Law in its broadest sense means any rule of action or norm of conduct applicable to all

kinds of action and to all objects of creation. It is in this sense that law includes all “laws”
whether they refer to state law, physical law, divine law, precepts and others.
 
In its strict sense, law is an ordinance of reason promulgated by competent authority for
the common good.
Characteristics:
1.  It is a rule of conduct (ordinance).
a. Law serves as a guide of an individual in relation to his fellow and to the
community.
b.  It is not a mere request, but a decree/order or a command that OUGHT to
be followed or obeyed.
c.  obligatory
2.  a product of reason (just)
a.  law is a result of a deliberate process, not whimsical
b.  it is in harmony with higher laws
c.  must be practical. Must meet the demands not only of the present time but
of the future
3.  promulgated
a.  law in order to effect order or to serve as a guide or rule of conduct must
be made known
b.  basis of law as obligatory
c.  method of promulgation is through publication
d.  ignorantia legis non excusat
4.  competent authority (source of law)
a.  addresses the issue of legitimacy
b.  if laws are not prescribed by legitimate authority, the people could not be
expected to observe them.
5.  For the common good/benefit
a.  Ultimate goal of law
b.  Laws should be applied not only to a particular group of people. They
should be applied to all citizens, regardless of religion, political persuasion
and status in life
c.  Salus populi est suprema lex
Classification of law
1.  Natural law (eternal law) - Laws derive its force and authority from God. It is
superior to other laws. It is binding to the whole world, in all countries at all times
a.  Physical law – universal rule of action that governs the conduct and
movement of things which are non-free and material
 b.  Moral law – set of rules which establishes what is right and what is wrong
as dictated by human conscience and inspired by the eternal law
2.  Positive law - enacted (positive act)

a.  Divine law

i.  Divine positive law (ten commandments)

ii.  Divine human positive law (precepts of church authorities or religious leaders)

a.  Public law

i.  Constitutional law – fundamental law of the land which defines the powers of the
government
ii.  Administrative law – fixes the organization and determines the competence of
the administrative authorities and which regulates the methods by which the
functions of the government are performed
iii.  International law – body of rules which regulated the community of nations

a.  Private (civil) law – body of rights which creates duties, rights and obligations
and the means and methods of setting courts in motion for the enforcement of
rights or of a redress of wrong
1.  Substantive private law – rules which declare legal relations of litigants when the
courts have been properly moved to action upon facts duly presented to them
2.  Procedural or adjective private law – refers to the means and methods of setting
the courts in motion and making the facts known to them and effectuating their
judgments
NOTE: the classification is incomplete, but is sufficient for purposes of introduction to
law
Sources of Law
a.  Constitution
b.  Statutes/Legislation

c.  International treaty

d.  Executive issuances

e.  Administrative orders

f.  Ordinance

g.  custom

h.  court decisions (precedent/ doctrine of stare decisis)

 
CIVIL LAW
Branch of Law that treats the personal and family relations of a person, his property and
successional rights, and the effects of obligation and contracts. "Civil" is derived from
the Latin "civiles", a citizen. Originally, the word pertained to a member of "civitas" or a
free political community (Black's Law Dictionary)
Four of the most important types of civil law deal with 1) contracts, 2) property, 3) family
relations, and 4) civil wrongs causing physical injury or injury to property (tort).
CIVIL CODE OF THE PHILIPPINES (Republic Act 386) (June 18, 1949)
HISTORY OF THE CIVIL CODE
The Civil Code is strongly influenced by the Spanish Civil Code, which was first
enforced in 1889 within the Philippines, then a colony of Spain. The Spanish Civil Code
remained in effect even during the American colonization of the Philippines. However,
by 1940, the Commonwealth Government of President Manuel Quezon had created a
Commission to create a new Civil Code. The Commission was initially headed by Chief
Justice Ramon Avanceña. However, the work of the Commission was interrupted by the
Japanese invasion of the Philippines, and its records were destroyed during the Battle
of Manila in 1945.
In 1947, President Manuel Roxas created a new Code Commission, this time headed
by the former Dean of the University of the Philippines College of Law Jorge Bocobo.
Among the members who sat on the new Commission were future Supreme Court
Associate Justice Francisco R. Capistrano, and future Vice-President Arturo Tolentino.
The Commission completed the final draft of the new Civil Code by December 1947,
and this was submitted to Congress, which enacted it into law through Republic Act No.
386. The Civil Code took effect in 1950.
FEATURES OF THE CIVIL CODE
The Civil Code is divided into 5 “books”, with a specific book covering persons and
family relations; property; succession; obligations and contracts; and special contracts.
Special contracts encompasses several classes of contracts as sales, agency, and
partnership. The law on torts and damages is found in Book V, although developments
in tort and damages law have been guided less by the Code than by judicial precedents.
PRELIMINARY TOPICS:
 
An obligation is a juridical necessity to give,to do or not to do. – Article 1156 Civil
Code
 
 
The term obligation is derived from the Latin word “obligatio” which means a
“tying” or “binding.”
1) It is a tie of law or a juridical bond by virtue of which one is bound in favor of
another to render something — and this may consist in giving a thing, doing a
certain act, or not doing a certain act.
2) Manresa defines the term as “a legal relation established between one party
and another, whereby the latter is bound to the fulfillment of a prestation which
the former may demand of him.” 
 3) Article 1156 gives the Civil Code definition of obligation, in its passive aspect.
Our law merely stresses the duty of the debtor or obligor (he who has the duty of
giving, doing, or not doing) when it speaks of obligation as a juridical necessity.
Obligation is a juridical necessity because in case of non-compliance, the
courts of justice may be called upon to enforce its fulfillment or, in default
thereof, the economic value that it represents. In a proper case, the debtor
may also be made liable for damages, which represent the sum of money given
as a compensation for the injury or harm suffered by the creditor or obligee (he
who has the right to the performance of the obligation) for the violation of his
rights. In other words, the debtor must comply with his obligation whether he likes
it or not; otherwise, his failure will be visited with some harmful or undesirable
legal consequences. If obligations were not made enforceable, then people can
disregard them with impunity. If an obligation cannot be enforced, it may be only
a natural obligation.
NATURE OF OBLIGATIONS UNDER THE CIVIL CODE
Obligations which give to the creditor or obligee a right of action in courts of
justice to enforce their performance are known as civil obligations. They are to be
distinguished from natural obligations which, not being based on positive law but
on equity and natural law, do not grant a right of action to enforce their
performance although in case of voluntary fulfillment by the debtor, the latter may
not recover what has been delivered or rendered by reason thereof. (Art.*
1423.)      
            ESSENTIAL ELEMENTS OF AN OBLIGATION

            The following are the essential elements of an obligation:

            1.JURIDICAL TIE OR VINCULUM JURIS OR EFFICIENT CAUSE- the

efficient cause by virtue of  which the debtor becomes bound to perform the prestation
(Pineda, 2000).

            2.ACTIVE SUBJECT [CREDITOR OR OBLIGEE]- The person demanding the

performance of the    obligation. It    is he in whose favor the obligation is constituted,
established, or created.

            3.PASSIVE SUBJECT [DEBTOR OR OBLIGOR] - The person bound to perform

the prestation to     give, to do, or not todo.

4.OBJECT OR PRESTATION - The subject matter of the obligation which has a

corresponding economic value or susceptible of pecuniary substitution in case of
noncompliance. It is a   conduct that may consist of giving, doing, or not doing
something.

            NOTE: Absence of any of the first three makes the object void.
            
EXAMPLE
 
            A promises to paint B’s picture for B as a result of an agreement.
 
(Here A is the obligor, B is the Obligee; the painting of B’s picture is the
object or prestation; the agreement or contract is the efficient cause.)       
            
CONCEPT OF PRESTATION
 
A prestation is an obligation; more specifically, it is the subject matter of an
obligation -  and may consist of giving a thing, doing or not doing a certain act.
The law speaks of an obligation as a juridical necessity to comply with a
prestation. There is a “juridical necessity” for non-compliance can result in
juridical or legal sanction.
 
Reminder: It is NOT THE OBJECT which is the prestation but rather it is the act
of giving, doing or not doing.
 
So using the example above, B’s picture is not the prestation but it is the
act of painting B’s picture.
 
FORMS OF OBLIGATION
 
            (1) As a general rule, the 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.
 
            KINDS OF OBLIGATION ACCORDING TO SUBJECT MATTER 
            Note: More of the kinds of obligation will be discussed in the succeeding
modules
 
            From the viewpoint of the subject matter, obligation may either be:
 

            (1) Real obligation (obligation to give) or that in which the subject matter is a

thing which the obligor must deliver to the obligee; or 
            (2) Personal obligation (obligation to do or not to do) or that in which the subject
matter is an act to be  done or not to be done.

            There are thus two (2) kinds of personal obligation:

            (a) Positive personal obligation or obligation to do or to render service (see Art.

1167.); and

            (b) Negative personal obligation or obligation not to do (which naturally includes

obligations “not to give”). (see Art. 1168.)
 
            SOURCES OF OBLIGATIONS (how obligation arise)
1. Law (obligation ex lege)- like the duty to pay taxes and to support one’s family
2. Contracts (Obligation ex contractu) – like the duty to repay a loan by virtue of
an agreement 
3. Quasi-contracts (Obligations ex quasi contractu) – like the duty to
refund an “over change” of money because of the quasi-contract of
solution indebiti or “undue payment”
4. Delict, crimes or Acts or Omissions Punishable by Law
(Obligation ex malificio or ex delicto) – like the duty to return a stolen
carabao;
5. Quasi-delicts or torts – (obligation ex quasi-delicto or ex-quasi-
maleficio, Culpa aquiliana) – like the duty to repair damage due to
negligence. 
            This enumeration is exclusive. No obligation exists if its source is not one of those
enumerated in Art.           1157 of the NCC (Navales v. Rias, G.R. No. L3489,
September 7, 1907). 
NOTE: ACTUALLY, THERE ARE ONLY TWO SOURCES (I.E., LAW AND
CONTRACTS) BECAUSE OBLIGATIONS ARISING FROM 
QUASICONTRACTS, DELICTS, AND QUASI-DELICTS        ARE IMPOSED BY
LAW (LEUNG BEN V. O’BRIEN, 38 PHIL. 182). 
            Time of perfection (when will obligation arise)
            General Rule:
            Law – from the time designated by the law creating or regulating them;
            Contracts– from the time of the perfection of the contract e.g. meeting of the
minds
            Exemption:
1. When the parties made a stipulation on the right of the creditor to the fruits of the
thing; 
 2. When the obligation is subject to a suspensive condition, from which it arises
upon fulfillment of the condition; 
3. When the obligation is with a period; there is already an existing obligation, but it
is only demandable when   the period expires or becomes due. 
Quasi Contracts, delicts, quasi-delicts – from the time designated by the law
creating or regulating them.
 
