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Article 1156 TO 1178 REVIEWER FOR LAW AND OBLIGATIONS Download Save

Article 1156 TO 1178 REVIEWER FOR LAW AND OBLIGATIONS

3. Object / prestation – subject matter of the obligation. Conduct required
GENERAL PROVISIONS
article 1156 upto article 1178 reviewer that can help us inWas this document
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This... View more to be observed by the debtor. Consists in giving, doing, and not doing.
4. Juridical tie – efficient cause. That which binds the parties to the
ARTICLE 1
1156.
156. An obligation is a juridical necessity to give, to do or not to do
do.. obligation. It can be determined by knowing the source of the
(n) obligation.
University 2 0
DEFINITI
DEFINITION
ON FORM OF OBLIGATION
Ateneo de Zamboanga University
- Derived from the Latin word “obligatio” = tying or binding - General Rule: no legal requirement for the form of obligations arising from
- It is a tie of law or a juridical bond where one is bound in favor of another contracts.
Course to render something – which may consist in giving a thing, doing, or not - Obligations arising from other sources do not have a form at all.
doing an act
Biomedical Engineering -(BS BmE)definition
Manresa OBLIGATION v. RI
RIGHT
GHT v. WRONG
o A legal relation established between one party and another, whereby the
Obligation Right Wrong
latter is bound to the fulfillment of a prestation which the former may
Academic year demand of him. The act or performance The power which a An act or omission of
- Art. 1156 is the passive definition of obligation in that the law stresses the which the law will person has under the one party in violation of
2021/2022 duty of the debtor or obligor only. enforce. law, to demand from the legal right or rights
- Nature of obligations in the Civil Code another any prestation. of another, causing
injury to the latter.
o These are civil obligations, which gives to the creditor or oblige a right
Helpful? of action in courts to enforce their performance.
ELEMENTS OF A CAUSE OF ACTION
o As opposed to a natural obligation, which is based on equity and natural
law. It does not grant a right of action for the obligation’s enforcement 1. Legal right in favor of a person by whatever means and under whatever
but in case of voluntary fulfillment, the latter may not recover what he law it arises or is created
has delivered. 2 0
2. A correlative legal obligation on the part of another to respect or not
to violate said right
JURIDICAL NECESSITY 3. An act or omission in breach or violation of said right by the defendant
- Obligation is a juridical necessity because in case of non-compliance, the with consequential injury or damage to the plaintiff for which he may
Comments courts may be called to enforce its fulfillment. maintain an action for the recovery of damages.
- The debtor must comply with his obligation whether he likes it or not. His
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lead to legal consequences. - If any of the elements are absent, the complaint becomes v ulnerable to a
- If an obligation cannot be enforced, it may be only a natural obligation. motion to dismiss for the failure to state a cause of action.
- The cause of action only arises upon the happening of the third requisite.
REQUISITES OF AN OBLIGATION - Right of action
Preview text 1. Passive subject – debtor / obligor. Person who is bound to the o Right to commence and maintain an action
fulfillment of the obligation. He who was a duty. o Depends on substantive law, as opposed to cause of action, which is
2. Active subject – creditor / obligee. Person who is entitled to demand remedial.
the fulfillment of the obligation. He who has a right. o Springs from a cause of action but does not accrue until all the requisites
GENERAL PROVISIONS of cause of action have occurred.

ARTICLE 1156. An obligation is a juridical necessity to give, to do or not to do. (n)

DEFINITION
DAMAGE v. IINJURY
NJURY v. DAMAGES GENERALLY
Damage Injury Damages - Exclusive. No obligation may arise if it does not come from the enumeration.
Lost, hurt, or harm Illegal invasion of a Denote the sum of
which results from the legal right; wrongful act money recoverable as SOURCES
injury which causes harm to amends for the 1. Law – when the obligation is enforced by the law itself
another wrongful act or 2. Contracts – when the obligation arises from the stipulation of the parties
omission (Art. 14306 NCC).
3. Quasi-contracts – when the obligation arises from lawful, voluntary, and
- There may be injury without damage and damage without injury unilateral acts and which are enforceable to the end that no one shall be
unjustly enriched or benefited at the expense of another (Art. 2154 NCC).
- Injury without damage
4. Crimes / acts or omissions punished by law – when the obligation arises
o Something wrongful and illegal was done but there was no resulting
from civil liability, the consequence of a criminal offense (Art. 1161 NCC).
damage i.e. slap to the face.
5. Quasi-delicts / torts – when the obligation arises from damage caused to
- Damage without injury
another through an act or omission, there being fault or negligence, but
o Something wrongful but legal was done as when one exercises his right no contractual relation exists between the parties (Art. 2176 NCC).
but such exercise results in the damage on the part of another i.e. a
confiscated land was sold via public auction. B bought it. The owner
exercised his right to question the validity of the confiscation. As a result, CLASSIFICATIONS
the delivery of the land to B was delayed. The owner exercised his right 1. Obligations arising from law
resulting to damage to buyer B. 2. Obligations arising from private acts where the law merely recognizes
the existence of the obligations
KINDS OF OBLIGATION ACCORDI
ACCORDING NG TO SUBJECT MAT
MATTER
TER a. Licit acts i.e. contracts and quasi-contracts
1. Real Obligation – obligation to give; the object is a thing which the b. Illicit acts i.e. delicts and quasi-delicts
obligor must deliver to the obligee.
2. Personal Obligation – obligation to do or not to do; the prestation is ARTICLE 115
1158.8. Obligations derived from law are not presumed. Only those
an act to be done or not to be done. expre
expressly
ssly det
determined
ermined in this Code or in speci
special
al laws are d
demandable
emandable
emandable,, and shall
a. Positive personal obligation – obligation to do or to render be rregulate
egulate
egulatedd by the precepts of the law which establishes them; and as to what
some service has not been foreseen, by the provisions of this Book. (1090)
b. Negative personal obligation – obligation not to do / not to
give GENERALLY
- Refers to legal obligations or those arising from law.
ARTICLE 1157. Obligations arise from: - Burden of proof that an obligation is derived from law falls on the obligor.
(1) Law; - Can only be demandable if found in:
(2) Contracts; 1. Civil Code
(3) Quasi-contracts; 2. Special Laws – all other laws not contained in the Civil Code (Art. 1158
(4) Acts or omissions punished by law; and NCC).
(5) Quasi-delicts. (1089a)
 1. Consent
ARTICLE 1159. Obli
Obligations
gations arising from contracts have the force of law 2. Object
between the contracting parties and should be complied with in good faith. 3. Causa
(1091a) - Must not be contrary to (Art. 1306 NCC):
1. Law
GENERALLY 2. Morals
- Refers to contractual obligations or obligations arising from voluntary 3. Good customs
agreements.
4. Public order
5. Public policy
CONTR
CONTRACT
ACT
- A void contract does not exist. It creates no obligations.
- Meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service (Art. 1305)
GOVERNMENT APPROVAL
BINDING FORCE - Can only be binding on the parties once the contract has been approved by
the government.
- Obligations are primarily governed by the agreement of the parties.
- Have the force of law between the parties once perfected.
GOOD FAITH
- Parties are bound to comply in good faith.
- Means compliance in accordance with the stipulations or terms of the
- They need each other’s consent before they can renege from the contract. contract or agreement.
- Right of relief of one party against a non-complying party requires:
o Proof of contract BREACH OF CONTRACT
o Proof of failure to perform - No party cannot breach a contract with impunity even though the contract
- In case of defect, alleging party must prove the defect by convincing does not impose sanctions.
evidence prior to the invalidation of the contract. - Philippine law provides that actionable injury is inherent in every breach of
- Every provision of law regulating contracts must be deemed included in the contract.
contractual agreement because contracts are not superior to law although - Courts may impose interests on damages awarded to the plaintiff.
the former have the effect of the latter.
- On a demand of one party for performance of the contract by the other
- Compromise agreement party:
o Immediately executory o Failure of a party to demand performance for an unreasonable length of
o Non-appealable except for reasons of: time will render the contract ineffective even if the contract does not
1. Vices of consent provide for a specific period.
2. Forgery o Failure of a party to respond to a demand letter is not an implied
o Has the effect and authority of res judicata admission of liability.
o May either be extrajudicial or judicial
PRESERVATION OF INTER
INTEREST
EST OF PROMISEE
REQUIREMENTS OF A VALID CONTRACT - A breach of contract confers upon the plaintiff a cause of action to recover
- All essential elements are present what has been lost.
- A breach of contract creates a new duty i.e. to make recompense to the entered into a contract to prevent
plaintiff. injustice.

