OBLIGATIONS  Real obligation (to give) – subject matter is a thing

(Arts. 1156-1304, Civil Code.)  Personal obligation (to do or not to do) – subject matter is an act
Positive personal obligation – or obligation to do (Art. 1167)

Art 1156. An obligation is a juridical necessity to give, to do or not to do. (n) Negative personal obligation – obligation not to do (Art. 1168)

Analyzed:
Juridical – enforceable & the law requires it SOURCES OF OBLIGATIONS
To give – immaterial things or intellectual properties 1. Law – imposed by law itself
To do or not to do –services or material things
2. Contracts – arise from the stipulation of the parties
Obligation is derived from the Latin word “obligatio” which means
3. Quasi-contracts – implied contracts (Solutio indebiti & Negotiorum gestio)
tying or binding. It is juridical necessity because in case of noncompliance,
4. Crimes of Delict – criminal offense
the courts of justice may be called upon by the aggrieved party to enforce
5. Quasi-delict or torts – not a crime but an offense, there being fault or
its fulfillment.
negligence
“No one shall be unjustly enriched
In other words, the debtor must comply with his obligation whether
 Negotiorum gestio or benefited at the expense of
he/she likes it or not.
 Solution indebiti another”
REQUISITES OF AN OBLGATION

1. A passive subject – the debtor or obligor who has a duty/liability CHAPTER 2

2. An active subject – the creditor or obligee who has right Nature & Effect of Obligations
3. Object or prestation – subject matter of the obliation (what was Art 1163. Every person obliged to give something is also obliged to take care
owed or must be given of it with the proper diligence.
4. A juridical tie or legal tie – source of the obligation or contract  Specific or determinate – specifically designated
which can either be verbal or written  Generic or indeterminate – refers to a class or genus

Obligation – is the act or performance Art 1164. The creditor has a right to the fruits of the thing if it arises at the

Right – the power which a person has under the law time of the obligation to deliver. However, he shall acquire no real right

Wrong – violation of the legal right or rights recognized by law over it until the same has been delivered to him. (1095)
 Natural fruits – spontaneous meaning without human intervention or  Demand payment of damages only where it is only the feasible
natural products of the soil, and the young and other products of remedy
domesticated animals
 Demand specific performance and demand rescission or cancellation
 Industrial fruits – are produced by lands of any kind through cultivation with a right to indemnity for damages cannot be chosen at the same
or labor wherein there’s a human intervention time however the demand payment of damages is always available.

 Civil fruits – derived by virtue of a juridical relation or products of KIND OF DAMAGES

contracts like rent for example  Moral damages – sleepless nights, mental anguish, besmirched (tainted)
reputation
Personal right and Real right distinguished  Exemplary damages – apparent (obvious) bad faith or fraud
 Personal right – the right or power of a person (creditor) to demand  Nominal damages – if the actual damages cannot be determined
from another (debtor)  Temperate damages -
 Real right – the right or interest of a person over a specific thing  Actual damages – injury
(like ownership, possession, mortgage)  Liquidated damages – damages that can be determined or calculated

Art 1165. When what is to be delivered is a determinate thing, the creditor, Art 1166. The obligation to give a determinate thing includes tat of
in addition to the right granted him by Art 1170; may compel (force) the delivering all its accessions and accessories, even though they may not have
debtor to make the delivery been mentioned
 Accession – are the fruits of a thing or additions or improvements
Remedies of creditor in real obligation: upon a thing (principal)
In a specific real obligation (obligation to deliver a determinate  Accessories – are things joined to or include with the [principal
thing); thing for the latter’s embellishment, better use, or completion
 Demand specific performance or fulfillment (if it is still possible)
with a right to indemnity (compensation) for damages Art 1167. If a person obliged to do something fails to do it the same shall be
 Demand rescission or cancellation (in certain cases) with a right to executed at his cost. This same rule shall be observed if he does it in
indemnity for damages contravention of the tenor (purpose) of the obligation
Article 1167 refers to an obligation to do. Art 1169. Those obliged to deliver or to do something incur in delay from
1) If the debtor fails to perform an obligation to do; or the time the obligee judicially or extra-judicially demands from them the
2) The debtor performs an obligation to do but contrary to the terms fulfillment of their obligation.
thereof; the creditor has the right:
 To have the obligation performed by himself or by another Requisites:
at the debtor’s expense and to recover damages  Due and demandable
3) The debtor performs an obligation to do but in poor manner;  Demand by the creditor
 It may be ordered (by the court) that it be undone if it is still  Failure of the debtor to perform the obligation
possible to undo what was done
However the demand by the creditor shall not be necessary in order
The remedy to do a specific thing through servitude is not possible that delay may exist:
because you cannot force a person to work without any compensation.
XPN to requirement of demand
Remedies include:  When the law says so
 Third person  If the party stipulates
 Rescission  When demand would be useless
 Damages
MEANING
Art 1168. When the obligation consists in not doing, and the obligor does 1) Ordinary delay (simple postponement) – the failure to perform an
what has been forbidden him, it shall also be undone at his expense obligation on time