LEGAL OBLIGATIONS or Obligation Ex Lege (article 1158)
            Obligations derived from law are not presumed. Only those expressly
determined in the Code or in         special laws    are demandable and shall be regulated
by the precepts of the law which establishes      them and as to what has not been
foreseen by the provisions of Book IV of NCC (NCC, Art. 1158). 
            Characteristics of a legal obligation 
1. Does not need the consent of the obligor; 
2. Must be expressly set forth in the law creating it and not merely presumed; and 
3. In order that the law may be a sourceof obligation, it should be the creator
of the obligation itself (NCC, Art. 1158). 
            Determining whether an obligation arises from law or from some other source 
1. Arises from law if it establishes obligation; 
2. Arises from the act itself if the law merely recognizes the existence of an
obligation generated by an act (Manresa).            
            Examples:       
1. According to Art. 2014 of the NCC, a loser in a game of chance may recover his
loss  from the winner, with  legal interest from the time he paid the amount lost
(Leung Ben v. O’Brien, G.R. No. L-13602, April 6, 1918); 
2. The obligation of the spouses to support each other; 
3. The obligation of the employers under the Worker’s Compensation Act; 
4. The obligations of the owners of the dominant and servient estates in legal
easements and others scattered in the NCC and in special laws 
5. The obligation to pay taxes.

  
CONTRACTUAL OBLIGATIONS (Article 1159)
            
            Requisites of a contractual obligation 
1. It must contain all the essential requisites of a contract (NCC, Art. 1318); and 
 2. It must not be contrary to law, morals, good customs, public order, and public
policy.
            Rules governing the obligations arising from contracts 
            General Rule:These obligations arising from contracts shall be governed
primarily by the stipulations,           clauses, terms, and conditions of the parties’
agreements. 
            Exemptions: Contracts with prestations that are unconscionable or
unreasonable (Pineda, 2009). 
            Binding force of obligation ex contractu
            Obligations arising from contracts have the force of law between the parties and
should be complied            with in good faith (NCC, Art. 1159). This is known as the
“principle of obligatory force of contracts”        the contract (Pineda, 2000). 
            Good faith is performance in accordance with the stipulation, clauses, terms,
and conditions of the             contract.
            General Rule:Neither party may unilaterally evade his obligation in the contract.
            Exemptions: Unilateral evasion is allowed when the: 
1. Contract authorizes such evasion; or 
2. Other party assents thereto.
 
            Difference between an Obligation and Contract
An OBLIGATION is the result of a contract (or some other source). Hence, while
a CONTRACT, if valid, always results in an obligation, not all obligations come
from contract. 
Be it noted that, however, from another viewpoint that a contract may itself be the
result of an obligation. Thus, if P engages A as the former’s agent, we have the
contract of agency. As an agent, A has the obligation, say to look around for
clients or buyers, as in the real estate business. As a result of such obligation, A
may enter into a contract of sale with C, a costumer. The contract of sale itself
results in the obligations to pay and to deliver. The obligation to deliver may
result in a contract of carriage. 
            The so-called INNOMINATE CONTRACTS
For want of an express name, the following are termed “contratos innominados”
  Do ut des – I gave that you may give.
  Do ut facias – I give that you may do.

  Faciout des – I do that you may give.

  Faciout facias – I do that you may do.

  
QUASI-CONTRACT (Art. 1160)

            A juridical relation arising from lawful, voluntary, and unilateral acts based on the
principle that no one shall be unjustly enriched or benefited at the expense of another
(NCC, Art. 2142). 

            Distinguished from   “implied contracts”

            An implied contract, in the proper sense, is a contract which arises when the
intention of the  parties is not expressed, but an agreement in fact, creating an
obligation, is implied or presumed  from their acts, or where there are circumstances
which show a mutual intent to contract. An implied contract requires consent while a
quasi-contract, being a unilateral contract, does not. The basis of an implied contract is
the will of the parties while the basis of a quasi-contract is law, to the end that there be
no unjust enrichment (Rabuya, 2017).

            

Characteristics of a quasi-contract 

1. It must be Lawful; 

2. It must be Unilateral; and 

3. It must be Voluntary 

            Presumptive consent

            Since a quasi-contract is a unilateral contract created by the sole act(s) of the
gestor, there is no   express consent given by the other party. The consent needed in a
contract is provided by law through presumption (Pineda, 2000). 

            Principal forms of quasi-contracts 

1. Negotiorum gestio (inofficious manager) – Arises when a person voluntarily takes

charge of the  management of the business or property of another without any
power from the latter (NCC, Art.       2144); 

2. Solutio indebiti (unjust   enrichment) – Takes place when a person received

something from       another without any right to         demand for it, and the thing
was unduly delivered to him through mistake
NOTE: The delivery must not be through liberality or some other cause.

Query: is a Quasi-Contract an Implied Contract?

            Ans: No, because in a quasi-contract (unlike in an implied contract) there
is NO meeting of the minds.

Examples of Quasi-Contracts

1.  When during a flood, fire, or other calamity, property is save from

destruction by another person without the knowledge of the owner, the
latter is bound to pay the former just compensation. (Article 2168, Civil
Code)

2.  Any person who is constrained to pay the taxes of another shall be

entitled to reimbursement from the latter. (Article 2175, Civil Code)

DELICT or EX DELICTO

Pertinent Provision of the Revised Penal Code (RPC)

Article 100, RPC says, “Every person criminally liable for a felony is also civilly
liable.” The reason lies in the fact oftentimes the commission of a crime causes
not only moral evil but also material damage. If no material damage is done, civil
liability be enforced.

Civil Action Implicitly Instituted in Criminal Case

As a general rule, whenever a criminal action is instituted, the civil action for the
civil liability is also impliedly instituted together with the criminal action. (Rule 3,
Section 1, Revised Rules of Court)

Liability of an Insane Criminal 

An insane man who commits a crime is exempted from criminal liability, but his
guardian can be held civilly liable unless the latter was diligent in his task of
taking care of the insane. If there is no guardian or the guardian is insolvent, the
property of insane man can be held liable. (See Arts. 12 and 101, RPC).

Effect of DEATH of Criminal Offender pending trial

 
Buenaventura Belama vs. Marcelino Polinar
L-24098, Nov. 18, 1967
 
FACTS: the defendant in a criminal case for physical injuries died before final judgment.
 ISSUE: is his civil liability extinguished? 
  HELD: No, his civil liability is not extinguished for, after all, in Art. 33 of the Civil Code,
there can, in the case of physical injuries, still be an independent action. The action will
be directed against the administrator of the estate, the obligation having become the
obligation of the heirs; but of course the liability cannot exceed the value of inheritance. 
 
Effect of ACQUITTAL in criminal Case
 Suppose the defendant in a criminal case is acquitted, can he still be held liable civilly?
 ANS: it depends
1.  If the reason why there was an acquittal was because the accused could not have
acquitted the act, , no civil action can later on be brought.
2.  If the reason for acquittal was because of exempting circumstance (as in case the
defendant is insane) he would still be civilly liable 
3.  If there is an independent civil action allowed by the law, civil liability may still arise if this
action is instituted and the defendant’s liability is proved by mere preponderance of
evidence (because while guilt beyond reasonable ground might not have proved, it
would be a simpler matter to prove guilt by mere preponderance of evidence) eg.Estafa
case
 
QUASI-DELICT (Art. 1162)
 A quasi-delict is a fault or act of negligence (or omission of care) which causes
damages to another, there being no pre-existing contractual relations between the
parties.
Culpa Aquiliana (quasi-delicts) can refer to acts which are criminal in character, whether
the same be voluntary or negligent.
 
Examples
1.  While driving a car recklessly, Pedro injured a pedestrian.
2.  Pedro while cleaning his window sill, caused a flower pot to fall on the street, breaking
the arms of his neighbor.
 
Note: in the above examples, Pedro can also be charged with the crime of physical
injuries thru simple or reckless imprudence.
 

Definition of NEGLIGENCE (Culpa )

 1.  Negligence is the 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. (U.S. vs Barrias, 23 Phil. 434)
2.  As defined by the Civil Code, negligence is the omission of that diligence which is
required by the circumstances of person, place, and time. (Art. 1173)
Test for determination of Negligence
 
“The test in determining whether a person is negligent…is this: Would a prudent man (in
his position) foresee harm to the person injured as a reasonable consequence of the
course about to be pursued? If so, the law imposes a duty on the actor to refrain from
that course, or to take precaution against its mischievous results, and the failure to do so
constitutes negligence. Reasonable foresight of harm, followed by the ignoring of the
admonition born of this provision, is the constitute fact of negligence.” (Picart vs Smith,
37 Phil. 890)
 
Requirements before a person can be held liable for Quasi-Delict
1.  there must be fault or negligence attributable to the person charged;
2.  there must be damage or injury
3.  there must be a direct relation of cause and effect between the fault or negligence on
the one hand and the damage or injury on the other hand (proximate cause)
 
NOTE:
1.  Proximate Cause is that adequate and efficient cause, which in the natural
order of events, necessarily produces the damages or injury complained of.
in the case of Tuason vs Luzon Stevedoring Corp..,L-13541, January 28, 1961,
the Supreme Court held that since the plaintiff, Eduardo Tuazon, was travelling at
a very high speed and on the wrong side of the road, his negligence was the
proximate cause of the accident which badly injured him, and therefore he cannot
recover damages from the other party in the collision.  
 There are instances when “although there is damage, there is no legal injury or wrong”
(damnum absque injuria – damage without legal injury ) . (Example: if carefully driven car
causes damage to a pedestrian because the driver was suddenly struck by lightning, this is an
instance of damage without injury)
Article 1163. Every person obliged to give something is also obliged to take care
if 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. (1094a)
 Reason behind Art.1163:
 the obligation to deliver a thing would be illusory if the debtor were not also
obliged to preserve it. (Tolentino)
 Effect of breach: Debtor who fails to exercise the diligence of a good father of a family
in preserving the thing can be held liable for damages. (Tolentino)
 * Note: Art. 1163 can be read in conjunction with Art. 1173.
 3 kinds of prestation in obligations:
 To give - real (there is some physical thing which may be the subject of
possession, the delivery of which completely discharges the obligation)
 To do - positive personal obligation
 Not to do - negative personal obligation (non-fulfillment is resolved in the end by
the payment of an indemnification of damages)
 Obligation to do or not to do
  Perfection of the obligation devolves upon the person himself who is bound by
the obligation
 Obligation to give/to deliver
  Intimately connected with the thing that is the subject matter of relation
  Definition: That which has for its object the delivery of a thing which the obligor
must deliver to the obligee because of whatever right the latter may have
acquired over the same (Caguioa)
 Classification of Obligation to give/deliver:(distinction lies purely and exclusively on the
will of parties or under the norms of law)
1.  Specific obligation
2. Generic obligation
 
