What is a LAW?
- Under a building contract, X bound himself to construct Y
➢ The system of rules which a particular country or community
recognizes as regulating the actions of its members and which it
may enforce by the imposition of penalties. (Dictionary
definition)
Why is it necessary to have laws?
➢ Laws promote order in the society
➢ The law is important for a society for it serves as a norm of
conduct for citizens. It was also made to provide for proper
guidelines and order upon the behavior for all citizens and to sustain
the equity on the three branches of the government.
➢ Its absence will ultimately lead to anarchy wherein everyone can
do unrestrictedacts even if it violates the
rights of others.
Chapter 1: General Provisions (Art. 1156-1162)
Article 1156. An obligation is a juridical necessity
to give, to do or not to do.
• Obligation
▶ Latin “obligatio” which means to tying or binding
▶ A tie of law by virtue of which one is obliged to render
something in favor of another which may consist of:
• Giving a thing
• Doing a certain thing
• Not doing a certain act (includes not giving a thing)
• Juridical Necessity
▶ In case of non-compliance the courts of justice may be called
upon to enforce its fulfillment or the economic value that it
represents.
▶ Damages may be awarded in proper cases to compensate for the
injury or harm suffered by the creditor or oblige for violation of his
rights
▶ Therefore the debtor must comply with his obligation to avoid
legal consequences
• Why must obligations be made enforceable in
courts?
• So that people cannot disregard them with impunity
• Also to avoid recourse to violence or social unrest expecting to
benefit from obligations
▶ Nature of Obligations under the Civil Code
• Civil Obligations
• Gives the creditor or obligee a right of action in courts of justice
to enforce performance.
• Natural Obligations (Art. 1423-1430)
• Not based on positive law but on equity and natural law
• Do not grant right of action to enforce performance in court but
voluntary fulfillment by the debtor bars the recovery of what has
been delivered or rendered
▶ Essential Requisites of an Obligation
1. Passive subject (called: Debtor/Obligor)
• Person bound to the fulfillment of the obligation
• He who has the duty
2. Active subject (called: Creditor/Obligee)
• Person who is entitled to demand fulfilment of the obligation
• He who has the right
3. Object or Prestation (The subject matter of the obligation)
• Conduct required to be observed by the debtor
• Consist of GIVING, DOING, or NOT DOING
4. Juridical or Legal Tie (The “Vinculum” or Efficient cause)
• That which binds or connects the parties to the obligation
• Determined by knowing the source of the obligation (See Art.
1157: Law, contract, quasi contract, acts or omissions punishable by
law, quasi-delict)
• Illustration:
a house for P1,000,000.00. Identify therequisites/elements
of an obligation.
▶ Passive subject (debtor/obligor) – X
▶ Active subject (creditor/oblige) – Y
▶ Object/Prestation – Building of a house (obligation to do
something)
▶ Juridical/legal tie – Contract/Agreement
- Since this is a bilateral contract, if the contract stipulates
that after X constructs the house, Y will pay X the amount
agreed, then:
▶ Passive subject (debtor/obligor) – Y
▶ Active subject (creditor/oblige) – X
▶ Object/Prestation – Pay P1,000,000.00 (obligation to give)
▶ Juridical/legal tie – Contract/Agreement
What happens if debtor violates his obligation?
▶ The creditor gains a “CAUSE OF ACTION” to file a case in
court against the debtor
• Forms of obligation
▶ Refers to the manner in which an obligation is manifested or
incurred
▶ Obligations can be entered into:
1. Orally
2. In writing
3. Partly oral, partly in writing
Injury, Damage, Damages
▶ Injury
• The illegal invasion of a legal right
• The wrongful act or omission which causes loss or harm to
another
▶ Damage
• The loss, hurt, harm which results from the injury
▶ Damages
• Denote the sum of money recoverable as amends for the
wrongful act or omission
• Injury is the legal wrong to be redressed; Damages are the
recompense or compensation awarded or recoverable for the
damage or loss suffered.
Injury, Damage, Damages
Illustration:
1. X punched Y in public. What is the INJURY, DAMAGE and
DAMAGES?
▶ INJURY – Inflicting physical injury on Y
▶ DAMAGE – Physical pain suffered by Y, Public humiliation
suffered by Y
▶ DAMAGES – Monetary compensation to be awarded Y for the
pain and humiliation he suffered.
