OBLIGATIONS

GENERAL PROVISIONS

GENERAL
PROVISIONS
ARTICLE 1156

An obligation is a juridical necessity to give, to do, or not to do.

Essential Requisites (PAOJ)

1. Passive subject
2. Active subject
3. Object or prestation
4. Juridical or legal tie

GENERAL
PROVISIONS
Forms of obligations
Distinction of an obligation, a right, and a cause of action
Essential elements of a cause of action
Distinction of injury, damage, and damages

Existence of one without the other

Real obligation vs. Personal obligation

GENERAL
PROVISIONS
ARTICLE 1157

Obligations arise from: (LCQAQ)

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.

BARREDO V. GARCIA
Civil liability (subsidiary) arising from a crime under Article
103 of the Revised Penal Code of the Philippines; or create an action
for quasi-delicto or culpa aquiliana under Articles 2179 and 2180 of
the Civil Code and the parties are free to choose which course to
take.
The negligent act of Fontanilla produces two (2) liabilities of
Barredo: First, a subsidiary one because of the civil liability of
Fontanilla arising from the latters criminal negligence under Article
103 of the Revised Penal Code, and second, Barredos primary and
direct responsibility arising from his presumed negligence as an
employer under Article 2180 of the Civil Code. Since the plaintiffs are
free to choose what remedy to take, they preferred the second, which
is within their rights.

A quasi-delict is a separate legal institution under the Civil

Code, with a substantivity all its own, and individuality that is entirely
apart and independent from a delict or crime.

PSBA V CA (1992)
The school and the students, upon registration
established a contract between them, resulting in bilateral
obligations. The institution of learning must provide their students
with an atmosphere that promotes or assists its primary
undertaking of imparting knowledge, and maintain peace and
order within its premises.

Note:
The SC dismissed the petition and the case was
remanded to the trail court to determine if the school neglected its
obligation to perform based on the contractual relation of them
and the students.

ASILO V BOMBASI
Where the civil liability survives, as explained, an action
for recovery therefore may be pursued but only by way of filing a
separate civil action
The New Civil Code provisions under the Chapter,
Human Relations, were cited by the prosecution to substantiate its
argument that the civil action based therein is an independent
one, thus, will stand despite the death of the accused during the
pendency of the case.

CATHAY PACIFIC
AIRWAYS V VASQUEZ
A contract of carriage existed between Cathay and
Vasquezes. They voluntarily and freely gave their consent to an
agreement whose object was the transportation of the Vasquezes
from Manila to HongKong aircraft, and whose cause or
consideration was the fare paid by the Vazquezes to Cathay.

FGU INSURANCE CORP. V

G.P. SARMIENTO TRUCKING
CORP. GR NO. 141910, (2002)
The mere proof of the existence of the contract and the failure of
its compliance justify, prima facie, a corresponding right of relief

The effect of every infraction is to create a new duty, that is, to

make recompense to the one who has been injured by the failure
of another to observe his contractual obligation unless he can
show extenuating circumstances.

GENERAL
PROVISIONS
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.

DE LA CRUZ V. NORTHERN
THEATRICAL ENTERPRISES,
95 PHIL. 739 (1954)
An employer has no obligation to furnish free legal assistance to
his employees because no law requires this and therefore, an
employee may not recover from his employer the amount he may
have paid a lawyer hired by him to recover damages caused to
said employee by a stranger or strangers while in the
performance of his duties

PELAYO V. LAURON,
12 PHIL. 453 (1909)
The rendering of medical assistance in case of illness is
comprised among the mutual obligations to which spouses are
bound by way of mutual support.
This liability originates from the above-mentioned mutual
obligation which the law has expressly established between the
married couple.

GENERAL
PROVISIONS
ARTICLE 1159

Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith.
ARTICLE 1160

Obligations derived from quasi-contracts shall be subject to the

provisions of Chapter 1, Title XVII, of this Book.

GENERAL
PROVISIONS
Kinds of Quasi-Contracts (NSO)
1.

Negotiorum gestio

2.

Solutio indebiti

3.

Other cases

GENERAL
PROVISIONS
ARTICLE 1161
Civil obligations arising from criminal offenses shall be governed
by the penal laws, subject to the provisions of article 2177, and of
the pertinent provisions of Chapter 2, Preliminary Title, on Human
Relations, and of Title XVIII of this Book, regulating damages.

GENERAL
PROVISIONS
Civil liability arising from crimes or delicts
Right to recover civil liability
Scope of civil liability

GENERAL
PROVISIONS
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: an act or omission by a person which causes damage
to another in his person, property, or rights giving rise to an obligation to
pay for the damage done, there being no fault or negligence but there is o
pre-existing conractual relation between the parties
REQUISITES: (AFDDN)
1) Act/omission by the defendant
2) Fault or negligence of the defendant
3) Damage caused to plaintiff
4) Direct relation between the act/omission & the damage
5) No pre-existing contractual relations between the parties

GENERAL
PROVISIONS
Two causes of action to recover damages:
1.Article 100 of RPC Civil Liability arising from crime
2.Article 2176 of the Civil Code Action for Quasi Delict
Cannot recover damages twice for the same act, but failure to recover
from one action will not preclude action based on the other.

