since it was known that the properties delivered were secondhand. thus, it is not covered by warranty against hidden defects.
excited to listen to you po in our LTD pre-bar review Atty. Thanks for this vid.
Dacion en pago or dation in payment is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation( Phil Lawin Bus vs CA).
It is submitted that warranty against hidden defect is not applicable in dacion en pago. As such, Chinabank is not correct in invoking this warranty as dacion en pago is not a contract of sale.
1.The sources of obligation are law, contracts, quasi-contracts, quasi-delicts, delicts. atty. Campo does not have the right and the corporation does not have the obligation to allow atty. campo to attend the meeting. In this case, the obligation to allow Atty. Campo to attend arises only from the contract between the outgoing chairman and Atty. Campo. This contract ,however, does not extend to the incoming chairman.
2. Compensation refers to extinguishment of obligation of persons who are reciprocally debtor and creditor of each other. The bank was not correct. Compensation does not apply in this case because the debts are not yet due and liquidated.
3. Dacion en pago refers to alienation of property in favor of the creditor in satisfaction of debt of the debtor. In this case, the bank is correct in invoking the warranty of hidden defects. In dacion en pago the law on sales applies, and thus, invocation of warranty against hidden defects is correct.
Thanks for this atty! Hope na magkaroon for Law on Partnership.
1. a. The sources of obligations are law, contracts, quasi-contracts, delicts and quasi'delicts.
B. No, Atty. Campos does not have a right to attend the board meeting and at the same time, ABC Corporation does not have the obligation to allow him to attend said board meeting. The elements of an obligation are there must be an active subject, a passive subject, a juridical tie and a prestation. The former Board of Directors merely gave him the permission to attend. There is no obligation on the part of the Board of Directors to let him attend the Board Meeting because he is not an elected Board Member. There is no prestation, therefore, there is no obligation.
2.a. Compensation or set-off is the extinguishment in the concurrent amount of the obligation of those persons who are reciprocally debtors and creditors of each other.
B. No, XYZ Bank is not correct in applying compensation or set-off with regard to the default of the Housing Loan of Julius. The requisites of legal compensation are that each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other and that both debts consist in a sum of money, or if the things due are consummable, they be of the same kind, and also the same quality if the latter has been stated. A bank deposit and a housing loan are not the same kind of debt that the law contemplates when it speaks of compensation. XYZ Bank and Julius are not reciprocally debtors and creditors of each other. Therefore, compensation cannot be applied in this case.
3. A. Dacion en pago can be applied when there is an existence of a monetary obligation, alienation to the creditor of a property by the debtor with the consent of the former and there is satisfaction of the money obligation of the debtor.
B. No, Chinabank is not correct in invoking warranty against hidden defects. Even though the law on Sales applies in Dacion en Pago, warranty against hidden defects may be invoked by the buyer only within 6 months from the Sale as provided for under the New Civil Code. In this case, 7 months has already passed from the date of sale. Therefore, Chinabank cannot invoke warranty against hidden defects.
- Camille Adalem
1. a)The sources of obligation are as follows: law, contracts, quasi-contracts, delict, and quasi-delicts.
b) Atty. Campos does not have the right to attend the board meeting since he became a minority stockholder. Moreover, he cannot rely on the arrangement before since it was made with the prior board and only upon its tolerance.
2.a) Compensation or set-off is a mode of extinguishing the obligations of persons who in their own right and as principals are reciprocally debtors and creditors of each other.
b) No, since a savings account is not of the same kind as that of a loan, hence no compensation can be effected. Furthermore, without authorization or prior agreement, the savings account cannot be used to off-set the loan.
3.a) Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.
b) No, since the warranty on hidden defects is applicable only in a contract of sale. In dacion en pago, the obligation is extinguished upon the delivery of the thing to the extent of the value of the thing delivered. Furthermore, it took seven months for the bank to raise the hidden defects, which is beyond the period for raising such issue.
EXERCISE NO. 1
1. The sources of obligations are Law, Contacts, Quasi-Contracts, Delicts and Quasi-Delicts.
2. No. Atty. Campos has no right and the ABC Corporation’s Board has no obligation to allow him to attend the board meeting.
Under the law, one of the sources of the obligation is contract.
Here, there is no contract between Atty. Campos and ABC Corporation’s Board. There is no existing obligation between them. Hence, Atty. Campos has no right and the ABC Corporation’s Board has no obligation to allow him to attend the board meeting.
EXERCISE NO. 2
1. Compensation or set-off is a mode of extinguishing to the concurrent amount the obligations of persons who in their own right and as principals are reciprocally debtors and creditors of each other.
2. Yes. XYZ Bank is correct in applying compensation or set-off.
Under the law, the deposit made by Julius is governed by the contract of loan and the bank is considered a debtor with respect to such deposit. Julius is also a debtor of the bank because of the housing loan extended by said bank to Julius. Hence, XYZ Bank is correct in applying compensation or set-off.
EXERCISE NO. 3
1. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.
2. Yes. Chinabank is correct in invoking the warranty against hidden defects.
Under the law on sales, the seller shall be responsible for warranty against the hidden defects which the thing sold may have, should the defect render it unfit for its intended use, or if the defect diminishes its fitness for such use to such an extent that, had the buyer been aware of such defect, he would have purchased it for a lower price, or not have purchased it at all.
1.) The sources of obligation are law, contracts, quasi-contract, quasi-delicts, and delicts, or acts or omissions punishable by law as defined in the Revised Penal Code or special laws.
Atty. Campos has no right to compel the Board of Directors to allow him to attend the Board Meeting.
