Chapter 1 – Concept and Elements

Article 1156. An obligation is a juridical necessity to give, to

do or not to do.

Concept of Obligation

- Emphasizes on juridical tie between parties and defined this
tie as a law which binds us, according to the rules of our civil law, to
render something.
Element of Obligation
- Juridical tie (vinculum juris)
- Object (prestation)
- Active subject (obligee/creditor)
- Passive subject (obligor/debtor)
Juridical tie
- Essentially binds parties (subject) to the object of the
obligation. By virtue of which the debtor is bound to the creditor to
fulfill a determinate prestation.
Object of Obligation
- Prestation; the particular conduct required to be observed by
the obligor and which can be demanded by the obligee.
- Either to give, to do or not to do.
Note: it is the law which creates the obligation in view of organization
of juridical institutions and the social interest; obligations arising from
other acts not constituting contracts, there is always individual act
which give rise to the obligation, and the law intervenes only to
provide a sanction or prevent an injustice.
Article 1158. Obligations derived from law are not
presumed. Only those expressly determined in this Code or
in special laws are demandable and shall be regulated by the
precepts of the law which establishes them; and as to what
has not been foreseen, by the provision of this book.
Obligations Arising from Law (Obligatio Ex Lege)
- It establishes the obligation, making the act of party or parties
only a moment, or determining the occasion in order that the obligation
contained in the legal precept may begin to be demandable, then the
law is said to be the origin of the obligation.
- However, if it merely guarantees the compliance and
demandability of obligation, it only regulates.
Examples:

Obligation to give – real obligations; intimately connected with the 1) Obligation of taxpayers to pay taxes
thing to be delivered. 2) Spouses to render mutual help and support to each other

Obligation to do – positive personal obligations, incumbent upon the
personal obliged.
Note: In obligations to give, the oblige may avail of the remedy of
compelling the obligor to give or deliver what is due. In obligations to
do, the obligor may not be compelled against his will, to perform the
act that he is bound to render.
Active and Passive Subject
- Obligee has the right to demand the prestation; Obligor is the
one bound to perform.
Legal Sanctions
- Juridical necessity implies the existence of legal sanctions
that may be imposed upon the obligor in case of breach of the
obligation.
The oblige may seek appropriate reliefs from the courts in case of such
breach.
CHAPTER 2 – SOURCES OF OBLIGATIONS
In these examples, it is the law that regulate and give sanctions.
In the rest of the sources of obligation it is formed through unilateral or
bilateral agreement.
Article 1159. Obligations arising from contracts have the
force of law between the contracting parties and should be
complied with in good faith.
Obligations Arising from Contracts (Obligatio Ex Contractu)
- “a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some
service.”
- Consent is the essence of contract.
- Implied contract – arises where the intention of the parties is
not expressed, but an agreement in fact, creating an obligation, there is
ordinary course of dealing and the common understanding of men,
show a mutual intent to contract.
Note: contracts – requires consent from parties; quasi-contracts – not
predicated on consent, it is a product of a unilateral act.

Obligatory force of contracts – Obligations arising from contracts have

Article 1157. Obligations arise from:
the force of law between the contracting parties and should be
complied with in good faith.
1. Law;
2. Contracts; Article 1160. Obligations derived from quasi-contracts shall
3. Quasi-contracts; be subject to the provisions of Chapter 1, Title XVII, of this
4. Acts or omissions punished by law; and Book.
5. Quasi-delicts.
Obligation Arising from Quasi-contracts (Obligatio Ex Cuasi
Sources of Obligations Contractu)

