Obligations and Contracts
G r a v a d o r
General Provisions
Concept
ARTICLE 1156. An obligation is a juridical necessity to give, to do or not to do.
Obligation
- judicial necessity to give, to do or not to do;
- a tie of law or a juridical bond by virtue of which one
is bound in favor of another to render something
(giving a thing, doing a certain act, or not doing a
certain act)
- moral or legal; distinguish based on basis of
consequence for non-compliance
๏ Juridical Necessity — in case of noncompliance,
there is a legal sanction
‣ Moral obligation - in case of non-compliance,
there will be no sanctions imposed at least from
civil law authorities; only answerable to your
conscience; you cannot be sued on the basis of
this
‣ Legal obligation - there are legal sanctions for
non- compliance such as being sued in court;
aggrieved party can always go to court to compel
you to perform obligation; you are answerable to
the court
‣ Natural obligation - the middle ground; obligation
which at the outset is not a source of a legal right,
but in case the obligor voluntarily complies with
the obligation, it authorizes the retention of what
has been voluntarily delivered
— Example: Debt is due and demandable now. If
creditor collects the debt within 10 years from
now, that is a legal obligation because within
that period, you can be sued for compliance.
But if creditor fails to collect within that period
and allow that to lapse (prescription period
lapses), like he collect 15 years from now,
debtor cannot be held liable anymore under the
law because the debt has prescribed.
— Next scenario: Debtor knows that he is no
longer liable, and he still voluntarily complies
with the obligation/pays the debt. Later he
decides to file a case to recover the debt he
paid since he alleges he was not already
required to pay, he cannot recover anymore.
He cannot recover what he voluntarily paid.
Essential requisites of an obligation
(1) Passive subject (debtor or obligor) — person bound
to the fulfillment of the obligation;
(2) Active subject (creditor or obligee) — person
entitled to demand the fulfillment of the obligation;
(3) Object or prestation (subject matter of obligation) —
the conduct required by the debtor ; may be giving,
doing, or not doing
(4) Juridical or legal tie (efficient cause) — binds or
connects the parties to the obligation; determined
by knowing the source of the obligation
Forms of Obligations
- manner in which an obligation is incurred; may be
oral or in writing, partly oral or partly writing
(1) General Rule: Law does not require any form in
obligations arising from contracts for their validity
or binding force.
(2) Obligations arising from other sources do not have
any form at all.
SUAN
A t t y.
๏ Cause of Action
- an act or omission of one party in violation of the
legal right or rights of another, causing injury to
the latter
Sources of Obligations
ART. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
The enumeration by the law is exclusive; hence, there is
no obligation as defined in Article 1156, if its source is
not any of those enumerated.
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 fore- seen, by the provisions of this Book.
ART. 1159. Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith.
ART. 1160. Obligations derived from quasi-contracts shall be subject to the
provisions of Chapter 1, Title XVII of this bk
ART. 1161. Civil obligations arising from criminal offenses shall be
governed by the penal laws, subject to the provisions of Article 2177, and of
the pertinent provisions of Chapter 2, Preliminary Title on Human Relations,
and of Title XVIII of this Book, regulating damages.
ART. 1162. Obligations derived from quasi-delicts shall be governed by the
provisions of Chapter 2, Title XVII of this Book, and by special laws.
(1) LAW
- imposed by law itself.
- must be categorical/clear enough as to create no
doubt on the obligation
- obligations arising from law
- 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
- Special laws — refer to all other laws not contained
in the Civil Code.
❖ Example: No law requiring owners of big malls to
provide free parking; law imposing taxes;
(2) CONTRACT
- source of an obligation because when one agrees
to a contract, he is binding himself to do/give
something; meeting of the minds between two
persons where one binds himself with respect to
the other to render some service
- meeting of minds between two persons whereby
one binds himself, with respect to the other, to
give something or render some service
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Obligations and Contracts
(1) Binding force – Once a contract between
contracting parties are perfected, they have the
force of law between the parties who are bound to
comply therewith in good faith, and neither one may
without the consent of the other, withdraw.
(2) Requirements of a valid contract. — A contract is
valid if it is not contrary to law, morals, good
customs, public order, and public policy. It is invalid
or void if it is contrary to law, morals, good
customs, public order, or public policy. In the eyes
of the law, a void contract does not exist, therefore,
no obligations will arise.
(3) Where contract requires approval by the
government. — Where a contract is required to be
verified and approved by the government before it
can take effect, such contract becomes the law
between the contracting parties only when
approved.
(4) Compliance in good faith. — compliance or
performance in accordance with the stipulations or
terms of the contract or agreement. Good faith and
fair dealing must be observed to prevent one party
from taking unfair advantage over the other.
(5) Liability for breach of contract. — A party cannot
breach it with impunity. Actionable injury inheres in
every contractual breach. Parties may be awarded
damages for breach of contract
(6) Unreasonable delay in demanding performance —
Failure a par ty to a contract to demand
performance of the obligation for an unreasonable
length of time may render the contract ineffective.
(7) Preservation of interest of promisee. — Breach of
contract confers upon the injured party a valid
cause for recovering that which may have been lost
or suffered which has remedy to preserve the
interest of the promisee of having the benefit of his
bargain, or reimbursed or restored any benefit
Proving damages from contract is easy. Prove:
a) a contract,
b) there was a breach.
Hence, it is difficult for defendant to defend his case
Generally, there is no contract in obligations arising from
quasi-delict. Any damage resulting if there is a contract
can only be based on obligation arising from contract &
not quasi-delict (PSBA vs CA).
— HOWEVER, even when there is a contract,
one can still file for quasi-delict if the act that
breaks the contract is a negligent act or a
tortuous act, like an employee asking a
passenger to vacate seat in a plane because he
is colored
(3) QUASI-CONTRACT
- it is similar to a contract; but here, the law only
presumes there is a contract (but there really is
no contract)
- 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.
SUAN
A t t y. G r a v a d o r
Contract Quasi-contract
there is meeting of minds or no consent but supplied by fiction of law;
consent; parties must have law considers parties as having entered
deliberately entered into a formal contract, irrespective of intention, to
agreement prevent injustice
there is a contract there is no preexisting contractual relation.
Kinds of Quasi-contracts
(1) Negotiorum Gestio — unauthorized or voluntary
management of affairs, without consent, but certain
benefits go to one of the parties. The one benefitted
has obligation to reimburse.
❖ EXAMPLE: Spending funeral expenses for
someone who is not a relative; but he has right to
be reimbursed by the persons responsible
(2) Solutio indebiti — obligation to return what has been
mistakenly delivered
❖ EXAMPLE: You forgot to return change
(4) DELICT
- acts or omissions punished by law; made
punishable by the RPC; source of the liability is
crime; one criminally liable is also civilly liable
Two kinds of acquittals and civil liability:
(1) Acquittal based on reasonable doubt — there is
still civil liability, though no criminal liability. The
source of liability here is the crime (still). A crime
was committed but the accused was not the one
responsible, hence, no criminal liability for him.
Here, you can even be charged twice for civil
liability: from crime and quasi-delict
(2) Acquittal because the fact on which the crime is
based does not exist — no civil liability arising
from crime because there was no crime committed
at all. However, it does not follow that there is no
civil liability at all. Still, even if there is no crime and
there was damage that resulted, one can still be
charged for civil liability arising from quasi-delict (as
long as you can prove there was negligence)
Criminal Liability includes:
(1) RESTITUTION – restoration of property previously
taken away; the thing itself shall be restored, even
though it be found in the possession of a third
person who has acquired it by lawful means, saving
to the latter his action against the proper person
who may be liable to him.
(2) REPARATION OF THE DAMAGE CAUSED – court
determines the amount of damage: price of a thing,
sentimental value, etc.
(3) INDEMNIFICATION FOR CONSEQUENTIAL
DAMAGES– includes damages suffered by the
family of the injured party or by a third person by
reason of the crime.
Rule on reservation of civil actions
- There is a need to reserve if it is a civil liability
arising from crime, but if it is civil liability which is
independent civil action, there is no need to
reserve
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Obligations and Contracts A t t y. G r a v a d o r

