TITLE I

OBLIGATIONS
(Arts. 1156-1304.)
 CHAPTER 1- GENERAL OBLIGATIONS

 The term obligation is derived  Obligation is a juridical necessity

from the Latin word “obligation” because in case of non-compliance,
which means a “tying” or the courts of justice may be called
“binding.” upon to enforce its fulfillment or, in
 Article 1156 gives the Civil Code default thereof, the economic value
definition of obligation, in its that it represents.
passive aspect. Our law merely
stresses the duty of the debtor or  Obligations which give to the creditor
obligor (he who has the duty of or obligee a right of action in courts of
giving, doing, or not doing) when it justice to enforce their performance
speaks of obligation as a juridical are known as civil obligations.
necessity.
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 Essential Requisites of an Obligation
An obligation as defined in Article 1156 is constituted upon the concurrence of
the four (4) essential elements thereof, namely:
 A passive subject (called debtor or obligor) or the person who is bound to the
fulfillment of the obligation.
 An active subject (called creditor or obligee) or the person who is entitled to
demand the fulfillment of the obligation.
 Object or prestation (subject matter of the obligation) or the con-duct required
to be observed by the debtor.
 A juridical or legal tie (also called efficient cause) or that which binds or
connects the parties to the obligation. 3
Obligation, right, and wrong (cause of action) distinguished
(1) Obligation is the act or performance which the law will enforce.
(2) Right, on the other hand, is the power which a person has
under the law, to demand from another any prestation.
(3) A wrong (cause of action), according to its legal
meaning, is an act or omission of one party in
violation of the legal right.
Form of Obligation
As a general rule, the law does not
require any form in obligations arising
from contracts for their validity or
binding force.
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 Essential Elements of Cause of Action

▰ (a) a legal right in favor of a person (creditor/plaintiff) by

whatever means and under whatever law it arises or is created;
▰ (b) a correlative legal obligation on the part of another
(debtor/defendant) to respect or not to violate said right; and
▰ (c) an act or omission in breach or violation of said right by the
defendant with consequential injury or damage to the plaintiff
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Injury, damage, and damages distinguished
▰ The words “injury,” “damage,’’ and “damages’’ are
sometimes used synonymously, although there is a
material difference among them.
▰ Injury is the illegal invasion of a legal right; it is the
wrongful act or omission which causes loss or harm to
another, while damage is the loss, hurt, or harm which
results from the injury.
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 Kinds of obligation according to subject matter

(1) Real obligation (obligation Two (2) kinds of personal

to give) or that in which the obligation:
subject matter is a thing which (a) Positive personal obligation
the obligor must deliver to the or obligation to do or to render
obligee; or service and
(2) Personal obligation (b) Negative personal obligation
(obligation to do or not to do) or obligation not to do (which
or that in which the subject naturally includes obligations
matter is an act to be done or “not to give”).
not to be done. 7
 ART. 1157. Obligations arise from:
(1) Law- when they are imposed by the law itself, e.g., obligation to pay taxes.

(2) Contracts- when they arise from the stipulation of the parties e.g., the obligation
to repay a loan by virtue of an Agreement.

(3) Quasi-contracts- when they arise from lawful, voluntary and unilateral acts e.g.,
the obligation to return money paid by mistake or which is not due.

(4) Acts or omissions punished by law- when they arise from civil liability which is
the consequence of a criminal offense e.g., the obligation of a thief to return the car
stolwhen they are imposed by the law itselfen by him;

(5) Quasi-delicts- when they arise from damage caused to another through an act
or omission, e.g., the obligation of the head of a family that lives in a building or a
part thereof to answer for damages caused by things thrown or falling from the
same. 8
 ART. 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.
Article 1158 refers to legal obligations or obligations arising
from law. They are not presumed because they are considered
a burden upon the obligor. They are the exception, not the
rule. To be demandable, they must be clearly set forth in the
law, i.e., the Civil Code or special laws.
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 Contractual Obligations
A contract is a meeting of minds between two persons whereby one
binds himself, with respect to the other, to give something or to render
some service.
 Binding force. — Obligations arising from contracts are governed
primarily by the agreement of the contracting parties.
 Requirements of a valid contract. — As a source of obligation, a contract
must be valid and enforceable.
 Where contract requires approval by the government. — Where a
contract is required to be verifi ed and approved by the government
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before it can take effect.
Compliance in good faith. — It means compliance or
performance in accordance with the stipulations or
terms of the contract or agreement.
Liability for breach of contract. — Although the contract
imposes no penalty for its violation, a party cannot breach it
with impunity.
Preservation of interest of promise. — A breach upon the
contract confers upon the injured party a valid cause for
recovering that which may have been lost or suffered.
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Quasi-contractual obligations
A quasi-contract is 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 that
no one will be unjustly enriched or benefited at
the expense of another.
ART. 1161. Civil obligations arising from
criminal offenses shall be governed by the
penal laws,14 subject to the provisions of
Article 2177,15 and of the pertinent
provisions of Chapter 2, Preliminary Title
on Human Relations,16 and of Title XVIII of
this Book, regulating damages. 12
 Civil liability arising from crimes or delicts
The commission of an offense has a two-pronged effect: one, on
the public as it breaches the social order and the other, upon the
private victim as it causes personal sufferings or injury.
Oftentimes, the commission of a crime causes not only moral
evil but also material damage. From this principle, the rule has been
established that every person criminally liable for a felony17 is also
civilly liable.
In crimes, however, which cause no material damage (like
contempt, insults to person in authority, gambling, violations of traffi
c regulations, etc.), there is no civil liability to be enforced. But a
person not criminally responsible may still be liable civilly. 13
 Scope of civil liability