Concept of Quasi-Contract
- “Art. 2142. Certain lawful, voluntary and unilateral acts give
rise to the juridical relation of quasi-contract to the end that no one
shall be unjustly enriched or benefited at the expense of another.”
Note: One of the sources extra-contractual obligations is the quasi-
contract nemo cum alterius detriment locupletari protest (no man shall
enrich himself at the expense of another).
Characteristics of Juridical relation of quasi-contracts:
1) Lawful act. Distinguishes quasi-contract from delict and
quasi-delict which are both products of unlawful acts.
2) Voluntary act. Characteristic distinguishes quasi-contract
from culpa criminal and culpa aquiliana (committed thru negligence)
3) Unilateral act. Distinguishes quasi-contract from contract
which requires consent.
Forms of Quasi Contract
1) Negotiorum gestio
2) Solution indebiti
3) Other Quasi-Contracts
Note: Civil Code does not confine itself exclusively to the quai-
contracts enumerated from Art. 2144 to 2175 but is open to it.
Negotiorum Gestio
- Form of quasi-contract which arises when a person, called
the officious manager or gestor, voluntarily takes charge of the agency
or management of the business or property of another which has been
neglected or abandoned, without any power from the latter.
- Developed primarily to govern the management of an absent
person’s affairs.
Note: our own concept of negotiorum gestio still retains the
requirement that the owner of the business or property must either be
physically absent or has failed to appoint a proper agent to administer
the business or property because the concept explicitly covers
abandoned or neglected property or business.
Requisite of Negotiorum Gestio
1) A person, called the officious manager, who voluntarily
assumes the agency or management of the business or property of
another;
2) The property or business is neglected or abandoned;
3) There is no authorization from the owner, either expressly or
impliedly; and
4) The assumption of agency or management is done in good
faith.
Note: if the manager acts without authority from the owner and enters
int contracts with third persons relating to the owner’s property or
business, the provisions of Art. 1317, 1403, No. 1, and 1404 regarding
unauthorized contracts shall govern.
- The gestor must have acted in good faith. Thus, connotes an
idea of neighborliness or kindliness.
- For the gestor to be entitled to reimbursement, he must have
acted on behalf of the owner but with the intention of demanding
indemnification for expenses he incurred.
Obligations Created in Negotiorum Gestio
a) On the part of the officious manager or gestor
- Once the gestor intervenes, he cannot just quit and abandon
the property or the business. The law requires him to continue with the
agency or management until the termination of the affair and its
incidents or until the owner appears and substitutes him in such
management.
- If the owner suffers damage by reason of his fault or
negligence, he is liable to pay damages to the owner. Situation such as:
1) Undertakes risky operations which the owner was not
accustomed to embark upon;
2) Prefers his own interest to that of the owner;
3) Fails to return the property or business after demand by the
owner;
4) Assumes the management in bad faith;
5) Manifestly unfit to carry on the management, except when
the same was assumed to save the property or business from imminent
danger; and
6) Prevents, by his intervention, a more competent person from
taking up the management, except when the same was assumed to save
the property or business from imminent danger.
- The gestor may delegate to another person all or some of his
duties, but he shall remain liable to the owner for the acts of the
delegate.
He becomes liable for any fortuitous event if he:
1) Undertakes risky operations which the owner was not
accustomed to embarking upon;
2) Prefers his own interest to that of the owner.
3) Fails to return the property or business after demand by the
owner.
4) Assumes the management in bad faith;
5) Is manifestly unfit to carry on the management, except when
the same was assumed to save the property or business from imminent
danger; or
6) Prevents, by his intervention, a more competent person from
taking up the management, except when the same was assumed to save
the property or business from imminent danger.
GR: He is the one personally liable to the third persons with whom he
dealt with, there shall be no right to action between owner and third
persons in relations to said contact.
XPN: shall not apply if:
a) The owner has ratified management, either expressly or
tacitly;
b) When the contracts refer to things pertaining to the owner of
the business.
Note: in case of ratification of the management of the business, the
effects of an express agency will be produced, even if the business may
not have been successful. Meaning the relationship between the gestor
and the owner will cease to be that of negotiorum gestio but will
become contractual in nature.
b) on the part of the owner
In negotiorum gestio, the owner of the business or property become
liable to the gestor for: a) obligations incurred in his interest; b)
necessary and useful expenses; and c) damages suffered by the gestor
in the performance of his duties, although the officious management
may not have been expressly ratified, in any of the following situations
–
1) Owner enjoys the advantages of the officious management;
2) The management prevention of an imminent and manifest
loss, although there is no benefit.
3) Even if the owner did not derive any benefit and there has
been imminent and manifest danger to the property or business,
provided that the gestor has acted in good faith and the property or
business is intact, ready to be returned to the owner.
While the primary objective of this legal institution is the prevention of
unjust enrichment on the part of the owner at the expense of the gestor,
an idea which thereby connotes receipt of benefit by the former, it must
be emphasized that the existence of benefit is not an essential element.
Art. 2151. Allows the gestor to demand reimbursement from the owner even if
no benefit has been derived by the latter or even when there us no imminent
and manifest danger to the property or business.
Extinguishment of Negotiorum Gestio
1) Repudiation of the officious management Art. 2154. If something is received when there is no right to demand it, and it
2) Putting an end to officious management was unduly delivered through mistake, the obligation to return it arises.
3) Death, civil interdiction, insanity or insolvency of the owner
or gestor A creditor-debtor relationship is created under a quasi-contract
4) Withdrawal from the management by the gestor, but without whereby the payor becomes the creditor who then has the right to
prejudice to his liability for damages should the owner suffers damage. demand that return of payment made by mistake, and the person who
has no right to receive such payment becomes obligated to return the
Solutio Indebiti same.

Concept and Requisites
Solutio Indebiti – quasi-contract; no one shall enrich himself unjustly at
the expense of another.
Art. 2154. If something is received when there is no right to demand it, and it
was unduly delivered through mistake, the obligation to return it arises.”
The recipient of the payment is exempt from the obligation to restore if
the following requisites are present:
(1) He believed in good faith that the payment was being made
of a legitimate and subsisting claim; and
(2) He destroyed the document, allowed the action to prescribe,
or gave up the pledge, or cancelled the guaranties for his right.

Applies in: Other forms of Quasi-Contract:

i. Payment is made when there exists no binding relation
between the payor and the person who received the payment;
ii. Payment is made through mistake.
GR: the mistake committed must be one of the fact because “ignorance
of the law excuses no one from compliance therewith”.
XPN: “payment by reason of a mistake in the construction or
application of a doubtful or difficult question of law may come within
the scope of solution indebiti”
1. Giving of Legal Support and Payment of Funeral
Expenses
If such support is given by a stranger without the knowledge of the
person obliged to give support, the former has a right to claim
reimbursement from the latter, unless it appears that the stranger gave it
out of piety and without intention of being repaid.
The obligation to refund the amount is not by virtue of the law but
based on quasi-contract.

