Elements of a Negotiorum Gestio
1. The property was abandoned and neglected
2. The person who took over the possession is not
authorized to do so.
(3. Voluntary)
Obligations of a Gestor
1. Take care of the property until the owner
returns.
2. Take care of the property with the due diligence
of a good father.
3. Return the property to the owner
The obligation of the Owner
1. Reimburse the gestor of all his expenses that
are necessary and desirable to the property
General Rule:
The gestor shall be liable for the damage caused
to the property while it is under his management.
Exception:
If the property was damaged through a fortuitous
event
Exception to the Exception:
1. When the gestor undertakes a risky operation
that the owner is not accustomed to embarking
upon
2. If he has preferred his own interest to that of the
owner
3. If he fails to return the property after the
demand of the owner
4. If he assumed the management in bad faith.
A gestor is liable for the damage to property if:
1. He is manifestly unfit to manage the property
2. He prevented a more qualified person to take
over the management
Except: if he undertook the management to
save the property from imminent danger
3 kinds of Delay (Mora)
1. Mora Solvendi (delay by the debtor)
2. Mora Accipiendi (delay by the creditor)
3. Compensation Morae (delay by both)
b. Solutio indebiti – This refers to the payment by
mistake of an obligation that was not due when
paid. It creates the obligation to return the
payment. (Art. 2154)
2 Kinds of Solutio Indebiti
1. Delivery by Mistake
2. Payment before due
Delivery by mistake
 Anyone who receives something by mistake is
obliged to return the same to:
1.) The person entitled to receive it.
2.) The person who sent the property
3.) The person who delivered the property.
 Should the property produces fruits, he shall be
liable to deliver the same together with the
property
 The person who returns said property is entitled
to be reimbursed for his expenses in preserving
and returning the thing
Payment before due
Should payment be made before it was
due, anyone who receives said payment is obliged
to return the same to the payor.
Payment by Third Party
 A Creditor is not obliged to receive payment
from a third party because he is not privy to the
contract (Art 1159)
 Should the creditor accept the payment, the
third party will acquire all the rights of the
creditor
 Except when the debtor objects to the payment
by a third party, in which case, the debtor shall
only be liable to the third party up to the extent
that he benefitted.
Finder of Lost Property
 involves only personal or movable property.
 if the owner is known, return to the owner.
 if not, must deposit it with the mayor’s office.
 the mayor’s office must publicly announce the
find for two consecutive weeks, through the
means he deems fit. (2 notices in 2 public
places).
 if the property is perishable, it must be
auctioned 8 days after publication.
 after 6 months, should the owner fails to
retrieve the property, it shall be awarded to the
finder. The finder however is liable to pay the
expenses of the state.
 should the owner claim the property, he shall be
obliged to give 1/10 of the value of the property
to the finder as a finder’s fee. He is also liable
to pay the expenses of the state.
Obligations imposed by Law
1. Obligation to reimburse a stranger who
provided support without the knowledge of the
person obliged to give support.
2. Obligation to reimburse anyone who paid for the
funeral expenses of a deceased.
3. Obligation to reimburse a person who provided
support because the person obliged to give
support refuses to do so.
4. Obligation to reimburse a person who aided
another whose life was in imminent danger by
reason of calamity or natural disaster.
5. Obligation to reimburse the state in the event
that a person who is obliged to comply with any
health or safety regulation fails to do so and the
state performed the necessary task for him.
c. Other quasi-contracts
c.1. Finder of Lost Property
c.2. Payment by Third Party
c.3. Obligations Imposed by Law
ACTS OR OMISSIONS PUNISHABLE BY LAW
 These are crimes or felonies.’’ The
commission of a crime makes the offender
civility liable. (Act. 100 Revised Penal Code.)
Such civil liability includes restitution,
reparation of the damage caused, and
indemnification of consequential damages.
(Art. 104, R.P.C.)

