Reviewer on Obligations and Contract

Prelim date: Saturday, August 4, 2018

1:00pm - 3:00pm

“x”
Legend
= Over all main top
Note para sa lahat ng possibleng
makakuha nito:
= Skip the front pages
[] = Everything na nasa
= Lahat ng explanations, meanings, or
kapag nabasa na ung
loob ng bracket ay ang
topic being discussed other information na makikita niyo sa “Note para sa lahat ng
 = Under meaning ng reviewer na to ay based on the
topic following: possibleng makakuha

 /~
= Under topics ng topic
= Under topic ng (1) Main book: “Obligations and nito (middle box)
mismong under topic Contracts” by Hector S. De Leon and
Hector S. De Leon, Jr. (2014)
= Start your print at
* = Synonyms or other
meanings = May mga nagtatanong kasi kung the next page
(06/18) = Date discussed/ung aling book ung ginamit para sa ibang
maliit na date after the information, maaaring may mga
first main topic mamiss akong vital or important
Grey = Lahat ng nakahighlight information kaya before the
ay mga additional departmental make sure to see the
notes na hindi under book “Notes in Business Law” by
ng topic Fedelito R. Soriano (2016) or even
Bolded = Exactly nakalagay sa “Pointers in Business Law” by Carlos
B. Suarez and Alexander Q. Suarez.
Paragraphs batas
(note: remember ung For more clarifications and examples
mismong number ng
article) (2) By the lecture mula kay Atty. Padilla
from the lecture date of June 18, 2018
Bolded = Important
to July 16, 2018
Phrases or Details/Words to
Words remember
(3) Make mga nilagay din ako based sa
(~) = Refer to Atlas reviewer material na binigay ng atlas,
Reviewer see the legend para mas malinaw ang
“Atty. Padilla = Italic and quoted are information
2018” given by atty. Padilla,
although lahat naman = Wag madaliin ang pagreview medyo
ng meaning ay mahaba-haba ang buong coverage ng
nanggaling sa kanya, Prelim, based on the information na
in case lang na mas nagather, ang coverage ng articles na
madaling tandaan o possibleng lumabas is from article
magets 1156 to 1186, if mali yan or kulang,
(B) = Refer to lectures in the sabihin agad sa iba, spread the
book “Notes in information para mas madaming
Business Law” by makinabang, ok? Hahaha
Fedelito R. Soriano
(2016) = Note, wag lang magrelay sa iisang
book or iisang reviewer, masyadong
broad ang mga topics, use every
resources to your advantage. Also take
note, students lang din gumawa nito,
wag ka lang umasa sa iisang reviewer,
find your own notes ksi there is a huge
chance na may mga mali or kulang
dito, if may mali or kulang baguhin
nlng, feel free to edit this to your
advantage.

REMINDER:
Wag hayaang malate or masabaw
when ung time na ng departmental.

Goodluck and Godbless us all

~Original Owner
 (~)
“Dates to remember”
[1915]
 The year that the Civil Code of the
Philippines was made
 Pattern was set by Spaniards
[August 30, 1950]
 Effectivity of Civil Law
“Concept of Law”
(06/18)
[Definition]
 Law is a rule of conduct
promulgated by the legislative
authority for the common
observance of each constituent so
that there shall be Peaceful,
Harmonious, and orderly society.
 Ang batas ay panuntunan ng pag-
galaw ng tao na itinakda ng
Sangay ng Pamahalaan na may
kapangyarihang gumawa ng batas.
[Deeper meaning in Law]
 Law is a Rule of Conduct
*Conduct also means
Behavior or Action
 Law is a Norm that has to be
followed by every citizen
*Norm also means Standard
[Who Promulgates the Law?]
*Promulgates means
Nagtatakda/Nagakda
 The Legislative Authority are the
one’s that promulgates the law
[Sino ang Legislative Authority?]
 Legislative Authority is a branch of
the government empowered under
the constitution in the enactment of
laws
 Also known as Law Makers
 At the National level:
The Legislative Authority belongs
to the Congress of the Philippines
that is composed of:
 Senate
 House of Representatives
 The Job of the Legislative authority:
 Make Laws for the people
 At the Local level:
Lower Levels (Local Government
Level) that can be enacted as a
Legislative Authority:
 Provision Board of the
Province
 City Council
 Municipal Council
 Barangay Council
 Any of the Lower Levels of the
legislative authority can enact
ordinances that must be observed
by all of the constituent in that
level
“Ordinance and Statue”
 When a rule of conduct is enacted
by the Legislative Authority of a
Local government unit, it is called
Ordinance
 When the Law is enacted by the
Congress of the Philippines
(National Level) it is called,
Statute
[Ordinance]
 Laws that are passed/enacted by
the Legislative Authority Local
Government Unit or by the Local
Legislation
 Also known as Local Laws
 Example:
Local laws are ordinances by the
city of Caloocan can only be
enforced/implemented to all
constituents (citizens) in the city of
Caloocan OR it can only be
enforced/implemented WITHIN the
city of Caloocan
 Laws that are confined within the
specific place/territory
(Nasasakupan)
[Statute]
 Enacted by the Congress (by the
Congressman and the Senators)
of the Philippines (National Level)
 Also known as National Laws
 Laws that must be followed strictly
(No One must be above the Law)
within the National Territory
“3 Branches of the Government”
 Executive Authority
 Carries out the Law
 Consist of the:
President (Head)
Vice President
Cabinet Members
 Legislative Authority
 Makers of the Law
 Consist of the:
Congress
(In the national level, and
has two parts:)
- Senate
(Head: Senate President)
- House of
Representatives
 Judicial Authority
 Evaluates the Law
 Consist of:
Supreme Courts (Head)
Other Courts
[Notes]
*Urban = City *Rural = Municipality
 Any Organization can make rules
of conducts that regulates within
their territory (nasasakupan) para
sa kaligtasan at kaayusan ng mga
members at ng buong group
 Not Every Rule of Conduct can be
considered a Law
- It can ONLY be a Law when it is
resulted into Legislation
(the process of enacting laws)
 Ang may kapangyarihang gumawa
ng batas sa Local Government
Level ay ang City Council,
Headed by the Vice Mayor and
consist of the Elected Councilors
“Sources of Law”
(06/20)
[1. Constitution]
 “There can be no law unless it is
compliant with the Highest Law of
the Land”
 It can also be defined as:
 Supreme Law,
 Highest Law, or the
 Fundamental Law of the Land
 All other laws must be compliant of
the constitutional requirements
 Walang maiaakdang batas kung
yan ay di sangayon sa saligang
batas
 #1 na pinagkukunan ng batas
[2. Legislation]
 Process of enacting laws
 Most popular source of law
because the congress legislates
local laws and national laws. No
one can have an ordinance or
statue without passing through the
Legislative Authority (It must be
approved by the congress)
[3. Jurisprudence]
 Also known as Case Law
 Refers to the decision of the court
 Exactly Similar decisions of the
court in the past can be a basis for
a similar case
 “Ang desisyon ng hukuman” can
be a Source of law
 Ang batas ay nakabatay sa
desisyon ng hukuman na
magsisilbing bahagi ng batas ng
lipunan
 Nakadepende sa mga desisyon
kaya nagbabago ang
Jurisprudence
[4. Customs and Traditions]
 Only used When 1, 2, and 3 are
not available
 It can be used to cite
practices/traditions to which the
community is accustomed to in
time
[5. Religion]
 Refers to one’s Religious Faith
 It can only be a source of law
when 1, 2, and 3 are not available
[6. Treaty]
 Agreement between two
Sovereign States
 It adheres to Generally accepted
principles of international laws
Ang desisyon ng hukuman ay
nagiging final kapag hindi na
naaapela (Pagdefend)
“Important Branches of law”
[Public Law and Private Law]
 Public Law
- Law that govern the relation
between the state and the people
 Private Law
- Law that govern the disputes
involving/among the people
[Public Laws]
A. Constitutional Laws
 Study of the Constitution
- The Constitution has 3 components
or “Mga Panuntunan sa
Nasasakupan”
1. Constitution of Liberty or Rights
= Rights of the People
2. Constitution of the Government
= System of the Government
3. Constitution of Sovereignity
= Procedures in which the
constitution can change
B. Political Laws
 Deals with the System of the
Government
C. Administrative Laws
 Rules that govern how public
officials shall induct themselves in
their respective offices
- Rules in order for them to
perform in their respective offices
so that the Public official is doing
his/her duty
D. Criminal Law
 Laws that punishes act or
omission
*Omission means
Dapat gawin pero di ginawa
Ang isang gawain na may kaakibat
na parusa na nakasaad sa batas ay
matatawag na isang Krimen
 Criminal law is a public law
because when someone commits
a crime, that person is committing
an offense against the state
because it affects the welfare and
security of the people
=PERO=
If it is a Civil Case not a criminal
case (ex.Pagpapautang) may kaso
pero hindi makukulong, the
penalty is only of the Payment of
Damages
E. International Law
 Relation between two Sovereign
States
 The source of law can be a Treaty
The Prime Duty of every Sovereign
state is to serve and protect the
people
[Private Laws]
 Private transaction between the
people
A.Laws on Person’s and Family
Relations
B.Business Law
C.Property Law
“Natural Law and Civil Law”
[Natural Law]
 Refers to what is right and wrong
according to the established norms
and conducts, it is based and
supported by morality
(Moral Necessity)
 Hindi pwedeng kasuhan because it
is only a Natural Obligation
[Civil Law]
 It has Juridical/Legal Necessity
*Juridical Necessity means
 Right to go to a court and file
a case, against someone who
might have offended another
 A way of seeking solution
through the intervention of a
court
 It is based on Positive Law
“Obligation”
(06/22)
[Definition]
 In General Terms:
- Something that commands/requires
an Undertake of performance
*Undertake means
Things that you commit
yourself to do, not to do, or to
give.