Distinguished from In Rem Verso Title VII. Support

Art. 22. Every person who through an act or performance by another, or by Art. 195. Subject to the provision of the succeeding articles, the following are
any other means, acquires or comes into possession of something at the obliged to support each other to the whole extent set forth in the preceding
expense of the latter without just or legal ground, shall return the same to article:
him.”
(1) The spouses;
Accion In Rem Verso – action for recovery of what has been paid (2) Legitimate ascendants and descendants;
without just cause. (3) Parents and their legitimate children and the legitimate and
illegitimate children of the latter;
(4) Parents and their illegitimate children and the legitimate and
To prosper: illegitimate children of the latter;
(5) Legitimate brothers and sisters, whether of the full or hald-blood.
1) Defendant has been enriched
2) Plaintiff suffered loss Art. 196. Brothers and sisters not legitimately related, whether of the full or
3) Enrichment is without just or legal ground; half-blood, are likewise bound to support each other to the full extend set
4) Plaintiff has no other action based on contract, quasi-c, quasi- forth in Article 194 except only when the need for support of the brother or
sister, being of age, is due to a cause imputable to the claimant’s fault or
d
negligence.

Solutio Indebiti In Rem Verso Art. 199. Whenever two or more persons are obliges to give support, the
liability shall devolve upon the following persons in the order herein
provided:
Based on principle of unjust enrichment.
(1) The spouse;
(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
Contemplates payment when there is no duty to pay, and the
(4) The brothers and sisters.
person who receives that payment has no right to receive it.

Unjust enrichment exists when a person unjustly retains a

Support for orphan, Art. 2166 applies.
benefit to the loss of another. [elements of solution indebiti &
in rem verso] Art. 2166. When the person obliged to support an orphan, or an insane or
other indigent person unjustly refuses to give support to the latter, any third
person may furnish support to the needy individual, with right of
Obligation comes from quasi- reimbursement from the person obliged to give support. The provision of this
Obligation comes from law. article apply when the father or mother of child under 18 yo unjustly refuses
contract.
to support him.

Mistake in payment Remedy to recover the 2. Act of Good Samaritan

payment
When a person is injured or becomes seriously ill by reason of an
accident or other cause and he is treated or helped while he is not in a
condition to give consent to a contract, he is liable to pay for the
services of the physician or other person aiding him, unless the service
Obligation of debtor in Solutio Indebiti has been rendered out of pure generosity.

3. third Person Pays Debt or Taxes of Another

anyone who is constrained to pay the taxes of another shall be entitle to
reimbursement from the latter.
4. Acts in Consideration of General Welfare
DELICT
Art. 1161. Civil obligations arising from criminal offenses
shall be governed by penal laws, subject to the provisions of
Art. 2177. And of the pertinent provisions of Chap. 2,
Preliminary Title, on Human Relations, and of Title XVIII
of this book, regulating damages.
Obligations arising from Delicts (Obligatio Ex Delicto):
QUASI-DELICT
ART. 1162. Obligations derived from quasi-delicts shall be
governed by the provision of Chapter 2, Title XVII of this
Book, and by special laws.
Obligations arising from Quasi-delicts (Obligatio Ex Cuasi
Delicto)
1. Concept
Quasi-delicts – separate legal institution with a substantivity all its
own, and individuality that is entirely apart and independent from delict
or crime; proceed from commission of an unlawful act.

1. Basis of Civil Liability in Crimes or Delicts Art. 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
Art. 100 (PRC). Civil liability of a person guilty of a felony. – every person Chapter.
criminally liable for a felony is also civilly liable.
Requisites:
A crime has a dual character: (1) offense against the state; and (2)
offense against private person
(1) Damage suffered by the plaintiff;
(2) Fault or negligence of the defendant
Unless it involves the crime of treason, rebellion, espionage, contempt (3) Connection of cause and effect between the fault or
and others wherein no civil liability arises on the part of offender negligence of the defendant and the damage incurred by the plaintiff.
either because there are no damages to be compensated or there is no
private person injured by the crime.
Man should subordinate his acts to the precepts of prudence and if he
fails to observe them and causes damage to another, he must repair the
Civil liability exists in a crime only if there is a private offended party damage.
who suffered damage. Criminal liability will giver rise to civil liability
if the act or omission results in damage or injury to another and is the
direct and proximate cause thereof. 2. Scope
- A distinction exists between the civil liability arising from
delict and quasi-delict.
2. Effect of Acquittal of the accused
Difference:
Depend upon the nature of the acquittal, or the reason relied upon by
the court. Our law recognized two kinds:
Delict Quasi-delict
First is an acquittal on the ground that the accused is not the author of
the act or omission.
Public interest Private concern
The responsibility arising from fault or negligence in a quasi-delict is
entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. Penal law punishes to Civil Code, by means of
correct criminal act indemnification
Second is ab acquittal on reasonable doubt on the guilt of the accused.