Civil liability arising from crimes delicts or
felonies
1. Oftentimes, the commission of a crime causes
not only moral evil but also material damage.
From this principle, the rule has been established
that every person criminally liable for an act or
omission is also civilly liable for damages. (Art.
100, Revised Penal Code.)
2. In crimes, however, which cause material
damage (like contempt, insults to persons in
authority, gambling, violations of traffic
regulations, etc.), there is no civil liability to be
enforced. But a person not criminally responsible
may still be liable civilly (Art.29; Sec.2[c], Rule
111, Rules of court.).
Scope of civil liability
The extent of the civil liability for damages arising
from crimes, this civil liability includes:
1. Restitution;
2. Reparation for the damage caused; and
3. Indemnification for consequential damages.
(Art. 104, Revised Penal Code.)
Causes of Action
a. Civil Action
 There must be a right possessed by the
claimant
 There was a violation of said right by the
respondent
 The respondent has the obligation to
respect the right of the claimant
b. Criminal Action
 There must be a law prohibiting an act or
omission
 There is a violation of the prohibition
 The accused is not justified or excused in
the violation
Kinds of Damages
1. Moral
2. Exemplary
3. Nominal
4. Temperate
5. Actual
6. Liquidated
Quasi-delicts (also known as “tort” or “culpa
aquiliana”)
 these are acts or omissions that cause
damage to others, there being fault or
negligence but without any pre-existing
contractual relation between the parties. (Art.
2176)
Elements of Quasi-delict
1. There must be an act or omission;
2. There must be fault or negligence;
3. There must be damage caused;
4. There must be a direct relation or connection of
cause and effect between the act of omission and
the damaged; and
5. There is no pre-existing contractual relation
between the parties.
 Proximate Cause – that cause, which, in a
natural and continuous sequence, unbroken by
any efficient intervening cause, produces the
injury, and without which the result would not
have occurred.
 Direct cause – that which actually caused the
injury.
 Quasi-delict may be due to the negligence of a
person in the performance of his duty or his
negligence in the supervision or management
of another person.
 The defense against a quasi-delict is to prove
that the person in question exercised the
diligence required of him.
Who are liable for quasi-delict?
1. Father, or in his absence or incapacity, the
mother – for damage or injury caused by minor
child.
2. Guardian – for damage or injury caused by
ward
3. Manager or Owner of Establishment – for
damage or injury caused by employees within the
establishment
4. Employer – for damage or injury caused by
household helpers
5. State – for damage or injury caused by special
agents, or for faulty or damaged public structures
and utilities
6. Teacher or School Administration – for damage
or injury caused by students who are under their
care or supervision
7. Guardian of insane person – for damage or
injury caused by insane person under their
guardianship
8. Pet Owner – for damage or injury caused by
unrestrained pets, unless the pet escaped due to
fortuitous event
9. Owner of Vehicle – for damage or injury caused
by his driver where the owner was a passenger in
the vehicle when the incident occurred
10. Manufacturer – for damage or injury caused by
a product produced by the manufacturer.
Effects and Nature of Obligation
 the default diligence required in fulfilling an
obligation is the diligence of a good father.
 any person who is obliged to deliver something
is also required to deliver the fruits of the thing
after it was overdue. It shall also include all the
accessories and accessions.
 if the obligation is to deliver a generic thing, the
loss of the object does not extinguish the
obligation.
 if the obligation if deliver a specific thing, the
loss of the object extinguishes the obligation,
but if the thing was lost due to the fault of the
debtor, he shall be liable for damages.
 if the debtor fails to deliver the goods on time, in
contravention of tenor, negligently or through
fraud, he shall also be liable for damages.
MODULE 3: Kinds of Obligation
A. As to the subject matter
Focusing on the subject matter of the
obligation or the conduct required to be
observed by the debtor:
a. Real obligation – those which require the
debtor to give.
Art. 1163. Every person obliged to give
something is also obliged to take care of it with
the proper diligence of a good father of a family
unless the law or the stipulation of the parties
requires another standard of care. (1094a)
b. Personal Obligation – those which require
the debtor to do or not to do something.
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)
B. As to the number of persons bound to
perform
This classification focuses on who is bound to
perform an obligation, it is either only one of the
parties or both are bound to comply with the
obligation.
a. Unilateral obligation – it is an obligation
wherein only one of the parties is obliged to
perform the obligation.
b. Bilateral obligation – it is an obligation
where both parties are obliged to perform part
of the obligation. It is further classified to:
i. Reciprocal – Obligations that depend on
the performance of both parties. The
performance of one party’s obligation is
dependent on the other party performing his/her
own obligation.
ii. Non-reciprocal – obligations wherein the
performance of one party is not dependent on
the performance of the other party.
C. As to the capability of fulfillment
Obligations may also be classified based
on their possibility of performance.
a. Possible obligation – those which are
capable of being accomplished by the debtor in
accordance with nature or in law.
b. Impossible obligation - those which are not
capable of being accomplished by the debtor in
accordance with nature or in law.
D. As to susceptibility of partial
fulfillment/divisibility
Certain obligations, due to their nature may
be accomplished in parts, while some cannot
be fulfilled unless the whole prestation is
complied with.
a. Divisible obligation – those which are
capable of partial performance.
