Special LMT Civil Law 202021

SPECIAL LAST MINUTE REMINDERS – CIVIL LAW 2020/21
MARITAL RELATIONSHIPS
Bar Question: The wife filed a case of legal separation against her husband on the ground of sexual
infidelity without previously exerting earnest efforts to come to a compromise with him. The judge
dismissed the case for having been filed without complying with a condition precedent. Is the dismissal
proper?
Answer: No, since legal separation like validity of marriage is not subject to compromise agreement for
purposes of filing.
Article 26 par. 2 FC Republic v. Orbecido

The Supreme Court, conceding that the provision in question on its face does not appear to govern the
case at hand and seems to apply only to cases where at the time of the celebration of the marriage, the
parties were a Filipino and a foreigner, and that the deliberations of the Committee on the Family Code
showed that it was intended to avoid the absurd situation where a Filipino spouse remains married to the
alien spouse, who after obtaining a divorce, is no longer married to the Filipino spouse, held, however,
that taking into consideration the legislative intent behind said provision and applying the rule of reason,
said provision should be interpreted to allow a Filipino citizen who has been divorced by a spouse who
had acquired foreign citizenship and remarried, also to remarry. (Handbook on the Family Code of the
Phil., Sempio-Diy)
Article 26 par. 2 FC Republic v. Manalo

According to the Supreme Court, the wording of Article 26, paragraph 2 of the Family Code requires only
that there be a valid divorce obtained abroad and does not discriminate as to who should file the divorce,
i.e., whether it is the Filipino spouse or the foreign spouse. Also, even if assuming arguendo that the
provision should be interpreted that the divorce proceeding should be initiated by the foreign spouse, the
Court will not follow such interpretation since doing so would be contrary to the legislative intent of the
law.
Important provisions:
Art. 2 FC. No marriage shall be valid, unless these essential requisites are present:
(1) Legal capacity of the contracting parties who must be a male and a female; and
(2) Consent freely given in the presence of the solemnizing officer.
Art. 4 FC. The absence of any of the essential or formal requisites shall render the marriage void ab initio,
except as stated in Article 35 (2).
A defect in any of the essential requisites shall not affect the validity of the marriage but the party or
parties responsible for the irregularity shall be civilly, criminally and administratively liable.
Art. 7 FC. Marriage may be solemnized by:
(1) Any incumbent member of the judiciary within the court’s jurisdiction;
(2) Any priest, rabbi, imam, or minister of any church or religious sect duly authorized by his church or
religious sect and registered with the civil registrar general, acting within the limits of the written authority
granted by his church or religious sect and provided that at least one of the contracting parties belongs to
the solemnizing officer’s church or religious sect;
(3) Any ship captain or airplane chief only in the case mentioned in Article 31;
(4) Any military commander of a unit to which a chaplain is assigned, in the absence of the latter, during a
military operation, likewise only in the cases mentioned in Article 32;
(5) Any consul-general, consul or vice-consul in the case provided in Article 10. (56a)
Art. 36 FC A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, shall likewise be void even if
such incapacity becomes manifest only after its solemnization.
Art. 41 FC. A marriage contracted by any person during subsistence of a previous marriage shall be null
and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for
four consecutive years and the spouse present has a well-founded belief that the absent spouse was
already dead. In case of disappearance where there is danger of death under the circumstances set forth
in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient.
For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse
present must institute a summary proceeding as provided in this Code for the declaration of presumptive
death of the absentee, without prejudice to the effect of reappearance of the absent spouse.
Art. 45 FC. A marriage may be annulled for any of the following causes, existing at the time of the
marriage:
(1) That the party in whose behalf it is sought to have the marriage annulled was eighteen years of age or
over but below twenty-one, and the marriage was solemnized without the consent of the parents,
guardian or person having substitute parental authority over the party, in that order, unless after attaining
the age of twenty-one, such party freely cohabited with the other and both lived together as husband and
wife;
(2) That either party was of unsound mind, unless such party after coming to reason, freely cohabited with
the other as husband and wife;
(3) That the consent of either party was obtained by fraud, unless such party afterwards, with full
knowledge of the facts constituting the fraud, freely cohabited with the other as husband and wife;
(4) That the consent of either party was obtained by force, intimidation or undue influence, unless the
same having disappeared or ceased, such party thereafter freely cohabited with the other as husband
and wife;
(5) That either party was physically incapable of consummating the marriage with the other, and such
incapacity continues and appears to be incurable; or
(6) That either party was afflicted with a sexually-transmissible disease found to be serious and appears
to be incurable.
PROPERTY
IN GENERAL:
Property is not defined under the Civil Code but simply implies that the concept refers to things which are
susceptible of appropriation. Hence, things which cannot be subjected to human control by reason of
sheer physical impossibility are not considered as property.
Art. 414. All things which are or may be the object of appropriation are considered either:
(1) Immovable or Real Property; or
(2) Movable or Personal Property.
Classification of Property
Immovable Property (Art. 425) Movable Property (Art. 416 and 417)
(1) Land, buildings, roads and constructions of all Things that are deemed to be personal property:
kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they (1) Those movables susceptible of appropriation
are attached to the land or form an integral part of which are not included in the preceding article;
an immovable; (2) Real property which by any special provision
(3) Everything attached to an immovable in a fixed of law is considered as personal property;
manner, in such a way that it cannot be separated (3) Forces of nature which are brought under
therefrom without breaking the material or control by science; and
deterioration of the object; (4) In general, all things which can be transported
(4) Statues, reliefs, paintings or other objects for from place to place without impairment of the real
use or ornamentation, placed in buildings or on property to which they are fixed.
lands by the owner of the immovable in such a
manner that it reveals the intention to attach them
permanently to the tenements; Things that are also considered as personal
(5) Machinery, receptacles, instruments or property:
implements intended by the owner of the
tenement for an industry or works which may be (1) Obligations and actions which have for their
carried on in a building or on a piece of land, and object movables or demandable sums; and
which tend directly to meet the needs of the said (2) Shares of stock of agricultural, commercial and
industry or works; industrial entities, although they may have real
(6) Animal houses, pigeon-houses, beehives, fish estate.
ponds or breeding places of similar nature, in
case their owner has placed them or preserves
them with the intention to have them permanently
attached to the land, and forming a permanent Note: Movable property is either consumable or
part of it; the animals in these places are included; non-consumable. To the first class belong those
(7) Fertilizer actually used on a piece of land; movables which cannot be used in a manner
(8) Mines, quarries, and slag dumps, while the appropriate to their nature without their being
matter thereof forms part of the bed, and waters consumed; to the second class belong all the
either running or stagnant; others (Art. 418, CC).
(9) Docks and structures which, though floating,
are intended by their nature and object to remain
at a fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes
and other real rights over immovable property.
Classes of Immovable Property
 By Nature – it cannot be carried from place to place.

 By Incorporation – they are essentially movables but are attached to an immovable in a fixed
manner to be an integral part thereof.
 By Destination – essentially movable but are placed in an immovable as an added utility.
 By Analogy – classified by express provision of law because it is regarded as united to the
immovable.
Q: Manila Petroleum Co. owned and operated a petroleum operation facility off the coast of Manila. The
facility was located on a floating platform made of wood and metal, upon which was permanently
attached the heavy equipment of the petroleum operations and living quarters of the crew. The floating
platform likewise contained a garden area, where trees, plants and flowers were planted. The platform
was tethered to a ship, the MV 101, which was anchored to seabed.
(1) Is the platform movable or immovable property?
Immovable under par. 9 of Art. 415 if it can be shown that it was intended to remain fixed on the
sea.
(2) Are the equipment and living quarters movable or immovable property?
Immovable under par. 5 of Art. 415 if it can be shown that they are being used for the industry,
and that they were permanently attached to the immovable property by the owner of said
immovable property.
(3) Are the trees, plants and flowers immovable or immovable property?
Yes. Under par. 2 of Art. 415, trees, plants and growing fruits are immovable while they are
attached to another immovable property. Flowers, although not expressly included in the
enumeration, can fall under growing fruits.
Q: Salvador, a timber concessionare, built on his lot a warehouse where he processes and stores his
timber for shipment. Adjoing the warehouse is a furniture factory owned by NARRAMIX of which Salvador
is a majority stockholder. NARRAMIX leased space in the warehouse where it placed its furniture-making
machinery.
(1) How would you classify the furniture-making machinery as property under the Civil Code?
Movable. It was not attached to the land by the owner of the land but only by the lessee. Except
in cases where the Court applies the doctrine of piercing the veil of corporate fiction, Salvador,
although a majority stockholder of Narramix, is a separate entity from the corporation.
(2) Suppose the lease contract between Salvador and NARRAMIX stipulates that at the end of the
lease the machinery shall become the property of the lessor, will your answer be the same?
My answer would be different. In Davao Saw Mill, the Court ruled that the lessee was acting as
an agent of the lessor of the premises. Therefore, the machinery attached by lessee Narramix
was, by fiction of law, attached by owner Salvador.
PROPERTY IN RELATION TO WHOM IT BELONG

Art. 419. Property is either or public dominion or of private ownership.
Property of Public Dominion

 Property of Public Dominion is not owned by the State but pertains to the State, which, as territorial
sovereign, exercises certain juridical prerogatives over such property. The ownership of such
properties is in the social group, whether national, provincial or municipal.
 The purpose of property of public dominion is not to serve the State as a juridical person but the
citizens. It is intended for the common and public welfare so it cannot be the object of appropriation
either by the Sate or by private persons.
 Properties of public dominion are outside the commerce of men. Thus, it cannot be sold, leased or
otherwise be the subject matter of contracts; it cannot be acquired thru prescription not even by
municipalities against the State; it cannot be burdened by easements; and it cannot be registered
under the land registration law and be the subject of the Torrens title.
Kinds of Public Dominion:

1. For public use (Art 420[1])
Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
2. For public service (art 420 [2])

Those which belong to the State, without being for public use, and are intended for some public
service or for the development of the national wealth.
3. For the development of national wealth (Art 424[1]), 420[2])

Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads,
city streets, municipal streets, the squares, fountains, public waters, promenades, and public
works for public service paid for by said provinces, cities, or municipalities. (Art 424[1])
Those which belong to the State, without being for public use, and are intended for some public
service or for the development of the national wealth. (Art 420[2])
Property of Private Ownership

Refers to all property belonging to private persons either individually or collectively and those belonging to
the State and any of its political subdivisions which are patrimonial in nature.
Patrimonial Property of the State

 Those owned by the State that are not devoted for public use, public service or the development of
national wealth. The patrimonial property is the property owned by the State in its private or proprietary
capacity.
 May be acquired by private individuals or corporations through prescription (Art. 1113), and can also
be an object of ordinary contract.
 In order that the property of public dominion form part of patrimonial property when it is no longer
devoted for public use or public service, the property must be converted.
o A formal declaration by the legislative department of the government that the property is
no longer needed for public use or public service. Otherwise, the property continues to be
of public dominion notwithstanding the fact that it is not actually devoted for such use or
service.
o In case of political subdivisions, the conversion must be authorized by law.
Q: Which of the following statements is wrong?

(1) Patrimonial property of the state, when no longer intended for public use or for public service,
shall become property of public dominion
(2) All property of the State, which is not of public dominion, is patrimonial property
(3) The property of provinces, cities and municipalities is divided into property for public use and
patrimonial property
(4) Property is either of public dominion or of private ownerhship
Answer:
(1) because it is the other way around – ANSWER; It is the other way around. Property of public
dominion, when no longer intended for public use or for public service, shall become patrimonial
property of the state.
(2) is true. Property owned by the State which is not intended for public use or public service is
patrimonial.
(3) is true. Property of provinces, cities and municipalities is divided into property for public use
and patrimonial property. Property for public use in these LGUs consist of the provincial roads,
city streets, municipal streets, the squares, fountains, public waters, promenades, and public
works for publc service paid for by the concerned LGUs. All others are patrimonial property.
(4) Property is either of public dominion or of private ownership.
The relevance of distinguishing public properties from private ones is that the former are exempt
from execution because of their necessity for governmental functions. For the same reason,
properties of the public domain are not within the commerce of men.
 Anthony bought a piece of untitled agricultural land from Bert. Bert, in turn, acquired the property by
forging Carlo’s signature in a deed of sale over the property. Carlo had been in possession of the
property for 8 years, declared it for tax purposes, and religiously paid all taxes due on the property.
Anthony is not aware of the defect in Bert’s title, but has been in actual physical possession of the
property from the time he bought it from Bert, who had never been in possession. Anthony has since
then been in possession of the property for one year.
(1) Can Anthony acquire the property through acquisitive prescription?