 Legal Definition/Civil Definition:
- According to Article 1156: An
Obligation is a juridical necessity
to give, to do, or not to do.
 Derived from Obligatio (Latin word)
meaning tying or binding (A)
[3 Possible Prestation]
 To do
- To perform a certain task
 To give
- You commit yourself to deliver a
specific thing
 Not to do
- Things that you commit yourself
to not performing
When “To do, Not to do, and to give”
are combined, it is called Prestation
*Prestation means
Subject Matter of the Obligation
[Juridical Necessity]
 (B) Juridical Necessity means that
the court may be asked to order
the performance of an obligation if
the debtor refuses to perform. If
the obligation cannot be enforced
through the courts, it may be
disregarded with impunity
 If the obligation is non-
complied/not performed, the one
entitled to the performance (the
creditor) and suffering from the
non-performance shall be entitled
to avail a solution/remedy in court
 It is a Legal means or the basis or
the foundation of it is a positive law
and not just morality
 The Opposite of Juridical
Necessity is Moral Necessity
Moral Necessity is dependent on the
sense of value of the debtor to
perform, it has no remedy or solution
in the court
Basis of Moral Necessity:
- Character
- Consciousness
- Sense of Value
“3 Requisites/Requirements in order
for a Prestation to be Valid”
 In order to be valid, kailangan
complete ang tatlo
1. Determinable/Specific
 Also known as Determinate
 You Should know exactly;
 What should be done
 What should not be done
 What should be given
 It must be specific and described
exactly
 It must be extracted from the
generic class which it belongs
(B)
[Concept of a Determinate thing and
Generic Thing]
 A thing is determinate when it is
particularly designed or physically
segregated from all others of the
same class (Article 1460)
EXAMPLES:
- An object which is a 2015 Toyota
Atlis with an engine number of
123476, body no. 547865, and plate
no. ERC 1455
- My only wristwatch
- My house that is located at 123
Moret Street, Sampaloc Manila
 A thing is indeterminate or generic
when it is not particularly designed
or physically segregated from all
other of the same class
EXAMPLES:
- A Horse/Dog/Cat
- A Car
- P10,000,000
[Importance of knowing whether a
thing is determinate or generic]
As a rule, the loss of a determinate
thing through a Fortuitous event
extinguishes the obligation.
(Article 1262)
(A)
*SPECIFIC or
DETERMINATE THING
~ Physically segregated, particularly
designated (PSPD)
*GENERIC or
INDERTERMINATE THING
~ Class or genus to which it pertains
and cannot be pointed out with
particularity.
~ Note: Genus never perish, an
indeterminate thing cannot be the
subject matter of a fortuitous event,
thus still making the debtor liable for
any damages
2. Possible (Legally and Physically)
 The subject must be both
Physically possible and Legally
allowed
Example:
- To deliver illegal drugs
(Not legally possible)
- To make a dead man live again
(Not Physically Possible)
Due Process
- No person shall be deprived of his
rights, liberty, and his property
- The right to be given the opportunity
3. Capable of Pecuniary Estimation
 The obligation, if not
complied/performed, can be given
certain monetary value so that the
corresponding payment of
damages for non-performance can
be determined.
Example:
Payment for penalty in terms of per
day in Delay
[Notes]
 Agreed Party (The Creditor)
- The one in whose favor the
obligation has been established
- Ang Naaagrabyado
- The one who suffer from the failure
of the one committing himself to do,
not to do, or to give
 No Prestation means
No Obligation that also means
No Subject Matter
“Real Obligation and
Personal Obligation”
[Real Obligation]
 “To give”
 Things/Objects are involve
[Personal Obligation]
 Involves Personal Service
 “To do”
- Positive Personal Obligation
 “Not to do”
- Negative Personal Obligation
 “Essential Requisites *In default means 3. Object or Prestation
of an Obligation” Guilty of non-fulfillment  (B) The object/subject matter of
(A) the obligation
Piano  Article 1170  (B) Consist of giving, doing, or not
= The person who is in default doing something
Seller ===== Buyer
shall be liable for the obligation  (B) A Prestation is generally used
P50,000 and the damages incurred with reference to the acquisition
To Deliver: Those who in performance of their (or loss) of a right by the lapse of
Active: Buyer obligations are guilty of fraud, time. The prescriptive period refers
Passive: Seller negligence, or delay and those to the time within which an action
(Obliged to deliver) who in any manner contravene the must be brought; otherwise, such
Prestation: Piano tenor thereof, are liable for right to file the action lost.
Juridical Tie: Contract of Sale damages. (See Doctrine of Prescription)

To Pay:  Doctrine of Prescription Without Prestation,

Active: Seller - By virtue in the passage of time, There is nothing to perform (A)
Passive: Buyer rights may be acquired and those
(Obliged to pay) who already have acquired can 4. Juridical Tie
Prestation: Money or Payment lose it.  Also known as:
(P50,000) - (A) Obligations that are beyond 10  Legal Tie
Juridical Tie: Contract of Sale years have already prescribed or  Vinculum, or
not demandable  Efficient Cause
(06/25)
Example:  It is the part of the agreement that
1. Passive Subject
 If the loan was on (2006), it is not binds or connects the parties to
 Also known as:
demandable now (2017) the obligation
 Reactive Subject
 If may isang tao na umutuang, at  (A) “Reason why the obligation
 Debtor, or
ang nakasaad sa kanilang exist”
 Obligator
agreement ay may exact date kung  The tie in an obligation can be
 The one who reacts/initiates
kailan dapat magbayad ang debtor, easily determined by the source of
 The Passive party/person/subject
hindi na necessary na magdemand the obligation. (Article 1157:
is the one obliged to
ang creditor, he/she has a right to get Source of Obligation)
undertake/perform the obligation
the payment or else the debtor will
 The one who has duty
be in default. Noong dumating na “Sources of an Obligation”
 The one who is bounded to the
ang exact date na pinagusapan,
obligation (A)
hindi naningil ang creditor at hindi [1. Law]
 (B) the one who is obliged to
niya naexercise ang right niya to  According to Article 1158:
perform the obligation
collect or even to put the debtor in Obligations derived from law are
default. Lumipas ang ilang mga taon not presumed. Only those
2. Active Subject
at dumating sa point na expressly determined in this code
 Also known as:
nangangailangan ang creditor ng or in special laws are demandable,
 Proactive Subject,
pera, kapag naningil ang creditor, the and shall be regulated by the
 Creditor,
obligation of the debtor will no longer precepts of the law which
 or Obligee
be a civil obligation because it has no establishes them; and as to what
 The one in whose favor the
more juridical necessity (the right of has not been foreseen, by the
obligation is established
the creditor has expired in terms of provisions of this book
 The one who has the right to
civil obligation), it is only a moral  (B) Law is a rule of conduct, just
demand performance to fulfill the
necessity (nakadepende na sa and obligatory, laid down by the
obligation
conscience ng debtor kung Legislative Authority for the
 The one who takes Initiative
magbabayad siya or hindi). common observance and benefit.
[Notes]
= Why? =
 Article 1169
”An obligation, once it prescribed is
= No Demand means No Default
no longer a demandable obligation”
“No person shall invalidate unless
~ Tinuturing ng batas na sa tagal ng
there has been a demand
panahon na di ka naniningil even
judicially/extra judicial”
though may right ka, wala ka nang
karapatang maningil
[Law]
 (B) Obligations that derived from
Law are not presumed. Only those
expressly determined in the Civil
Code or in special laws are
demandable, and shall be
regulated by the precepts of the
law which establishes provisions
on obligations.
 It is a source of obligation when;
 It is imposed by the law itself
 The law mandates it and not
any other source
 All other four sources are
unavailable
 A source of obligation that all
citizen must apply/follow
 No need to wait for demand
 If one of the other sources are
available, the source of an
obligation is that other source, All
other sources are lawful or based
on the law
EXAMPLE:
The National Internal Revenue
Code which provides for the payment
of taxes; Anti-Mendicancy law which
prohibits the giving of aims to
beggars
(06/27)
[2. Contracts]
 According to Article 1305: A
contract is a meeting of minds
between two parties whereby
one binds himself, with the
respect to the other, to give
something, or to render some
service.
*Meeting of Minds means
Formal Agreement
(A) *Contracts means
~ meeting of minds between two
persons, there is a consent
 Consent should have:
 Offer (Certain/Definite)
 Acceptance
(Absolute/Unconditional)
Note: a contract must pertain to the
same object for both parties
 EXAMPLE:
X bought an air-conditioning unit.