b. Indivisible obligation – those which are not
susceptible to partial performance.
E. As to their dependence upon one another
There are obligations that can exist without
any other obligations, while some can only exist
in relation to another obligation.
a. Principal Obligation – this pertains to the
main obligation entered into by the parties.
b. Accessory Obligation – refers to the
secondary obligation which exists to guarantee
the fulfillment of the principal obligation.
F. As to the existence of a burden or
condition
Another classification of obligations is
based on the presence of an attached burden
on the performance of the obligation itself.
a. Pure obligation – an obligation where the
performance of which does not rely on the
happening of any condition.
b. Conditional Obligation – provides for
certain conditions before the obligation
becomes demandable or the right exists.
Conditions can be classified to:
1. Resolutory Condition/ Condition
Subsequent – the right or obligation exists until
the condition is met.
2. Suspensive Condition/ Condition
Precedent – the right or obligation does not
exist until the condition is met.
c. Obligation with a term – an obligation that
is subject to the fulfillment of an event that is
certain to happen, although the date may not
be known as of the moment.
G. As to the nature of the performance
An obligation may also be classified based
on whether the debtor is required to do
something or forbidden to do something.
a. Positive Obligation – the debtor is obliged
to give or do something in favor of the creditor.
b. Negative Obligation – when the debtor is
forbidden to do something.
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)
H. As to the nature of the creation of the
obligation
An obligation may exist through the will of
parties or by operation of law.
a. Legal Obligation – obligations which are
expressly provided by law.
b. Conventional Obligation – obligations that
are created by the agreement of the parties.
I. As to the character of responsibility or
liability/ plurality of subjects
 Obligations may be classified taking into
consideration the relationship of multiple
debtors and/or multiple creditors.
a. Joint obligation – an obligation where each
debtor is only liable to a part of the whole
liability and each creditor is only entitled to a
part of the correlative rights.
b. Solidary Obligation – an obligation wherein
each one of the debtors is bound to render the
entire performance of the obligation while each
creditor has the right to demand fulfillment of
the entire obligation.
J. As to the grant of the right to choose one
prestation out of several, or to substitute the
first one/ plurality of objects
An obligation may have a single or multiple
prestations.
a. Single Obligation – an obligation where
there is only one prestation.
b. Alternative Obligation – an obligation
wherein the debtor has the option to perform
any of several prestations to fulfill the
obligation.
c. Facultative Obligation – an obligation
wherein only one prestation is agreed upon but
the debtor may render one in substitution of the
first one.
K. As to the imposition of a penalty
Some obligations may provide certain
sanctions in case of breach or default.
a. Simple Obligation – an obligation wherein
there is no provision of penalty in case there is
a default.
b. Obligation with penalty/ with penal
provision – an obligation that already provides
a sort of penalty for violation of its terms.
MODULE 4: Rights of the Obligor in
Obligation to do or not to do
Determinate things and generic things
1. Concept
A thing is determined when it is particularly
designated or physically segregated from all
others of the same class. (Art.1460).
2. Importance of knowing whether a thing is
determined or generic
As a rule, the loss of a determinate thing
through a fortuitous event extinguishes the
obligation. (Art. 1262)
The obligation of one obliged to give a
determinate thing
1. To take good care of the thing with the
diligence of a good father of a family unless the
law or agreement of the parties requires
another standard of care. (Art. 1163)
2. To deliver the thing. (Art. 1163)
This involves placing the thing in the
possession or control of the creditor either
actually or constructively.
3. To deliver the fruits of the thing. (Art. 1164)
4. To deliver its accessions and accessories
even if they have not been mentioned. (Art.
1166)
a. Kinds of fruits
1) Natural fruits – They are the spontaneous
products of animals on the soil without the
intervention of man and the colt delivered by a
mare are natural fruits.
2) Industrial fruits – They refer to those
produced by the land of any king through
cultivation or labor (At. 442) Examples are rice,
corn, and other crops produced through the
intervention of human labor.
3) Civil fruits – they refer to fruits that are the
result of a juridical relation such as the rent of a
building, the price of lease of land and other
property, and the amount of perpetual or life
annuities. (Art. 442)
b. When a creditor has a right to the fruits of
a determinate thing
The creditor has the right to the fruits of a
thing from the time the obligation to deliver it
arises. However, he shall acquire no real right
over it until the thing has been delivered to him.
(Art. 1164)
c. When the obligation to deliver the thing
arises
1) If the obligation is a pure obligation or one
whose performance is not subject to a
suspensive period or suspensive condition, the
obligation to deliver arises from perfection.
2) If the obligation is subject to a suspense
period or suspensive condition, the obligation to
deliver arises upon the arrival of the term or the
fulfillment of the condition.
d. Rights of the creditor
1) Personal right – This is a right that may be
enforced by one person on another, such as
the right of the creditor to demand the delivery
 of the thing and its fruits from the debtor. This is 3. Delay
also called jus in personam or jus ad rem. 4. Contravention of the tenor of the
2) Real right – This refers to the right or power obligation. (Art.1170.)
over a specific thing, such as possession of
ownership, which is a right enforceable against
the whole world. This is also called jus in re.

