OBLIGATIONS REVIEWER | AAY 2021

E. CLASSIFICATION OF OBLIGATIONS
ARTICLE 1156
Primary Classification under the Civil Code:
An Obligation is a juridical necessity to give, to do,
a. Pure and Conditional Obligations (1179-1192)
or not to do.
b. Obligations With a Period (1193-1198)
c. Alternative and Facultative Obligations (1199-
A. CONCEPT AND MEANING OF OBLIGATION
1206)
d. Joint and Solidary Obligations (1207-1222)
-derived from Latin Word “obligatio” which means “tying”
e. Divisible and Indivisible Obligation (1223-1230)
or ‘binding.”
f. Obligation with a Penal Clause (1226-1230)
Sanchez Roman: “the juridical necessity to comply with
Secondary Classification under Civil Code:
a prestation.”
1. Legal, Conventional, and Penal (1158-1162)
2. Real and Personal (1163-1168)
Manresa: “legal relation established between one
3. Determinate and Generic (1163-1166)
person and another, whereby the latter is bound to the
4. Positive and Negative (1167-1168)
fulfillment of a prestation which the former may demand
5. Unilateral and Bilateral (1169-1191)
of him.”
6. Individual and Collective (1207-1223)
7. Accessory and Principal (1166, 1226)
Arias Ramos: “juridical relation whereby a person
(called the creditor or obligee) may demand from another
Classification according to Sanchez Roman:
(called the debtor or obligor) the observance of a
1. As to Juridical Quality:
determinate conduct, and, in case of breach, may obtain
a. Natural- in accordance with natural law
satisfaction from the assets of the latter.”
b. Civil- in accordance with positive law
c. Mixed- in accordance with both natural and
Obligation is a juridical or legal relationship between
positive law
parties, whereby one party called the debtor or obligor is
bound to fulfill a prestation (to give, to do, or not to do)
2. As to Parties:
which the other party called the creditor or obligee may
a. Unilateral and bilateral — unilateral, where
demand from them.
only one party is bound, and bilateral, where
both parties are mutually or reciprocally
B. WHAT IS JURIDICAL NECESSITY?
bound.
b. Individual and collective — individual, where
This means that in case of non-compliance, the courts of
there is only one obligor, and collective,
justice may be called upon to enforce or ask the obligor
where there are several obligors. The latter
for the fulfillment of the obligation.
may be joint, when each obligor is liable only
for his proportionate share of the obligation,
In other words, the debtor must comply with his
or solidary, when each obligor may be held
obligation whether he likes it or not; otherwise, his failure
liable for the entire obligation.
will be visited with some harmful or undesirable legal
sanctions.
3. As to Object:
a. Determinate and generic — determinate,
C. NATURE OF OBLIGATION
when the object is specific; generic, when
the object is designated by its class or
Obligations which give to the creditor or obligee a right of
genus.
action in courts of justice to enforce their performance
are known as civil obligations. They are to be
b. Simple and multiple — simple, when there is
distinguished from natural obligations which, not being
only one undertaking; multiple, when there
based on positive law but on equity and natural law, do
are several undertakings. Multiple
not grant a right of action to enforce their performance
obligations may be conjunctive, when all of
the undertakings are demandable at the
(1) A civil obligation is based on positive law, while a
same time, or distributive, when only one
natural obligation is based on equity and natural law;
undertaking out of several is demandable.
(2) The former is enforceable in courts of justice, while
Distributive obligations, on the other hand,
the latter is not.
may be alternative, when the obligor is
allowed to choose one out of several
D. FOUR REQUISITES OR ELEMENTS OF
obligations which may be due and
OBLIGATION
demandable, or facultative, when the obligor
is allowed to substitute another obligation for
1. ACTIVE SUBJECT- called the Creditor or Obligee to
one which is due and demandable
whom an obligation is rendered or the one who can
demand for its fulfillment.
c. Positive and negative — positive, when the
2. PASSIVE SUBJECT- refers to the Debtor or
obligor is obliged to give or do something;
Obligor, the one who renders the obligation or the
negative, when the obligor must refrain from
person who is bound to its fulfillment.
giving or doing something.
3. JURIDICAL TIE- or vinculum juris, the efficient
cause established by the various sources of
obligation which binds the parties to the obligation. d. Real and personal — real, when the
4. OBJECT or PRESTATION- a particular conduct obligation consists in giving something;
which is required to be fulfilled or observed by the personal, when the obligation consists in
debtor and which the creditor may demand. doing or not doing something.

e. Possible and impossible — possible, when

the obligation is capable of fulfillment in
 nature as well as in law; impossible, when
the obligation is not capable of fulfillment
either in nature or in law.
f. Divisible and indivisible — divisible, when
the obligation is susceptible of partial
performance; indivisible, when the obligation
is not susceptible of partial performance.
g. Principal and accessory — principal, when it
is the main undertaking; accessory, when it
is merely an undertaking to guarantee the
fulfillment of the principal obligation.
4. As to perfection and extinguishment:
a. Pure — when the obligation is not subject to
any condition or term and is immediately
demandable.
b. Conditional — when the obligation is subject
to a condition which may be suspensive, in
which case the happening or fulfillment of
the condition results in the birth of the
obligation, or resolutory, in which case the
happening or fulfillment of the condition
results in the extinguishment of the
obligation.
c. With a term or period (a plazo) — when the
obligation is subject to a term or period
which may be suspensive or from a day
certain, in which case the obligation is
demandable only upon the expiration of the
term, or resolutory or to a day certain, in
which case the obligation terminates upon
the expiration of the term.
LAW VS CONTRACT
 Law is defined as a rule of conduct, just and
obligatory, promulgated by the legitimate
authority, for common observance and benefit.
 Contract is defined as the meeting of minds
between two persons whereby one binds
himself, with respect to the other, to give
something or render service.
CONTRACT VS OBLIGATION
 As defined, a contract is the meeting of the
minds, and the agreement therein would
constitute the obligation, thus a contract is a
source of an obligation.
 Obligation, on the other hand, may not
necessarily arise from meeting of the minds, as
long as it is enforceable by courts of justice
when there is transgression or breach.
CIVIL VS NATURAL OBLIGATION
 Civil Obligation is an obligation which give to
the creditor or obligee a right of action in courts
of justice to enforce their performance. It has a
binding force in law, and which it gives the
obligee or creditor the right of enforcing it
against the obligor or debtor in a court of justice.
Based on positive law.
 Natural Obligation is one which cannot be
enforced by action, but which is binding on the
party who makes it in conscience and according
to natural law. Not being based on positive law,
but on equity and natural law, do not grant a
right of action to enforce their performance. (Art
1423)
ARTICLE 1157
Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (1089a)
A. Classification of Sources of Obligations
a. Obligations emanating from Law
b. Obligations emanating from Private Acts
aa. Licit Acts such as contracts and quasi-
contracts
bb. Illicit Acts which refer to delicts and quasi-
delicts
B. Sources of Obligation
1. Law
2. Contracts
3. Quasi-Contracts
4. Delicts
5. Quasi-Delicts
This enumeration of sources of obligation in Article
1157 is exclusive. Thus, an obligation imposed on one
party and rights to demand which is granted to the other
must be anchored from the sources exclusively
enumerated in 1157.
Actually, there are only two (2) sources: law and
contracts, because obligations arising from quasi-
contracts, crimes, and quasi-delicts are really imposed
by law. (see Leung Ben vs. O’Brien, 38 Phil. 182 [1918].)
Where the source of the obligation is a private act, the
law merely recognizes or acknowledges the existence of
the obligation.
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
provisions of this Book. (1090)
A. OBLIGATIONS ARISING FROM LAW (OBLIGATIO
EX LEGE)
These obligations arise when they are imposed by the
law itself, e.g., obligation to pay taxes; obligation to
support one’s family (see Art. 195, Family Code.).
In obligations arising from law, the law itself is the origin
of the obligation and imposes sanctions in case of
breach.
Obligations derived from law are not presumed. Thus,
only those expressly determined by the Civil Code or in
Special Laws shall be demandable which shall be
regulated by the following:
a. By the precepts of the law which establishes
them
b. By the provisions of the Civil Code Book IV (as
to what has not been foreseen)
B. HOW TO DETERMINE IF THE OBLIGATION
ARISES FROM LAW OR NOT