Under the law on obligation, a right is a claim or title to anything that is enforceable by law. For every right enjoyed by any person, there is a corresponding obligation on the part of another person or party to respect such right in accordance with Article 1157 as sources of obligation which arise from the law, contracts, quasi-contracts, delicts, or quasi-delict.
Here, the claim of Atty. Campos of his right to attend the Board of Directors meeting has no basis in accordance with the law. The privilege given to him by the previous Chairman of the Board of Directors to attend the Board meeting was only a mere accommodation in respect of his past good performance which does not accrue into an obligation on the part of the ABC Corporation as it was not was granted by law, contract, or any other legal source, the right to attend the Board meeting.
Therefore, Atty. Campos has failed to establish the basis or authority for his alleged right to participate in a Board meeting of the ABC Corporation.
2.) Compensation is one of the modes in extinguishing an obligation whereby the concurrent amount of obligation of those persons who are reciprocally debtors and creditors each other.
No, the XYZ Bank was not correct in applying for compensation or set off.
Under the law on obligation, compensation will take place only when both obligations are fully liquidated and demandable.
Here, the housing loan of Julius with XYZ Bank is not yet fully demandable and liquidated as his failure to pay one installment payment does not make the entire loan obligation due and demandable.
Therefore, XYZ Bank was not correct in applying for compensation or set-off of his loan installment with his savings account.
3.) Dacion en pago is a payment of an obligation by a debtor in a form of in-kind instead of cash wherein the debtor alienates his property to the creditor in satisfaction of his money obligation.
No, Chinabank was not correct in invoking the warranty against hidden defects.
Under the law on obligation, the law on sales shall apply in dacion en pago as to warranties in relation to properties being alienated to the creditor by the debtor as payment of his obligation. Warranties on hidden defects under the law on sales do not include sales on second items or products.
Here, the 20 salon seats and 10 hair blowers of Norma's Salon, Inc. were all second-hand and used salon equipment not covered under warranties on hidden defects but were accepted by Chinabank as dation payment of the debts of the former. In the addition, the nature of the business of a bank requires the exercise of utmost diligence in all their dealings with their clients in which in this case they could have carefully check the said second-hand or used salon equipment upon its delivery, hence, the failed its fiduciary obligation to exercise utmost diligence in dealing with their client.
Therefore, Chinabank is not correct in invoking the warranty against hidden defects.
I
• The Sources of Obligation are the following: Law; Contracts; Quasi-contracts; Acts or omissions punishable by law; and Quasi-delicts.
• No. Atty. Campos does not have a right -- and the ABC Corporation Board the obligation to allow him -- to attend the board meeting.
The Court held that an obligation imposed on a person, and the corresponding right granted to another, must be rooted in at least one of the five sources of obligations enumerated under the New Civil Code. The mere assertion of a right and claim of an obligation in an initiatory pleading, whether a Complaint or Petition, without identifying the basis or source thereof, is merely a conclusion of fact and law. In the problem given, Atty. Campos merely claimed that he has the right attend and the board the obligation to permit him to attend. He failed to show the basis or source of the said right and obligation. Thus, Atty. Campos does not have a right -- and the ABC Corporation Board the obligation to allow him -- to attend the board meeting.
II.
• Compensation or set-off is a mode of extinguishing obligation which takes place when two persons, in their own right, are creditors and debtors of each other.
• Yes. XYZ was correct in applying compensation or set-off.
The Court held in one case that all the elements of legal compensation are present therein. The obligors bound principally are at the same time creditors of each other. Petitioner bank stands as a debtor of the private respondent, a depositor. At the same time, said bank is the creditor of the private respondent with respect to the dishonored U.S. Treasury Warrant which the latter illegally transferred to his joint account. The debts involved consist of a sum of money. They are due, liquidated, and demandable. They are not claimed by a third person.
Here, XYZ bank is a debtor with respect to the savings account of Julius while the said bank is, on the other hand, a creditor with respect to the housing loan applied for by Julius. Based on this, XYZ was correct in applying compensation or set-off.
III. • In dacion en pago, property is alienated to the creditor in satisfaction of a debt in money. The debtor delivers and transmits to the creditor the former's ownership over a thing as an accepted equivalent of the payment or performance of an outstanding debt. As a mode of payment, dacion en pago extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon by the parties or as may be proved, unless the parties by agreement-express or implied, or by their silence-consider the thing as equivalent to the obligation, in which case the obligation is totally extinguished.
• Chinabank is not correct in invoking the warranty against hidden defects.
Under the law, Dation in payment shall be governed by the law on sales which in turn provides that actions arising from the provisions on warranty against hidden defects shall be barred after six months from the delivery of the thing sold. In the given problem, considering that Chinabank found that the salon seat and hair blowers were defective only after seven months, its action has already prescribed. Thus, it is not correct in invoking the warranty against hidden defects.
1. a. Sources of obligation are 1. law, 2. contracts, 3. quasi-contracts, 4. delict and 5. quasi-delict
b. Atty. Campos has no right to attend the Board meeting and the Board is under no obligation to allow him to attend. Atty. Campos is no loner an elected member of the Board. His attendance is the first board meeting was by mere tolerance or consideration extended to him by the former Chairman.
2. a. Compensation or set-off is a mode of extinguishing the concurrent obligations of persons who in their own right and as principals are reciprocally debtors and creditors of each other.
b. XYZ Bank is correct in applying compensation or set-off. In the case at bar, the deposit made by Julius is governed by the contract of loan and the bank is considered a debtor with respect to such deposit made by Julius in his savings account.