4. To deliver its accessions and accessories

even if they have not been mentioned. (Art.
1166)
a. Accessions – They include everything that
is produced by a thing or is incorporated or
attached thereto, either naturally or artificially,
(Art. 440) such as alluvium, the soil gradually
deposited by the current of a river on a river
bank or whatever is built, planted or sown on a
parcel of land.
b. Accessories – Those joined to or included
with the principal thing for the latte’s better use,
perfection, or enjoyment (such as the keys to a
car a house, or the bracelet of a wristwatch).

Remedies of the creditor

1. If the debtor fails to perform his obligation to
deliver a determinate thing
a. To compel the debtor to make the
delivery. (Art. 1165)
b. To demand damages from the debtor.
(Art. 1170)

2. If the debtor fails to perform his obligation to

deliver a generic thing
a. To ask that the obligation be complied
with at the expense of the debtor. (Art. 1165)
b. To demand damages from the debtor.
(Art. 1170)

3. If the debtor fails to perform his obligation in

obligations to do
a. If the debtor fails to perform the
obligation or performs it but contravenes the
tenor thereof
1) Creditor may have the obligation
executed at the expense of the debtor.
(Art. 1167)
2) He may also demand damages from the
debtor. (Art. 1170)
b. If the debtor performs the obligation but
does it poorly
1) Creditor may have the same be undone at
the debtor's expense. (Art.1167)
2) Creditor may also demand damages from
the debtor. (Art.1170)