▶ X promised to deliver to Y medicine for the letter’s pet dog. X
failed to deliver the medicine
and the dog died.
▶ INJURY – failure to deliver medicine
▶ DAMAGE – Loss/death of Y’s pet dog
▶ DAMAGES – Monetary compensation to be awarded Y for the
death of his pet dog
Chapter 1: General Provisions: Art. 1156
Kinds of obligation according to Subject Matter
1. Real Obligation (Obligation TO GIVE)
▶ Subject matter is a thing which the obligor/debtor must deliver
to the oblige
2. Personal Obligation (Obligation TO DO or NOT TO DO/ NOT
TO GIVE)
▶ Subject matter is an act to be done or not to be done/not to give
▶ 2 Kinds of personal obligation
a. Positive personal obligation – obligation to do or to render some
service
b. Negative personal obligation – obligation not to do or not to
give
Art. 1157. Obligations arise from:
1) Law; (correlate with Art. 1158)
2) Contracts; (cor. w/ Art. 1159)
3) Quasi-contracts; (cor. w/ Art. 1160)
4) Acts or Omissions punishable by law (DELICTS); and (cor. w/
Art. 1161)
5) Quasi-delicts (“Torts” or “Culpa-aquiliana”) (cor. w/ Art. 1162)
▶ This article speaks about the sources of obligation.
▶ Recall one of the essential requisites of an obligation – the
JURIDICAL or LEGAL TIE (also “vinculum” or efficient
cause). Juridical/Legal tie is limited to any of the 5 sources of
obligation as mention under Art. 1157.
Sources of obligation
1. Law
▶ 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 provision of this Book.
▶ Refers to obligations found is the law.
▶ Are not presumed because they are a burden upon the
debtor/obligor. The law must clearly set forth the obligation
imposed upon to debtor.
- Examples:
• Obligation to pay taxes under the Tax code
• Obligation to support one’s family under the Family Code
Chapter 1: General Provisions: Art. 1157 & 1159
2. Contracts
▶ Art. 1159. Obligations arising from contracts have
the force of law between the contracting parties and
should be complied with in good faith.
▶ Contracts is defined as 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 and effect
• Valid contracts once perfected have the force of law between the
parties who are bound to comply fully in good faith
▶ Good faith
• Means compliance or performance of an obligation in
accordance with the stipulations or terms of the contract or
agreement.
• Must be observed to prevent one party from taking unfair
advantage over the other party.
▶ Non-compliance with obligations of a contract by a party is
called BREACH OF CONTRACT
▶ Actionable injury for breach of contractual obligation
▶ Damages may be awarded in addition to being compelled to
perform the obligation under a contract
3. Quasi-contracts
▶ Art. 1160. Obligations derived from quasi-
contracts shall be subject to the provisions of Chapter 1,
Title XVII of this Book.
▶ When they arise from lawful voluntary and unilateral acts and
which are enforceable to the end that no one shall be unjustly
enriched at the expense of another (“no unjust enrichment”)(Art.
2142)
▶ Are not contracts at all since there is no meeting of minds or
consent given in a given quasi-contract but is merely supplied by
fiction of law.
▶ Fiction of Law – meaning the law considers (assumes) the
parties as having entered into a contract irrespective of their
intention, to prevent injustice.
▶ Purpose is to prevent UNJUST ENRICHMENT
Kinds of Quasi-contracts:
a. Negotiorum Gestio (Art. 2144)
▶ When a person voluntarily takes charge of the property or
business of another even though was not authorized
▶ Owner must reimburse the person for his useful and
necessary expenses incurred
- Requirements:
i. Voluntary management of property or affairs of another
ii. There was no knowledge/consent by the owner
iii. Property/business is neglected or abandoned
iv. There is no manager authorized by the owner
- Illustration:
• While Y was away, X saw the former’s house was on fire. X
incurred costs to repair Y’s house. On Y’s return, Y is obliged to
reimburse X of his useful and necessary expenses.