(5) QUASI-DELICT
- obligation arising from voluntary acts and damage
results because of negligence; not purely delict EXAMPLE: Riding a Taxi
- is an act or omission by a person (tort feasor) which
Contract of carriage exists between the passenger &
causes damage to another in his person, property, the operator;
or rights giving rise to an obligation to pay for the — There would be a violation if you are not brought to
damage done, there being fault or negligence but your destination.
— Hence, the source of the obligation for such violation
there is no pre-existing contractual relation is one arising from contract
Contract
between the parties
- also known as TORT Against the operator
— The contract with the operator is that the passenger
should be taken to his destination safely as far as
❖ Example: the case in Crim where people brought a human foresight would allow
torch to an overturned bus and it burned
Against the driver
— Driver drove negligently (there was damage to you/
Requisites of quasi-delict: passenger), so if there is a crash from the negligence,
there is an obligation arising from quasi-delict
(1) act or omission by the defendant;
(2) fault or negligence of the defendant; Quasi-Contract Against the operator
— There is negligence on his part to exercise due
(3) damage caused to the plaintiff; diligence/diligence of a good father of a family or
(4) a direct relation or connection of cause and effect ordinary diligence in the selection & supervision of
his employees
between the act or omission to the damage; and — You as operator are responsible for any negligent act
(5) no pre-existing contractual relation between the committed by the employee (driver)
parties
Against the driver
— Reckless imprudence resulting to homicide
— Serious physical injuries/less serious/slight;
Crime or Delict Quasi-delict — may also be against the operator when the driver
is insolvent;
there is criminal or malicious intent or
there is only negligence
criminal negligence Against the operator
Delict/Crime
— Operator has subsidiary liability;
affects public interest concerns private interest — There is no denial of due process to operator because
operator is still given time to prove:
there are generally two liabilities: 1. Driver is employee;
there is only civil liability 2. Damage was inflicted in the course of
criminal and civil
employee’s performance of functions.
— Operator should provide very good counsel to driver
the purpose is punishment indemnification of the offended party

Criminal liability can not be Liability for quasi-delict can be

compromised or settled by the parties compromised as any other civil
themselves liability Under jurisprudence: The list of sources is exhaustive.
If source is not among these, it is only probably a moral
fault or negligence of the defendant
guilt of the accused must be proved obligation and hence, cannot be a cause of action. It
need only be proved by
beyond reasonable doubt preponderance of evidence is not a legal obligation. Many criticisms have been
given to this restrictive rule.
liability of the person responsible for
liability of the person responsible is
the author of the negligent act or
direct and primary
omission is subsidiary ❖ Example: Coca Cola giving away promotions and
not being true to the promotion
Defenses available to defendant: - there may be a legal obligation but not under
the civil code, it may be a violation of a DTI
a) Defendant can claim it was an accident order only or the Consumer’s Act (case has
! it’s very difficult here for complainant to not yet been decided)
prove that indeed there was negligence - But in this example, cannot be a contract
on part of driver because there was no previous acceptance/
b) Operator can claim he exercised diligence of a meeting of minds (only unilateral)
good father of a family/ordinary diligence in the - When you file a case, you should have a
selection of his employees cause of action/proper legal basis. Do not
! but in contract of carriage, extraordinary abuse your prerogative/right to file a case
diligence is required (Ayg pasagad ug file ug kaso na wai klaro!),
you can be counterfiled (Uypitching case)
❖ Example: Amadora vs CA, the parents were not
given anything/damages. The school & teacher Do not equate contract with obligation, because
were not responsible; able to prove there was no contract is only one of the sources of an obligation. In
negligence. There were many defenses here. obligations arising from contracts, parties can stipulate
just about anything. These are valid, and the only
condition is that the stipulations must not contravene
law, public policy, morals, good customs.