3. If the debtor does what has been forbidden to

him
a. The creditor may demand that what has
been done be undone.
b. He may also demand damages from the
debtor. (Art. 1168)

Grounds for liability to pay damages

1. Fraud
2. Negligence
MODULE 4: Specific Circumstances Affecting
Obligations in General
DAMAGES
1. Concept, distinguished from injury
Damages refer to the harm done and the
sum of money that may be recovered.
Injury refers to a wrongful, unlawful or
tortuous act. It is legally wrong to be redressed.
2. Kinds of damages
a. Actual or compensatory damages - These refer
to the pecuniary loss, (such as loss in business or
profession) that may be recovered. It includes the
value of the loss suffered and profits not realized.
(Art.2199)
b. Moral damages - They include physical suffering,
mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury. (Art.2217)
c. Nominal damages - They refer to damages to
vindicate a right. (Art.2221)
d. Temperate or moderate damages - They are
more than nominal but less than compensatory
damages but may be recovered if the court finds that
some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be
proved with certainty. (Art.2224)
e. Liquidated damages - Those agreed upon by the
parties to a contract, to be paid in case of a breach.
(Art.2226)
f. Exemplary or corrective damages - These are
imposed by way of example or a correction for the
public good, in addition to the moral, temperate,
liquidated, or compensatory damages. (Art.2229)
3. Proof of pecuniary loss
a. Actual damages - Proof is required unless
provided by law or stipulation. (Art.2199)
b. Other damages - Proof is not required in order
that moral, nominal, temperate or liquidated or
exemplary damages may be adjudicated. The
assessment of such damages, except liquidated
ones, is left to the discretion of the court, according
to the circumstances of each case. (Art.2216)
FRAUD
1. Concept
Fraud is the deliberate or intentional evasion
by the debtor of the normal compliance of his,
obligation. Under Art 1170, this actually refers to the
fraud committed by the debtor at the time of the
performance of his obligation.
2. Kinds of fraud in general
According to meaning:
1) Fraud in obtaining consent
a) Causal fraud or dolo causante - This refers
to fraud without which consent would not have
been given. t renders the contract voidable.
b) Incidental fraud or dolo incidente - This
refers to fraud without which consent would have
still been given but the person giving it would
have agreed on different terms. The contract is
valid but the party employing it shall be liable for
damages.
2) Fraud in the performance of the obligation
This is the deliberate act of evading fulfillment
of an obligation in a normal manner. This
presupposes an existing obligation; hence, the fraud
has no effect on the validity of the contract since it
was employed after perfection However, the party
employing it shall be liable for damages. (Art. 1170)
b. According to the time of commission
1) Future fraud
A waiver of action for future fraud cannot be
made. If there is an agreement for its waiver, the
same is void. (Art. 1171) Thus, the debtor will still be
liable for damages if he commits fraud in the
performance of his obligation despite the waiver.
2) Past fraud
A waiver of action for past fraud may be
made since the commission of fraud can no longer
be encouraged. A waiver is an act of liberality on the
part of the creditor.
NEGLIGENCE
1. Concept
It is the omission of that diligence that is
required by the nature of the obligation and
corresponds with the circumstances of the person, of
the time, and of the place. (Art 1173).
The test of negligence is whether the
defendant in doing the alleged negligent act uses
that reasonable care and caution that an ordinary
person would have used in the same situation.
If the law or contract does not state the
diligence which is to be observed in the performance
of the obligation, the debtor must observe the
diligence of a good father of a family.
2. Kinds
a. Culpa contractual (contractual negligence) -
This negligence in the performance of a contract
(such as the negligence committed by the driver
of a bus when a passenger is hurt during a trip
because there is here a breach of contract of
carriage).
b. Culpa aquiliana (civil negligence or tort or
quasi-delict or culpa extra-contractual) - These
are acts or omissions that cause damage to
another, there being no contractual relation
between the parties. Art 2176)