3. a . Dation in payment is made if upon the agreement of the parties, a thing is delivered to the creditors in lieu of the original prestation. in such as case, the rules on sales shall apply.
b. Yes, the bank can sue the salon for breach of warranty since in cases of dacion en pago, the rules on sales will apply. According to Art. 1561 of the Rules on Sales, the vendor shall be responsible for the warranty against hidden defects which the thing sold may have, should they render it unfit for the use for which it is intended, or should they diminish the fitness for such use to such an extent that, had the vendee been aware thereof, he would not have acquired it or would have given a lower price.
--- C. Ocampo
Hello Atty! At 24:44 you mentioned that corporate officers are held solidarily liable in the case of Polymer vs Salamuding. But in that case, the corporate officer (Mr Ang) was not held solidarily liable with the corporation because bad faith or malice was not established correct?
1. A. Under law, the sources of obligations are laws, contracts, quasi-contracts, delict, and quasi-delicts.
B. No, Atty. Campos does not have a right - and the Board, the obligation to allow him - to attend the meeting.
Under the law, only the members of the Board are allowed to attend the board meetings. Since Atty. Campos was not a board member, he also does not have a right to attend the said meetings.
The Board also does not have the obligation to allow Atty. Campos to attend the board meetings. Under the law, obligation arises only from law, contracts, quasi- contracts, delict, and quasi-delicts.
Here, the privilege given to Atty. Campos by the former Chairman to attend board meetings despite not being a member of the board did not arise from any of the sources enumerated in the law. Hence, the Board of ABC Corporation does not have the obligation to extend such right to Atty. Campos.
2. A. Under the law, compensation as a mode of extinguishing obligations, takes place when two, persons, in their own right, are creditors and debtors of each other.
B. Yes, the bank is correct in applying the compensation or set-off. Under the law, compensation takes place by operation of law. The requirements for a legal compensation to set-in are: that each obligors be bound principally, and that they be at the same time a principal creditor of each other; and that both debts consists in a sum of money, or if the things due are consumable, they be of the same kind and quality if the latter has been stated.
Here, considering that under the law the relationship between a bank and a depositor is that of a creditor-debtor where the bank is the debtor, as such Julius and the Bank are creditors and debtors of each other for a sum of money, the requirements of legal compensation are satisfied.
Hence the bank is correct in applying compensation.
3. A. Under the law, in dacion en pago, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt.
B. Yes, Chinabank is correct in invoking the warranty against hidden defects. Under the law, dacion en pago is governed by law of sales. Here, the warranty against hidden defects that was raised by Chinabank is among the warranties, a seller is responsible for. It is covered by the law of sales. Hence, the Chinabank correctly invoke the warranty against hidden defects.
Mallari, Jeremiah
1. 1. As provided by Article 1157 of the New Civil Code, obligations arise from:
a)Law
b) Contracts
c)Quasi-Contracts
d)Quasi-Delicts
e)Delicts
1.2. Atty. Campos does not have a right to demand for his admittance to the meeting.
There is nothing from any of the provided sources of obligation that provide for the latter’s duty to admit atty. Campos. The acquiescence of the former chairman to allow atty. Campos in attending the meetings does not bind and give rise to an obligation of the Board to admit him.
2. 1. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other.
2.2 Yes. As provided by article 1279 of the New Civil Code, in order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other;
(2) 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;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor.
The Court has ruled in several instances that banks and depositors are effectively debtor and creditor of each other. That deposits shall be treated as that of a simple loan.
In this case, it can be gleaned upon that Julius and XYZ Bank are in their own right, creditors and debtors of each other. Both debts consist of a sum of money, due and demandable.
The set-off is proper.
3.1. Dacion en pago, as a special mode of payment, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that is, the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor’s debt.
3.2. No. Chinabank can no longer invoke the warranty against hidden defects. The Civil Code provides that Actions arising from the provisions of warranties shall be barred after six months, from the delivery of the thing sold. In this case, the defects were found seven months after delivery, hence action is already barred.
Answers
No. 1.
Sources of obligations are as follows:
a. Law;
b. Contracts;
c. Quasi-contracts;
d. Delict;
e. Quasi-delict
Atty. Campos has no right to attend and the Corporation's Board have no obligation to allow him to attend the board meeting. Right to attend Board meeting is reserved only officers elected by the stockholders.
Under the law, one of the source of the obligation is law.
From the facts, Atty. Campos is a minority stockholder and not a member of the Board. Meeting is only reserved to the members of the Board and the Board has the right to deny his entry in the meeting.
No. 2
Compensation
It is a situation where each one of the obligors be bound principally and he he be at the same time a principal creditor of the other.
XYZ Bank is correct in applying compensation or set-off.
The deposit of Julius is governed by the contract of loan and the bank is considered a debtor with respect to the deposit and Julius is also a debtor of the bank because of the loan extended by XYZ Bank to Julius.
No. 3
Dacion en Pago
It is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.
The thing offered as an accepted equivalent of the performance of the obligation where the thing offered is considered as the purchase price to have the effect of totally extinguishing the obligation in this case 20 saloon seats and 10 hair blowers.
Acceptance of Chinabank of said properties extinguished the obligation and the warranty against hidden defect does not apply.
The sources of obligation are as follows:
Law
Contact
Quasi Contracts
Delicts
Quasi Delicts
No Atty Campos does not have any right nor the company obligated to allow Atty Campos to attend the meeting for there is no source of obligation from which Atty Campos may derive his right to attend nor any source of obligation that the company may be compelled to allow Atty. Campos to attend the meeting. Under the facts of the case, Atty. Campos is merely tolerated to attend the meeting and not under any obligation.
