Introduction to Law

What is law?
• Any rule of action or any system of uniformity
• It determines the activities of men as rational beings, the movements or motions of all objects of
creation, whether animate or inanimate

Divine law
• It is the law of religion and faith which concerns itself with the concept of sin and salvation.
• It is formally promulgated by God and revealed by means of direct revelation
• The sanction of divine law lies in the assurance of certain rewards and punishments in the present life or
in the life to come

Natural law
• It is the divine inspiration in man of the sense of justice, fairness, righteousness, not by divine revelation
or formal promulgation, but by internal dictates of reason alone.
• It is ever present and binding on all men everywhere and at all times. There is in every man a basic
understanding of right and wrong based on an understanding of the fundamental standard or criterion of
good and evil.
• It is said to be impressed in man as the core of his higher self at the very moment of being or, perhaps,
ever before that. Divine law as the law of religious faith, is made known to man by means of direct
revelation.

Moral law
• It is the totality of the norms of good and right conduct growing out of the collective sense of right and
wrong of every community.
• Determination of what is right and wrong: At a comparatively early stage of their existence, human
beings learned that it was good for the welfare of the group that the privilege to determine what is right
and what is wrong was not left to each member of the group. The mores or ways of life were then
evolved which were always considered right and correct, and obedience to them was demanded by the
group.
• Moral law is not absolute. It varies with the changing times, conditions or convictions of the people.
• Moral law, to a great extent, influences or shapes state law.

Physical law
• These are uniformities of actions and orders of sequence which are the physical phenomena that we
sense and feel in the operation or course of nature. They are known as the laws of physical science or
physical law.
• It is called law only by analogy such as law of gravitation / law of chemical combination
State law
• Law that is promulgated by the state.
• It is also called positive law, municipal law, civil law, or imperative law.
• As a rule of action, only state law is enforced by the state, with the aid of its physical force, it
necessary

Concept of state law

• It is a rule of conduct, just, obligatory, promulgated by legitimate authority, and of common observance
and benefit.

Characteristics of law
1. It is a rule of conduct – law tells us what shall be done and what shall not be done
2. It is obligatory – it is a positive command imposing a duty to obey and involving a sanction which forces
obedience
3. It is promulgated by legitimate authority – legislature; laws are enacted by Congress
4. It is of common observance and benefit – law is intended by man to serve man. It regulates the relations of
man to certain harmony in society and to make order and co-existence possible.

Sources of Law
1. Constitution – fundamental law of the land
2. Legislation – enacted law or statute law; ordinances enacted by lgu
3. Administrative or executive orders, regulations and rulings – issued by administrative officials under
legislative authority
4. Judicial decisions or jurisprudence
5. Custom – those habits and practices which through long and uninterrupted usage have become
acknowledged and approved by society as binding rules of conduct.
6. Other sources

Law on obligations and contracts, defined

The law on obligations and contracts is the body of rules which deals with the nature and sources of obligations
and the rights and duties arising from agreements and the particular contracts.
OBLIGATIONS

Article 1156. An obligation is a juridical necessity to give, to do, or not to do.

Obligation is derived from the latin word obligation which means tying or binding. It is a tie or bind
recognized by law 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.

Meaning of juridical necessity

Obligation is a juridical necessity because in case of noncompliance, the courts of justice may be called upon by
the aggrieved party to enforce its fulfillment or in default hereof, the economic value it represents.

Essential requisites of an obligation

1. A passive subject (called debtor or obligor) – the person who is bound to the fulfillment of the obligation;
he who has the duty
2. An active subject (called the creditor or obligee) the person who is entitled to demand the fulfillment of the
obligation, he who has the right.
3. Object or prestation (subject matter of the obligation) – the conduct required to be observed by the debtor;
it may consist in giving, doing or not doing
4. A juridical or legal tie (also called efficient cause) – that which binds or connects the parties to the
obligation. The tie in an obligation can easily be determined by knowing the source of the obligation.

Example;
Under a building contract, X bound himself to build a house for Y for P1,000,000.
X is the passive subject, Y is the active subject, the building of the house is the object or prestation, and the
agreement or contract, which is the source of the obligation, is the juridical tie.