A person acquitted from a criminal charge is not necessarily free from Punishes only if there is a Include all acts in which any
civil liability because the quantum of proof required in criminal penal law covering them kind of fault or negligence
prosecution is greater than that required for civil liability (mere intervenes
preponderance of evidence).
Similarities:
3. Rule of Implied Institution
a) Fault or negligence is committed
G.R.: When a criminal action is instituted, the civil action for recovery b) Such act is unlawful
of civil liability arising from the offense charged is deemed instituted c) Causes damage or injury to others.
with the criminal action.
Art. 2176 covers not only acts committed with negligence, but also acts
XPN: Offended party waives the civil action, reserves the right to which are voluntary and intentional.
institute it separately or institutes the civil action prior to the criminal
action.
The Court held that Art. 2176, where it refers to “fault and
negligence,” covers not only acts “not punishable by law” but also
The criminal action is one which is based on the delict. acts criminal in character, whether intentional and voluntary or
negligent. (Elcano v. Hill)
4. Effect of Death of Accused Pending Appeal
When the quasi-delict is committed through negligence or culpa, it is
Civil liability and criminal liability is extinguished. referred to as culpa aquiliana or culpa extra-contractual.

The death of the accused prior to final judgement terminated his
criminal liability and only the civil liability directly arising from and
based solely on the offense committed. The claim for civil liability
survives notwithstanding the death of the accused, if the same may also
predicated on a source of obligation other than delict.
3. Prohibition Against Double Recovery
Act or omission by fault or negligence and which causes damage to
another, may produce two distinct sources of obligations – delict and
quasi-delict – the law provides for a prohibition against double jointly and severally liable with the employee, based on quasi-delict
recovery from both delict and quasi-delict, “for the same act or under Art. 2176 and Art. 2180.
omission of the defendant”. - Before the employer’s subsidiary liability is enforced,
evidence must exist establishing that:
Art. 2177. Responsibility for fault or negligence under the preceding article is a) They are indeed the employers of the convicted employees;
entirely separate and distinct from the civil liability arising from negligence b) They are engaged in some kind of industry;
under the Penal Code. But the plaintiff cannot recover damages twice for the c) The crime was committed by the employees in the discharge
same act or omission of the defendant. of their duties; and
d) The execution against the latter has bot been satisfied due to
4. Effect of Pre-existing Contractual Relations insolvency.

Art. 2176 give us the impression that the existence of a contract
between the parties prior to the occurrence of the fault or negligence
precludes the commission of quasi-delict. The pre-existing contract
between the parties bar the applicability of the law on quasi-delict, the
liability itself be deemed to arise from quasi-delict.
The acts which breaks the contract may also be a quasi-delict.
When an act which constitutes a breach of contract would have itself
constituted the source of a quasi-delictual liability had no contract
existed between the parties, the contract can be said to have been
breached by tort, thereby allowing the rules on tort to apply.
Recovery under Quasi-Delict
- Offended party may choose to recover only from the
employee for the latter’s negligence pursuant to Art. 2176 or directly
from the employer pursuant to the latter’s vicarious liability under Art.
2180, or from both.
Whenever the employee’s negligence causes damage or injury to
another, a presumption juris tantum that there was negligence on the
part of the employer, either in the selection of the employee (culpa in
eligiendo) or the supervision over him after the selection (culpa in
vigilando)

Distinction between culpa aquiliana (culpa extra-contractual) and
culpa contractual:
Culpa aquiliana
Source is tortfeasor
Negligence is substantive
and independent
Clearly established bc it is
the basis of action
5. Liability of employer for act or omission of his
employee
- To escape solidary liability for a quasi-delict committed by
his employee, an employer must rebut the presumption by presenting
convincing proof that in the selection and supervision of his employee,
he has exercised the care and diligence of a good father of a family.
Culpa contractual
CHAPTER 3: CIVIL AND NATURAL OBLIGATIONS
(KINDS OF OBLIGATIONS)
Premised upon negligence
in the performance of a
contractual obligation Classification of Obligations (CR PuCo JoDiW)
There exist a obligation 1. Civil or natural;
2. Real or personal
a) Real, in turn, may either be specific or generic;
Mere proof of existence of b) Personal, on the other hand, may either be positive or
the contract and failure of negative;
its compliance justify as 3. Pure, conditional or with a term;
right of relief. 4. Conjunctive or distributive, and the distributive may be
alternative or facultative;
5. Joint or solidary;
6. Divisible or indivisible; and
7. With a penal clause.
Civil and Natural Obligations

The extent and nature of the employer’s liability vis-a-vis his employee
and other applicable principle vary depending on the source of
obligation involved.
The possible sources of obligation:
Art. 1423. Obligations are civil or nature. Civil obligations give a right of
action to compel their performance. Natural obligation, not being based on
positive law but on equity and natural law, do not grant a right of action to
enforce their performance, but after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or rendered by reason
thereof. Some some natural obligations are set forth in the following articles.

