OBLIGATIONS AND CONTRACTS
Atty. Risel Castillo-Taleon
Dizon2012
First Meeting OBLICON
Can parties stipulate terms and conditions in a contract
which is contrary to law, public order or public policy?
In relation to Article 5 of the Civil Code. Acts
contrary to the provisions of mandatory and
prohibitory laws are void unless the law itself
authorizes their validity.
Thus, if the laws are not mandatory or prohibitory
(directory, etc.) then the contracting parties may
stipulate terms and conditions which are contrary to
law (as long as they are not mandatory or prohibitory),
public order or public policy
Differences: liability of the employer under quasi-
delicts and culpa criminal.
Legal Basis:
Quasi Delict: Article 2176 of the Civil Code
Criminal Offense: Article 103 of the RPC
Quasi delict: direct and primary (solidary)
Criminal offenses: subsidiary
In criminal offense, it is necessary that the assets of the
accused or the employee has been exhausted before the
employer may be held liable in case of such insolvency
while in quasi delict, it is not necessary that the assets
of the employee must be exhausted because he is
directly and primarily liable
Quasi delict: not necessary that the employer is
engaged in a trade or industry
Criminal Offense: it is necessary that the
employer is engaged in trade or industry
Quasi delict:
observance of due diligence of a father of a family in
the SELECTION and SUPERVISION of the employee
is a defense which may exempt the employer from civil
liability
Criminal offense:
observance of due diligence of a father of a family is
not a defense to exempt the employer from the civil
liability
If Christian Grey is acquitted in a criminal case, may a
civil case still be filed against him?
What is Article 100 of the RPC?
Article 100: Every person criminally liable for a felony
is also civilly liable.
-talks about the dual aspect of a criminal offense (the
criminal and civil aspect)
What are the exempting circumstances?
Article 12: The following are the exempt from criminal
liability:
An imbecile or an insane person, unless the latter has
acted during a lucid interval.
A minor.
Any person who while performing an act with due
care, causes an injury by mere accident without fault or
intention of causing it
Any person who acts under the compulsion of an
irresistible force.
Any person who acts under the impulse of an
uncontrollable fear.
Any person who fails to perform an act required by
law, when prevented by some lawful or insuperable
cause.
Difference between justifying and exempting
circumstance
Justifying circumstances- there is no criminal because
there is NO CRIME.
Exempting circumstances- There IS a crime but there
is NO CRIMINAL.
* nos. 5 and 6 is in relation with civil liability or when
is an offender exempt from civil liability if the above
circumstances are present.
Who are subsidiary liable in Article 103? (tanong kay
Pau)
Article 103: The subsidiary liability established in the
next preceding article shall also apply to employers,
teachers, persons, and corporations engaged in any
kind of industry for felonies committed by their
servants, pupils, workmen, apprentices, or employees
in the discharge of their duties.
What does civil liability includes?
Legal Basis: Artice 104 of the RPC states:
Restitution- in theft, the culprit is duty-bound to return
the property stolen
Reparation - in case of inability to return the property
stolen, the culprit must pay the value of the property
stolen, or the damages caused
Indemnification- for consequential damages- the loss
of his salary or earning.
What are the requisites of a contract?
Juridical relation which arises whenever a person
unduly delivers a thing through mistake to another who
has no right to demand it.
What is a right?
Source: Makati Stock Exchange vs. Campos
Right- a claim or title to an interest in anything
whatsoever that is enforceable by law.

Consent of the parties What is an obligation according to JBL Reyes in the

Object of the contract
Cause for the establishment of the contract
When is a contract perfected?
Legal Basis:
Article 1315: Contracts are perfected by mere consent,
and from that moment the parties are bound not only to
the fulfillment of what has been expressly stipulated
but also to all the consequences which, according to
their nature, may be in keeping with good faith, usage
and law.
Article 1316: Real contracts, such as deposit, pledge
and commodatum, are not perfected until the delivery
of the object of the obligation.
What are the 2 kinds of contracts?
Consensual contract
perfected by mere agreement of the parties e.g. sale,
lease.
2. Real contracts
those which require not only the consent of the parties
for their perfection , but also the delivery of the object
by one party to the other.
Commodatum, deposit, pledge
case of Makati Stock Exchange? (tanong kay Radz)
Source: Makati Stock Exchange vs. Campos
Obligation- is a juridical relation whereby a person
(called the creditor) may demand from another (called
the debtor) the observance of the determinative
conduct (the giving, doing or not doing) and in case of
breach, may demand satisfaction from the assets of the
latter.