It is Obligatio Ex Lege if the law itself gives birth to the
obligation or establishes it. It is arising from the act itself
when the law merely recognizes or acknowledges the
obligation it has generated.
ARTICLE 1159
Obligations arising from contracts have the force of
law between the contracting parties and should be
complied with in good faith. (1091a)
A. OBLIGATIONS ARISING FROM CONTRACTS
(OBLIGATIO EX CONTRACTU)
The Obligation is established when they arise from the
stipulation of the parties (Art. 1306.), e.g., the obligation
to repay a loan by virtue of an agreement.
B. DEFINITION OF CONTRACT
Contract is the meeting of minds between two persons
whereby one binds himself with respect to the other, to
give something or to render some service.
Meeting of Minds of Contracting Parties is necessary to
perfect a contract. It implies the giving of consent of each
party.
C. REQUIREMENTS OF A VALID CONTRACT
As a source of obligation, a contract must be valid and
enforceable. (see Art. 1403.)
A contract is valid (assuming all the essential elements
are present, Art. 1318.) if it is not contrary to law, morals,
good customs, public order, and public policy.
It is invalid or void if it is contrary to law, morals, good
customs, public order, or public policy. (Art. 1306).
D. COMPLIANCE IN GOOD FAITH
This means performance in accordance with the
stipulations, clauses, terms and conditions of the
contract.
Good faith and fair dealing must be observed to prevent
one party from taking unfair advantage over the other.
Evasion by a party of legitimate obligations after
receiving the benefits under the contract would constitute
unjust enrichment on his part.
ARTICLE 1160
Obligations derived from quasi-contracts shall be
subject to the provisions of Chapter 1, Title XVII, of
this Book. (n)
A. OBLIGATIONS ARISING FROM QUASI-
CONTRACTS
When they arise from lawful, voluntary and unilateral
acts and which are enforceable to the end that no one
shall be unjustly enriched or benefited at the expense of
another (Art. 2142.), e.g., the obligation to return money
paid by mistake or which is not due. (Art. 2154.) In a
sense, these obligations may be considered as arising
from law.
B. CONCEPT OF QUASI-CONTRACT
It is not, properly, a contract at all. In a contract, there is
a meeting of the minds or consent; the parties must have
deliberately entered into a formal agreement. In a quasi-
contract, there is no consent but the same is supplied
by fiction of law.
In other words, the law considers the parties as having
entered into a contract, irrespective of their intention, to
prevent injustice.
Although there is no pre-existing contract that binds the
two parties, this rule is logical to prevent unjust
enrichment.
C. CHARACTERISTICS OF QUASI-CONTRACTS
a. It arises from lawful acts- this distinguishes
quasi-contract from delict and quasi-delict which
are both products of unlawful acts.
b. It arises from a voluntary act- this
distinguishes quasi-contract from culpa criminal
and culpa aquiliana which are both committed
thru negligence.
c. It arises from unilateral act- this distinguishes
quasi-contract from contract which requires
consent or meeting of minds of the contracting
parties.
D. KINDS OF QUASI-CONTRACTS (OBLIGATIO EX
CUASI CONTRACTU)
The principal kinds of quasi-contracts are negotiorum
gestio and solutio indebiti.
a. NEGOTIORUM GESTIO- is the juridical relation
which arises whenever a person voluntarily takes
charge of the agency or management of the
business or property of another without any power or
authority from the latter.
In this type of quasi-contract, once the gestor or
officious manager has assumed the agency or
management of the business or property, he shall be
obliged to continue such agency or management
until the termination of the affair and its incidents,
exercising such rights and complying with such
obligations as provided for in the Code.
REQUISITES:
a. A person called the GESTOR or Officious
Manager who voluntarily takes charge or
assumes the agency or management of the
business or property of another;
b. Abandoned or neglected property or business;
c. No implied or express authorization from the
owner;
d. Assumption of agency or management is in
good faith.
b. SOLUTIO INDEBITI- is the juridical relation which
arises whenever a person unduly delivers a thing
through mistake to another who has no right to
demand it.
In this type of quasi-contract, once the delivery has
been made, the person to whom the delivery is
unduly made shall have the obligation to return the
property delivered or the money paid.
REQUISITES:
a. Payor rendered payment by mistake
b. Payee received undue payment
SOLUTIO INDEBITI VS ACCION IN REM VERSO
 Obligation to return undue payment in Solutio
indebiti is based on quasi-contract. In Accion in rem
verso, the basis of returning undue payment is the
law. That is, for example, to return excessively
collected tax or erroneously imposed penalties,
ARTICLE 1161
Civil obligations arising from criminal offenses shall
be governed by the penal laws, subject to the
provisions of Article 2177, and of the pertinent
provisions of Chapter 2, Preliminary Title, on Human
Relations, and of Title XVIII of this Book, regulating
damages. (1092a)
A. OBLIGATIONS ARISING FROM DELICTS
(OBLIGATIO EX DELICTO)
Culpa Criminal are obligations arising from crimes or
acts or omissions punished by law. They arise from civil
liability which is the consequence of a criminal offense
(Art. 1161.), e.g., the obligation of a thief to return the car
stolen by him; the duty of a killer to indemnify the heirs of
his victim.
As a rule, every person liable for a felony (criminally
liable) is also civilly liable except for offenses and
special crimes without civil liability. Examples are crimes
of treason, rebellion, illegal possession of fi rearm and
gambling. But a person who is not criminally liable may
still be civilly liable.
This principle is based on the fact that, generally, a crime
has a dual aspect — the criminal aspect and the civil
aspect. Although these two aspects are separate and
distinct from each other in the sense that one affects the
social order and the other, private rights, so that the
purpose of the first is to punish or correct the
offender, while the purpose of the second is to repair
the damages suffered by the aggrieved party, it is
evident that the basis of the civil liability is the criminal
liability itself.
B. RULE ON IMPLIED INSTITUTION
When a criminal action is instituted, the civil action for
recovery of civil liability arising from the offense charged
is impliedly instituted with the criminal action, unless the
offended party:
(i) expressly waives the civil action, or
(ii) reserves his right to institute it separately, or
(iii) institutes the civil action prior to the criminal
action.
Under the present rule, only the civil liability arising from
the offense charged is deemed instituted with the
criminal unless the offended party waives the civil action,
reserves his right to institute it separately, or institutes
the civil action prior to the criminal action.
C. EFFECT OF ACQUITTAL OF THE ACCUSED
Acquittal based on the ground that he did not commit the
offense charged closes the door to civil liability.
Subsequent institution of a civil action to recover
damages is, as a general rule, no longer possible.
If the acquittal of the accused is based on the ground
that his guilt has not been proved beyond reasonable
doubt, a civil action to recover damages based on the
same act or omission may still be instituted. In such
case, mere preponderance of evidence shall be
sufficient in order that the plaintiff will be able to recover
from the defendant.
D. EFFECT OF THE DEATH OF THE ACCUSED
PENDING APPEAL
As to the criminal liability, the RPC Art. 89 is clear that
the same is totally extinguished.
As to civil liability arising from the same crime committed
by the accused who died is also extinguished. This is
because the final determination of criminal liability is a
condition precedent to the prosecution of civil action.
Otherwise stated, prosecution of criminal liability is a
requisite before the civil action will prosper.
ARTICLE 1162
Obligations derived from quasi-delicts shall be
governed by the provisions of Chapter 2, Title XVII of
this Book, and by special laws. (1093a)
A. OBLIGATIONS ARISING FROM QUASI-DELICTS
(OBLIGATIO EX CUASI DELICTO/ CULPA
AQUILIANA/ TORT FEASOR)
When they arise from damage caused to another
through an act or omission, there being fault or
negligence, but no contractual relation exists between
the parties (Art. 2176.), e.g., the obligation of the head of
a family that lives in a building or a part thereof to
answer for damages caused by things thrown or falling
from the same (Art. 2193.); the obligation of the
possessor of an animal to pay for the damage which it
may have caused. (Art. 2183.)
The Supreme Court, in Elcano vs. Hill, has held that
“fault or negligence” in Article 2176 covers not only acts
“not punishable by law” but also acts criminal in
character, whether intentional and voluntary or negligent.
B. REQUISITES OF QUASI-DELICT
Before a person can be held liable for quasi-delict, the
following requisites must be present:
(1) There must be an act or omission by the defendant;
(2) There must be fault or negligence of the defendant;
(3) There must be damage caused to the plaintiff;
(4) There must be a direct relation or connection of
cause and effect between the act or omission and the
damage (Rule on Proximate Cause); and
(5) There is no pre-existing contractual relation between
the parties.
C. CRIME DISTINGUISHED FROM QUASI-DELICT
The following are the distinctions:
(1) In crime or delict, there is criminal or malicious intent
or criminal negligence, while in quasi-delict, there is only
negligence;
(2) Crime affects public interest, while quasi-delict
concerns private interest;
(3) In crime, there are generally two liabilities: criminal
and civil, while in quasi-delict, there is only civil liability;
(4) In crime or delict, the purpose is punishment, while in
quasi-delict, indemnification of the offended party;
(5) Criminal liability cannot be compromised or settled by
the parties themselves, while the liability for quasi-delict
can be compromised as any other civil liability;
(6) In crime, the guilt of the accused must be proved
beyond reasonable doubt, while in quasi-delict, the fault
or negligence of the defendant need only be proved by
preponderance of evidence; and
(7) In crime, the liability of the person responsible for the
author of the negligent act or omission is subsidiary,
while in quasi-delict, it is direct and primary.
D. PROHIBITION AGAINST DOUBLE RECOVERY
Same act or omission characterized by fault or
negligence which causes damage to another, may
produce two distinct sources of obligations: delict/crime
or quasi-delict. However, the law provides that when
damage has been recovered already from one,
recovering from another resulting from the same act is
barred.
Consequently, the failure to recover in one will not
necessarily preclude recovery in the other.
E. RECOVERY IN DELICT AND QUASI-DELICT
In Delict, the employee is directly and primarily liable
while the employer is subsidiarily liable.
Reason: It is erroneous to hold the employer jointly and
severally liable with his employee.
In Quasi-Delict, the employer is jointly and severally
liable for the obligation arising from the negligence
committed by his employee.
Reason: The Doctrine of Vicarious Liability or
Imputed Negligence states that there is direct and
primary negligence of the employer in the selection,
supervision, or both of his employees.
There must be an established employee-employer
relationship.
The rule is that whenever an employee’s negligent act
causes damage, it is instantly presumed that the
employer has committed negligence in either selection or
supervision or in both.
ARTICLE 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 require another standard of
care.
A. CLASSIFICATION OF OBLIGATION BASED ON
SUBJECT MATTER/OBJECT/PRESTATION
REAL AND PERSONAL OBLIGATIONS
Real Obligation: Consists in giving (obligation to give)
-compliance with the obligation is intimately connected
with the thing to be delivered.
-involves delivery of a movable or immovable thing for
the following purpose:
-in order to create a real right,
-for the use of the recipient
- for its simple possession
-in order to return it to the owner.
Personal Obligation: Consists in doing or not doing
(obligation to do or not to do)
-compliance with the obligation is incumbent upon the
person obliged.
- “to do” includes all kinds of service
- “not to do” consists in abstaining from such acts.
B. TYPES OF REAL OBLIGATIONS (TO GIVE)
DEPENDING ON THE NATURE OF THE THING
TO BE DELIVERED
SPECIFIC AND GENERIC OBLIGATIONS
a. Specific or Determinate- consists in the delivery
of a specific or the EXACT thing in question.
-A thing is said to be specific or determinate when it is
particularly designated or physically segregated from all
others of the same class.
-the object is a concrete, particularized thing, indicated
by its own individuality
b. Generic or Indeterminate- delivering ANY of the
same genus or class.
-it is generic or indeterminate when the object is
designated merely by its class or genus without any
particular designation or physical segregation from all
others of the same class.
-the object cannot be pointed out with particularity and
whose determination is confined to that of its nature
SPECIFIC THING AND GENERIC THING
DISTINGUISHED
(1) A determinate thing is identified by its
individuality. The debtor cannot substitute it with
another although the latter is of the same kind
and quality without the consent of the creditor.
(Art. 1244.)
(2) A generic thing is identified only by its species.
The debtor can give anything of the same class
as long as it is of the same kind.
In other words, in the first the object is a concrete,
particularized thing, indicated by its own individuality,
while in the second the object is one whose
determination is confined to that of its nature — to the
genus to which it pertains.
C. TYPES OF PERSONAL OBLIGATIONS AS TO
AFFIRMATIVENESS
POSITIVE AND NEGATIVE
a. Positive Personal Obligation- “to do”
b. Negative Personal Obligation- “not to do”
D. DUTIES OF A DEBTOR IN OBLIGATION TO GIVE
A SPECIFIC OR DETERMINATE THING:
MAIN OBLIGATION:
1. TO DELIVER THE THING ITSELF
-giving what is supposed to be given.
-to deliver what is due.
In an obligation to deliver or to give a specific or
determinate thing, the one that must be delivered is the
EXACT THING which is particularly designated and
physically segregated from all others of the same class.
Delivering otherwise will constitute breach which might,
as a consequence, give birth to undesirable legal
sanctions.
ACCESSORY OBLIGATIONS:
1. TO PRESERVE OR TAKE CARE OF THE THING
DUE. 1163
-it is but logical for a debtor to preserve the EXACT thing
which is due while the same is under his possession to
ENSURE EFFICACY of fulfilling the main obligation.
DILIGENCE REQUIRED
General Rule: Diligence of a good father of the family
(Bonus Pater Familias Rule)
-Refers to the diligence required of a reasonably prudent
person.
-In obligations to give (real obligations), the obligor has
the incidental duty to take care of the thing due with the
diligence of a good father of a family pending delivery.
The phrase has been equated with ordinary care or that
diligence which an average (a reasonably prudent)
person exercises over his own property.
Exception: Unless the Law or stipulation requires
different standard of care (Rule on Standard Care)
~That which the law requires
~That stipulated by the party
-If the law or the stipulation of the parties provides for
another standard of care (slight or extraordinary
diligence), said law or stipulation must prevail. (Art.
1163.)
NEGLIGENCE
-If through negligence, something causes the thing
damage, the debtor is liable for damages.
Test to determine Negligence of Culpa
Would a prudent man (in his position) foresee harm to
the person injured as a reasonable consequence of the
course about to be pursued? If so, the law imposes a
duty on the actor to refrain from that course, or to take
precaution against its mischievous results, and the
failure to do so, constitutes negligence.
In Mandarin Villa, Inc. v. CA (1996), the Test of
Negligence is framed as follows:
Did the defendant in doing the alleged negligent act use
the reasonable care and caution which an ordinary and
prudent person would have used in the same situation?
If not, then he is guilty of negligence.
-The diligence required in in here is not applicable to a
generic thing because the debtor can comply with his
obligation by delivering ANY member of the thing so long
as it belongs to the same genus of what is being asked
to deliver.
NOTE: Without diligence or standard of care
required, it will render the obligation ILLUSORY.
ARTICLE 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.
2. TO DELIVER THE FRUITS OF THE THING. 1164
-To account and deliver to the creditor the fruits if the
thing bears fruits upon the time the obligation to deliver it
arises (Article 1164).
DIFFERENT KINDS OF FRUITS
1.Natural fruits are the spontaneous products of the
soil, and the young and other products of animals,
e.g., grass; all trees and plants on lands produced
without the intervention of human labor.
2.Industrial fruits are those produced by lands of any
kind through cultivation or labor, e.g., sugar cane;
vegetables; rice; and all products of lands brought
about by reason of human labor.
3.Civil fruits are those derived by virtue of a juridical
relation, e.g., rents of buildings, price of leases of
lands and other property and the amount of perpetual
or life annuities or other similar income. (Art. 442.)
RIGHTS OVER FRUITS
-By law, the creditor is entitled to the fruits of the thing to
be delivered from the time the obligation to make
delivery of the thing arises.
-This is to protect the interest of the obligee should the
obligor commit delay, purposely or otherwise, in the
fulfillment of his obligation.
WHEN OBLIGATION TO DELIVER ARISES?
General Rule: From the time of the Perfection of the
Contract- which refers to the time when meeting of the
minds between parties occurred or upon the birth of the