Yes. He can acquire the property through acquisitive prescription because the subject land is
unregistered property.
(2) How many years does Anthony need?
1 year because Anthony is a possessor in good faith. Thus, the 8 years of possession by Carlo
can be continued by Anthony to acquire the real property through ordinary acquisitive
prescription.
(3) If Carlo is able to legally recover his property, can he require Anthony to account for all the fruits
he has harvested from the property while in possession?
No. The general rule is that the fruits pertain to the owner. There are exceptions to this rule such
as: (1) when possessor of the land receives the fruits in good faith; (2) in antichresis where the
creditor gets the fruits; (3) in usufructuary where the possesor has the right to enjoy the fruits; and
(4) in a lease agreement where the lessee gets the natural and industrial fruits.
(4) If there are standing crops on the property when Carlo recovers possession, can Carlo
appropriate them?
Yes. Art. 448 applies since both parties acted in good faith. Carlo, as owner of the land, has the
following options:
a. Appropriate the fruits
b. Compel Bert, who is a sower in good faith, to rent the land
OWNERSHIP
 It is the independent and general right of a person to control a thing particularly in his possession,
enjoyment, disposition and recovery, subject to no restrictions except those imposed by the State or
private persons, without prejudice to the provisions of law.
 Ownership may be exercised over things and rights (Art 427).
 Distinguish occupation from possession

(1) Both are modes of acquiring ownership
(2) Occupation is a way of acquiring things that are appropriable by nature which are without an
owner such as animals, hidden treasure and abandoned movables. It is, however, not a
mode for acquiring a piece of land.
(3) On the other hand, possession is a mode for acquiring both movables and immovables. In the
case of immovables, such possession must be adverse in character.
Attributes of Ownership
 Right to enjoy – includes right to use and enjoy (jus utendi), right to the fruits (jus fruendi), right to
accessories (jus accessories), and right to consume by use (jus abutendi), within the limits
prescribed by law; includes the right to exclude any person from the enjoyment and disposal thereof.
o Provisions to take note:
 Art 428 (1) – right to enjoy property
 Art 437 – right to construct any works or make any plantations and excavations
on the surface or subsurface of the land
 Art 438 – Right to hidden treasure found in the owner’s property
 Art 440 – Right to accessions
 Right to dispose – or jus dispodendi, is the right of the owner to alienate, encumber, transfer and
even destroy the thing owned, totally or partially, within the limits prescribed by law. Includes right
not to dispose.
 Right of action – or jus vincandi, given by the law to the person whose property has been wrongfully
taken from him against any person unlawfully detaining it even if the possession of the latter has
been legalized by conveyance, either to recover damages or the possession of the property; the right
of action can be transferred.
o However, the person who claims the he has a better right to the property must prove
(burden of proof) his title thereto. Accordingly, a person in peaceful possession of
property must be respected in his possession until a competent court rule for his ouster.
CO-OWNERSHIP
 There is co-ownership whenever the ownership of an undivided thing or right belongs to different
persons. In default of contracts, or of special provisions, co-ownership shall be governed by the
provisions of this Title. (Art 484)
 The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their
respective interests. Any stipulation in a contract to the contrary shall be void. The portions belonging
to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved. (Art.
485)
 Each co-owner may use the thing owned in common, provided he does so in accordance with the
purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or
prevent the other co-owners from using it according to their rights. The purpose of the co-ownership
may be changed by agreement, express or implied. (Art 486)
Requisites of Co-ownership
1. Plurality of subjects
2. Unity of object
3. Recognition of ideal share
Q: Marcelino, a treasure hunter as just a hobby, has found a map which appears to indicate the location
of hidden treasure. He has an idea of the land where the treasure might possibly be found. Upon inquiry,
Marcelino learns that the owner of the land, Leopoldo, is a permanent resident of Canada. Nobody,
however, could give him Leopoldo's exact address. Ultimately, anyway, he enters the land and conducts
a search. He succeeds. Leopoldo, learning of Marcelino “find", seeks to recover the treasure from
Marcelino but the latter is not willing to part with it. Falling to reach an agreement, Leopoldo sues
Marcelino for the recovery of the property, Marcelino contests the action. How would you decide the
case?
(1) Is this still by chance since he found a map and used it to find the hidden treasure?
No. It is by chance if it is by good luck. In this case, Marcelino used a map to find it.
(2) Is Leopoldo entitled to a share?
Yes. The owner of the land is the owner of its surface and everything under it. Assuming
arguendo that Marcelino found the subject property by chance and that the find is therefore
hidden treasure, Leopoldo is still entitled to ownership of the subject property. Under Art. 438,
hidden treasure belongs to the owner of the land, building or other property on which it is found.
Marcelino would have been entitled to a 50% share except that he was a trespasser.
Q: X, Y, Z are siblings who inherited a 10-storey building from their parents. They agreed in writing to
maintain it as a co-owned property for leasing out and to divide the net profits among themselves equally
for a period of 20 years. On the 8th year, X wanted to get out of the co-ownership so he could get his 1/3
share in the property. Y and Z refused, saying X is bound by their agreement to keep the co-ownership
for 20 years. Are Y and Z correct? Explain.
A: Y and Z are partly correct. The law provides that none of the co-owners shall be obliged to remain in
the co-ownership and it is the right of a co-owner to ask for partition of the co-ownership anytime. One
exception to the rule is if the co-owners agree to keep the thing undivided which period shall not exceed
ten years. In this case, the agreement to keep the thing undivided shall be valid at the most for ten years
(Art. 494).
RIGHT OF ACCESSION
 It is the right of the owner of a thing, real or personal, to become the owner of everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or artificially.
 To the owner belongs the:
o Natural Fruits - the spontaneous products of the soil and the young and other products
of animals
o Industrial Fruits – those produced by lands of any kind through cultivation or labor.
o Civil Fruits – the rents of buildings, the price of leases of lands and other property and
the amount of perpetual or life annuities or other similar income.
Q: The properties of Jessica and Jenny, who are neighbors, lie along the banks of the Marikina River. At
certain times of the year, the river would swell and as the water recedes, soil, rocks and other materials
are deposited on Jessica’s and Jenny’s properties. This pattern of the river swelling, receding and
depositing soil and other materials being deposited on the neighbors’ properties have gone on for many
years. Knowing this pattern, Jessica constructed a concrete barrier about 2 meters from her property line
and extending towards the river, so that when the water recedes, soil and other materials are trapped
within this barrier. After several years, the area between Jessica’s property line to the concrete barrier
was completely filled with soil, effectively increasing Jessica’s property by 2 meters. Jenny’s property,
where no barrier was constructed, also increased by one meter along the side of the river. Can Jessica
and Jenny legally claim ownership over the additional 2 meters and one meter, respectively, of land
deposited along their properties?
A: Jenny can legally claim ownership of the lands by right of accession (accretion) under Article 457 of
the Civil Code. The lands came into being over the years through the gradual deposition of soil and silt by
the natural action of the waters of the river. Jessica cannot claim the two meter-wide strip of land added to
her land. Jessica constructed the cement j barrier two meters in front of her property towards the river not
to protect her land from the destructive forces of the water but to trap the alluvium. In order that the
riparian owner may be entitled to the alluvium the deposition must occur naturally without the intervention
of the riparian owner (Republic v. CA, 132 SCRA 514[1984]).
Q: For many years, the Rio Grande river deposited soil along its bank, beside the titled land of Jose. In
time, such deposit reached an area of one thousand square meters. With the permission of Jose, Vicente
cultivated the said area. Ten years later, a big flood occurred in the river and transferred the 1000 square
meters to the opposite bank, beside the land of Agustin. The land transferred is now contested by Jose
and Agustin as riparian owners and by Vicente who claims ownership by prescription. Who should
prevail? Why?
A: Jose should prevail. The disputed area, which is an alluvion, belongs by right of accretion to Jose, the
riparian owner (Art. 457 CC). When, as given in the problem, the very same area was “transferred" by
flood waters to the opposite bank, it became an avulsion and ownership thereof is retained by Jose who
has two years to remove it (Ant. 459, CC). Vicente's claim based on prescription is baseless since his
possession was by mere tolerance of Jose and, therefore, did not adversely affect Jose’s possession and
ownership (Art. 537, CC). Inasmuch as his possession is merely that of a holder, he cannot acquire the
disputed area by prescription.
OBLIGATIONS
I. IN GENERAL
A. DEFENITION
Art. 1156. An obligation is a juridical necessity to give, to do or not to do.
JURIDICAL NECESSITY:
Art. 1423 provides that obligations are either natural or civil. Art. 1156 provides the definition of civil
obligations.
Under Art. 1423, civil obligations give a right of action to compel their performance or fulfillment. In this
sense, there is juridical necessity.
What are the elements of obligation?

1. an active subject, who has the power to demand the prestation, known as the oblige or creditor;
2. a passive subject, who is bound to perform the prestation, known as the obligor or debtor;
3. an object or the prestation;
4. the efficient cause or the juridical tie (vinculum juris) between the two subjects by reason of which
the debtor is bound in favor of the creditor to perform the prestation.
How will you distinguish an obligation from natural obligations?

Since the definition above only refers to the civil obligation or those which give a right of action to compel
their performance, the same will not include the natural obligation, which are those which cannot be
enforced by court action but which are binding on the party who makes them, in conscience and
according to equity and natural justice. The differences between the two include the following:
1. Civil obligations derive their binding force from positive law while Natural obligations derive
their binding effect from equity and natural justice;
2. Civil obligations can be enforced by court action or the coercive power of public authority while
the fulfillment of Natural obligations cannot be compelled by court action but depends
exclusively from conscience.
B. KINDS OF OBLIGATIONS AS TO BASIS AND ENFORCEABILITY
What are the types of obligations?

1. Natural obligation
2. Civil obligation
Why would Natural Obligation be allowed in our jurisdiction?
It is because equality, morality and natural justice as the foundations of a positive law makes wisdom to
this obligation so as the so-called moral obligation.
What is the basis of natural obligation?

It is from the nature of man and of things, as well as from law and reason, there arises a natural law,
which is immutable and independent of all human regulations; as sometimes called as rational law.
Illustration:
1. A filed an action to compel B to fulfill the latter’s obligation to the former, will the action prosper? Not
necessarily because in natural obligations no court action can compel performance because it is an
action based on equity, conscience and natural justice. Natural obligations are midway between civil
obligations and the purely moral obligations. In order that there may be a natural obligation, there must
exist a juridical tie (vinculum juris) which is not prohibited by law and which in itself could give a cause of
action, but because of some special circumstances is actually without such legal sanction or means of
enforcing compliance by invoking the intervention of the court.
Basis: Art. 1423 Obligations are civil or natural. Civil obligations give a right of action to compel their
performance. Natural obligations, not being based on positive law but on equity performance, but after
voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered
by reason thereof. Some natural obligations are set forth in the following articles.
Requisites of Natural Obligation:

1. There is a juridical tie between two persons (distinguishes it from moral obligation)
2. The tie is not given effect by law (distinguishes it from civil obligation)
What are imperfect and perfect obligations?

Perfect obligation is one where there is a determination of the creditor, debtor and the nature and value
of the obligation while imperfect obligation has no determination of those above.
What is its implication to natural obligation?

Perfect obligation is natural obligation in a sense that all those elements have been determined and it is
only the performance that is left to the will of the debtor.
C. PRESCRIPTION OF ACTIONS
What does “prescription of actions” means?

It is also known as the limitation of actions which refers to the time within which an action may be brought,
or some act done, to preserve a right.
What are “Statutes of Limitation”?

These are the acts limiting the time within which actions shall be brought. They do not confer any right of
action but are enacted to restrict the period within which the right might be asserted. They can be
available as defenses but not matters of substantive right. The purpose is to protect the diligent and
vigilant not those who sleep on their rights. They are statutes of repose, the object of which is to suppress
fraudulent and stale claims from springing up at great distances of time and surprising the parties or their
representatives when all the proper vouchers and evidence are lost or the facts have become obscure
from the lapse of time or the defect memory or death or removal of witnesses. These contemplate civil
actions not criminal actions.
What is the difference between laches and prescription? Laches is concerned with the effect of delay
while prescription is concerned with the fact of delay. Laches is principally the question of inequity of
permitting a claim to be enforced while prescription is a matter of time. Laches applies to equity while
prescription is statutory/law.
II. SOURCES OF OBLIGATIONS

A. Law
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.
Q: What are the characteristics of a legal obligation?

A: The following are the characteristics of a legal
obligation:
1. Does not need the consent of the obligor;
2. Must be expressly set forth in the law creating it and not merely presumed; and
3. In order that the law may be a source of obligation, it should be the creator of the obligation itself.
(NCC, Art. 1158)
B. Contracts
Article 1159. Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith.
Article 1305. A contract is a meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service.
What are the requisites of a contractual obligation? The following are the requisites of a contractual
obligation:
1. It must contain all the essential requisites of a contract (NCC, Art. 1318); and
2. It must not be contrary to law, morals, good customs, public order, and public policy. (NCC, Art.
1306)
Q: What rules govern the obligations arising from contracts?

A: The following are the characteristics of a legal
obligation:
1. Does not need the consent of the obligor;
2. Must be expressly set forth in the law creating it and not merely presumed; and
3. In order that the law may be a source of obligation, it should be the creator of the obligation itself.
(NCC, Art. 1158)
Autonomy of Contract - It is that principle which states that obligations arising from contracts have the
force of law between the contracting parties and should be complied with in good faith. (NCC, Art. 1159)
C. QUASI-CONTRACTS
Article 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1,
Title XVII, of this Book.
QUASI-CONTRACT is a juridical relation which arises from certain unlawful, voluntary and unilateral acts
to the end that no one may be unjustly enriched or benefited at the expense of another.
The act must be:

1. Lawful – thus different from delict which is unlawful;
2. Voluntary – thus different from quasi-delict which is based on fault or negligence or lack of
foresight;
3. Unilateral – thus different from contract, in which parties agree.
e.g. in Negotiorum Gestio:
1. Benefits Conferred Voluntarily
2. For preservation of Property or Business
EXTRA-CONTRACTUAL OBLIGATIONS are OBLIGATIONS without an agreement or based on