SPECIFIC OBLIGATION

o an obligation to give a specific or determinate thing
  *SPECIFIC/DETERMINATE THING
 a thing determined individually in such a manner that it cannot be substituted with
another
 object is particularly designated or physically segregated from all others of the
same class; object is a concrete, particularized thing, indicated by its own
individuality (Jurado)
 one that is individualized and can be identified or distinguished from others of its
kind (Tolentino)
- examples: white horse which won the Senior Grand Derby in 1979, Samsung G600 G-
660#1-1G-6608 PC
 NOTE:
  the very same thing promised must be delivered by the debtor and he cannot
substitute said thing with another although the substitute is more valuable than
that agreed upon unless the creditor agrees to the substitution (Art. 1206 par.1)
   3 accessory obligations of debtor in an obligation to give (deliver)
1. obligation to take care of it with the proper diligence of a good father of a family
(Art.1163); 
2. to deliver the accessions and accessories although the same may not have been
mentioned (Art.1166); 
3. to deliver the fruits from the moment the obligation to deliver arises (Art.1164)
 
GENERIC OBLIGATION
 has for its object a genus an object that is determined only by the class to which
it pertains (incertum corpus)
 delivery of a thing belonging to a specie stipulated, usually those which are
fungible and those which are determined by amount, number or measure
 an obligation to give a generic thing
*GENERIC/INDETERMINATE THING
 the object is one whose determination is confined to that of its nature – to the
genus to which it pertains (Jurado)
 one that is indicated only by its kinds, without being designated and distinguished
from others of the same kind  (Tolentino)
o examples: ten white horses, Samsung G600, Acer laptop

  2 Purposes of obligations to give/deliver: (Caguioa)

1.  To transfer title/ownership (e.g. contract of sale or barter)
2. To transfer merely possessions (commodatum—Art. 1933, by the contract of
loan, one of the parties delivers to another, either something not consumable so
that the latter may use the same for a certain time and return it, in which case the
contract is called a commodatum )
 
Kinds of Delivery
 Delivery may be either actual or constructive.
1.  Actual delivery (or tradition) –where physically, the property changes hands.
Example: if A sells B a fountain pen, the giving by A to B of the fountain pen is
actual tradition.
2.  Constructive delivery – that where the physical transfer is implied. This may be
done by:
 1.
a.  Tradition simbolica (symbolical tradition – (as when the keys of a bodega
are given)
b.  Tradition longa manu (delivery by mere consent or the pointing out of the
object) – Example: pointing out the car, which is the object of the sale.
c.  Tradition brevi manu–(delivery by the short hand; that kind of delivery
whereby a possessor of a thing not as owner, becomes the possessor as
owner) (example: when a tenant already in possession buys the house he
is renting)
d.  Traditio constitutum possessorium– the opposite of brevi manu; thus, th e
delivery whereby the possessor of a thing as an owner, retains possession
no longer as an owner, but in some other capacity (like a house owner,
who sells a house, but remains in possession as tenant of the same
house) 
e.  Tradition by the execution of legal forms and solemnities(like the
execution of public instrument selling land)
 Other form of classifying obligations in general: (Caguioa)
1.  Positive- obligations which have for their object to give or to do
2. Negative - restrains the obligor from delivering or doing something which he
could do where it not for the obligation
 
Diligence of a good father of a family (BONUS PATER FAMILIAS)
  That reasonable diligence which an ordinary prudent person would have done
under the same circumstances 
  general legal standard of care or degree of diligence the law requires in
obligation to deliver a thing
 Degree of diligence required
  That agreed upon; that which is required by the nature of the obligation an d
corresponds with the circumstances of a person, time and plaace. (Art. 1173,
Civil Code). This is really a diligence of a good father of a family.
  In the absence of such, that which is required by the law;

 General Rule: In the absence of the foregoing, diligence of a good father of a family
(minimum standard of diligence)
Exceptions:
1. Common carriers requiring extraordinary diligence (NCC, Arts. 1998-2002);
2.  Banks require the highest degree of diligence, being imbued with public interest.
 Circumstances that should be taken into consideration in determining the degree
of diligence: (Caguioa)
 nature of the obligation depending on the circumstances of the debtor
 nature of the obligation depending on the time of the performance of obligation
  nature of the obligation depending on the place of the performance of the
obligation
 OBLIGATIONS OF A DEBTOR IN AN OBLIGATION TO GIVE/DELIVER:
BASIS   Specific Generic

Deliver the thing which is neither of

superior nor inferior quality if quality 
What the obligation Deliver the thing agreed upon (NCC,
and  circumstances have not been
consist of Art 1165).   
stated by the parties. (NCC,
Art.1246).            

Take care of the thing with the

proper diligence of a good father of a If the object is generic, but the source is
Required diligence
family unless the law requires or specified or delimited, the obligation is to
to be observed
parties stipulate another standard of preserve the source
care (NCC, A rt.1163).           

Delivery of another thin g within the

Deliver all accessions, accessories,
same genus as the thing promised if
What delivery and fruits of the thing even though
such thing is damaged due to lack of
comprises of they may not have been mentioned
care or a general breach is
(NCC, A rt. 1166)
committed.     

Pay damages in case of breach of Pay damages in case of breach of

Effects of breach of obligation by reason of delay, fraud , obligation by reason of delay, fraud,
obligation negligence, contravention of the negligence, contravention of the tenor
tenor thereof (NCC, Art. 1170). thereof (NCC, Art. 1170).        

Obligation is not extinguished (genus

Effect of fortuitous Fortuitous event extinguishes the
nun quam peruit – genus never
event             obligation.
perishes).

                        
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 until
the same has been delivered to him. (1095)
 
 General rule: The creditor or obligee, in an obligation to deliver a determinate thing, is
entitled to the fruits from the time the obligation to deliver arises.
KINDS  OF FRUITS
1. Natural fruits – spontaneous products of the soil and the young and other
products of animals (Art.442)
2. Industrial fruits – produced by lands of any kind through cultivation or labor (Art.
442)
3. Civil fruits – rents of buildings, price of leases of lands and other property and the
amount of perpetual or life annuities or other similar income (Art.442)
Nature of the right of the creditor with respect to fruits
   Before delivery – Personal right;
    After delivery – Real right.
Distinctions between personal and real rights
Personal Right Real Right

power belonging to one person to demand of power belonging to a person over a specific thing,
another, as a definite passive subject, the without a passive subject individually determined,
fulfillment of a prestation to give, to do, or not to against whom such right may be personally
do (Tolentino) exercised

jus in re - right enforceable against the whole

jus ad rem - right enforceable only against a
world (e.g. right of ownership, possession,
definite person or group of persons
usufruct, or easement)

Note:
 Before delivery, the creditor, in obligations to give, has merely a personal right against
the debtor – a right to ask for delivery of the thing and the fruits thereof; ownership does
not pass to the creditor
Once the things and fruits delivered, the creditor acquires real right over such which is
enforceable against the whole world à the creditor only acquires the right of ownership
over the thing and the fruits once they are delivered to him.
 
*When does the obligation to deliver the thing and the fruits arise?
1.  Obligations arising from contracts

o From the time designated by the provisions of the Civil Code or of special
laws creating or regulating them
o  General rule: from the moment of the perfection of contract (basis:
Art.1537)
  Exceptions to the general rule:
 In case there is a contrary stipulation of the parties with respect to the time when
the thing or fruits shall be delivered.
 If the obligation is subject to a suspensive condition à obligation to deliver the
thing as well as the fruits shall arise only from the moment of the fulfillment of the
obligation; otherwise stated, from the moment the condition happens (Art.1187) 
suspensive condition – the happening or fulfillment of the condition results in the birth of
the obligation

o  If the obligation is subject to a suspensive term or period à obligation to
deliver arises only upon the expiration of the designated term or period

o  Reason/justification of the article: found in the corresponding liability of
the creditor for any loss that is occasioned to the property, since he bears
the same from the moment of the perfection of the contract.
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.
 Remedies of the creditor in case of failure to deliver the thing due:
 The following are the remedies of the creditor in case of failure to deliver the thing due
(Pineda, 2000)
Determinate Generic

To compel specific performance, for the debtor to

make the delivery of the very thing agreed upon
(when the debtor does not comply with what he
has promised and the creditor demands that he
fulfill the same)
NOTE: Under Art. 1244 par.1, the debtor of a
thing cannot compel the creditor to receive a
different one, although the latter may be of the
same value as, or more valuable than that which
is due.
 
To ask for performance of the obligation
NOTE 1: the delivery of a thing belonging to the
species stipulated will be sufficient and hence, it is
not absolutely necessary for the debtor to make
the delivery himself, since the delivery of anything
of the same species will fulfill the obligation. It may
be performed by another, but at the expense of the
debtor. (substitute performance)
NOTE 2: Creditor can only ask for the delivery of a
thing or object belonging to the class or genus
stipulated which must be neither of superior nor
inferior quality (Art.1246)

Rescission (action to rescind under NCC, To ask that the obligation to be complied with at
Art.1380). the expense of the debtor

The creditor may ask a third person to perform the

Resolution (action for cancellation under NCC,
obligation and all expenses incurred shall be
Art.1191).
charged against him

To recover damages for breach of the obligation, in both cases (NCC, Art. 1170).
NOTE: May be exclusive or in addition to the above-mentioned remedies

Requisites for substitute performance:

 There be non-fulfillment of the obligation either totally or partially whether non-
performance or mere delay, and the same is imputable to the debtor
 Specific performance is not possible
 There exists a compensable damage or injury
 There is a casual relation as of cause and effect between the non-fulfillment of
the obligation and the damage done. The indemnification for damages covers
both the injury suffered (damnum emergens or daño emergente) and the loss of
profits (lucrum cesans or lucro cesante)
 
Art. 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.
(1097a)
 Accessions—those things incorporated or attached to the principal either naturally or
artificially (e.g., alluvion, buildings, constructions, etc.)
Accessories—those things which although not incorporated to the principal are added to
the same for its completeness, use, perfection or embellishment (e.g., keys to a house,
tools of a car, etc)
General Rule: Everything that is attached, naturally or artificially, to the principal thing,
as well as that which serves to complete it, even if not attached to it, must be delivered
together with it.
 Exception: When the parties agree to exclude any accession or accessory of the thing.
 
 Right by accession – right corollary to ownership of property which gives the owner the
right to everything produced by the property (FRUITS) or which is incorporated or
attached thereto, either naturally or artificially. (Art.440)
 
Summary:
1.  Obligations of debtor in determinate obligations:

o  To perform the obligation specifically.
o To take care of the thing with the proper diligence of a good father of a
family.
o To deliver all accessions and accessories of the thing even though they
may not have been mentioned.
o To be liable for damages in case of breach of the obligation by reason of
delay, fraud, negligence or contravention of the tenor thereof.
2.  Obligations of debtor in generic obligations:
1.

o To deliver a thing which is neither of superior nor inferior quality. (Art.
1246)
o To be liable for damages in case of breach of the obligation by reason of
delay, fraud, negligence or contravention of the tenor thereof.
o an obligation to deliver a generic thing, the loss or destruction of anything
of the same class or genus as that which constitutes the object thereof
shall not extinguish the obligation (the genus of a thing can never
perish) (art. 1263)
 Art. 1167. If a person obliged to do something fails to do it, the same shall be
executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the
obligation. Furthermore, it may be decreed that what has been poorly done be
undone. (1098)
Obligations to do
 those obligations which have for their object a prestation consisting of performing
a certain activity, physical or intellectual, distinct from that of the delivery of a
thing (Caguioa)
difference from an obligation to give:
 obligee or creditor does not possess the power to compel the obligor to comply
with his obligations
o  reason: the law recognizes the individual’s freedom or liberty to choose
between doing that which he has promised to do and not doing it.
 