2. No XYZ Bank is not correct in applying compensation or set-off.
Under the Law compensation or set-off is the extinguishment of the concurrent amount of the obligation of those persons who are reciprocally debtors and creditors of each other.
There are two types of compensation or set-off:
Legal compensation or set-off and voluntary compensation or set-off.
The requisites of legal compensation or set-off are as follows:
That each of the obligors be bound principally and that he be at the same time a principal creditor of the other
That both debts be consist in a sum of money
That the two debts be due
That they be liquidated and demandable
That over neither of them there be any retention or controversy commenced by third persons and communicated in due time to the debtor.
The requisites of conventional compensation or set-off are as follows:
That each of the parties can dispose of the credit he seeks to compensate
That they agree to mutual extinguishment of the credits.
In the case at bar, the requisites of legal or conventional compensation or set-off was not fulfilled.
In the case of legal compensation or set-off, the two debts are not both due or demandable, the loan may be due and demandable but the deposits are not.
In case of voluntary compensation or set-off, there was no mutual agreement for the extinguishments of their credits.
3.
Dacion en pago dation in payment refers to the extinguishment of an obligation provided the following requisites are present:
There must be the existence of a monetary obligation
Alienation to the creditor of a property by the debtor with the consent of the former
Satisfaction of the money obligation of the debtor
Yes Chinabank is correct in invoking the warranty against hidden defects.
Under the Law, in dacion en pago or dation in payment, the law on sales is applicable.
Under the Law on sales the warranty against hidden defects is observed between parties. This as as the law on sales is applicable to dation in payment, the bank was correct in invoking the same.
1. Under Art.1156 the sources of obligations are law, contracts, quasi contracts, delicts and quasi-delicts. Atty. Campos does not have the right and the to attend the board meeting and the corporation does not have the obligation to allow Atty. Campos said right because the same does not fall in any of the sources of obligations under the Civil Code. The previous right granted to him to attend Board meetings is a mere liberality which does not ripen into a vested right.
2.Compensation is a mode of extinguishing to the concurrent amounts the obligation of persons who, in their own right and as principals, are reciprocally creditors and debtors of each other. The bank was not correct. Compensation does not apply to the instant case because Julius and the bank are not creditors and debtors of each other as far as the savings account of Julius are concerned which the bank applied as payment to his loan balance.
3. Dation in payment is the alienation of property to the creditor in satisfaction of a debt in money. No, Chinabank is not correct in invoking the warranty against hidden defects in this case because such can be invoked only in Cession which is akin to a contact of sale and not in dation in payment.
Exercise no. 1
Source of obligation - Obligation, Contracts, Quasi-Contracts, Delicts, and Quasi-Delicts.
No. Atty. Campos does not have the right to attend the Board Meetings and the ABC Board has no obligation allowing Atty. Campos to attend the same.
Under the Civil Code, one of the sources of obligation is contract. Rights and obligations of directors are defined in the By-Laws of the corporation, which is the social contract between the corporation and its stockholders.
In the case at bar, Atty Campos is no longer part of the board. Company’s By-laws should determine the right of the stockholder like Atty Campos, otherwise it is within the discretion of the members of the board to determine who can attend the board meetings. Thus, company practice such as allowing Atty Campos to attend Board Meetings, cannot be a source of obligation.
Exercise no. 2
Compensation is the extinguishment in the current amount of the obligation of those persons who are reciprocally debtors and creditors of each other.
There is no compensation in Julius’ situation.
Under the Civil Code, compensation takes place when the parties are debtors and creditors of each other and both obligations are due and demandable.
In the case at bar, the relationship between the XYZ bank and Julius are not debtors and creditors of each other. Hence, there is no compensation to speak of.
Exercise no. 3
Dacion En Pago is the payment or performance of an obligation where the parties agreed to change its prestation.
Yes, Chinabank is correct in invoking warranty against hidden defects.
Warranty against hidden defects is proper when the transaction is sale.
In the case at bar, the transaction is a contract of loan. Thus, warranty against hidden defects cannot be invoked by Chinabank.
1. Law, Contracts, Quasi Contracts, Delicts and Quasi Delicts
1. a. No, he has no right to attend. The corporation has no obligation to let him attend the meeting.
2. A condition in which two parties are mutually creditors and debtors of each other and both obligations are due and demandable.
2. a. No, the bank is not correct. Julius and XYZ bank are mutually creditors and debtors of each other. The Bank is not correct. Compensation or set-off takes place when both parties are both mutually creditors and debtors of each other and that both obligations are due and demandable. In the case above, Julius defaulted in payment of his amortization.
3. Dation in payment or dacion en pago is a special form of payment whereby another thing is alienated by the debtor to the creditor who accepts it as equivalent of payment of an existing debt in money.
3.b No, Chinabank cannot invoke warranty against hidden defects. It may be invoked only in cases of sale of goods and services.
In Dation in payment or dacion en pago, there is no sale. The things given to Chinabank in this case is treated as an equivalent of payment of an existing debt in money.
Article 1248 of the NCC as cited was mistakenly quoted. Please refer to the NCC. Nonetheless, it's a very informative lecture.
I.
a. Under the Civil Code, the sources of obligation are laws, contracts, quasi-contracts, delicts, and quasi-delicts.
b. No, Atty. Campos does not have the right to attend the board meeting because he is not elected as a director of the reorganized Board. There being no juridical tie between them, the Board does not have any obligation to allow him to attend the meeting.