contract.
Exceptions:
-If the obligation is subject to a suspensive condition or
period (Arts. 1179, 1189, 1193.), it arises upon fulfillment
of the condition or arrival of the period. However, the
parties may make a stipulation to the contrary as regards
the right of the creditor to the fruits of the thing.
The obligation to deliver the determinate thing due
deemed to have arisen VARIES depending on the
source of the obligation:
a. In a contract of sale, the obligation arises from the
perfection of the contract even if the obligation is
subject to a suspensive condition or a suspensive
period where the price has been paid.
b. In obligations to give arising from law, quasi-
contracts, delicts, and quasi-delicts, the time of
performance is determined by the specific provisions
of law applicable.
PERSONAL AND REAL RIGHTS
a. Personal right- “a right or power of a person
(creditor) to demand from another (debtor), as a
definite passive subject, the fulfillment of a prestation
to give, to do or not to do.”
-It is a jus ad rem, a right enforceable only against a
definite person or group of persons, such as the right
of a creditor to demand from the debtor the delivery of
the object of the obligation after the perfection of the
contract.
b. Real right- is the right or interest of a person over a
specific thing (like ownership, possession, mortgage,
lease record) without a definite passive subject
against whom the right may be personally enforced.
a “right pertaining to a person over a specific thing,
without a passive subject individually determined against
whom such right may be personally enforced.”
-It is a jus in re, a right enforceable against the whole
world, such as the right of ownership, possession,
usufruct or easement.
PERSONAL RIGHT AND REAL RIGHT
DISTINGUISHED
While in personal right there is a definite active subject
and a definite passive subject, in real right, there is only
a definite active subject without any definite passive
subject.
A personal right is, therefore, binding or enforceable only
against a particular person while a real right is directed
against the whole world.
MEANING OF “he shall acquire no REAL RIGHT over
it until the same has been delivered to him.”
-the creditor does not become the owner until the
specific thing has been delivered to him.
OWNERSHIP ACQUIRED BY DELIVERY
-Non nudis pactis, sed traditione domina rerum
transferentur (The Ownership of Things is transferred
not only by mere agreements, but by tradition or
delivery.)
-the creditor does not become the owner until the
specific thing has been delivered to him.
-when there is no delivery yet, remedy of the court must
be enforcement of the performance of the obligation and
not recovery of possession or ownership.
-OWNERSHIP is transferred only BY DELIVERY.
Hence, creditor’s right over the fruits is merely personal.
-It is clear from these definitions that before delivery, the
creditor, in obligations to give, has merely a personal
right against the debtor— a right to ask for delivery of the
thing and the fruits thereof.
KINDS OF DELIVERY
Actual or Constructive
Actual Delivery (or Tradition)- a kind of delivery
wherein physically, the property changes hands.
Constructive Delivery- the physical transfer is implied
through the following:
a. traditio simbolica (Symbolical Tradition)
b. traditio longa manu (delivery by mere
consent or the pointing out of the subject.)
c. traditio brevi manu (delivery by shorth
hand, whereby the possessor of the thing
not as an owner, becomes the possessor as
the owner.)
d. traditio constitutum possessorio
(opposite of brevi manu, whereby a
possessor of a thing as an owner, retains
possession not as an owner, but in some
other capacity (house owner who sells a
house, but remains in possession as tenant
of the house.
e. Tradition by execution of legal forms and
solemnities (like in the execution of public
instrument selling land.)
ARTICLE 1165
When what is to be delivered is a determinate thing,
the creditor, in addition to the right granted him by
Article 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.
(1096)
REMEDIES OF CREDITOR IN REAL OBLIGATION
UNDER 1170 IF DEBTOR FAILS TO COMPLY WITH
HIS OBLIGATION:
SPECIFIC REAL OBLIGATION
a. Demand specific performance or fulfillment (if it
is still possible) of the obligation with a right to
indemnity for damages; or
b. Demand rescission or cancellation (in certain
cases) of the obligation also with the right to
recover damages; or
c. Demand payment of damages only, where it is
only feasible remedy.
GENERIC REAL OBLIGATION
 a. A generic real obligation (obligation to deliver a
generic thing), on the other hand, can be
performed by a third person since the object is
expressed only according to its family or genus.
It is thus not necessary for the creditor to compel
the debtor to make the delivery although he may
ask for performance of the obligation. In any
case, the creditor has a right to recover
damages under Article 1170 in case of breach of
the obligation
MEANING OF PARAGRAPH 3 OF 1165:
Gives 2 instances:
1. The debtor DELAYS
2. The debtor has PROMISED DELIVERY TO
SEPARATE CREDITORS (BAD FAITH)
These are instances when a fortuitous event DOES NOT
EXEMPT the DEBTOR from responsibility.
Paragraph 3 also refers to determinate things.
Indeterminate thing cannot be a subject of destruction by
a fortuitous event because genus nunquam perit (genus
never perishes.)
FORTUITOUS EVENT:
-A fortuitous event is any extraordinary event which
cannot be foreseen, or which, though foreseen, is
inevitable.
In other words, it is an event which is either impossible
to foresee or impossible to avoid.
The essence of a fortuitous event consists of being a
happening independent of the will of the obligor and
which happening, makes the normal fulfillment of the
obligation impossible.
FORTUITOUS EVENT DISTINGUISHED FROM FORCE
MAJEURE.
(1) Acts of man. — Strictly speaking, fortuitous event is
an event independent of the will of the obligor but
not of other human wills, e.g., war, fire, robbery,
murder, insurrection, etc.
(2) Acts of God. — They are those events which are
totally independent of the will of every human being,
e.g., earthquake, flood, rain, shipwreck, lightning,
eruption of volcano, etc. They are also called force
majeure. The term generally applies to a natural
accident.
In our law, fortuitous events and force majeure are
identical in so far as they exempt an obligor from liability.
Both are independent of the will of the obligor.
ARTICLE 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.
3. TO DELIVER ITS ACCESSIONS AND
ACCESSORIES.
This accessory obligation is expressly imposed upon the
debtor by the provision of Art. 1166
of the Code.
The term “accessions’’ signifies all of those things
which are produced by the thing which is the object of
the obligation as well as all of those which are naturally
or artificially attached thereto.
Such as accesión discreta (natural, industrial and civil
fruits) as well as accesión industrial (building, planting
and sowing), accesión natural (alluvion, avulsion,
abandoned river beds, and islands formed in non-
navigable or non-floatable rivers) and accession with
respect to movable property (adjunction or conjunction,
confusion or commixtion, and specification).
Understand it to mean things that go with the thing to be
delivered (i.e. radio of the car).
“Accessories,’’ on the other hand, must be understood
in its current and popular sense. It signifies all of those
things which have for their object the embellishment, use
or preservation of another thing which is more important
and to which they are not incorporated or attached.
In other words, it includes all of those things which are
necessary or convenient for the perfection of another
thing, such as the equipment of a factory, the spare parts
and tools of a machine, the key of a house, and others of
a similar nature.
4. TO ANSWER FOR DAMAGES IN CASE OF NON-
FULFILLMENT OR BREACH. 1165
-To be liable for damages in case of breach of the
obligation by reason of delay, fraud, negligence or
contravention of the tenor thereof. This obligation is
expressly imposed upon the debtor by the provision of
Art. 1170 of the Code.
It must be noted, however, that this liability does not
arise if the breach is due to a fortuitous event.
RIGHTS OF CREDITOR IN DETERMINATE
OBLIGATIONS. — If the obligation to give is
determinate, the rights of the creditor are as follows:
1. TO COMPEL SPECIFIC PERFORMANCE. This
right is expressly recognized by the first
paragraph of Art. 1165 of the Code which states
that the creditor may compel the debtor to make
the delivery.
2. TO RECOVER DAMAGES FOR BREACH OF
THE OBLIGATION. Besides the right to compel
specific performance, the creditor has also the
right to recover damages from the debtor in case
of breach of the obligation through delay, fraud,
negligence or contravention of the tenor thereof.
DUTIES OF DEBTOR IN OBLIGATION TO DELIVER A
GENERIC OR INDETERMINATE THING.
They are:
(1) To deliver a thing which is of the quality intended
by the parties taking into consideration the
purpose of the obligation and other
circumstances (see Art. 1246.);
-neither of superior nor inferior quality
-creditor cannot demand a thing of superior quality;
-neither the debtor delivers a thing of inferior quality
 (2) To be liable for damages in case of breach of
the obligation by reason of fraud, negligence, or
delay, in the performance of his obligation, or
contravention of the tenor thereof. (see Art.
1170.)
- includes the obligation to reimburse all expenses
incurred by the creditor in those cases where the latter
avails himself of the right to ask a third person to perform
the obligation at the expense of the debtor.
- the doctrine enunciated in Art. 1174 of the Code, by
virtue of which the obligation is extinguished in case the
object thereof is lost or destroyed through a fortuitous
event, is not applicable to this type of obligation.
- the genus of a thing can never perish (genus nunquam
peruit)
RIGHTS OF CREDITOR IN GENERIC OBLIGATIONS.
— If the obligation to give is generic, the rights of the
creditor are as follows:
1. TO ASK FOR PERFORMANCE OF THE
OBLIGATION. Whether the object of an
obligation to give is determinate or generic, it is
undeniable that the creditor has the right to ask
for the performance of the obligation.
The only difference is that in determinate obligations to
give, the creditor can compel specific performance, while
in indeterminate or generic obligations to give, he can
only ask for the delivery of a thing or object belonging to
the class or genus stipulated which must be neither of
superior nor inferior quality.
2. TO ASK THAT THE OBLIGATION BE
COMPLIED WITH AT THE EXPENSE OF THE
DEBTOR. If the debtor refuses or is unable to
comply with his obligation, the creditor can even
ask that the obligation be complied with at the
expense of such debtor.
3. TO RECOVER DAMAGES FOR BREACH OF
THE OBLIGATION. In case of failure of the
debtor to comply with his obligation, or in case of
breach by reason of fraud, negligence, delay or
contravention of the tenor of the obligation, the
creditor can demand for indemnification for
damages.
ARTICLE 1167
If a person obliged to do something fails to do it, the
same shall be executed at his cost.
The 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.
POSITIVE PERSONAL OBLIGATION:
Obligations To Do
Situations:
a. Debtor fails to do it.
b. The debtor did it, but in contrary to obligation’s
tenor.
c. The debtor did it, but in poor manner.
Substandard work done.
INVOLUNTARY SERVITUDE
May the creditor compel the debtor?
-in obligations to do, the obligee does not
possess the power to compel the obligor to comply with
his obligation. In this type of obligation, the law
recognizes the individual’s freedom or liberty to choose
between doing that which he has promised to do and not
doing it.
- courts may not compel compliance as it is
considered an act of violence to do so. Otherwise, this
will amount to involuntary servitude prohibited by Section
18, Article III-Bill Of Rights, Philippine Constitution.
NOTE: The creditor cannot compel or force the
debtor specific performance against his will for it will
amount to INVOLUNTARY SERVITUDE which is
PROHIBITED BY THE CONSTITUTION, Article III,
Section 18(2).
Is there a remedy?
- Consequently, since compliance or fulfillment
can only be voluntary, the Code in the first paragraph of
Art. 1167 has granted a remedy to the obligee to have
the obligation performed or executed at the expense of
the obligor, a remedy which, although irregular, is most
analogous to fulfillment.
-It can be executed by himself or by another person
(third person) at the cost of the debtor.
PERFORMANCE REQUIRES PERSONAL
QUALIFICATIONS
-However, if the performance requires personal
qualifications of the debtor, the only feasible remedy for
the creditor is indemnification of damages, an action
for damages against the debtor.
TO DO: RIGHTS OF THE CREDITOR
If the performance is done in contravention of the
agreed terms or it has been poorly done:
(1) To have the obligation performed or executed at
the expense of the obligor;
(2) to ask that what has been poorly done be
undone; and
(3) to recover damages because of breach of the
obligation.
ARTICLE 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.
NEGATIVE PERSONAL OBLIGATION:
Obligation Not To Do
-The duty of the obligor is to abstain from the act.
-Obligation is fulfilled in not doing what is forbidden.
-So long as the prohibited act is not done, the obligation
is being complied with.
-Obligation is fulfilled or realized so long as that which is
forbidden is not done by the obligor.
In case of breach, If the obligor does what has been
forbidden him, two remedies are available to the obligee
— to have it undone at the expense of the obligor in
accordance with Art. 1168 and to ask for damages in
accordance with Art. 1170.
BREACH OF OBLIGATIONS IN GENERAL
In general, the breach of an obligation may be either
voluntary or involuntary.
VOLUNTARY BREACH:
It is voluntary if the debtor or obligor in the performance
of his obligation is guilty of:
a. default (mora), or
b. fraud (dolo), or
c. negligence (culpa), or
d. performing in any manner which contravenes the
tenor thereof as stipulated.
INVOLUNTARY BREACH
It is involuntary if he is unable to comply with his
obligation because of an event which cannot be
foreseen, or which, though foreseen, was inevitable.
In the first he is liable for damages, in the second he
is not.
ARTICLE 1169
Those obliged to deliver or to do something incur in
delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of
their obligation.
However, the demand by the creditor shall not be
necessary in order that delay may exist:
(1) When the obligation or the law expressly so
declare; or
(2) When from the nature and the circumstances of
the obligation it appears that the designation of the
time when the thing is to be delivered or the service
is to be rendered was a controlling motive for the
establishment of the contract; or
(3) When demand would be useless, as when the
obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in
delay if the other 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
fulfills his obligation, delay by the other begins.
(1100a)
A. DEFAULT or MORA or DELAY
(1) Ordinary delay is merely the failure to perform an
obligation on time.
(2) Legal delay or default or mora is the failure to
perform an obligation on time which failure,
constitutes a breach of the obligation.
In other words, DELAY, DEFAULT or MORA is the
failure to perform or nonfulfillment of the obligation with
respect to time.
KINDS OF DELAY (MORA)
They are:
(1) MORA SOLVENDI or the delay on the part of the
debtor to fulfill his obligation (to give or to do) by
reason of a cause imputable to him;
(2) MORA ACCIPIENDI or the delay on the part of the
creditor without justifiable reason to accept the
performance of the obligation; and
(3) COMPENSATIO MORAE or the delay of the
obligors in reciprocal obligations (like in sale), i.e.,
the delay of the obligor cancels the delay of the
obligee, and vice versa.
GENERAL REQUISITES FOR MORA
They are:
(1) The obligation is demandable and already liquidate;
(2) The obligor or debtor delays performance; and
(3) The creditor requires the performance judicially or
extra-judicially.
WHEN IS DELAY INCURRED?
The debtor incurs in delay from the time the creditor
judicially or extrajudicially demands from him the
fulfillment of his obligation and in spite of such demand,
he is unable to comply with the obligation. (Art. 1169,
par. 1, NCC.)
WHEN IS DEMAND NOT NECESSARY?
a. When the law so provides
(a) Under the law, taxes should be paid on or before
a specific date; otherwise, penalties and surcharges
are imposed without the need of demand for
payment by the government.
(b) The partner is liable for the fruits of the thing he
may have promised to contribute to the partnership
from the time they should have been delivered
without the need of any demand. (Art. 1786; see
also Art. 1788.)
b. When the obligation expressly so declares.
The obligation must expressly so declare that
demand is not necessary or must use words to that
effect, as for instance, “the debtor will be in default”
or “I will be liable for damages.
The mere fixing of the period is not enough.
c. When time is of essence.
The debtor is fully aware that the performance of the
obligation after the designated time would no longer
benefit the creditor.
Examples:
Balloons for Birthday Parties
Cakes for Wedding Ceremony
It is not necessary for the contract to categorically
state that time is of the essence; intent is sufficient.
d. When demand would be useless, as when obligor
has rendered it beyond his power to perform. (Bad
faith)
Examples:
1. Seller sold the same thing to two buyers. He
delivered it to the 2nd buyer who is unaware of the
first sale. 2nd buyer is in good faith and acquires
ownership.
The seller incurred delay as demand has been
already useless.
2. Thus, if A, for instance, has promised to deliver his
automobile to B on the 15th day of November, 1980,
but a few days before such date, the automobile was
completely destroyed through his fault, and the fact
of its destruction was known to B, demand by the
latter would be useless.