General rule in obligations to do (or not to do):
 The debtor must perform the act as promised and cannot substitute the same
with another act of forbearance, unless of course with the consent of the creditor
or in case the obligation is facultative. (Art.1244, par.2)
 Note: (from Caguioa)
 The act to be performed is either very personal or not.
o  *if very personal - when the qualifications of the debtor are involved; the
debtor is the only one that must perform it (specific singer or painter)
o  *if not personal – performance by an agent is permitted (substitute
performance)
 
 Effects of breach
  In positive personal obligations to do, if the obligor fails to do that which he has
obligated himself to do, the obligee can have the obligation performed or
executed at the expense of the former.  (Art. 1167, par.2)
 In case the debtor should have performed the act agreed upon in contravention
of the agreement, or in a manner that is improper or inappropriate, the same
thing shall be ordered undone and performed by another at the expense of the
debtor should he refuse to do it all over again.
 Obligee can also demand for damages by reason of the breach. (Art. 1170)

 
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. (1099a)
Obligation not to do
Negative personal obligations – 
 the object of the obligation is realized or fulfilled so long as that which is
forbidden is not done by the obligor (Jurado)
 those obligations whose object is the abstention of the debtor from whatever act
which otherwise he could perform (Caguioa)
o This type of obligation carries with it no accessory obligation and by its
nature is purely personal to the debtor and consequently, he himself must
abstain or refrain from performing the conditions prohibited and cannot
delegate the same to an agent, except when there is consent from the
creditor.
o Delay or mora is NOT possible unlike in positive obligations; obligation is
either fulfilled or not (Jurado)
 General rule: The debtor must perform the act as promised and cannot substitute
the same with another act of forbearance. (Art. 1244, par.2)
Effects of breach:
 In case the debtor breaches the obligation, the same shall be ordered undone at
his expense. (Art.1168)
 In those cases where it is not possible to undo the act done either physically or
legally, or because the rights of third persons are involved, or for some other
reason, the only feasible remedy on the part of the creditor is an indemnification
for the damage caused. (Art.1170)
 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 fulfillment of
their obligation.
 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.
 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. (1100a)
 
Fulfillment of the obligation: (how)
  Performance of the obligation or payment, juridically speaking, presupposes the
exact and complete execution of the prestation on the part of the debtor.
(Caguioa)
 Traditionally, performance or fulfillment of the obligation has been expressed in
the term “payment” or “solutio,” which expression has also the concept of
extinction of the juridical relation.
NOTE: The Civil Code regulates fulfillment or payment among the models of
extinguishing obligations
 
Default or Mora (1st kind of voluntarily breaching obligation, a defect and partial
non-fulfillment of obligation) (DEBTOR’S DEFAULT)
Principles:
1.  covers all non-fulfillment in point of time in its broadest sense; juridically,
however, it pertains only to culpable delay where fulfillment or compliance with
the obligation, although late, is still possible (Caguioa)
2.  signifies the idea of delay in the fulfillment of an obligation with respect to time
(Jurado)
3.  delay in the fulfillment of obligations; it is non-fulfillment with respect to time
(Tolentino)
Note: There can be delay ONLY in positive obligations (to do and to give); but there can
be NO delay in negative obligations
 
 Kinds of delay
Ordinary delay – This is the mere failure to perform an obligation at the stipulated ti me.
Extraordinary delay or legal delay – T his delay already equates to non-fulfillment of the
obligation and arises after the extrajudicial or judicial demand has been made upon the
debtor (Pineda, 200 0).
 
Classification of Mora/Default:
 Mora solvendi – delay on the part of the debtor
mora solvendi ex re - when demand by the creditor is not necessary to make the debtor
in mora (Caguioa) (refers to obligations to give)
mora solvendi ex persona - if demand by the creditor is necessary in order to make the
debtor in mora (Caguioa) (refers to obligations to do)
Mora accipiendi – delay on the part of the creditor to accept the delivery of the thing
which is the object of the obligation (Jurado); generally, delay on the part of the creditor
Compensatio morae – delay of the parties or obligors in reciprocal obligations; where
mora of the creditor neutralizes the mora of the debtor (Caguioa)
 
 3 requisites which should be present in order that the obligor or debtor may be
considered in default (Jurado)
1. Obligation is demandable and already liquidated
2. Obligor or debtor delays performance
3. Creditor requires (demand) the performance judicially or extra-judicially
 
Mora solvendi
requisites: (Caguioa)
1. Obligation consists of a positive prestation (to do or to give)
2. Obligation should be demandable, due, determined or liquidated
3. Debtor delays in the performance due to causes imputable to him
4. Creditor should demand performance of the debtor
 When does the obligor incur in delay?
 The obligor or debtor incurs in delay from the time the obligee or
creditor demands from him the fulfillment of the obligation; 
o the demand may be judicial or extrajudicial 
 judicial: if the creditor files a complaint against the debtor for the
fulfillment of the obligation
 extrajudicial: if the creditor demands from the debtor the fulfillment
of the obligation either orally or in writing (Jurado); sending of a bill
or demand letter (Caguioa)
Notes:
 A mere reminder or any act which cannot be qualified as a demand for payment
will not be considered a demand since the code requires that the tolerance and
benevolence of the creditor has terminated (Castan as cited in Caguioa)
 The proof of the demand will be incumbent upon the creditor (Tolentino)
 Demand is generally necessary even if a periof has been fixed in the obligation
(Tolentino)
 Where there has been an extrajudicial demand before action for performance
was filed, the effects of default arise from the date of such extrajudicial demand.
But where the evidence does not disclose any particular date on which the
creditor made extrajudicial demand upon the debtor, the payment of interest or
damages for the default must commence from the filing of the complaint.
(Tolentino)
 The demand must refer to the prestation that is due and not to another
(Tolentino)
When demand is NOT necessary
 when the obligation or the law expressly so declares
o the obligation or the law itself must expressly declare that the demand is
not necessary in order that the debtor shall incur in delay
o  example: in the obligation it is stipulated that, “D shall incur in delay if he
does not pay the obligation upon the arrival of the designated date for
payment”.
 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
o basis: the time element for the fulfillment of the obligation is of the
essence of the contract
o examples: 
o (1) where a building was to be completed on a certain date because it was
to be opened as a school on a fixed date; 
o (2) where goods were to be delivered on a specified date because they
were to be loaded on a boat leaving on such date
 when demand would be useless, as when the obligor has rendered it beyond his
power to perform
o where performance has become impossible either through 
 (1) some act or fault of the debtor or 
 (2) as that caused by fortuitous event but the debtor has bound
himself to be liable in cases of such events.
*Note: 4th instance when demand is not necessary according to some authors
(acknowledged by Tolentino):
  when the debtor expressly recognizes or acknowledges that he has incurred in
delay. There must, however, be an express recognition of the default and not
merely requests for extension to time to perform. 
Effects of mora solvendi:
1. to indemnify the creditor for damages which his delay has occasioned in
obligations to give and to do (Caguioa)
2. to answer for the loss or deterioration of the thing due even if caused by
fortuitous event (Caguioa)
3. When it has for its object a determinate thing, the delay places the risks of the
thing on the debtor (Tolentino)
 Non-applicability of mora solvendi
  Mora solvendidoes not apply in natural obligations because performance is
optional or voluntary on the debtor’s part. One can never be late in not giving or
doing something.
 
MORA ACCIPIENDI
 constitutes non-acceptance (on the part of the creditor) without reason
(justifiable) (Caguioa)
 delay in the performance based on the omission by the creditor of the necessary
cooperation, especially acceptance on his part (Tolentino)
 Requisites: (Caguioa)
1. That there exists an obligation which has already matured and for whose
fulfillment an act of cooperation on the part of the creditor is required
2. That the debtor has performed al that is incumbent upon him under the obligation
and made tender of payment to the creditor
3. That the creditor refused to accept payment or to cooperate in the fulfillment of
the obligation without any justifiable reason
 
When does the creditor incur in delay?
The creditor incurs in delay when the debtor tenders payment or performance, but the
creditor refuses to accept it without just cause. 
Effects of mora accipiendi:
1. it excludes the mora of the debtor and destroys the effects of the latter (Caguioa)
2. it transfers the risk to the creditor for fortuitous events which formerly belonged to
the debtor (Caguioa & Tolentino)
3. debtor can obtain his freedom from the obligation by the consignation of the thing
due, and consequently, after consignation, his obligation to pay interest is
extinguished (Caguioa & Tolentino)
4. the responsibility of the debtor for the thing is reduced and limited to fraud and
gross negligence (Tolentino)
5. all expenses incurred by the debtor for the preservation of the thing after the
mora shall be chargeable to the creditor (Tolentino)
6. creditor becomes liable for damages (Tolentino)
 
COMPENSATIO MORAE 
Reciprocal obligations – 
 those which are created or established at the same time, out of the same cause,
and which result in mutual relationships of the creditor and debtor between the
parties.
 are conditional in the sense that fulfillment of an obligation by one party  depends
upon the fulfillment of the obligation by the other
General rule in reciprocal obligations:
 the fulfillment by the parties should be simultaneous. Where both are in default,
their respective liability for damages shall be offset equitably.
When does delay or mora begin?
 Delay or mora begins from the moment the other party fulfills or tenders
fulfillment of his obligation in a proper manner (Caguioa)); otherwise put,
delinquency commences when one of the contracting parties fulfills his obligation
and becomes invested with power to determine the contract because of failure on
the part of the other to carry out the agreement. (Tolentino)
 How is demand made in reciprocal obligations?
 Demand is made in only one way and that is by actual performance or tender of
performance of the obligation of the party claiming delay or default by the other.
(Caguioa)
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. (1101)
   enumerated herein are those kinds of voluntary breaches of obligation:
(1) through fraud; (2) negligence; (3) delay; (4) contravention of the tenor of the
obligation.
General rule: in cases where there is voluntary breach of obligation, one of the rights of
the creditor is to ask for indemnification of damages under this article.
Notes:
 “Damages” as used in the above provision include any and all damages that a
human being may suffer in any and all manifestations of his life: physical or
material, moral or psychological, mental or spiritual, financial, economic, social,
political and religious. (Tolentino)
 Breach of contractual obligation entitles the other party damages even if no
penalty for such breach is provided in the contract.
 The responsibility for damages arising from non-fulfillment of a contractual
obligation cannot be divided nor can it be extended to persons who have nothing
to do with the obligation (Tolentino)
Contravention of the tenor of obligation (also another kind of voluntary breach of
obligation or partial non-fulfillment of obligation)
 Any illicit act which impairs the strict and faithful fulfillment of the obligation or
every kind of defective performance.
o example: an architect who made plans that contain defects and
inadequacies which led to the collapse of the building 
2 kinds of Breach of Obligations: (Jurado)
Voluntary – if the debtor or obligor in the performance of his obligation is guilty of
default, fraud, negligence, or in any manner contravenes the tenor thereof; debtor is
liable for damages

o Voluntary breach through default or mora (Art.1169)
 o Voluntary breach through fraud or dolo (Art. 1171)
o Voluntary breach through negligence or culpa (Art. 1172)
o Voluntary breach through contravention of tenor of the agreement (Art.
1170)
Involuntary – if the non-fulfillment is brought about by circumstances foreign to the will
of the debtor (Caguioa); otherwise put, if the debtor is unable to comply with his
obligation because of some fortuitous event; debtor is NOT liable for damages (Art.
1174)
 
Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any
waiver of an action for future fraud is void. (1102a)
 Fraud or Dolo
  voluntary execution of a wrongful act, or a willful omission, knowing and
intending the effects which naturally and necessarily arise from such act or
omission. (Tolentino)
  consists in the conscious and intentional proposition to evade the normal
fulfillment of the obligation (Jurado)
 2 kinds of Fraud: deceit and malice
Distinctions:
Deceit (Fraud in the Malice/Bad Faith (fraud in the
  performance) performance)
   

Exists in the celebration of

contracts/ Exists in the fulfillment of
obligations
Exists ahead of the contractual
As to time Present only during the
obligation, or at the birth of the
  obligation performance of a pre-existing
obligation
 
 
 

Consent is free and not vitiated.

Results in a vitiation of consent there is no question of
and a possible annulment of the annulment and the remedy
Consent/Result same granted by law is indemnification
for damages
 
 

Securing the consent of the

Evading the normal fulfillment of
As to purpose other party to enter into the
an obligation
contract
 
 
 
 Gives rise to a right of the
Gives rise to a right of the
innocent party to ask for the
creditor or obligee to recover
As to rights that arise annulment of the contract if the
damages from the debtor or
fraud is causal or to recover
  obligor
damages if it is incidental
 
 

 
What type of fraud is contemplated under Art.1171?
 The fraud referred to in this article is malice or bad faith.

 Malice or bad faith

 any voluntary and willful act or omission which prevents the normal realization of
the prestation, knowing and intending the effects which naturally and necessarily
arise from such act. (Tolentino)
 Manresa: deliberate and intentional purpose to evade the normal compliance of
an obligation (as cited in Caguioa)
Responsibility for malice or bad faith:
 For the consequences of his malicious act, the debtor is liable not only for the
results intended but also for their natural and probable consequences even
though they haven’t been foreseen by the debtor or they exceeded its intention
 This responsibility for malice or bad faith is demandable in all kinds of obligations
but it is necessary that it must be proved and not simply presumed and results in
an aggravation of the damages that are recoverable
Waiver of action for malice or bad faith:
 if in advance, e. a waiver for a fraud which has not yet been committed à void;
prohibited because it is against law and public policy
 if past, i.e. a waiver for a fraud already committed à valid; is deemed an act of
generosity on the part of the creditor
 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. (1103)
Culpa or fault or negligence
1. 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 (Art. 1173)
2. omission of that diligence required in social relations which if observed would
have prevented the contrary and undesired result (Caguioa)
3.  simply the absence of due care required by the nature of the obligation (Jurado)
 Kinds/classes:
 According to form
 o Culpa in faciendo (positive act)
o Culpa in non faciendo (omission)
 According to degree of culpa / diligence
o Culpa lata (grave which is the omission of the most minimum diligence)
o Culpa leve (omission of the diligence of an ordinary layman or bonus pater
familias)
o Culpa levissima (omission of the maximum diligence of a very careful
man)
Culpa contractual (Most important classification)
  fault or negligence in the performance of a pre-existing contractual obligation
resulting in a breach of obligation (Caguioa & Tolentino)
  fault or negligence of the obligor by virtue of which he is unable to perform his
obligation arising from a pre-existing contract because of the omission of the
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 (Jurado
Culpa extra-contractual or aquiliana
  failure to observe the care required by law with respect to other persons not
connected by contract or of any juridical relation whatsoever save the generic
one which is common to all men of not damaging another (Caguioa)
  fault or negligence of a person, who, because of the omission of the diligence
which is required by the nature of the obligation and which must correspond with
the circumstances of the persons, of the time and of the place, causes damage
to another. (Jurado)
  fault or negligence which constitutes an independent source of obligation
between parties not previously bound. (Tolentino)
 Distinctions:
 
CULPA CONTRACTUAL CULPA AQUILIANA

There is pre-existing contractual relation None.

The negligence involved is substantive and

The negligence of the defendant is merely an independent.
incident in the performance of an obligation
 

Source of liability—breach or non-fulfillment of the

Source of liability—negligent act or omission itself
contract

There is presumption of negligence from the Plaintiff must prove the existence of negligence
breach of the contract  

The master cannot exempt himself by proving due The master is free from liability upon proof of
diligence in the selection and supervision of such diligence
employee
  

Damages may be claimed only by the parties, their A stranger may claim damages such as the
heirs and privies relatives and dependents

Negligence referred to in Art.1173 Negligence referred to in Art. 217

 
 
 
Fraud Negligence

There is malice or dolo when there is non- There is culpa when there is non-fulfillment due to
fulfillment due to a cause of which the debtor is a cause which the debtor could or ought to have
aware;  foreseen; 

there is actual knowledge there is possibility of knowledge

Liability cannot be mitigated. Liability may be mitigated

Distinguishing element: INTENTION mere abandonment, inattention, carelessness,

presence of intent to cause damage or injury lack of diligence 

The guilty party is responsible for all the The guilty party only answers for the damages
consequences attributable to his act whether which are foreseen or could have been foreseen
intended or not or foreseen or not at the time the obligation was constituted

Waiver in advance is not allowed Allowable (waiver) unless contrary to public policy

  
Responsibility for fault or negligence:
 If the debtor or obligor is unable to comply with his obligation because of his fault
or negligence, the creditor or obligee can hold him liable for damages.
 The liability arising from negligence in the performance of every kind of obligation
may be regulated by the courts. The court may increase or decrease the liability
of the party at fault depending upon the circumstances of each case.
o Exemptions from liability:
 in which a party to a contract is relieved from the effects of his fault
or negligence by a third person
 in which one party to a contract renounces in advance the right to
enforce liability arising from the fault or negligence of the other.
Notes:
Test of negligence: If the defendant in doing the alleged negligent act DID NOT use the
reasonable care and caution which an ordinarily prudent person would have used in the
same situation, he is guilty of negligence.
Waiver of action for negligence:
  Future negligence - can be waived, unless the nature of the obligation and public
policy should require extraordinary diligence; or if the negligence is so gross that
it amounts to malice or bad faith
 Past negligence - all the more valid
Effect of good/bad faith
 If the obligor has acted in good faith, he shall be liable only for natural and
probable consequences of the breach of the obligation and which the parties
have foreseen or could have reasonably foreseen at the time the obligation was
constituted.
 If the negligence of the obligor shows bad faith, provisions of Arts. 1171 and
2201, par.2[1] shall apply. It is in this case that the boundary line, at least with
regard to effects, between negligence and fraud disappears altogether; otherwise
put, when negligence shows bad faith the rules on fraud or dolo shall govern.
Effect of contributory negligence:
 If there was contributory negligence of the obligee or creditor, the effect is to
reduce or mitigate the damages which he can recover from the obligor or debtor
as a result of the breach of the obligation. BUT, if the negligent act or omission of
the obligee or creditor was a proximate cause of the event which led to the
damage or injury complained of, he cannot recover. (Jurado)
 
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 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.
(1104a)
General degree of diligence required:
 When neither the law nor the obligation itself states the degree of diligence
required of the obligor or debtor in the performance or fulfillment of the obligation,
the standard diligence required is “that which would be observed by a good
father of a family”. 
o Exceptions:

o
 when the parties stipulated another degree of diligence required
 when the law requires a higher degree of diligence
 example: common carriers (Art.1733, par.1)

 
GOOD FATHER OF A FAMILY (bonos paterfamilias)
 a person of ordinary or average diligence

3 quantum of diligence:
 extraordinary diligence
 diligence of a good father of a family (DOAGFOAF)
o A general degree of diligence expected of an owner of a property
 simple diligence

 
Art. 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 responsible for those events which could
not be foreseen, or which, though foreseen, were inevitable. (1105a)
Fortuitous Event
 an event which could not be foreseen, or which, though foreseen, was inevitable.
 includes unavoidable accidents, even if there has been an intervention of human
element, provided fault or negligence cannot be imputed to the debtor.
(Tolentino)
Negative Definition: that incident not imputable to the debtor which impedes the exact
fulfillment of the obligation. (Caguioa)
Positive Definition: event not imputable to the debtor which is unforeseen or although
foreseen is inevitable and which renders impossible to exact fulfillment of the obligation
(Caguioa)
 DISTINCTIONS: 
fortuitous event proper force majeure/act of man
or that which is caused by an “act of God” where there is human intervention

examples: earthquakes, floods, storms, examples: armed invasion, attack by robbers,

epidemics, fires, etc. attack by bandits

 
*Note: Essentially, there is NO substantial difference between the two, they both refer to
an event or cause which is independent of the will of the obligor.
 