Chapter 1: General Provisions: Art. 1157 & 1160
b. Solutio Indebiti (Art. 2154)
▶ If something is received when there is no right to demand it, and
it was unduly delivered through mistake
▶ Person receiving is obliged to return the amount given by
mistake
- Requirements:
i. Something is received but no right to demand it
ii. Delivery was made by mistake
▶ Illustration:
▶ X owes Y P50,000.00. On due date, X paid Z the amount
believing he was Y. Z is obliged to return the amount to X.
c. Other quasi contracts (Art. 2164-2170, 2174-2175)
4. Act or omissions punishable by law (CRIMES or
“DELICTS”)
Art. 1161. Civil obligations arising from criminal
offenses shall be governed by the penal laws, subject to
the provisions of Art. 2177, and of the pertinent
provisions of Chapter 2, Preliminary Title on Human
Relations, and of Title XVIII of this Book, regulating
Damages.
▶ This refers to the CIVIL LIABILITY arising from the
commission of a criminal offense (Art. 1161)
▶ Civil liability arising from crimes or delicts:
▶ A person who is convicted of a crime has 2 pronged effect: he
incurs -
a. CRIMINAL LIABILITY – obligation for breach of the social
order (ie. Imprisonment or fine)
b. CIVIL LIABILITY – Obligation to recompense the suffering
caused to the victim/s or their heirs. (ie. Payment of damages)
Scope of Civil liability arising from crime or delict:
(Art. 104 of Revised Penal Code)
I. Restitution; - to restore
II. Reparation of damages caused; and - to repair
III. Indemnification for consequential damages - to compensate
Chapter 1: General Provisions: Art. 1157 & 1161
- Illustration:
▪ X stole the car of Y and drove around Naga City then crashed the
car in one of the posts. If X if convicted:
▶ CRIMINAL LIABILITY – He will serve his sentence in prison
▶ CIVIL LIABILITY:
1. Restitution – to return the car or pay the value of the car if
lost/destroyed
2. Reparation – pay for the damage caused or the cost of repairs for
the car
3. Indemnification of consequential damages – Other damages as a
consequence. (ie. Repair of the post he damaged, indemnification to
heirs of him victim if death is caused as a consequence)
5. Quasi-delict (“Torts” or “Culpa-Acquiliana”)
▶ Arise from damage caused to another through an act or
omission, there being fault or negligence, but no contractual
obligation exist between the parties. (Art. 2176)
▶ “Culpa” – Latin for fault/negligence.
▶ Obligation under a quasi-delict is demandable against persons
from whom one is responsible (ie. Employer-employee, teacher-
student, parent-child)
- Requisites of a quasi-delict:
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.
- Illustration:
▶ X hired Y as a jeepney drive for public transport. One day Y
reported to work while drunk. While
driving along Magsaysay avenue with A as passenger, Y occupied
the left lane of the road to overtake some vehicles while the traffic
lights was on STOP. The jeepney figured an accident hitting a
pedestrian, B, who was crossing. B survived but is badly hurt. The
passenger, A was also hurt during the incident. What are the
obligations and their sources and who are the parties thereto?
▶ Recall one of the essential requisites of an obligation – Object
or Prestation (subject matter of the obligation)
2 kinds of obligation according to Subject Matter
(1) Real Obligation (obligation to give) and (2) Personal
Obligation (obligation to do or not to do/not to give)
▶ Real obligations speak about the obligation to give a “thing”.
▶ The thing may either be a (1) Specific or Determinate thing, or
a (2) Generic or Indeterminate thing
1. Specific or Determinate thing
▶ A thing is SPECIFIC or DETERMINATE when it is
particularly designated or physically segregated from all others
of the same class (Art. 1460)
▶ Examples:
• The watch I’m wearing
• The car sold by X
• My dog named “Terror”
• My house located at the corner of Magsaysay and Dayangdang
street
• Mitsubishi Mirage car with plate number “ABC 123”
• This cavan or rice
• The money I gave you
2. Generic or Indeterminate thing
▶ A thing is generic when it refers only to a class or genus to
which it pertains and cannot be pointed out with particularity.