e. When there is performance by a party in reciprocal
obligations.
- In case of reciprocal obligations (see Art. 1191.), the
performance of one is conditioned upon the
simultaneous fulfillment on the part of the other.
- So, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner
with what is incumbent upon him. (Art. 11699, last
par.)
- From the moment a party in reciprocal obligations fulfills
or is ready to fulfill his obligation, delay by the other
begins. Where the parties fix a period for the
performance of their reciprocal obligations, neither
party can demand performance nor incur in delay
before the expiration of the period.
B. MORA SOLVENDI
Refers to default on the part of the debtor.
There are two types:
a. Mora solvendi ex re (Real Obligation)
b. Mora solvendi ex persona (Personal Obligation)
REQUISITES FOR MORA SOLVENDI
a. The obligation must be demandable and already
liquidated.
 It is due, enforceable, and determinate in
amount.
b. There must be non-performance or nonfulfillment.
 Failure of the debtor to perform his obligation on
the date and time agreed upon.
c. There must be a demand, unless unnecessary.
 Demand made by the creditor against the debtor
to comply his obligation.
 Demand can be made judicially through courts
or extrajudicially when done outside or not
through the court, or in writing.)
d. The demand must be for the obligation that is due.
 Demand must be for the obligation that is due.
Not on obligations with bigger amount (in case of
multiple debts), except in certain instances,
considering all the circumstances (such as the
burdensome of the debts).
EFFECTS OF MORA ACCIPIENDI ON DEBTOR
a. Guilty of Breach or Violation of the Obligation
b. Liable for Damages
c. Liable to pay the Interests
 In case of obligations to pay money.
 In the absence of extrajudicial demand, the interest
shall commence from the filing of the complaint.
d. Liable even for fortuitous event when the obligation
is to deliver a determinate thing.
-in case of generic thing, the debtor can still be
compelled to deliver a thing of the same kind or
within the same genus
C. MORA ACCIPIENDI
This pertains to the default on the part of the creditor to
accept the delivery of the thing without justifiable reason.
REQUISITES OF MORA ACCIPIENDI
a. There must be an offer of performance from the
debtor who has the require capacity.
b. The offer must be to comply with the prestation as it
should be performed.
c. The creditor refuses the performance or does not
accept the thing without a just cause.
EFFECTS OF MORA ACCIPIENDI
a. The creditor is guilty of breach.
b. The creditor is liable to pay for damages, if any,
incurred or suffered by the debtor such as
delivery costs.
c. The creditor bears the loss of the determinate
thing that is due.
d. From the time of creditor’s delay, the debtor is
not liable to pay for interests in case of obligation
to pay for money.
e. The debtor may release himself from the
obligation by consignation (by depositing the
thing or sum of money to the court.) 1256
D. COMPENSATIO MORAE
This is the default resulting from the inaction of both
parties.
This is the delay or default on the part of both parties
because neither has completed their part of the
reciprocal obligation.
In Reciprocal Obligations, both parties are in default.
Default of one cancels the other as if no one is in default
at all.
The delay of the obligor cancels the effects of the delay
of the creditor and vice versa.
EFFECT OF COMPENSATIO MORAE
The result is that there is NO ACTIONABLE DEFAULT
on the part of both parties. Such that as if neither is guilty
of delay.
If it cannot be determined which party is guilty of delay,
the contract shall be deemed extinguished.
Each party shall bear each own damages (1192)
WHAT ARE RECIPROCAL OBLIGATIONS
-are those arising from the same cause, wherein each
party is a creditor and debtor of each other, such that the
obligation of one is dependent upon the obligation of the
other.
-obligations of both parties are to be performed
simultaneously.
-before one can demand performance of the obligation of
the other, he must also perform his own.
-mutual inaction of each party amounts to
compensation morae.
ARTICLE 1170
Those who in the performance of their obligations
are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof, are
liable for damages. (1101)
This Article speaks of the four modes of committing
breach in the performance of obligations which may held
the committing party liable for damages.
 obligation for the purpose of evading the normal
They are: fulfillment of an obligation. (NCC Art. 1170)
1. FRAUD, DECEIT, or DOLO (1171)
 Involves design to mislead or deceive another D. DOLO CAUSANTE & DOLO INCIDENTE,
 Tantamount to bad faith. DISTINGUISHED