As to foreseeability:
ordinary fortuitous event - refers to an event
which usually happens or which could have been extraordinary fortuitous event - refers to an event
reasonably foreseen which does not usually happen and which could
not have been reasonably foreseen
 
 example: tropical storms, floods examples: fire, war, pestilence, unusual flood
  (Ondoy), locust, earthquake

 
CHARACTERISTICS/REQUISITES:
1. the cause of the unforeseen and unexpected occurrence, or the failure of the
debtor to comply with his obligations, must be independent of the human will
2. it must be impossible to foresee the event which constitute the caso fortuito, or if
it can be foreseen, it must be impossible to avoid
3. possibility of foreseeing the event – should be appreciated rationally according to
the circumstances
4. inevitableness of the event – varies according to the case and circumstances and
must have a relation with the means of the debtor and therefore with the degree
of diligence he should have exercised.
5. the occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner
6. the obligor must be free from any participation in the aggravation of the injury
resulting to the creditor
Effects of fortuitous event on liability:
 General rule: The effect of fortuitous event is to exempt the debtor from liability
for the non-fulfillment of the obligation and to the payment of damages to the
creditor. His obligation is extinguished.
o Exceptions:
  The law expressly so provides (as in the case of aleatory
contracts)
  example: Arts. 552, par.2
 The parties expressly so stipulated
 The nature of the obligation requires the assumption of risk as in
the case of insurance contracts
Assumption of risk
 – refers to a situation in which the obligor or debtor, with full knowledge of the
risk voluntarily enters into some relation with the obligee or creditor
 - ordinarily requires knowledge and the appreciation of the risk and the voluntary
choice to encounter it.
 -   doctrinal basis: no wrong is done to one who consents (volenti non fit injuria)
 -   based on social justice; it is based on an ethico-economic sensibility of
modern society, which has noted the injustices which industrial civilization has
created
 NOTE:
  The debtor is guilty of dolo, malice or bad faith as when he promises to deliver
the same thing to two or more persons who do not have the same interest (Art.
1165, par.3)
 The debtor is already in mora at the time the fortuitous event happens
 The liability arises from a criminal act unless the loss occurs after the debtor
tendered the thing to the creditor and the creditor refused to accept the same
without justifiable cause. (Art. 1268)
 In order that a fortuitous event may exempt a person from liability, it is necessary
that he be free from any previous negligence or misconduct by reason of which
the loss may have been occasioned. (Southeastern College Inc. vs. CA);
otherwise put, the fortuitous event must not only be the proximate cause of the
loss or destruction, but that it must be the SOLE cause.
 Art. 1175. Usurious transactions shall be governed by special laws. (n)
  Usury à contracting for or receiving something in excess of the amount allowed
by law for the loan or forbearance of money, goods or chattels; the taking of
more interest for the use of money, goods or chattels or credit than the law
allows.
 The special laws referred to are the Usury Law (Act. No. 2655) and the different
laws amending it. Usury Law provided for a legal rate interest of 6% per annum
and a contractual rate not exceeding 12% per annum if the loan is secured by a
duly registered real estate, and 14% if not so secured.
 Usury Law was repealed during the martial law period, leaving parties free to
stipulate higher rates.
 There is now no longer any ceiling in interest rates on loans pursuant to Central
Bank Circular No. 224 issued last Dec.1, 1982.
 
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. (1110a)
 The presumptions enunciated in the above provision are rebuttable and not
conclusive
 2 presumptions stipulated by Art.1176:
  Par. 1 à If the debtor is issued a receipt by the creditor and on the face of the
receipt it is shown that the principal has been paid without any reservation with
respect to the interest, there arises a disputable presumption that the interest has
also been paid.
 o Basis: If a debt produces interest, payment of the principal shall not be
deemed to have been made until the interests have been covered. (Art.
1253)
 Par. 2 à If the debtor is issued a receipt by the creditor acknowledging payment
of a latter installment of a specified debt without any reservation with respect to
prior installments, there also arises a disputable presumption that such prior
installments have already been paid. (This rule is in conformity with the rule
stated in Rule 131, Sec.5, subsec. (i) of the New Rules of Court.)
Estoppel (Art. 1431, Civil Code) – a condition or state by virtue of which an admission or
representation is rendered conclusive upon the person making it and cannot be denied
or disproved as against the person relying thereon.
 
 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.
(1111)
 2 distinct aspects/elements of an obligation: (Caguioa)
  Debtor
o Guaranty/responsibility
o duty of the debtor to answer for his obligation with his entire patrimony
 Rights of creditors in satisfying their claims against the debtor:
o to levy by attachment and execution upon all the property of the debtor,
except such as are exempt by law from execution
o exhausting the property in possession of the debtor
 For the fulfillment of the obligation of the debtor responds with all
his property present and future.
 All the property of the debtor is answerable for the obligation not
only those properties existing at the time of birth of the obligation
but also all those which later on become or form part of the
patrimony of the debtor.
   in conformity with Art. 2236 of the Civil Code which states that the
debtor is liable with all his property, present and future for the
fulfillment of his obligations subject to the exemptions provided by
law.

o  to exercise all the rights and actions of the debtor, except such as are
inherently personal to him
 creditor being subrogated to all of the rights and actions of the
debtor save those which are inherent in his person
Art. 1178. Subject to the laws, all rights acquired in virtue of an obligation are
transmissible, if there has been no stipulation to the contrary. (1112)
  General rule: Rights of obligations or those rights which are acquired by virtue of
an obligation are as a general rule transmissible in character – they may be
alienated or assigned to third persons.
o   Exceptions:

o
 where they are not transmissible by their very nature (personal
right)
 where there is a stipulation of the parties that they are not
transmissible
 where they are not transmissible by operation of law
  Note: Intransmissibility by stipulation of the parties, being exceptional and contrary to
the general rule, should not be easily implied, but must be clearly established, or at the
very least, clearly inferable from the provisions of the contract itself. (Jurado)

PURE AND CONDITIONAL OBLIGATIONS

 
Pure Obligation
 
An obligation whose performance does not depend upon a future or uncertain event, or
upon a past event or upon a past event unknown to the parties, demandable at once
(NCC, Art. 1179). One without a condition or a term (hence, demandable at once),
provided there will be no absurdity.
 
Examples:
1.  I promise to pay you P 1million. [this is demandable at once, unless a period was
really intended, as when a loan has just been contracted(Floriano v. Delgado, 11
Phi.. 154), when some time is reasonably necessary for the actual fulfillment of
the obligation, as when a person binds himself to pay immediately for the
subscription of corporate shares of stock. (Paul Schenker vs. William F.
Gemperle, L-16449, August 31, 1962)
2.  “I‟ll pay you P1million on demand.” (Abarri Inc vs Galan, 47 O.B. 6241)
but instant performance is not a necessity, otherwise absurd consequences will 
 
NOTE: Other obligations which are demandable at once are:
1.  Obligations with a resolutory condition; and
2.  Obligations with a resolutory term or period [NCC, Arts. 1179 (2) and 1193 (2)].
 
The most distinctive characteristic of a pure obligation is its immediate demandability.
This quality, however, must not be understood in such a way as to lead to absurd
interpretations which would literally require the obligor or debtor to comply immediately
with his obligation. A distinction must be made between:
 
1.  The immediate demandability of the obligation; and
2.  Its performance or fulfillment by the obligor or debtor. Although the obligee or
creditor can demand the performance of the obligation immediately, the quality of
immediate demandability is not infringed or violated when a reasonable period is
granted for performance (Jurado, 2009).
 

Conditional Obligation
 
An obligation subject to a condition and the effectivity of which is subordinated to the
fulfillment or non-fulfillment of a future and uncertain event, or upon a past event
unknown to the parties (Pineda,2000).
 
Condition
 A condition is an event which is future and uncertain, upon which the efficacy or
extinguishment of an obligation depends. It has two requisites: first, futurity; and
second, uncertainty.
 
Period v Condition
BASIS PERIOD CONDITION
    May refer to past event
As to time Refers to the future unknown to the parties
It will happen at an exact  
  date or at an indefinite
time, but is definite to May or may not
As to fulfillment
arrive happen
   
Futurity and
Characteristic Futurity and certainty uncertainty
  May give rise to an
 
No effect upon the obligation (suspensive)
The effect of its or the cessation of one
existence of the
happening to the already existing
obligation but only in its
obligation (resolutory)
demandability
If fulfillment is  
Valid. But the court is
dependent upon
empowered to fix the Annulled.
the sole will of the
duration of the period.
 debtor
The moment the
    condition is fulfilled, the
effects will retroact on
    the day of
Retroactivity No retroactivity. the constitution of the
obligation.
 
Suspensive Condition
A condition the fulfillment of which will give rise to the acquisition of a right. While the
condition has not arrived yet, in the meantime, the rights and obligations of the parties
are suspended.
 
NOTE: In suspensive condition or condition precedent, the efficacy or the obligatory
force is subordinated to the happening of a “future and uncertain event”; if the
suspensive condition does not take place the parties would stand as if the conditional
obligation never existed (Gaite v. Fonacier, GR L-11827, July 31, 1961; Cheng v.
Genato, 300 SCRA 722, GR 129760, December 29, 1998; Pineda, 2000).
 

Effect of loss, deterioration and improvement in an obligation to deliver a

determinate thing subject to a suspensive condition
 
WITHOUT DEBTOR’S
  BASIS WITH DEBTOR’S FAULT
FAULT
  Obligation is not extinguished. Obligation is
 
Loss Debtor pays damages. extinguished.

Creditor     may  choose

  between rescission of obligation or
  fulfillment     (with Impairment    borne    by creditor.
Deterioration indemnity for damages in either
case)

a.   By the thing‟s nature or through time – inure to the benefit of the

 
creditor
Improvement b.   At the debtor‟s  hand - Debtor shall have no right other that
granted to a usufructuary
NOTE: The abovementioned do not apply to indeterminate or generic things on the
basis of the maxim “genus nun quam peruit” (genus never perishes). It will only apply
when the object or thing to be given is specific.
 

Positive Suspensive Condition

 A condition which requires a positive act on the part of the obligor that gives rise to the
acquisition of rights
 In case of a contract to sell, the obligation to deliver the subject properties becomes
demandable only upon the happening of the positive suspensive condition (payment of
full purchase price). Without full payment, there can be no breach of contract to speak of
because the seller has no obligation yet to turn over the title (Reyes v. Tuparan, G.R.
No. 188064, June 1, 2011).
 

Resolutory Condition
A condition where the rights already acquired are lost upon fulfillment of the condition. It is
also known as condition subsequent.

Suspensive Condition vs. Resolutory Condition

 
 
BASIS SUSPENSIVE CONDITION RESOLUTORY CONDITION

   
 
Effect of Obligation arises or becomes
Obligation is extinguished.
fulfillment effective.
     
Effect of non- If not fulfilled, no juridical If not fulfilled, juridical relation
fulfillment relation is created. consolidated.

   
 
  Rights are not yet acquired, but
Rights are already vested, bu
there is hope or expectancy that
When rights are to the threat or danger of ex
they will soon be acquired.
acquired

 
Negative Resolutory Condition
An act, which if not done, would give rise to a cause of action against the
obligor. It contemplates a situation where rights are already acquired but subject to an
obligation, the non- fulfillment of which does not affect the rights already acquired but
merely gives a cause of action in favor of the other party. In a contract of sale, the
buyer‟s non-payment of the price is a negative resolutory condition. In such case, the
seller has lost and cannot recover the ownership of the property unless he takes action
 to set aside the contract of sale (Heirs of Atienza v. Espidol, G.R. No. 180665, August
1, 2010).
 

Potestative Condtion
A condition which depends upon the will of one of the contracting parties (NCC, Art. 1182).
 

Effects of potestative conditions upon the obligation

 
If the condition is potestative in the sense that its fulfillment depends exclusively
upon the will of the debtor, and the same is suspensive, both the condition and
obligation are VOID.
However, if the condition is a pre-existing one or the condition is resolutory, only the
condition is void, leaving the obligation itself valid because what is left to the sole will of
the debtor is not the existence or the fulfillment of the obligation but merely its
extinguishment.
 
If the condition is potestative in the sense that its fulfillment depends exclusively upon
the will of the creditor, the obligation shall be valid. This is so because the provision of
the first sentence of Art. 1182 extends only to conditions which are potestative to the
obligor or debtor. Besides, the creditor is naturally interested in the fulfillment of the
condition since it is only by such fulfillment that the obligation arises or becomes
effective (Jurado, 2009 citing NCC, Art. 1181 and Manresa).
 