c. Culpa criminal (criminal negligence) - This is
negligence that results in the commission of a
crime.
DELAY OR DEFAULT OR MORA
1. Concept
Delay or default or mora is the non-fulfillment of an
obligation with respect to time.
2. Kinds
a. Mora solvendi - Delay on the part of the debtor.
1) Ex re - Delay in real obligations (obligations to
give).
2) Ex persona - Delay in personal obligations
(obligations to do).
b. Mora accipiendi - Delay on the part of the
creditor.
This exists when the creditor refuses to accept the
thing due without justifiable reason.
c. Compensatio morae - Delay in reciprocal
obligations i.e., both parties are in default. Here, it is
as if there is no delay.
3. When debtor incurs in delay in obligations to
give or to do requisites
General rule: The debtor incurs in delay from the
time the creditor demands fulfillment of the obligation
but the debtor fails to comply with such demand (no
demand, no delay, as a rule). The following are the
requisites of delay:
a. The debtor does not perform his obligation on
the date it is due.
b. The creditor demands the performance of the
obligation.
c. The debtor does not comply with the creditor's
demand.
EXCEPTIONS, i.e., the delay will exist even without
demand in the following cases (Art. 1169):
a. When the law so provides.
b. When the obligation expressly so declares
c. When time is of the essence of the contract.
d. When demand would be useless.
e. In reciprocal obligations, where the obligations
arising out of the same cause must be fulfilled at the
same time from the moment one of the parties fulfills
his obligation, delay by the other begins
notwithstanding the absence of demand.
4. Effects of delay
a. The debtor shall be liable for the payment of
damages. (Art. 1170)
b. If the obligation consists in the delivery of a
determinate thing, he shall be responsible for any
fortuitous event until he has effected the delivery.
(Art. 1165)
And, in order for a fortuitous event to exempt one
from liability, it is necessary that he must have
committed no negligence or misconduct that may
have occasioned the loss.
Presumptions on receipt of principal or of later
installment (these are disputable presumptions
and evidence may be introduced to the contrary
by the creditor) (Art. 1176)
1. The receipt of the principal without reservation as
to the interest, shall give rise to the presumption that
the interest has been paid.
2. The receipt of a later installment without
reservation as to prior installments, shall give rise to
the presumption that such prior installments have
been paid.
Remedies of the creditor to enforce payment of
his claims against the debtor (Art. 1177)
1. Pursue the property in the possession of the
debtor, except those exempt by law.
2. Exercise all the rights and bring all the actions of
the debtor except those personal to him (accion
subrogatoria).
3. Impugn the acts which the debtor may have done
to defraud his creditors (accion pauliana).
Rule on the transmissibility of rights and
exceptions thereto (Art. 1178)
General rule: All rights acquired in virtue of an
obligation are transmissible. (Thus, a creditor may
assign his credit to a third person or such right is
transmitted to the heirs upon his death.)
Exceptions:
1. If the law prohibits the transmission of the right.
2. If the parties agreed against transmission
3. If the right is by nature not transmissible

FORTUITOUS EVENTS
1. Concept
Fortuitous events are those events that could
not be foreseen, or which, though foreseen, are
inevitable. (Art.1174). It is not enough that the event
should not be foreseen or anticipated, but it must be
impossible to foresee or avoid.

2. Elements
a. The cause must be independent of the debtor's
will.
b. There must be the impossibility of foreseeing
the event or of avoiding it even if it can be
foreseen.
c. The occurrence of the event must be of such
character as to render it impossible for the debtor
to perform his obligation in a normal manner.

3. Liability for fortuitous events

General rule: No person shall be liable for fortuitous
event i.e., his obligation will be extinguished.
Exceptions. to the rule (Art. 1174):
a. When the law expressly provides tor liability
even in case of fortuitous events
b. When the parties have declared liability even in
case of a fortuitous event.
c. When the nature of the obligation requires the
assumption of risk

4. Burden of proving loss due to fortuitous event

The burden of proving that the loss was due
to a fortuitous event rests on him who invokes it.