2. NEGLIGENCE or CULPA (1172-1173) DOLO CAUSANTE DOLO INCIDENTE

 There is absence of necessary diligence. Present at the time of the Present during the
 No malice. Unintentional or Voluntary Act constitution of the performance of the
obligation. obligation.
3. DELAY, DEFAULT, or MORA (1169)
 Nonfulfillment or non-performance of obligation with As to purpose, it is It is committed for the
respect to time. committed to lure or induce purpose of evading the
another to get into the normal fulfillment of
4. CONTRAVENTION OF THE TENOR (1170) contract. obligation.
 Any act done which is contradictory to what is Deceit which gives rise to Deceit committed in
stipulated, the actual obligation. obligation already existing.
 Done in poor manner.
 Substandard or defective performance. Results to vitiation of the Results to nonfulfillment or
 Did not follow the contract innocent party’s consent. breach of the obligation.
 The debtor is liable and bound to indemnify the
creditor for damages the latter suffered. Gives rise for action for Gives rise for action for
innocent party to seek for innocent party to seek for
annulment of the contract. payment for damages.

ARTICLE 1171 E. WAIVER OF ACTION FOR FUTURE OR PAST

Responsibility arising from fraud is demandable in
all obligations. Any waiver of an action for future
fraud is void. (1102a)
A. FRAUD, DECEIT, OR DOLO
As used in Article 1170, it is the deliberate or intentional
evasion of the normal fulfillment of an obligation.
As a ground for damages, it implies some kind of
malice or dishonesty and it cannot cover cases of
mistake and errors of judgment made in good faith.
It is synonymous to bad faith in that it involves a
design to mislead or deceive another.
Under Article 1170, the fraud is employed for the
purpose of evading the normal fulfillment of an
obligation and its existence merely results in breach
thereof giving rise to a right by the innocent party to
recover damages. The Civil Code refers to civil fraud.
Criminal fraud gives rise to criminal liability.
In other words, FRAUD, DECEIT or DOLO implies
malice or dishonesty which is synonymous to bad
faith in that it involves deliberate and intentional
design to mislead or deceive another for the purpose
of evading the normal fulfillment of an obligation.
B. ELEMENTS OF DOLO
a. It implies malice or dishonesty
b. It involves design to mislead
c. It is deliberate and intentional
d. It involves conscious doing of wrong
e. The purpose is evasion of normal fulfillment of
an obligation
C. TWO TYPES OF DOLO
1. DOLO CAUSANTE- refers to deceit that is prior
to the constitution of the contractual obligation.
This is committed for the purpose of inducing
another to enter into a contract. (NCC Art. 1138)
2. DOLO INCIDENTE- refers to bad faith or malice
with respect to the performance of the existing
FRAUD
a. FUTURE FRAUD- are generally invalid or void
(no effect, as if there is no waiver) as being
against the law and public policy.
REASON: If allowed, this would encourage the
perpetration of fraud because the obligor knows
that even if he should commit fraud, he would
not be liable for it thus making the obligation
illusory.
b. PAST FRAUD- A past fraud can be the subject
of a valid waiver
REASON: This can be considered as an act of
generosity and magnanimity on the part of the
party who is the victim of the fraud.
NOTE: In the commitment of fraud, COURTS are not
given the power to mitigate or reduce the damages
to be awarded.
ARTICLE 1172
Responsibility arising from negligence in the
performance of every kind of obligation is also
demandable, but such liability may be regulated by
the courts, according to the circumstances. (1103)
A. NEGLIGENCE, FAULT, OR CULPA
This is committed through voluntary act or omission,
being unintentional or without malice, just the absence of
due diligence or reasonable care required by the nature
of the obligation, resulting to the prevention of the normal
fulfillment of the obligation.
Negligence is simply the absence of due care required
by the nature of the obligation.
B. KINDS OF NEGLIGENCE
Culpa, Negligence, or Fault, may either be CIVIL or
CRIMINAL.
a. CIVIL NEGLIGENCE is governed by NCC.
b. CRIMINAL NEGLIGENCE is governed by RPC.
C. KINDS OF CIVIL NEGLIGENCE (Culpa or Fault) (Dolo or Deceit)
As to Intention:
a. CULPA CONTRACTUAL or Contractual There is no intention, only There is bad faith, malice,
Negligence may be defined as the fault or carelessness. There is and deliberate intention to
negligence of the obligor by virtue of which he is lack of diligence, or cause damage.
unable to perform his obligation arising from a inattention.
pre-existing contract, because of the omission of As to Validity of Waiver of Action:
the diligence which is required by the nature of Waiver of Action for Waiver of Action for
the obligation and corresponds with the Future Negligence may Future Fraud is Void.
circumstances of the persons, of the time and of be Valid. EXCEPT when Otherwise, this will grant
the place. the nature of the permission to commit
b. CULPA EXTRA CONTRACTUAL or CULPA obligation requires an fraud without being liable
AQUILLIANA or Quasi-Delict. may be defined extraordinary diligence or and consequently
as the fault or negligence of a person, who, care as in the case of rendering the obligation
because of the omission of the diligence which is common carriers. illusory.
required by the nature of the obligation and As to Proof Required:
which must correspond with the circumstances Presumed from the It must be proved. Mere
of the persons, of the time and of the place, breach of contractual preponderance of
causes damage to another. obligation. evidence is not enough to
Mere Preponderance of prove guilt.
Evidence is sufficient.
As to Negotiability of Liability:
Liability to pay damages Liability cannot be
may be reduced mitigated by the Courts.
according to
circumstances.
D. DISTINCTION BETWEEN CULPA CONTRACTUAL
AND CULPA AUILLIANA F. REGULATORY POWER OF COURTS
CULPA CONTRACTUAL CULPA AQUILLIANA Under Art. 1172, liability arising from negligence in the
As regards the character of the negligence of the performance of every kind of obligation may be regulated
defendant by the courts.
negligence of the it is substantive and
defendant is merely an independent. Consequently, the court may increase or decrease the
incident in the liability of the party at fault depending upon the
performance of an circumstances of each case.
obligation
As regards the relationship of the parties: Thus, the court may take into consideration the good or
there is always a pre- there may or may not be bad faith of the obligor (defendant) or the conduct of the
existing contractual a pre-existing contractual obligee (plaintiff) when the damage was incurred.
relation relation.
As regards the source of the obligation: G. EFFECT OF GOOD FAITH ON DEBTOR
source of the obligation of source is the defendant’s
the defendant to pay negligent act or omission Debtor shall be liable only for natural and probable
damages to the plaintiff is itself. consequences of the breach of the obligation and which
the breach or the parties have foreseen or could have reasonably
nonfulfillment of the foreseen at the time the obligation was constituted.
contract
As regards the proof required for recovery: H. EFFECT OF BAD FAITH: WHEN CULPA IS
proof of the existence of the negligence of the EQUIVALENT TO DOLO
the contract and of its defendant must be
breach or nonfulfillment is proved and clearly Where negligence is gross or shows bad faith, it is
sufficient prima facie to established. Test of considered equivalent to fraud. Bad faith does not simply
warrant a recovery. Negligence must be done connote negligence or bad judgment causing damages
through Courts. to another. Any waiver of an action for future negligence
As regards the availability of due diligence as a of this kind is, therefore, void.
defense:
proof of diligence in the proof of diligence in the If the negligence of the obligor shows bad faith, then, by
selection and supervision selection and supervision express provision of Art. 1173, the provisions of Arts.
of employees is NOT of employees is 1171 and 2201, par. 2, shall apply. It is in this case that
AVAILABLE as a AVAILABLE as a the boundary line, at least with regard to effects,
defense defense between negligence and fraud disappears altogether.
As to the basis of employer’s liability: Hence, the obligor can be held responsible for all
liability of employers is it is based upon the damages which may be reasonably attributed to the
based upon the principle principle that the nonperformance of the obligation Furthermore, any
that the negligence of the negligence of the waiver or renunciation which is made in anticipation of
employee is conclusively employee is prima facie such liability is null and void.
presumed to be the presumed to be the
negligence of the negligence of the I. WHAT IS GROSS NEGLIGENCE
employer. employer.
This is negligence characterized by the absence of or
failure to observe or exercise even the slightest care or
E. NEGLIGENCE AND FRAUD, DISTINGUISHED
diligence which has resulted to the non-fulfillment of the
obligation, even if the person bound to perform the
NEGLIGENCE FRAUD
prestation has all the means and ways to avoid them but
he exerted no effort at all.
J. OTHER CIRCUMSTANCES
The courts may also equitably mitigate the damages in
the following instances:
(1) Where the plaintiff himself has contravened the
terms of the contract;
(2) Where the plaintiff has derived some benefit as
a result of the contract;
(3) In cases where exemplary damages are to be
awarded, where the defendant acted upon the
advice of counsel;
(4) Where the loss would have resulted in any
event; and
(5) Where upon the fi ling of the action, the
defendant has done his best to lessen the
plaintiff’s loss or injury.
K. DAMAGES
ARTICLE 1173
The fault or negligence of the obligor consists in the
omission of that diligence which is required by the
nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the
provisions of Articles 1171 and 2201, paragraph 2,
shall apply.
If the law or contract does not state the diligence
which is to be observed in the performance, that
which is expected of a good father of a family shall
be required. (1104a)
As defined by Art. 1173, omission of that diligence
which is required by the nature of the obligation and
corresponds with the circumstances of the persons,
of the time and of the place.
In other words, “negligence is conduct that creates
undue risk or harm to another. It is the failure to observe
for the protection of the interests of another person, that
degree of care, precaution and vigilance which the
circumstances justly demand, whereby such other
person suffers injury.”
A. TEST FOR NEGLIGENCE
Did the defendant in doing the alleged negligent act use
the reasonable care and caution which an ordinarily
prudent person would have used in the same situation?
If not, then he is guilty of negligence.
B. FACTORS TO BE CONSIDERED
(1) Nature of the obligation. — e.g., smoking while
carrying materials known to be inflammable constitutes
negligence;
(2) Circumstances of the person. — e.g., a guard, a
man in the prime of life, robust and healthy, sleeping
while on duty is guilty of negligence;
(3) Circumstances of time. — e.g., driving a car without
headlights at night is gross negligence but it does not by
itself constitute negligence when driving during the day;
and
(4) Circumstances of the place. — e.g., driving at 60
kilometers per hour on the highway is permissible but
driving at the same rate of speed in Quezon Boulevard,
Manila, when traffic is always heavy is gross
recklessness.
When the source of an obligation is derived from a
contract, the mere breach or non-fulfillment of the
prestation gives rise to the presumption of fault on the
part of the obligor.
C. DILIGENCE REQUIRED
Diligence depends upon the situation of the parties and
the degree of care and vigilance which the
circumstances reasonably require.
Where the danger is great, a high degree of care is
necessary, and the failure to observe it is a want of
ordinary care under the circumstances.
(1) that agreed upon by the parties, orally or in writing;
(2) in the absence of stipulation, that required by law in
the particular case (like the extraordinary diligence
required of common carriers); and
(3) if both the contract and law are silent, then the
diligence expected of a good father of a family (par.
2.) or ordinary diligence
ARTICLE 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. (1105a)
A. FORTUITOUS EVENTS
As a GENERAL RULE, no person shall be responsible
for those events which could not be foreseen, or which,
though foreseen, were inevitable.
EXCEPT in the following cases:
a. cases expressly specified by the law;
b. when it is otherwise declared by stipulation; or
c. when the nature of the obligation requires the
assumption of risk.
B. CLASSIFICATION OF FORTUITOUS EVENTS
ACTS OF GOD- are fortuitous events proper, also
known as Caso Fortuito which refers to an event which
is absolutely independent of human intervention.
 They are those events which are totally
independent of the will of every human
being, e.g., earthquake, flood, rain, shipwreck,
lightning, eruption of volcano, etc.
ACTS OF MAN- also known as fuerza mayor or force
majeure which refers to an event which is dependent
upon human intervention other than that of the obligor.
 event independent of the will of the obligor
but not of other human wills, e.g., war, fi re,
robbery, murder, insurrection, etc
NOTE: The distinction, however, is merely technical.
Essentially, there is no substantial difference between
the two; both refer to an event which is independent
of the will of the obligor.
They are identical in so far as they exempt an obligor
from liability. Both are independent of the will of the
obligor.
C. REQUISITES OF A FORTUITOUS EVENT
Whether an act of man or an act of God, to constitute a
fortuitous event, it is essential that:
(1) The event must be independent of the human
will or at least of the obligor’s will;
(2) The event could not be foreseen
(unforeseeable), or if it could be foreseen, must
have been impossible to avoid (unavoidable);
(3) The event must be of such a character as to
render it impossible for the obligor to comply
with his obligation in a normal manner; and
(4) The obligor must be free from any participation
in, or the aggravation of the injury to the obligee
D. INSTANCES WHER DEBTOR IS STILL LIABLE
EVEN IF THE IMPOSSIBILITY OF FULFILLMENT
IS DUE TO FORTUITOUS EVENTS
In the following instances, a person is still civilly liable for
failure to comply with his obligation although he was
prevented from doing so by a fortuitous event:
(1) When by law, the debtor is liable even for fortuitous
events;
(2) When by stipulation of the parties, the debtor is liable
even for fortuitous events;
(3) When the nature of the obligation requires the
assumption of risk;
(4) When the object of the obligation is lost and the loss
is due partly to the fault of the debtor;
(5) When the object of the obligation is lost and the loss
occurs after the debtor has incurred in delay;
(6) When the debtor promised to deliver the same thing
to two or more persons who do not have the same
interest;
(7) When the obligation to deliver arises from a criminal
offense; and
(8) When the obligation is generic.
ARTICLE 1175
Usurious transactions shall be governed by special
laws. (n)
A. MEANING OF SIMPLE LOAN OR MUTUUM
Simple loan or mutuum is a contract whereby one of the
parties delivers to another money or other consumable
thing, upon the condition that the same amount of the
same kind and quality shall be paid. It may be gratuitous
or with a stipulation to pay interest. (Art. 1933.)
B. MEANING OF USURY
Usury is contracting for or receiving interest in excess of
the amount allowed by law for the loan or use of money,
goods, chattels, or credits.
C. WHAT IS PROHIBITED:
INTEREST RATES WHENEVER UNCONSCIONABLE
IS ILLEGAL. For being immoral and unjust and is
tantamount to repugnant spoliation and an iniquitous
deprivation of property.
TWO KINDS OF PRESUMPTION IN 1176
(1) CONCLUSIVE PRESUMPTION. — one which
cannot be contradicted like the presumption that
everyone is conclusively presumed to know the law (see
Art. 3.); and
(2) DISPUTABLE (OR REBUTTABLE)
PRESUMPTION. — one which can be contradicted or
rebutted by presenting proof to the contrary like the
presumption established in Article 1176. (see Sec. 69[i],
Rule 123, Rules of Court.)
ARTICLE 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. (1110a)
A. TWO PRESUMPTIONS ESTABLISHED
a. That interest has been paid if payment of the
principal is received by the creditor WITHOUT
RESERVATION WITH RESPECT TO THE
INTEREST
b. Those prior installments have been paid if
payment of a later installment is received by the
creditor WITHOUT RESERVATION AS TO
PRIOR INSTALLMENTS
B. WHEN 1176 DOES NOT APPLY
a. With reservation as to interest
b. Receipt for a part of principal
c. Receipt without indication of particular
installment paid
d. Payment of taxes
e. Non-payment proven
ARTICLE 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. (1111)
A. REMEDIES AVAILABLE TO CREDITORS FOR
THE SATISFACTION OF THEIR CLAIMS
In case the debtor does not comply with his obligation,
the creditor may avail himself of the following remedies
to satisfy his claim:
(1) exact fulfillment (specific performance) with the
right to damages;
(2) pursue the leviable (not exempt from attachment
under the law) property of the debtor;
(3) “after having pursued the property in possession
of the debtor,’’ exercise all the rights (like the
right to redeem) and bring all the actions of the
debtor (like the right to collect from the debtor of
his debtor) except those inherent in or personal
to the person of the latter (such as the right to
vote, to hold office, to receive legal support, to
revoke a donation on the ground of ingratitude,
etc.); and (ACCION SUBROGATORIA)
(4) ask the court to rescind or impugn acts or
contracts which the debtor may have done to
defraud him when he cannot in any other
manner recover his claim. (see Arts. 1380-
1389.) (ACCION PAULIANA)
(5) The debtor is liable with all his property, present
and future, for the fulfillment of his obligations,
subject to the exemptions provided by law. (see
Art. 2236.)
B. ACCION SUBROGATORIA AND ITS REQUISITES
The Creditor may exercise all the rights and bring all the
actions of the debtor, except those which are inherent in
his person.
REQUISITES MUST CONCUR:
a. That the creditor has a right of credit against the
debtor although at the moment it is not
liquidated.
b. The credit must be due and demandable.
c. Failure of the debtor to collect
d. Insufficiency of the assets in the hands of the
debtor
e. That the rights and actions are not purely
personal or inherent in the person of the debtor.
C. ACCION PAULIANA AND ITS REQUISITES
The Creditor may seek rescission of the contracts
executed by the debtor in fraud of their rights. This is a
subsidiary remedy which can only be instituted by the
party suffering damage has no other legal means to
obtain reparation for the same.
Otherwise stated, it may only be availed after all other
legal remedies have been exhausted and proven futile.
REQUISITES MUST CONCUR:
a. The plaintiff asking for rescission has a credit
prior to the alienation, although demandable
later.
b. The debtor has made a subsequent contract
conveying a patrimonial benefit to the third
person
c. That the creditor has no other legal remedy to
satisfy his claim, but would benefit by rescission
of the conveyance to the third person
.
d. That the act being impugned is fraudulent
e. That the third person who received property
conveyed, if by onerous title, has been an
accomplice to fraud.
ARTICLE 1178
Subject to the laws, all rights acquired in virtue of an
obligation are transmissible, if there has been no
stipulation to the contrary. (1112)
A. TRANSMISSIBILITY OF RIGHTS
GENERAL RULE: All rights acquired in virtue of an
obligation are generally transmissible.
EXCEPTIONS: They are:
1. where they are not transmissible by their very
nature, such as in the case of a purely personal
right;
2. where there is a stipulation of the parties that they
are not transmissible; and
3. where they are not transmissible by operation of law.
DIFFERENT KINDS OF OBLIGATIONS (NCC)
PRIMARY CLASSIFICATION UNDER THE
CIVIL CODE:
1. Pure and Conditional Obligations (1179-1192)
2. Obligations With a Period (1193-1198)
3. Alternative and Facultative Obligations
(1199-1206)
4. Joint and Solidary Obligations (1207-1222)
5. Divisible and Indivisible Obligation (1223-
1230)
6. Obligation with a Penal Clause (1226-1230)
SECONDARY CLASSIFICATION UNDER
CIVIL CODE:
1. Legal, Conventional, and Penal (1158-1162)
2. Real and Personal (1163-1168)
3. Determinate and Generic (1163-1166)
4. Positive and Negative (1167-1168)
5. Unilateral and Bilateral (1169-1191)
6. Individual and Collective (1207-1223)
7. Accessory and Principal (1166, 1226)
SECTION 1: PURE AND CONDITIONAL 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. (1113)
A. PURE OBLIGATION: CONCEPT
This is a type of an obligation which fulfillment and
extinguishment are not subject to or does not depend on
condition, term or period, and is specifically
characterized by its immediate demandability.
IMMEDIATE DEMANDABILITY
This does not necessarily imply an instantaneous
compliance. The COURTS may give the debtor a
reasonable time in which the to act or comply
accordingly.
GRACE PERIOD
This is the reasonable time or period given to perform
the obligation.
OBLIGATIONS DEMANDABLE AT ONCE
1. When it is Pure Obligation (1179)
2. When Subject to a Resolutory Condition (1179)
3. When Subject to a Resolutory Period (1193)
NOTE: Obligations subject to resolutory condition or
period are immediately demandable, but
extinguishes upon arrival of day certain when the
even occurs.
B. CONDITIONAL OBLIGATION: CONCEPT
A conditional obligation is one whose consequences are
subject in one way or another to the fulfillment of a
condition.
These are obligations which fulfillment or extinguishment
is depending upon the arrival happening of a condition
which may either give rise to rights or extinguish rights
already acquired.
CONDITION, DEFINED
This is an event characterized by its FUTURITY AND
UNCERTAINTY, occurrence of which may render the
obligation effective or extinguished.
This may also refer to PAST EVENTS UNKNOWN TO
BOTH PARTIES which pertain to events that has already
occurred, but not within the knowledge of both parties.
Knowledge is yet to be acquired in the future about a
past event.
TERM OR PERIOD
This refers to a future that is certainly going to happen. It
is characterized by its FUTURITY and CERTAINTY
C. CLASSIFICATION OF CONDITIONS
Conditions are traditionally classified as follows:
 (1) SUSPENSIVE — when the fulfillment of the
