CHAPTER 1: GENERAL PROVISIONS

**ARTICLE 1156**
*Juridical necessity- in case of noncompliance, the courts of justice may be called
upon by the aggrieved party to enforce its fulfillment
Essential requisites of an obligation:
1.
2.
3.
4.

Passive subject- debtor; he who has duty

Active subject- creditor; he who has a right
Object- subject matter of the obligation
Juridical/Legal tie- binds or connects the parties to the obligation

Obligation, right and wrong distinguished

Obligation- the act/ performance which the law will enforce; what we
should do
Right- the power which a person has under the law; what we gain
Wrong (Cause of action)- is an act of one party in violation of the legal
right/s of another
The essential elements of a legal wrong/ injury are:
(a) a legal right in favor of a person (CREDITOR)
(b) a correlative legal obligation on the part of another (DEBTOR);
to respect or not to violate the said right
(c) an act of one party in violation of the right with resulting
damage to another
**ART 1157**
Obligations arise from:
(SOURCES OF OBLIGATIONS)
1. Law
2. Contracts
3. Quasi- contracts- arise from lawful, voluntary acts; no one shall be unjustly
enriched at the expense of another; is a legal substitute for a contract. A
quasi-contract is a contract that should have been formed, even though in
actuality it was not
4. Criminal Offenses
5. Quasi-delicts- arise from damage caused to another , there being fault or
negligence; there is an obligation to pay for the damage done
Requisites/ There must be:
a) An act
b) Fault/Negligence
c) Damage caused
d) Connection of cause and effect between the act and damage
e) No pre-existing contractual relations
**ARTICLE 1159**

*Compliance in good faith- compliance/performance in accordance with the

terms of the contract
Kinds of quasi-contracts
1. Negotiorum gestio-voluntary management of the property/affairs of
another without the knowledge of the latter
2. Solutio indebiti- there is no right to demand it, it was delivered through
mistake

CHAPTER 2: NATURE AND EFFECT OF OBLIGATIONS

**ARTICLE 1163**
*Specific/ Determinate- particularly designated/ physical segregated from others
of the same class
*Generic/ Indeterminate- cannot be pointed out with particularity; refers only to a
class
Duties of debtor in obligation to deliver a determinate thing:
1.
2.
3.
4.
5.

Preserve the thing

Deliver the fruits of the thing
Deliver the accessions or accessories
Deliver the thing itself
Answer for damages in case of non-fulfillment

**ARTICLE 1164**
Different kinds of fruits
1. Natural- products of the soil & the young of other animals e.g trees, plants
2. Industrial- produced by lands through cultivation/labor e.g sugar cane,
vegatables, rice
3. Civil- Revenues derived from a thing by operation of law e.g rentals,
interests
When obligation to deliver fruits arises
The obligation to deliver the thing due and its fruits (if any) arises from the
perfection of the contract- birth of the contract/ meeting of the minds
between parties
Personal Right & Real Right
a) Personal- definite active and passive subjects; enforceable only against
one person
b) Real-without a definite passive (debtor) subject; directed against the
whole world
**ARTICLE 1165**

Remedies of creditor in real obligation:

1. Specific
a) demand specific performance
b) demand cancellation
c) demand payment of damages
2. Generic- can be performed by a third person
**ARTICLE 1166**
*Accessions-fruits of a thing/ additions / improvements; not necessary
*Accessories- things joined or included for better use or completion; accessory
follows the principal a must
**ARTICLE 1167**
Remedies of creditor in positive personal obligation:
1. If debtor fails, creditor has the right:
a) Perform the obligation himself
b) Recover damages
2. May be ordered by the court that it be undone if still possible
**ARTICLE 1169**
Meaning of delay
1. Ordinary delay- failure to perform an obligation on time
2. Legal delay-failure constitutes a breach of the obligation
Kinds of delay
1. Mora solvendi- delay on the part of the DEBTOR to fulfill
2. Mora accipendi- delay on the part of the CREDITOR to accept
3. Compensatio morae- delay of the obligors in reciprocal obligations; no
actionable default on both parties
*Delay by the debtor begins only from the moment a demand for the
fulfillment of the debtors obligation is made by the creditor

When demand is not necessary to put debtor in delay

1.
2.
3.
4.
5.