▶ Example:
• A watch
• A car
• A dog
• A cavan of rice
• A sum of P11,000.00
Distinction between a Specific and a Generic thing:
-Illustrations:
▶ If D obliged himself to deliver an apple watch. D may deliver
any apple watch as long as it is an apple watch. (Thing is generic)
▶ If D’s obligation is to deliver to C the watch that D is wearing,
the thing is now specific or determinate and therefore D cannot
substitute it with another without C’s consent. C cannot also require
D to deliver another watch without D’s consent although it may be
of the same kind and value. (Thing is specific/determinate)
▶ If D’s obligation is to deliver to C one of his cars, the object
refers to a class which in itself is determinate. (Thing is
DETERMINABLE, thing becomes determinate upon delivery)
▶ Obligations of one obliged to give a determinate thing
1. To take good care of the thing with the diligence of a good
father of a family unless the law or agreement of the parties
requires another standard of care (Art. 1163)
▶ Diligence of a good father of a family means ORDINARY
CARE that an average person exercises in taking care of his
property
2. To deliver the thing (Art. 1163)
▶ Placing the thing under the possession or control of the creditor
either actually or constructively
3. To deliver the fruits of the thing (Art. 1164)
Kinds of fruits:
i. Natural fruits – spontaneous products of the soil and the young
and other products of animals.
ii. Industrial fruits – Those produced by land of any kind
through cultivation or labor
iii. Civil fruits – fruits which are the result of a juridical relation.
(ie. Price of a lease/rent contract)
When creditor has a right to the fruits of a determinate thing
• The creditor has the right to the fruits from the time the
obligation to deliver it arises. However, he shall acquire no real
right over it until the thing has been delivered to him (Art. 1164)
When obligation to deliver the thing arises
• If obligation is a PURE obligation (performance in not subject to
a period or condition), the obligation to deliver arises from
PERFECTION
• If obligation is subject to a suspensive period or condition, the
obligation to deliver arises upon the arrival of the term or upon
the fulfillment of the condition
• In a contract of sale, obligation arises from the PERFECTION of
the contract even if the obligation is subject to a suspensive
condition or a suspensive period where price has been paid
▶ Meaning of REAL right and PERSONAL right (rights of the
creditor)
• Personal Right – The right or power of a person (obligee) to
demand from another (obligor), as a definite passive subject, the
fulfillment of the latter’s obligation to give, to do, or not to do. (jus
in personam/jus ad rem)
• Real Right – The right or interest of a person over a specific
thing (ie. Ownership, possession, mortgage) without a definite
passive subject against whom it may be enforced (the right can
therefore be enforced against anyone) (jus in re)
- Delivery of the thing is necessary so that ownership of
the thing is transferred to the creditor
4. To deliver its accessions and accessories even if they have not
been mentioned. (Art. 1166)
▶ Accessions – includes everything that is produced by a thing
or is incorporated or attached thereto (ie. Additions,
improvements), either naturally or artificially (Art. 440)
▶ Accessories – those joined to or included with the principal
thing for the latter’s better use, perfection or enjoyment (ie. wrist
of a watch, frame of a picture)
- Rule: Accessory follows the principal.
5. To answer for damages in case of non fulfillment or breach
(Art. 1170)
▶ Obligations of one obliged to give a generic thing
1. To deliver a thing which is of the quality intended by the parties
taking into consideration the purpose of the obligation and other
circumstances (Art. 1246); and
2. To be liable for damages is case of FRAUD, NEGLIGENCE, or
DELAY, in the performance of his obligation, or incontravention of
the tenor thereof. (Art. 1170)
*Rule: “Genus nunquam perit” ~ generic never perishes
▶ Remedies of the creditor if the debtor fails to perform his
obligation (to give, to do, or not to do/not to give
A. Specific Real Obligations (Obligation to give a determinate
thing)
1. To compel debtor to make the delivery (Specific
performance/Fulfillment of obligation) + damages (Art. 1165)
2. To rescind/cancel the contract + damages (Art. 1170)
3. To demand payment of damages only (Art. 1170)
B. Generic Real Obligations (Obligation to give a generic thing)
1. To ask that the obligation be complied with at the expense of the
debtor (Art. 1165) + damages (Art. 1170),
2. Demand damages from the debtor (Art. 1170)
C. Positive Personal Obligation (Obligation to do)
➢ *Debtor fails to comply with obligation/Debtor performed
but in contravention of tenor
1. To have the obligation performed by himself, or by another, at the
debtor’s expense (Art. 1167),
▪ EXCEPTION: when personal considerations are involved
2. Demand damages from the debtor (Art. 1170)
(*in personal obligations, no specific performance/Fullfilment
option for the creditor as this will result to INVOLUNTARY
SERVITUDE)