 Art. 2176. Whoever by act or

This civil liability omission causes damage to
includes: another, there being fault or
(1) Restitution; negligence, is obliged to pay for
the damage done.
(2) Reparation for the
 The concept of quasi-delict as
damage caused; and
enunciated in Article 2176,
(3) Indemnification for includes not only injuries to
consequential damages. persons but also damage to
property.
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 Requisites of quasi-delict

Before a person can be held liable for quasi-delict, the following

requisites must be present:
(1) There must be an act or omission by the defendant;
(2) There must be fault or negligence of the defendant;
(3) There must be damage caused to the plaintiff;
(4) There must be a direct relation or connection of cause and effect
between the act or omission and the damage; and
(5) There is no pre-existing contractual relation between the parties.
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 Recovery of damages twice for the
same act or omission prohibited
(1) In crime or delict, there is criminal or malicious intent or crimi- nal
negligence, while in quasi-delict, there is only negligence;
(2) Crime affects public interest, while quasi-delict concerns private
interest;
(3) In crime, there are generally two liabilities: criminal and civil,23
while in quasi-delict, there is only civil liability;
(4) In crime or delict, the purpose is punishment, while in quasi-
delict, indemnifi cation24 of the offended party;
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 Recovery of damages twice for the
same act or omission prohibited
(5) Criminal liability can not be compromised or settled by the
parties themselves, while the liability for quasi-delict can be
compromised as any other civil liability;
(6) In crime, the guilt of the accused must be proved beyond
reasonable doubt, while in quasi-delict, the fault or negligence of the
defendant need only be proved by preponderance of evidence; and
(7) In crime, the liability of the person responsible for the author of
the negligent act or omission is subsidiary, while in quasi-delict, it is
direct and primary.
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 Chapter 2
NATURE AND
EFFECT
OF OBLIGATIONS
 ART. 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.
The above provision refers to an obligation to give a specific or
determinate thing. A thing is said to be specific or determinate when it is
particularly designated or physically segregated from all others of the same
class.
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.
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 Specific thing and generic thing distinguished

(1) A determinate thing is identified by its individuality. The

debtor cannot substitute it with another although the latter is of
the same kind and quality without the consent of the creditor.
(2) 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.
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 Duties of 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; and
(5) To answer for damages in case of non-fulfillment or breach.
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 Obligation to take care of the thing due

(1)Diligence of a good father of a family

(2)Another standard of care
(3)Factors to be considered
(4)Reason for debtor’s obligation

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 Duties of debtor in obligation to
deliver a generic thing

(1) To deliver a thing which is of

the quality intended by the ART. 1164. The creditor has a
parties taking into consideration right to the fruits of the thing from
the purpose of the obligation and the time the obligation to deliver it
other circumstances and arises. However, he shall acquire
(2) To be liable for damages in no real right over it until the same
case of fraud, negligence, or has been delivered to him.
delay, in the performance of his
obligation, or contravention of the
tenor thereof.
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 Different Kinds of Fruits
The fruits mentioned by the law refer to natural, industrial, and civil fruits.
(1) Natural fruits are the spontaneous products of the soil, and the young
and other products of animals, e.g., grass; all trees and plants on lands
produced without the intervention of human labor.
(2) Industrial fruits are those produced by lands of any kind through
cultivation or labor, e.g., sugar cane; vegetables; rice; and all products of
lands brought about by reason of human labor.
(3) Civil fruits are those derived by virtue of a juridical relation, e.g., rents of
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buildings, price of leases of lands and other property and the amount.
Right of creditor to the fruits
By law, the creditor is entitled to the fruits of the thing to be delivered
from the time the obligation to make delivery of the thing arises.
Meaning of personal right and real right
(1) Personal right is the right or power of a person (creditor) to demand
from another (debtor), as a definite passive subject, the fulfillment of the
latter’s obligation to give, to do, or not to do.
(2) Real right is the right or interest of a person over a specific thing (like
ownership, possession, mortgage, lease record) without a definite passive
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subject against whom the right may be personally enforced.
ART. 1165. When what is to be delivered is a
determinate thing, the creditor, in addition to the right
granted him by Article
1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask
that the obligation be complied with at the expense of
the debtor.