When the obligation so provides

When the law so provides
When time is of the essence
When demand would be useless
When there is performance by a party in reciprocal obligations;
Compensatio morae

**ARTICLE 1170**
Grounds for liability

1. Fraud (deceit or dolo)- intentional evasion of the normal fulfillment of the

obligation; criminal deception to result in financial or personal gain
a) Incidental fraud(dolo incidente)- committed in the performance of
obligation because of contract; not serious; Remedy: pay damages
b) Causal fraud (dolo causante)- employed in the execution of a
contract which vitiates consent; Fraud in obtaining consent; consent
is defective, contract is voidable. Remedy: annulment
2. Negligence (fault or culpa)- voluntary act; no bad faith or malice
3. Delay (mora)
4. Contravention of the terms of the obligation- violation in the terms of the
terms and conditions stipulated in the obligation
FRAUD vs NEGLIGENCE
There is an intention to cause damage
Waiver for future fraud is invalid
Must be clearly proved
Liability cannot be reduced

No such intention
Waiver may be allowed
Presumed from violation of contractual
obligation
Liability may be reduced

**ARTICLE 1171**
Responsibility arising from fraud is demandable; this is so because fraud is
deemed serious and evil.
-A waiver for future fraud is void; as being against the law and public policy
-A waiver for past fraud is valid; it can be considered as an act of generosity
**ARTICLE 1172**
*Responsibility arising from negligence is demandable; the debtor is liable for
damages, the courts however are given wide discretion in fixing the measure
of damages because negligence is not as serious as fraud
-A waiver for future negligence may be renounced except for common carriers
(which require extra diligence)
-Negligence shows bad faith = FRAUD therefore waiver is void
Kinds of Negligence according to source of obligation
1. Contractual negligence (culpa contractual)- resulting in breach;
negligence in the performance of a contract
2. Civil negligence (culpa aquiliana)- also called torts or quasi- delict;
negligence as a source of obligation
3. Criminal negligence (culpa criminal)- results in the commission of a
crime
**ARTICLE 1173**

*Negligence is the failure to observe for the protection of the interests of another
person, that degree of care and precaution whereby such other person suffers
injury
*Negligence is dependent upon the circumstances of each case
Factors to be considered
1.
2.
3.
4.

Nature of the obligation

Circumstances of the person
Circumstances of time
Circumstances of the place

*Damages signify the money compensation given to a party for loss or injury
Purpose: To place the innocent party in the same position he/she would have
been if the contract/obligation has been performed according to terms
Kinds of diligence required
1. Agreed upon by parties
2. Required by law in particular cases
3. If both contract and law is silent, Diligence of a good father of a family is
expected
**ARTICLE 1174**
Meaning of fortuitous event
A fortuitous event is an unforeseen event or, if foreseen, inevitable; impossible to
avoid
- An unforeseen event that occurs by chance or accident from natural or manmade forces over which an affected person has no control
Fortuitous vs force majeure
1. Acts of man- there is human intervention (riot, strikes, war)
2. Acts of God(majeure)- forces without any human interference (typhoon,
earthquake)
Kinds of fortuitous events
1. Ordinary- common events; parties can reasonably foresee
2. Extra-ordinary- uncommon events; parties could not reasonably foresee;
unexpected
Requisites of a fortuitous event
1. Event must be independent of human will
2. Unavoidable
3. It is impossible for the obligor to comply with his obligation in a normal
manner
4. There is no negligence on the part of the obligor

Rules as to liability in case of fortuitous event

-a person is not responsible for damage due to fortuitous events therefore:
OBLIGATION IS EXTINGUISHED

Exceptions:
1. When specified by law
a) The debtor is guilty of fraud, negligence or delay
b) Debtor promised to deliver a specific thing to two different persons
with different interests
c) Obligation arises from a crime
d) Thing to be delivered is generic
2. When declared by stipulation- to protect the interest of the creditor and
obtain greater diligence on the part of the debtor in the fulfillment of his
obligation
3. When the nature of the obligation requires assumption of risk
**ARTICLE 1175**
*Simple loan or mutuum- one of the parties delivers to another money or
another consumable thing with the understanding that the same
amount of the same kind and quality shall be paid; involves the return of the
equivalent only
Usury
-the illegal action or practice of lending money at unreasonably high rates of
interest.
Requisites for recovery of interest:
1. Payment must be clearly specified
2. Must be in writing
3. Must be lawful
**ARTICLE 1176**
Presumption
-A legal presumption is a conclusion based upon a particular set of facts, combined
with established laws, logic or reasoning. It is a rule of law which allowing a court to assume a fact
is true until it is rebutted by the greater weight (preponderance) of the evidence against it

Two kinds of presumption:

1. Conclusive- cannot be contradicted
2. Disputable/ Rebuttable- can be contradicted by presenting a proof
Example:

1.
2.
3.

A child born of a husband and wife living together is presumed to be the natural child
of the husband.
A person who has disappeared and not been heard from for seven years is presumed
to be dead.
An accused person is presumed innocent until proven guilty.

These presumptions may be rebutted by proof such as:

1. a DNA test conclusively proving the husband is not the father,
2. the missing person is found alive, and
3. a verdict based upon the evidence at trial convicts the defendant.
**ARTICLE 1177**
Remedies available for creditors for the satisfaction of their claims:
1.
2.
3.
4.