IMPLIED CONSENT.
Q: What does the concept of presumptive consent mean?
A: It means that since a quasi-contract is a unilateral contract created by the sole act(s) of the gestor,
there is no express consent given by the other party. The consent needed in a contract is provided by law
through presumption. (Pineda, 2000)
NEGOTIORUM GESTIO – juridical relation which arises whenever a person voluntarily takes charge of
an agency or management of the business or property of another without any power or authority from the
latter.(NCC, Art. 2144)
This juridical relation does not arise in either of these instances: ELEMENTS –
1. When the property or business is not neglected or abandoned;
2. If in fact the manager has been tacitly authorized by the owner.
In the first case, the provisions of articles 1317, 1403, No. 1, and 1404 regarding unauthorized
contracts shall govern.
In the second case, the rules on agency in Title X of this Book shall be applicable.
SOLUTIO INDEBITI – juridical relation which arise whenever person unduly delivers a thing through or
by mistake of another who has no right to demand it. (NCC, Art. 2154)
D. DELICTS
Revised Penal Code, Article 100. Civil liability of a person guilty of felony. - Every person criminally
liable for a felony is also civilly liable.
Revised Penal Code, Article 104. What is included in civil liability. – The civil liability established in
articles 100, 101, 102, and 103 of this Code includes:
1. Restitution;
2. Reparation of the damage caused;
3. Indemnification for consequential damages.
QUASI DELICT DELICT
it is subsidiary (imputed) ER’s liability is primary in RPC
Diligence of good father of the family may be set up In RPC, such defense of GFF is not available
by the ER as a defense
A person while not criminally liable may still be civilly liable - Failure of the plaintiff to reserve in the
criminal case his right to file a separate civil action is not fatal to the civil action after the acquittal of the
accused. When the acquittal is based on ground that the guilt of the accused has not been proved
beyond reasonable doubt, plaintiff has the right to institute a civil action for damages (culpa aquiliana).
Q: Is it possible that even if there is a contract between the parties, a quasi-delict can still be
committed by one against the other regarding the area covered by the contract?
A: Yes, according to the case of Araneta v. de Joya, 57 SCRA 59. The same act can give rise to
obligations arising from different sources. For example, Alinea is the owner of a bus co., the Alinea Bus
Co., Molina is a driver of one of the buses of Alinea Bus Co. Lagdameo rode the bus being driven by
Molina. As a result of the reckless driving of Molina, Lagdameo suffered injuries. In this case,
Lagdameo has a choice-- he can sue on either contract, quasi-delict or on crime. If he decided to sue on
the breach of the contract of carriage, all he has to prove is the (existence of the contract) & that it was
not performed. In this case, he can sue the common carrier but not the driver because he has no contract
with the driver. If he sues on quasi-delict, he can sue both the common carrier & the driver. The defense
of the driver would be diligence in driving (or fortuitous event.) The defense of the common carrier would
be diligence in the selection & supervision of employees. If he sues under crime, he has to sue the
driver. In case the driver is convicted & has been sentenced to pay civil liability, the employer (Alinea
Bus Co.) is subsidiarily liable. If Molina is insolvent, Alinea Bus Co. will pay.
NOTE: Notice that the choice of cause of action will determine three things: the theory of the plaintiff,
the defense of the defendant & the question of whom to sue.
E. QUASI-DELICTS
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
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.
QUASI-DELICTS – the fault or negligence of a person who, by his act or omission connected or not with,
but independent from any contractual relation, causes damage to another person;
> The omission to do something which ordinarily reasonable men guided by those considerations which
ordinarily regulate the conduct of human affairs, would do; or doing something which prudent and
reasonable men would not do.
> Liability on Quasi Delict is based on equity, man is responsible not only for acts conscious and
intentional acts but also for his lack of foresight, care and diligence which may cause harm to another.
ELEMENTS:
1. A duty on the part of the defendant to protect the plaintiff from the injury of which the latter
complains;
2. failure to perform that duty, and
3. injury to the plaintiff through such failure.
TEST OF NEGLIGENCE: Would a prudent man, in the position of the person on who negligence is
attributed, foresee harm to the person injured as a reasonable consequence of the course about to be
pursued?
KINDS OF NEGLIGENCE:
1. Culpa aquiliana, also known as culpa extra-contractual, or negligence as a source of
OBLIGATION, QUASI-DELICT;
a. Governed by Arts. 2176-2194
b. NO contractual relation at all
2. Culpa contractual, or negligence in the performance of a contractual OBLIGATION.

a. Governed by Article 1179 (common carrier), & all on contracts
PERSONS LIABLE: (IMPUTED/vicarious LIABILITY, 2180)

1. father / mother
2. guardians
3. owners/managers
4. employers
5. the State
6. teachers
NOTE: The responsibility shall cease if they can prove that they have observed diligence of good father
of the family to prevent damage;
REQUISITES OF LIABILITY (IMPUTED):

1. the fault of negligence of the defendant
2. the damage suffered or incurred by the plaintiff
3. the relation of the fault or negligence and damage incurred by the plaintiff
A TORT is a civil wrong (an actionable wrong) consisting of a violation of a right or a breach of duty for
which the law grants a remedy in damages or other relief. The right is created by law in favor of a person
called a creditor to compel another called a debtor to observe duty or a prestation either to render what is
due him or to refrain from causing him injury.
Classes of Torts According to Manner of Commission

1. Intentional Torts
a. tortfeasor desires to cause the consequences of his act, or
b. tortfeasor believes that the consequences are substantially certain to result from it
c. ex. Article 26, 32 & 33 (CC)
2. Negligent Torts:
d. tortfeasor’s conduct merely creates a forseeable risk of harm which may or may not occur
e. Article 2176 (CC)
3. Strict Liability Torts:
f. Ex. Article 2183 & 2187 (CC)
Q: If there is a contract between the parties, can there be a quasi-delict committed by one against
the other regarding the area covered by the contract?
A: If you look at Article 2176, you get the impression that if there is a contract between the parties, they
cannot be liable for quasi-delict on an area covered by the contract. The case of Cangco has not really
resolve this controversy.
Contracts & quasi-delicts create two concentric circles with quasi-delict as the bigger circle.
FRAUD NEGLIGENCE
dolo Culpa
Nature of Act involves willfulness or deliberate intent to mere want of care or diligence, not
cause damage or injury to another voluntary act or omission
Gives rise to the act itself the want or care or diligence

OBLIGATION
> A single act may be a crime and a QD at the same time; (Article 100, RPC)
> Injured party cannot recover damages twice for the same act or omission of defendant; (must choose 1
Remedy)
QUASI-DELICT CRIME
As to nature of private right public right

Right violated
Is a Wrong the individual the State

against
Criminal Intent not needed Necessary
Legal Basis for Broad penal law necessary

liability
Liability for every QD gives rise to liability for damages there are crimes without civil
Damages liability
Form of Redress reparation for injury punishment/fine/imprisonment

suffered/indemnification/compensation
Quantum of Preponderance Beyond reasonable doubt

Evidence
Compromise can be compromised criminal liability can never be

compromised
REQUISITES FOR LIABILITY: (onus)

1. Wrongful act or omission imputable to the defendant by reason of his fault or negligence;
2. Damage or injury proven by the person claiming recovery;
3. A direct causal connection between the negligent act and the injury.
DOCTRINE OF PROXIMATE CAUSE is that which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces injury and without which the result would not have occurred.
The exemplification by the Court in one case is simple and explicit; viz: "(T)he proximate legal cause is
that acting first and producing the injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each having a close causal connection with its
immediate predecessor, the final event in the chain immediately affecting the injury as a natural and
probable result of the cause which first acted under such circumstances that the person responsible for
the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at
the moment of his act or default that an injury to some person might probably result therefrom."
III. COMPLIANCE WITH OBLIGATIONS
Kinds of performance:
1. specific performance - performance by the debtor himself (applies only to OBLIGATION
to give )
2. substitute performance - performance at the expense of the debtor
3. equivalent performance - grant of damages
Articles 1163 - 1166 cover obligation to give.
Three Accessory Obligations:

1. Article 1163- To take care of the thing with the diligence of a good father of a family until actual
delivery.
2. Article 1164- To deliver the fruits to the creditor (fruits produced after obligation to deliver arises.)
3. Article 1166- To deliver accessions & accessories.
 From the time the obligation arises, the creditor has a personal right against the debtor as to the
fruits. But he has no real right over them until actual delivery.
 Real right is a right which is enforceable against the whole world. He has only the personal
right against the debtor with regard to the undelivered fruits.
 This is because of the principle Non nudis pactis, sed traditione, dominia rerum
transferentur (It is not by mere agreement, but by delivery, is ownership transferred.)
 Personal right arises from the time the obligation to deliver arises whereas the real right does not
arise until actual delivery.
Articles 1165 – 1167- Remedies Available to the Creditor (specific performance, substitute
performance, equivalent performance.)
A. In obligations to give

1. A determinate thing
a. Specific performance
b. Equivalent performance
2. A generic thing, all remedies are available
B. In an obligation to do, make a distinction:

In obligation to do, which is purely personal, only equivalent performance is available
In an obligation to do which is not personal:

a. substitute performance
b. equivalent performance
Note: In obligations to do, specific performance is not available. The reason for this is that specific
performance will give rise to involuntary servitude.
C. Obligation not to do
1. substitute performance
2. equivalent performance.
In all these cases, the creditor has the option of resolution or rescission under Article 1191. In
addition, he can also claim damages.
Nature and Effects of Obligations
OBJECT OF THE OBLIGATION:

1. to give: real OBLIGATION; determinate (specific) or indeterminate (generic)
2. to do
3. not to do: personal OBLIGATION; positive (to do) or negative (not to do)
REAL OBLIGATION:
a. DETERMINATE OBLIGATION – particularly designated from a particular class;
PRINCIPAL OBLIGATION – to give (to deliver) a determinate thing;
ACCESSORY OBLIGATION – exists even when not expressly stipulated;
b. GENERIC THING is one that is indicated only by its kinds, without being distinguished from others of
the same kind. (indeterminate)
NOTE: In an OBLIGATION to deliver a generic thing, the object is determinable; when delivered it
becomes determinate.
DELIMITED GENERIC is not totally generic nor specific; obligation to deliver one of SEVERAL things;
does not have designation nor physical segregation; rule re Fortuitous Events still apply.
DETERMINATION OF DILIGENCE REQUIRED:

(1) LAW, e.g. extra ordinary diligence required in Common carriers
(2) Stipulation of Parties
(3) Presumed: diligence of a Good father of the Family if none is specified/expressed by law or
agreement.
REAL RIGHT is the power by a person over a specific thing, susceptible of being exercised against the
whole world.
PERSONAL RIGHT belongs to a person who may demand from another, as a definite passive subject,
the fulfillment of a prestation.
Kinds of Fruits;
1) CIVIL – derived by virtue of juridical relation
2) Natural – spontaneous products of the soil and the young and other products of animals;
3) Industrial – produced by lands of any kind through cultivation or labor or by reason of human labor.
IV. Kinds of Civil Obligations
a. As to Perfection & Extinguishment
i. Pure
A pure obligation is one which is not subject to a condition or a term and it is immediately demandable
that there is nothing to exempt the debtor from compliance therewith. (Floriano vs. Delgado)
What is a demand note? It is subject to neither a suspensive condition nor a suspensive period. The
demand is not a condition precedent, since the effectivity and binding effect of the note does not depend
upon the making of the demand: the note is binding even before the demand is made. Neither does
the demand constitute an implied suspensive period since there is nothing to prevent the creditor from
making a demand.
Q: Does the happening of a condition give rise to the OBLIGATION?

A: Not necessarily, only if suspensive condition; if resolutory condition, the happening extinguishes the
OBLIGATION;
Q: In an OBLIGATION with a TERM will the answer above be the same?
A: Yes.
ii. Conditional
Q: What is a conditional obligation?
A: An obligation subject to a condition and the effectivity of which is subordinated to the fulfillment or non-
fulfillment of a future and uncertain event, or upon a past event unknown to the parties. (Pineda, 2009)
Q: What is a potestative condition? (1997, 2000, 2003 BAR)

A: A condition which depends upon the will of one of the contracting parties. (NCC, Art. 1182)
Q: Why does a potestative condition make the obligation void?

A: Because such an obligation lacks one of the essential elements of an obligation, the vinculum juris,
the binding force- the means by which it is enforceable in court. In this case, there is no binding force.
Casual Condition is one where the condition is made to depend upon a third person or upon chance.
Mixed Condition is one which depends partly upon the will of one of the parties & partly on either chance
or the will of a third person.
Q: What if the condition is suspensive, potestative & depends solely on the will of the creditor, is
the conditional obligation valid?
A: Yes. In fact, the obligation is not even a condition obligation. It is a pure obligation, binding at once.
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.
There are 2 classes of impossible conditions:

1. Impossible in fact
EXAMPLE: "I promise to sell my car to Mr. M for P2 if he can swim across the Pacific Ocean for
2 hours."
2. Impossible in law or one which attaches an illegal condition

EXAMPLE: "I promise to sell my car to Mr. M for P2 on condition that he burns the College of
Law."