Casual Condition
 
It is the performance or the fulfillment of the condition which depends upon chance
and/or the will of a third person.
 

Mixed Condition
 
It is the performance or fulfillment of the condition which depends partly upon the will of
a party to the obligation and partly upon chance and or the will of a third person.
 
NOTE: Casual and mixed conditions are valid, unlike purely potestative conditions.
 

Impossible Conditions
 
General Rule: Impossible conditions annul the obligation which depends upon the
parties but not of a third person.
 Exceptions:
1.  Pre-existing obligation;
2.  Obligation is divisible;
3.  In simple or remuneratory donations;

4.  In case of conditions not to do an impossible thing; and

5.  In testamentary

NOTE: In the foregoing, the obligations remain valid, only the condition is void
and deemed to have not been imposed. it is applicable only to obligations not to
do and gratuitous obligations.
Other types of conditions
1. Positive – It involves the doing of an act;
 

2.  Negative –Itinvolves the omission of an act;

3.  Divisible – Itis susceptible of partial performance;

4.  Indivisible – It is not susceptible of partial performance;

5.  Conjunctive – There are several conditions in an obligation all of which must be

performed;
6.  Alternative – There are several conditions in an obligation but only one must be
performed;
7.  Possible – Itis capable of fulfillment according to the nature, law, public policy or
good customs; and
8.  Impossible – It is not capable of fulfillment according to nature, law, public policy
or good customs (NCC, Art. 1183).
 
 
OBLIGATIONS WITH A PERIOD
 
Obligation with a period or a term
Obligations for whose fulfillment a day certain has been fixed, shall be demandable
only when that day comes (NCC, Art.1193).
 

Term or period
A certain length of time which determines the effectivity or the extinguishment of the
obligations.
Requisites of a valid period or term
 
1.  Future;
2.  Certain; and
3.  Possible, legally and physically (Paras, 2008).
“Day certain”
It is understood to be that which must necessarily come, although it may not be known when.

Kinds of terms or periods

1.  Ex die – This is a term or period with suspensive effect. The obligation begins
only from a day certain, in other words upon the arrival of the 
2.  In diem – A period or term with a resolutory effect. Up to a certain extent, the
obligation remains valid, but upon the arrival of said period, the obligation 
3.  Legal – A period granted under the provisions of the 
4.  Conventional or voluntary – The period agreed upon or stipulated by the 
5.  Judicial – The period or term fixed by the courts for the performance of an
obligation or for its 
6.  Definite – The exact date or time is known and 
7.  Indefinite – It is something that will surely happen but the date of happening is 
e.g. “I will pay when my means permit me to do so.” When the debtor
 
When the debtor binds himself to pay when his means permit him to do so, the obligation is
deemed with a period (NCC, Art. 1180). This is valid because it is not the payment itself
that is dependent upon the will of the debtor, but the moment of payment.
 
As the time of payment is not fixed, the court must fix the same before any action for
collection may be entertained, unless, the prior action of fixing the term or period will
only be a formality and will serve no purpose but delay (Tiglao v. Manila RailroadCo.,
98 Phil. 181, GR. L-7900, January 12, 1956).
 

Effect of a fortuitous event to an obligation with a period

It only relieves the contracting parties from the fulfillment of their respective obligation
during the term or period.
 
 
ALTERNATIVE OBLIGATIONS
Alternative obligation
It is one where the debtor is alternatively bound by different prestations but the
complete performance of one of them is sufficient to extinguish the obligation.
Facultative obligation
It is one where the debtor, who has a reserved right to choose another prestation
or thing, is bound to perform one of the several prestations due or to deliver a
thing as substitute for the principal.
 
Conjunctive obligation
One where the debtor has to perform several prestations; it is extinguished
only by the performance of all of them.
 
 

BASIS FACULTATIVE OBLIGATIONS ALTERNATIVE

   
Number of
prestation Only one object is due. Several objects are du

     
Manner of May be complied with by substitution of one that is May be complied with
compliance due. alternately due.
 
  GR: Choice pertain to
 
   
Choice pertains only to debtor.
Right to choose XPN: Expressly grante
person.
   
 
Effect of Fortuitous loss of all p
fortuitous loss Fortuitous loss extinguishes the obligation.
obligation.
     
Effect of culpable Culpable loss obliges the debtor to deliver Culpable loss of any o
loss substitute prestation without liability to debtor. liability to debtor.

 
   
The creditor shall ha
  When substitution has been made and
damages when, throu
communicated to the creditor, the obligor is liable for
the things which are a
Liability of the the loss of the thing on account of delay, negligence
obligation have been l
debtor or fraud.
obligation has become

   
 
If principal obligation is void, the creditor cannot If one prestation is v
Void prestation from any vices of con
compel delivery of the substitute.
the obligation.
 
   
If some prestations are
  If there is impossibility to deliver the principal thing or except one - this one m
prestation, the obligation is extinguished, even if the 
Impossibility
substitute obligation is valid.
of If all prestations are im
 obligation is
prestation
extinguished.
   
 
Loss of the substitute before the substitution is made Where the choice is g
Loss of substitute through the fault of the debtor doesn‟t make him of the alternative thro
liable. renders him liable for d
 

Right to choose prestation in an alternative

obligation
General Rule: The right of choice belongs to the debtor
Exception: Unless it has been expressly given to the creditor (NCC, Art. 1200).
 
Limitations on debtor’s right to choose
 
1.  The debtor must absolutely perform the prestation chosen. He cannot compel
the creditor to receive part of one and part of the other undertaking;
2.  The debtor shall have no right to choose those prestation which are impossible,
unlawful or which could not have been the object of the obligation (NCC, Art.
1200);
3.  The debtor shall lose the right to choice when among the prestation whereby he
is alternatively bound, only one is practicable (NCC, Art. 1202);
4.  The selection made by the debtor (or the creditor when it has been expressly
granted to him) cannot be subjected by him to a condition or a term unless the
creditor (or debtor in case the choice is with the creditor) consents thereto
(Tolentino, 2002).
Effectivity of the choice in alternative obligations
 The choice made takes effect only upon communication of the choice to the other party and
from such time the obligation ceases to be alternative (NCC, Art. 1201; NCC, Art. 1205).
NOTE: The notice of selection or choice may be in any form provided it is sufficient
to make the other party know that the election has been made (Tolentino,2002).
 
When alternative obligation becomes a simple obligation
1.  When the debtor has communicated the choice to the creditor;
2.  When debtor loses the right of choice among the prestations whereby the debtor
is alternatively bound, only one is practicable (NCC, Art. 1202).
NOTE: The choice made by the debtor does not require the concurrence of the
creditor. Otherwise, it would destroy the very nature of the right to select given to the
debtor.
 
Impossibility of choice due to creditor’s acts
When choice is rendered impossible through the creditor‟s fault, the debtor may bring
an action to rescind the contract with damages (NCC, Art. 1203).
Plurality of parties
 
When there are various debtors or creditors and the obligation is joint, the
consent of all is necessary to make the selection effective, because none of
them can extinguish the entire obligation.
 
If the obligation is solidary and there is no stipulation to the contrary, the choice by one
will binding personally upon him, but not as to the others. Thus, if A and B solidarily
bind themselves to deliver a horse or a carabao to C, the selection of A of the horse,
when communicated to C will bind him and he cannot later on deliver the carabao. But
it is not binding on B who may extinguish the obligation by delivering the carabao
(Tolentino, 2002).
 

Effect of loss of objects in alternative obligations

 

Due to    fortuitous event                                               Due to debtor’s fault

Choice belongs to Debtor

    Creditor shall have a right to

    damages based on the valu
which disappeare
All are lost Debtor released from the obligation.

service which b
   
impossible

  Debtor shall deliver that whi

Debtor shall deliver that which he shall from among the remai
Some but not
choose from among the remainder. damages
all are lost

Only one
Deliver that which remains.
remains

       Choice belongs to Creditor

Creditor may claim the price
    them with indemnity
All are lost Debtor released from the obligation for damages.
     Creditors mat claim any of th
he may choose any of those
  Creditor may choose from among the the price or value of which rig
remainder or that which remains if only can be
Some but not one subsist. claimed.
all are lost

Only Deliver that which remains. In case of fault of debtor, creditor has a righ
one damages.
remains

JOINT AND SOLIDARY OBLIGATIONS

 
Joint Obligation
  One where the credit or debt shall be presumed to be divided into as many equal
shares as there are creditors or debtors, the credit or debts being considered distinct
from one another (NCC, Art. 1208). Each debtor is liable only for a proportionate part of
the debt and each creditor to his proportionate share to the credit.
Other terms for joint obligations are:
1.  joint simply;
2.  man communada; or
3.  pro rata
Solidary Obligations
 It is where each of the debtors obliges to pay the entire obligation while each one of the
creditors has the right to demand from any of the debtors, the payment or fulfillment of
the entire obligation (NCC, Art. 1207; Pineda, 2000).

Other terms for solidary obligations are:

1. Joint solidarily;
2.  Jointly and severally; or
3.  In solidum

Joint Obligation vs. Solidary Obligation

 

   
 
JOINT OBLIGATION SOLIDARY OBLIGATION
 Not presumed. Must be expressly
Presumption by Presumed by law. stipulated by the parties, or when the
law (NCC, Art. law or the nature of the obligation
1208). requires solidarity (NCC, Art. 1207).
     
Liability of each Proportionate part of Obliged to pay the entire
debtor the entire debt. obligation.
 
   Right of the  Each creditor, if Each creditor has the right to
creditor to the there are several, is entitled demand from any of  the debtors, the
fulfillment of only to a proportionate part payment or
the obligation of     the credit. fulfillment of the entire obligation
(Tolentino, 1999).
 
GENERAL RULE : When two or more creditors or two or more debtors concur in one
and the same obligation, the presumption is that the obligation is joint.
 
EXCEPTIONS: The obligation shall only be solidary when:
1. Law requires solidarity;
 

2.  Expressly stipulated that there is solidarity;

3.  Nature of the obligation requires solidarity; (e.g. Civil liability arising from crime.)

4.  Charge or condition is imposed upon heirs or legatees and the will expressly
makes the charge or condition in solidum (Manresa); or
5.  Solidary responsibility is imputed by a final Judgment upon several defendants
(Gutierrez v.utierrez, 56 Phil 177, GR 34840, September 31, 1931).
 