condition results in the acquisition of rights arising
out of the obligation.
 (2) RESOLUTORY — when the fulfillment of the
condition results in the extinguishment of rights
arising out of the obligation.
 (1) POTESTATIVE — when the fulfillment of the
condition depends upon the will of a party to the
obligation.
 (2) CASUAL — when the fulfillment of the condition
depends upon chance and/or upon the will of a third
person.
 (3) MIXED — when the fulfillment of the condition
depends partly upon the will of a party to the
obligation and partly upon chance and/or the will of a
third person.
 (1) POSSIBLE — when the condition is capable of
realization according to nature, law, public policy, or
good customs.
 (2) IMPOSSIBLE — when the condition is not
capable of realization according to nature, law,
public policy, or good customs.
 (1) POSITIVE — when the condition involves the
performance of an act.
 (2) NEGATIVE — when the condition involves the
nonperformance of an act.
 (1) DIVISIBLE ~ when the condition is susceptible of
partial realization.
 (2) INDIVISIBLE — when the condition is not
susceptible of partial realization.
 (1) CONJUNCTIVE — when there are several
conditions, all of which must be realized.
 (2) ALTERNATIVE — when there are several
conditions, one of which must be realized.
 (1) EXPRESS — when the condition is stated
expressly.
 (2) IMPLIED — when the condition is tacit. (8
Manresa, 5th Ed.} Bk. 1, pp. 323-324.)
ARTICLE 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. (n)
A. WHEN HIS MEANS PERMIT HIM TO DO SO
This is considered as an obligation WITH A PERIOD.
This means that the duration of the period depends upon
the will of the debtor.
BUT It is also held that the COURTS SHALL FIX the
period if the debtor and the creditor cannot agree among
themselves as to period when the payment must be
made.
ARTICLE 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. (1114)
A. ACQUISITION OF RIGHTS
 This refers to the effect of SUSPENSIVE
CONDITION.
 This is also known as CONDITION
ANTECEDENT/PRECEDENT.
 The happening of a suspensive condition gives rise
to an obligation.
 Juridical Tie is suspended until the happening of a This will render the obligation as ILLUSORY.
condition which constitutes the obligation.
b. Only the condition VOID
NOTE: If Suspensive Condition does not take place, it
will render the obligation as is never existed. EXAMPLE: If the obligation is a pre-existing one, and, therefore,
I WILL GIVE YOU 10,000 IF YOU PASS THE OBLICON does not depend for its existence upon the fulfillment by
SUBJECT. the debtor of the potestative condition, only the condition
is void leaving unaffected the obligation itself.
B. EXTINGUISMENT OR LOSS OF THOSE
ALREADY ACQUIRED Here, the condition is imposed not on the birth of the
obligation but on its fulfillment.
 This refers to the effect of the RESOLUTORY
CONDITION. C. SUSPENSIVE CONDITION DEPENDS UPON THE
 Also called CONDITION SUBSEQUENT. WILL OF CREDITOR.
 A condition when fulfilled ceases the obligation.
 Legal tie is right away active and remains the same If the condition depends exclusively upon the will of the
until it ends when the condition which constitutes the creditor, the obligation is VALID.
obligation occurs.
 During the pendency of the Resolutory Condition, EXAMPLE: “I will pay you my indebtedness upon your
Obligation is immediately demandable as if it was demand.”
PURE OBLIGATION.
The obligation does not become illusory. Normally,
NOTE: If Resolutory Condition takes place, it the creditor is interested in the fulfillment of the obligation
extinguishes the obligation and will render it as if it never because it is for his benefit. It is up to him whether to
constituted. EXAMPLE: I WILL FUND YOUR STAY IN A enforce his right or not.
CONDO UNTIL YOU FINISH YOUR COLLEGE.
D. RESOLUTORY CONDITION DEPENDS UPON THE
C. DISTINCTION WILL OF DEBTOR
SUSPENSIVE RESOLUTORY
If the condition is resolutory in nature, like the right to
Gives rise to an Extinguishes the
repurchase in a sale with pacto de retro, the obligation is
obligation. obligation
valid although its fulfillment depends upon the sole will of
Obligation remains Obligation remains
the debtor.
INEFFECTIVE until EFFECTIVE until
condition happens. condition happens.
The fulfillment of the condition merely causes the
Juridical Tie is
Juridical Tie is extinguishment or loss of rights already acquired. (Art.
consolidated appears
suspended or does not 1181.) The debtor is naturally interested in its fulfillment.
right away and stays the
appear when condition is
same when the obligation
not fulfilled. The position of the debtor when the condition is
is not fulfilled.
resolutory is exactly the same as that of the creditor
Obligation is when the condition is suspensive.
SUSTAINED, but
Obligation is a MERE
threatened by the A condition which is both potestative (or facultative) and
HOPE when condition will
possibility of resolutory may be valid, even though the condition is left
not happen,
discontinuance when to the will of the obligor.
condition occurs.
ARTICLE 1182 E. CASUAL CONDITION
When the fulfillment of the condition depends upon
the sole will of the debtor, the conditional obligation If the suspensive condition depends upon chance or
shall be void. If it depends upon chance or upon the upon the will of a third person, the obligation subject to it
will of a third person, the obligation shall take effect is valid.
in conformity with the provisions of this Code. (1115)
BY CHANCE EXAMPLE:
POTESTATIVE, CASUAL, MIXED CONDITION I will give you 1000 if I win the lotto tomorrow.
A. MEANING OF POTESTATIVE CONDITION 3RD PERSON EXAMPLE:
I will give you 10000 if you Duterte resigns.
A potestative condition is a condition suspensive in
nature and which depends upon the sole will of one of F. MIXED CONDITION
the contracting parties.
Its fulfillment depends partly upon the will of a party to
B. SUSPENSIVE CONDITION DEPENDS UPON THE the obligation and partly upon chance and/or the will of a
WILL OF DEBTOR third person, the obligation shall be valid.
a. Conditional Obligation is VOID EXAMPLE: I will give Benito 1000 if you marry Delilah.
Condition is given during the constitution of the G. DOCTRINE OF CONSTRUCTIVE FULFILLMENT
obligation. OF MIXED CONDITION
Where the potestative condition depends solely upon the When the fulfillment of the condition does not depend on
will of the debtor, the conditional obligation shall be the will of the obligor, but that on a third person who can
VOID because its validity and compliance are left to the in no way be compelled to carry it out, and it is found by
will of the debtor (Art. 1308.) and it cannot, therefore, be the court that the obligor has done all in his power to
legally demanded. comply with his obligation, his part of the contract is
deemed complied with and he has a right to demand
performance of the contract by the other party.
Stated otherwise, the condition is deemed fulfilled or
satisfied when the condition was not fulfilled even if the
debtor did everything in his capacity and power to
comply with the obligation, because the fulfillment
depends not only upon the effort of the debtor, but also
with the will of a third person, who could not be
compelled to fulfill the condition.
ARTICLE 1183
Impossible conditions, those contrary to good
customs or public policy and those prohibited by
law shall annul the obligation which depends upon
them. If the obligation is divisible, that part thereof
which is not affected by the impossible or unlawful
condition shall be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon. (1116a)
A. POSSIBLE AND IMPOSSIBLE CONDITIONS
POSSIBLE when it is capable of realization not only
according to its nature, but also according to the law,
good customs and public policy.
IMPOSSIBLE when it is not capable of realization either
according to its nature or according to law, good
customs or public policy.
B. IMPOSSIBLE CONDITIONS
These are conditions which are not capable of realization
either PHYSICALLY or LEGALLY.
a. PHYSICALLY IMPOSSIBLE CONDITION
When they, in the nature of things, cannot exist or
cannot be done. When they are incompatible with or
contrary to nature.
EXAMPLE: I will give you 1000 if you can revive a dead
man. Or I will pay you if you can fly.
b. LEGALLY IMPOSSIBLE CONDITION
When they are contrary to law, morals, good customs,
public order, or public policy.
EXAMPLE: I will give you 1000 if you will kill Bonita.
C. EFFECTS OF IMPOSSIBLE CONDITIONS
1. Conditional obligation void. — Impossible conditions
annul the obligation which depends upon them. Both
the obligation and the condition are void. The reason
behind the law is that the obligor knows his
obligation cannot be fulfilled. He has no intention to
comply with his obligation.
2. Conditional obligation valid. — If the condition is
negative, that is, not to do an impossible thing, it is
disregarded and the obligation is rendered pure and
valid. (par. 2.) Actually, the condition is always
fulfilled when it is not to do an impossible thing so
that it is the same as if there were no condition. The
negative condition may be not to give an impossible
thing. (I will give you 1M if you cannot split earth.)
3. Only the affected obligation void. — If the obligation
is divisible, the part thereof not affected by the
impossible condition shall be valid. (DIVISIBLE
OBLIGATION + IMPOSSIBLE)
4. Only the condition void. — If the obligation is a pre-
existing obligation, and, therefore, does not depend
upon the fulfillment of the condition which is
impossible, for its existence, only the condition is
void. (PRE-EXISTING + IMPOSSIBLE CONDITION)
NEGATIVE (NOT TO DO) + IMPOSIBLE CONDITION is
VALID and rendered as PURE OBLIGATION and shall
be demandable at once.
ARTICLE 1184
The condition that some event happen at a
determinate time shall extinguish the obligation as
soon as the time expires or if it has become
indubitable that the event will not take place. (1117)
A. POSITIVE AND NEGATIVE CONDITIONS
 POSITIVE if it involves the performance of an act or
the fulfillment of an event
 NEGATIVE if it involves the nonperformance of an
act or the nonfulfillment of an event.
B. POSITIVE AND SUSPENSIVE CONDITION
When the non-happening of the event which constitutes
the condition shall prevent the obligation from coming
into existence. The Obligation will not rise WHEN THE
TIME EXPIRES or it is CERTAIN THAT THE EVENT
WILL NOT TAKE PLACE.
EXAMPLE: I will give B a Car if he becomes a Lawyer
before he turns 25.
-certain not to exist when B has not yet graduated from
the moment, he reaches 25. (Time expired.)
-or when B is still in 2nd Year when he turns 24. (Event is
certainly not happening.)
C. POSITIVE AND RESOLUTORY CONDITION
When the non-happening of the event which constitutes
as the condition shall result in the consolidation of the
rights already acquired by the creditor. Rights become
ABSOLUTE when TIME EXPIRES and IT BECOMES
CERTAIN THAT EVENT IS NOT HAPPENING.
EXAMPLE: I will give my Law Books to Corteza, but if
Ligaya becomes a lawyer when she turns 25, the books
shall be given back to Ligaya.
-Rights of Corteza becomes ABSOLUTE when Ligaya
reaches 25 and still not a Lawyer. (Time expired.)
-or when Ligaya turns 24 and still a first-year law
student. (Event is certainly not happening.)
ARTICLE 1185
The condition that some event will not happen at a
determinate time shall render the obligation effective
from the moment the time indicated has elapsed, or
if it has become evident that the event cannot occur.
If no time has been fixed, the condition shall be
deemed fulfilled at such time as may have probably
been contemplated, bearing in mind the nature of the
obligation. (1118)
A. NEGATIVE CONDITION
The above provision speaks of a negative condition that
an event will not happen at a determinate time. (see Art.
879.) The obligation shall become effective and binding:
(1) from the moment the time indicated has elapsed
without the event taking place;
EXAMPLE: I will give you 5000 if you will not marry
Cleopatra this year 2021. (Jan. 1, 2022 at 12:01 AM, it’s
demandable if you did not marry)
(2) from the moment it has become evident that the
event cannot occur, although the time indicated has not
yet elapsed.
EXAMPLE: I will give you 5000 if you will not marry
Cleopatra this year 2021. But Cleopatra died on
December 2021. (Evidently, event is not happening,
thus, its demandable.)
NOTE: If no time is fixed, the circumstances shall be
considered to determine the intention of the parties. This
rule may also be applied to a positive condition.
ARTICLE 1186
The condition shall be deemed fulfilled when the
obligor voluntarily prevents its fulfillment. (1119)
A. DOCTRINE OF CONSTRUCTIVE FULFILLMENT
OF SUSPENSIVE CONDITION
The condition is deemed fulfilled when the debtor is
found to have INTENTIONALLY AND ACTUALLY
PREVENTED THE FULFILLMENT of the condition.
REQUISITES:
a. Condition is Suspensive
b. The obligor actually prevents the fulfillment of the
condition.
c. The obligor acts voluntarily or intentionally.
EFFECTS:
Despite his actual prevention of the fulfillment of the
condition which made it deemed fulfilled, THE DEBTOR
MUST COMPLY WITH THE OBLIGATION.
The law does not require that the obligor acts with malice
or fraud as long as his purpose is to prevent the
fulfillment of the condition. He should not be allowed to
profit from his own fault or bad faith to the prejudice of
the obligee. In a reciprocal obligation like a contract of
sale, both parties are mutually obligors and also
obligees. (see Art. 1167.)
B. CONSTRUCTIVE FULFILLMENT OF
RESOLUTORY CONDITION
Article 1186 applies also to an obligation subject to a
resolutory condition with respect to the debtor who is
bound to return what he has received upon the fulfillment
of the condition.
ARTICLE 1187
The effects of a conditional obligation to give, once
the condition has been fulfilled, shall retroact to the
day of the constitution of the obligation.
Nevertheless, when the obligation imposes
reciprocal prestations upon the parties, the fruits
and interests during the pendency of the condition
shall be deemed to have been mutually
compensated. If the obligation is unilateral, the
debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances
of the obligation it should be inferred that the
intention of the person constituting the same was
different.
In obligations to do and not to do, the courts shall
determine, in each case, the retroactive effect of the
condition that has been complied with. (1120)
A. EFFECT OF SUSPENSIVE CONDITIONS BEFORE
FULFILLMENT
If the obligation depends upon a suspensive condition,
the demand ability as well as the acquisition or effectivity
of rights arising from the obligation is suspended
pending the happening or fulfillment of the fact or event
which constitutes the condition. It is but logical,
therefore, that during the pendency of the condition, the
obligee or creditor has only a mere hope or expectancy.
This hope or expectancy, however is protected by the
law (NCC 1188).
B. RETROACTIVE EFFECTS OF FULFILLMENT OF
SUSPENSIVE CONDITION
(1) IN OBLIGATIONS TO GIVE. — An obligation to give
subject to a suspensive condition becomes
demandable only upon the fulfillment of the
condition. However, once the condition is fulfilled, its
effects shall retroact to the day when the obligation
was constituted.
The reason is because the condition is only an
accidental element of a contract. (see Art. 1318.) An
obligation can exist without being subject to a condition.
Had the parties known beforehand that the condition
would be fulfilled, they would have bound themselves
under a pure obligation. Hence, the obligation should be
considered from the time it is constituted and not from
the time the condition is fulfilled. It would seem that the
rule on retroactivity has no application to real contracts
as they are perfected only by delivery of the object of the
obligation. (see Art. 1316.)
(2) IN OBLIGATIONS TO DO OR NOT TO DO. — no
fixed rule is provided. This does not mean, however,
that in these obligations the principle of retroactivity
is not applicable. The courts are empowered by the
use of sound discretion and bearing in mind the
intent of the parties, to determine, in each case, the
retroactive effect of the suspensive condition that
has been complied with. (par. 2.) It includes the
power to decide that the fulfillment of the condition
shall have no retroactive effect or from what date
such retroactive effect shall be reckoned.
RETROACTIVE EFFECTS AS TO FRUITS AND
INTERESTS IN OBLIGATIONS TO GIVE.
(1) In reciprocal obligations. — There is no retroactivity
because the fruits and interests received during the
pendency of the condition are deemed to have been
mutually compensated. This rule is necessary for
purposes of convenience since the parties would not
have to render mutual accounting of what they have
received. Fruits here may be natural, industrial, or
civil fruits. (see Art. 442.)
(2) In unilateral obligations. — There is usually no
retroactive effect because they are gratuitous. The
debtor receives nothing from the creditor. Thus,
fruits and interests belong to the debtor unless
from the nature and other circumstances it should be
inferred that the intention of the person constituting
the same was different.
ARTICLE 1188
The creditor may, before the fulfillment of the
condition, bring the appropriate actions for the
preservation of his right.
The debtor may recover what during the same time
he has paid by mistake in case of a suspensive
condition. (1121a)
RIGHTS PENDING FULFILLMENT OF SUSPENSIVE
CONDITION
(1) Rights of creditor. — He may take or bring
appropriate actions for the preservation of his right,
as the debtor may render nugatory the obligation upon
the happening of the condition. Thus, he may go to
court to prevent the alienation or concealment of the
property of the debtor or to have his right annotated
in the registry of property. The rule in paragraph one
applies by analogy to obligations subject to a resolutory
condition. (see Art. 1190, par. 1.)
(2) Rights of debtor. — He is entitled to recover what
he has paid by mistake prior to the happening of the
suspensive condition. This right is granted to the
debtor because the creditor may or may not be able to
fulfill the condition imposed and hence, it is not certain
that the obligation will arise. This is a case of solutio
indebiti which is based on the principle that no one
shall enrich himself at the expense of another.
ARTICLE 1189
When the conditions have been imposed with the
intention of suspending the efficacy of an obligation
to give, the following rules shall be observed in case
of the improvement, loss or deterioration of the thing
during the pendency of the condition:
(1) If the thing is lost without the fault of the debtor,
the obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor,
he shall be obliged to pay damages; it is understood
that the thing is lost when it perishes, or goes out of
commerce, or disappears in such a way that its
existence is unknown or it cannot be recovered;
(3) When the thing deteriorates without the fault of
the debtor, the impairment is to be borne by the
creditor;
(4) If it deteriorates through the fault of the debtor,
the creditor may choose between the rescission of
the obligation and its fulfillment, with indemnity for
damages in either case;
(5) If the thing is improved by its nature, or by time,
the improvement shall inure to the benefit of the
creditor;
(6) If it is improved at the expense of the debtor, he
shall have no other right than that granted to the
usufructuary. (1122)
A. REQUISITES FOR APPLICATION OF ARTICLE
1189
These rules are natural consequences of the principle of
retroactivity which is embodied in Art. 1187. They refer
only to conditional obligations to give a determinate
thing. Although the loss, deterioration or improvement
occurs during the pendency of the condition, such rules
are predicated on the fulfillment of such conditions
Article 1189 applies only if:
(1) The obligation is a real obligation;
(2) The object is a specific or determinate thing;
(3) The obligation is subject to a suspensive condition;
(4) The condition is fulfilled; and
(5) There is loss, deterioration, or improvement of the
thing during the pendency of the happening on one
condition.
LOSS:
(1) If the thing is lost without the fault of the debtor, the
obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor, he
shall be obliged to pay damages; it is understood that
the thing is lost when it perishes, or goes out of
commerce, or disappears in such a way that its
existence is unknown or it cannot be recovered;
Loss of the thing due must be understood in its technical,
not vulgar, sense. Thus, according to the Code, it is
understood that the thing is lost:
(1) when it perishes; or
(2) when it goes out of commerce; or
(3) when it disappears in such a way that its existence is
unknown or it cannot be recovered.
 If the thing is lost without any fault of the debtor,
the obligation is extinguished.
 If it is lost through his fault, the obligation is
converted into one of indemnity for damages.
The first rule is in conformity with Art. 1262 of
the Code.
DETERIORATION
A thing deteriorates when its value is reduced or
impaired with or without the fault of the debtor.
(3) When the thing deteriorates without the fault of the
debtor, the impairment is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the
creditor may choose between the rescission of the
obligation and its fulfillment, with indemnity for
damages in either case;
IMPROVEMENTS
A thing is improved when its value is increased or
enhanced by nature or by time or at the expense of the
debtor or creditor. (see Art. 1187.)
(5) If the thing is improved by its nature, or by time, the
improvement shall inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall
have no other right than that granted to the usufructuary.
(Art. 1189, NCC.)
GENERAL RULE: Natural accessions, such as alluvion,
avulsion, abandoned river beds, or islands which are
formed, the accession shall inure to the benefit of the
creditor.
EXCEPTION: If the thing is improved at the expense of
the debtor, the creditor shall have no other right than that
granted to a USUFRUCTUARY (see bullets below).
Consequently, the debtor cannot ask reimbursement for
the expenses incurred for useful improvements or for
improvements for mere pleasure;
 he can, however, ask reimbursement for necessary
expenses.
 he has the right to remove such improvements,
provided it is possible to do so without damage to
the thing or property.
 he may also set off the improvements he may have
made on the property against any damage to the
same.
ARTICLE 1190
When the conditions have for their purpose the
extinguishment of an obligation to give, the parties,
upon the fulfillment of said conditions, shall return
to each other what they have received.