II.
a. Compensation is the extinguishment to the concurrent amount of the debts of two persons who, in their own right, are debtors and creditors of each other.
b. No. XYZ Bank is not correct. Julius and XYZ Bank are not mutual debtors and creditors of each other. The default in the housing loan cannot be automatically compensated by paying from his savings account since Julius did not give his consent.
III.
a. In dacion en pago, as a special mode of payment, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that is, the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor’s debt. As such, the essential elements of a contract of sale, namely, consent, object certain, and cause or consideration must be present.
b. No, Chinabank is not correct in invoking warranty against hidden defects. Actions arising from warranty against hidden defects should be initiated within six months from the delivery of the property sold.
Here, Chinabank found out about the defects after seven months.
Just in time for my subject this semester. Thank you!
Nice. Thank you for watching and good luck to law school! :)
1. The sources of obligation are : Law; contracts; quasi-contracts; delict; and, quasi-delict.
No, Atty. Campos does not have the right to attend and ABC Corp's Board of Directors do not have the obligation to allow Atty. Campos to attend the meeting. Under the law, only those who were elected to the Board of Directors are allowed to attend the meeting of such Board. Here, Atty Campos has not been elected as member of the Board of ABC Corp. Hence, he does not have any right to attend the meeting of such Board.
2. Compensation is a mode of extinguishing an obligation where the parties are principal creditors and debtors of each other .
No, XYZ bank is not correct in applying compensation. Under the law, in order for compensation may be availed of, two persons must be principal debtors. and at the same time they are also creditors of each other Here, there is only 1 principal debtor involved. Hence, the Bank is not correct in applying compensation in the present case.
3. Dacion en Pago is one where the parties to an obligation agree that the delivery of the ownership of a thing by the debtor to the creditor in lieu of the original obligation is the equivalent of such original obligation.
No, it is not correct in invoking the warranty against hidden defects. Under the law, the parties must agree that the thing delivered to the creditor shall be the equivalent of the obligation. Here, Chinabank did not agree that the items from Norma's salon shall be the equivalent of such obligation. Hence, Chinabank is not correct in invoking th warranty against hidden defects.
Thank you for this Atty.
Nadine Gabao
1. The sources of obligations according to Article 1157 of the Civil Code are as follows: (1) Law; (2) Contracts; (3) Quasi‐contracts; (4) Acts or omissions punished by law; and (5) Quasi‐delicts. Sources of Obligations Law.
Atty. Campos has no right to attend the Board Meeting held by the newly reorganized Board. He has no vested right based on law nor in contract, including the Articles of Incorporation and By-Laws of the said company, on which he can anchor the said right to attend such meeting of the Board, unless the latter permits him to do so.
On the part of the newly reorganized Board of ABC Corp., it has no obligation whatsoever to extend Atty. Campos the right to attend the board meeting. Art. 1156 of the Civil Code clearly enumerated the sources of obligations. Applying the provision of law in the instant case, there is no existing source on which ABC Corporation is obligated to allow Atty. Campos to attend the board meeting, considering that he is neither a member of the Board or an officer of the corporation allowed to attend such meeting.
2. Compensation or set off takes place by operation of law when two persons, in their own right, are creditor and debtor of each other. For compensation to take place, a distinction must be made between a debt and a mere claim.
No. XYZ Bank is not correct in applying compensation or set-off in the instant case.
The Civil Code provides compensation or set off in order to take place by operation of law is that the two (2) persons, in their own right, are creditor and debtor of each other. Although, in the instant case, Julius and XYZ Bank in regard to their relationship as depositor and the bank is that of creditor and debtor, it is separate and distinct from that relationship arising from the housing loan agreement. Hence, the savings of Julius should not be made to apply to settle his housing loan which is a separate and considered a primary contract, unless otherwise a stipulation was made therein to apply his savings as payment in case of default of said loan.
3. Under case law, dacion en pago is the transmission of the ownership of a thing by the debtor to the creditor at an accepted equivalent of the performance of an obligation.
Chinabank is not correct in invoking the warranty against hidden defects in the instant case for considering that the obligation was settled through dacion en pago. Applying the abovementioned jurisprudence in the instant case, Chinabank’s acceptance of the delivered items deems the same an accepted equivalent of the performance of an obligation of Norma’s Salon, Inc. It is presumed that the acceptance was made to the bank’s satisfaction, hence, Chinabank may not invoke the warranty of hidden defects.
1. a. The following are the sources of obligation: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Delict; (5) Quasi-delicts.
b. No. Atty. Campos does not have the right to attend ABC Corporation's Board Meeting because he is no longer a member of the Board of Directors of ABC Corporation. The rights and obligations of members of the Board of Directors of a Corporation are created by law, and the by-laws governing the Corporation. Said rights can only be invoked by members of the Board of Directors. Hence, the Board has no obligation to permit Atty. Campos to attend the Board Meeting.
2. a. As a mode of extinguishing obligations, compensation or set-off shall take place when two persons, in their own right, are creditors and debtors of each other.
No. XYZ Bank is not correct in applying compensation or set-off because the housing loan contracted by Julius with XYZ Bank is not yet liquidated and demandable. Under the Civil Code, one of the requisites in order for compensation to be proper is that both debts must be liquidated and demandable. Here, Julius merely defaulted in the payment for the amortizations of the housing loan for a specific year; thus, the debt is not fully liquidated. Hence, compensation or set-off does not apply in this case.
3. a. As a mode of extinguishing an obligation, dacion en pago takes place when property is alienated to the creditor in satisfaction of a debt in money.