➢ *Debtor performs the obligation but does it poorly
1. To have the same be undone at debtor’s expense (Art. 1167) +
damages (Art. 1170)
2. Demand damages from debtor (Art. 1170)
D. Negative Personal Obligation (Obligation not to do)
1. To have the same be undone at debtor’s expense (Art. 1168) +
damages (Art. 1170)
2. Demand damages from debtor (Art. 1170)
(*in personal obligations, no specific performance/Fullfilment
option for the creditor as this will result to INVOLUNTARY
SERVITUDE)
Grounds for liability to pay damages
1. Fraud
2. Negligence
3. Delay
4. Contravention with the tenor of the obligation (Art. 1170)
“Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner
contravene with the tenor thereof, are liable for damages”
▶ Injury (the wrong done)
• The illegal invasion of a legal right
• The wrongful act or omission which causes loss or harm to
another (which must be redressed)
▶ Damage (the direct effect of the wrong done)
• The loss, hurt, harm which results from the injury
▶ Damages (compensation for the wrong done)
• Denote the sum of money recoverable as amends for the
wrongful act or omission
Kinds of damages (M.E.N.T.A.L)
▶ Moral damages – sum of money recoverable for physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation,
and similar injury (Art. 2217)
▶ Exemplary or Corrective damages – sum of money
recoverable imposed by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or
actual/compensatory damages. (Art. 2229)
▶ Nominal damages - sum of money recoverable to vindicate a
right which has been violated by the defendant. (Art. 2221)
▶ Temperate or moderate damages - sum of money recoverable
if the court finds that some pecuniary loss has been suffered but
its amount cannot, from the nature of the case by proved with
certainty. Amount is more than nominal but less than
actual/compensatory damages. (Art. 2224)
▶ Actual/Compensatory Damages - sum of money recoverable
for the pecuniary loss one has suffered. It includes loss suffered
and profits realized (Art. 2199)
▶ Liquidated damages - sum of money recoverable as agreed by
the parties to a contract in case of breach. (Art. 2226)
Grounds for liability to pay damages: FRAUD
▶ The deliberate or intentional evasion by the debtor of the
normal compliance of his obligation
Kinds of Fraud in general
▶ According to meaning:
a. Fraud perpetrated in obtaining consent
1. Causal fraud (Dolo causante)
▶ Fraud without which consent would not have been given.
(consent is “vitiated”)
- Effect: makes the contract voidable. Remedy for the
aggrieved party is to annul the contract
2. Incidental fraud (Dolo incidente)
▶ Fraud without which consent would still have been given but the
person giving it would have agreed on a different terms
- Effect: contract is still valid but the party employing it is
liable for damages
b. Fraud in the performance of obligation
▶ A deliberate act of evading fulfillment of an obligation in the
normal manner.
▶ Presupposes an existing obligation, hence fraud has no effect on
the validity of the obligation since it was employed after perfection.
▶ Party employing it shall be liable for damages
According to time of commission:
a. Future fraud
▶ In relation to waiver of an action for future fraud: the waiver is
void for being against PP. (Art. 1171)
▶ Effect: debtor still liable for damages
b. Past fraud
▶ In relation to waiver of an action for past fraud: the waiver is
valid since the commission of fraud can no longer be encouraged.
▶ The waiver is an act of liberality on the part of the creditor
Grounds for liability to pay damages:
NEGLIGENCE
▶ The omission of that diligence which is required by the nature of
the obligation and corresponds with the circumstances of the person,
of the time, and of the place. (Art. 1173)
What is the degree of diligence required?
▶ Diligence of “a good father of a family” or simply Ordinary
diligence.
▶ Exception: if the law or contract state otherwise.
- Illustrations:
▶ Obligation to deliver a specific window glass: Diligence
requires that Debtor to ensure glass is well- protected when he
delivers it to the creditor. (Nature of the obligation)
▶ Obligation of a baby-sitter 21 yrs old, strong and healthy:
Diligence requires that the baby-sitter do not sleep while on duty
considering that the circumstanced of her person were considered
when she was hired for the job (Circumstances of the person)
▶ Driver of a car at night will be negligent if he drives at night
without any headlight considering that the circumstances of
nighttime requires such light. (Circumstance of time)
▶ If a car driver drives at 50 kilometers per hour along a busy
street where many people are crossing, will be considered as
negligent because the circumstances of the place requires that the
driver drives slowly (Circumstances of the place)
Different kinds:
1. Culpa contractual (Contractual Negligence)
▶ Negligence in the performance of a contract
- Example: negligence committed by a bus driver where a
passenger is hurt during the trip. (breach of contract of
carriage). Master-servant rule applies, the negligence if
the driver is the negligence of the bus owner. Defense of a
good father of a family will not apply.