In case of the loss, deterioration or improvement of
the thing, the provisions which, with respect to the
debtor, are laid down in the preceding article shall
be applied to the party who is bound to return.
As for the obligations to do and not to do, the
provisions of the second paragraph of Article 1187
shall be observed as regards the effect of the
extinguishment of the obligation. (1123)
A. EFFECT OF RESOLUTORY CONDITIONS AFTER
FULFILLMENT
Rights rights which are vested in the obligee or creditor
in obligations with a resolutory condition are always
subject to a threat of extinction during the pendency of
the condition.
RESOLUTORY CONDITION IS NOT FULFILLED: such
rights are consolidated; in other words, they become
absolute in character.
IF IT IS FULFILLED: such rights are extinguished
altogether; in other words, whatever may have been
paid or delivered by one or both of the parties upon the
constitution of the obligation shall have to be returned
upon the fulfillment of the condition. There is, therefore,
a return to the status quo.
(1) IN OBLIGATIONS TO GIVE
When the resolutory condition in an obligation to give is
fulfilled, the obligation is extinguished (Art. 1181.) and
the parties are obliged to return to each other what
they have received under the obligation. (par. 2.)
(a) There is a return to the status quo. In other words,
the effect of the fulfillment of the condition is retroactive.
(b) The obligation of mutual restitution is absolute. It
applies not only to the things received but also to the
fruits and interests.
(c) In case the thing to be returned “is legally in the
possession of a third person who did not act in bad faith”
(see Art. 1384, par. 2.), the remedy of the party entitled
to restitution is against the other.
In such case, the only remedy of the injured party is to
proceed against the party responsible for the
transfer or conveyance for damages. However, if the
third person had acquired the thing in bad faith, the
injured party can still go after the property.
If for any cause the thing can no longer be recovered,
the only remedy of the injured party is to proceed
against the third person who had acted in bad faith
for damages.
(2) IN OBLIGATIONS TO DO OR NOT DO
The retroactivity of effects of the resolutory condition
shall depend upon the discretion of the courts, as in the
case of suspensive conditions.
B. THE EFFECT OF LOSS, DETERIORATION OR
IMPROVEMENT OF THE THING DURING THE
PENDENCY OF A RESOLUTORY CONDITION
Once the condition is fulfilled, same are also applicable
here.
However, in the application of the rules stated in Art.
1189 to obligations subject to a resolutory condition, the
“debtor” is the person obliged to return, while the
“creditor” is the person to whom the thing or object must
be returned.
ARTICLE 1191
The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should
not comply with what is incumbent upon him.
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages in either case. He may also
seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed,
unless there be just cause authorizing the fixing of a
period.
This is understood to be without prejudice to the
rights of third persons who have acquired the thing,
in accordance with Articles 1385 and 1388 and the
Mortgage Law. (1124)
A. CONCEPT OF RECIPROCAL OBLIGATIONS
Reciprocal obligations are those which are created or
established at the same time, out of the same cause,
and which result in mutual relationships of creditor and
debtor between the parties.
B. KINDS OF OBLIGATION ACCORDING TO THE
PERSON OBLIGED
(1) UNILATERAL — when only one party is obliged to
comply with a prestation.
EXAMPLES: Donation; In a contract of loan, the lender
has the obligation to give. After the lender has complied
with his obligation, the debtor has the obligation to pay.
(2) BILATERAL — when both parties are mutually
bound to each other.
In other words, both parties are debtors and creditors of
each other. Bilateral obligations may be reciprocal or
non-reciprocal.
a. Reciprocal obligations are those which arise from
the same cause and in which each party is a debtor
and creditor of the other, such that the performance
of one is designed to be the equivalent and the
condition for the performance of the other.
GENERAL RULE: to be performed simultaneously or at
the same time such that each party may treat the
fulfillment of what is incumbent upon the other as a
suspensive condition to his obligation.
and its non-fulfillment, as a tacit or implied
resolutory condition, giving him the right to demand
the rescission of the contract, i.e., it may be exercised
even if it is not provided in the agreement of the
parties.
b. Non-reciprocal obligations are those which do not
impose simultaneous and correlative performance
on both parties. In other words, the performance of
one party is not dependent upon the simultaneous
performance by the other.
C. TACIT RESOLUTORY CONDITION
If one of the parties fail to comply with what is incumbent
upon him, there is a right on the part of the other to
rescind the obligation. The power to rescind is given to
the injured party.