CASES GOVERNED BY
- An oral agreement inconsistent with a prior written agreement is binding. 1. Articles 2142-2175, Chapter I, Title XVII NCC
- A contract stipulating that in case of failure of debtor to pay amount of loan,
his property shall be considered sold to creditor is valid and binding.
CASES
- Courts have the power to ignore a contract stipulating unreasonable
- A quasi-contract cannot emerge as against one party when the subject
attorney’s fees and may itself determine the appropriate amount to be paid. matter thereof is already covered by an existing contract with another.
- Corporations cannot argue for equity in a litigation about their act of
- When both parties are negligent in the performance of their obligations. The
breaching a contract.
fault of one cancels the other. Their rights and obligations may be equitably
- If a corporation unconditionally undertook to redeem preferred shares at determined by the court.
specified dates and then argues that it can no longer perform such - Taxes paid by mistake may be recovered.
obligation due to financial problems, the same corporation is liable for
breach of contract for its unconditional undertaking does not depend on its
financial ability. KINDS
Negotiorum gestio Solutio indebiti
Voluntary management of the Juridical relation which is created
ARTICLE 1160. Ob Obligations
ligations der
derived
ived from quasi-contracts shall be subject to property or affairs of another without when something is received when
the provisions of Chapter 1, Title XVII, of this Book. (n) the knowledge or consent of the there is no right to demand it and it
latter (Art. 2144 NCC). was unduly delivered through
GENERALLY mistake (Art. 2154 NCC).
- Refers to obligations arising from quasi-contracts. Does not arise when: Based on the principle of unjust
1. The property / business is not enrichment whereby no one shall
abandoned unjustly enrich himself at the expense
QUASI-CONTR
QUASI-CONTRACTACT
2. The manager has been tacitly of another.
- That juridical relation resulting from certain lawful, voluntary and unilateral
acts by virtue of which the parties become bound to each other to the end authorized by the owner
that no one will be unjustly enriched or benefited at the expense of another Applies when:
(Art. 2142 NCC). 1. Payment is made where there is no
duty to pay by the payor and the
CONTR
CONTRACT
ACT v. Q
QUASI-CONTRACT
UASI-CONTRACT payee has no right to receive such
payment
Contract Quasi-contract
2. Payment is made due to mistake
There is meeting of the minds / There is no meeting of the minds / and not due to liberality
consent. consent.
Parties deliberately entered into an The consent of the parties is supplied
agreement. by fiction of law, which means that
the law considers them as having
ARTICLE 1161
1161.. Civil obligations arising from criminal offenses shalshalll be and the city or municipality shall be subsidiarily responsible therefor.
governed by the penal laws, subject to the provisions of article 2177, and of The civil action herein recognized shall be independent of any criminal
the pertinent provision
provisionss of Chapte
Chapterr 2, Preliminary Title, on Human Relations, proceedings, and a preponderance of evidence shall suffice to support
and of Title XVIII of this Book, regulating damages. (1092a) such action.
4. ARTICLE 2176. Whoever by act or omission causes damage to another,
GENERALLY there being fault or negligence, is obliged to pay for the damage done.
- Refers to civil liability arising from crimes / delicts. 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
- Crime produces two effects provisions of this Chapter. (1902a)
o Moral evil. On the public because it breaches the social order
o Material damage. On the private victim because it causes personal
SCOPE OF CIVIL LIABILITY
sufferings
- Governed by:
- If there is no material damage, the offender is not civilly liable.
1. Revised Penal Code and Special Penal Laws subject to the provision of
- Every person criminally liable is also civilly liable (Art. 100 RPC ). Art. 2177 NCC
- A person not criminally liable may be civilly liable (Art. 29, Rule 111, ROC).
2. Chapter 2, Preliminary Title, NCC on Human Relations
- Supreme Court may modify decision on appeal to add civil liability if the
3. Title XVIII NCC on Damages
lower court did not include the same.
- Inclusions (Art. 104 RPC):
1. Restitution of the thing lost
ON A CIVIL ACTION
2. Reparation of the damage caused
- General Rule: civil action is deemed instituted in a criminal action.
3. Indemnification for consequential damages
- Exceptions
1. Offended party waives the civil action
2. Offended party reserves the right to institute it separately
ARTICLE 1162. Ob Obligations
ligations derived from quasquasi-delicts
i-delicts shall be governe
governed d by
3. Offended party institutes the civil action prior to the criminal action the provisions of Chapter 2, Title XVII of this B ook, and by specia
speciall laws. (1
(1093a)
093a)
- There is no need to reserve the right to file an independent civil action for
because these may be prosecuted separately even without a reservation:
GENERALLY
1. ARTICLE 32. Any public officer or employee, or any private individual,
who directly or indirectly obstructs, defeats, violates or in any manner - Refers to obligations arising from quasi-delicts / torts / culpa aquiliana
impedes or impairs any of the [constitutional] rights and liberties of - Includes:
another person shall be liable to the latter for damages. 1. Injury to persons
2. Damage to property
2. ARTICLE 33. In cases of defamation, fraud, and physical injuries, a civil - Coverage:
action for damages, entirely separate and distinct from the criminal 1. Acts criminal in character whether intentional or negligent
action, may be brought by the injured party. Such civil action shall
2. Acts punishable by law
proceed independently of the criminal prosecution, and shall require - No reservation of the right to file an independent civil action based on quasi-
only a preponderance of evidence.
delict need be made in the criminal case
3. ARTICLE 34. When a member of a city or municipal police force refuses - The offended party cannot recover damages twice for the same act or
or fails to render aid or protection to any person in case of danger to omission or under both delict and quasi-delict. Since these two (2) civil
life or property, such peace officer shall be primarily liable for damages,
 liabilities are distinct and independent of each other, the failure to recover
in one will not necessarily preclude recovery in the other.