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CASES
6. With a Penal Clause (Arts. 1226-1230)
1. Mangonon vs. CA G.R. No. 125041 June 30, 2006
- when there is a breach of the obligation, there is
2. PSBA vs. Court of Appeals G.R. No. 84698 January
already a built-in penalty clause
4, 1992
3. YHT Realty Corporation vs. Court of Appeals G.R.
No. 126780 February 17, 2005 SECONDARY CLASSIFICATIONS
4. Manliclic et.al. vs. Calaunan G.R. No. 150157
1. Legal (Art. 1158); Conventional (Art. 1159); Penal
January 25, 2007
(Art. 1161)
5. Barredo v. Garcia 73 Phil. 607
6. Mendoza vs. Arrieta 91 SCRA 113
2. Real (to give) and Personal (to do or not to do)
7. PSBA vs. CA 205 SCRA 729
• Real — obligation to give; no obligation not to give
8. Amadora vs. CA 160 SCRA 315
• Personal — obligation to do or not to do

Classifications 
 3. Determinate and Generic (as to subject matter)

of Obligations
PRIMARY CLASSIFICATIONS
1. Pure and Conditional (Arts. 1179 - 1192)
• Pure – not subject to any condition; demandable at
once
• Conditional – there are conditions attached to the
obligation; demandability depends on condition;
future and uncertain event
□ Suspensive – suspends the demandability of
the obligation; happens when condition
happens
□ Resolutory – demandable at once but
extinguished upon occurrence of obligation
2. With a Period or Term (Arts. 1193 - 1198)
- future but certain event; example: until the death
of your father
3. Alternative and Facultative (Arts. 1199-1206)
• Alternative — there are several prestations
available; example: you can deliver house or give
amount of 1 million; many but can choose only
one
• Facultative — one prestation available but
capable of being substituted; here there is only
one prestation but you can substitute
• Determinate — specifically designated; if
fortuitous event happens, obligation is
extinguished
• Generic — not designated, only the kind and
quality are given; if fortuitous event happens,
obligation not extinguished
4. Positive (to give, to do) and Negative (not to give,
not to do)
• Positive — obligation to do or to render service
• Personal — obligation not to do (which naturally
includes obligations “not to give”)
5. Unilateral and Bilateral
• Unilateral — only one person is obliged
• Bilateral — reciprocal obligations
6. Individual and Collective
7. Accessory and Principal
• Accessory — does not have a life of its own;
❖ EXAMPLE: Mortgage obligation cannot stand
without a loan obligation (which is the
principal obligation, does not depend on the
mortgage)
• Principal — can stand by itself, like the loan
obligation

8. As to object or prestation:
4. Joint and Solidary (Arts. 1207-1222)
• Simple/Multiple
• Joint — there are several debtors and several
• Conjunctive/Distributive
creditors; each to his own
- Each creditor is entitled to demand only • Alternative/Facultative
the payment of his proportionate part of
the credit, while each of the debtors is 9. Possible and Impossible
liable only for the payment of his
proportionate part of the debt
• Solidary — there are several debtors and several
creditors (still); all for one, one for all; debt of one,
debt of all
❖ EXAMPLE: You become a co-maker and even
if you do not get proceeds but your co-maker
cannot pay, it’s as if you were the one who
got the debt and you would be made liable
for entire debt
- Each creditors is entitled to demand the
payment of the entire credit, while each
of the debtors is liable for the payment of
the entire debt

5. Divisible and Indivisible (Arts. 1223-1225)

• Divisible — susceptible of partial performance
• Indivisible — not susceptible of par tial
performance full compliance

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Nature and Effects 
 ART. 1164. The creditor has a right to the fruits of the thing from the time the
obligation to deliver it arises. However, he shall acquire no real right over it
of Obligations until the same has been delivered to him.

Kinds of Prestation
Different kinds of fruits
OBLIGATION TO GIVE (1) Natural Fruits — spontaneous products of the soil,
and the young and other products of animals
ART. 1163. Every person obliged to give something is also obliged to take care ❖ EXAMPLE: grass; trees and plants on lands
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. without the intervention of human labor
(2) Industrial Fruits — produced by lands of any kind
through cultivation of labor
๏ Specific or Determinate — it is particularly ❖ EXAMPLE: sugar cane, vegetables, rice, products
designated or physically segregated from all others of lands brought by human labor
of the same class (3) Civil Fruits — are those derived by virtue of juridical
❖ EXAMPLE: “The watch I am wearing.” “The car
relation
sold by X.” “The Toyota car with Plate No. AAV ❖ EXAMPLE: rents of buildings, price of lease
344.” “My dog named “Terror.”
When obligation to deliver arises
๏ Generic or Indeterminate — refers only to a class or
genus to which it pertains and cannot be pointed out (1) From the time of perfection of the contract; birth of
with particularity the contract or the meeting of the minds
❖ EXAMPLE: a Bulova calendar watch; a police dog; (2) If the obligation is subject to suspensive condition or
a cavan of rice; a cavan of rice period, it arises upon fulfillment of condition or
arrival of the period
(3) In a contract of sale, the obligation arises from the
Specific Generic perfection of the contract
(4) In arising from law, quasi-contracts, delicts, and
- identified by its individuality - identified only by its specie quasi-delicts, it is determined by the specific
- debtor cannot substitute it with - debtor can give anything of the
another although the latter is of same class as long as it is of the provisions of law applicable.
the same kind and quality without same kind.
the consent of the creditor
๏ Personal Right — right of the creditor to demand from
the debtor, as a definite passive subject, the
❖ EXAMPLE: If D’s obligation is to deliver to C a fulfillment of the latter’s obligation to give, to do, or
Bulova calendar watch, D can deliver any watch not to do.
as long as it is Bulova with calendar. 
 ๏ Real Right — right or interest of a person over a
specific thing (like ownership, possession, mortgage,


lease record) without a definite passive subject
But if D’s obligation is to deliver to C a particular
against whom the right may be personally enforced.
watch, the one D is wearing, D cannot substitute
it with another watch without C’s consent nor can
C require D to deliver another watch without D’s Personal Right Real Right
consent although it may be of the same kind and
value. there is a definite active subject and a there is only a definite active subject
definite passive subject without any definite passive subject