2. Culpa aquiliana (Civil Negligence/ Tort/ Quasi-delict/ Culpa-
extra-contractual)
▶ These are act or omissions that cause damage to another
there being no contractual relation between the parties (Art. 2176)
▶ Master-servant rule does not apply. Hence, defense of a good
father of a family in the selection and supervision of employees
apply
▶ Example: If a pedestrian hit by the bus through the reckless
driving of the driver, the latter’s negligence is not the negligence of
the owner
3. Culpa criminal (Criminal negligence)
▶ Negligence that results in the commission of a crime. Defense
of a good father of the family is not proper because the employee’s
guilty is automatically the employer’s guilt, if the former is
insolvent (employer’s liability is subsidiary only, employer may
claim reimbursement from the employee)
▶ The passenger of the bus may bring a court action not only for
culpa contractual against the bus owner, but also one for culpa
criminal against the bus driver for physical injuries through reckless
imprudence. In the same way, the pedestrian may bring not only a
suit for culpa aquiliana against the driver and the owner, but also
one for culpa criminal against the bus driver for physical injuries
through reckless imprudence.
Grounds for liability to pay damages: DELAY OR
DEFAULT OR MORA
▶ Delay or default or mora is the non-fulfillment of an obligation
with respect to time.
Different kinds:
1. Mora solvendi – delay on the part of the debtor
▶ Ex re – delay in real obligations (obligations to give).
▶ Ex persona - delay in personal obligations (obligations to do).
2. Mora accepiendi – delay on the part of the creditor.
▶ This exists when the creditor refuses to accept the thing due
without justifiable reason.
3. Compensatio morae – delay on reciprocal obligations, i.e.,
both parties are in default. Here, it is as if there is no delay.
▶ When the debtor incurs in delay in obligations to give or to do?
General Rule: The debtor incurs in delay from the time the creditor
demands fulfillment of the obligation and the debtor fails to comply
with such demand (no demand, no delay, as a rule). The following
are the requisites of delay
1. The debtor does NOT perform his obligation on the date it is due.
2. The creditor demands the performance of the obligation.
3. The debtor does NOT comply with the creditor’s demand.
- Example: D owes C P5,000.00. The obligation is due on May 15.
If D does not pay on May 15, he is not yet in delay. But if C makes
a demand on him to pay on that date or thereafter, and D does not
comply, then D will be in delay.
▶ Exceptions, i.e., delay will exist even without demand in the
following cases (Art. 1169)
1. When the law so provides.
▶ Thus, where the law provides for the payment of penalty if the
obligation is not performed on due date (such as in the case of
taxes), then demand shall not be necessary.
2. When the obligation expressly so declares.
▶ Hence, no demand is necessary if a lease contract provides that
the rental shall be paid by the lessee within the first five days of the
month in advance “without need of demand.” (by provision of the
parties to a contract)
3. When time is of the essence of the contract.
▶ Thus, when a rent-a-car company is obliged to provide for the
bridal car during a wedding at a particular date, time and place, the
said company is liable if it fails to perform the said obligation
notwithstanding the absence of demand since time was a controlling
motive for the establishment of the contract.
▶ Exceptions, i.e., delay will exist even without demand in the
following cases (Art. 1169)(cont.)
4. When demand would be useless.
▶ Thus, the debtor will be in delay even without demand from the
creditor if the thing he is obliged to deliver has been destroyed
through his fault OR he has delivered it to another person.
5. In reciprocal obligations.
▶ Where the obligations arise out of the same cause and must be
fulfilled at the same time, from the moment one of the parties fulfills
his obligation, delay by the other begins notwithstanding the
absence of demand.
▶ NOTE: There is no delay in the obligation NOT TO DO as one
cannot be in delay for not doing something.