GOVERNED BY
1. Chapter 2, Title XVII NCC
2. Special Laws

QUASI-DELICT
- 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. (1902a)

REQUISITES
1. Act or omission by the defendant
2. Fault or negligence of the defendant
3. Damage caused to the plaintiff
4. Direct causal relation between the act or omission and the damage
5. No pre-existing contractual relation exists between the parties

CRIME v. QUASI-DELI
QUASI-DELICT
CT
Crime Quasi-delict
Criminal intent or criminal negligence Negligence
Affects public interest Affects private interest
Two liabilities: criminal and civil Only civil liability
Purpose is punishment Purpose is indemnification of the
offended party
Cannot be settled by the parties Can be settled by the parties
themselves themselves
Quantum of proof is beyond Quantum of proof is preponderance
reasonable doubt of evidence (
The liability of the person The liability of the person
responsible for the author of the responsible for the author of the
negligent act or omission is negligent act or omission is direct
subsidiary. and primary.

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18
Biomedical Engineering 100% (7)
 NATURE AND EFFECT OF OBLIGATIONS - General Rule: Diligence of a good father of a family
o Applies to real obligations (obligations to give)
o A.K.A ordinary care / diligence which an average prudent person
ARTICLE 1163. Every person obliged to give some sometthing is also o
obliged
bliged to take exercises over his own property
care of it with the prope
properr dili
diligence
gence of a good father of a family, unless the law - Exceptions: if the law or the stipulation of the parties provide for another
or the stipulation of the parties rrequires
equires another standard of care. (1094a) standard
- Factors to be considered for the diligence required (Art. 1173 NCC):
GENERALLY 1. Nature of the obligation
- Refers to an obligation to give a specific or determinate thing. 2. Corresponds with the circumstance of the person, time, and place
- Parties cannot stipulate for absolute exemption from liability for any fault or
negligence for that contract is contrary to public policy. DUTIES OF DEBTOR IN OBLIGATION TO GIVE AN IINDETERMINATE
NDETERMINATE THING
- Debtor’s obligation is extinguished if the specific / determinate thing is lost 1. To deliver a thing which is of the quality intended by the parties taking
due to force majeure (Art. 1174 NCC). into consideration the purpose of the obligation and other circumstances
(Art. 1246 NCC)
DEFINITION 2. To be liable for damages in case of fraud, negligence, or delay, in the
performance of his obligation, or contravention of the tenor thereof (Art.
- A thing is said to be specific or determinate when it is particularly
1170 NCC)
designated or physically segregated from all others of the same class (Art.
1459 NCC).
- A thing is generic or indeterminate when it refers only to a class or genus
to which it pertains and cannot be pointed out with particularity ARTICLE 1164. The creditor has a right to the fruits of the thing from the time
the obligation tto
o de
deliver
liver it arises. However, he shall acquire no real right over
SPECIFIC / DETERMINATE v. GENERIC / INDETERMINATE it until the same has been delive
delivered
red to him. (1095)
Specific / Determinate Generic / Indeterminate
GENERALLY
Identified by its individuality. Identified by its specie.
- The creditor is entitled to the fruits of the thing to be delivered from the
Debtor cannot substitute it with Debtor can give anything of the same time the obligation to make delivery of the thing arises. Thus, when there
another without the consent of the class as long as it is of the same kind. has been no delivery yet, the proper action of the creditor is not one for
creditor. recovery of possession and ownership but one for specific performance or
rescission of the obligation
- In case of rescission, the parties are under “obligation to return the things
DUTIES OF DEBTOR IN OBLIGATION TO GIVE A DETERMINATE THING
which were the object of the contract, together with their fruits and the price
1. To preserve or take care of the thing due with its interest.’’ (Art. 1385 NCC)
2. To deliver the fruits of the thing (Art. 1164 NCC)
3. To deliver its accessions and accessories (Art. 1166 NCC)
KINDS OF FRUITS
4. To deliver the thing itself
5. To answer for damages in case of non-fulfillment or breach (Art. 1170 1. Natural – products of the soil, young, and other animals
NCC) 2. Industrial – produced by lands of any kind or products of lands through
cultivation or labor
3. Civil – derived due to juridical relation
OBLIGATION TO TTAKE
AKE CARE OF THE THING DUE
WHEN OBLIGATION TO DELIVER ARISES ARTICLE 1165. Whe Whenn what is to be delivered is a determinate thing, the
1. From the time of the perfection of the contract / meeting of the minds creditor, in addition to the right granted him by article 1170, may compel the
2. If subject to a suspensive condition or period, when that condition or debtor to make the delive
delivery.
ry.
period arrives
a. Parties may still make a separate stipulation as to the fruits of the If the thing is indeterminate or generic, he may ask that the obligation be
thing to be delivered complied with at tth
he expense of the debtor.
3. In a contract of sale, obligation arises upon the perfection of the contract
even if there is a suspensive condition or period
4. In obligations to give arising from law, quasi-contracts, delicts, and quasi- If the obli
obligor
gor delays, o
orr has pro
promised
mised to del
delive
ive
iverr th
the
e sam
same
e thi
thing
ng to two or more
delicts, the time of performance is determined by the applicable persons who do not have the same intere interest,
st, he shall be responsible for any
provisions of law fortuitous event until he has effected the delivery. (1096)