DIFFERENCE OF
CRIME AND DELICT

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1163

Every person obliged to give something is also obliged to

take care of it with the proper diligence of a good father of a
family, unless the law or the stipulation of the parties
requires another standard of care.
This provision refers to an obligation to give a specific or determinate thing

SPECIFIC OR DETERMINATE THING

-When it is particularly designated or physically segregated from
all others of the same class (Art. 1459)

NATURE AND EFFECT

OF OBLIGATIONS
GENERIC OR INDETERMINATE THING
-When it refers only to a class or genus to which it pertains and
cannot be pointed out with particularity.
COMPARISON
A DETERMINATE THING is identified by its individuality. The
debtor cannot substitute it with another although the later is of
the same kind and quality without the consent of the debtor (Art.
1244)
A GENERIC THING is identified only by its specie. The debtor can
give anything of the same class as long as it is of the same kind.

NATURE AND EFFECT

OF OBLIGATIONS
DUTIES OF A DEBTOR IN OBLIGATION TO GIVE A
DETERMINATE THING
1. To preserve or take care of the thing due
2. To deliver the fruits of the thing
3. To deliver its accessions and accessories
4. To deliver the thing itself.
5. To answer for damages in case of nonfulfillment or breach
DUTIES OF A DEBTOR IN OBLIGATION TO DELIVER A
GENERIC THING
1. To deliver a thing is of the quality intended by the parties taking
into consideration the purpose of the obligation and other
circumstances.
2. To be liable for damages in case of fraud, negligence, or delay in
the performance of his obligation, or contravention to the tenor
thereof.

NATURE AND EFFECT

OF OBLIGATIONS
Diligence required
has the duty to take care of the thing due with the diligence of a
good father of a family pending delivery, unless law or stipulation
provides another standard
cannot stipulate for absolute exemption from liability for any fault
or negligence
depends on the nature of the obligation, the circumstances of the
person, time and place.
not liable for a fortuitous event.
To be able to preserve the thing as in its condition when the
obligation was made

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1164
The creditor has a right to the fruits of the thing from the time the obligation to
deliver arises. However, he shall acquire no real right over it until the same
has been delivered to him.
The creditor will have the right over the fruit of a thing from the time the
obligation to deliver arises.
Kinds of Delivery:
Actual- where physically, the property changes hands. (e.g. delivery of the
car)
Constructive- where physical transfer is implied.(e.g. giving of the key to the
house)
However, it only becomes his own possession (real right) when it is already
delivered to him either physically or constructively.
Note: Before delivery of the thing, he only has personal right to the fruits
or right to demand the fulfillment of the obligation to give the fruits.

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1165

When what is to be delivered is a determinate thing, the creditor,

in addition to the right granted him by Art. 1170, may compel the
debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the
obligation be complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to
two or more persons who do not have the same interest, he shall
be responsible for any fortuitous event until he has effected the
delivery.

NATURE AND EFFECT

OF OBLIGATIONS

NATURE AND EFFECT

OF OBLIGATIONS
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
Accessories: Things joined to or included with the principal thing,
for its better use, completion, embellishment. Unlike accessions,
the accessory and principal must go together.
Accessions: additions, improvements, fruits, upon the principal
Examples: Three forms of building, planting, sowing--Article 457,
Avulsion (Art. 459), Change of course of rivers (Arts. 461-462),
Alluvium

NATURE AND EFFECT

OF OBLIGATIONS
ACCESSION as a right: Accessions can also be used as a right-that is the right of the owner to the products or fruits attached to
the principal thing.
It can be NATURAL (plants) or ARTIFICIAL (building)
Accessions and Accessories exist only in relation to the principal
object. This rule is also based on the principle that an accessory
follows the principal. (De Leon)
EXCEPTION: STIPULATION
An obligation to deliver the accession or accessory of the
principal does not mean you have to deliver the principal or
thing

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1167
If a person obliged to do something fails to do it, the same shall be
excuted at his cost.
This same rule shall be observed if he does it in contravention of the
tenor of the obligation. Furthermore, it may be decreed that what has
been poorly done be undone.