Effect of Impossible Condition: It annuls the obligation which depends upon them. The entire juridical
tie is tainted by the impossible condition. Correlate this with Articles 727 & 873.
Doctrine of Constructive Compliance -There are three requisites in order that this article may apply:
1. Intent on the part of the obligor to prevent fulfillment of the condition. The intent does not have to
be malicious.
2. Actual prevention of compliance (by the obligor)
3. Constructive compliance can have application only if the condition is potestative. It can also
apply to mixed condition as to that part which the obligor should perform.
Kinds of Conditional OBLIGATIONS:
a. Suspensive Condition (Condition precedent)

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 court shall determine, in each case, the retroactive effect
of the condition that has been complied with.
This article refers to suspensive condition. This article sets forth the rule of retroactivity in an obligation to
give. This rule is logical but impractical. Many modern Civil Codes have discarded it.
No Retroactivity as to the Fruits - Notice that there is no retroactivity with respect to the fruits. The
fruits are deemed to cancel out each other. If only one of the thing produces fruits, there is no obligation
to deliver the fruits.
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.
The principle in this article is: Vigilantibus et non dormientibus jura subveniunt which means that the
laws aid those who are vigilant, not those who sleep upon their rights.
Q: Why does Article 1188 give the creditor a recourse although technically the creditor still have
no right?
A: Because as a matter of fact, although technically the creditor still have no right, he is already
expecting a right. You cannot let the creditor sit & fold his arms & wait for his right of expectancy to be
rendered illusory.
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)
b. Resolutory Condition (Condition subsequent)
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.
A condition is a future & uncertain event upon which an obligation or provision is made to depend.
NOTE: Futurity & uncertainty must concur as characteristics of the event.
NOTE: A past thing can never be a condition. A condition is always future & uncertain.
Past event unknown to the parties - It is really the knowledge of the event which constitutes the future.
It is the knowledge which is future & uncertain.
Condition compared to a term:
Condition Term
As to element of futurity Same, may be past event unknown to parties Same, always future
in the aspect of certainty uncertain certain

Conditions can either be:
1.Suspensive condition (condition precedent) wherein the happening of the event gives birth to
an obligation
2.Resolutory condition (condition subsequent) wherein the happening of the event will
extinguish the obligation.
iii. With a term or period
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.
A term is a future and certain event upon which the demandability (or extinguishment) of an obligation
depends.
A term can either be:

1. Suspensive term (ex die- from the day) or one the arrival of which will make the obligation
demandable;
2. Resolutory term (in die- into the day) or one the arrival of which will extinguish the obligation.
The period after which the performance must terminate.
Terms classified according to source;
1. Legal, period fixed by law
2. voluntary, stipulated by parties
3. judicial, fixed/allowed by court
Effect of Period: OBLIGATION with term are demandable only when day fixed for performance arrive;
right of action arises only when date fixed arrives;
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.
A term or period is an interval of time, which, exerting an influence on an obligation as a consequence of

a juridical act, either suspends its demandability or produces its extinguishment.
Distinguished from Condition:
CONDITION TERM / PERIOD
As to fulfillment uncertain event an event that must necessarily come, whether

on a date known before hand or at a time
which cannot be predetermined
As to influence a condition gives rise to an has no effect upon the existence of

on the obligation or extinguishes one OBLIGATIONS, but only their demandability
obligation already existing or performance
Effect May have retroactive effect NO retroactive effect, except when there is a
special agreement
As to time may refer to a past event always refer to the future

unknown to the parties
As to will of a condition which depends a period left to the debtor's will merely
debtor exclusively on the will of the empowers the court to fix such period
debtor annuls the obligation
NOTE: In a (suspensive) term, the obligation has already arisen except that it is not yet demandable.
Mistaken Premature Delivery: This article assumes 2 things:

1. the delivery was by mistake;
2. the mistake was discovered before the term arrives.
Q: If the term has already arrived, the question is moot & academic. But can he recover the fruits
produced during the meantime?
A: It depends on what school of thought you follow:
1. According to one school of thought, the debtor is entitled to the fruits produced in the meantime.
2. According to another school of thought, all the fruits received during the pendency of the term belong to
the creditor.
When fruits & interests cannot be recovered notwithstanding premature delivery:

1. When the obligation is reciprocal & there has been premature performance (by both parties);
2. When the obligation is a loan in which the debtor is bound to pay interest;
3. When the period is for the creditor's exclusive benefit;
4. When the debtor is aware of the period & pays anyway. (Knowledge, tacit waiver of benefit of
term)
Presumed for the benefit of BOTH parties:

Article 1196. Whenever in an obligation a period is designated, it is presumed to have been established
for the benefit of both the creditor and the debtor, unless from the tenor of the same or other
circumstances it should appear that the period has been established in favor of one or of the other.
General rule: If a period is attached to an obligation, the presumption is that it is for the benefit of both
parties.
The consequences are: 1) the creditor cannot compel the performance before the arrival of the term; and
2) the debtor cannot compel acceptance before the arrival of the term.
If the term is for the benefit of the creditor: The creditor can demand performance anytime; but the
debtor cannot insist on payment before the period.
If the term is for the benefit of the debtor: The creditor cannot demand performance anytime; but the
debtor can insist on performance anytime.
When NO period is fixed
Cases where the Court may fix a period:

1. Article 1197, par. 1
Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be
inferred that a period was intended, the court may fix the duration thereof.
The court shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the court shall determine such period as may under the circumstances have been probably
contemplated by the parties. Once fixed by the court, the period cannot be changed by them.
Exceptions:
Article 1682. The lease of a piece of rural land, when its duration has not been fixed, is
understood to have been made for all the time necessary for the gathering of the fruits which the
whole estate leased may yield in one year, or which it may yield once, although two or more years
may have to elapse for the purpose.
Article 1687. If the period for the lease has not been fixed, it is understood to be from year to year,
if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the
rent is weekly; & from day to day, if the rent is to be paid daily. xxx
Article 1606 in pacto de retro sale where the period is not specified by the parties
Article 1606. The right referred to in article 1601 (the right of conventional redemption on the part
of the vendor a retro), in the absence of an express agreement, shall last four years from the date
of the contract. XXX
Note: contract of services for an indefinite term (because fixing of a period by the court may
amount to involuntary servitude)
Article 1197. Xxx

The court shall also fix the duration of the period when it depends upon the will of the debtor.
Article 1191. Xxx

the court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a
period.
Article 1687. xxx

However, even though a monthly rent is paid, & no period for the lease has been set, the court
may fix a longer term for the lease after the lessee has occupied the premises for over one year. If
the rent is weekly, the court may likewise determine a longer period after the lessee has been in
possession for over six months. In case of daily rent, the court may also fix a longer period after
the lessee has stayed in the place for over one month.
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.
When debtor loses the benefit of period

Article 1198. The debtor shall lose every right to make use of the period:
1. When after the obligation has been contracted, he becomes insolvent, unless he gives a
guaranty or security for the debt;
2. When he does not furnish to the creditor the guaranties or securities which he has promised;
3. When by his own acts he has impaired said guaranties or securities after their establishment,
and when through a fortuitous event they disappear, unless he immediately gives new ones
equally satisfactory;
4. When the debtor violates any undertaking, in consideration of which the creditor agreed to the
period;
5. When the debtor attempts to abscond.
6. Article 2109 - If the creditor is deceived on the substance or quality of the thing
pledged, he may either claim another thing in its stead, or demand immediate payment
of the principal obligation.
Effects of Loss of Term (Article 1198):

 OBLIGATION becomes immediately due & demandable even if period has not yet expired.
 OBLIGATION is converted to a pure OBLIGATION
 Insolvency of DEBTOR – need not be judicially declared; state of financial difficulty is enough.
b. As to Plurality of Prestations
i. Alternative and Facultative Obligations

Alternative Obligations: where the debtor must perform any of several prestations, when several objects
are due, the fulfillment of one is sufficient, generally the debtor chooses which one.
Facultative Obligations: where only one thing is due but the debtor has reserved the right to substitute it
with another (Article 1206)
Q: In conjunctive, right to choose is always with debtor?

A: NO. No right to choose because all must be performed.
Q: In Alternative, right to choose can be given to 3 rd person?

A: YES. (Article 1000) as long as it is not contrary to law, morals, public order, public policy and etc.
Q: In an agreement where there is no stipulation as to who has right to choose?

A: It depends. If Alternative, generally debtor chooses; if facultative, only with debtor
Q: What if debtor has right to choose and he delays?

A: right is not lost by mere delay; (before creditor files his action)
Article 1199. A person alternatively bound by different prestations shall completely perform one of
them.
The creditor cannot be compelled to receive part of one & part of the other undertaking.
NOTE: The characteristic of alternative OBLIGATIONS is that, several objects being due, the fulfillment of
one is sufficient xxx.
Article 1200. The right of choice belongs to the debtor, unless it has been expressly granted to the
creditor.
The debtor shall have no right to choose those prestations which are impossible, unlawful or which
could not have been the object of the obligation.
Q: To whom does the right of choice belong?

A: General rule: To the debtor (Article 1200)
Exception: When expressly granted to the creditor (cannot be implied).
NOTE: There is a third possibility where the choice may be made by a third person upon agreement of
the parties. (expressed)
Q: What is the technical term of the act of making a choice in alternative obligations?
A: Concentration.
 The right to choose is indivisible 🡪 debtor can’t choose part of one prestation and part of another;
 Here, plaintiff’s action must be in alternative form;
Article 1201. The choice shall produce no effect except from the time it has been communicated.
Requirement for Communication of choice: If the choice belongs to the creditor, of course, he has to
communicate his choice to the debtor. The debtor is not a prophet.
Q: If the choice belongs to the debtor, why require communication before performance if the
choice belongs to him anyway?
A: To give the creditor an opportunity to consent to the choice or impugn it. ( Ong v. Sempio-Dy, 46 P
592.)
Articles 1202 to 1205 talk about the loss of some of the prestations before performance.
1. If the choice is to the debtor's
a. When only one prestation is left (whether or not the rest of the prestations have been lost through
fortuitous event or through the fault of the debtor), the debtor may perform the one that is left. (Article
1202)
b. If the choice is limited through the creditor's own acts, the debtor can ask for resolution plus
damages. (Article 1203)
c. If everything is lost through the debtor's fault, the latter is liable to indemnify the creditor for
damages. (Article 1204.)
d. If some things are lost through the debtor's fault, the debtor can still choose from those
remaining.
e. If all are lost through fortuitous event, the obligation is extinguished.
f. If all prestations but one are lost through fortuitous event, & the remaining prestation was lost
through the debtor's fault, the latter is liable to indemnify the creditor for damages.
g. If all but one are lost through the fault of the debtor & the last one was lost through fortuitous
event, the obligation is extinguished.
2. Choice is the creditor's
Article 1205. When the choice has been expressly given to the creditor, the obligation shall cease
to be alternative from the day when the selection has been communicated to the debtor.
Until then the responsibility of the debtor shall be governed by the following rules:
(1) If one of the things is lost through a fortuitous event, he shall perform the obligation by
delivering that which the creditor should choose from among the remainder, or that which
remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of the debtor, the creditor may claim
any of those subsisting, or the price of that which, through the fault of the former, has
disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor, the choice by the creditor shall fall upon
the price of any one of them, also with indemnity for damages.
The same rules shall be applied to OBLIGATIONS to do or not to do in case one, some or all of the
prestations should become impossible.
a. If one or some are lost through fortuitous event, the creditor may choose from those remaining.-
Article 1205 (1)
b. If one or some are lost through the debtor's fault, the creditor has choice from the remainder or the
value of the things lost plus damages.- Article 1205 (2), supra.
c. If all are lost through the debtor's fault, the choice of the creditor shall fall upon the price of any of
them, with indemnity for damages.-- Article 1205 (3), supra.
d. If some are lost through the creditor's fault, the creditor may choose from the remainder.
e. If all are lost through fortuitous event, the obligation is extinguished.
f. If all are lost through the creditor's fault, the obligation is extinguished.
Facultative vs. Alternative:
Alternative OBLIGATION Facultative OBLIGATION
As to contents there are various prestations all of only ONE principal prestation constitutes
of the which constitute parts of the obligation the obligation, the accessory being only a
obligation means to facilitate payment.
As to nullity the nullity of one prestation does not the nullity of the principal prestation
invalidate the obligation, which is still in invalidates the obligation & the creditor
force with respect to those which have cannot demand the substitute even when
no vice this is valid
As to choice the right to choose may be given to the only the debtor can choose the
creditor substitute prestation.
As to effect of only the impossibility of all the the impossibility of the principal
loss prestations due without fault of the prestation is sufficient to extinguish the
debtor extinguishes the obligation obligation, even if the substitute is
possible
Facultative obligations always involve choice by the debtor.

 In theory, it is easy to distinguish a facultative obligation from an alternative one. But in practice,
it is difficult to distinguish the two. You just have to find out what the parties really intended.
 Only One prestation is DUE and enforceable by the creditor at the time of choice; if the substitute
becomes impossible d/t fault of debtor the OBLIGATION is not affected, thus no damages;
 If after choosing the substitute and choice is communicated to creditor, the principal prestation
becomes impossible, OBLIGATION is not extinguished but has become a simple OBLIGATION
that must be performed; and he will be liable for damages in delay, neglect or bad faith.
 If principal OBLIGATION becomes impossible by fault or negligence of creditor, debtor cannot be
compelled to perform the substitute (no more substitute, becomes simple) – extinguished.
c. As to Rights and Obligations of Multiple Parties
i. Joint Obligation
A joint obligation is one in which each of the debtors is liable only for a proportionate part of the debt or
each creditor is entitled only to a proportionate part of the credit. In joint OBLIGATIONS, there are as
many OBLIGATIONS as there are debtors multiplied by the number of creditors.
There are three kinds of joint obligations:

1. Active joint 🡪 where the obligation is joint on the creditor's side;
2. Passive joint 🡪 where the obligation is joint on the debtor's side; &
3. Multiple Joint 🡪 where there are multiple parties on each side of a joint obligation.
JOINT character is PRESUMED: WHEN no stipulation as to liability of several debtors, presumption is

joint, and each is liable only for his proportionate part of the OBLIGATION;
Effects of Joint Liability:

1. The demand by one creditor upon one debtor, produces the effects of default only with respect to
the creditor who demanded & the debtor on whom the demand was made, but not with respect to
the others;
2. The interruption of prescription by the judicial demand of one creditor upon a debtor does not
benefit the other creditors nor interrupt the prescription as to other debtors. On the same
principle, a partial payment or acknowledgement made by one of several joint debtors does not
stop the running of the statute of limitations as to the others;
3. The vices of each obligation arising from the personal defect of a particular debtor or creditor
does not affect the obligation or rights of the others;
4. The insolvency of a debtor does not increase the responsibility of his co-debtors, nor does it
authorize a creditor to demand anything from his co-creditors;
5. In the joint divisible obligation, the defense of res judicata is not extended from one debtor to
another.
Disjunctive obligation: This is not covered by New Civil Code; there are 2 or more creditors and 2 or
more debtors but they are named disjunctively as debtors and creditors in the alternative.
ii. Indivisible Obligation
Article 1209. If the division is impossible, the right of the creditors may be prejudiced only by their
collective acts, & the debt can be enforced only by proceeding against all the debtors. If one of the latter
should be insolvent, the other shall not be liable for his share.
Article 1210. The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does
solidarity of itself imply indivisibility.
Joint Indivisible obligation. There are several debtors or creditors but the prestation is indivisible.
INDIVISIBILITY SOLIDARITY
Refers to the prestation, which is not Refers to the legal tie or vinculum
Nature
capable of partial performance defining the extent of liability
Effects to Joint Each cannot demand more than his Each may demand the full
creditors share prestation
Effects to joint Each is not liable for more than his Each has the duty to comply with
debtors share entire prestation
Article 1224. A joint indivisible obligation gives rise to indemnity for damages from the time
anyone of the debtors does not comply with his undertaking. The debtors who may have been
ready to fulfill their promises shall not contribute to the indemnity beyond the corresponding
portion of the price of the thing or of the value of the service in which the obligation consists.
If there is plurality of creditors to only one debtor, the OBLIGATION can be performed by delivery of the
object to all the creditors jointly;
 Delivery to only one creditor makes the debtor liable for damages to the other debtors for non-
performance, unless they have authorized this one creditor to collect in their behalf;
 If only one or some, not all creditors demand fulfillment the debtor may refuse to deliver and insist
that all the creditors together receive the thing, if not consignation to the court may be had;
 In non-performance, debtor is liable for damages 🡪 here with respect to damages, the prestation
becomes divisible, each creditor may recover proportionately.
Q: Is an OBLIGATION-not do divisible or not?