CLASSIFICATIONS OF OBLIGATIONS
PERSONAL RIRIGHT
GHT
- Right or power of a person (creditor) to demand from another (debtor), as a 1. Real – to give a specific or generic thing
2. Personal – to do or not to do
definite passive subject, the fulfillment of the latter’s obligation to give, to
do, or not to do.
REMEDIES FOR CREDITORS IIN N REAL OBLIGATION
1. Specific real obligation
REAL RIGHT
a. Demand specific performance or fulfillment with a right to indemnity
- Right or interest of a person over a speci fic thing (like ownership, for damages
possession, mortgage, lease record) without a definite passive subject b. Demand rescission or cancellation with a right to recover damages
against whom the right may be personally enforced c. Demand the payment of damages only where it is the only feasible
remedy
PERSONAL RIGHT v. REAL RI
RIGHT
GHT
- The very thing itself must be delivered.
Personal Right Real Right
- Only the debtor can comply with the obligation
There are definitive active and There is only a definitive active - Creditor cannot use force or violence. He must bring the matter to court
passive subjects. subject who will order the delivery.
Enforceable against a particular Enforceable against the whole world
person 2. Generic real obligation
a. Ask the debtor to perform the obligation with a right to recover
The active subject does not become the owner of the thing due unless it has damages in case of breach
been delivered to him. - Can be performed by a third person
- Not necessary for creditor to compel the debtor to make the delivery
KINDSD OF DELI
DELIVERY
VERY
1. Actual – the property changes hands physically ON DEBT
2. Constructive – physical transfer is implied - Constitution prohibits imprisonment for non-payment of debts purely civil
in nature or those arising from contracts.
- Subsidiary imprisonment may be imposed for non-payment of civil liability
in a criminal case.
 - General Rule: all accessions and accessories are considered included in the
DELAY AND BAD FAITH ON THE DELIVERY OF A SPECIFIC THING obligation to deliver a determinate thing although they may not have been
- General Rule: loss of specific thing to be delivered due to fortuitous event mentioned
extinguishes the debtor’s obligations o Principle: the accessory follows the principal
- Exceptions: o Exception: stipulation by the parties to the contrary
1. Unreasonable delay - General Rule: an obligation to deliver the accessions or accessories of a
2. Bad faith / when the debtor promises delivery to separate creditors with thing does not include the latter
no common interest o Exception: stipulation by the parties to the contrary
- Note that loss of an indeterminate thing due to fortuitous event does not
extinguish the debtor’s obligation.
ARTICLE 1167. If a peperson
rson obliged to do something fails to do it, the same
shall be executed at his cost.
ARTICLE 1166. The obli obligation
gation to give a determinate thing inclu
includes
des that of
delivering all its accessions and acce
accessories,
ssories, even though they may not have This same rule shall be observed if he does it in ccontravention
ontravention of the tenor of
been mentioned. (1097a) the o
obligation.
bligation. Fu
Furthermore,
rthermore, it may be decreed that what hhas
as been poorly done
be undone. (1098)
GENERALLY
- Accessions are not necessary to the principal thing but the accessory and GENERALLY
the principal thing must go together. - Refers to an obligation to do
- Both accessions and accessories can exist only in relation to the principal. - General Rule: may be performed by a third person
o Exception: if the determining motive is the personal qualifications of the
ACCESSIONS debtor, the obligation cannot be done by another. Thus, creditor may be
- Fruits of, or additions to, or improvements upon, a thing (the principal) indemnified for damages except if the obligation can still be performed
- Includes at the expense of the debtor, then court is not authorized to merely grant
1. Accession [artificial] in building, planting, and sowing damages to the creditor.
2. Accession natural in alluvion, avulsion, change of course of rivers, and - Specific performance cannot be ordered in a positive personal obligation
formation of islands because it may amount to involuntary servitude
- As a right
o May be defined as the right pertaining to the owner of a thing over its TYPES OF PERSONAL OBLIGATIONS
products and whatever is incorporated or attached thereto, either 1. Positive / affirmative – to do
naturally or artificially. 2. Negative – not to do
o Includes the right to the fruits and the accessories.
SITUATIONS CONTEMPLATED IN THE PROVISION
ACCESSORIES 1. Debtor fails to perform an obligation to do
- Things joined to, or included with, the principal thing for the latter’s 2. Debtor performs an obligation to do but contrary to the terms thereof
embellishment, better use, or completion 3. Debtor performs an obligation to do but in a poor manner