Ownership acquired by delivery

Ownership and other real rights over
property are acquired and transmitted by
law, by donation, by testate and intestate
succession, and in consequence of
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certain contracts by tradition
Meaning of accessions and accessories
Accessions are the fruits of, or additions to, or improvements
upon, a thing (the principal), e.g., house or trees on a land; rents of a
building; air conditioner in a car.
Right of creditor to accessions and accessories.
The general rule is that all accessions and accessories are
considered included in the obligation to deliver a determinate thing
although they may not have been mentioned.
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Accession as a right.
Accession is also used in the sense of a right. In that sense, it may be
defined as the right pertaining to the owner of a thing over its products and
whatever is incorporated or attached thereto, either naturally or artificially.
Right of creditor to accessions and accessories.
ART. 1167. If a person obliged to do something fails to do it, the same
shall be executed 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. 28
 Situations contemplated in Article 1167

(1) The debtor fails to perform an obligation to do; or

(2) The debtor performs an obligation to do but contrary to the
terms thereof; or
(3) The debtor performs an obligation to do but in a poor
manner.
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 Remedies of creditor in negative personal
obligation
In an obligation not to do, the duty of the obligor is
to abstain from an act. Here, there is no specific
performance. The very obligation is fulfilled in not
doing what is forbidden. Hence, in this kind of
obligation the debtor cannot be guilty of delay.

Meaning of delay
The word delay, as used in the law,
is not to be understood according
to its meaning in common parlance.
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 Remedies of creditor in positive
personal obligation

(1) If the debtor fails to comply with his obligation to do, the
creditor has the right.
(2) In case the obligation is done in contravention of the terms
of the same or is poorly done, it may be ordered (by the court)
that it be undone if it is still possible to undo what was done.
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 (1) Ordinary delay is merely the failure to
perform an obligation on time.
Kinds of delay (mora)
(2) Legal delay or default or mora is the failure
(1) Mora solvendi or the delay
to perform an obligation on time which failure,
on the part of the debtor.
constitutes a breach of the obligation.
(2) Mora accipiendi or the
delay on the part of the
No delay in negative personal obligation
creditor.
In an obligation not to do, non-fulfillment may
(3) Compensatio morae or the
take place but delay is impossible for the
delay of the obligors in
debtor fulfills by not doing what has been
reciprocal obligations.
forbidden him. 32
 When demand not necessary to put
debtor in delay

The general rule is that delay begins only from the moment
the creditor demands, judicially or extrajudicially, the fulfillment
of the obligation. The demand for performance marks the time
when the obligor incurs mora or delay and is deemed to have
violated his obligation. Without such demand, the effect of
default will not arise unless any of the exceptions mentioned
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below is clearly proved.
 ART. 1170. Those who in the performance of their obligations
are guilty of fraud, negligence, or delay, and those who in any
manner contravene the tenor thereof, are liable for damages.

Ground for Liability

Article 1170 gives the four grounds for liability which may entitle
the injured party to damages for all kinds of obligations regardless
of their source, mentioned in Article 1157, whether the obligations
are real or personal. 34
Recovery of damages for breach of contract or obligation
Breach of contract is the failure without justifiable excuse to comply with the
terms of a contract. The breach may be willful or done unintentionally. It has
been defined as the failure, without legal excuse, to perform any promise which
forms the whole or part of the contract.
Damages recoverable where obligation to pay money
Penalty interest for delay or non-performance — Damages may be
recovered under Article 1170 when the obligation is to do something other than
the payment of money but when the obligation which the debtor failed to perform
consists only in the payment of money, the rule of damages is that laid down in
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Article 2209 of the Civil Code.
 Fraud and negligence distinguished

(1) In fraud, there is deliberate intention to cause damage or injury, while in

negligence, there is no such intention;
(2) Waiver of the liability for future fraud is void (Art. 1171.), while such waiver
may, in a certain sense, be allowed in negligence;
(3) Fraud must be clearly proved, mere preponderance of evidence not being
sufficient, while negligence is presumed from the breach of a contractual
obligation; and
(4) Liability for fraud cannot be mitigated by the courts, while liability for
36
negligence may be reduced according to the circumstances.
Responsibility arising from fraud demandable
Responsibility arising from fraud can be demanded
with respect to all kinds of obligation and unlike in
the case of responsibility arising from negligence
(Art. 1172.), the court is not given the power to
mitigate or reduce the damages to be awarded.