D. NECESSITY OF JUDICIAL ACTION
Without stipulation: Through Courts
The right to rescind or resolve the obligation is a right
which belongs to the injured party alone. However, it is
essential that it MUST BE INVOKED JUDICIALLY.
With stipulation: Judicial Permission is not necessary
Where the contract itself contains a resolutory provision
by virtue of which the obligation maybe cancelled or
extinguished by the injured party in case of breach,
judicial permission to cancel or rescind the contract is no
longer necessary.
THE RIGHT TO RESCIND IS “IMPLIED’’ ONLY IF NOT
EXPRESSLY GRANTED; NO RIGHT CAN BE SAID TO
BE IMPLIED IF EXPRESSLY RECOGNIZED.
E. NATURE OF BREACH
GENERAL RULE: Rescission will not be permitted for a
slight or casual breach of the contract, but only for such
breaches as are substantial and fundamental as to
defeat the object of the parties in making the agreement.
F. REMEDY
1. action for specific performance (fulfillment) of the
obligation with damages.
2. action for rescission of the obligation also with
damages
REMEDIES ARE ALTERNATIVE
The remedies of the injured or aggrieved party are
alternative and not cumulative, that is, he is privileged
to CHOOSE ONLY ONE of the remedies, and NOT
BOTH, subject only to the exception in paragraph 2, to
wit: he may also seek rescission even after he has
chosen fulfillment if the latter should become
impossible. But after choosing rescission of the
obligation, he cannot thereafter demand its compliance,
nor seek partial fulfillment under the guise of recovering
damages.
G. RESCISSION VS TERMINATION
To rescind is “to declare a contract void in its
inception and to put an end to it as though it never
were.’’ It is “not merely to terminate it and release
parties from further obligations to each other but to
abrogate it from the beginning and restore parties to
relative positions which they would have occupied had
no contract even been made.’’
In other words, seeking discharge from contractual
obligations and offer for restitution by the vendor is not
the same as the abrogation of the contract.
Rescission has likewise been defined as the “unmaking
of a contract, or its undoing from the beginning, and not
merely its termination.” Rescission may be effected by
both parties by mutual agreement; or unilaterally by one
of them declaring a rescission of contract without the
consent of the other, if a legally sufficient ground exists
or if a decree of rescission is applied for before the
courts.
On the other hand, termination refers to an “end in time
or existence; a close, cessation or conclusion.”
When an agreement is rescinded, it is deemed
inexistent, and the parties are returned to their status
quo ante. Hence there is mutual restitution of benefits
received.
However, when it is terminated, it is deemed valid at its
inception. Prior to termination the contract binds the
parties who are thus obliged to observe its provisions.
The consequences of termination may be anticipated
and provided by the contract. As long as the terms of the
contract are not contrary to law, morals, good customs,
public order or public policy they shall be respected by
the courts.
H. EFFECT
IT IS THE DUTY OF THE COURT TO REQUIRE THE
PARTIES TO SURRENDER WHATEVER THEY MAY
HAVE RECEIVED FROM THE OTHER
MUTUAL RESTITUTION is required to bring back the
parties, as far as practicable, to their original situation
prior to the inception of the contract.
Rescission creates the OBLIGATION TO RETURN THE
OBJECT OF THE CONTRACT. It requires a mutual
restitution of the benefits each party may have received
as a result of the contract. It can be carried out only
when the one who demands rescission can return
whatever he may be obliged to restore. To rescind is to
declare a contract void and to abrogate it from its
inception.
UPON THIRD PERSONS:
Rescission creates the obligation of mutual restitution.
However, if the thing, subject matter of the obligation, is
in the hands of a third person who acted in good faith,
rescission is not available as a remedy. (par. 4; see Arts.
1385, 1388.) In such case, the injured party may recover
damages from the person responsible for the transfer.
I. RIGHT TO RESCIND MAY BE WAIVED
The right to rescind may be waived, expressly or
impliedly.
If the right to rescind may be waived, the right to impugn
rescission may be lost on the ground of estoppel.
ARTICLE 1192
In case both parties have committed a breach of the
obligation, the liability of the first infractor shall be
equitably tempered by the courts. If it cannot be
determined which of the parties first violated the
contract, the same shall be deemed extinguished,
and each shall bear his own damages. (n)
A. FIRST INFRACTOR KNOWN
One party violated his obligation; subsequently, the other
also violated his part of the obligation. In this case, the
liability of the first infractor should be equitably reduced.
B. FIRST INFRACTOR CANNOT BE DETERMINED
One party violated his obligation followed by the other,
but it cannot be determined which of them was the first
infractor.
The rule is that the contract shall be deemed
extinguished and each shall bear his own damages.

This means that the contract shall not be enforced. In

effect, the court shall not provide remedy to either of the
parties, who must suffer the damages allegedly
sustained by them.

NOTE: The above rules are deemed just.

The first one is fair to both parties because the second

infractor also derived, or thought he would derive, some
advantage by his own act or neglect.

The second rule is likewise just because it is presumed

that both at about the same time tried to reap some
benefit.

SECTION 2. - OBLIGATIONS WITH A PERIOD

ARTICLE 1193
Obligations for whose fulfillment a day certain has
been fixed, shall be demandable only when that day
comes.
Obligations with a resolutory period take effect at
once, but terminate upon arrival of the day certain.

A day certain is understood to be that which must

necessarily come, although it may not be known
when.

If the uncertainty consists in whether the day will

come or not, the obligation is conditional, and it
shall be regulated by the rules of the preceding
Section. (1125a)