RIGHT OF CREDITOR TO ACCESSIONS AND ACCESSORIES REMEDIES OF CREDIT

CREDITOR
OR IN POSI
POSITIVE
TIVE PERSONAL OBLIGATION
 1. If the debtor fails to perform is to be re
rendered
ndered was a controlling motive for the esta
establishment
blishment of the contract;
a. To have the obligation performed by the debtor, or by another unless or
personal considerations are involved, at the debtor’s expense
b. To recover damages (3) When demand woul
wouldd be useless, as when the obligor has rendered it
2. If the debtor performs contrary to the terms beyond his power to perform.
a. To have the court order the debtor to undo what was done if still
possible
3. If the debtor performs in a poor manner In re
reciprocal
ciprocal obligations, neither part
artyy incurs i n de
delay
lay if the other does not
a. To have the court order the debtor to undo what was done if still comply or is not ready to compl
complyy in a proper manner with what is incumbent
possible upon him. From the moment one of the parties fulfills his obl obligation,
igation, delay by
the other begins. (1100a)

GENERALLY
ARTICLE 1168. Whe
Whenn the obligation co
consists
nsists in not do
doing,
ing, and the obligor does
what has been forbidden him, it shall also be undone at his expense. (1099a) - There is no delay if the obligation is not yet due or demandable and
liquidated.
o A debt is liquidated when the amount is known or is determinable by
GENERALLY inspection of the terms of relevant documents.
- Refers to negative personal obligation where the debtor is obliged not to o Failure to furnish a debtor a detailed statement of account does not ipso
do an act. facto result in an unliquidated obligation.
- There is no specific performance for the obligation is fulfilled in not doing. - Demand is not merely notifying or reminding.
- No debtor can be delayed in this kind of obligation. - The creditor has the burden of proving that demand has been made. If there
is no demand, the law assumes that an extension has been given.
REMEDIES OF CREDIT
CREDITOROR IN NEGATIVE PERSONAL OBLIGATION - Default arises on the day the demand was made and was not complied with
1. Debtor undoes what was done by the debtor.
2. If not possible, action for damages - In the absence of evidence of an extra-judicial demand, the effects of default
arise from the date of the judicial demand / filing of complaint.
o An extrajudicial demand is not required before a judicial demand.
- The debtor may relieve himself from liability if he proves that the delay was
ARTICLE 1169. Those obliged to delive
deliverr or to do somet
something
hing incur in de
delay
lay from not his fault.
the time the obliobligee
gee judicially or extrajudicially dedemands
mands from them th the
e
fulfillment of their obligation.
DELAY
1. Ordinary delay – failure to perform an obligation on time
However, ththe
eddemand
emand by the creditor shall not b
be
e necessary in order that delay 2. Legal delay / default / mora – failure to perform an obligation on time
may exist: constituting a breach of the obligation

(1) When the obligation or the law expressly so declare; or KINDS OF DELAY
1. Mora solvendi - delay on the part of the debtor to fulfill his obligation (to
(2) When from the natur
naturee and the circumstances of the obligation it appears give or to do) by reason of a cause imputable to him
that the de
designation
signation of the time when the thing is to be delivered or the serv
servic
ic
ice
e 2. Mora accipiendi - delay on the part of the creditor without justifiable
reason to accept the performance of the obligation
 3. Compensatio morae - delay of the obligors in reciprocal obligations. The 4. Where the obligation is to pay money, the debtor is not liable for interest
delay of the obligor cancels out the effects of the delay of the obligee from the time of the creditor’s delay
and vice versa. 5. The debtor may release himself from the obligation by the consignation
of the thing or sum due.
REQUISITES OF MORA SOLVENDI - Compensatio morae
1. No delay
1. Failure of the debtor to perform on the date agreed upon
2. If the delay of one party is followed by that of the other, the liability of
2. Judicial or extrajudicial demand made by the creditor upon the debtor
the first infractor shall be equitably tempered or balanced by the courts.
3. Failure of the debtor to comply with such demand
If it cannot be determined which of the parties is guilty of delay, the
contract shall be deemed extinguished and each shall bear his own
CASES damages (Art. 1192 NCC).
- S obliged himself to deliver to B a speci fic refrigerator on December 10. If
S does not deliver the refrigerator on December 10, he is only in ordinary WHEN DEMAND NOT NECESSARY TTO O PU
PUT
T DEBTOR IIN N DELAY
delay in the absence of any demand from B although a period has been
- General Rule: delay begins from the moment demand is made judicially or
fixed for the fulfillment of the obligation. extrajudicially for the fulfillment of the obligation.
o The law presumes that B is giving S an extension of time. Hence, there is - Exceptions:
no breach of the obligation and S is not liable for damages. 1. When the obligation so provides
o If a demand is made upon S by B on December 15 and S fails to deliver a. The obligation must state that demand is not necessary.
the refrigerator, S is considered in default only from the date. b. “The debtor will be in default” or “I will be liable for damages.”
o If an action for specific performance is filed by B on December 20, the 2. When the law so provides
payment of damages for the default must commence on December 15 3. When time is of the essence
when he made the extra-judicial demand and not on December 20. a. When the time of delivery is not fixed or is stated in general and
o In the absence of evidence as to such extra-judicial demand, the effects indefinite terms, time is not of the essence.
of default arise from the date of the judicial demand, that is, from the fi b. As such, the delivery must be made within a reasonable time, in the
ling of the complaint. absence of anything to show that an immediate delivery was intended.
c. It is not necessary for the contract to categorically state that time is
EFFECTS OF DELAY of the essence; intent is sufficient.
- Mora solvendi 4. When demand would be useless
1. Debtor is guilty of breach of the obligation a. When a specific thing is lost to fortuitous event
2. Debtor is liable for interest in case of obligations to pay money or b. When debtor refuses to comply with the obligation
damages in other obligations 5. When there is performance by a party in reciprocal obligations
a. Interest shall start from the filing of the complaint. a. The performance of one is conditioned upon the simultaneous
3. Debtor is liable even in a fortuitous event for delivery of a determinate fulfillment on the part of the other
thing b. From the moment a party in reciprocal obligations ful fills or is ready
a. Except if the debtor can prove that the loss would have resulted just to fulfill his obligation, delay by the other begins.
the same even if he had not been in default, the court may equitably
mitigate the damages WHEN IS TIME OF THE ESSENCE
- Mora accipiendi
1. Creditor is guilty of breach of obligation - Factors to consider:
1. Nature of the contract
2. Creditor is liable for damages suffered by the debtor
2. Subject matter
3. Creditor bears the risk of losing the thing due
 3. Circumstances under which the contract is made o It is not causal fraud, which is fraud employed in the execution of a
- Examples: contract that vitiates consent and makes the contract voidable
1. In agreements which are executed in the form of options, time is always - This is termed as civil fraud which gives rise to civil liability. This is not
held to be of the essence of the contract and acceptance of the option criminal fraud which gives rise to criminal liability.
and payment of the purchase price constitute conditions precedent to
specific performance. NEGLIGENCE
2. Unilateral contracts
- Any voluntary act or omission, there being no malice, which prevents the
3. mercantile contracts for the manufacture and sale of goods
normal fulfillment of an obligation.
4. Where the subject matter of a contract is of speculative or fluctuating
value, it is held that the parties must have intended time to be of the
essence. DELAY
5. Where the contract relates to mining property which requires the parties - Delay must either be malicious or negligent. Mere inadvertence is not
to be vigilant in asserting their right. enough.
o Where the omission of the buyer to sign a check, one of 24 post dated
checks which were delivered to the seller who did not bother to call the
buyer to ask him to sign the check, was mere “inadvertence’’ on the part
ARTICLE 1170. Those who in the perfo
performance
rmance of their o
obligations
bligations are guilty of
of the buyer, the latter was held not liable for damages resulting from
fraud, negligence, or delay, and those who in any manner con
contravene
travene the tenor
the delay in the payment of the value of the unsigned check.
thereof, are liable for damages. (1101)