When does an obligation arise from law and when can
you say that it arises from a contract, quasi-contract ,
criminal offense and quasi delict? (tanong kay marj)
It arise from law when the law establishes the
obligation and the act or condition which predicates the
obligation is nothing more than a factor in determining
the moment it becomes demandable.
It arises from contract, quasi-contract, quasi-delict or
criminal offense when the law merely recognizes or
acknowledges the existence of an obligation generated
by an act which may constitute a contract, quasi-
contract, quasi-delict or criminal offense and the
purpose is merely to regulate such obligation.

What are the classifications of Obligations under RPC? CASES:

(tanong kay Radz) Makati stock exchange vs. Campos (tanong ni shinji)
1. Pure and Conditional Issue is whether or not Campos has the right to
2. With a Period participate in the allocation of IPO’s
3. Alternative and Facultative
4. Joint and Solidary No because his alleged right is based on customs or
5. Divisible and Indivisible practice which is not one of the 5 sources of
6. With a Penal Clause obligations stipulated by the civil code and a custom is
Quasi-contracts: In negotiorum gestio, who is not a source of right that is demandable and
obligated? Who is the obligee? enforceable by law
What the owner incurs loss during the management of
the property? Liga vs. Allegro
What is a solutio indebiti? A contract has a force of law between the contracting
parties and should be complied with in good faith.
Tips:
If the prof ask you a YES or NO question, ask yourself
whether the question can be qualified. If it is
answerable by yes or no then start with “MISS I
QUALIFY MY ANSWER… or MISS IT DEPENDS,
IF…”
IN EXAMS, it is better if you will write the legal
reason first before saying yes or no… answer the yes
or no in the concluding part of your answer so that at
least the prof will be able to read your reason and
might give you extra points instead na if mali na ang
yes or no mo sa first part din a niya babasahin ang
reasons…
Second Meeting Merge Class (Nov. 26, 2012)
What is a Determinate object?
Differentiate Generic and Determinate thing.
What are the obligations of the Debtor if the object is
Determinate.
What is Article 1169? When does the Obligor incur
Delay?
Article 1169: Those obliged to deliver or to do
something incur in delay from the time the obligee
judicially or extrajudicially demands from them the
fulfillment of their obligation.
What are the other things an obligor is obliged to
deliver?
Article 1166: The obligation to give a determinate
thing includes that of delivering all its accessions and
accessories, even though they may not have been
mentioned.
What is accession? What is an accessory?
Accession- all those things which are produced by the
thing which is the object of the obligation as well as all
of those which are naturally or artificially attached
Accessory- all those things which have for their object
the embellishment, use or preservation of another thing
which is more important and to which they are not
incorporated or attached. It is merely convenient for
the perfection of another thing.
How can you say that it is the proper diligence of a
good father of a family?
Obligation to deliver a 2012 white Toyota Corolla:
determinate or generic?
-It is a determinate object. Usually, to turn the example
above (Toyota car) into a determinate object, the serial
number [?] of the car will determine its individuality
amongst its class.
What are the obligations of the Debtor if the object is
generic? Determinate thing?
The following are the obligations of the debtor if the
object is generic:
To deliver a thing which is neither of superior nor
inferior quality
Liable for damages in case of breach of obligation
Liability subsist even if thing is lost through fortuitous
event because the genus of a thing can never perish
(genus nunquam peruit)
The following are the obligations of the debtor if the
object is determinate:
To perform the obligation specifically
To take care of the thing with the proper diligence of a
good father of a family
Deliver all the accessions and accessories of the thing
Liable for damages in case of breach of obligation by
reason of delay, fraud, negligence and contravention of
tenor
Rights of the creditor?
Rights of creditor for Determinate Obligations:
Compel specific performance
Legal Basis: Article 1165: When what is to be
delivered is a determinate thing, the creditor in addition
to the right granted him by Article 1170, may compel
the debtor to make the delivery.
Article 1224: Debtor cannot compel creditor to accept
different one
Recover damages for breach of obligation
Legal Basis: as stated in Article 1165 “right granted
him by Article 1170”
Article 1170: Those who in the performance of their
obligation are guilty of fraud, negligence or delay and
those who in any manner contravene the tenor thereof,
are liable for damages.
Rights of creditor in Generic Obligations
To ask for the performance of the obligation
Delivery of the thing or object of neither superior nor
inferior quality belonging to a class or genus.