He already paid for the item but
when the item was delivered and
as soon as the box was opened,
he noticed that the item was
damaged. He told the delivery
crew that he wants his money
back, but the crew said he can’t
because the item is already
transferred. Can X get his money
back?
Answer
Yes. Because he didn’t accept the
item.
~Own lecture~
 2 Types of Contract
 Expressed Contract
 Implied Contract
Note to self:
Hindi inexplain kung ano
pagkakaiba but be ready for
anything gago hahaha
 All Contracts can create and
obligation/agreements BUT not all
obligations/agreements can be
created by a contract
REASON:
All Contracts can result to a Civil
Obligation
CIVIL OBLIGATION
(B) According to Article 1156
Juridical Necessity to give, to do,
or not to do
- A civil obligation is based on
Positive Law, hence, it is enforceable
by court action
But an agreement/obligations can
either result to a civil obligation or a
natural obligation
NATURAL OBLIGATION
- (B) A natural obligation is based
on Natural Law, hence, it is not
enforceable by court action. The
obligation however, exist in equity
and moral justice, such that if the
debtor voluntarily performs, he can
no longer recover what is given.
(Note: this is still under contract as a
source of obligation)
 According to Article 1159:
Obligations arising from Contracts
have the force of law between the
contracting parties and should be
complied with in good faith
(A)
a. Stipulations of the parties are the
law between them
 The contract has a binding force of
demand sa parties to do their
respective obligations BASED on
what is stated in the contract
b. Must be complied in good faith
 It must be complied with in good
faith because it is the law between
two parties; neither party may
unilaterally evade his obligation
 The contract has a binding force of
demand sa parties to do their
respective obligations BASED on
what is stated in the contract
 Reciprocal Agreement/Contract
- The only type of agreement in
where both parties can be the
debtor and creditor of the
Prestation
Reason: By a contract of sale
Seller: Obligation to deliver the
specific thing
Buyer: Obligation to pay for the thing
 Any Dispute/Conflict arising from
contract can be resolved with:
 Finding what the contract
provides
(if it is not specified, then)
 It can be resolved using the
General Provision of the Law
Explanation:
Any Dispute/Conflict arising from
contract can be resolved with;
= First according to what the contract
provides (why? Because It must be
complied in good faith, must depend
on the law of the agreement
“Principal law of the agreement”
which is the stipulations stated in the
contract)
= If the contract is lacking or have
insufficient necessary provision that
will lead to the resolution of the
problem then that would be the only
time that the agreement would result
to what the law provides or the
general provision of the law
*Quasi means
- It looks like there is but there is
none OR “As If” (A) OR
- It appears to be but it is absent
[3. Quasi-Contracts]
 (A) There was no actual contract
but it’s as if you entered into one
(in a sense these obligations
maybe considered as arising from
law)
 (A) No one shall be enriched /
benefited at the expense of
another.
 A Juridical relation (Sanctioned by
Law) resulting from 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
(Process)
 Requisites of a Quasi-Contract
 Lawful
- Not against the law
 Voluntary
- In your own Initiative
 Unilateral Act
- One way; you don’t expect the
same thing that you did to be done
to you by the party whom you
demand payment for reasonable
compensation
 It must result to:
 Benefits resounding to the
debtor (nagbenefit ang ibang tao
dahil sa ginawa mo)
 In order to prevent:
 Unjust Enrichment
(Makikinabang ka sa pagod/
sikap na ginawa ng iba)
 THUS THE PERSON SHOULD
BE PAID REASONABLE
COMPENSATION
 Only in Certain Circumstances:
(In Negotiorum Gestio)
 Natural Calamity
 Extreme Emergency
NOTE:
(B) There is unjust enrichment “when
a person unjustly retains money or
property of another against the
fundamental principles of justice,
equity, and good conscience.
 If not compensated then it will
result to Quasi-Contract Obligation
 Hindi lahat ng kabutihang
ginagawa mo ay entitled ka na sa
payment for reasonable
compensation, yung ginawa mo ay
dapat magbebenefit yung tao and
magpeprevent ang unjust
enrichment o ang pakikinabang ng
taong tinulungan mo dahil sa
pagod mo
 Kung gumastos ka para magawa
ang isang bagay na magreresult to
quasi-contract (ex. Sinagip mo ang
isang bata mula sa isang
emergency, dinala mo sya sa
hospital, at ikaw ang nagbayad sa
pang-gamot niya) then pwede
mong hingin sa magulang niya
ang (1) bayad para dun sa
ginastos mo sa pang-gamot at (2)
reasonable compensation dahil sa
ginawa mo (Pabuya/Prize money)
 2 Doctrine’s Under Quasi-Contract
 Negotiorum Gestio
- Unauthorized management
by another person’s affair
- Without Consent (A)
- (B) It creates the obligation
to reimburse the gestor for
necessary and useful
expenses
(A) Note: Only Expenses for
preservations are reimbursable, not
the ornamental.
 Solutio Indebiti
- Performance or Payment by
mistake (Honest to goodness
mistake) or it is done without
being aware that it is not
supposed to be done
- (B) This creates the
obligation to return the
payment
“I Thought that it was due, that
is why I pay”
EXAMPLE:
If the debtor pays the loan without
knowing that it shouldn’t be paid,
the creditor must return the money.
There is solutio indebiti.
BUT
If the debtor pays the loan knowing
that it shouldn’t be paid, the
creditor can keep the money.
There is no solutio indebiti.
 Requisites for Solutio Indebiti;
There is no right to
receive the thing
delivered
The thing was delivered
through mistake
 When a person prevented another
who is more skillful/qualified to do
the work or the specific thing to be
done, then walang quasi-contract
na magaganap, ang magiging
source ay quasi-delict because the
person who prevented the other
become negligent in what is
suppose to be done
(06/29)
[4. Delict]
 Any Act or Omission punishable by
imprisonment
 Also known as Crime or Felony
(A) *Omission can also refer to
Negligence
(or also known as Culpa)
 (A) 3 Kinds of Culpa
 Contractual Negligence
(Culpa Contractual)
- Negligence in contracts
resulting in their breach
  Civil Negligence
(Culpa Aquiliana)
- Negligence without pre-
existing contract
 Criminal Negligence
(Culpa Criminal)
- Negligence resulting in the
commission of a crime.
- Punishable in the revised
civil code.
(A) EXAMPLES:
• A sales lady broke a vase while she
was wiping it
- Culpa contractual
• A window shopper broke a vase in
the mall
- Culpa aquiliana
• An angry person decided to vent
his frustrations on the vase
- Not culpa criminal
Because it is his intention.
• A truck driver loses control of the
vehicle, killing another motorist
- Culpa criminal
Because it is not his intention
 Basis for Delict to become for a
source of obligation:
REASON:
According to Article 100 of the
Revised Penal Code
Every person who is Criminally
Liable should also be Civilly Liable
*Criminal Liability means
Sentence to imprisonment
*Civil Liability means
Payment of Damages to the victim
 Hindi mo lang babayaran kung ano
ang damages,
Civil Liability includes:
(1) Restitution
- Babalik mo kung ano yung kinuha
mo at kung hindi ko mabalik dahil
nawala na, babayaran according to
the monetary value
(2) Reparation for the damages
caused
- Babayaran mo ang mga damages
na nangyari sa thing na ninakaw mo
(example: sira sa car na ninakaw mo)
(3) Indemnification for consequential
damages
= Payment of other damages
suffered dun sa ninakawan mo as a
consequence dun sa crime na
ginawa mo
 For Delict to become a Civil
Obligation, it must relate to
the person who committed
the crime or in other words
“Proof by reasonable doubt.
*Proof by reasonable doubt
Means that Someone is
Guilty of a crime
[5. Quasi-Delict]
 Also known as:
 Tort
 OR (B) Culpa Aquiliana
 (B) These are acts or omissions
that cause damage to another,
there being fault or negligence but
without any preexisting contractual
relations between the parties.
 (B) For Quasi-delict case to
prosper, the compliant must
establish:
 Damages to the Compliant;
 Negligence, by act or
omission of the defendant or
by some person for whose act
the defendant must respond,
was guilty; and
 The connection of cause and
effect between such
negligence and damages.
With respect to the third
element, the negligent act or
omission must be the cause
of the injury
 Treated like a Delict or someone
has committed a crime
 It is any act/omission done with
fault or negligence resulting to the
damages to one person, his
property, or an immediate member
of his family
 (A) No Contractual relation between
parties
 Quasi Delict is a
Cause and Effect Relationship
Maiiwasan kung may
proper diligence
 Effect: Injury
Cause: Fault or Negligence
 Finding the cause of injury and if it
is from the fault or negligence of
another then the person who is
suffering from the injury can ask
for payment of damages PERO if
yung person naman ay gumawa
ng paraan (diligent enough) to
warn people about what can
happen then the fault would be at
the person who suffered because
of his own negligence
“Nature and Effect of an Obligation”
It refers to:
 What type of Obligation do you
have?
 To do
 Not to do
 To give
 And what is the effect?