Duties of debtor in obligation to give a binding or enforceable only against a

particular person directed against the whole world
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; ART. 1166. The obligation to give a determinate thing includes that of
delivering all its accessions and accessories, even though they may not have
(4) To deliver the thing itself; and
been mentioned.
(5) To answer for damages in case of non-fulfillment or
breach
๏ Accessions — fruits of, or additions to, or
Obligation to take care of the thing due. improvements upon, a thing (the principal)
❖ EXAMPLE: house or trees on a land; rents of a
(1) Diligence of a good father of a family
building; airconditioner in a car;
(2) Another standard of care ๏ Accessories — things joined to, or included with, the
(3) Factors to be considered thing for latter’s embellishment, better use, or
(4) Reason for debtor’s obligation completion
❖ EXAMPLE: key of a house; frame of a picture;
Duties of debtor in obligation to deliver a generic bracelet of a watch; machinery in a factory; bow
thing. of a violin
(1) To deliver a thing which is of the quality intended by
the parties taking into consideration the purpose of GENERAL RULE: All accessions and accessories are
the obligation and other circumstances considered included in the obligation to deliver a
(2) To be liable for damages in case of fraud, determinate thing although they may not have been
negligence, or delay, in the performance of his mentioned
obligation, or contravention of the tenor — EXCEPTION: Unless otherwise stipulated

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OBLIGATION TO DO (ART. 1244)

3. Delay
ART. 1167. If a person obliged to do something fails to do it, the same shall be - delay must be must be either malicious or negligent
executed at his cost.
4. Contravention of the Tenor
This same rule shall be observed if he does it in contravention of the tenor of
- violation of the terms and conditions stipulated in
the obligation. Furthermore, it may be decreed that what has been poorly done
the obligation.
be undone.
- must not be due to a fortuitous event or force
majeure
Refers to an obligation to do, i.e., to perform an act or
render a service. It contemplates three situations: BREACH OF CONTRACT
(1) The debtor fails to perform an obligation to do; or - failure without justifiable excuse to comply with the
(2) The debtor performs an obligation to do but contrary terms of a contract
to the terms thereof; or - failure, without legal excuse, to perform any promise
(3) The debtor performs an obligation to do but in a poor which forms the whole or part of the contract
manner.

FRAUD NEGLIGENCE
OBLIGATION TO DO
1. Debtor’s failure to perform an obligation Deliberate intention to cause damage
or injury There is no such intention
(a) creditor may do the obligation, or by another, at
the expense of the debtor; Waiver of the liability for future fraud is Such waiver may, in a certain sense, be
(b) recover damages void allowed in negligence
2. Performance was contrary to the terms agreed upon
Must be clearly proved, mere
(a) order of the court to undo the same at the Is presumed from the breach of a
preponderance of evidence not being
expense of the debtor contractual obligation;
sufficient
3. Performance in a poor manner
Liability for fraud cannot be mitigated Liability for negligence may be reduced
(a) order of the court to undo the same at the by the courts according to the circumstances
expense of the debtor
Both are voluntary, that is, they are committed with volition
• In an obligation to do, in case of non-compliance,
obligor cannot be forced to comply because this will a party, by his voluntary execution of a
violate constitutional right against involuntary wrongful act, or a willful omission,
knows and intends the effects which
servitude. However, there is still liability naturally and necessarily arise from
• If something is done poorly or not in accordance with such act or omission which deliberate
the contract, it can be undone at his expense intent is lacking in negligence

• Always remember damages; damages can be given in

either case

MODES OF BREACH
OBLIGATION NOT TO DO (ART. 1244)
1. F r au d
ART. 1168. When the obligation consists in not doing, and the obligor does
what has been forbidden him, it shall also be undone at his expense. ART. 1171. Responsibility arising from fraud is demandable in all obligations.
Any waiver of an action for future fraud is void.

OBLIGATION IN NOT DOING

1. Undone at his expense • Can be a mode of committing Estafa; done through
swindling
2. IF not possible, action for damages

WAIVER OF FUTURE FRAUD

Breach of Obligation • Fraud may be past or future.
• A waiver of an action for future fraud is void (no effect,
CONCEPT as if there is no waiver) as being against the law and
public policy
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. WAIVER OF PAST FRAUD
• Past fraud can be the subject of a valid waiver
because the waiver can be considered as an act of
- Contemplates that the obligation was eventually generosity and magnanimity on the part of the party
performed but the obligor is guilty of breach who is the victim of the fraud.
- Breach of the obligation is voluntary • What is renounced is the effects of the fraud — the
right to indemnity of the party entitled
1. Fraud
- deliberate or intentional evasion of the normal KINDS OF FRAUD
fulfillment of an obligation 1.Fraud in the Performance of obligation – this is
the fraud referred to in 1170; presupposes there is
2. Negligence already obligation arising from contract; nothing
- any voluntary act or omission, there being no wrong in securing consent; contract is perfectly fine
malice, which prevents the normal fulfillment of an — Remedy:
obligation Damages (and even criminal liabilities)

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- Damages grounded only on the natural and

2. Fraud in the Execution/ Creation/ Birth of
Contract – the fraud here is to secure consent/ so
other party may enter into contract with you; no
contract yet; makes contract voidable; can be causal
or incidental fraud; affects existence of contract
— Remedy:
Annulment of contract
probable; can include actual damages e.g. loss of
earning capacity
3.Criminal Negligence (Culpa Criminal)
- Negligence resulting in the commission of a crime
- May produce civil liability arising from a crime
- Create an action for quasi-delict