When negligence equivalent to fraud

Where the negligence shows bad faith
or is so gross that it amounts to malice or
wanton attitude on the part of the
defendant, the rules on fraud shall apply.
37
.
Waiver of action for future fraud void
A waiver of an action for future fraud is void (no effect, as if there is no
waiver) as being against the law and public policy.
Waiver of action for past fraud valid
A past fraud can be the subject of a valid waiver because the waiver
can be considered as an act of generosity and magnanimity on the part of
the party who is the victim of the fraud.
ART. 1172. Responsibility arising from negligence in the performance
of every kind of obligation is also demandable, but such liability may be
38
regulated by the courts, according to the circumstances.
Validity of waiver of action arising from negligence
(1) An action for future negligence (not fraud) may be renounced
except where the nature of the obligation requires the
exercise of extraordinary diligence as in the case of common
carriers.
(2) Where negligence is gross or shows bad faith, it is
considered equivalent to fraud. Bad faith does not simply
connote negligence or bad judgment causing damages to
another.
When negligence equivalent to fraud
Where the negligence shows bad faith
or is so gross that it amounts to malice or
wanton attitude on the part of the
defendant, the rules on fraud shall apply.
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.
Effect of negligence on the part of the injured party
To be entitled to damages, the law does not require that the negligence of the
defendant should be the sole cause of the damage.
Presumption of contractual negligence
(1) In an action for quasi-delict or tort, the negligence or fault should be clearly
established because it is the basis of the action, whereas in a breach of
contract, the action can be pursued by proving the existence of the contract,
and the fact that the obligor failed to comply with the same.
(2) When the action is based on a contract of carriage, and the obligor, in
this case the carrier, failed to transport the passenger to his
destination, the fault or negligence of the carrier is presumed. 40
 Meaning of fault or negligence

(1) Fault or negligence is defined by the above provision.

(2) According to our Supreme Court, “negligence is conduct that
creates undue risk or harm to another. It is the failure to observe for
the protection of the interests of another person, that degree of care,
precaution and vigilance which the circumstances justly demand,
whereby such other person suffers injury.”
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 Factors to be considered
Negligence is a question of fact, its existence being dependent upon the particular
circumstances of each case.
(1) Nature of the obligation. — e.g., smoking while carrying materials known to be
inflammable constitutes negligence;
(2) Circumstances of the person. — e.g., a guard, a man in the prime of life, robust and
healthy;
(3) Circumstances of time. — e.g., driving a car without headlights
(4) Circumstances of the place. — e.g., driving at 60 kilometers per hour on the highway
is permissible but driving at the same rate of speed in Quezon Boulevard, Manila, when
42
traffic is always heavy is gross recklessness.
Fortuitous event distinguished from force majeure
(1) Acts of man. — Strictly speaking, fortuitous event is an event
independent of the will of the obligor but not of other human wills,
e.g., war, fi re, robbery, murder, insurrection, etc.
(2) Acts of God. — They are those events which are totally
independent of the will of every human being, e.g., earthquake,
flood, rain, shipwreck, lightning, eruption of volcano, etc.

Meaning of fortuitous event

A fortuitous event is any extraordinary
event which cannot be foreseen, or which,
though foreseen, is inevitable.
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 Kinds of diligence required

Diligence is “the attention and care required of a person in a given

situation and is the opposite of negligence.’’
(1) that agreed upon by the parties, orally or in writing;
(2) in the absence of stipulation, that required by law in the particular
case (like the extraordinary diligence18 required of common carriers);
(3) if both the contract and law are silent, then the diligence expected
of a good father of a family 44
Kinds of fortuitous events
(1) Ordinary fortuitous events or those events which are
common and which the contracting parties could reasonably
foresee (e.g., rain); and
(2) Extraordinary fortuitous events or those events which are
uncommon and which the contracting parties could not have
reasonably foreseen (e.g., earthquake, fi re, war,19
pestilence, unusual flood). 45
Requisites of a fortuitous event
(1) The event must be independent of the human will or at least of the
obligor’s will;
(2) The event could not be foreseen (unforeseeable), or if it could be
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. 46