A: OBLIGATION-not do when there are several debtors, is a joint indivisible OBLIGATION.
iii. Solidary Obligation

A solidary obligation is one in which the debtor is liable for the entire obligation or each creditor is
entitled to demand the whole obligation. If there is only one obligation, it is a solidary obligation.
There are three kinds of solidarity:

1. Active solidarity where there are several creditors with one debtor in a solidary obligation;
2. Passive solidarity where there is one creditor with several debtors solidary bound;
3. Mixed Solidarity where there are several creditors & several debtors in a solidary obligation.
1. Active Solidarity
Article 1211. Solidarity may exist although the creditors & the debtors may not be bound in the same
manner & by the same periods & conditions.
Article 1207. The concurrence of two or more creditors or of two or more debtors in one & the same
obligation does not imply that each one of the former has a right to demand, or that each one of the latter
is bound to render, entire compliance with the prestation. There is solidary liability only when the
obligation expressly so states, or when the law or the nature of the obligation requires solidarity.
Q: When is an obligation with several parties on either side Joint or Solidary?
A: The presumption is that an obligation is joint because a joint obligation is less onerous that a
solidary one.
There is solidary obligation in the following:
1. When the obligation expressly so states – stipulation by parties;
2. When a will expressly makes charging or a condition in solidum;
3. When the law requires
4. Nature of the obligation requires solidarity – Article 19-22, NCC; Article 10, RPC; Article 2194, &
Article 2157, NCC;
5. Imposed by final judgment upon several defendants – must be expressed in the judgement for the
obligation, cannot be amended after finality.
Article 1212. Each one of the solidary creditors may do whatever may be useful to the others, but not
anything which may be prejudicial to the latter.
Acts beneficial: each solidary debtor may,

 interrupt prescription,
 constitute a debtor in default,
 bring suit so that OBLIGATION may produce interest
Acts prejudicial: Solidary creditor cannot do anything prejudicial to the others, like remission, novation,
compensation, merger or confusion, but such provision in Article 1212 conflicts with Article 1215.
What should be done? Harmonize Articles 1212 & 1215 by such acts of extinguishment, which is
prejudicial to co-creditors, will be valid so as to extinguish the claim against the debtors, but not with
respect to the rights of co-creditors which subsists and may be enforced against such creditor who
performed the act alone.
Concept of Mutual Agency is the essence of active solidarity, implies mutual confidence, thus one
creditor cannot assign/transfer his rights to another without consent of the others.
Effects of Unauthorized Transfer: No effect, no rights transferred; assignee does not become solidary
creditor, co-creditors and debtor/s not bound by such transfer;
 Payment made by this assignee will not extinguish obligation; suit filed by him may not interrupt
the rights.
 EXCEPT, if the assignee is also one of the co-creditors, because mutual confidence is
incumbent.
General Rule: A debtor may pay any of the solidary creditors.

Exception: If demand is made by one creditor upon the debtor, in which case the latter must pay the
demanding creditor only.
2. Passive Solidarity
Article 1216. The creditor may proceed against any one of the solidary debtors or some or all of them
simultaneously. The demand made against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has not been fully collected.
Q: If a judgment made in an action brought by a solidary creditor against a solidary debtor will it
be res judicata against the co-debtors?
A: A favorable judgment that inures to the benefit of the co-creditors will be res judicata as to the latter.
An adverse judgment would have the same effect if the action of the plaintiff-creditor is not founded on a
cause personal to him, but actually consolidates in him all the rights as well of his co-creditors.
PASSIVE SOLIDARITY SURETY
Nature Solidary debtors solidary guaranty
Extent of Liability whole OBLIGATION only to the extent of contract

stipulations/as expressed
Liability Primary Subsidiary
Effects of Extension of time solidary OBLIGATION releases the surety

granted by creditor remains
Passive Solidarity vs. Suretyship

Similarity:
(1) both stands for some other person;
(2) both may require reimbursement
 If surety binds itself in solidum, creditor may go against anyone of them.
Distinctions Passive Solidarity Suretyship
Nature Solidary debtor is liable for his own liable only as to his own
OBLIGATION & that of his co-debtors’ OBLIGATION
Primary liability Subsidiary liability
Extension of Time does not release a solidary debtor releases a solidary guarantor or
given by creditor (novation) surety (extinguishment)
NOTE: Payment by one solidary debtor in whole – extinguishes the OBLIGATION and releases the
credit 🡪 gives rise to a new OBLIGATION for reimbursement by the other debtors to this one debtor who
paid (JOINT OBLIGATION); plaintiff creditor may be properly substituted by the debtor who paid;
EXCEPT: If payment was made after the OBLIGATION prescribed or become illegal (mistake or not).
(Article 1218)
 After the OBLIGATION has prescribed or becomes illegal, it is no longer due & demandable.
None of the solidary debtors can be compelled by the creditors to pay.
 Thus, if one debtor pays, he cannot reimburse from his co-debtors because his action will not
revive the inexistent OBLIGATION;
 Generally, neither could he recover from the creditor to whom he paid (Article 1424); except
perhaps under solutio indebiti.
Effect of Remission.
Problem: Solidary debtors W, X, Y & Z are indebted to A for P12,000. A remits the share of Y (P3,000).
Q: Can Y be sued?

A: Yes, for the P9,000 (P12,000 less P3,000 share of Y) his share was remitted but not the solidary
OBLIGATION.
Q: Supposing X is insolvent?

A: Y can still be made to contribute. Remission will benefit Y only in so far as his share is concerned. His
liability in case of insolvency of one co-creditor is not affected.
Q: Can A demand the P9,000 from Y?

A: Yes. But he can recover the same from W, X & Z.
Q: If W paid the whole debt before A remits Y’s share, may W still demand reimbursement of Y’s
share?
A: Yes, Article 1219, Y will not be released from his solidary OBLIGATION. Upon W’s full payment the
entire OBLIGATION was extinguished, there’s nothing more to remit in Y’s favor.
Q: After A remits share of Y, W pays in full the remaining 12,000. X then becomes insolvent. May
Y be compelled to contribute to the share of X?
A: Yes, gratuitous acts should be construed restrictively as to permit the least transmission of rights
(Article1378). Thus, if W paid 9,000 and X and Z were suppose to reimburse him 3000 each, Y could be
compelled to contribute 1000 as to the insolvency of X.
Three Defenses of Solidary Debtor:

1. Those derived from the nature of the obligation is a total defense;
e.g., prescription, illegality of obligation (illicit object); vitiated consent; unenforceability under the
Statute of Frauds; non-happening of condition; arrival of resolutory period; extinguished
OBLIGATION d/t payment, remission;
2. Those defenses personal to the debtor-defendant;
e.g., insanity 🡪 If it involves vitiation of consent, total defense. If it involves a special term or a
condition, a partial defense.
3. Those defenses personal to other co-debtors;
e.g., defense as to the share corresponding to other debtors is a partial defense, i.e. suspensive
condition or period as to the OBLIGATION of one co-debtor.
V. Breach of Obligations
MANNER OF BREACH
a. Fraud
Article 1171. Responsibility arising from fraud is demandable in all OBLIGATIONS. Any waiver of an
action for future fraud is void.
Article 1338. There is fraud when, through insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which, without them, he would not have agreed to.
Article 1344. In order that fraud may make a contract voidable, it should be serious and should not have
been employed by both contracting parties.
Incidental fraud only obliges the person employing it to pay damages.
Is it correct to say that fraud in Article 1170 means deceit or insidious machinations? No.
LEGASPI OIL VS. CA [224 SCRA 213] - Definition of Fraud:

 In general, fraud may be defined as the voluntary execution of a wrongful act, or willful
omission, knowing & intending the effects which naturally & necessarily arise from such
act or omission;
 The fraud referred to in Article 1170 is the deliberate & intentional evasion of the normal
fulfillment of obligation;
 It is distinguished from negligence by the presence of deliberate intent, which is lacking in the
latter.
Fraud as used in Article 1170 is different from fraud as a cause for vitiation of consent in contracts (more
properly called deceit which prevents the contract from arising; this is found in Article 1380, et seq.)
Fraud as referred here is the deliberate and intentional evasion of normal fulfillment of OBLIGATIONS;
thus, as ground for damages from this article, implies some kind of malice or dishonesty, which does
not cover mistake, errors of judgment made in good faith.
Q: What is a synonym for fraud as used in Article 1170?

A: Malice.
Effects of Fraud:
1. Creditor may insist on performance, specific or substitute (Article 1233.)
2. Creditor may resolve/ rescind (Article 1191.)
3. Damages in either case (Article 1170.)
b. Negligence
Article 1171. Responsibility arising from fraud is demandable in all OBLIGATIONS. Any waiver of an
action for future fraud is void.
Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but such liability shall may be regulated by the courts, according to the circumstances.
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 & corresponds with the circumstances of the persons, of the time
& of the place. When negligence shows bad faith, the provisions of articles 1171 & 2201, paragraph 2,
shall apply.
Negligence is the failure to use due diligence through either an act or omission.
Measure of Due Diligence

There are two guides:
1. Diligence demanded by circumstances of person, place & time
2. Care required of a good father of a family (fictional bonus pater familias who was the embodiment
of care, caution & protection in Roman law.)
In common law, the degree of care required is the diligence of a prudent businessman. This is
actually the same as the diligence of a good father of a family.
Effects of Negligence:
1. Creditor may insist on performance, specific or substitute (Article 1233.)
2. Creditor may resolve/ rescind (Article 1191.)
3. Damages in either case (Article 1170.)
c. Delay
Delay is the non-fulfillment of the obligation with respect to time.
Q: What are the requisites of delay (mora)?

A:
1. Obligation must be due, demandable, and liquidated;
2. Debtor fails to perform his positive obligation on the date agreed upon;
3. A judicial or extra-judicial demand made by the creditor upon the debtor to fulfill, perform or comply with
his obligation; and
4. Failure of the debtor to comply with such demand.
General Rule: There is no delay when there is no demand.

Exceptions: Under Article 1169, Civil Code:
x x x
(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.
Kinds of Delay:
1. Mora Solvendi- delay in the performance (on the part of the debtor);
2. Mora Accipiendi- delay in the acceptance (on the part of the creditor);
3. Compensation Morae- mutual delay
Article 2201. xxx

(2) In contracts & quasi-contracts, the damages for which the obligor who acted in good faith is liable
shall be those that are the natural & probable consequences of the breach of the obligation, & which the
parties have foreseen or could have reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation.
EXCUSE FOR NON-PERFORMANCE
a. Loss due to Fortuitous Events
Article 1174. Except in cases expressly specified by law, or when it 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.
Q: What are the requisites of a fortuitous event?

A: The requisites are:
1. Cause is independent of the will of the debtor;
2. The event is unforeseeable or unavoidable;
3. Occurrence renders it absolutely impossible for the debtor to fulfill his obligation in a normal
manner; impossibility must be absolute not partial, otherwise not force majeure; and
4. Debtor is free from any participation in the aggravation of the injury to the creditor.
NOTE: The fortuitous event must not only be the proximate cause but it must also be the only and sole
cause. Contributory negligence of the debtor renders him liable despite the fortuitous event. (Pineda,
Obligations and Contracts, 2000 ed, p. 62)
General Rule: The happening of a fortuitous event exonerates the debtor from liability.
Exceptions:
1. Law;
2. Nature of the obligation requires the assumption of risk;
3. Stipulation;
4. The debtor is guilty of dolo, malice or bad faith, has Promised the same thing to two or more persons
who does not have the same interest;
5. The debtor Contributed to the loss (Tan v. Inchausti & Co., G.R. No. L-6472, Mar. 7, 1912);
6. The possessor is in Bad faith (Art. 552); and
7. The obligor is Guilty of fraud, negligence or delay or if he contravened the tenor of the obligation (Juan
Nakpil v. United Construction Co., Inc. v. CA, G.R. No. L-47851, Apr. 15, 1988)
VI. MODES OF EXTINGUISHMENT
Q: What are the modes of extinguishing an obligation?

A: Article 1231. Obligations are extinguished BY:
(1) Payment or Performance;
(2) Loss of the thing due;
(3) Condonation or Remission of the debt;
(4) Confusion or Merger of the rights of creditor and debtor;
(5) Compensation;
(6) Novation.
Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a resolutory
condition, and prescription are governed elsewhere in this Code.
Q: Is the enumeration under Article 1231 exclusive?

A: The enumeration is not exclusive.
Other modes of extinguishing an obligation are the following:
1. Death, particularly where the obligation is purely personal;
2. Renunciation by the creditor;
3. Compromise;
4. Arrival of Resolutory Term or fulfillment of resolutory condition;
5. Mutual Desistance or mutuo disenso (Saura v. DEBTORP);
6. In some cases, Unilateral Withdrawal;
7. In some cases, change of civil status;
8. Unforeseen Events (rebus sic stantibus) (Article 1267.)
9. Want of Interest
 GR: No, but there are certain cases:
 If it is equitable to deem the OBLIGATION extinguished due to want of interest of creditor
in the fulfillment of such OBLIGATION.
10. Abandonment of the thing - as in Article 662, party wall; or abandonment of a vessel under
Code of Comm.
11. Insolvency of debtor judicially declared and discharged.
a. Payment or Performance of Obligation

Payment-means not only the delivery of money but also the performance, in any other manner, of an
obligation.
Payment may consist of not only in the delivery of money but also the giving of a thing (other than
money), the doing of an act, or not doing of an act.
A debt may refer to an obligation to deliver money, to deliver a thing (other than money), to do an act or
not to do an act.
Q: What are the requisites of a valid payment?