Woodhouse vs Halili CULPA CONTRACTUAL CULPA AQUILIANA

□ Fraud here was incidental fraud; did not prevent
the meeting of minds An employer or master may excuse This defense is not available if the
himself under the last paragraph of liability of the employer or master
Article 2180 by proving that he had arises from a breach of contractual
2 . N e gl ige nc e exercised “all the diligence of a good duty (culpa contractual) though this
father of a family to prevent the may mitigate damages
damage.” It is a complete defense.
ART. 1172. Responsibility arising from negligence in the performance of every
kind of obligation is also demandable, but such liability may be regulated by
the courts, according to the circumstances.
❖ EXAMPLE: Where the injury is due to the
concurrent negligence of the drivers of the
colliding vehicles
ART. 1173. The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and - Drivers and owners — primarily, directly and
corresponds with the circumstances of the persons, of the time and of the solidarily liable for damages
place. When negligence shows bad faith, the provisions of Articles 1171 and - it is immaterial that one action is based on
2201, paragraph 2, shall apply. quasi-delict and the other on culpa
contractual as the solidarity of the obligation
If the law or contract does not state the diligence which is to be observed in is justified by the very nature thereof.
the performance, that which is expected of a good father of a family shall be
required.
Sarmiento vs Spouses Cabrido
□ Case of negligence on the part of a jeweler in
• Omission of that diligence which is required by the dismounting diamond from a ring
nature of obligation and corresponds with the □ Negligence here is culpa contractual, because
circumstances of the persons, time and place. there was a contract; negligence arising from
• Failed to exercise the prudence demanded by the contract; damage suit from culpa contractual
circumstances □ Duty of plaintiff to prove negligence; show
• Difference: Source of liability here from negligence is industry standard in how to dismount diamond
contract; in quasi-delict, source of negligence is not
contract but the quasi-delict Crisostomo vs CA
□ Case of culpa contractual
VALIDITY OF WAIVER □ Plaintiff contended that the agency was a common
(1) An action for future negligence (not fraud) may be carrier; significance of this lies in the degree of
renounced diligence required
— EXCEPT: □ Common Carrier – business engaged with the
Nature of the obligation requires the exercise public in transporting goods to a specific
of extraordinary diligence as in the case of destination; extraordinary diligence is necessary
common carriers. (periodic maintenance, seminars, etc.)
(2) Negligence is gross or shows bad faith, it is □ Travel Agency – not a common carrier; only
considered equivalent to fraud. Any waiver of an diligence of a good father (basta mudagan lang
action for future negligence of this kind is void. ang sakyanan!)
□ She wanted to allege that agency had to exercise
KINDS OF NEGLIGENCE extraordinary diligence, but it was not a common
1. Culpa Aquiliana (Civil Negligence) carrier
- Negligence in Quasi-Delict
- There is no contract that binds the parties & HOW TO DETERMINE TYPE OF DILIGENCE
negligence happens REQUIRED
- Defense of a good father available - Determine how the others observe diligence; the
nature of the obligation
- All damages attributable to the incident may 

be asked; relief is broader; includes everything
such as actual, moral, exemplary damages DEFENSE IN NEGLIGENCE CASES
- Negligence which by itself is the source of an - The proximate cause of the accident/negligence is the
obligation act of the plaintiff himself
- Show cause of damage was negligence of plaintiff
himself
2. Culpa Contractual (Contractual Negligence)
- Negligence in the performance of an obligation/
contractual negligence 3 TYPES OF STIPULATIONS WITH REGARD TO
- This kind of negligence is not a source of obligation. NEGLIGENCE (CONTRACTUAL ONLY) WHICH
- There is a contract here but the negligence is the ARE ILLEGAL
same negligence in culpa aquiliana (1) N o t l i a b l e f o r a n y n e g l i g e n c e u n d e r a n y
circumstance 
- Defense of a good father not available here

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Obligations and Contracts A t t y. G r a v a d o r

(2) Limiting the amount that may be recovered
(3) Contract of adhesion if the conditions are too onerous
which leave the contracting party with no choice 
 breach of obligation; need to prove that there
*when asked if contract of adhesion is valid or not –
make a qualification (if the contract is onerous or
with choice)
GROSS NEGLIGENCE
- Negligence characterized by want or absence of or
failure to exercise even slight care or diligence, or
the entire absence of care, acting or omitting to act
on a situation where there is a duty to act, not
inadvertently but willfully and intentionally
DETERMINING WHETHER A PERSON IS
NEGLIGENT
(1) Reasonable care and caution expected of an ordinary
prudent person
(2) No hard and fast rule for measuring degree of care
FACTORS TO BE CONSIDERED
(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, sleeping
while on duty is guilty of negligence;
(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 traffic is always heavy is
gross recklessness.
DILIGENCE
- 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
diligence required of common carriers); and
(3) if both the contract and law are silent, then the
diligence expected of a good father of a family
(par. 2.) or ordinary diligence
3. D e l ay
๏ Legal Delay (Default) – failure to perform an
obligation on time which failure, constitutes a
was demand
IN AN OBLIGATION NOT TO DO
- Non-fulfillment may take place but Delay is
impossible for the debtor fulfills by not doing what
has been forbidden him.
KINDS OF DELAYS
(1) MORA SOLVENDI
- delay on the part of the debtor to fulfill his
obligation;
— REQUISITES:
1. Failure of the obligor to perform obligation on
the DATE agreed upon;
2. Demand (judicial/extrajudicial) by the
creditor;
3. Failure to comply with such demand
— EFFECTS:
1. Debtor – guilty for breach of the obligation
2. Debtor – liable for damages and interests
3. Debtor – liable for the loss of a thing due to a
fortuitous event
(2) MORA ACCIPIENDI
- delay on the part of the creditor to accept the
performance of the obligation;
— EFFECTS:
1. Creditor – guilty for breach of the obligation
2. Creditor – liable for damages
3. Creditor – bears the risk of loss of the thing
4. Debtor – not liable for interest from the time of
creditor’s delay
5. Debtor – release himself from the obligation
(3) COMPENSATIO MORAE
- delay of the obligors in reciprocal obligation.
- both creditor and debtor are at fault or delay
— EFFECTS: the default of one compensates the
default of the other; their respective liabilities shall
be offset equitable.

ART. 1169. Those obliged to deliver or to do something incur in delay from the
time the obligee judicially or extra-judicially demands from them the GENERAL RULE: There must be a demand.
fulfillment of their obligation. No demand, no delay.

However, the demand by the creditor shall not be necessary in order that delay — EXCEPTIONS:
may exist: (1) Time is of the essence
(1) When the obligation or the law expressly so declares; or
(2) When from the nature and the circumstances of the obligation it
- time is the controlling motive
appears that the designation of the time when the thing is to be - the debtor knows what the obligation is for and
delivered or the service is to be rendered was a controlling motive for time is a factor
the establishment of the contract; or ❖ EXAMPLE: A wedding gown not delivered on
(3) When demand would be useless, as when the obligor has rendered it time
beyond his power to perform.