No. Chinabank is not correct in invoking warranty against hidden defects. Norma's Salon, Inc's obligation to pay debts to Chinabank has been extinguished by Chinabank's acceptance of the 20 salon seats and 10 hair blowers. There is no more obligation to speak of.
1. a. The sources of obligation are law, contracts, quasi-contracts, quasi-delicts and delict.
b. No, Atty. Campos des not have the right to attend the Board meeting and ABC Corp has no obligation to allow him to attend the meeting.
Atty. Campos does not have any relationship with the Board for he is no longer part of it. By virtue of which ABC Corp is not bound to perform for Atty. Campos’ benefit. ABC does not have any obligation to allow Atty. Campos to attend the board meeting.
2. a. Compensation or offset under the New Civil Code takes place only when two persons or entities in their own rights, are creditors and debtors of each other.
b. No, XYZ Bank is incorrect.
A legal compensation requires that both parties must be mutually creditors and debtors to each other and be bound principally; that both debts must consist in sum of money or if consumable, of the same kind or quality; that both debts be due at the same time; that both debts be liquidated and demandable; that neither debt is held by any retention or controversy commenced by third persons, and communicated in due time to the debtor; and that the debts are allowed by law.
In this case, only the housing loan (mortgage) is due and demandable. In addition, XYZ Bank did not notify Julius that they will deduct the said obligation to his savings account. Requisites of compensation/set-off are not present, hence, the act of XYZ Bank is not proper.
3. a. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of an existing obligation. It is a special mode of payment where the debtor offers another thing to the creditor who accepts it as equivalent to the payment of an outstanding debt.
b. Yes, China Bank is correct.
In dacion en pago, as a special mode of payment, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that is, the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor’s debt. As such, the essential elements of a contract of sale, namely, consent, object certain, and cause or consideration must be present.
What actually takes place in dacion en pago is where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered as the purchase price. In which warranty is a legally binding commitment forming part of the sales contract which assures the buyer that the product or service is free from defects.
Thank you po, Atty!
Sir, comment ko lang, at 1:06, di po ba any change in the person of the debtor should be with consent of creditor? Since by expromision, the debtor may even be replaced without his knowledge.
Atty. Can you have a lecture also on succession and family code? It really helps a lot.. your lectures are nice and easily understood.. thank you sir.. salamat..
Hi Ariel! Thanks! Browse through my Civil Law playlist. I have some videos on Succession and Inheritance. You can watch them in the meantime. I will also make videos on the Family Code and Succession in the near future. Stay tuned! :)
Thank you atty, big helps para sa pagddikdik ng concepts
1. Sources of obligation - law; contract; quasi-contract; delict; quasi-delicts
Atty. Campos has no right to attend the meeting, likewise the board has no obligation to allow him entry because his attendance in the given case was by mere tolerance. Under the law one of the elements of an obligation is the juridical relation between the parties to begin with, Atty. Campos’ relation with the Board terminated when he was not re-elected, and the current board was reorganized. He cannot claim fulfilment of an obligation because the element of the juridical relation between him and the board is not present.
Therefore, such right cannot be claimed by him as he has no dealings with the current board. Likewise, the Board has the power to reject Atty. Campos entry to their board meetings.
2. Under the law, compensation shall take place when two persons, in their own right, creditors and debtors of each other.
XYZ Bank is not correct to apply compensation. There is only one debt that is demandable the requisites for a valid compensation are: that each obligor is principally bound, and that he is also the principal creditor of the other; both debts consist of a sum of money or if the things due are consumable are of the same kind; both debts are due and demandable; and that over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor.
Compensation demands that both parties are debtors and creditors of each other and that their debts to each other are due and demandable, in the given case, only one debt is demandable which is pertaining to the housing loan by Julius when he defaulted. Neither was there consent coming from Julius to allow the bank to use his savings in payment of his due loan.
3. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.
Chinabank is not correct to invoke the warranty against hidden defects, the Civil Code provides that warranty against hidden defects only applies in the sale of goods and that said goods are to be used by the buyer. It does not apply in payment of an existing obligation as similar in the case given, the facts are clear that the Salon equipments given by Norma Salon was in payment of her pre-existing obligation which the bank accepted as provided in the facts. There was no mention that the bank bought those equipments.
Therefore, Chinabank is wrong to invoke warranty against hidden defects.
Thank you Atty.
Yvonne Villafuerte.
BSBA-HRDM
4TH YEAR
TYVM, Atty.
The sources of obligation are a)law b)contract c)quasi-contract d)delict e)quasi-delict
Atty. Campos is not one of the
Directors of the company, hence, has no right to attend the board meeting.
Compensation is the extinguishment of obligation of those persons who are reciprocally debtors and creditors of each other.
a)Each obligation must be due b) both are principal creditor of the other c)both debt consist of sum of money d) if consumable, must be of the same kind e) both debt be due, liquidated and demandable.
XYZ company is not correct. Legal compensation is present.
Dation en pago - use of property as payment for an obligation.
ChinaBank is not correct. They accepted the items as payment, hence, there was dation in payment of the obligation.