Remedies: 2) Legal delay (default or mora) – failure to perform an obligation on time

1) To have what is done be undone which failure constitutes a breach of the obligation
2) Undo by third person
3) Indemnity of damages
KINDS of DELAY  Whether incidental or causal fraud, the debtor will still be held liable for
 Mora solvendi – delay on the part of the debtor (to give or to do) damages
 Mora accipiendi – delay on the part of the creditor to accept the
performance of the obligation (when you refuse to accept without a 2) Negligence (fault or culpa) – lack of due care in the fulfillment of
valid reason) the obligation
 Compensatio morae – delay of the obligors in reciprocal obligations 3) Delay (mora) – Art 1169
(the delay of one cancels the delay of the other). For example when 4) Contravention of the terms of the obligation – the violation of the
the delivery can only be made upon payment terms and conditions stipulated in the obligation. The contravention
must not be due to a fortuitous (unexpected) event or force majeure.
Art 1170. Those who in the performance of their obligations are guilty of (Art 1174)
fraud, negligence, or delay and those who in any manner contravene (breach)
the tenor (purpose) thereof, are liable for damages Art 1171. Responsibility arising from fraud is demandable in all obligations.
1) Fraud (deceit or dolo) – the deliberate of intentional evasion of the Any waiver of an action for future fraud is void.
normal fulfillment of an obligation.  Waiver of action for past fraud is valid.
 Note: Future fraud cannot be waived (Art. 1171)
 The use of insidious (sneaky) work or machination (scheme) in Art 1172. Responsibility arising from negligence in the performance of every
the performance or acquisition kind of obligation is also demandable but such liability may be regulated by
the courts according to the circumstances. (See Art 1173)
Incidental Causal  Waiver for future negligence is valid as long as there’s an agreement
 Incidental fraud (dolo incidente) – committed in the performance of however for common carriers (e.g., bus, shipping or airline
an obligation that’s already existing company) such waiver is void
 Causal fraud (dolo causante) – fraud employed in the execution of a
contract under Art 1338, which vitiates (void) consent KINDS OF NEGLIGENCE:
1) Contractual negligence (culpa contractual) – negligence in contracts
Art 1338. . Failure to disclose facts when there is duty to reveal them
resulting in their breach. This kind of negligence is not a source of
during or before creation of contract, the other is induced to enter into a
contract which without them he would not have agreed to. obligation (Art 1157). It merely makes the debtor liable for damages
 2) Civil negligence (culpa aquiliana) – negligence which by itself is the  Negligence – consists in the omission of that diligence which is
source of an obligation between the parties not so related before by required by the nature of the particular obligation and corresponds
any pre-existing contract (Quasi-delict or tort) with the circumstances of the persons, of the time, and of the place.
3) Criminal negligence (culpa criminal) – negligence resulting in the
commission of a crime.  Diligence – the attention and care required of a person in a given
situation and is opposite of negligence.
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 KINDS of DILIGENCE:
corresponds with the circumstances of the persons, of the time and of the 1. Diligence of a good father – a good father does not abandon his family,
Place. If the law or contract does not state the diligence which is to be he is always ready to provide and protect his family; ordinary care which
observed in the performance, that which is expected if a good father of a an average and reasonably prudent man would do.
family shall be required. 2. Diligence required by the law governing the particular obligation
3. Diligence stipulated by the parties
FRAUD NEGLIGENCE
There is deliberate intention to There is no deliberate intention to Art 1174. No person shall be held responsible for those events which could
cause damage cause damage not be foreseen or which though foreseen were inevitable.
Liability cannot be mitigated Liability may be mitigated  Not unless law says so
Waiver for future fraud is void Waiver for future negligence may be
 Stipulation from parties
allowed in certain cases:
 Obligation assumes the possibility (insurance)
1. Gross – can never be excused in
advance; against public policy
 Fortuitous event – an event which is either impossible to foresee or
2. Simple – may be excused in
impossible to avoid.
certain cases