 Depends on the Prestation
“If the Obligation is to
deliver a specific thing,
It carries 3 undertaking”
(07/04)
*Undertaking means
Equipment/Covenant/Obligation
1. Preserve the thing
According to Article 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
care
 There will be compliance of the
debtor if he serves the Diligence
of a good father of a family
(Also known as Proper Care or
Ordinary Care)
*(B) Diligence of a good father of a
family means the ordinary care that
an average person exercises in
taking care of his property
”Considering the object of the
obligation as if they belong to
you”
 BUT if the law requires or the
stipulation requires that ordinary
care is Insufficient. The need for
Extra-ordinary care/diligence
(Every degree of care that a
human person can imagine or
give greater care) comes
 IF FAILED AND NOT COMPLIED
- The debtor will be liable for
damages
(A)
 Exceptions on when not to
exercise the proper diligence of
the good father of the family
A. Law so provides
B. Stipulation of the parties
C. Object is a generic thing
~Own Lectures~
2. Deliver the Fruits
 Different Kinds of Fruits
 Natural Fruits
- Due to nature (Article 442)
= Spontaneous products of
the soil; (A) Young and other
product of animals
(B) = Those trees that grows
naturally on the soil without the
intervention of man and the colt
delivered by a mare are natural fruits.
 Industrial Fruits
- Intervention of man
- Result of Human
Labor/industry (Article 442)
EXAMPLE:
Poultry farm - chickens/hens
lay eggs because of the feeds
they eat.
= (B) They refer to those produced
by land of any kind through
cultivation or labor.
 Civil fruit
- Not consumable
- Sanhi ng kasunduang legal
- Can arise from contracts
= (B) Result of a juridical relation
such as the rent of a building, price of
lease of land, and other property and
the amount or perpetual or life
annuities. (Article 442)
 According to Article 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 until the same
has been delivered to him.
3 Stages of Contracts:
 Preparation = Paguusap
 Perfection = Pagkakasunduan
 Execution = Pagsasakatuparan
[What will be the right of the creditor
to the fruits of the thing?]
 Once the fruit is delivered, it
is a Real Right
Real Right
- Pertains to the right of a person
over a specific thing which he can
invoke/enforce against ANYBODY
 (B) This refers to the right or
power over a specific thing, such
as possession or ownership, which
is a right enforceable against the
whole world. This is a right
acquired by the creditor over a
thing and its fruits when they have
been delivered to him
 (B) Also known as jus in re
 “Ownership upon Delivery”
(Art.1164)
 According to the law on sale:
Payment is not a factor that may
transfer ownership to anything that
you buy
 If it is not yet delivered it is
going to be a Personal Right
Personal Right
- Pertains to the right of a person
over a specific thing which he can
ONLY avail/invoke/enforce against A
SPECIFIC debtor or passive person
 (B) This is a right that may be
enforced by one person on
another, such as the right of the
creditor to demand the delivery of
the thing and its fruits from the
debtor
 (B) Also known as:
 jus in personam; or
 jus ad rem
 The person who paid but has not
been delivered the specific thing
(the one who only has Personal
Rights) can file a case or is entitled
for payment of damages
Example:
- If someone who has personal right
would file a case against someone
who did not perform their duty can
gain the following:
= Return of the value that was
given in the first place (principal
payment/monetary value) and;
= Payment of damages
 Acting “In bad faith”
- A person doing things despite of
his knowledge that he is not
allowed to do those
 The person in which the specific
thing was delivered, if that person
is in good faith, then he is
entitled/has real right over it. If he
is not in good faith, he will be
accused to fraud or being a
deceiver.
(B)
[“When the obligation to deliver it
arises”]
 If the obligation is a pure obligation
or one whose performance is not
subject to a suspensive period or
suspensive condition, the
obligation to deliver it arises from
perfection
 If the obligation is subject to a
suspensive period or suspensive
condition, the obligation to deliver
it arises upon the arrival of the
term or upon the fulfillment of the
condition
EXAMPLE:
 If D is obliged to give C a specific
Car on Christmas Day next year,
the obligation to deliver it arises
only on the arrival of such date
 If the obligation of D is to give C
such a Car if C passes the CPA
Examination, then the obligation to
deliver it arises only upon the
fulfillment of such condition
3. Deliver the Accessions and
Accessories
 Not instating the fact that it was
not mentioned in the agreement or
even if not stated, it is already
considered part of the obligation
 According to Article 1166: The
obligation to give a determinate
thing includes that of delivering
all its accessions and
accessories, even though they
may not have been mentioned.
 Even though na hindi sinabi sa
usapan o sa kasunduan na
ibibigay ng debtor ang accessory
at accessions (mga karagdagang
bagay) kasama ng specific thing,
kailangan iyong isama, ibigay, at
ideliver kasama ng principal thing
dahil batas ang nagtatakda na iyon
ay mangyari
 “All Accessories are Accessions,
BUT not all Accessions are
Accessories”
 Accessions are anything
added artificially/naturally to
the principal thing (ex. Fruits)
~ Fruits of a thing or additions
to improvements upon a thing
~ (B) They include everything
that is produced by a thing or
is incorporated or attached
thereto, either naturally or
artificially (Article 440)
 Accessories are limited to
those addition made by man
to make the principal
comfortable, serviceable, and
convenient
~ Things joined to or included
with the principal thing for the
latter’s embellishment, better
use, perfection, enjoyment, or
completion.
(Keys to a Car/House)
(Bracelet of a wristwatch)
EXAMPLE:
Principal Item: Car
Accessions: Seat cover/Fog lights
Accessories: Key
(A) Notes:
Explanation through
Article 1167 and 1168
 According to Article 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
 An obligation to do, to perform an
act or render a service.
It contemplates three (3) situations:
1. The debtor fails to perform an
obligation to do
2. The debtor performs an obligation
to do but contrary to the terms
3. The debtor performs an obligation
to do but in a poor manner
“what has been poorly done be
considered as undone”
Remedies of creditor in positive
personal obligation:
 Get a third (3rd) person who will
command the debtor to do the job,
and if there are expenses incurred,
it will be charged against the
original debtor.
 If the original debtor still refuse,
this time the remedy of the creditor
is to go to court for the collection
of that amount.
The court can only command:
a. The debtor to pay
b. To stop the debtor what he has
been doing
Note:
Do not force the debtor to do
something for you, if you force him it
is considered as harassment.
 According to Article 1168
When the obligation consists in
not doing, and the debtor does
what has been forbidden him, it
shall also be undone at his
expense.
 An obligation NOT to do, the
debtor does what was forbidden
for him to do.
Remedies of creditor in negative
personal obligation:
(1) The creditor can go to court, and
the court will order the debtor to stop
or refrain to such act.
(2) If there are expenses incurred, it
will be charged against the original
debtor.
~Own lecture na ulit~
 If hindi nagawa ng debtor ang
pagpreserve sa specific thing,
pagdeliver ng fruits, at pagdeliver
ng accessions and accessories,
the creditor can commit to Article
1170 (liable for damages)
According to Article 1170:
Those who in 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.
 “Contravention of the tenor of the
obligation”
~ Kung ano ang itinakda, yun
dapat ang gawin mo. The
buyer/creditor is entitled to all the
accessions and the accessories of
the specific product.
[If the debtor fails to comply to deliver
the specific thing, what would be the
remedy of the creditor?]
~ First the creditor must Sue in court
for not delivering then the following
are the remedies of the creditor:
(1) Demand to fulfill the obligation
with the right to ask for damages
 The one who must do the
obligation is STILL the debtor and
NOT somebody else,
Reason:
If iba ang gumawa, the creditor is
also encouraging someone to
act/omit a crime
=BUT=
If Generic (Not specific) ang thing na
kailangan I-deliver, pwede ang 3rd
Person.
(Based on Article 1165, Paragraph 2)
If the thing is indeterminate or
generic, he may ask that the
obligation be complied with at the
expense of the debtor.
 Pwede ang third person ang
magperform ng obligation but NOT
at the expense of the creditor
(2) Cancel the Obligation but with
payment of damages
(3) Ask ONLY for payment of
damages
 It should be made clear, however,
that the law does not mean that
the creditor can use force or
violence upon the debtor. The
creditor must bring the matter to
court and the court will be the one
to order the delivery
[(B) If the debtor fails to
comply/perform his obligation to
deliver a generic thing]
(1) To ask that the obligation be
compelled with at the expense of the
debtor
(2) To demand damages from the
debtor
 The creditor can ask the court for
the obligation to still be fulfilled by
a third person since the object is
expressed only according to its
family or genus. It is thus, not
necessary for the creditor to
demand the debtor to make the
delivery, although he may ask for
performance of the obligation. In
any case, the creditor has the right
to recover damages under article
1170 in case of breach or violation
of the obligation
[(B) The remedies of the creditor
when the debtor fails his obligation to
do]
 If the debtor fails to perform the
obligations or performs it but
contravene the tenor thereof:
 The creditor may have the
obligation executed by a third
person at the expense of the
debtor
 He may also demand for
damages from the debtor
[(B) The remedies of the creditor if
the debtor performs the obligation
but does it poorly]
 The creditor may have the
same obligation be undone at
the expense of the debtor
 Demand for damages
[(B) The remedies of the creditor if
the debtor does what is forbidden
him (not to do)]
 The creditor may demand that
what has been done be
undone
 Demand for damages
“Fortuitous Event”
 (A) Also known as Force Majure
(Meaning an act of man or an act
of God)
(A) EXAMPLE:
Eruption of Volcano
“No one is to be held liable in the
fortuitous event”
Fortuitous event + Damages
= Not Liable
Not Fortuitous event + Damages
= Liable
 According to Article 1174:
Except in cases expressly
specified by the law, or when it is
otherwise declared by stipulation,
or when the nature of the
obligation requires the
assumption of risk, no person
shall be held responsible for those
events which could not be
foreseen, or which though
foreseen, it is inevitable.