Ask the obligation be complied with at the expense of
such debtor
Creditor can order he delivery from a third person at
the expense of the debtor
Recover damages of breach of obligation
Demand to indemnify for damages
Legal Basis: Article 1165, Par. 2: If the thing is
indeterminate or generic, he may ask that the
obligation be complied with at the expense of the
debtor.

What is negligence?
Negligence- consist in the omission of diligence which
is required by the nature of a particular obligation and
corresponds with the circumstances of the persons, of
the time and of the place.
When does the delay of the delivery of the thing and its
fruits arises?
Qualify the answer for it:
Depend upon the nature of the obligation. If it is
derived from law, quasi-contracts, criminal offenses
and quasi-delicts, the delivery arises from the time
designated by the provisions of the Civil Code or the
Special Laws.
If it is derived from a contract, then it arises from the
moment of the perfection of the contract.
What are the remedies of the creditor if there is failure
of delivery on the part of the obligor?
Exhaust the property in possession of debtor
Be subrogated to all the rights and action of the debtors
save those which are inherent in his person *subsidiary
Impugn all the acts which the debtor may have done to
defraud him *subsidiary
What is Article 1165?
Article 1165: When what is to be delivered is a
determinate thing, the creditor in addition to the right
granted him by Article 1170 , may compel the debtor
to make the delivery.
If the thing is indeterminate or generic, he may ask that
the obligation be complied with at the expense of the
debtor.
If the obligor delays or has promised to deliver the
same thing to two or more persons who do not have the
same interest, he shall be responsible for fortuitous
event until he has effected the delivery.
What are the exceptions of the observance of the
diligence of a good father of a family?
The exceptions for the observance of DoaGFoaF:
If the law requires another standard of care e.g.
Common Carrier
Parties stipulate another standard or care
What is a common carrier?
Article 1732: Common carriers are persons,
corporations, firms or associations engaged in the
business of carrying or transporting passengers or
goods or both , by land, water or air, for compensation,
offering their services to the public.
Article 1733: Common carriers, from the nature of
their business and for reasons of public policy, are
bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the
passengers transported by them, according to all the
circumstances of each case.
Can a party stipulate observance of care that is
ordinary or below than that of the standard?
Third Meeting (November 29, 2012)
What is a pure condition?
Legal Basis:
Article 1179:
Every obligation whose performance does not depend
upon a future or uncertain event or upon a past event
unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition
shall also be demandable, without prejudice to the
effects of the happening of the event.
One whose effectivity or extinguishment does not
depend upon the fulfillment or non-fulfillment of a
condition or upon the expiration of a term or a period
which as a consequence, is characterized by the quality
of immediate demandability.
Differentiate: Potestative, Casual and Mixed conditions
Potestative
fulfillment of the condition depends upon the will of a
party to the obligation
Casual
Fulfillment depends upon chance and/or will the will
of one of the parties of the obligation
Mixed
Fulfillment of the condition depends partly upon the
will of the party to the obligation and partly upon the
chance and/or will of a third person
What is Article 1170?
Article 1170: those who in the performance of their
obligation are guilty of fraud, negligence or delay, or
those who contravene the tenor thereof, shall be liable
for damages.
What is dolo?
Dolo consist in the conscious and intentional
proposition to evade the normal fulfillment of an
obligation.
What is the distinctive character of a pure obligation?
The distinctive character of a pure obligation is its
immediate demandability.
What is a conditional obligation?
One whose effectivity is subordinated to the fulfillment
or non-fulfillment of a future or uncertain fact or event.
Article 1181:In conditional obligations, the acquisition
of rights as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of
the event which constitutes the condition.
Can an action for fraud be waived?
It depends. If the waiver is for future fraud, then it is
void. If the action taken is to waive an existing fraud, it
is valid for it is considered as an act of generosity.
Article 1171: Responsibility arising from fraud is
demandable in all obligations. Any waiver of an action
for future fraud is void.
What is future fraud? Why can’t we waive future
fraud?
In potestative condition, what is the nature of the
obligation?
Potestative conditions are conditions whose fulfillment
depends upon the will of a party to the obligation.
If it depends upon the will of the creditor; the condition
and obligation is valid.
If it depends upon the will of the debtor; the condition
and obligation is void.
Legal Basis: Article 1182: When the fulfillment of the
condition depends upon the will of the debtor, the
conditional obligation shall be void. If it depends upon
chance or the will of a third person, the obligation shall
take effect in conformity with the provisions of this
Code.