JOINT INDIVISIBLE OBLIGATIONS

 
 The obligation is joint because the parties are merely proportionately
liable. It is indivisible because the object or subject matter is not physically divisible into
different parts. In other words, it is joint as to liabilities of the debtors or rights of the
creditors but indivisible as to compliance (De Leon, 2010).
 A joint indivisible obligation gives rise to indemnity for damages from the time anyone of
the debtors does not comply with his undertaking. The debtors who may have been
ready to fulfill their promises shall not contribute to the indemnity beyond the
corresponding portion of the price of the thing or of the value of the service in which the
obligation consists (NCC, Art. 1224).
Effects of different permutations of joint indivisible obligations
 
 1.  If there are two or more debtors, compliance with the obligation requires the
concurrence of all the debtors, although each for his own share. The obligation
can be enforced only by preceding against all of the debtors;
2.  If there are two or more creditors, the concurrence or collective act of all the
creditors, although each of his own share, is also necessary for the enforcement
of the obligation;
3.  Each credit is distinct from one another; therefore a joint debtor cannot be
required to pay for the share of another with debtor, although he may pay if he
wants 
 
In case of insolvency of one of the debtors, the others shall not be liable for his
shares. To hold otherwise would destroy the joint character of the obligation
(NCC, Art. 1209).

Effect of breach of a joint indivisible obligation by debtor

 If one of the joint debtors fails to comply with his undertaking, and the obligation can no
longer be fulfilled or performed, it will then be converted into one of indemnity for
damages. Innocent joint debtor shall not contribute to the indemnity beyond his
corresponding share of the obligation.
 

SOLIDARY OBLIGATIONS
 Each one of the debtors is obliged to pay the entire obligation, and each one of the
creditors has the right to demand from any of the debtors the payment or fulfillment of
the entire obligation.
Kinds of solidary obligation
1.  Passive – Solidarity on
the part of the debtors; 
2.  Active –Solidarity on the
part of the creditors ; 
3. Mixed –Solidarity on both 
 
 
Active solidarity
 
The essence of active solidarity consists in the authority of each creditor to claim and
enforce the rights of all, with the resulting obligation of paying every one what belongs
to him; there is no merger, much less a renunciation of rights, but only mutual
representation. It is thus essentially a mutual agency. Its juridical effects may be
summarized as follows:
 
1.  Since it is a reciprocal agency, the death of a solidary creditor does not transmit
the solidarity to each of his heirs but to all of them taken together;
 2.  Each creditor represents the others in the act of receiving payment, and in all
other acts which tend to secure the credit or make it more advantageous. Hence,
if he receives only a partial payment, he must divide it among the other creditors.
He can interrupt the period of prescription or render the debtor in default, for the
benefit of all other creditors;
3.  One creditor, however, does not represent the others in such acts as novation
(even if the credit becomes more advantageous), compensation and
remission. In these cases, even if the debtor is released, the other creditors can
still enforce their rights against the creditor who made the novation,
compensation or remission;
4.  The creditor and its benefits are divided equally among the creditors, unless
there is an agreement among them to divide differently. Hence, once the credit is
collected, an accounting and a distribution of the amount collected should follow;
5.  The debtor may pay to any solidary creditor, but if a judicial demand is made on
him, he must pay only to the plaintiff; and
6.  Each creditor may renounce his right even against the will of the debtor, and the
latter need not thereafter pay the obligation to the 
Passive solidarity
 
In passive solidarity, the essence is that each debtor can be made to answer for the
others, with the right on the part of the debtor-payor to recover from the others their
respective shares. In so far as the payment is concerned, this kind of solidarity is
similar to a mutual guaranty. Its effects are as follows:
 
1.  Each debtor can be required to pay the entire obligation; but after the payment,
he can recover from the co-debtors their respective shares;
2.  The debtor who is required to pay may set up by way of compensation his own
claim against the creditor, in this case, the effect is the same as that of payment;
3.  The total remission of a debt in favor of a debtor releases all the debtors ; but
when this remission affects only the share of one debtor, the other debtors are
still liable for the balance of the obligation;
4.  All the debtors are liable for the loss of the thing due, even if such loss is caused
by only one of them, or by fortuitous event after one of the debtors has incurred
in delay;
5.  The interruption of prescription as to one debtor affects all the others; but the
renunciation by one debtor of the prescription already had does not prejudice the
others, because the extinguishment of the obligation by prescription extinguishes
also the mutual representation among the solidary debtors; and
6.  The interest due by reason of the delay by one of the debtors are borne by all of
them.
 
NOTE: Example of words that connote solidary obligation: a) joint and several; b) in solidum;
c)individually and collectively; d) each will pay the whole value; e) “I promise to pay”
and there are two or more signatures; and f) juntos o separada mente
  
Solidarity v. Indivisibility
BASIS SOLIDARITY INDIVISIBILITY
   
Refers to the vinculum
As to the kind of existing between the Refers to the prestation or
unity it refers to subjects or parties object of the contract
As to the    
requirement of
plurality of parties Requires the plurality of Does not require plurality of
or subjects parties or subjects subjects or parties.
In case of breach, it is
  In case of breach, the liability converted to one of indemnity
of the solidary debtors for damages and the
  indivisibility of the obligation
although converted into one
As to the effect of of the indemnity for damages is terminated and
breach remains solidary so each debtor is liable only
for his part of the indemnity
Death of solidary debtor  
  terminates the solidarity, the
ties or vinculum being Heirs of the debtor remain
As to the effect of
intransmissible to the bound to perform the same
death of a party
heirs prestation.

 
 
DIVISIBLE AND INDIVISBLE OBLIGATIONS
 
Divisible obligations
 Those which have as their object a prestation which is susceptible of partial
performance with the essence of the obligation being change
 
Indivisible obligations
 
 Those which have as their object a prestation which is not susceptible of partial
performance, because otherwise the essence of the obligation will be changed. The
obligation is clearly indivisible because the performance of the contract cannot be done
in parts, otherwise, the value of what is transferred is diminished (Nazareno v. CA, G.R.
No. 138842, October 18, 2000).
 
NOTE: The divisibility of the object does not necessarily determine the divisibility of the
obligation; while the indivisibility of the object carries with it the indivisibility of the
obligation.
 

Test of divisibility
 
 Whether or not the prestation is susceptible of partial performance, not in the sense of
performance in separate or divided parts, but in the sense of the possibility of realizing
the purpose which the obligation seeks to obtain. If a thing could be divided into parts
and as divided, its value is impaired disproportionately, that thing is indivisible (Pineda,
2000).
 

Obligations that are deemed indivisible

 
1.  Obligations to give definite things;
2.  Those which are not susceptible of partial performance;
3.  Even the object or service may be physically divisible, an obligation is indivisible
if so provided (i) by law or (i) intended by the parties (NCC, Art. 1225).
 
NOTE: A pledge or mortgage is one and indivisible by provision of law, and the rules
apply even if the obligation is joint and not solidary (NCC, Art. 2089).
 

Obligations that are deemed divisible

 When the object of the obligation involves:
1.  Certain number of days of work;
2.  Accomplishment of work by metrical unit;
3.  Analogous things  which   are       by        their     nature susceptible     
of         partial performance (NCC, Art.1225).
 Factors to determine whether an obligation is divisible of indivisible
1.  The will or intention of the parties (express or implied);
2.  The objective or purpose of the stipulated prestation;

3.  The nature of the thing; and

4.  The provisions of law affecting the 

 
 

OBLIGTIONS TO GIVE OBLIGATIONS TO DO

In obligations to give, those for the delivery of In obligations to do, invisibility is also
certain objects such as an animal or a chair presumed, and it is only when ther are under
are invisible [(NCC, 1225 (1)] the exceptional cases mentioned in New Civil
Code (NCC), Art 1225 (2) that they are
 divisible.

 
Effect of Illegality of a part of a contract
1.  Divisible contract – The illegal part is void and unenforceable. Legal part is valid
and enforceable (NCC, Art. 1420).
2.  Indivisible contract – The entire contract is indivisible and Partial in indivisible
obligation
 
GENERAL RULE : In indivisible obligations, partial performance is equivalent to non-
performance.
 
EXCEPTIONS:(NCC, Articles 1234 and 1235).
1.  Where the obligation has been substantially performed in good faith, the debtor
may recover as if there had been complete performance, minus the damages
suffered by the creditor; and
2.  Where the creditor accepts performance knowing its incompleteness and without
protest, the obligation is deemed fully 
 
 
 
OBLIGATIONS WITH A PENAL CLAUSE
 
An obligation with a penal clause is one with an accessory undertaking by virtue of
which the obligor assumes a greater liability in case of breach of the obligations
(Jurado, 2009).
Penal clause
  A penal clause is an accessory undertaking to assume greater liability in case of
breach. It is attached to an obligation in order to insure performance. The penalty is
generally a sum of money. But it can also be any other thing stipulated by the parties,
including an act or abstention.
Double functions:
1.  To provide for liquidated damages; and
2.  To strengthen the coercive force of the obligation by the threat of greater
responsibility in case of breach
Kinds of penalties
 
 as to origin
a.  Legal - it is legal when it is constituted by law
 b.  Conventional – it is constituted by agreement of the parties
  as to purpose
1.  compensatory – it is compensatory when it is established for the purpose of
indemnifying the damages suffered by the oblige or creditor in case of breach of
the obligation
2.  punitive – it is punitive when it is established for the purpose of punishing the
obligor or debtor in case of breach of obligation
 as to effect
1.  subsidiary – it is subsidiary when only the penalty may be demanded in case of
breach of the obligation
2.  joint – it is joint when injured party may demand the enforcement of both the
penalty and the principal 
 
Can the debtor just choose penalty over non-fulfillment?
 
GENERAL RULE: The debtor cannot exempt himself from the performance of the
obligation by paying the penalty (NCC, Art. 1227).

EXCEPTION: When the right has been expressly reserved to the debtor (NCC, Art. 1227).
 

Creditor cannot demand both the fulfillment of the principal obligation and the penalty
 
GENERAL RULE: The creditor cannot demand the fulfillment of the obligation and the
satisfaction of the penalty at the same time (NCC, Art. 1227).
 
EXCEPTIONS:
1.  When the right has been clearly granted to him;
2.  If the creditor has decided to require the fulfillment of the obligation, the
performance thereof should become impossible without his fault, the penalty may
be enforced (NCC, Art. 1227).
 
NOTE: The creditor need not present proof of actual damages suffered by him in order
that the penalty may be demanded (NCC, Art. 1228). In this jurisdiction, there is no
difference between a penalty and liquidated damages, so far as the results are
concerned. Whatever differences exist between them as a matter of language, they are
treated the same legally (Rabuya, 2017).
 

Effect of incorporating a penal clause in an obligation

 
GENERAL RULE: the Penalty fixed by the parties is a compensation or
substitute for damages in case of breach.
 
 EXCEPTIONS: Damages shall still be paid even if there is a penal clause if:
1.  There is a stipulation to the contrary
2.  The debtor refuses to pay the agreed penalty; or
3.  The debtor is guilty of fraud in the fulfillment of the obligation (NCC, Art. 1126).
 
NOTE: The nullity of penal clause does not carry with it that of the principal obligation.
For example, the penal clause may be void because it is contrary to law, morals, good
custom, public order or public policy. In such case, the principal obligation subsists if
valid.
 
NOTE: When there are several debtors in an obligation with a penal clause, the
divisibility of the principal obligation among the debtors does not necessarily carry with
it the divisibility of the penalty among them