i. Acts of man – war, fire, robbery, murder, insurrection etc.
ii. Acts of Divine Providence – force majeure (independent will of
human being) Example: earthquake, flood, rain, lighting,
eruption of volcano etc.
  Ordinary fortuitous event – events that are common which could When presumptions in Art 1176 do not apply:
reasonably foresee. (rain) 1) With the reservation a the interest
 Extra-ordinary fortuitous event – events which are uncommon and 2) Receipt without indication of particular installment paid
could not have reasonably foreseen. (earthquake, war, pestilence) 3) Receipt for a part of the principal
4) Payment of taxes
Art 1175. Usurious transactions shall be governed by special laws. 5) Non-payment proven
 Simple loan (mutuum) – a contract whereby one of the parties
delivers to money of other consumable thing, upon the condition Art 1177. Remedies available to creditors for the satisfaction of their claims:
that the same amount of the same kind shall be paid. It may be i. Exact fulfillment with right to damages
gratuitous or with a stipulation to pay interest. ii. Exhaustion of the debtor’s properties still in his possession – writ of
attachment (before judgment) or writ of execution (for final
 Usury – is contracting for a receiving interest in the excess of the judgment not yet executed)
amount allowed by the law for the on or use of money, goods, iii. ACCION SUBROGATORIA – an action where the creditor whose
chattels o credits. (Overcharging) claims had not been fully satisfied, may go after the debtors (3rd
person) of the defendant debtor.
Art 1176. The receipt of the principal by the creditor without reservation iv. ACCION PAULIANA – an action where the creditor files an action in
with respect to the interest shall give rise to the presumption that said court for the RESCISSION of acts or contracts entered into by the
interest has been paid. debtor designed to defraud the former.
 Law states that interest is only recognized if it has been stipulated
on writing. Art 1178. Subject to the laws, all rights acquired in virtue of an obligation
i. Conclusive presumption – cannot be contradicted, like the are transmissible, if there has been no stipulation to the contrary.
presumption that everyone is conclusively presumed to know the  EXCEPTIONS:
law a) Those not transmissible by their nature like
ii. Disputable presumption – one which can be contradicted or b) purely personal rights;
rebutted by presenting proof to the contrary c) Those not transmissible by provision of law;
d) Those not transmissible by stipulation of parties.
 CHAPTER 3  Past events unknown to the parties cannot be said to be a condition
since the demandability of an obligation subject to a condition
Different Kinds of Obligations
depends upon whether the event will happen or will not happen.
Section 1 – Pure and Conditional Obligations

Art 1180. When the debtor binds himself to pay when his means permit him
Art 1179. Every obligation, whose performance does not depend upon a
to do so, the obligation shall be deemed to be one with a period, subject to
future or uncertain event, or upon a past event unknown to the parties, is
the provisions of Article 1197.
demandable at once. Every obligation which contains a resolutory condition
 Speaks of a period depending on the will of the DEBTOR. If its
shall also be demandable, without prejudice to the effects of the happening
purpose is to delay, immediate action is allowed. The court fixes the
of the event.
terms.
 PURE OBLIGATION – an obligation which does not contain any
 A period is a future and certain event where obligation will either be
condition or term upon which the fulfillment is made to depend;
due or terminated.
immediately demandable by the creditors and the debtor cannot be
excused from not complying with his prestation.
Art 1181. In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the
 CONDITION – an event which is both future and uncertain (past and
happening of the event which constitutes the condition.
not known) upon which the existence or extinguishment of an
obligation is made to depend. A condition must not be impossible
 Suspensive Condition – the acquisition of rights by the creditor
(see Art 1183)
depends upon the happening of the event which constitutes the
condition; if such condition does not take place, it would be as of
a) Suspensive Obligation – its fulfillment gives rise to an obligation; the
the conditional obligation had never existed.
demandability of the obligation or the effectivity of the contract can take
(E.g. promise to give a car after graduating from law school as cum laude)
place only after the condition has been fulfilled.