 These are events which could not
be foreseen, or which though
foreseen, it is inevitable
*Inevitable = Impossible to avoid
 Those who failed to perform
because of a fortuitous event
makes the debtor unable for
liability
 “No Person shall be held
responsible for a Fortuitous Event”
 It can either be;
 An act of man (Crime)
 An act of God (Calamities)
In every loss = one must suffer
Who Suffers? = The Owner
”Ownership upon Delivery”
[Elements of a Fortuitous Event]
 The cause must be independent of
the debtors 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
is impossible for the debtor to
perform his obligation in a normal
manner.
(See: 07/11)
 Exceptions of a Fortuitous Event
according to Article 1174
1. When Expressly specified law
(Unless the law provides)
(Additional: 07/04)
 According to Article 1165,
Paragraph 3
If the obligor delays, or has
promised to deliver the same
thing to two different persons who
do not have the same interest, he
shall be responsible for fortuitous
event until he has effected the
delivery.
 Meaning of Article 1165,
Paragraph 3:
(1) When the debtor failed to deliver
because of a fortuitous event BUT if
the debtor omitted to deliver the
specific thing to two different persons
whose interest are not the same, the
debtor is STILL liable due to an “Act
of bad faith”
 (2) If there was an act of delay for …even though that the reason for [(B) Damages and Injury]
the fortuitous event to happen, the the loss is a fortuitous event, the  Damages
debtor is still liable/still in default debtor still need to do his duty to ~ refer to the harm done and the
REASON: serve the creditor. sum of money that may be recovered
The Obligation left is to pay the in reparation for the harm done
monetary value of the loss thing that “Assuming the Risk of Loss”  Injury
is yet to deliver Main na Layunin: ~ the wrongful, unlawful, or tortuous
(Additional: 07/11) - Sagutin ang possible na act which causes loss or harm to
 When someone borrows a thing: mawala sa creditor another.
 And pays for it  Aleatory Contract ~ It is the legal wrong to be
= Contract of Lease - Ang isang contract ay nagiging redressed
 Does not pay and return it aleatory kapag ang event na
= Commodatum binayaran ng isang tao, na inassume [Kinds of Damages]
*Commodatum means niya ang risk ay hindi nangyari (ex.  Actual or compensatory
 A thing is delivered by it’s owner to Nagbayad siya ng fire insurance damages
another giving the latter the pero over the course of the year hndi ~ Refers to the pecuniary loss,
authority to use the thing and siya nasunugan)PERO may mga (such as loss in business or
returning after accomplishing the instances na may scenario na profession) that may be
purpose of it being lend nangyari pero aleatory parin recovered
 Under the Rule: (Example = Lotto) ~ Includes the value of the
- One cannot be made responsible *Aleatory means that loss suffered and profits not
for non-performance of an obligation “hindi magkatumbas ang halaga” realized
if you are prevented by a Fortuitous ang narecieve
Event, BUT, If you use that thing for - When the parties received from  Moral Damages
a different purpose other than the each other not compensating value/ ~ This include physical
purpose on why the creditor lend it in not equal to its value suffering, mental anguish,
the first place, the debtor will still be - Opposite of aleatory, fright, serious anxiety,
held responsible for any loss Compensating Contract/ besmirched reputation,
 When a Bailee used the thing loan Commulative Contract wounded feelings, moral
or lend to him for a purpose other = Equal Value shock, social humiliation, and
than what he had indicated, even if other similar injuries
he cannot return the thing  Requisites for a Fortuitous Event
anymore (due to a fortuitous ~The Debtor will not be liable for  Nominal Damages
event), he can still be held liable anything if: ~ it refers to the damages to
*Bailee also means  It was due to a fortuitous vindicate right
Person Receiving the thing event,
 The thing is specific,  Temperate or moderate
2. When declared by stipulation  The debtor is not guilty of damages
(Unless the stipulation provides) delay, fraud, negligence, or ~ More than nominal but less
 Kung nabanggit ang isang contravention of the tenor of than compensatory damages
scenario sa isang agreement and the obligation ~ May be recovered if the
nangyari yun, even though that the  There is no law that provides court finds that some
scenario is a fortuitous event, the otherwise, pecuniary loss has been
debtor will still be held liable for the  There is no stipulation that suffered but its amount
obligation kasi nakasaad yun sa provides otherwise, cannot, from the nature of the
agreement  The nature of an obligation case, be proved with certainty
~ If the object was lost the obligation does not require the
left is more likely to be transformed assumption or risk,  Liquidated Damages
into a monetary value  And the debtor should must ~ Those agreed upon by the
not be guilty of any act which parties to a contract, to be
3. When the nature of the obligation can serve as an approximate paid in case of breach
requires the assumption of risk cause of the loss
(Also known as Aleatory Contracts) *Approximate cause means
 If the obligation has been = Indirect cause of the loss
established for the principal reason = Negligence
of assuming the risk of loss…
  Exemplary or Corrective
Damages
~ These are imposed by way
of example or correction for
public good, in addition to the
moral, temperate, liquidated,
or compensatory damages
“4 Voluntary Ground for
Non-fulfillment of an obligation” or
“4 Voluntary Grounds for
payment of damages”
(07/06)
 According to article 1170,
Paragraph 1:
Those who in 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.
1. Delay
 (A) Also known as Mora
OR (B) Default
 According to article 1169,
Paragraph 1
Those obliged to deliver or to do
something incur in delay from the
time the obligee judicially or extra-
judicially demands from them the
fulfillment of their obligation.
*Juridically means Through the court
*Extra-juridically means
Out of the court
 (B) Non-fulfillment of an obligation
with respect to time
 Even after the creditor demanded
for fulfillment juridically/extra-
juridically, the debtor fails to
comply.
 (A) Delay incurred by debtor when
the creditor demands. If the debtor
is delayed, creditor can ask for
damages
 (A) 2 Types of Delay
 Ordinary delay
– Failure to perform an
obligation on time
(creditor did not demand)
 Legal delay
– Failure to perform an
obligation on time which
failure constitutes a breach of
the obligation.
(creditor demanded)
Note: No demand, no delay, no
damages. (3Ds)
 Kinds of Delay:
 Mora Solventi
~ If the debtor fails to comply,
the Debtor would be in default
~ Mora Solventi ex re
*re means real
= Obligations to give
= Real Obligation =
~ Mora Solventi ex persona
*persona means personal
= Obligations to do
= Personal Obligation =
 Mora Accipiendi
~ Delay on the part of the
creditor to accept the
performance of the obligation
~ If the debtor complies and
the creditor did not accept the
tender of performance, the
creditor will be in default
~ Creditor in Default
*Tender of Performance means
Act by the debtor in complying
 Compensatio Morae
~ Delay of the obligors in
reciprocal obligation, net
result is that there is NO
actionable default on the part
of both parties.
~ (B) Delay in reciprocal
obligations, in which both
parties are in default, thus
making as if there is no delay
Legal Tender
 Type of money which any creditor
can be required to accept as
payment of an obligation.
(Example)
- Philippine Coins and Bills
*Check is not a Legal Tender
[Can there be a Mutual Default?]
 Possible in a Reciprocal Obligation
 According to article 1170,
Paragraph 6:
In reciprocal obligations, neither
party incurs in delay if the other
does not comply or is not ready to
comply in a proper manner with
what is incumbent upon him.
From the moment one of the
parties fulfills his obligation, delay
by the other begins.
[(B) Requisites of Delay]
 When the debtor incurs in delay
from the time the creditor demands
fulfillment of the obligation (either
judicially or extra-judicially) but the
debtor fails to comply with such
demand (No Demand, No Delay)
 That the obligation be
demandable and already
liquidated
 The debtor does not perform
the obligation
 The creditor demands
performance either judicially
or extra-judicially
 The debtor fails to comply
with such demand
[Exceptions in Delay]
 According to article 1170,
Paragraph 2 to 5:
However, the demand by the
creditor shall not be necessary in
order that delay may exist:
(1) When the obligation or the law
expressly so declare; or
(2) When from the nature and the
circumstances of the obligation it
appears that the designation of
the time when the thing is to be
delivered or the service is to be
rendered was a controlling motive
for the establishment of the
contract; or
(3) When demand would be
useless, as when the obligor has
rendered it beyond his power to
perform.