A: The following are its requisites:
1. Capacity of the person who pays
2. Capacity of the person to whom payment is made
3. Propriety of the time, place, and manner of payment
4. Acceptance of the payment by the creditor
5. Delivery of the full amount or the full performance of the prestation
Q: Who may effect payment and compel the creditor to accept the payment?
A: The following persons:
1. Debtor himself
2. His heirs and assigns
3. His agents and representatives
4. Third persons who have a material interest in the fulfilment of the obligation
Q: How is payment made?

A: It must be on the currency agreed on, and in the time and place stipulated. The thing delivered or
service rendered must be exactly that which was the object of negotiation.
Q: What is Substantial Compliance?

A: There is substantial compliance by the debtor when in good faith he has attempted to perform the
contract or prestation but through excusable neglect or oversight, he failed to make full and complete
performance for which the other party may be indemnified.
If there is substantial compliance the obligor may recover as though there has been complete fulfillment
minus the amount of damages suffered by the obligee.

Q: When is an obligee estopped from demanding a complete fulfillment of an obligation from the
obligor?
A: When the obligee accepts the performance of the obligor despite knowing its incompleteness or
irregularity, and without expressing any protest or objection.

Q: What is the status of such obligation?
A: The obligation is deemed completely complied with.
Requisites for Article 1235 take effect:

1. The obligee knows that the performance is incomplete or irregular.
NOTE: If payment is incomplete/irregular, the creditor may properly reject it.
2. He accepts the performance without expressing any protest or objection.
NOTE: Mere receipt of partial payment is NOT equivalent to acceptance of performance by the
creditor.
Q: What is the rule in case payment is made by third persons?

A:
General Rule: The creditor is not bound to accept payment or performance by a third person.
Exceptions:
1. When made by a third person who has interest in the fulfillment of the obligation
2. Contrary stipulation (NCC, Art. 1236)
Right of third person to subrogation - Whoever pays on behalf of the debtor is entitled to subrogation if
the payment is with the consent of the latter. (Arts. 1237, 1302[2].) If the payment is without the
knowledge or against the will of the debtor, the third person cannot compel the creditor to subrogate him
in the latter’s accessory rights of mortgage, guaranty, or penalty.

Q: May there be subrogation, if the creditor willingly permits the payor to be subrogated in his
rights? Since the provision of Article 1237 is for the benefit of the debtor, the subrogation can only take
place with his consent. The third person who without necessity paid under such condition is amply
protected by his right to reimbursement.
b. Loss of the Thing Due

Q: When is a thing considered lost? (DOPE)
A: A thing is considered lost if:
1. It Disappears in such a way that its existence is unknown;
2. It goes Out of commerce;
3. It Perishes; or
4. Its Existence is unknown or if known, it cannot be recovered
Requisites to free the obligor from liability:

1. Obligation is a determinate thing
2. Loss is w/o fault of the debtor
3. Obligor is NOT in delay
4. Obligor is NOT in bad faith
The happening of a fortuitous event does not automatically extinguish the obligation or exempt
the obligor from liability of losing the thing due. The obligor may only be exempted when the
determinate thing shall be lost or destroyed without fault of the obligor/debtor and before he is in default.
There is no exemption from liability for the debtor in these circumstances:

1. when the law so provides
2. when the stipulation so provides
3. when the nature of the obligation requires the assumption of risk
4. when the obligation to deliver a specific thing arises from a crime
Effect of partial loss of a specific thing:

There is partial loss when only a portion of the thing is lost or destroyed or when it suffers depreciation or
deterioration. Partial loss is the equivalent of difficulty of performance in obligations to do. (Art. 1267.)

In case of partial loss, the court is given the discretion, in case of disagreement between the parties, to
determine whether under the circumstances it is so important in relation to the whole as to extinguish the
obligation. In other words, the court will decide whether the partial loss is such as to be equivalent to a
complete or total loss.

Types of Impossible Obligations:
1. Legal Impossibility - when the acts stipulated to be performed is subsequently prohibited by law;
and
2. Physical Impossibility - when the act is supposed to be performed by the obligor due to reasons
subsequent to the execution of the contract, could not be physically performed by the obligor.
c. Condonation or Remission of Debt

Condonation or remission is an act of liberality where the creditor gives up his right against the debtor,
either in whole or in part, resulting in the extinguishment of the latter's obligation. It is essentially
gratuitous and requires the acceptance of the debtor.
Q: What are the requisites of condonation?

A: For condonation to take place, the following requisites
must concur:
1. Renunciation of the debt is purely gratuitous;
2. Acceptance by the debtor;
3. Must not be inofficious;
4. Formalities provided by law on donations must be complied with if condonation is express; and
5. An existing demandable debt.
d. Confusion or Merger of the rights of creditor and debtor

Confusion or merger is the meeting in one person of the qualities of creditor and debtor with respect to
the same obligation. It takes place between the principal debtor and creditor and the very same obligation
must be involved.
e. Compensation
Compensation is the extinguishment to the concurrent amount of the debts of two persons who, in their
own right, are debtors and creditors of each other.

Kinds of Compensation:
1. By its effect or extent:
1. Total- when both obligations are of the same amount.
2. Partial- when the two obligations are of different amounts.
2. By its cause or origin:
1. Legal- when it takes place by operation of law even without the knowledge of the parties.
2. Voluntary- when it takes place by agreement of the parties.
3. Judicial- when it takes place by order from a court of litigation.
4. Facultative- when it can be set up only by one of the parties.
Legal compensation takes place by operation of law even against the will of the interested parties and
even w/ their consent. It also takes place the moment there exists a reciprocal concurrence of debts and
all the requisites of law are present.

Requisites of Legal Compensation:
Under Article 1279, in order for legal compensation to take place, the following requisites must concur:
(a) that each one of the obligors be bound principally, and that he be at the same time a principal creditor
of the other;
(b) that both debts consist in a sum of money, or if the things due are consumable, they be of the same
kind, and also of the same quality if the latter has been stated;
(c) that the two debts be due;
(d) that they be liquidated and demandable; and
(e) that over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor.

Q: Is consent of parties required in legal compensation?
A: Compensation occurs automatically by mere operation of law. — From the moment all the requisites
mentioned in Article 1279 concur, legal compensation takes place automatically even in the absence of
agreement between the parties and even against their will, and extinguishes reciprocally both debts as
soon as they exist simultaneously, to the amount of their respective sums. It takes place ipso jure from
the day all the necessary requisites concur, without need of any conscious intent on the part of the parties
and even without their knowledge, at the time of the co-existence of such cross debts.

Voluntary/conventional compensation affords the parties the freedom to agree on terms.

Requisites of Voluntary Compensation:
(1) each of the parties has the right to dispose of the credit he seeks to compensate, and
(2) they agree to the mutual extinguishment of their credits. (CKH Industrial & Development Corp. vs.
Court of Appeals)
Compensation not allowed by Law:

1. Depositum
2. Commodatum
3. Support
4. Civil liability arising from crime
Extinguishment; Compensation (2009)

Q: Sarah had a deposit in a savings account with Filipino Universal Bank in the amount of five million
pesos(P5,000,000.00). To buy a new car, she obtained a loan from the same bank in the amount of
P1,200,000.00, payable in twelve monthly installments. Sarah issued in favor of the bank post-dated
checks, each in the amount of P100,000.00, to cover the twelve monthly installment payments. On the
third, fourth and fifth months, the corresponding checks bounced.
The bank then declared the whole obligation due, and proceeded to deduct the amount of one million
pesos (P1,000,000.00) from Sarah’s deposit after notice to her that this is a form of compensation allowed
by law. Is the bank correct? Explain.
A: No, the bank is not correct. While the Bank is correct about the applicability of compensation, it was not
correct as to the amount compensated.
A bank deposit is a contract of loan, where the depositor is the creditor and the bank the debtor. Since
Sarah is also the debtor of the bank with respect to the loan, both are mutually principal debtors and
creditors of each other. Both
obligation are due, demandable and liquidated but only up to the extent of P300,000.00 (covering the
unpaid third, fourth and fifth monthly installments). The entire one million was not yet due because the
loan has no acceleration clause in case of default. And since there is no retention or controversy
commenced by third person and communicated in due time to the debtor, then all the requisites of legal
compensation are present but only up to the amount of P300,000.00. The bank, therefore, may deduct
P300,000.00 from Sarah’s bank deposit by way of compensation.
Extinguishment; Compensation (2008)

Q: Eduardo was granted a loan by XYZ Bank for the purpose of improving a building which XYZ leased
from him. Eduardo, executed the promissory note ("PN") in favor of the bank, with his friend Recardo as
co-signatory. In the PN, they both acknowledged that they are "individually and collectively" liable and
waived the need for prior demand. To secure the PN, Recardo executed a real estate mortgage on his
own property. When Eduardo defaulted on the PN, XYZ stopped payment of rentals on the building on the
ground that legal compensation had set in. Since there was still a balance due on the PN after applying
the rentals, XYZ foreclosed the real estate mortgage over Recardo's property. Recardo opposed the
foreclosure on the ground that he is only a co-signatory; that no demand was made upon him for
payment, and assuming he is liable, his liability should not go beyond half the balance of the loan.
Further, Recardo said that when the bank invoked compensation between the rentals and the amount of
the loan, it amounted to a new contract or novation, and had the effect of extinguishing the security since
he did not give his consent (as owner of the property under the real estate mortgage) thereto.
(A). Can XYZ Bank validly assert legal compensation?
A: Yes, XYZ Bank can validly assert legal compensation. In the present case, all of the elements of legal
compensation are present: (1) XYZ Bank is the creditor of Eduardo while Eduardo is the lessor of XYZ
Bank; (2) both debts consist in a sum of money, or if the things due are consumable, they be of the same
kind, and also of the same quality if the latter has been stated; (3) the two debts be due; (4) they be
liquidated and demandable, and (5) over neither of them there be any retention or
controversy,commenced by third persons and communicated in due time to the debtor (Art. 1279, Civil
Code).
f. Novation
Novation is the total or partial extinction of an obligation through the creation of a new one which
substitutes it. It is the substitution or change of an obligation by another, which extinguishes or modifies
the first, either by changing its object or principal conditions, by or substituting another in place of the
debtor, or by subrogating a third person in the rights of the creditor.

Novations takes effect by:
(1) Changing their object or principal conditions
(2) Substituting the person of the debtor
(3) Subrogating a third person in the rights of the creditor

Requisites of Novation:
(1) a previous valid obligation;
(2) the agreement of all the parties to the new contract;
(3) the extinguishment of the old contract; and
(4) validity of the new one. There must be consent of all the parties to the substitution, resulting in the
extinction of the old obligation and the creation of a valid new one. (G.R. No. 156162, June 22, 2015)
Passive Subjective Novation may be in the form of Expromision and Delegacion:

1. Expromision - initiative comes from a third person. The old debtor must be released from his
obligation; otherwise, there will be no expromision, there will be novation.
2. Delegacion-initiative comes from the debtor, for it is he who delegates another to pay the debt,
and thus, he excuses himself. Here, the three parties concerned—the old debtor, the new debtor,
and the creditor—must agree.
Effect of novation on accessory obligations:

GENERAL RULE: The extinguishment of the principal obligation carries with it that of the accessory
obligations.
EXCEPTION: Accessory obligations subsist insofar as they benefit third persons who have NOT given
their consent to the novation.
CONTRACTS
I. IN GENERAL
Contract distinguish from obligation:
Contract as distinguished from obligation is that contract is one of the sources of obligations. On the other
hand, obligation is the legal tie or relation itself that exists after a contract has been entered into. Hence,
there can be no contract if there is no obligation. But an obligation may exist without contract.

Contract is deemed perfected or given force by the law when the components of consent, object and
consideration are present.
A. Definition
Q: What is a contract?
A: Under article 1305, a contract is a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service.
Stages of Making a Contract:

1. Negotiation - where the parties begin their initial negotiation for the formation of the contract.
2. Perfection or Birth - here the parties had a meeting of minds or mutually agreed as to the object
and consideration.
3. Consummation - consists in the performance of the obligation. the parties ceased to be
contractually related to one another.
B. Elements
Essential Natural Accidental
Elements that without which Elements which exist as part of Elements which are agreed upon
there can be no contract. These the contract even if the parties by the parties and which cannot
are: do not provide for them because exist without being stipulated.
the law creates them.
1) Consent
2) Subject Matter
3) Cause
II. FUNDAMENTAL CHARACTERISTICS/PRINCIPLES OF CONTRACTS

A. Consensuality
Parties cannot be coerced to enter into a contract where no agreement between them as to the principal
terms and conditions of the contract. Freedom to stipulate such terms and conditions is of the essence of
our contractual system. (Republic v. PLDT)
Innominate Contracts
The innominate contract have been elevated to a law that provides that such contracts shall be regulated
by the stipulation of the parties, by the general provisions or principles of obligations and contracts, by the
rules governing analogous nominate contracts, and by the customs of the people. (Corpus v. CA)
The innominate contract facio ut des is based on the principle of unjust enrichment. (Id.)
Contract of Adhesion - There are cases in which one party has already a prepared form of a contract,
containing the stipulations he desires, and he simply asks the other party to agree to them if he wants to
enter into the contract. The party who adheres to the contract is in reality free to reject it entirely; if he
adheres, he gives his consent.
B. Autonomy of Will
The autonomy of contracts allows the parties to establish such stipulations, clauses, terms and
conditions as they may deem appropriate provided only that they are not contrary to law, morals, good
customs, public order or public policy. (Article 1306)
Freedom to contract guaranteed - The right to enter into contracts is one of the liberties guaranteed to
the individual by the Constitution. It also signifies or implies the right to choose with whom one desires to
contract. The Constitution prohibits the passage of any law impairing the obligation contracts. (Art. III,
Sec. 10 thereof.) However, the constitutional prohibition against the impairment of contractual obligations
refers only to legally valid contracts. In appropriate cases, it cannot be invoked as against the right of the
state to exercise its police power.