CONTR
CONTRAVENT
AVENT
AVENTION
ION
GENERALLY
- Violation of the terms and conditions of the obligation.
- Gives the grounds for liability to entitle the plaintiff to recover damages.
- Must not be due to force majeure
- Contemplates that the obligation was performed but the obligor is guilty of
- Example: unilateral act of terminating the contract without informing the
breach thereof.
other party.
- Applies to all kinds of voluntary obligations

BREACH OF CONTRACT
GROUNDS
- Failure without justifiable excuse to comply with the terms of a contract.
1. Fraud
- May be willful or done unintentionally.
2. Negligence
- Failure, without legal excuse, to perform any promise which forms the
3. Delay
whole or part of the contract.
4. Contravenes the tenor of the obligation
FRAUD
RECOVERY OF DAMAGES
- Deceit or dolo - Measure of recoverable damages shall be governed by Title XVIII on
- Deliberate or intentional evasion of the normal fulfillment of an obligation Damages NCC.
- Implies malice or dishonesty - One injured by a breach of a contract, or by a wrongful or negligent act or
- Does not cover mistake or errors of judgement made in good faith. omission shall have a fair and just compensation commensurate to the loss
- Bad faith in that it is designed to mislead or deceive another. sustained as a consequence of the defendant’s act.
- Refers to incidental fraud committed in the performance of an obligation - The remedy of recovering damages serves to preserve the following
already existing because of contract. interests of the promise
1. Expectation interest – interest in having the benefit of his bargain
 2. Reliance interest – interest in being reimbursed for loss caused by If negligence shows bad faith or it is so gross that it amounts to malice or
reliance on the contract wanton attitude, the rules on fraud shall apply and no more distinction exists
3. Restitution interest – interest in having restored to him any benefit that between the two.
he has conferred on the other party.
- Proof needed by the plaintiff:
1. Existence of the obligation - Gross negligence: characterized by intentional and willful want or absence
2. Existence of the failure to perform it of or failure to exercise even slight care or diligence
- Defense for the defendant:
1. Proof of exercise of his due diligence
2. Proof of fortuitous event ARTICLE 1171. Re Responsibility
sponsibility arising from fraud is de demandable
mandable in all
- The obligee has the duty to minimize the damages for which he intends to
obligations. Any waiver of an action ffor future fraud is void. (1102a)
or future
hold any obligor responsible. Thus, he cannot recover damages for any
loss which he might have avoided with ordinary care.
GENERALLY
DAMAGES RECOVERABLE WHERE TTHE HE OBL
OBLIIGATION IS TO PAY MONEY - Refers to incidental fraud employed in the fulfillment of an obligation.
- Courts cannot mitigate or reduce the damages to be awarded because fraud
- Art. 1170 only talks about the obligation to do something other than the is serious and evil.
payment of money.
o Art. 2209 governs when the debtor failed to make payment of money.
- Rates of penalty interest: WAIVER
o Stipulation - Waiver of future fraud is void.
o Rate equal to the regular monetary interest - Waiver of past fraud is valid as an act of generosity and magnanimity on the
o Legal interest (6%) part of the injured party.
- Usury Law o Once this waiver is effected, the injured party renounces the effect of the
o The rate of interest for the loan or forbearance of any money, goods or fraud, which is the right to indemnity.
credits and the rate allowed in judgments, in the absence of express
contract as to such rate of interest, shall be 12% per annum.
ARTICLE 1172. Re Responsibi
sponsibi
sponsibility
lity arising from negligence in the perfo
performance
rmance of
FRAUD v. NEGLIGENCE every kind of obligation is als
alsoo demandable, but such liability ma
mayy be regulated
Fraud Negligence by the courts, according to the circumstances. (1103)
Deliberate intention to cause No intention
damage GENERALLY
- Courts have a wide discretion in fixing the measure of damages because
Waiver for future fraud is void. Allowed
negligence is a question which must depend upon the circumstances of each
Must be clearly proven Preponderance of evidence is case.
enough for negligence is presumed - If both parties are mutually negligent, the fault of one cancels the other.
from the mere breach of the - In negligence cases, the aggrieved party may choose between a criminal
contractual obligation. action under Article 100 of the Revised Penal Code or a civil action for
Liability cannot be mitigated by Can be mitigated according to the damages under Article 2176 of the Civil Code. What is prohibited under
courts. circumstances Article 2177 of the Civil Code is to recover twice for the same negligent act.
WAIVER PRESUMPTION OF CONTRACTURAL NEGLIGENCE
- Waiver of future fraud is valid. Exceptions: 1. In tort cases, negligence should be clearly established since it is the basis
1. Nature of the obligation requires the exercise of extraordinary diligence of the action.
2. If the fraud committed shows bad faith which makes it equivalent to 2. In breach of contract cases, the action need only prove:
fraud. a. Existence of contract
b. Fact that the obligor failed to comply with the contract
KINDS OF NEGLIGENCE ACCORDING TO SOURCE OF OBLIGATION
1. Contractual (culpa contractual) – not a source of obligation; merely makes
the debtor liable for damages in view of his negligence in the fulfillment ARTICLE 1173. The fault or negligence of the obligor cconsists
onsists in the omission
of a pre-existing obligation resulting in its breach; does not amount to a of that diligence whi
which
ch is required by the nature of the obli obligation
gation and
crime. corresponds with the circumstances of the persons, of the time and of the place.
2. Civil (culpa aquiliana) – source of an obligation between the parties not When neglige
negligence
nce shows bad faith, the provisions of articles 1171 and 2 201,
formally bound before by any pre-existing contract; quasi-delict paragraph 2, shall apply.