a) The contract of carriage; Civil Obligations – provides legal sanction in case of its breach.
b) Delict or crime; and
c) Quasi-delict Natural Obligation – does not provide for a legal sanction in case of
non-performance.
Recovery Under Contract of Carriage
Note: The debtor may not be compelled by the coercive power of the
- Liability devolves upon the employer because the driver is State, exercised through our courts, to perform this kind of obligation
not a party to the contract of carriage and may not be held liable under because its performance depends exclusively upon his conscience.
contract.
- Under the law on common carriage, the common carrier is - Natural obligation grants the creditor the right to retain what
presumed to have been at fault or to have acted negligently in case of has been delivered by reason of voluntarily fulfilled by the debtor.
death of or injuries to passengers, and such liability applies even if it is
through the negligence or willful acts of his employee. Distinguished from Moral Obligations

Recovery under Delict or Crime
- The employee is directly and primarily liable, while the
employer is subsidiary liable. If the cause of action against the
employee is based on delict, it is not correct to hold the employer
Natural obligation – exist juridical tie; could give a cause of action but
because of some special circumstances is actually rendered ineffective
Moral obligation – without juridical tie.
Requirement of Voluntary Fulfillment
a) Act is spontenously or free from any coercion.
b) Free from error or mistake.
If there is payment by reason of mistake, there is no voluntary
fulfillment of the obligation.
Art. 1956. No interest shall be due unless it has been expressly stipulated in
writing.
Art. 1960. If the borrower pays interest when there has been no stipulation
therefore, the provisions of this Code concerning solution indebiti, or natural
obligations, shall be applied, as the case may be.
Instances of Natural Obligations
Last sentence of Art. 1423 “some natural obligations are set forth in the
following articles.” This recognizes the fact that other natural obligations
may be found in scattered provisions of the Civil Code, or in other
laws.
When debt has Prescribed Prescribed
When the right to sue upon a civil obligation has lapsed by extinctive
prescription, the obligation ceases to be a civil one and becomes a
natural obligation.
Extinctive prescription (or bar by statute of limitations) is a ground for the
dismissal of an action under RoC.
When a third person pays a debt which had already prescribed, he
cannot demand reimbursement from the debtor if the payment was
made without knowledge or against the will of the latter. The law says
that in cases of payment by third person without the knowledge or against the
will of the debtor, the third party payor can recover only insofar as the payment
has been beneficial to the debtor.
When action to Enforce Obligation Has Failed, the civil obligation
ceases for another action to enforce the same obligation is barred by the
principle of res judicata.
Res judicata – a matter decided; a matter that has been adjudicated by a
competent court and may not be pursued by the same parties.
When payment of Deceased debt exceeds inheritance, the heirs shall be
liable thereto only up to the extent of the value of the property he
received from the decedent. The obligation to pay the debt up to the
value of the inherited property is a civil one, while the obligation to pay
the excess is only natural.
Payment of Legacy In Void Will, the estate shall not be distributed
pursuant to the testor’s will, but pursuant to the provisions of law (legal
or intestate succession).
CHAPTER 4 – REAL AND PERSONAL OBLIGATIONS
(KINDS OF OBLIGATIONS)
Art. 1163. Every person obliged to give something is also
obliged to take care of it with the proper diligence of a good
father of a family, unless the law or the stipulation of the
parties requires another standard of care.
Art. 1164. The creditor has a right to the fruits of the thing
from the time the obligation to deliver it arises. However, he
shall acquire no real right over it until the same has been
delivered to him.
Real and Personal Obligations
Real obligation – to give
Personal obligation – to do or not to do
To give – compliance with the obligation is intimately connected with
the thing to be delivered; deliver yof a movable or an immovable thing
in order ti create a real right, or for the use of the recipient, or for its
simple possession, or in order to return it to its owner. (Obligation to
pay)
To do or not to do – compliance with the obligation is incumbent upon
the person obliged. Obligation to do, all kinds of work or service;
obligation not to do, consists in abstaining from such acts.
Specific and Generic Obligations
Obligation to give:
Specific or determinate thing – designated or physically segregated
from all others of the same class.
Generic or indeterminate thing – delivery of any member of genus or
class; it cannot be distinguished from others.
Positive and Negative Personal Obligations
Positive personal obligation – obligation “to do”
Negative personal obligation – obligation “not to do”
Accessory Obligation in Determinate (Specific) Obligations
Debtor always has three accessory obligations in determinate
obligations.
1. The obligation to preserve the thing to be delivered;
2. The obligation to deliver fruits, if the creditor is already
entitled to them; and
3. The obligation to deliver the accessions and accessories.
 Duty to Preserve Specific Thing Due
Art. 1244. The Debtor of a thing cannot compel the creditor to receive a
different one, although the latter may be of the same value as, or more valuable
than that which is due.
a) Degree of Diligence Required.
G.R.: the debtor in a determinate obligation is bound to observe the
“proper diligence of a good father of a family” in taking care of the
thing to be delivered.
Good father of a family – law require the observance of the diligence of a good
father og a family,” the law is simply referring to the diligence required of a
reasonably prudent person.
XPN: the law or the stipulation of the parties requires another standard
of care.
Par. 3 of Art. 1165. If the obligor delays, or has promised to deliver the same
thing to two or more persons who do not have the same interest, he shall be
responsible for any fortuitous event until he has effected the delivery.
The parties can validly agree even on a standard of care lower than
that of the bonus pater familias. However, the parties may not validly
agree to make the debtor absolutely exempt from any liability even
from those arising from his own negligence.
Art. 1174. The parties may declare in their agreement that a person shall still
be liable for a fortuitous event.
 Duty to Deliver Fruits
a) When the Creditor Acquired Rights Over Fruits
- It is necessary to determine the exact time when a creditor
acquired a right over the fruits of the determinate thing due.
Art. 1164. The creditor shall acquire a right over the fruits of the determinate
thing due only from the time the obligation to deliver said thing arises.