 Rule:
No demand = No delay
 Exceptions:
“No demand but with delay”
(1) When the Stipulation provide/
There is a stipulation in the contract
 If it specifies the date in which the
debtor must perform, there can be
No demand but with delay
 (B) No demand is necessary such
as when the lease contract
provides that “The rental shall be
paid by the lessee within the first
five days of the month in advance
without the need of demand”
(2) According to the law
 Obligations that is specified in the
law
 (B) When the law provides for the
payment of penalty if the obligation
is not performed on due date, then
demand shall not be necessary
(3) When time is of the essence
 Time as a Principal Factor
 The Debtor must be IN time
(Not ON time)
 The Debtor must allow
sufficient/reasonable time for
the thing to be properly set up
(4) Useless Demand
 There is a demand but no
compliant
 (B) The debtor will still be liable if
the thing that he is suppose to
deliver is destroyed through his
fault or delivered it to the wrong
person
(5) 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 fulfill his
obligation, delay by the other
begins not withstanding the
absence of demand
EXAMPLE:
If the thing is lost due to negligence,
it is converted in monetary value
= No need for demand to get the
object, It must be collected according
to its monetary value to complete the
obligation
[Effects of Delay]
= On the part of the Debtor
 The debtor shall be liable for the
payment of damages
 If the obligation consist of the
delivery of a determinate thing, he
shall be responsible for any
fortuitous event until he has
effected the delivery
= On the part of the Creditor
 He shall bear the risk of loss and
shoulder the expenses for the
preservation of the thing
 The debtor may resort to the
consignation of the thing due
2. Fraud
 (B) the deliberate or intentional
evasion by the debtor of the
normal compliance of his
obligation.
 (B) Committed by the debtor at the
time of the performance of his
obligation
 (A) Also known as Dolo
 According to Article 1171:
Responsibility arising from fraud
is demandable in all obligations.
Any waiver of an action for future
fraud is void
 Guilty of Deception, Deceiver
 2 kinds of Frauds
(B) according to its meaning:
 Dolo Causante
*Also known as Causal Fraud
~ Dinaya para sumangayon
sa isang kasunduan
~ Involves = Contracts
(A) Other info:
~ Fraud committed during the
time of perfection
(nag ooffer and acceptance
palang nanloloko na)
(Article 1330)
Note: Contract is Voidable,
Remedy: annulment
*Annulment means
Contract is voidable
(valid until annulled)
*Remedy of Void contract
= Declaration of nullity of contract
 Dolo Incidente
*Also known as
Incidental Fraud
~ Dinaya para sa pagtupad ng
isang obligasyon
~ Involves = Obligations
(A) Other info:
~ Fraud committed during the
performance of an obligation,
contract already exists.
(Article 1170)
Note: Contract is Valid
Remedy: you can ask for damages
 (B) Fraud in the performance of
the obligation
 This is the deliberate act of
evading fulfillment of an obligation
in a normal manner. This
presupposes an existing obligation;
hence, the fraud has no effect on
the validity of the contract since it
was employed after perfection.
However, the party employing it
shall be liable for damages
EXAMPLE:
B ordered 10 bags of powder soap
from S who agreed to deliver the
same soap after 2 days. On due date,
S delivered 10 bags of powder soap
which he mixed with chalk. This is
fraud in the performance of an
obligation which entitles B to recover
damages. The fraud, however, does
not have any effect on the validity of
the contract
 According to time of commission
 Future Fraud
~ A waiver of an action for
future fraud cannot be made.
If it is an agreement for its
waiver, the same is void
(Article 1171) Thus, the
debtor will still be liable for
damages if he commits fraud
in the performance of his
obligation despite any waiver
made by his creditor
  Past Fraud
~ A waiver of an action for
future fraud may be made,
since the commission of fraud
can no longer be encouraged.
Such waiver Is to act of
liberality on the part of the
creditor
Notes:
 Cannot be waived/subject matter
 Future Fraud is Void
 Past Fraud can be a subject
matter
3. Negligence
 (A) According to Article 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.
 The payment for damages may be
reduced if there is negligence
because it was unintentional
 The payment for damages may not
be reduced if there is fraud
because it was intentional and it
involved malice
 (B) The omission of that diligence
which is required by the nature of
the obligation and corresponds
with the circumstances of the
person, time, and of the place
According to Article 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
corresponds with the
circumstances of the persons, of
the time and of the place. When
negligence shows bad faith, the
provisions of Articles 1171 and
2201, paragraph 2, shall apply.
If the law or contract does not
state the diligence which is to be
observed in the performance, that
which is expected of a good father
of a family shall be required.
 (B) It is failure to observe, for the
protection of the interest of
another person, that degree of
care, precaution, and vigilance
which the circumstances justly
demand, whereby such other
person suffers injury
 (B) It is the omission to do
something which ordinarily
regulate the conduct of human
affairs, would do, or the doing of
something which a prudent and
reasonable man, would not do
 Guilty of Carelessness
 Can be Controlled by being
diligent and careful
 Measured According to 3
circumstances
 Time (Day/Night)
 Person (Comparing personal
circumstances, in which a
person who is more qualified
that the other for the job but
being negligent can cause a
higher penalty other than the
person who is not or less
qualified than him)
 Place (To perform in a place
that is not at its best)
 Cannot be compromised,
Cannot be Void
*Void means Baliwala
EXAMPLES IN CIRCUMSTANCES:
 Circumstances of persons
EXAMPLE:
Security guard sleeping on a night
duty – liable of damages
 Circumstances of place
EXAMPLE:
CM recto before vs. CM Recto now
 Circumstances of time
EXAMPLE:
Car without headlights at night
– liable for damages
(B)
 Kinds of Negligence
 Contractual Negligence
~ Also known as Culpa contractual
~ This is negligence in the
performance of a contract
~ Did not execute the proper
diligence according to the stipulation
 Civil Negligence
~ Also known as:
= Culpa Aquiliana
= Culpa extra-contractual
= Tort
= Quasi-Delict
~ These are acts or omissions that
cause damage to another, there
being no contractual relation
between the parties
 Criminal Negligence
~ Also known as Culpa Criminal
~ Negligence that results in the
commission of a crime
[Difference between Fraud and
Negligence]
 In Fraud it is Intentional
In Negligence it is unintentional
 In Fraud, Damages are always
mandatory, cannot be fixed, and
cannot be regulated, once na
nalaman na nandaya ka, damages
will be fined against you.
While, In Negligence, Damages
can be regulated (pababain)
depende sa circumstances
 (A) Exerting proper diligence of a
good father of the family depends
on the:
 Nature of object of the
obligation
(if the nature of object does
not require the proper
diligence of a good father of
the family you are not liable
for damages)
EXAMPLE:
Sand
– does not need the proper diligence
of a good father of the family
Fluorescent light
– requires the proper diligence of a
good father of the family
~Own lecture~
4. Contravention of the Tenor of the
Obligation
*Contravention
= You did what is not expected of
you, thus, you did not comply with
the agreement
[The ONLY Involuntary Ground for
non-fulfillment of an obligation]
 Fortuitous Event
= NO CONTROL
“Usurious Transaction”
(07/11)
 Lending money with an interest
that is higher with what the law
provides to be a maximum one
 According to Article 1175:
Usurious transactions shall be
governed by special laws
 (A) Law that regulates the amount
of interest the creditor should ask
from the debtor.
 (A) Usury is now suspended or
legally non-existent. Parties are
now free to stipulate any amount
of interest.
 NOTE:
Wala ng Usurious Transaction
- Nasuspend sya in the time of
President Marcos because
tinatago ng mga tao ang pera at
hindi siya nagcicirculate within the
economy. In order to encourage
the people to circulate the nation’s
money,inalis niya to.
 Recovery of Interest
= Kelan pwede kunin ang tubo sa
pautang?
1. Indications in the Stipulation
2. The stipulation must be in writing
3. Must be lawful (nung time ng
Usurious Transaction)
Dahil wala ng Usurious Transaction,
lahat ng patubo ay lawful
“Passing of Rights”
 According to Article 1178
Subject to the laws, all rights
acquired in virtue of an obligation
are transmissible, if there has
been no stipulation to the contrary.
 Rights = Naipapasa
Obligations = Hindi naipapasa
 Utang = Obligation
Pautang = Asset = Right
 Rights resulting from an obligation
as a rule transmits
 If the Creditor dies, the heir will
take over and collects the
obligations left by his parent
 If the debtor dies, the obligation
also dies. Kasabay mamatay ng
debtor ang utang niya. PERO if
may naiwang ari-arian ang debtor,
pwedeng kunin ito ng creditor
bilang bayad sa utang
[Exceptions in Article 1178]
 If the law prohibits the
transmission of rights
~ Thus the rights of a general partner
in a partnership are not transmitted
to their heirs upon his death as
provided by law
 If the parties agreed against their
transmission
~ Thus, the right is not transmitted to
an assignee or to their heirs if their
was a stipulation to the effect
between the parties
 If the right is by nature not
transmissible
Kayamanan = Ari arian = Estate
Estate
 The Value of all of the properties
left by a person who passed away
[Differences between Legal Rate,
Stipulation Rate, and Lawful Rate]
Legal Rate
 Ang nakalagay sa agreement ay
“with Interest” lang
 Kung walang nakaspecify na tubo
sa agreement, ang tubo na
gagamitin ay ang nakasaad sa
batas
Stipulation Rate
 “With 5% per month”
 Ang nakasaad na specific na tubo
sa agreement
Lawful Rate
 The rate of interest are below the
ceiling rate of interest set by the
law
 All interest are lawful dahil wala ng
Usurious Transaction
[Remedies for Over Interest]
 If the rates are Immoral or
shocking to the conscience of man,
the interest is still lawful because
wala ng usurious transaction but it
is immoral. With this the debtor
can file a petition in court, and ask
to regulate and make the interest
reasonable.