 Resolutory Condition – the rights and obligations already existing

b) Resolutory Obligation – this happening extinguishes the obligation or
are under threat of extinction upon the happening or fulfillment of
rights which already exists
such condition.
(E.g. donation by reason of marriage – the celebration of marriage is a iii. Mixed – the condition depends partly upon the will of the parties
resolutory condition; if the marriage did not push through, the donation and partly upon chance or the will of a third person; (Example is
may be revoked) Atty. De Chavez: passing the bar)

Art 1182. When the fulfillment of the condition depends upon the sole will  Alternative – has multiple prestations but choosing only one is

of the debtor, the conditional obligation shall be void. If it depends upon enough to fulfill the obligation.

chance or upon the will of a third person, the obligation shall take effect in
conformity with the provisions of this Code. Art 1183. Impossible conditions, those contrary to good customs or public

 Note: Applies only to suspensive conditions. (Specific thing not yet policy and those prohibited by law shall annul the obligation which depends

given / lost) upon them. If the obligation is divisible, that part thereof which is not

 The owner bears any improvement before delivery unless it’s a fruit. affected by the impossible or unlawful condition shall be valid. The
condition not to do an impossible thing shall be considered as not having
Res perit domino
been agreed upon.
 POSSIBLE CONDITION – if it is capable of realization or actualization
Property loss dominion according to nature, law, public policy or good customs.

 Owner bears the burden of the lost thing

2 KINDS OF IMPOSSIBLE CONDITIONS

3 KINDS OF CONDITIONS UNDER THIS ARTICLE i. Physically Impossible – cannot exist or cannot be done in its nature;

i. Potestative – a suspensive condition which depends upon the will ii. Legally Impossible – contrary to law, good customs, or public policy.

of one of the contracting parties = if at the sole will of the debtor, it

is void; if at the creditor’s, still valid. This is to prevent the  Conditional obligation is VOID – impossible conditions annul the

establishment of illusory obligations. obligation which depends upon them; the obligor knows his obligation
cannot be fulfilled; he has no intention to comply with his obligation.

ii. Casual – the condition depends upon chance or the will of a third
person. (i.e. cellphone warranty)  Conditional obligation is VALID – if the condition is negative (not to do
an impossible thing), it is disregarded and the obligation is rendered
pure and valid. Only the affected obligation is void
Art 1184. The condition that some event happen at a determinate time shall b) From the moment it has become evident that the event cannot
extinguish the obligation as soon as the time expires or if it has become occur, although the time indicated has not yet elapsed.
indubitable that the event will not take place.
Art. 1184 (POSITIVE SUSPENSIVE) Art. 1185 (NEGATIVE SUSPENSIVE)
 Positive condition – refers to the fulfillment of an event or Jose obliges himself to give the Jose obliges himself to give the
performance of an act. pregnant woman Maria P5000 if she pregnant woman Maria P5000 if she
 Negative condition – refers to the non-fulfillment or would give birth on or before would NOT give birth on December
nonperformance of an act. December 30. 30.
a. Jose is LIABLE if Maria gives birth a. Jose is NOT LIABLE if Maria gives

POSITIVE SUSPENSIVE CONDITION on or before December 30 birth on December 30.