Very clear and intelligibly explain
Thank you! :)
thank you sir for this.
thank you atty
You're welcome 😊
Thank you for this :)
sir paano po kung naaksidente ako at nabalian nnag 2 ribs at collar bone and recommended nang doctor na mag sbed rest po ako nang 2 months may medical documents po ako. .. while filing a sss sickness benefit leave nag ask po ako sa HR nmin since im wfh settting due to pandemic tinanong ko po kung pwede ako mag wokr while on sick leave since computer lang namn po ang gamit ko for work (BPO COMPANY) and sabi po s akin yes , dont think it will be an issue while you applied for SSS sickness benefits. so assuming na oks lang po while on Sick leave and bedrest i worked while at home ... andami ko po email sa HR asking for a follow ups about my sss sickness benefits status sabi nila it will take a matter of time from 2 months to 3 months upon application.. ako po nagwowork from home may time in at time out po assuming na oks lang since di naman po ako nag pupunta sa site or travel... then lately last july 26th sinabihan po ako nang HR na hindi daw po ako qualified s sickness benefits nang SSS since im working while on leave... Hindi po nila ako sinabihan n bawal po mag work while on sick leave s sss. in fact they know and allowed me to work for 3 months kahit masakit po katawan ko pinipilit ko po magwork para sa company. ngayon po wala ako makukuha sa sss dahil viod daw po yung application ko.. My complain sir is , bakit po hinayaan ako nnag employer ko na mag work alam namn po nilang nag file ako nag sss sickness benefits dahil i need money for my operation. sabi nila ok lang di maapektuhan ang pagfifile s sss kahit pumasok po ako... false information resulting to my sss sickness void na kailangan ko po. pano po ba mahahabol si company sa negligence nila.. ako po ang naaksidente nagwork po ako sa kniala kahit bali mga buto ko at suffering from pain para lang matrugunan yung company needs kasi po that time need nila manpower... i have all the txt mssge, documents, medicals to proved that they allowed me to work even they know i filed for SSS sickness benefits...please help me sit im still employed with them..
Law, Contract, Quasi-contract, Delict, Quasi-contract , are the sources of obligation under the Civil Code.
No.
Atty. Campos has no legal right to demand to be allowed to attend the Board meeting neither the Board of Directors has a legal obligation to allow him There is no obligation nor a contract between the parties to which Atty. Campos be given the legal right to demand such right
Compensation refers to extinguishment of obligation of persons who are reciprocally debtor and creditor of each other. Compensation does not apply in this case because the debts are not yet due and liquidated.
Hence, the bank is not correct.
Dacion en pago refers to alienation of property in favor of the creditor in satisfaction of debt of the debtor.
The bank is correct in invoking the warranty of hidden defects.
In dacion en pago the law on sales applies, and thus, invocation of warranty against hidden defects is correct.
THANK YOU PO..
😍
Thank you sir. 😇
Thank you po, atty.
Welcome 😊
Irra Jane Teje
bsba-Hrdm
4th year
Norsu
Sana ni explain why it is juridical?
Nice lecture...
Thanks and welcome
Thank you atty...
You're welcome! :)
1. law, contracts, quasi-contract, delict, and quasi delict. -Edzmar Alpha here
Atty. Campos has no right to clang to since the civil code provides for sources of obligation such as law, contracts, quasi contract, delict and quasi-delict. In this case Atty. Campos' rights does not arise from sources of obligation since he was merely allowed by tolerance to attend said board meeting. The same did not constitute a right as argued by him. Hence, Atty. Campos cannot compel the corporation to allow him to attend board meeting if he is not duly elected member of the board.
2. Compensation takes place when two persons in their own right are creditors and debtors of each others.
XYZ Bank is not correct in applying the bank savings of Julius to defaulted housing loan. Pursuant to Civil Code, in order for compensation may be proper, obligors must be bound principally and principal creditor of each other; that the object or debts consist in sum of money. In this case the parties are not principal creditor of each other and both debts are different. Hence, XYZ banks cannot avail the remedy of compensation.
3. Dacion en pago or dation in payment is where property is alienated to the creditor in satisfaction of a debt in money.
Yes, China Bank is correct in invoking warranty against hidden defects. Pursuant to Civil Code, dation in payment shall be governed by law of sales. Following this law, it is submitted that China Bank may invoke warranty against hidden defects while accepting the thing delivered as dation in payment. China Bank cannot be denied since dation in payment is governed by law on sales in which warranty against hidden defects is a matter of right in favor of the creditor.
present ako sir..
The sources of obligation under the Civil Code are as follows: Law, Contract, Quasi-Contract, Delicts, and Quasi-Delicts.
In the given case, ABC Corporation's Board has no obligation to allow Atty. Carlos to attend the board meeting. Under the Civil Code, obligation arises from law, contracts, quasi-contracts, delicts and quasi-delicts.
Here, Atty. Campos claimed that he has the right to attend the said board meeting and that ABC Corporation's Board has an obligation to permit him to attend the board meeting. The claim of Atty. Campos is misplaced since the board has no obligation to permit Atty. Campos to attend the meeting as he was not a member of board thereof. Only those duly elected members of the board can attend said meeting. It must be stressed that Atty. Campos is permitted to attend the board meeting because of his significant contribution to the company and not by means of his right. Considering that Atty. Campos is not elected as member of the board then the latter has no obligation to permit his attendance in the board meeting.
Compensation releases the debtor from his obligation. For compensation to be proper, the following requisites must concur; that the obligors and obligee are creditor and debtor of each other; that both debts consist in a sum of money; that the two debts be due and demandable; that there is no controversy or case commenced by third persons.
In the given case, XYZ Bank is incorrect in applying compensation. Under the Civil Code, for compensation to be proper, all the requisites provided therefor must be present. Here, the XYZ Bank and Julius are not creditor and debtor with each other. Both debts are not consist of sum of money. Hence, the application of compensation is not proper.
Dacion en pago is the transmission of the ownership of a thing by the debtor to the creditor at an accepted equivalent of the performance of an obligation.