Art 167 speaks of positive personal obligation

TO DO--act or render service
Debtor fails to perform
Debtor performs the obligation, but contrary to the terms
Debtor perform but in a poor manner

NATURE AND EFFECT

OF OBLIGATIONS
Remedy of the Creditor:
1.Perform obligation by himself or another; at debtors expense,
have another do it
2.Recover damages

Personal obligation to do can be performed by a third person,

EXCEPT:
1. A specific performance involuntary servitude
2. Personal qualifications of the debtor
Remedy: indemnification for damages.
(Exception: Perform at the expense of the debtor)

NATURE AND EFFECT

OF OBLIGATIONS
UNDONE:
If made poorly: Performance and Damages
Obligation is a negative one - if undoing is still possible

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1168
When the obligation consists in NOT doing, and the obligor does
what has been forbidden him, it shall also be undone at his
expense.

MEANING: This is a remedy of a creditor in a an obligation not to

do. Because the obligation is to abstain from an act, there is NO
specific performance.
GENERAL RULE: Remedy of the obligee is the UNDOING of the
thing plus DAMAGES. If impossible to undo, only damages may
be claimed.

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1169
Those obliged to deliver or to do something incur in delay from the time
the obligee judicially or extra-judicially demands from them the fulfillment
of their obligation. However, demand by the creditor shall not be
necessary in order that delay may exist:
1. When the obligation or law expressly so declares; or
2. When from the nature and circumstances of the obligation it
appears
that the designation of the time when the thing to be
rendered or
service to be rendered was a
controlling motive in 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 does not 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.

NATURE AND EFFECT

OF OBLIGATIONS
Delay contemplated: failure to perform an obligation on time which
constitutes breach of the obligation.
General Rule: Creditor should make a demand before debtor incurs
delay.
Exceptions:
1. Law/Obligation provides
2. Time is of the Essence
3. Demand would be useless
Kinds of Delay
1. Mora Solvendi - on the part of the debtor (Not applicable in
obligations NOT to do/give)
2. Mora Accipendi - on the part of the creditor
3. Compensatio Morae - delay of obligors in reciprocal obligations
which cancels out each other

NATURE AND EFFECT

OF OBLIGATIONS
Requisites of mora solvendi (PdC-DL)
1.Failure of debtor to perform his obligation
2.Demand by creditor (judicial or extra judicial)
3.Failure of debtor comply with the demand.
4.Debt is due and demandable
5.Debt is liquidated.
Requisites of COMPENSATIO MORAE (PDC-DL)
Compensatio morae, as a general rule, is when parties in a bilateral
contract can regulate the order in which they shall comply with their
reciprocal prestations. Otherwise, the fulfillment must be
SIMULTANEOUS and RECIPROCAL.
Requisites of MORA ACCIPIENDI (OCR)
1.Offer of performance by the debtor.
2. Offer is to comply with the prestation.
3.Creditor refuses without just cause

NATURE AND EFFECT

OF OBLIGATIONS
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.
Modes of Breach that entitles one to damages: (FNDC)
1.
Fraud
2.
Negligence
3.
Delay
4.
Contravention of tenor

NATURE AND EFFECT

OF OBLIGATIONS
FRAUD: Deliberate and intentional evasion of the normal fulfillment of
obligations.
This talks about INCIDENTAL fraud as to be distinguished from causal
fraud or fraud employed in the execution of a contract which vitiates the
consent and makes the contract voidable.
Woodhouse v Halili
The false representation was not the causal consideration or principal
inducement that led Halili to enter into the agreement. The consideration
was the transfer (by Woodhouse) of the franchise to the partnership in
exchange for 30% of the profits. Meaning, Woodhouse falsely
represented himself to get Halili to consent to giving him 30% of net
profits. This is dolo incidente because it was used to get an incidental
matter (30% share in net profits) into the agreement.

NATURE AND EFFECT

OF OBLIGATIONS
NEGLIGENCE: In Maranan vs. Perez, if a taxi passenger is intentionally
killed by the driver, an action can be brought against both the driver and
the taxi company/operator. Although the driver did not act within the
scope of his authority, but a carrier should afford full protection. It
delegates to its driver the duty to protect passengers with utmost care.
Thus, it bears the risk of negligent acts of its employees since it
possesses power to select and remove.
DELAY: Mora. (Example)
CONTRAVENTION OF TENOR: Sandy and Pixie agreed on having Pixie
construct a brick house for Sandy. However, when the construction
finished, it turned out that Pixie made use of wood. Therefore, Pixie is
guilty of breaching the contract due to doing the contravention of the
tenor of the obligation.

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1171
Responsibility arising from fraud is demandable in all obligations.
Any waiver of an action for future fraud is void.
This provisions speaks of INCIDENTAL FRAUD (employed in
the fulfillment of the obligation).
Unlike in the case of responsibility arising from negligence, the
court is not given the power to mitigate or reduce the damages
to be awarded in Fraud.

NATURE AND EFFECT

OF OBLIGATIONS
Waiver of action for future fraud is void because it is against law
and public policy.
Waiver of action for past fraud is valid because it is considered
as an act of generosity and magnanimity.