The obligation is extinguished

b. Jose is NOT LIABLE if Maria gives b. Jose is LIABLE if Maria DID NOT
1) As soon as the TIME EXPIRES without the event taking place;
birth after December 30 give birth on December 30
2) As soon as it has become certain that the EVENT WILL NOT TAKE
– if Maria gives birth BEFORE or
PLACE although the time specified has not yet expired.
AFTER December 30.
c. If Maria would have a miscarriage c. If Maria would have a miscarriage
TIME is the condition – should happen for the obligation to extinguish. before December 30, the obligation before December 30, the obligation
is EXTINGUISHED. is deemed FULFILLED.
Art 1185. The condition that some event will not happen at a determinate
time shall render the obligation effective from the moment the time Art 1186. The condition shall be deemed fulfilled when the obligor

indicated has elapsed, or if it has become evident that the event cannot voluntarily prevents its fulfillment.

occur. This provision speaks of the DOCTRINE OF CONSTRUCTIVE

FULFILLMENT - REQUISITES:

NEGATIVE SUSPENSIVE CONDITION i. The condition is SUSPENSIVE;

The obligation shall become effective and binding: ii. The obligor ACTUALLY PREVENTS the fulfillment of the condition;

a) From the moment the time indicated has elapsed without the event iii. He acts VOLUNTARILY.