▶ Effects of delay
1. The debtor shall be liable for the payment of damages. (Art.
1170)
2. If obligation consists in the delivery of a determinate thing, he
shall be responsible for any fortuitous event until he has affected the
delivery. (Art. 1165)
Chapter 1: Nature and Effect of Obligations (Art. 1163-1178)
▶ Fortuitous events
1. Concept: Events that could not be foreseen, or which, though
foreseen, are
inevitable. (Art. 1174)(Act of God & Act of man)
➢ “Fortuitous” – means happening by accident or chance rather
than design (dictionary)
▶ Examples: Natural calamities or acts of God such as earthquake,
typhoon and lightning; and acts of man (“force majeure”) such as
war and armed robbery.
2. Characteristics
▶ The cause must be independent of the debtor’s will.
▶ There must be impossibility of foreseeing the event or of
avoiding it even if it can be foreseen.
▶ The occurrence of the event must be of such character as to
render it impossible for the debtor
to perform his obligation in a normal manner.
3. Liability for fortuitous events
General Rule: No person shall be liable for fortuitous events, i.e.,
his obligation will be extinguished.
Chapter 1: Nature and Effect of Obligations (Art. 1163-1178)
▶ Fortuitous events (cont.)
Exceptions to the rule (Art. 1174):
1. When the law expressly provides for liability even in case of
fortuitous events (such as that provided in Art. 1165 where the obligor
is liable for fortuitous events if he delays or has promised to deliver
the same thing to two or more persons who do not have the same
interest).
2. When the parties have declared liability even in case of fortuitous
event
3. When the nature of the obligation requires the assumption of risk
(such as an insurer who must pay the policy holder even if the loss is
caused by a fortuitous event)
Chapter 1: Nature and Effect of Obligations (Art. 1163-1178)
Presumption on receipt of principal or of later installment
(Disputable presumptions) (Art. 1176)
1. The receipt of the principal without reservation as to interest,
shall give rise to
the presumption that the interest has been paid
2. The receipt of a later installment without reservation as to prior
installments, shall
give rise to the presumption that such prior installments have been
paid
(*Disputable presumptions vs. Conclusive presumptions)
Chapter 1: Nature and Effect of Obligations (Art. 1163-1178)
▶ Remedies of creditor to enforce payment of his claims
against debtor (Art. 1177)
1. Pursue the property in the possession of the debtor, except those
exempt by law.
➢ Usually by “Attachment”.
➢ If court finds it appropriate, the property subjected attachment
shall be ordered sold and the proceeds will be
applied in payment of the obligation
2. Exercise all the rights and bring all the actions of the debtor,
except those personal to him (Accion subrogatoria)
➢ Speaks about subrogation to the rights of the creditor
➢ ie. Say A is the creditor of B for the amount of P10,000.00; and B
is the creditor of C also for P10,000.00. If A cannot collect from B
because B has no money at the moment, A may collect from C as if
A is the creditor of C, in place of B. A steps into the shoes of B as
creditor of C.
3. Impugn the acts which the debtor may have done to defraud his
creditors (Accion Pauliana)
➢ “Impugn” – To dispute/question the validity of an action
(Dictionary)
➢ ie. Say D in indebted to C for P500,000.00. Say that D has no
sufficient cash with him and to prevent C from
collecting from D (by requiring D to sell his property and apply the
proceeds in payment of his obligation), D sold to B (who knows of
the fraudulent intention by D) his property.
➢ Here C may impugn the act of D selling his property to B in
order to rescind/cancel such sale. Thereafter, C may have the
property sold and apply the proceeds in payment of the obligation.
Chapter 1: Nature and Effect of Obligations (Art. 1163-1178)
▶ Rule of transmissibility of rights and exceptions thereto (Art.
1178)
▶ General Rule: All rights acquired in virtue of an obligation are
transmissible
▶ ie. A creditor may assign his credit to a third person or such
right is transmitted to his heirs upon death
▶ Exceptions:
1. If the law prohibits the transmission of the right
➢ Rights of general partners
➢ The right of a spouse cannot be transferred to another person
2. If parties agreed (stipulated) against transmission
➢ A lease contract which includes a stipulation of non-transmission
of rights to use the property. If the lessee dies during the pendency
of the lease, his heirs cannot may use of the property.
3. If the right by nature is not transmissible
➢ Scholarship grants