In reciprocal obligations, neither party incurs in delay if the other does not (2) When the law so provides/When the
comply or is not ready to comply in a proper manner with what is incumbent obligation so provides
upon him. From the moment one of the parties fulfills his obligation, delay by - Not enough that you put date/deadline; there
the other begins. must be “without need of prior demand”.
- If no such phrase, debtor can only be in
๏ Ordinary Delay — failure to perform an ordinary delay
obligation on time ❖ EXAMPLE of law expressly stating: Law on
taxation setting date of payment

SUAN P a g e 8 o f 13
Obligations and Contracts
❖ EXAMPLE of obligation expressly stating:
 • Malicious or negligent violation of the terms and
There is a specific: “without need of prior
demand”
(3) When demand would be useless
- Fortuitous event
- If Specific Thing — demand is useless
because the specific thing is lost already;
debtor is excused
(4) When debtor already gave the thing to
another person who is innocent
(5) Reciprocal Obligation
- Neither party incurs delay when the other is
not ready to comply with what is incumbent
upon him
- Both can be in delay here (compensation
morae)
- How to show readiness (in complying with
his corresponding obligation) – file for
specific performance
❏ Need not literally bring money to the court
to show that you are ready to comply with
your obligation; just state on the record
that you are ready
WHO CAN BE GUILTY OF DELAY?
1. Debtor (discussed above)
2. Creditor
- Fails to accept the performance of the obligation
- REMEDY:
(1) tender of payment then
(2) consign the money in court
- PURPOSE: To be absolved from the obligation
- CONSEQUENCE: if you will not follow is that you
will keep paying interest
VALID REASONS FOR THE CREDITOR NOT TO
ACCEPT:
1. Manager’s Check is not legal tender
- Creditor is justified not to accept something that
is not a legal tender
2. No payment in full
- Delay of the obligors in reciprocal obligation
BP22 – when the check bounced
• the debtor can inform the creditor – no delay yet
• delay only after the creditor demands
• debtor has 5 days
EJECTMENT – can only be had if there is a failure to pay
after the demand within the period given (Cetus Case)
• If there is payment within the period, there is no
cause of action
• If payment is still given after the period given -
invalid
4 . C o nt r ave nt ion of t he T enor
- (terms of contract)
- violation in any manner; any kind of defective
performance
• Any illicit act, which impairs the strict and faithful
fulfillment of the obligation or every kind of defective
performance
SUAN
A t t y. G r a v a d o r
conditions stipulated in the obligation
• Must not be due to fortuitous event or force majeure,
otherwise there would be no liability
• Immaterial whether or not the debtor is in bad faith or
negligent, what is required is that it is his fault or the
act done contravenes their agreement
• Fixing a period to comply with obligation is not always
necessary; period can be determined by the nature
of the obligation since there is no express standard
here; go by the industry standard; reasonable time
(so it is not practical to go to court just to fix period
for a typewriter) (Chavez)
CATCH-ALL PHRASE:
- If you are not sure if breach was delay, negligence,
fraud, contravention can be used as ground
Telefast vs Castro
□ Telegram company did not send telegram on time;
family was not able to attend the burial
□ Example of contravention
Arrieta vs NARIC
□ There was a requirement that before bank
approved letter of credit, there must be a
marginal deposit, which was not complied and
import quota was not also released
□ SC ruled that it was the fault of NARIC since it did
not comply with marginal deposit
□ [difficult case to understand but if you can’t
understand, then I’m sorry! – Atty G]
Remedies of Creditor 

in case of Breach
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.
If the obligor delays, or has promised to deliver the same thing to two or more
persons who do not have the same interest, he shall be responsible for any
fortuitous event until he has effected the delivery.
REMEDIES of creditor in real obligation
Specific performance, rescission, damages, OR specific
performance + damages, rescission + damages,
damages
(1) Specific Real Obligation/Principal Remedies
(obligation to deliver a determinate thing) — can be
availed of by aggrieved creditor
(a) Specific Performance
(b) Damages
(c) Rescission or Cancellation
(2) Generic Real Obligation/Subsidiary Remedies
(obligation to deliver a generic thing) — may be
performed by a third person since object is
expressed according to its family or genus; not
necessary to compel the debtor.
(a) right to recover damages
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Obligations and Contracts
• Question: Would it be correct to say that if there is
Literal/slightest Breach of Contract, cause of action
automatically arises or it can result to rescission
already?
Answer: No, it depends on the nature of the
violation.
‣ Slight breach — court here can still give the
debtor a period to comply with obligation; e.g.
when 90% of payments have been paid & debtor
was only in delay for 5 days, no rescission
‣ Substantial breach — this is the type that warrants
rescission as a remedy plus damages; must be
grave enough; not enough to say that there was a
violation
Primary Remedies
ACTION FOR SPECIFIC PERFORMANCE
Obligation to give specific thing
- ask the court to compel the debtor to comply with
this obligation/make the delivery
Demand specific performance with a right of
indemnity for damages
- can only compel debtor to deliver the thing; thing
has not yet been delivered and the ownership
has not yet transferred
Specific performance — Personal right creditor only has
personal right over a thing pending its delivery when
case is filed, it is against the debtor
QUALIFICATION:
• Only available in Obligation to Give (cannot be
availed in Obligation to Do); might amount to
involuntary servitude
REMEDIES IF SPECIFIC PERFORMANCE NOT
AVAILABLE:
• Action for substituted performance
- may be in the form of:
□ Reimbursement and damages
□ Damages only
• Substituted performance
- a third person can do the obligation for the creditor
❖ EXAMPLE: Another architect can do the
design but at the expense of the first
architect
• Action for undoing of poor work
- Undo what was poorly done
- To compel debtor to undo what was poorly done;
but if he refuses, he cannot be coerced
(involuntary servitude); then you can resort to
other possibilities (discussed below)
■ How to undo a poor work?
- Ask the court for an order of undoing poor
work at expense of debtor, then execute
the order like destroying a poor house
in totality and build another one (money
is not a question!)
- Another possibility of undoing, engage the
services of another person to do the
task of the previous debtor (contractor),
so new contractor will build another
house; commission another person at
the expense of the debtor
SUAN
A t t y. G r a v a d o r
DISTINGUISHED FROM RECOVERY OF
OWNERSHIP (REAL RIGHT)
• The right of the creditor over a thing becomes a real
right when it is delivered & ownership is transferred;
this is done through delivery of a public document
❖ EXAMPLE: Land — delivered when debtor gives to
creditor the deed of sale
- it is the right over the specific thing (do not use
right against “whole world” because that is
different)
- Remedy: not limited to specific performance; you
can file for recovery of ownership if there is a
violation of your right
• If not yet delivered,
- you can only ask for specific performance;
- you cannot file for ejectment when there is no
delivery yet.
- when there was no delivery yet & the seller sold it
to someone else (double sale), only feasible
remedy is specific performance; not recovery of
ownership because you do not have ownership
in the first place
• So make a distinction between specific performance
and the recovery of thing
Cases:
Tanguilig vs. CA 266 SCRA 78
Chavez vs. Gonzales 32 SCRA 547 