What is renounced is the effects of fraud.

Waiver of past fraud must be clear and expressed.

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1172
Responsibility arising from negligence in the performance of every
kind of obligation is also demandable, but such liability may be
regulated by the courts, according to the circumstances.

Court has discretion to fix measure of damages because

negligence is a question which must necessarily depend upon the
circumstances of each case.
Negligence = No bad faith. No deliberate intent to cause injury.
Future negligence may be renounced.
EXCEPTION: where the nature of the obligation requires
the exercise of extraordinary diligence.
When Negligence is gross or shows bad faith (dishonest purpose
or motive), it would be equivalent to FRAUD. = cannot be waived.

DISTINCTION BETWEEN
CULPA AND DOLO
Culpa (Negligence)

Dolo (Fraud)

Mere want of care or diligence, not

the voluntariness of act or omission

Willfulness or deliberate intent to

cause damage or injury to another

Liability may be mitigated by the

courts

Liability cannot be mitigated by the

courts

Waiver for future negligence:

Valid if simple
Void if gross

Waiver for future fraud is void

When Negligence is gross or shows bad faith (dishonest purpose

or motive), it would be equivalent to FRAUD. = cannot be waived.

NATURE AND EFFECT

OF OBLIGATIONS
Kinds of Negligence (according to source)
1.Culpa Aquilina
2.Culpa Contractual
3.Culpa Criminal Result of commission of a crime. May produce
civil liability.
Culpa Aquilina (Civil)

Culpa Contractual (Contractual)

Negligence as a source of
obligation

Negligence in the performance of a

contract

Constitutes an independent source

of obligation between parties not
previously bound

An incident in the fulfillment of an

existing obligation

Negligence should be proximate cause of damage is liability is attached.

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1173
The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time,
and of the place. When negligence shows bad faith, the
provisions of Article 1171 and 2201, paragraph 2 shall apply.
If the law or contract does not state the diligence which is to be
observes in the performance, that which is expected of a good
father of a family shall be required.
Test of negligence: Whether the person accused of being
negligent foreseen the injury as a reasonable consequence of the
course about to be pursued. (FORSEEABILITY)

NATURE AND EFFECT

OF OBLIGATIONS
Factors to be considered: (NPTP)
1. Nature of the obligation
2. Circumstances of the person
3. Circumstances of time
4. Circumstances of place

NEGLIGENCE IS NEVER PRESUMED. It must be proven by the

party who alleges it.
Kinds of negligence required:
1. That agreed upon by the parties
2. In the absence of stipulation, that required by law
3. If both contract and law is silent, then the diligence expected
of a good father of a family

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1174
Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the
obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or
which, though foreseen, were inevitable.
Fortuitous events extraordinary events which cannot be
foreseen or which, though foreseen, is inevitable

Acts of man
Acts of God

NATURE AND EFFECT

OF OBLIGATIONS
Requisites

Independent of human will or the obligors will

Unforeseeable or unavoidable
Renders the obligation impossible to perform in a normal
manner
Debtor must be free from participation or the aggravation of
injury to the creditor (concurrent or previous negligence of
obligor)
Rules
Expressly specified by law
Stipulated by parties
Assumption of risk

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1175
Usurious transactions shall be governed by special laws.
Usury contracting for or receiving interest in excess of the amount allowed
by law for the loan, or use of money, goods, chattels, or credits. Usury is now
legally non-existent. A stipulation for the payment of usurious interest is void.
Legal rate 6% per annum
Maximum rate
12% per annum if secured loan
14% per annum if unsecured
The rate prescribed by the Monetary Board
Monetary interest stipulation between parties
Compensatory interest imposed by law or by courts as penalty or indemnity
for damages; paid when obligor is proven to have defaulted

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1176
The receipt of the principal by the creditor, without reservation with respect to
the interest, shall give rise to the presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior
installments, shall likewise raise the presumption that such installments have
been paid.
Conclusive presumption
Disputable presumption Article 1176
When presumptions under Article 1176 do not apply:

Reservation as to interest (in writing or orally made)

Receipt for a part of principle
Receipt without indication of particular installment paid
Taxes
Non-payment proven

NATURE AND EFFECT

OF OBLIGATIONS
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.
Remedies available to creditors for the satisfaction of claims:

Specific performance
Pursue leviable property of debtor
Subrogation (accion subrogatoria)
Rescission of contract (accion pauliana) which the debtor may
have done to defraud him

NATURE AND EFFECT

OF OBLIGATIONS
ARTICLE 1178
Subject to the laws, all rights acquired in virtue of an obligation are
transmissible, if there has been no stipulation to the contrary.
Exceptions to transmissibility of rights
Prohibited by law
Partnership
Agency
Commodamtum

Stipulation of parties
Must not be contrary to public policy
Must be clearly proven or clearly inferable from the stipulation