Limitations:
1. Contract must not be contrary to law
2. Contract must not be contrary to morals.
3. Contract must not be contrary to good customs.
4. Contract must not be contrary to public order.
5. Contract must not be contrary to public policy.

C. Mutuality
Under Article 1308, the mutuality of contracts do not only refer to the validity but to the compliance of
the contract. Both parties should be bound to comply with the contract. The principle is based on the
essential equality of the parties
Acceleration Clause - An acceleration clause authorizes the maturity of certain conditions are valid.
(Insular Bank v. Salazar)
Escalation Clause - An escalation clause authorizes the automatic increase in interest rates in the event
a law increasing the lawful rates of interest that may be charged, does not include a Central Bank Circular
because it is not strictly a statute or a law. An escalation clause to be valid must include a de-escalation
clause. (Banco Filipino Savings v. Navarro)
Escalation clauses are valid stipulations in commercial contracts to maintain fiscal stability and to retain
the value of the money in long term contracts. (Florendo v. CA)
D. Obligatory Force
Classifications of Contracts According to Perfection:
(1) Consensual contract or that which is perfected by mere consent of the parties.
(2) Real contract or that which is perfected, in addition to the above, by the delivery of the thing subject
matter of the contract.
E. Relativity
Principle of Relativity. The basic principle of relativity of contracts is that contracts can only bind the
parties who entered into it, and cannot favor or prejudice a third person, even if he is aware of such
contract and has acted with knowledge thereof “Where there is no privity of contract, there is likewise no
obligation or liability to speak about.” (Philippine National Bank v. Teresita Tan Dee, et al., G.R. No.
182128, February 19, 2014.)
The Court laid down the requisites of a stipulation pour autrui:

(1) there is a stipulation in favor of a third person;
(2) the stipulation is a part, not the whole, of the contract;
(3) the contracting parties clearly and deliberately conferred a favor to the third person — the favor is not
an incidental benefit;
(4) the favor is unconditional and uncompensated;
(5) the third person communicated his or her acceptance of the favor before its revocation; and
(6) the contracting parties do not represent, or are not authorized by, the third party.
III. STAGES OF MAKING A CONTRACT
A. Negotiation
Offer is a proposal made by one party to another to enter into a contract. It is more than an expression of
desire or hope. It is a promise to act or to refrain from acting on condition that the terms thereof are
accepted by the person to who it is made.
Character of the Offer:

1) certain,
2) definite
3) concrete
Acceptance - manifestation by the offeree of his assent to the terms of the offer. Acceptance must be
both absolute and not conditional.
The acceptance made by the party to an offer, binds the offeror only from the time the offeror came to
know of the acceptance. The law presumes that the contract was perfected at the pace where the offer
was made, the place of origin of the conception of the contract.
WHEN OFFER BECOMES INEFFECTIVE

An offer may be withdrawn before it is accepted. After acceptance, the contract is already perfected.
Under Article 1323, even if the offer is not withdrawn, its acceptance will not produce a meeting of the
minds in case the offer has already become ineffective because of the death, civil interdiction, insanity, or
insolvency of either party before the conveyance of the acceptance to the offeror.
OTHER GROUNDS WHICH RENDER OFFER INEFFECTIVE

The above grounds are not exclusive. Thus, failure to comply with the condition of the offer as to the time,
place, and the manner of payment, the expiration of the period fixed in the offer for acceptance, the
destruction of the thing due before acceptance, rejection of the offer, etc. will also render then offer
ineffective and prevent the juridical tie from being formed.
Pre-Contractual Obligations
Damages suffered by a party during the period of negotiation can be recovered, even if there is no
perfected contract, when an offer is made and the offereree incurs expenses and such expenses would
be a total loss if the offeror suddenly withdraws his offer. The offer, however, must be clear and definite,
thus leading the offeree in good faith to incur expenses in the expectation of entering into the contract;
and the withdrawal of the offer must be without any legitimate cause.
If the offeror, in so acting, is guilty or fault or negligence, his liability would be based on quasi-delicts; but
if there is no fault or negligence, and the withdrawal was in abuse of right, the basis of his liability would
be Article 19.
Contract of Option
In this stage, there can already be a perfected contract, such as a contract of option.
B. Perfection or Birth
A perfected contract allows the parties to validly demand or compel the performance of the contractual
obligations.
The cause of a contract has been defined as the essential reason which moves the contracting parties to
enter into it. In other words, the cause is the immediate, direct and proximate reason which justifies the
creation of the obligation thru the will of the contracting parties. (Tong Brothers Co. v. IAC)
A definite agreement on the manner of payment of the purchase price is an essential element in the
formation of a binding and enforceable contract of sale.
(Velasco v. CA)
C. Consummation
Once a contract has been consummated, its existence and binding effect can no longer be disputed; and
there is nothing left to be done or to be demanded by the parties thereto. All obligations arising from the
contract are extinguished. (Weldon v. CA)
D. Elements of a Contract
A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the
other, to give something or to render some services. A contract is also defined as “a juridical convention
manifested in legal form, by virtue of which one or more persons bind themselves in favor of another or
others, or reciprocally, to the fulfillment of a prestation to give, to do, or not to do.” A contract binds both
contracting parties and has the force of law between them.
Art. 1318. There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
TORTS
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Quasi-Delict – the fault or negligence of a person who, by his act or omission connected or not with, but
independent from any contractual relation, causes damage to another person.
Distinction between Quasi-Delict and Crime
Quasi-delict Crime
As to nature of right Private right Violation against the State/public

interest
As to condition of mind Intent is immaterial Criminal intent is necessary

As to legal basis of liability Broader than crimes in that even An act may only be punished as
if there is no particular law a crime where there is a law
punishing the act, the plaintiff punishing it
may still seek redress
As to liability for damages There is always liability for Not all crimes provide for liability
damages for damages
As to form of redress Compensation/indemnification Fine/imprisonment since the

towards the party suffering the violation is against the State
damages
As to amount of evidence Preponderance of evidence Proof beyond reasonable doubt
As to compromise May be compromised since it is Cannot be compromised

only civil liability
The acquittal of the accused, even if based on a finding that he is not guilty, does not carry with it the
extinction of the civil liability based on quasi-delict (Heirs of Guaring, Jr. v. CA [1997]).
Distinction Between Quasi-Delict and Contract
Quasi-Delict Contracts
As to its vinculum juris The wrongful or negligent act or The vinculum juris exists at the
omission itself which creates execution of the contract and
vinculum juris independently of the breach of
voluntary duty assumed by the
parties in the contract
As to applicability of Art. 1903 Only relates to culpa aquiliana. Not applicable.

(now Art. 2180)
Due diligence in the selection In culpa contractual, the due

and supervision of employees is diligence in the selection and
a defense. supervision of employees is not
a defense
As to burden of proof When the sources of the Plaintiff is not obliged to prove
obligation upon which plaintiff's negligence on the part of the
cause of action depends is a defendant, or of his servants or
negligent act or omission, the agents. Proof of the contract and
burden of proof rests upon of its nonperformance is
plaintiff to prove the negligence sufficient prima facie to warrant
— if he does not his action fails. a recovery.
(Cangco vs. Manila Railroad, G.R. No. L-12191, October 14, 1918)
ELEMENTS OF QUASI-DELICT
1. Damages suffered by the plaintiff;
2. Fault or negligence of the defendant, or some other person for whose acts he must respond; and
3. The connection of cause and effect between the fault or negligence of the defendant and the
damages incurred by the plaintiff (Philippine Bank Commerce v. CA [1997]).
Q: Does Art. 2176 refers only to negligent acts and not to acts intentional or criminal in character?
A: Quasi-delict is not limited to negligent acts, even a malicious or intentional act may be the basis of
quasi-delict.
In the case of Heirs of Dulay v. Court of Appeals, the Court held that contrary to the theory of private
respondents, there is no justification for limiting the scope of Article 2176 of the Civil Code to acts or
omissions resulting from negligence. Well-entrenched is the doctrine that article 2176 covers not only acts
committed with negligence, but also acts which are voluntary and intentional. As far back as the definitive
case of Elcano v. Hill this Court already held that Article 2176, where it refers to "fault or negligence,"
covers not only acts "not punishable by law" but also acts criminal in character; whether intentional and
voluntary or negligent.
CONCEPT OF NEGLIGENCE
 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 the other person suffers
injury (Layugan v. IAC [1988]).
 The omission to do something which a reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs would do, or doing something which prudent and
reasonable man would not do.
 Art. 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.
TEST OF NEGLIGENCE
The test by which to determine the existence of negligence in a particular case may be stated as follows:
Did the defendant in doing the alleged negligent act use that reasonable care and caution which an
ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence
(Picart v. Smith [1918]).
STANDARD OF CARE: DEGREE OF DILIGENCE
Art. 1173. x x x 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.
 Art. 1173 provides for the degree of diligence that has to be observed in case the law or contract
does not state what degree of diligence is to be observed, that is, the diligence of a good father of
a family.
 The concept of diligence of a good father of a family connotes reasonable care consistent with
that which an ordinarily prudent person would have observed when confronted with a similar
situation.
Degree of Diligence for Common Carriers
The law expressly provides for extra ordinary diligence with respect to common carriers.
PROOF OF NEGLIGENCE: BURDEN OF PROOF
The burden of proof rests upon plaintiff to prove the negligence of the defendant.
But there were instances where the plaintiff need not to prove the negligence of the defendant for the
latter’s negligence on his/her act or omission is presumed. And in some instances, the injured party
knows, or by mere use of logic they must have knowledge, that a particular thing is the cause of the injury
or damage suffered by them although evidence is not sufficient to prove that that particular thing is the
cause of damage or injury.
Presumption of Negligence
There are laws that provide that negligence can be presumed upon the occurrence of certain facts. The
following are the instances where negligence is presumed to exist:
 Art. 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former,
who was in the vehicle, could have, by the use of the due diligence, prevented the misfortune. It
is disputably presumed that a driver was negligent, if he had been found guilty or reckless driving
or violating traffic regulations at least twice within the next preceding two months.
 Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation.
Aside from the presumptions established under Articles 2184 and 2185, as well as the presumption
established by jurisprudence when there is a violation of law, there is another kind of presumption under
Article 2188.
 Art. 2188. There is prima facie presumption of negligence on the part of the defendant if the
death or injury results from his possession of dangerous weapons or substances, such as
firearms and poison, except when the possession or use thereof is indispensable in his
occupation or business.
Thus, death or other injuries that may have been suffered from the possession of dangerous weapons or
substances will instantly raise a disputable presumption of negligence on the part of the defendant.
Exception: The possession or use thereof is indispensable in their occupation or business.
Doctrine of Res Ipsa Loquitur

Res ipsa loquitur is a Latin phrase which literally means “the thing or the transaction speaks for itself.”
The phrase “res ipsa loquitur” is a maxim for the rule that the fact of the occurrence of an injury, taken
with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or
make out a plaintiff’s prima facie case, and present a question of fact for defendant to meet with an
explanation. Where the thing which caused the injury complained of is shown to be under the
management of the defendant or his servants and the accident is such as in ordinary course of things
does not happen if those who have its management or control use proper care, it affords reasonable
evidence, in the absence of explanation by the defendant, that the accident arose from or was caused by
the defendant’s want of care (Ramos vs. CA [1999]).
The doctrine of res ipsa loquitur is simply a recognition of the postulate that, as a matter of common
knowledge and experience, the very nature of certain types of occurrences may justify an inference of
negligence on the part of the person who controls the instrumentality causing the injury in the absence of
some explanation by the defendant who is charged with negligence. It is grounded in the superior logic of
ordinary human experience and on the basis of such experience or common knowledge, negligence may
be deduced from the mere occurrence of the accident itself. Hence, res ipsa loquitur is applied in
conjunction with the doctrine of common knowledge (Ibid).
Much has been said that res ipsa loquitur is not a rule of substantive law and, as such, does not create or
constitute an independent or separate ground of liability. Instead, it is considered as merely evidentiary or
in the nature of a procedural rule. It is regarded as a mode of proof, or a mere procedural convenience
since it furnishes a substitute for, and relieves a plaintiff of, the burden of producing specific proof of
negligence. In other words, mere invocation and application of the doctrine does not dispense with the
requirement of proof of negligence. It is simply a step in the process of such proof, permitting the plaintiff
to present along with the proof of the accident, enough of the attending circumstances to invoke the
doctrine, creating an inference or presumption of negligence, and to thereby place on the defendant the
burden of going forward with the proof (Ibid).
The doctrine can be invoked when and only when, under the circumstances involved, direct evidence is
absent and not readily available (Layugan v. IAC [1988]).
Requisites of Res Ipsa Loquitur