ACTION FOR DAMAGES (ART. 1170)
Demand payment of damages only
- an action solely for damages in case of breach
ACTION FOR RESCISSION (ART. 1191-
1192)
• To put an end to the contract; as if contract did not
exist; available in a Reciprocal Obligation (parties
are both creditor and debtor to each other)
• There must be a violation of the contract before
rescission can be availed of – the creditor may
choose:
□ Rescission with damages
□ Fulfillment of the obligation with damages
Demand recession or cancellation with a right to
recover damages
- Right to Rescind – putting an end to the contract
but there is duty to return
- Creditor must state in the contract that in case of
non-payment, previous payments are forfeited. If
this is not stipulated, creditor would be obliged
to return when there is rescission
- There must be a judicial decision/cour t
intervention, there is a need for the court to
determine whether rescission is proper
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Obligations and Contracts
GUIDELINES IN RESCISSION
1. Nature of breach must be substantial; not merely slight
- Contract will remain if there is just slight breach
- When there is no substantial breach, remedy is
that the court may fix a period for debtor to still
comply with obligation
2. There must be readiness to restitute
- When there is a manifestation that you are ready,
you can ask for rescission, provided other
qualifications are met
3. Can only be availed of by the aggrieved party
4. Must be preceded by a court order
• There can be a PARTIAL SPECIFIC PERFORMANCE
AND PARTIAL RESCISSION (Central Bank vs CA)
PRIMARY EFFECT
- Contract is treated as if it did not exist
- Why is it necessary for parties to go to court to ask
for declaration of rescission? Parties cannot
decide for themselves the validity of the contract
SECONDARY EFFECT ONLY
- Mutual Restitution
— EXCEPT:
- In the case of paying down payments,
restitution may be mutual if there was no
stipulation in the contract on forfeiture. If
there was a stipulation on forfeiture, the
guilty party/debtor cannot recover what he
paid. This is because it would be unfair to
creditor when debtor had used the land
already without paying full amount
- Even if there is no forfeiture, aside from
rescission, you can always incorporate
damages as additional remedy
- Actual cases, it is often rescission + damages
• Only for substantial breach - “substantial” would
depend on the circumstances/decision of judge
Sung Foo vs Hawaiian Philippines
□ There was non-compliance with the consideration
of the contract (the reason for entering into the
contract)
□ The buyer wanted to pay in another manner, and
he imposed new conditions; but this cannot be
done because when you impose new conditions,
this amounts to a counter-offer; this is not
compliance
□ Court said there was breach on part of the buyer
□ Seller was entitled to rescission because there is a
violation and it was substantial
□ Issue on restitution here: forfeiture clause in the
contract is conditioned on the violation on the
real estate mortgage. However in the case, what
was violated was the contract of sale because as
a matter of fact, mortgage was not approved.
Hence, forfeiture clause cannot be applied, so
general rule was applied which is mutual
restitution
□ If seller failed to include a non-forfeiture clause in
the contract, remedy could be in damages. In
contracts, the remedy could also be rescission +
damages and not solely rescission or damages
• Attorney’s fees does not belong to the lawyer; it
belongs to client
SUAN
A t t y. G r a v a d o r
Cancellation Recission
giving partial effects to the contract;
as if the contract did not exist, no legal legal effects before the violation are
effects recognized, only effects after that are
not recognized
no basis for claims, e.g. no basis on if contract of lease is only cancelled,
claiming rentals in arrears because contract only ceases to exist after
contract of lease was already demand is made; there is basis for
rescinded; cannot claim for rentals for claiming rentals in arrears because
months before breach of contract you just asked the contract to be
because contract here is not partially void for the months following
recognized the breach
Subsidiary Remedies
ART. 1177. The creditors, after having pursued the property in possession of the
debtor to satisfy their claims, may exercise all the rights and bring all the
actions of the latter for the same purpose, save those which are inherent in his
person; they may also impugn the acts which the debtor may have done to
defraud them.
- Can’t be immediately availed of
REMEDIES AVAILABLE TO CREDITORS FOR
THE SATISFACTION OF THEIR CLAIMS
1. Exact fulfillment with right to damages
2. Exhaustion of the debtor’s properties still in his
possession – writ of attachment (before judgment) or
writ of execution (for final judgment not yet executed)
3. ACCION SUBROGATORIA – an action where the
creditor whose claims had not been fully satisfied,
may go after the debtors (3rd person) of the
defendant debtor.
4. ACCION PAULIANA – an action where the creditor
files an action in court for the RESCISSION of acts or
contracts entered into by the debtor designed to
defraud the former.
❖ SCENARIO: There is a writ of execution issued by the
court, executed by the sheriff, debtor has no assets
to satisfy judgment, subsidiary remedies can now be
availed by filing in court
- (have to avail first of principal remedies and they
failed)
ACCION SUBROGATORIA (ART. 1177)
- Step into the shoes of your debtor; you “exercise all
the rights and bring all the actions” of the debtor
• Creditor is vested with right to collect from the debtor
of his debtor; e.g. accounts receivable
• Condition: insolvency of the debtor
RIGHTS OF CREDITORS ARE:
□ Levy by attachment and execution all the property
of the debtor, except those exempt by law from
execution, OR
□ Exercise all the rights and actions of the debtor,
except such as are inherently personal to him
(need to file a motion in court)
— EXCEPTION/LIMITATIONS
• Inherent Rights
• Personal Rights
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Obligations and Contracts A t t y. G r a v a d o r