- Law, quasi-contracts, delicts, and quaasi-delicts; specific
provisions applicable to them determine the time when the obligation
to deliver arises.
- Contracts - obligation to deliver generally arises upon the
perfection of the contracts because at such time, “the parties are bound
not only to the fulfillment of what has been expressly stipulated but
also to all the consequences which, according to their nature, may be in
keeping with good faith, usage and law.”
XPN: obligation to deliver has been subjected to a suspensive
condition, in which, the obligation does not come into existence until
after the condition is fulfilled.
Art. 1164 speaks only of the “time the obligation to deliver arises.”
- Right begins from the moment the vinculum attaches, even
when another date has een fixed for the delivery of the thing.
Art. 1537. The vendor is bound to deliver the thing sold and its accessions and
accessories in the condition in which they were upon the perfection of the
contract.
All the fruits shall pertain to the vendee from the day on which the contract was
perfected.
Art. 1315. Contracts are perfected by mere consent, and from that moment the
parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature,
may be in keeping with good faith, usage and law.
b) When Creditor Acquired Real Right
Personal right – the power of one person to demand of another, as a
definite passive subject, the fulfillment of a prestation to give, to do, or
not to do.
Real right – the power belonging to a person over as specific thing,
without a passive subject individually determined, against whom such
right may be personally exercised.
Art. 1164. The creditor “shall acquire no real right over it until the same has
been delivered to him.”
Par. 2 of Art. 712. Ownership and other real rights over property are acquired
and transmitted by law, by donation, by testate and intestate succession, and in
consequence of certain contracts, by tradition.”
The creditor acquires a real right over a thing only upon its delivery
and this principle applies not only to the specific things due, but also to
its fruits.
Non nudis pactis, sed traditione dominia rerum transderuntur (the
ownership of things is transferred not by mere agreement, but by
tradition or delivery).
 Duty to deliver the Accessions and Accessories.
Art. 1166. The obligation to give a determinate thing includes that of delivering
all its accessions and accessories, even though they may not have been
mentioned.
Accessories – those things which, being intended for ornamentation,
use or preservation of another of more importance, have for their object
the completion of the latter for which they are indispensable or
convenient.
Accession – cases of natural accessions, such as alluvium, avulsion and
formation of islands, and cases of industrial accessions, in the of form
of building, planting and sowing.
Art. 1165. When what is to be delivered is a determinate
thing, the creditor, in addition to the right granted him by
Art. 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the
obligation be complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same
thing to two or more persons who do not have the same
interest, he shall be responsible for any fortuitous event
until he has effected the delivery.
Art. 1166. The obligation to give a determinate thing
includes that of delivering all its accessions and accessories,
even though they may not been mentioned.
Art. 1167. If a person obliged to do something fails to do it,
the same shall be executed at his cost.
This same rule shall be observed if he does it in
contravention of the tenor of the obligation. Furthermore, it
may be decreed that what has been poorly done be undone.
Art. 1168. When the obligation consists in not doing, and the
obligor does what has been forbidden him, it shall also be
undone at his expense.
Remedies of Creditor in case of Breach of Obligation
 Classification into real or personal obligation.
 Breach of determinate things
A determinate thing can obly be complied with by delivering the
determinate thing which is due.
In case of breach, the creditor can compel his debtor to make the
delivery.
Part 1 of Art. 1165. When what is to be delivered is a determinate thing, the
creditor, in addition to the right granted him by Art. 1170, may compel the
debtor to make the delivery.
- The action by the creditor against his debtor to compel the
latter to deliver the thing due is one for specific performance if the
source of obligation is contract.
- The creditor may also recover damages against the debtor.
The right to recover damages from the debtor by virtue of the basic rule
on liability for damages by reason of non-fulfillment of obligations
expressed in Art. 1170.
 Breach of generic obligations
- Can be complied with by delivering any member of the genus
or class, even if what is to be delivered is not one of those which the
debtor owns or possesses.
Art. 1165. Compels the performance of the obligation at the expense of
the obligor.
The delivery shall be done by someone else, expenses incurred in
performance shall be borne by the latter.
Alternative remedy, creditor may compel the debtor himself to make
the delivery.
 Breach of Positive Personal Obligations
An obligation “to do” is breached when it is not performed, but also
when the performance is poor or in contravention of the tenor of the
obligation.
Debtor cannot be compelled, against his will, to execute the act which
he bound himself to do. To force him to execute is against the
Constitution.
The alternative mode of fulfilling the obligation in this case, the law
authorizes the creditor to have the act excuted himself or bu another at
his expense.
Art. 1164. Par 2. If a person obliged to do something fails to do, the same shall
be executed at his cost.
 Breach of Negative Personal Obligations
when debtor does what has been forbidden. XPN: the debtor incurs mora, even in the absence of demand, in the
following instance:
Remedy demand for the undoing of what has been don, at his expense
and recover damages. 1. Obligation expressly so declares;
2. Law expressly so declare;
3. From the nature and circumstance of the obligation it appears
Art. 1168. When the obligation consists in not doing, and the obligor does what
that the designation of the time when the thing is to be delivered or the
has been forbidden him, it shall be undone in his expense.
service to is to be rendered was a controlling motive for the
establishment of the contract; or
If it is already impossible to undone, remedy is to recover damage. 4. When the demand would be useless, as when the obligor has
rendered it beyond his power to perform.
CHAPTER 5: BREACH OF OBLIGATION
Effects of Mora Solvendi – liability of debtor to damages or interest.
ARTICLE 1169. Those obliged to deliver or to do something incur
in delay from the time the obligee judicially or extrajudicially Compensation Morae – delay or default on the part of both parties
demands from them the fulfillment of their obligation. because neither has completed their part in their reciprocal obligations.