- However, a pre-existing contractual relation between the parties does If the law or contract doe
doess not state the diligence which is to be observed in
not preclude the existence of culpa aquiliana. This rule governs only the performance, that which is expected of a good father of a family shall be
where the act or omission complained of would constitute an actionable required. (1104a)
tort independently of the contract.
GENERALLY
3. Criminal (culpa criminal) – results in the commission of a crime.
- This provision defines fault or negligence.
- Test to determine negligence
CULPA CONTRACTUAL v. CULPA AQU
AQUILIANA
ILIANA o Reasonable care and caution expected of an ordinary prudent person i.e.
Culpa contractual Culpa aquiliana would a prudent man foresee harm as a consequence of the act to be
done?
Liability arises from a breach of Liability arises from mere tort o Generally, there is no hard and fast rule for measuring degree of care.
positive obligation
Defense of a good father of a family Diligence of a good father of a family FACTORS
will only mitigate damages. is a complete defense.
1. Nature of the obligation
2. Circumstances of the person
NEGLIGENCE ON THE PART OF THE INJURED PARTY 3. Circumstances of time
- Art. 2179 NCC. When the plaintiff’s own negligence was the immediate and 4. Circumstances of the place
proximate cause of his injury, he cannot recover damages. But if his
negligence was only contributory, the immediate and proximate cause of the MEASURE OF LIABILITY FOR DAMA
DAMAGES
GES
injury being the defendant’s lack of due care, the plaintiff may recover
Art. In contracts and quasi-contracts, the damages for which the obligor
damages, but the courts shall mitigate the damages to be awarded.
2201 who acted in good faith is liable shall be those that are the natural
- If proximate cause, no right to recover damages. If only contributory, may
and probable consequences of the breach of the obligation, and
recover damages but it shall be mitigated.
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 DILIGENCE
damages which may be reasonably attributed to the non- - Attention and care required of a person in a given situation and is the
performance of the obligation. opposite of negligence.
Art. Willful injury to property may be a legal ground for awarding moral - Kinds
2220 damages if the court should find that, under the circumstances, such o That agreed upon by the parties, orally or in writing
damages are justly due. The same rule applies to breaches of o Required by law in the absence of stipulation
contract where the defendant acted fraudulently or in bad faith. o If both are silent, then the diligence expected of a good father of a family
or ordinary diligence
Art. In contracts and quasi-contracts, the court may award exemplary
2232 damages if the defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.
ARTICLE 1174. Except in cases expre
expressly
ssly specified by the law, or when it is
Art. Any person who wilfully causes loss or injury to another in a manner
otherwise declared by stipulation
stipulation,, or when the nature of the obligation re
requires
quires
21 that is contrary to morals, good customs or public policy shall the assumption of risk, no person sshall
hall be responsible for those events which
compensate the latter for the damage. could not be foreseen, or which, though foreseen, w were
ere inevitable. (1105a)

- Contractual breach committed in good / bad faith DEFINITION

o If there is no bad faith, the liability for damages is limited to the natural - Any extraordinary event which cannot be foreseen, or though foreseen, is
and probable consequences of the breach and which the parties had inevitable.
foreseen or could have foreseen. Thus, no moral and exemplary damages. - An event which is impossible to foresee or impossible to avoid.
- On moral damages - Happens independent of the will of the obligor.
o Not punitive - As opposed to force majeure
o Must be proportional to an in approximation of the suffering inflicted o Acts of man – independent of the will of obligor but not of others
with the factual basis satisfactorily proved. o Acts of god – totally independent of the will of every human being
- Code of Commerce provisions o But in our law, they are the same in so far as the exempt an obligor from
Art. The ship agent shall also be civilly liable for the indemnities in favor liability.
587 of third persons which may arise from the conduct of the captain
in the care of goods which he loaded on the vessel; but he may
exempt himself therefrom by abandoning the vessel with all the KINDS
equipments and the freight it may have earned during the voyage. 1. Ordinary – those events which are common and could be reasonably
foreseen
Art. The co-owners of a vessel shall be civilly liable in the proportion of
2. Extraordinary – uncommon and could not be foreseen
590 their interests in the common fund for the results of the acts of the
captain referred to in Art. 587. REQUISITES OF A FORTUITOUS EVENT
Art. The civil liability incurred by shipowners in the case prescribed in 1. The event must be independent of the human will or at least of the
837 this section, shall be understood as limited to the value with all the obligor’s will;
appurtenances and the freightage served during the voyage. 2. The event could not be foreseen (unforeseeable), or if it could be
Applies to limited liability in cases of collision only. foreseen, must have been impossible to avoid (unavoidable);
3. The event must be of such a character as to render it impossible for the
obligor to comply with his obligation in a normal manner; and
4. The obligor must be free from any participation in, or the aggravation
of the injury to the obligee.
 a. There must be no concurrent or previous negligence on the part SIMPLE LOAN OR MUTUUM
of the obligor. - A contract whereby one of the parties delivers to another money or other
consumable thing, upon the condition that the same amount of the same
- An absence of any of the requisites would prevent the obligor from being kind and quality shall be paid.
exempt from liability. - It may be gratuitous or with a stipulation to pay interest.
- Impossibility of the performance must result from occurrence of fortuitous
event.
USURY
- Contracting for or receiving interest in excess of the amount allowed by law
EXCEPTIONS TO TTHE
HE E
EXEMPTION
XEMPTION RULE for the loan or use of money, goods, chattels, or credits.
1. When expressly specified by law
a. Obligor is guilty of fraud, delay, negligence, or contravenes the
tenor of the obligation KINDS OF INTEREST
b. Bad faith 1. Simple – rate is stipulated by parties
c. Debt proceeds from a criminal offense 2. Compound – when the interest earned is upon interest due
d. Thing is generic 3. Legal – presumed by law
2. When declared by stipulation 4. Lawful – interest is within the maximum allowed by usury law
3. When the nature of the obligation requires the assumption of risk 5. Unlawful – rate is beyond the law’s maxuimum