Define condition.
Condition – a future or uncertain factor event upon
which an obligation is subordinated or made to depend.
Define suspensive condition.
Condition precedent; future or uncertain event upon the
happening or fulfillment of which rights arising out of
the obligation are acquired.
What is a term? Differentiate term from a condition.
Definition
Term/period- proof of ascertainment of fact or event
will surely come to pass although clearly it may not be
known when
Article 1193, Par. 3: A day certain is understood to be
that which must necessarily come, although it might
not be known when.
Condition- a future or uncertain factor event upon
which an obligation is subordinated or made to depend.
As to requisites:
Term- interval of time which is future or uncertain
Condition- refers to fact or event which is future and
uncertain
As to fulfillment
Term – an interval of time which must necessarily
come, although it may not be known when
Condition- future or uncertain fact or event which may
or may not happen
As to influence on obligation
Term- merely exerts an influence upon the time of the
demandability or the extinguishment of an obligation
Condition – exerts an influence upon the very
existence of the obligation itself
As to retroactivity of effects
Term – does NOT have retroactive effects unless there
is an agreement to the contrary
Condition- has retroactive effects
As to effect of the will of the debtor
Term – if left exclusively to the will of the debtor, the
existence of the obligation is not affected
Condition- if left exclusively to the will of the debtor,
the very existence of the obligation is effected
Promise to pay debt once you receive money: is it a
conditional obligation? Pure obligation or an obligation
with a period?
Obligation with Period.
Legal Basis: Article 1180: When the debtor obliges
himself to pay when his means permits him to do so,
the obligation is deemed to be oe with a period, subject
to the provisions of Article 1197.
What is 1197?
Article 1197: If the obligation does not fix a period,but
from itsnature and the circumstances it can be inferred
that a period was intended, the courts may fix the
duration thereof.
The courts shall fix the duration of the period when it
depends upon the will of the debtor.
In every case, the courts shall determine such period as
may under the circumstances have been probably
contemplated by the parties. Once fixed by the courts,
the period cannot be changed by them.
What is Article 1180? Article 1197? Article 1177?
Article 1180: When the debtor obliges himself to pay
when his means permits him to do so, the obligation is
deemed to be oe with a period, subject to the
provisions of Article 1197.
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 courts may fix the
duration thereof.
The courts shall fix the duration of the period when it
depends upon the will of the debtor.
In every case, the courts shall determine such period as
may under the circumstances have been probably
contemplated by the parties. Once fixed by the courts,
the period cannot be changed by them.
Article 1177: The creditors, after having pursued the
property in possession of the debtor to satisfy their
claims, may exercise all the rights and bring all the
actions of the latter for the same purpose, save those
which are inherent in his person; they may also impugn
the acts which the debtor may have done to defraud
them.
What are specific steps the creditor must do to avail the
remedy?
Exhaust the possession of the creditors
Exercise all the rights and bring all the actions the
debtor may have against third persons
Impugn all the acts which the debtor may have done to
defraud the creditor
If the condition is potestative, Is it valid or void?
Potestative and resolutory: valid or void?
Define: suspensive vs. resolutory *not just the
effects…define them
Prior to the fulfillment of a suspensive condition, is
there right?
What is hope and expectancy?
Is this hope or expectancy protected by law? how is it
protected?
What are the rights or the creditor to protect his credit?
(Art. 1177)
Impossible vs. impossible condition
Can the creditor choose any of the remedies?
NO, the primary remedy is to exhaust the properties of
the debtor and the other remedies are subsidiary.
What is accion subrogatoria?
Can the creditor choose the subsidiary remedies
simultaneously or not?
What is accion pauliana?
Condition vs. Obligation
Requisites of Accion subrogatoria?
actions done by debtor intended to defraud the creditor,
the creditor must be prejudiced by the acts of the
debtor because accion subrogatoria is just a subsidiary
remedy
30. Hypo: Edward is indebted to Jacob, Edward
receives allowance from Bella which is not yet
collected by the latter. Jacob filed a case,won and
executed judgment against Jacob. The payment was
not enough, can Jacob pursue accion subrogatoria
against Bella?
Answer: NO. the right to receive allowance falls under
Support, thus it is inherent and personal to Edward.
Potestative, Conditional depends upon the will of the
debtor? Valid or Void?
Depends if it is suspensive or resolutory