ACCION PAULIANA (ART. 1177, 1381) REQUISITES

- The creditor has no other legal remedy; issued by the
court to satisfy claim
- While case was pending, debtor was (fraudulently)
transferring/disposing his properties so creditor’s
claim cannot be satisfied; fraudulent transfers
- So as a creditor, do accion pauliana- given the right to
set aside and declare as void all those contracts
because they were entered into with fraud. However,
you must establish you have exhausted the
properties of the debtor/ you have availed of
principal remedies and you cannot get anything from
the debtor
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 or if could be
foreseen, must have been impossible to avoid;
(3) The event must be of such character as to render
impossible for the obligor to comply with his
obligation in a normal manner; and
(4) The obligor must be free from any participation, or
the aggravation of the injury to the obligee

PRESCRIPTION: EXTINGUISHMENT OF LIABILITY;

□ When the right of the action accrues – time of EXCEPTIONS
discovery of the fraud
Case:
Khe Hong Cheng vs. CA 355 SCRA 701 EXCEPTIONS — When fortuitous event does not
distinguish liability
Siguan vs. Lim 318 SCRA 725
(1) When expressly specified by law — example ff:
(a) Art. 1170 — Debtor is guilty of fraud,
negligence, delay, or contravention of the tenor
Fortuitous event (b) Art 552 — A possessor in bad faith shall be
liable for deterioration or loss in every case,
• Extinguishment of Liability in case of Breach due to even if caused by a fortuitous event.
Fortuitous event (c) Art. 1165 — Promised to deliver the same
(specific) thing to two or more persons who do
CONCEPT OF FORTUITOUS EVENT not have the same interest
(d) Art. 1942 — Bailee is liable for the loss of the
thing, even if it should be through a fortuitous
GENERAL RULE: No person shall be responsible for event
those events which could not be foreseen, or which, (e) Art. 1169 —
though foreseen, are inevitable (f) Art. 1979 — The depositary is liable for the loss
— EXCEPT: of the thing through a fortuitous event
1. In cases expressly specified by the law (g) Art. 1268 — Debt of a thing certain and
2. when it is stipulated by the parties determinate proceeds from a criminal case
3. when the nature of the obligation requires (h) Art. 1263 — Thing to be delivered is Generic
assumption of risk “Genus never perishes” (genus nunquam perit)
(2) When declared by stipulation — rests upon the
ART. 1174. Except in cases expressly specified by the law, or when it is freedom of contract; intended to better protect the
otherwise declared by stipulation, or when the nature of the obligation interest
requires the assumption of risk, no person shall be responsible for those (3) When the nature of the obligation requires the
events which could not be foreseen, or which, though foreseen, were assumption of risk — risk of loss or damage is an
inevitable. essential element in the obligation
- Risk quite evident; must be impossible to
๏ Fortuitous Event — event which cannot be foreseen, foresee or to avoid
or which, though foreseen, is inevitable
๏ Force Majeure — acts of God; exempt an obligor from
Usurious Transactions
liability
ART. 1175. Usurious transactions shall be governed by special laws.
Acts of Man Acts of God
๏ Smple loan or mutuum — a contract where one of
Ordinary Extraordinary
the parties delivers to another money or other
Events that arise from legitimate or consumable thing, upon the condition that the same
Independent of human intervention illegitimate acts of persons other than amount of the same kind and quality shall be paid. It
the obligor.
may be gratuitous or with a stipulation to pay interest.
war, fire, murder, insurrection earthquake, flood, rain, rain ๏ Usury — contracting for or receiving interest in excess
of the amount allowed by law for the loan or use of
money, goods, chattels, or credits.
Kinds of fortuitous events.
(1) Ordinary Fortuitous Events — common and could CASES:
reasonably foresee (e.g. rain, etc.) Eastern Shipping Lines vs. CA 234 SCRA 781
(2) Extraordinary Fortuitous Events — uncommon and Crismina Garments v. CA 304 SCRA 356
could not have reasonably foreseen (e.g. Security Bank vs. RTC of Makati 263 SCRA 453
earthquake, fire, war, etc) Almeda vs. CA 256 SCRA 292

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Obligations and Contracts A t t y. G r a v a d o r

Cases:
Fulfillment of DKC Holdings Corp. vs. CA 329 SCRA 666
Obligations

CHAPTER 4 - PAYMENT

PRESUMPTIONS IN PAYMENT OF
INTERESTS AND INSTALLMENTS (ART.
1176)

ART. 1176. The receipt of the principal by the creditor, without reservation with
respect to the interest, shall give rise to the presumption that said interest has
been paid.

The receipt of a later installment of a debt without reservation as to prior

installments, shall likewise raise the presumption that such installments have
been paid.

๏ Presumption — the inference of a fact not actually

known arising from its usual connection with another
which is known or proved.

TWO KINDS OF PRESUMPTION

1. Conclusive presumption. — one which cannot be
contradicted like the presumption that everyone is
conclusively presumed to know the law; and
2. Disputable (or rebuttable) presumption. — one
which can be contradicted or rebutted by presenting
proof to the contrary like the presumption established
in Article 1176.

PRESUMPTIONS DO NOT APPLY

1. With reservation as to interest. — The presumptions
established in Article 1176 do not arise where there
is a reservation as to interest or prior installments, as
the case may be. The reservation may be made in
writing or verbally.
2. Receipt for a part of principal. — The first paragraph
of Article 1176 only applies to the receipt of the last
installment of the entire capital, not to a mere fraction
thereof. This is logical. A receipt for a part of the
principal, without mentioning the interest, merely
implies that the creditor waives his right to apply the
payment first to the interest and then to the principal,
as permitted by Article 1253. (infra.) Only when the
principal is fully receipted for, may failure to reserve
the claim for interest give rise to the presumption that
said interest has been paid.
3. Receipt without indication of particular installment
paid. — It has been held that the presumption in
paragraph 2, Article 1176 is not applicable if the
receipt does not recite that it was issued for a
particular installment due as when the receipt is only
dated. Thus, in the preceding example (No. 2), the
fact alone that the receipt issued by R is dated April
5, does not justify the inference that the rents for
February and March had been paid.
4. Payment of taxes.— Article1176 does not apply to
the payment of taxes. Taxes payable by the year are
not installments of the same obligation.
5. Non-payment proven. — not applicable where the
non-payment of the prior obligations has been
proven. Between a proven fact and a presumption
pro tanto, the former stands, and the latter falls.

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