1. The accident was of a kind which does not ordinarily occur unless someone is negligent;
2. The instrumentality or agency which caused the injury was under the exclusive control of the
person charged with negligence;
3. The injury suffered must not have been due to any voluntary action or contribution on the part of
the person injured; and
4. It must appear that the injured party had no knowledge or means of knowledge as to the cause of
the accident, or that the party to be charged with negligence has superior knowledge or
opportunity for explanation of the accident.
CAUSAL CONNECTION BETWEEN THE ACT OR OMISSION AND THE DAMAGE
DOCTRINE OF PROXIMATE CAUSE
To sue under quasi-delict, the plaintiff must not only prove the act or omission of the defendant and the
injury suffered by him, but he must also prove that the said act or omission is the proximate cause of the
injury suffered by him.
Proximate Cause is that cause which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have occurred.
A link must be established between the act or omission, on the one hand, and the damage and injury, on
the other.
To be considered as proximate cause, negligence need not be the event closest in time to the injury; a
cause is still proximate, although farther in time in relation to the injury, if the happening of it set other
foreseeable events into motion resulting ultimately in the damage.
Negligence need not be the direct cause of the injury. It suffices that it be the natural and probable cause.
Natural cause is an act directly producing the injury or sets in motion other cause producing it and forming
a continuous chain in natural sequence down to the injury, thus linking the negligence to the injury by a
chain of natural and consequential causation, although the former may be neither the immediate nor the
direct cause of the event.
Concurrent causes means that two or more causes operate at the same time to produce a result which
might be produced by either independently of each other.
The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions involving
breach of contract (Calalas v. CA).
PERSONS LIABLE
Article 2176 Article 2194
Primary Liability Solidary Liability
Whoever by act or omission causes damage to The responsibility of two or more persons who are
another, there being fault or negligence, is liable for quasi-delict is solidary.
obliged to pay for the damage done.
Article 2180
Vicarious Liability
The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but
also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are responsible for the damages
caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their
authority and live in their company.
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry.
The State is responsible in like manner when it acts through a special agent; but not when the
damage has been caused by the official to whom the task done properly pertains, in which case what
is provided in Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by
their pupils and students or apprentices, so long as they remain in their custody.
The responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damage.
VICARIOUS LIABILITY: PERSONS LIABLE FOR TORTIOUS ACTS OF ANOTHER
Under Art. 2180, aside from the person who actually caused injury or damage to another, there may be
another who may be held responsible for the infliction of the injury of the former. Thus, the parents,
guardians, the owners and managers of an establishment or enterprise, employers, the State, and
teachers or heads of establishments of arts and trade can be held responsible for the act or omission of
another to whom they are responsible.
DEFENSES IN CASES INVOLVING NEGLIGENCE
CONTRIBUTORY NEGLIGENCE
The conduct on the part of the injured party, contributing as a legal cause to the harm they have suffered,
which falls below the standard to which they are required to conform for their own protection.
If the negligence of the party is only contributory and the immediate and proximate cause of the injury is
still the defendant’s lack of due care, the former can still recover damages, but the courts shall mitigate
the damages to be awarded (Article 2179).
DOCTRINE OF LAST CLEAR CHANCE
The person who has the last fair chance to avoid the impending harm and fails to do so is chargeable with
the consequences, without reference to the prior negligence of the other party.
This doctrine, in essence, states that where both parties are negligent, but the negligent act of one is
appreciably later in time than that of the other, or when it is impossible to determine whose fault or
negligence should be attributed to the incident, the one who had the last clear opportunity to avoid the
impending harm and failed to do so is chargeable with the consequences thereof.
Stated differently, the rule would also mean that an antecedent negligence of a person does not preclude
the recovery of damages for the supervening negligence of, or bar a defense against liability sought by
another, if the latter, who had the last fair chance, could have avoided the impending harm by the
exercise of due diligence (Philippine Bank of Commerce vs. CA [1997]).
FORTUITOUS EVENT
Art. 2178 provides that he provisions of Articles 1172 to 1174 are also applicable to a quasi-delict.
Thus, fortuitous event under Article 1174 can be used as a defense in quasi-delict cases.
Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation,
or when the nature of the obligation requires the assumption of risk, no person shall be responsible for
those events which could not be foreseen, or which, though foreseen, were inevitable.
Under Art. 1174, one does not become liable for the losses or damage if the same is caused by fortuitous
event EXCEPT when the law or stipulation provides for liability even if fortuitous event exists, or when the
nature of the obligation requires assumption of risks.
Two kinds of Fortuitous Event
1. Act of God or the natural occurrences such as floods or typhoons; or
2. Act of man such as riots, strikes or war.
Elements of Fortuitous Event
1. The cause is independent of human will;
2. Impossible to foresee or although capable of being foreseen, impossible to avoid;
3. Occurrence rendered the impossibility of performance of the obligation in a normal manner
4. The obligor must be free from any participation in the aggravation of the injury resulting to the
creditor.
EMERGENCY RULE
An individual who suddenly finds himself in a situation of danger and is required to act without much time
to consider the best means that may be adopted to avoid the impending danger, is not guilty of
negligence if he fails to undertake what subsequently and upon reflection may appear to be a better
solution, unless the emergency was brought by his own negligence.
Courts have traditionally been compelled to recognize that an actor who is confronted with an emergency
is not to be held up to the standard of conduct normally applied to an individual who is in no such
situation.
The law takes stock of impulses of humanity when placed in threatening or dangerous situations and
does not require the same standard of thoughtful and reflective care from persons confronted by unusual
and oftentimes threatening conditions (Valenzuela vs. CA [1996]).
DOCTRINE OF ASSUMPTION OF RISK

This refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by
one who has knowingly and voluntarily exposed themselves to danger, even if they are not negligent in
doing so (Nikko Hotel Manila Garden v. Lim [2005]).
This doctrine cannot be applied if an emergency is found to exist, or if the life or property of another is in
peril, or when the plaintiff seeks to rescue their endangered property (Ilocos Norte Electric Company v.
CA [1989]).
Elements of Doctrine of Assumption of Risk
1. The plaintiff must know that the risk is present;
2. They must further understand its nature; and
3. Their choice to incur it must be free and voluntary (Abrogar v. Cosmos Bottling Inc. [2017]).
PRESCIPTION
Prescription may also be used as a defense in quasi-delict cases. Article 1146 provides that:
The following actions must be instituted within four years:
1. Upon an injury to the rights of the plaintiff;

2. Upon quasi-delict.
DAMAGES
IN GENERAL
Damages refer to recompense or compensation awarded for the damages suffered (Custodio v. CA
[1996]).
To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the
defendant, and damage resulting to the plaintiff therefrom.
KINDS OF DAMAGES
1. ACTUAL OR COMPENSATORY
Refers to the compensation for the loss suffered. The rule for actual damages is provided under Art. 2199
where it provides that the injured party is entitled only to an adequate compensation for pecuniary loss
suffered by him as he has duly proved except as otherwise provided by law or by stipulation.
To recover actual damages, the claimant must prove the actual amount of loss with a reasonable degree
of certainty premised upon competent proof and on the best evidence obtainable. Specific facts that could
afford a basis for measuring whatever compensatory or actual damages are borne must be pointed
out. Actual damages cannot be anchored on mere surmises, speculations or conjectures.
Art. 2205. Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury;
(2) For injury to the plaintiff's business standing or commercial credit.
Determining the Compensable Amount of Lost Earnings
The more important variables taken into account in determining the compensable amount of lost earnings
are: (1) the number of years for which the victim would otherwise have lived; and (2) the rate of loss
sustained by the heirs of the deceased (People v. Quilaton [1992]).
In the determination of the losses or damages sustained by dependents and intestate heirs of the
deceased, said damages consist not of the full amount of his earnings, but of the support they received or
would have received from him had he not died in consequence of the negligence of defendant. In fixing
the amount of that support, the necessary expenses of deceased of his own living should be deducted
from his earnings. Thus, it has been consistently held that earning capacity, as an element of damages to
one’s estate for his death by wrongful act is necessarily his net earning capacity, or his capacity to
acquire money less than the necessary expense for his own living. Stated otherwise, the amount
recoverable is not the loss of the entire earning, but rather the loss of that portion of the earnings which
the beneficiary would have received. In other words, only net earnings not gross earning, are to be
considered, that is, the total of the earnings less expenses necessary in the creation of such earning or
income and less living and other incidental expenses (Villa Rey Transit, Inc. v. CA [1970]).
2. MORAL
Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate result of the
defendant's wrongful act for omission.
Purpose of Moral Damages

Moral damages are awarded to enable the injured party to obtain means, diversion or amusements that
will serve to alleviate the moral suffering he had undergone, by reason of the defendant’s culpable action.
The Right to Recover Moral Damages is Based on Equity
The right to recover moral damages is based on equity. Moral damages are recoverable only if the case
falls under Article 2219 of the Civil Code in relation to Article 21. Part of conventional wisdom is that he
who comes to court to demand equity, must come with clean hands (LBC Express, Inc. vs. CA [1994]).
Instances where acts of negligence or intentional acts warrants the award of moral damages
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may
also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9
of this article, in the order named.
Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should
find that, under the circumstances, such damages are justly due. The same rule applies to breaches of
contract where the defendant acted fraudulently or in bad faith.
Malicious Prosecution
An action for damages arising from malicious prosecution is anchored on the provisions of Articles 21,
2217 and 2219 (8) of the New Civil Code.
While generally, malicious prosecution refers to unfounded criminal actions and has been expanded to
include unfounded civil suits just to vex and humiliate the defendant despite the absence of a cause of
action or probable cause, the foundation of an action for malicious prosecution is an original proceeding,
judicial in character (Ponce vs. Legaspi [1992]).
Essential elements for malicious prosecution suit to prosper

In order, however, for the malicious prosecution suit to prosper, the plaintiff must prove: (1) the fact of the
prosecution and the further fact that the defendant was himself the prosecutor, and that the action finally
terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause;
and (3) that the prosecutor was actuated or impelled by legal malice, that is by improper or sinister motive
(Ponce vs. Legaspi [1992]).
Malice and want of probable cause must both exist in order to justify the action.
Moral Damages Cannot be Awarded to a Corporation
Moral damages are granted in recompense for physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. A
corporation, being an artificial person and having existence only in legal contemplation, has no feelings,
no emotions, no senses; therefore, it cannot experience physical suffering and mental anguish. Mental
suffering can be experienced only by one having a nervous system and it flows from real ills, sorrows, and
griefs of life—all of which cannot be suffered by respondent bank as an artificial person (LBC Express,
Inc. vs. CA [1994]).
3. NOMINAL
Article 2221 of the Civil Code authorizes the award of nominal damages to a plaintiff whose right has
been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for
indemnifying the plaintiff for any loss suffered.
The court may also award nominal damages in every case where a property right has been invaded. The
amount of such damages is addressed to the sound discretion of the court, with the relevant
circumstances taken into account (Cojuangco, Jr. v. CA [1999]).
4. TEMPERATE OR MODERATE
Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory
damages, may be recovered when the court finds that some pecuniary loss has been suffered but its
amount can not, from the nature of the case, be provided with certainty.
Art. 2225. Temperate damages must be reasonable under the circumstances.

The amount of temperate damages to be awarded is usually left to the discretion of the courts, but the
amount must be reasonable under circumstances, bearing in mind that temperate damages should be
more than nominal but less than compensatory.
5. LIQUIDATED
Art. 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of
breach thereof.
Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable.
Art. 2228. When the breach of the contract committed by the defendant is not the one contemplated by
the parties in agreeing upon the liquidated damages, the law shall determine the measure of damages,
and not the stipulation.
6. EXEMPLARY OR CORRECTIVE
Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public
good, in addition to the moral, temperate, liquidated or compensatory damages.
Exemplary damages are designed by our civil law to permit the courts to reshape behavior that is socially
deleterious in its consequence by creating negative incentives or deterrents against such behaviour (New
World Developers and Management, Inc. vs. AMA Computer Learning Center, Inc. [2015]).
Under the law, it is imposed by way of example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.

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SPECIAL LAST MINUTE REMINDERS – CIVIL LAW 2020/21

Article 26 par. 2 FC Republic v. Orbecido

Article 26 par. 2 FC Republic v. Manalo

(2) Consent freely given in the presence of the solemnizing officer.

Art. 7 FC. Marriage may be solemnized by:

Classes of Immovable Property

 By Nature – it cannot be carried from place to place.

PROPERTY IN RELATION TO WHOM IT BELONG

Property of Public Dominion

Kinds of Public Dominion:

2. For public service (art 420 [2])

3. For the development of national wealth (Art 424[1]), 420[2])

Property of Private Ownership

Patrimonial Property of the State

Q: Which of the following statements is wrong?

(4) Property is either of public dominion or of private ownership.

(1) Can Anthony acquire the property through acquisitive prescription?

(2) How many years does Anthony need?

 Distinguish occupation from possession

(2) Is Leopoldo entitled to a share?

What are the elements of obligation?

How will you distinguish an obligation from natural obligations?

B. KINDS OF OBLIGATIONS AS TO BASIS AND ENFORCEABILITY

What are the types of obligations?

What is the basis of natural obligation?

Requisites of Natural Obligation:

What are imperfect and perfect obligations?

What is its implication to natural obligation?

What does “prescription of actions” means?

What are “Statutes of Limitation”?

II. SOURCES OF OBLIGATIONS

Q: What are the characteristics of a legal obligation?

Q: What rules govern the obligations arising from contracts?

The act must be:

EXTRA-CONTRACTUAL OBLIGATIONS are OBLIGATIONS without an agreement or based on

QUASI DELICT DELICT

it is subsidiary (imputed) ER’s liability is primary in RPC

2. Culpa contractual, or negligence in the performance of a contractual OBLIGATION.

PERSONS LIABLE: (IMPUTED/vicarious LIABILITY, 2180)

REQUISITES OF LIABILITY (IMPUTED):

Classes of Torts According to Manner of Commission

Gives rise to the act itself the want or care or diligence

As to nature of private right public right

Is a Wrong the individual the State

Criminal Intent not needed Necessary

Legal Basis for Broad penal law necessary

Form of Redress reparation for injury punishment/fine/imprisonment

Quantum of Preponderance Beyond reasonable doubt

Compromise can be compromised criminal liability can never be

REQUISITES FOR LIABILITY: (onus)

III. COMPLIANCE WITH OBLIGATIONS

Articles 1163 - 1166 cover obligation to give.

Three Accessory Obligations:

A. In obligations to give

B. In an obligation to do, make a distinction:

In an obligation to do which is not personal:

Nature and Effects of Obligations

OBJECT OF THE OBLIGATION:

DETERMINATION OF DILIGENCE REQUIRED:

IV. Kinds of Civil Obligations

a. As to Perfection & Extinguishment

Q: Does the happening of a condition give rise to the OBLIGATION?