“Presumption”
(07/13)
 According to Article 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.
 An inference from a certain set of
event (Pagpapalagay ng ibig
sabihin ng isang bagay)
 When the Creditor manages
payment of the principal in full
without mentioning the
status/condition of any interest
unpaid, the presumption will be
that the interest had already been
paid
REASON:
Based on the Rule on Sale:
Application of Payment
~ When the debtor only pays in
partial, the creditor must apply it
being first being the oldest payment
(record). If there are interest, it must
be applied first. The payment of the
Interest precedes (nauna) the
principal
(Example)
 In paying of rent, the monthly
payment for rent is 10,000. by the
month of january to march the rent
payment had not yet been paid,
then in the month of april the
debtor paid 10,000. if sinabi sa
resibo na “Paid rent for the month
of April” without stating na unpaid
ang january to march.
Ipagpapalagay ng batas na ang
prior months (january to march) ay
bayad na
 In paying for the Interest and
Principal, If sinabi sa resibo na ang
utang ay "payment for the
principal" Ipagpapalagay na
nabayaran na ang interest kung
walang other info tungkol sa tubo
na nakalagay
 2 Kinds of Presumption
 Conclusive Presumption
~ Hindi pwedeng baliin ang
presumption
~ Even if you have very strong
evidences to establish the
opposite that will not be allowed
Example:
If may isang tao na nakagawa
ng isang pagkakasala at siya ay
naakusahan, if ang defend niya
ay “hindi niya alam na yun ay
mali, isang kasalanan, o isang
krimen dahil hindi siya
nakapagaral”, hindi tatanggapin
ng batas yun dahil
ipagpapalagay nito (Ipepresume
ng batas) na bilang isang
mamamayang pilipino ay dapat
alam mo ang batas at hindi ka
makakaiwas sa pananagutan.
 Disputable Presumption
~ Also known as Rebuttable
Presumption
~Pwdeng baliin/pabulaanan/ or
I-destroy ang presumption
~kapag 2 tao ang nagkasala
pwdeng ang isa ay i-justify ang
reason sa isang kasalanan para
mabawasan ang consequences
or penalties
 [Mitigating Circumstances]
- Circumstances that will result to a
lower penalty
(A) Notes:
Additional information for
Article 1176
A. If there are back-rentals of
arranges, when issuing receipts,
indicate where the received payment
is applied. Otherwise, the
presumption is all debt is paid.
Example: Monthly rent is P10,000
January-May rent is not paid. Then
on June, P10,000 was paid. In the
receipt, the note was written
“Received the amount of P10,000 as
payment for rentals. Dated June 7,
2017.” The presumption, all debt
including those from January up to
the month of May was paid.
If “Received the amount of P10,000
as payment for the month of January
2017. Dated June 7, 2017.” was
written instead, it is clear that the
amount paid was just for one month
of rent.
B. Accessory follows the Principal. If
the Principal is extinguished, the
accessory is extinguished, too. But if
the accessory is extinguished, it
doesn’t mean that the principal is
extinguished, too.
Example 1: A debt of P10,000 with
10% interest is payable on
December 20.
Case 1: The problem stated that the
interest of P10, 000.00 was paid on
the said date.
Is the debt extinguished? No. Only
the interest (accessory) was
extinguished, not the principal.
Case 2: The problem stated that the
principal of P100, 000.00 was paid.
Is the debt extinguished? Yes.
Because the principal obligation was
extinguished.
Example 2: A loaned P100, 000.00
from B with a necklace as collateral.
The loan is payable on December 20.
Case 1: On the next day, the
necklace was back to A’s possession.
Is the P100, 000.00 debt
extinguished? No. The necklace
which is a contract of pledge is just
an accessory contract.
Case 2: The P100, 000.00 was paid.
Is the necklace back in A’s
possession? Yes, because the
principal obligation was extinguished.
~Own Lectures~
“Remedies available in favor
of the creditor who has not
been favored by the debtor
of his performance of obligation”
 According to Article 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
SCENARIO:
 Umutang ang isang tao ng 1M, the
maturity date has arrived and
nagdemand na ang creditor na
magbayad na si debtor (demand
for performance)
*Article 1169:
No demand = No default
 Hindi nakapagbayad ang Debtor
= Debtor in default
 Remedies na pwedeng gawin ng
creditor
1. Specific Performance
 The creditor can file a case in
court "Sue in Court"
 Also known as:
 Exact fulfillment
 Suing for payment
 Sum of money
= dinidemanda ka dahil sa
kadahilanang di pagbabayad
ng utang
 If natalo ang debtor sa court and
napatunayang wala talaga syang
pangbayad or if gumawa sya ng
paraan para magbayad pero hindi
sapat ang binigay nya, pwede ng
gamitin ni creditor ang #2A
2. Virtue of Attachment
 (B) Pursue the property in the
possession of the debtor through
the court except those exempt by
law
 Also known as the Act of
Attachment
 Ceasing/taking the property in the
name of the debtor
NOTE:
 Dapat under his name/registered
under his name ang property
Purpose:
 For the Debtor to sell the property
to the Public via Public Auction/
Auction Sale, in order na
pambayad sa utang
Exception:
 May mga properties na hindi
pwdeng makuha ng creditor, these
are properties na kinakailangan ng
debtor para makasurvive, ang mga
properties to earn a living
Example:
- Books ng lawyer
- Farmer’s farming equipments
You don’t need a house to earn a
living = pwede kang mangupahan
 In the process of selling or
disposing the property by virtue of
attachment, if ang nagenerate na
pera ay sobra sobra para sa
pambayad ng utang, kailangang
ibalik ng creditor ang excess
money na nakuha from the auction
to the debtor, thus presenting na
“Fully Paid” na ang debtor. PERO
kung hindi at kulang parin, pwde
nang I-avail ng creditor and #3
3. Subrogation
 (B) Exercise all the rights to bring
all of the actions of the debtor
except those personal to him (Also
known as accion subrogatoria)
 A juridical (legal) process where by
a third person is installed in the
place of the debtor
 By Subrogation, the law will permit
the creditor na siya na ang
maningil in the place of the debtor
sa kanyang mga pinautangan
(binibigyan ng court ng karapatang
maningil sa creditor over the
debtor)
=IF KULANG PARIN=
4. Rescission
 (B) Impugn the acts which the
debtor may done to defraud his
creditors (Also known as accion
pauliana)
 A process in law where by a
contract shall be set
aside/cancelled in order for the
purpose of restoring or installing
back to their prior status, the
parties to the contract.
Example
 If and debtor ay nagdonate ng
kanyang mga properties or mga
ari-arian even before kunin ng
creditor via virtue of attachment,
pwdeng ipacancel ng creditor ang
act of donation or ipasara ang
kasunduan ng debtor na
magdonate, thus babalik sa kanya
ang original na pag-aari (balik
ownership = nakapangalan ulit sa
debtor) then the creditor can do
the virtue of attachment
=PERO=
If binenta ang pag-aari, a contract of
sale can only be rescissible if it does
not result damage/injury to a 3rd
person.
 If nagawa na ang 1-4 and hindi
parin nababayaran in full ang
utang, then wala ng magagawa
ang creditor
 “No one shall be imprisoned for
non-payment of debt”
(Article 3, Section 20, Bill of rights,
Philippine Constitution)
=PERO
Kung ang ipinang bayad sa utang ay
isang bouncing check, ang debtor ay
possibleng makulong sa kasong
Estafa
 1-4 must be availed according to
their prescedence/ pagkakasunod
sunod
[Notes]
Exprovision
 When a third person offers to pay
for the debt of another without the
consent of the debtor,payment is
valid, obligation is extinguished
BUT a new obligation is
established
 Pwedeng singilin ang asawa if ang
inutang ay ginamit para sa welfare
ng family
Other Info:
(A) 10 Special Kinds of Obligation
1. Pure Obligations
2. Obligations with a period
3. Conditional Obligations
4. Alternative Obligations
5. Facultative Obligations
6. Joint Obligations
7. Solidary Obligations
8. Divisible Obligations
9. Indivisible Obligations
10. Obligations with a penal
clause
~Own Lecture~
PS: Hindi maayos ung last topic kasi
magulo siya hahaha
“Pure Obligation,
Conditional Obligation,
and Obligations with a Period”
(07/16)
According to Article 1179:
Every obligation whose
performance does not depend
upon a future & uncertain event,
or a past event unknown to the
parties, is demandable at once.
Every obligation which contain a
resolutory condition shall also be
demandable, without prejudice to
the effects of the happening of the
event
[Pure Obligation]
 Is one which is not subject to any
condition and no specific date is
mentioned for its fulfillment and is,
therefore, immediately
demandable
 When the demand-ability of an
obligation need not wait for either
fulfillment of a certain event, arrival
of a certain period, then that
obligation shall be immediately
demandable
[Exceptions: Not pure obligation but
immediately demandable]
Conditional Obligation with:
1. A Resolutory Condition
= Scenario na di sure na magaganap
(Under the principal kinds of
condition)
2. A Resolutory Period
= Scenario na sure na magaganap
= same principle as resolutory
condition pero sure ang event na
magaganap
3. Protestive on the side of the
creditor
= According to Article 1182:
When the fulfillment of the
condition depends upon the sole
will of the debtor, the conditional
obligation shall be void. If it
depends upon chance or upon the
will of a third person, the
obligation shall take effect in
conformity with the provisions of
this code.