However, the demand by the creditor shall not be necessary in Reciprocal obligations – those arising from the same cause, each party
order that delay may exist: is a debtor and a creditor of the other.

(1) When the obligation or the law expressly so declare; or Requirement of demand in reciprocal obligations

(2) When from the nature and the circumstances of the obligation GR: the fulfillment of the parties’ respective obligations should be
it appears that the designation of the time when the thing is to be simultaneous. No demand is necessary because both are obligated.
delivered or the service is to be rendered was a controlling motive
for the establishment of the contract; or XPN: if there is fixed date for each to comply.

(3) When demand would be useless, as when the obligor has Mora Accipendi – delay on the part of the oblige in accepting the
rendered it beyond his power to perform. performance of the obligation by the obligor.

In reciprocal obligations, neither party incurs in delay if the other Requisites:

does not comply or is not ready to comply in a proper manner with
what is incumbent upon him. From the moment one of the parties 1. An offer of performance by the debtor who has the required
fulfills his obligation, delay by the other begins. capacity.
2. The offer must be to comply with the prestation as it should
ARTICLE 1170. Those who in the performance of their obligations be performed.
are guilty of fraud, negligence, or delay, and those who in any 3. The creditor refuses the performance without just cause.
manner contravene the tenor thereof, are liable for damages.
Art. 1171. Responsibility arising from fraud is demandable in all
There is a breach of an obligation not performed and when it is obligations. Any waiver of an action for future fraud is void.
performed in contravention of its tenor.
Inducing another to enter contract.
Delay or Default (Mora)
The obligation already exists, and fraud is committed only during its
Default – involves the beginning of a special condition or status which performance. (Action for damage)
has its own effects or results.
Fraud which gives rise to the obligation. (Annulment of the contract)
Delay or default – The non-fulfillment of the obligation with respect to
the time. Art. 1172. Responsibility arising from negligence in the
performance of every kind of obligation is also demandable, but
Three kinds of Mora: such liability may be regulated by the courts, according to the
circumstances.
1. More solvendi – default on the part of the debtor to perform.
(a) mora solvendi ex re (obligation to give); (b) mora solvendi ex Art. 1173. The fault or negligence of the obligor consists in the
persona (obligations to do) omission of that diligence which is required by the nature of the
2. Mora accipiendi – default on the part of the creditor to obligation and corresponds with the circumstances of the persons,
receive of the time and of the place. When negligence shows bad faith, the
3. Compensation morae – default of both partiec in reciprocal provisions of articles 1171 and 2201, paragraph 2, shall apply.
obligations.
If the law or contract does not state the diligence which is to be
Mora Solvendi – a delay in fulfillment of an obligation by reason of a observed in the performance, that which is expected of a good
cause imputable to the debtor, or because of solo or culpa (debtor will father of a family shall be required.
be liable for damage).
Negligence – no intent.
Requisites:
Fraud – dishonesty, malice or bad faith. Intended.
1. Obligation is demandable and already liquidated.
2. Debtor delays in performance; and Culpa Aquiliana – wrongful or negligent act or omission which
3. The creditor requires the performance judicially or creates vinculum juris and gives rise to an obligation between two
extrajudicially. persons not formally bound by any other obligations.