In the given case, the Chinabank is not correct in invoking warranty against hidden defects because the acceptance of the thing offered by Norma's Salon in lieu of its obligation consumates dacion en pago. Under the Civil Code, there is dacion en pago when the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt.
Here, Chinabank accepts the 20 salons seat and 10 hair blowers as equivalent of Norma's Salon Inc. obligation. Therefore, it extignguishes Norma's Salon obligation. The bank is however in badfaith when after 7 months it found out that the thing offered have defects. The acceptance of the bank with thing offered means that it accepts the irregularity of performance of the obligation. Hence, Chinabank cannot invoke warranty against hidden defects.
Lyle Harvey A. Espinas
20200126756
Jerome DC. Daylo\20090160864
Exercises:
No. 1
a. The following are the sources of obligation: (a) law; (b) contracts; (c) quasi-contracts; (d) delicts; and (e) quasi-delicts.
b. No. Atty. Campos does not have the right to attend the Board Meeting and ABC Board has no obligation to allow the former to attend the said Board Meeting.
Only members of the Board of Directors and those authorized thereof may attend the said meeting. Atty. Campos is no longer part of the said Board of Directors at the time the meeting was to be held. Thus, his right to attend the said Board Meeting ceases.
No. 2
a. Article 1278 of the Civil Code provides that Compensation shall take place when two persons, in their own right, are creditors and debtors of each other.”
b. No, XYZ Bank is incorrect.
The requisites of legal compensation are: (i) that each one of the obligors be bound principally; (ii) That he be at the same time a principal creditor of the other; (iii) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also the same quality. In the case at bar, the bank deposit and a housing loan are not the same kind. Therefore, the requirements for legal compensation were not present.
No. 3
a. “Dacion en pago” refers to the mode of extinguishing obligation wherein a debtor may cede or assign his property to his creditors in payment of his debt.
b. Chinabank is correct. Under the New Civil Code provisions on the rule on dacion en pago partakes the nature of sale. Under the law on sales, the buyer is protected from any breach of warranty against hidden defects. Thus, Chinabank is correct in invoking the warranty against hidden defects.
Kinds of obli 5:35
1. The sources of obligations are: a) Contracts, b) quasi-contracts, c) Delicts and Quasi-delicts.
1.a. No, Atty Campos does not have a right to attend the board meeting. He has no vested rights.
2. Compensation or set-off as a mode of extinguishment of an obligation arise when both parties are mutually creditors and debtors of each other and both obligations are due and demandable.
2.a. The bank is not correct. There can be compensation when both the creditor and the debtor are mutually debtors and creditors of each other and both obligations are due and demandable. In this case, the bank is not a creditor of Julius as per the deposits in the saving account. In a case decided by the supreme court, a savings deposit cannot be used for compensation purposes.
3. Dacion en pago is a special form of payment whereby another prestation or thing is presented in lieu for the payment of the monetarial obligation of a debtor to a creditor.
3.a No, Chinabank is not correct. A warranty against hidden defects only applies to contracts of sales. In the case given, the transaction was a dacion in payment upon which, the acceptance of the creditor of the thing extinguishes the obligation and is not a contract of sale between the parties (creditor and debtor). Hence, the Warranty against hidden defects shall not apply.
Jude Arranguez here hahah
Sir,
Just want to ask a question, kung ano po yung remedies ko para mag bayad po ng utang sa akin yung pina utangan ko.
Thank you.
Hi! You can first send a demand letter. Pag di pa din nagbayad, ipa-barangay nyo. If di pa din magbayad, kasuhan nyo na ng action for sum of money sa court. Check mo kung pasok yan sa small claims. For more info on small claims, you can check my FB post here: facebook.com/attyaljumrani/posts/110199504367909
law,contract, quasi contract, delict , quasi delict..
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9:15 Pote
#1. The sources of obligations are as follows:
a. Law
b. Contracts
c. Quasi-contracts
d. Quasi-delicts
e. Delicts
No, Atty. Campos do not have a right to attend and the ABC Corporation neither has an obligation to allow him to attend the board meeting. There is no juridical tie that binds Atty. Campos and ABC Corportion.
#2. Compensation or set off is a mode of extinguishment of an obligation which takes place when two persons are creditors and debtors of each other, in their own right.
No, XYZ Bank is not correct in applying compensation or set off.
In order to have a valid compensation to extinguish an obligation, both parties must be mutually creditor s and debtors in their own right as principals; both debts must be due and demandable; both debts must consist of sum of money, or if consumable, of the same kind or quality; and neither debt must be retained in a controversy commenced by a third person;
In this case, applying the requisites above, there is no valid compensation. XYZ Bank and Julius are not reciprocally creditor and debtor in their own right and not bound to each other.
#3. Dacion en pago is a mode of extinguishment of an obligation whereby the debtor alienates in favor of the creditor property to satisfy his monetary debt.
No, Chinabank is not correct in invoking the warranty against hidden defects.
Dacion en pago in this case partakes of and is governed by law on sales. The law on sales pertaining to warranty in hidden defects maybe applied. However, Chinabank can no longer avail of the provision of the warranty on hidden defects because the action is now barred by prescription. The action should have been brought by Chinabank against Norma’s salon after 6 years from the delivery of the things subject of dacion en pago. In this case, 7 months is beyond the prescriptive period.
Yvonne Villafuerte.
BSBA-HRDM
4TH YEAR
thank u Atty
Thank u atty
You're welcome! :)
Thank you atty
You're welcome! Good luck! 😊