= if nakadepende sa creditor ang
obligation, it is immediately
demandable
= if it is dependent on the will of the
debtor, in terms of suspensive, it is
void and not demandable, if it is
resolutory, it is valid
= if it is dependent on the will of the
3rd person, that person controls the
scenario and controls the
extinguishment and acquisition of
obligations, if it is not based on it’s
will, the scenario will solely based on
the actions of the 3rd person, This is
also called a Mix Condition
Mix Condition
= Protestative + Casual
4. Condition is Impossible
= When the condition is impossible,
and it is imposed in the negative way,
the demand is anytime because the
scenario is impossible
[Conditional Obligation]
 One whose consequences are
subject in one way or another to
the fulfillment of a condition
 The demand-ability is dependent
upon the happening of an
uncertain event (event that may or
may not happen)
According to Article 1181:
In conditional obligations, the
acquisition of rights, as well as
the extinguishment or loss of
those already required shall
depend upon the happening of the
event which constitutes the
condition
[Classifications of Conditions
According to:]
 2 Principal kinds of condition
 Suspensive Condition
Also known as
Condition Precedent or
Condition Antecedent
= One fulfillment of which will give
rise to an obligation.
= The demand is suspended up until
the happening or the uncertain event
happen, when the uncertain event
comes the demand can be acquired
to ask
 Resolutory Condition
Also known as
Condition Subsequent
= The obligation will extinguish when
the uncertain event comes, the
obligation is already existing and at
the start of the agreement, it is
already demandable
 Potestative, Causal, and Mix
*Potestative Condition means
The happening is exclusive in the
will of the Debtor (which is going to
be Void) or will of the creditor (which
is going to be valid)
*Casual Condition means
The happening or scenario is
dependent on the will of a 3rd person
or by chance
*Mixed Condition means
A condition in which it is
dependent partly upon the will of one
of the parties and partly upon the
chance or upon the will of a third
person
 Possible and Impossible
~ Possible
= One that is capable of fulfillment
in its nature and by the law.
~ Impossible
= One that is not capable of
fulfillment in its nature. In which the
obligation and condition are void.
Note:
If the obligation is not to do an
impossible thing, it shall be deemed
as not having agreed upon. Thus,
the obligation is immediately
demandable.
 Positive and Negative
Positive
~ This is a condition that some event
happen at a determinate time. Here,
the obligation is extinguish as soon
as the time expires or it has become
indubitable that the event will not
take place
Negative
~ This is a condition that some event
will not happen at a determinate time.
Here, the obligation becomes
effective as soon as the time
indicated has elapsed or it has
become evident that the event will
not occur
 Divisible and Indivisible
Divisible
~ One that is capable of partial
performance
~ Under Article 1183, if the obligation
is divisible, that part thereof which is
not affected by the impossible or
unlawful condition shall be valid
Indivisible
~One that is not capable of partial
performance by its nature or by the
law or agreement of the parties.
[Obligation with a Period]
 According to Article 1193
Paragraph 1:
Obligations for whose
fulfillment a day certain has
been fixed, shall be demandable
only when that day comes
 The event, scenario, or period of
time in the future is sure to happen
which has an influence over the
obligation
 Dependent of the arrival of day
that is certain even though it is not
known when
 When the obligation is dependent
upon the scenario of the debtor,
“Whenever he has capacity to pay,
Whenever he has the money to
pay, Whenever his resources will
permit, when he can afford to pay”
~ The obligation is still with a period,
because according to article 1180:
When the debtor binds himself to
pay when his means permit him to
do so, the obligation shall be
deemed to be one with a period,
subject to the provisions of article
1197.
If magulo, See 07/16 (45:00)
 When the debtor and creditor
cannot agree to the period in
which the debtor will pay because
the obligation is based on his will
(ayaw talaga ng debtor na
magbayad) the creditor can file a
petition in court and according to
article 1197 Paragraph 2:
The courts shall also fix the
duration of the period when it
depends upon the will of the
debtor
 The Court will fix the conflict
[Difference between a Condition and
a Period]
1. As of time
 A Condition may refer to a past
event but generally it is futuristic
 A Period is always futuristic,
always referring to a time in the
future
Explanation:
 A past event can only be used as
a subject matter of a condition
when it is unknown to the parties
involve
Example:
If both parties are unknown to a
certain event that happened in the
past, they can still do a conditional
obligation
 A past event can never be used as
a subject matter in a period
 Both can be used as a subject
matter to a future event
2. As to happening
 Condition = may or not happen
 Period = it may happen but it is
sometimes not know when it is
exactly to happen
3. As to influence on demand-ability
 When the event comes, the
obligation is immediately
demandable (Suspensive)
 When the event comes, obligation
is extinguished (resolutory)
[Notes]
 Contingency
 Something that may or may
not happen
(A) Notes:
Additional information the last topics,
purely based on (A)
I. PURE OBLIGATION
- No period
- No condition
- Immediately demandable
II. OBLIGATION W/ A PERIOD
– Future & CERTAIN event
Examples :
• Everybody will die
• I’ll give you P10k if Mr. X will die
• I’ll give you P10k if the sun shines
tomorrow
• I’ll give you P10k if Mr. X’s 60 year
old father dies.
• “on Christmas Day” “This Year”
• “little by little” “as soon as possible”
“from time to time” “at any time I have
the money” “In partial payments”
“when I am in a position to pay”
III. CONDITIONAL OBLIGATION
– Future & UNCERTAIN event
– Past & Unknown to the parties.
Two Principal Kinds of Condition
(as to EFFECTS):
1. Suspensive Condition
(Condition Precedent or Condition
Antecedent)
– The fulfilment of the condition will
give rise to the obligation.
Example: I’ll give you P10k if you
pass this subject this semester.
2. Resolutory Condition
(Condition Subsequent)
– The fulfilment of the condition will
extinguish an obligation.
Example:
You can use my car until you pass
this subject.
As to FORM:
1. Express
– Condition is clearly stated.
2. Implied
– Condition is merely inferred.
As to POSSIBILITY:
1. Possible
– The condition is capable of
fulfilment, legally and physically.
2. Impossible ~I will give you P10k if I will win the 2.Resolutory Period (in diem)
– It shall ANNUL the OBLIGATION. lottery tomorrow. – the obligation is valid upto a day
a. Legally NOTE: certain and TERMINATES upon the
– susceptible of happening The fulfilment of the condition if arrival of the period.
but contrary to law, morals, based upon the chance, therefore Example:
good customs, public order or the CONDITIONAL OBLIGATION is You can use my car until the end of
public policy. VALID. this year.
Example:I
will give you P20k if you kill your 3. Mixed Three (3) Kinds of Obligation that are
seatmate. – Partly potestative & partly casual. IMMEDIATELY DEMANDABLE
NOTE: Example: • PURE OBLIGATION
It is as if we did not have any I will buy that car if I will be hired at • RESOLUTORY CONDITION
agreement, because the condition is San Miguel Corporation. • RESOLUTORY PERIOD (In Diem)
illegal therefore there will be no NOTE:
obligation to be made. the fulfilment of the condition
depends upon the debtor whether he
b. Physically will buy the car or not, and it also
– in nature of things, cannot depends upon the will of the 3rd
exist or cannot be undone. person (San Miguel whether they will
Example: accept the debtor or not)
Punta ka nga sa 5th floor, talon ka
sandal, dapat una paa pagbagsak As to MODE:
mo. 1. Positive
– The condition consists in the
As to ORIGIN: performance of an act.
1. Potestative 2. Negative
– Depends upon the will of the – The condition consists in the
creditor/ debtor. omission of an act.
Examples:
~ I will give you this watch if I step As to NUMBERS:
out of this room right now. 1. Conjunctive
NOTE: – there are several conditions & ALL
If the fulfilment of the condition is must be fulfilled
based solely upon the will of the 2. Disjunctive
debtor, – there are several conditions &
the CONDITIONAL OBLIGATION ONLY ONE or SOME of them must
shall be VOID. be fulfilled.
~I will give you this watch if you step
out of this room right now.
NOTE:
If the fulfilment of the condition is As to DIVISILBILITY:
based upon the will of the creditor, 1. Divisible
then the CONDITIONAL – the condition is susceptible of
OBLIGATION is VALID. partial performance.
2. Indivisible
2. Casual - the condition is NOT susceptible of
– Depends upon the 3rd person/ partial performance.
chance.
Examples: KINDS of PERIOD
~ I will give you this watch if the 1. Suspensive Period (ex die)
couple outside went kissing. – the obligation BEGINS only upon
NOTE: the arrival of the period.
The fulfilment of the condition is Example:I
based upon the will of the 3rd person, promise to give you P10k if Mr. X
therefore the CONDITIONAL dies.
OBLIGATION is VALID.