taking place;  Malice or fraud is not required, as long as his purpose is to prevent
the fulfillment of the condition.
  No person shall profit by his own wrong.  Obligations to do or not to do – the retroactive effect shall be
determined by the court using its sound discretion without disregarding
Art 1187. The effects of a conditional obligation to give, once the condition the intentions of the parties.
has been fulfilled, shall retroact to the day of the constitution of the
obligation. Nevertheless, when the obligation imposes reciprocal Art 1188. The creditor may, before the fulfillment of the condition, bring the
prestations upon the parties, the fruits and interests during the pendency of appropriate actions for the preservation of his right.
the condition shall be deemed to have been mutually compensated. If the The debtor may recover what during the same time he has paid by
obligation is unilateral, the debtor shall appropriate the fruits and interests mistake in case of a suspensive condition.
received, unless from the nature and circumstances of the obligation it
should be inferred that the intention of the person constituting the same  Rights of CREDITOR – creditor has the right to command the debtor
was different. to reserve the object.
In obligations to do and not to do, the courts shall determine, in  Rights of the DEBTOR – entitled to recover what has been paid by
each case, the retroactive effect of the condition that has been complied mistake prior to the happening of the suspensive condition.
with. * The effect of the obligation
Art 1189. When the conditions have been imposed with the intention of
 Applies only to fulfilled suspensive conditions. suspending the efficacy of an obligation to give, the following rules shall be
 Retroactive statute observed in case of the improvement, loss or deterioration of the thing
during the pendency of the condition:
 The effects of the obligation is deemed to commence not from the
fulfillment of the obligation but from the day of its constitution (similar LOSS
to the legitimation of a natural child)  Debtor without fault – obligation is extinguished
 Debtor with fault – obligation to pay damages
 The article does not require the delivery of fruits or payment of Kinds of Loss:
interests accruing (accumulating) before the fulfillment of the  Physical loss – when a things perishes
suspensive condition.  Legal loss – when a thin goes out of commerce
 Civil loss- when a thing disappears and is unknown or if known it
cannot be recovered
DETERIORATION Art 1191. The power to rescind obligations is implied in reciprocal ones, in
 Debtor without fault – impairment is to be borne by the creditor case one of the obligors should not comply with what is incumbent upon
 Debtor with fault – creditor chooses: rescission of obligation, him.
fulfillment, indemnity The injured party may choose between the fulfillment and the
rescission of the obligation, with the payment of damages in either case. He
IMPROVEMENT may also seek rescission, even after he has chosen fulfillment, if the latter
 By nature or time – improvement: inure to the benefit of the should become impossible.
creditor The court shall decree the rescission claimed, unless there be just
 At the expense of the debtor – granted to the usufructuary cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third
Art. 1190. When the conditions have for their purpose the extinguishment persons who have acquired the thing, in accordance with Articles 1385 and
of an obligation to give; 1388 and the Mortgage Law.
RECIPROCAL – arise from same causse; each is a debtor and
Effect of a resolutory condition happening creditor of the other
 Creditor is obliged to return the object RESCISSION – resolution or cancellation of the contract
 The creditor becomes the debtor  Applies only to reciprocal obligations where two
parties are mutually debtor and creditor of each
 The parties are bound to return or restore whatever they have received other in the same transaction. The cause must be
from each other – “reciprocal restitution” identical ad the obligations must arise
 Donation by reason of marriage – if the marriage does not happen, such simultaneously.
donation should be returned to the donor.  The party who can demand rescission should be the
 Loss, deterioration and improvement – governed by Art 1189. party who is ready, willing, and able to comply with
his own obligations while the other is not capable to
 In obligations to do and not to do, the courts shall determine, in each perform his own.
case, the retroactive effect of the condition that has been complied REMEDIES:
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lOMoARcPSD|4528194 has been fixed, shall be demandable only when that
OBLIGATIONS AND CONTRACTS day comes.
REVIEWER Obligations with a resolutory period take effect at once,
1. Specific performance or fulfillment of but terminate upon arrival of the day certain.
obligation with damages; A day certain is understood to be that which must
2. Rescission of contract with damages. necessarily come, although it may not be known when.
Effect of rescission: the parties must surrender whatever they If the uncertainty consists in whether the day will come
have received from the other, and the obligation to pay is or not, the obligation is conditional, and it shall be
extinguished. regulated by the rules of the preceding Section.
If there is an express stipulation of automatic rescission PERIOD / TERM – consists in a space or length of time upon
between parties – such resolution shall take place only after the arrival of which, the demandability or the extinguishment
the creditor has notified the debtor of his choice of rescission of an obligation is determined; it may be definite (exact date
subject to judicial scrutiny. or time is known) or indefinite (arrival of date is unknown but
1192. In case both parties have committed a breach of sure to come).
the obligation, the liability of the first infractor shall be - Future + Certain event
equitably tempered by the courts. If it cannot be GENERAL CLASSIFICATIONS:
determined which of the parties first violated the a) EX DIE / SUSPENSIVE PERIOD – from a day
contract, the same shall be deemed extinguished, and certain give rise to the obligation; suspensive
each shall bear his own damages. effect.
FIRST INFRACTOR KNOWN b) IN DIEM / RESOLUTORY PERIOD – arrival of a
The liability of the first infractor should be equitably reduced. term certain terminated the obligation;
– equitably offset each other’s damages. resolutory effect.
FIRST INFRACTOR CANNOT BE DETERMINED Term – length of time sure to come
The court shall declare the extinguishment of the obligation Condition – fact or event uncertain to come
and each shall bear his own damages. Basis Period/Term Condition
Section 2 – Obligations with a Period 1. TIME Always refers to
1193. Obligations for whose fulfillment a day certain FUTURE
Can refer to past demandable, may be recovered, with the fruits and
events unknown to interests.
the parties  The payment or delivery is done before the arrival of
2. FULFILLMENT Sure to happen at the period.
an exact date or CONSEQUENCES:
indefinite time but 1. If he was not aware of the period or he
sure to come. believes that the obligation has become due
May or may not and demandable – he can recover what he
happen. paid or delivered including fruits and
3. INFLUENCE Merely fixes the interests;
time for the 2. If he was aware and he paid voluntarily –
demandability or he cannot recover the delivery made; it is
performance of deemed a waiver of the benefit of the term
obligation. and the obligation is considered already
May cause the arising matured.
or cessation of the  The presumption is that the debtor knew that the
obligation. debt was not yet due. He has the burden of proving
REQUISITES: that he was unaware of the period.
3. Future 1196. Whenever in an obligation a period is designated,
4. Certain, sure to come it is presumed to have been established for the benefit
5. Physically or legally possible of both the creditor and the debtor, unless from the
1194. In case of loss, deterioration or improvement of tenor of the same or other circumstances it should
the thing before the arrival of the day certain, the rules appear that the period has been established in favor of
in Article 1189 shall be observed. one or of the other.
1195. Anything paid or delivered before the arrival of
the period, the obligor being unaware of the period or
believing that the obligation has become due and