Right to damages
Collect the property of the debtor
Exercise all the rights
Ask the court to cancel acts or contracts

**ARTICLE 1178**
Transmissibility of rights
1. Prohibited by law
2. Prohibited by the stipulation of the parties

CHAPTER 3: DIFFERENT KINDS OF OBLIGATIONS

1. PRIMARY
a) Pure and conditional
b) With a period
c) Alternative and Facultative
d) Joint and Solidary
e) Divisible and Indivisible
f) With a penal cause
2. SECONDARY
a) Unilateral and bilateral
b) Real and personal
c) Determinate and generic
d) Civil and natural
e) Legal, conventional an penal
Section 1- Pure and Conditional Obligations
**ARTICLE 1179**
*Pure obligation- immediately demandable by the creditors and the debtor
cannot be excused from not complying with his prestation.
*Conditional obligation- the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition
*A condition has been defined as every future and uncertain even

Characteristics:
a) Future and uncertain
b) Past but unknown
Two principal kinds:
1. Suspensive- happening of condition gives rise to obligation
2. Resolutory- happening of condition extinguishes obligation
Distinction between Suspensive and Resolutory
1. Suspensive- condition is fulfilled, obligation arises // Resolutorycondition fulfilled, obligation is extinguished
2. Suspensive- condition does not take place, tie of the law does not
appear // Resolutory-condition does not take place, tie of the law
appears
3. Suspensive- existence of obligation is mere hope // Resolutory-effects
flow but wit the possibility of termination
4.
An obligation is demandable at once:
1. When it is pure
2. Subject to a resolutory condition
3. Subject to a resolutory period
**ARTICLE 1180**
Where duration of period depends upon the debtor
A period is a future and certain event upon which the obligation subject to it
arises or is extinguished
1. The debtor promises to pay when his means permit him- duration of the
period
2. Other cases little by little; as soon as possible ;from time to time
**ARTICLE 1181**
Restates the distinction between suspensive and resolutory condition
1. Acquisition of rights
2. Loss of rights already acquired
**ARTICLE 1182**
Conditions may be classified as follows:
1) As to effect:
a) Suspensive rise of obligation

b) Resolutory extinguishment of
obligation

2) As to form:
a) Express clearly stated

b) Implied merely inferenced

3) As to possibility:
a) Possible condition is capable of

b) Impossible not capable of fulfillment

fulfullment, legally and physically

4) As to cause or origin:
a) Potestative depends
upon will of one of the
contracting parties

b) Casual depends upon

chance or will of a third
person

5) As to mode:
a) Positive consists in performance of
act

c) Mixed depends partly

upon chance and partly
(a) and (b)

b) Negative consists in omission of an act

6) As to numbers:
a) Conjunctive several conditions, all
must be fulfilled

b) Disjunctive several conditions, only

some or one must be fulfilled

7) As to divisibility:
a) Divisible susceptible of partial
performance

b) Indivisible not susceptible of partial

perfornmance

1. Potestative condition- suspensive in nature; depends upon the will of

ONE of the parties
Where suspensive condition depends upon the will of the debtor
a) Conditional obligation void- cannot be easily demanded; the
debtor will not just fulfill the condition in order to be not liable; no
juridical tie
b) Only the condition void- condition is imposed on the fulfillment of
obligation
Where suspensive condition depends upon the will of the creditor
If the condition depends upon the will of the creditor, obligation is valid
2. Causal condition- depends on chance or the will of a third person (ex. I
will give you 10,000 if I won the lottery)
3. Mixed condition- - depends partly upon chance and partly upon the will
of 3rd person
**ARTICLE 1183**
*POSSIBLE CONDITION if it is capable of realization or actualization according to
nature, law, public policy or good customs
Two kinds of impossible conditions
1. Physically impossible (e.g I will pay you P10,000 if it will not rain for one
year in the PH)
2. Legally impossible (e.g I will give you P10,000 if you will kill)
Effect of impossible conditions
1. Conditional obligation void
2. Conditional obligation valid- If the condition is NEGATIVE (e.g I will sell you
my land if you do not carry 20 cavans of palay on your shoulder)

3. Only the affected obligation void- if the obligation is DIVISIBLE (e.g I will
give you 10,000 if you sell my land, and a car,and if you kill Pedro) ;only
the obligation to give 10,000 is VALID
4. Only the condition void- ( D borrowed 10,000 from C. If C later agreed to
kill X before D pays him, the condition to kill X is invalid but not the
obligation of D to pay C
**ARTICLE 1184**
Positive Condition
This article refers to a SUSPENSIVE condition the happening of an event at a
determinate time. The obligation is extinguished:
1. The time expires without the event taking place
2. As soon as it become definite that the event will not take place

**ARTICLE 1185**
This provision speaks of a NEGATIVE condition- an event will not happen at a
determinate time. The obligation shall become effective:
1. The time indicated has passed without the event taking place
2. When it has become evident that the event cannot occur
**ARTICLE 1186**
Requisites
1. The condition is suspensive
2. Obligor prevents fulfillment of obligation
3. Voluntarily acts