G.R.: default generally begins from the time the creditor demands the Culpa Contractual – the fault incident in the performance of an
performance of the obligation, obligation which already existed, increases the liability from existing
obligation.
Art. 1174. Except in cases expressly specified by the law, or when it
is otherwise declared by stipulation, or when the nature of the
obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which,
though foreseen, were inevitable.
Fortuitous event – extraordinary events not foreseeable or avoidable.
Effects and Requisites
G.R: the occurrence of a fortuitous event excuses the debtor from
liability for non-performance of the obligation.
Requisites:
1. Cause of the breach of the obligation must be independent of
the will of the debtor.
2. The event must be either unforeseeable or unavoidable. (Acts
of God)
3. Event made it impossible for the debtor to fulfill his
obligation in normal manner.
4. Debtor must be free from any participation in, aggravating of
the injury to the creditor.
XPN: (1) when the law expressly provides for liability even when for
fortuitous event; (2) when the stipulation of the parties expressly
provides for liability for fortuitous event; and (3) when the nature of
the obligation requires the assumption of risk.
ARTICLE 1262. An obligation which consists in the delivery of a determinate
thing shall be extinguished if it should be lost or destroyed without the fault of
the debtor, and before he has incurred in delay.
When by law or stipulation, the obligor is liable even for fortuitous events, the
loss of the thing does not extinguish the obligation, and he shall be responsible
for damages. The same rule applies when the nature of the obligation requires
the assumption of risk.
Art. 1175. Usurious transactions shall be governed by special laws.
Usury Law – illegal act of lending money at unreasonable high rates of
interest.
Art. 1176. The receipt of the principal by the creditor, without
reservation with respect to the interest, shall give rise to the
presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as
to prior installments, shall likewise raise the presumption that such
installments have been paid.
Two presumptions established
1. Interest has been paid if payment of the principal is received
by the creditor without preservation with respect to the interest.
2. Those prior installments have been paid if payment of a later
installment is received by the creditor without reservation as to prior
installments.
Art. 1177. The creditors, after having pursued the property in
possession of the debtor to satisfy their claims, may exercise all the
rights and bring all the actions of the latter for the same purpose,
save those which are inherent in his person; they may also impugn
the acts which the debtor may have done to defraud them.
Remedies of Creditor to Protect and Satisfy His Credit
3 Successive Measure before creditor may bring an action for
rescission:
1. Exhaust the properties of the debtor through levying.
2. Exercise all the rights and actions of debtor.
3. Seek rescission of contract.
An action for rescission is a subsidiary remedy; it cannot be instituted
except when the party suffering damage has no other legal means to
obtain reparation for the same.
Accion Subrogatoria – the creditor cannot recover the credit because
the debtor has no property or has insufficient to satisfy the debt but has
credits or rights which he fails to collect, the creditor may exercise all
his rights and bring all the actions of the debtor. Except those which are
inherent in his person.
Accion Pauliana – rescissory action to set aside contracts in fraud of
creditors. There has to be an existing debt, the debtor’s property is
being transferred to not be included in the payment of his debt, there is
no other remedy and there is fraudulent acts.
CHAPTER 6: PURE AND CONDITIONAL
OBLIGATIONS (KINDS OF OBLIGATIONS)
ARTICLE 1179. Every obligation whose performance does not
depend upon a future or uncertain event, or upon a past event
unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall also
be demandable, without prejudice to the effects of the happening of
the event.
Pure obligation – the performance does not depend upon a condition.
Not subjected to a term or period. Immediately demandable (also
resolutory condition).
Art. 1180. When the debtor binds himself to pay when his means
permit him to do so, the obligation shall be deemed to be one with a
period, subject to the provisions of article 1197.
Art. 1181. In conditional obligations, 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.
Pure Obligation – where the performance does not depende upon a
condition. Immediately demandable. (resolutory condition or term
also).
Art. 1180. When the debtor binds himself to pay when his means
permit him to do so, the obligation shall be deemed to be one with a
period, subject to the provisions of article 1197.
Art. 1181. In conditional obligations, 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.
Conditional Obligation – the acquisition of rights and extinguishment
or loss of those already acquired, shall depend upon the happening of
the event that constitutes the condition.
Condition – uncertain event which wields an influence on a legal
relation. Every future and uncertain event upon which an obligation or
provision is made to depend.
When the debtor binds himself to pay when his means permit him to do
so, the obligation shall be considered to be one with a term, and not
one with the condition dependent upon the sole will of the debtor which
is void under Art. 1182.
Classification of Conditions
1. Suspensive – happening gives rise to an obligation
Resolutory – happening of the extinguishment of the obligation.
2. Postestative – fulfillment depends upon the exclusive will of either
of the parties to the juridical relation
Casual – fulfillment depends upon chance or the will of a 3 rd
person
Mixed – fulfillment is dependent partly upon the will of either of
the parties and partly upon chance or the will of a 3rd person.
3. Impossible and possible – whether a condition can be fulfilled or
not, it is either possible or impossible.
4. Positive and negative – depending upon whether the condition is
an act or omission.
5. Divisible and indivisible – if it can be performed in parts, it is
divisible; if not, it is indivisible.
6. Conjunctive, if all are required to be performed; alternative if
only one is required to be perform.
7. Express and implied – a condition is stated or merely inferred. If
stated, express; and if merely inferred, it is implied.
CONTRACTS
Art. 1305. A contract is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give
something or to render some service.
Characteristics:
1. Obligatory force of contracts – contracts have the force of law
between the parties and should be complied with in good faith.
2. Autonomy of the contracts – contracting parties may establish such
stipulations as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public
policy.
3. Mutuality of contracts – the contract must bind both contracting
parties and the validity or compliance cannot be left to the will of
one of them.
4. Relativity of contracts – contracts take effect only between the
parties. Except in case where the rights and obligations arising
from the contract are not transmissible by their nature, or by
stipulation or provision of law.
Classification
1. According to the degree of dependence