EFFECT WHERE RISK NOT ONE IMPOSSIBLE TO FORESEE RULES OF INTEREST

- If foreseen, then it can be said that the nature of the obligation is such that - Legal Rate
a party could be deemed to have assumed it. o 12% (from default until fully paid) if the transaction is a loan or
- Mere difficulty of foreseeing is different from impossibility to foresee. forbearance of money, goods, or credits or the judgment involves a loan
or forbearance of money, goods or credits, as prescribed in Central Bank
Circular No. 416
EFFECT OF OBLIGOR’S NEGLIGENCE UPON HIS LIABILITY o 6% for all others
1. Negligence contributed to the loss or damage - Maximum Rate
a. In order that fortuitous event may release a debtor from his o 12% per annum — if the loan is secured in whole or in part by a
obligation, it is necessary that he be free from previous mortgage upon real estate with a Torrens Title or by any agreement
negligence or misconduct by which the loss or damage may conveying such real estate (also registered) or an interest therein.
have been occasioned. o 14% per annum — if the loan is not secured as provided above
2. Negligence not contributory to the loss or damage o The rate prescribed by the Monetary Board of the Central Bank.
a. But where both fortuitous event and lack of due diligence are
present under conditions that the loss would have happened
MONETARY INTER
INTEREST
EST v. COMPENSATORY INTEREST
with or without the negligence of the obligor, it cannot be said
that responsibility arises therefrom Monetary Compensatory
Interest fixed by the parties to a It is imposed by law or by courts as
contract for the ease or forbearance penalty or indemnity for damages
ARTICLE 1175. Usurious transactions shall be governed by special laws. (n) of money

- Requisites for recovery of monetary interest

 1. Payment of interest must be expressly stipulated WHEN ART. 1176 DOES NOT APPLY
2. Agreement must be in writing 1. With reservation as to interest - Article 1176 do not arise where there
3. Interest must be lawful is a reservation as to interest or prior installments. The reservation may
be made in writing or verbally.
LIABILITY FOR LEGA
LEGAL L IINTEREST
NTEREST 2. Receipt for a part of principal - the first paragraph of Article 1176 only
1. For loan or forbearance of money, the rate of interest due is that applies to the receipt of the last installment of the entire capital, not to
stipulated; otherwise, 12% per annum computed from judicial or a mere fraction thereof.
extrajudicial demand until fully paid. Interest due shall earn legal 3. Receipt without indication of particular installment paid - the
interest (compound interest) from the time it is judicially demanded. presumption in paragraph 2, Article 1176 is not applicable if the
2. For other than loan or forbearance of money, the interest shall be 6% receipt does not recite that it was issued for a particular installment
as indemnity at the discretion of the court. When the amount of the due as when the receipt is only dated
obligation is reasonably established, the interest shall run from judicial 4. Payment of taxes
or extra-judicial demand; otherwise, from the time the amount is finally 5. Non-payment proven
adjudged.
3. Where a judgment awarding a sum of money under (a) or (b) above, has
become final and executory, the legal rate of interest shall be 12% from ARTICLE 1177. The creditors, after havin
having
g pursued the prope
property
rty in poss
possession
ession
such finality, based on the adjudged principal and unpaid interest, until of the debtor to sat
satisfy
isfy their claims, may exe
exercise
rcise all the rights and bring all
full satisfaction. the actions of the latter for the same purp
purpose,
ose, save those which are inherent
in his person; they may also impugn the acts which the debtor may have done
to defraud them. (1111)
ARTICLE 1176. The rreceipt
eceipt of the principal by the creditor, without reservation
with respect to the intere
interest,
st, shall give rise to the pre
presumption
sumption that said interest CREDITORS
CREDITORS’’ R REMEDIES
EMEDIES FOR THE S SATISFACTION
ATISFACTION OF THEIR CLAIMS
has been paid. 1. Exact fulfillment with the right to damages (specific performance)
2. Pursue the leviable property of debtor
The receipt of a later installment of a debt without reservation as to prior 3. “After having pursued the property in possession of the debtor,’’
installments, shall likewise raise the pre
presumption
sumption that such installments have exercise all the rights (like the right to redeem) and bring all the actions
been paid. (1110a) of the debtor (like the right to collect from the debtor of his debtor)
4. Ask the court to rescind or impugn acts or contacts which the debtor
did to defraud the creditor when he cannot in any other manner recover
PRESUMPTION his claim
- The inference of act not actually known arising from its usual connection - The debtor is liable with all his property, present and future, for the
with another which is known or proved. fulfillment of his obligations, subject to the exemptions provided by law.
- Kinds
o Conclusive – cannot be contradicted
o Disputable / rebuttable – can be contradicted by presenting proof to the
contrary ARTICLE 1178. Subject to the laws, all rights acquire
acquiredd in v irtue of an ob
obligation
ligation
are transmissible, if there has b
been
een no stipulation to the contrary. (1112)

EXCEPTIONS TO ART. 1178

1. Prohibited by law
 a. By the contract of partnership, two or more persons bind
themselves to contribute money, property or industry to a
common fund, with the intention of dividing the profits among
themselves. (Art. 1767.)
b. By the contract of agency, a person binds himself to render
some service or to do something in representation or on behalf
of another, with the consent or authority of the latter. (Art.
1868.)
c. By the contract of commodatum, one of the parties delivers to
another something not consumable so that the latter may use
the same for a certain time and return it. Commodatum is
essentially gratuitous. (Art. 1933.)
2. Prohibited by stipulation

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