Form 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 from other sources do not have any form at all.
Kinds of obligation as to subject matter.
1. Real obligation – obligation to give – the subject matter is a thing which the obligor must deliver to the
oblige.
2. Personal obligations – obligation to do or not to do – the subject matter is an act to be done or not to be
done. Two kinds of personal obligation:
a. Positive personal obligation – obligation to do or to render service
b. Negative personal obligation – obligation not to do (which includes not to give)

Art. 1157. Obligations arise from:

1. Law
2. Contracts
3. Quasi contracts
4. Delicts
5. Quasi delicts

Sources of obligations:
1. Law – when they are imposed by the law itself (obligation to pay taxes)
2. Contracts – when they arise from stipulation of the parties
3. Quasi contracts – when they arise from lawful, voluntary and unilateral acts which are enforceable to the
end that no one shall be unjustly enriched or benefited at the expense of another.
4. Delicts or crimes or acts or omissions punishable by law – when they arise from civil liability which is the
consequence of a criminal offense.
5. Quasi – delicts or torts – when they arise from damage caused to another through an act or omission, there
being fault or negligence, but no contractual relation exists between the parties.

Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or
in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as
to what has not been foreseen, by the provisions of this Book.
• To be demandable, they must be clearly set forth in the law i.e. Civil Code or special laws

Art. 1159. Obligations arising from contracts have the force of law between the contacting parties and should
be complied with in good faith.
• The contract must be valid and it cannot be valid if it is against the law
 • Compliance in good faith means compliance or performance in accordance with the stipulations or
terms of the contract or agreement. Sincerity and honesty must be observed to prevent one party from
taking unfair advantage over the other.

Example:
If S agrees to sell his house to B, and B agrees to buy the house of S, voluntarily and willingly, then they are
bound by the terms of their contract and neither party may, upon his own will, and without any justifiable
reason, withdraw from the contract or escape from his obligations thereunder. That which is agreed upon in the
contract is the law between S and B and must be complied with in good faith.

Art. 1160. Obligations derived from quasi contracts shall be subject to the provisions of Chapter 1, Title XVII
of this Book.

Quasi contractual obligations

A quasi- contract is that juridical relation resulting from lawful, voluntary, and unilateral acts by virtue of which
the parties become bound to each other to the end that no one will be unjustly enriched or benefited at the
expense of another.
The law considers the parties as having entered into a contract although they have not actually did so, and
irrespective of their intentions, to prevent injustice.

Kinds of quasi contracts

1. Negotiorum gestio – is the voluntary management of the property or affairs of another without the
knowledge or consent of the other
2. Solutio indebiti – is the juridical relation which is created when something is received when there is no
right to demand it and it was unduly delivered through mistake.

Art. 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws xxx.

Art. 1162. Obligations arising from quasi delicts shall be governed by the provisions of Chapter 2, Title XVII
of this Book, and by special laws.

Quasi delict
A quasi delict is an act or omission by a person which causes damage to another in his person, property or rights
giving rise to an obligation to pay for the damage done, there being fault or negligence but there is no pre-
existing contractual relation between the parties.
Requisites 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 or omission and the
damage; and
5. There is no pre existing contractual relation between the parties.
Example:
While playing softball with his friends, X broke the window glass of Y, his neighbor. The accident would not
have happened had they played a little farther from the house of Y. In this case, X is under obligation to pay the
damage caused to Y by his act although there is no pre-existing contractual relation between them because he is
guilty of fault of negligence.

NATURE AND EFFECT OF OBLIGATIONS

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 or the parties require another standard of care.

Meaning or specific or determinate thing

A thing is said to be specific or determinate if it is particularly designated or physically segregated from others
of the same class.
Example: the watch I am wearing, the Toyota car with plate no. ABC123

Meaning of generic or indeterminate thing

A thing is generic or indeterminate when it refers only to a class or genus to which it pertains and cannot be
pointed out with particularity.
Example: a 1995 Toyota car, a cavan of rice, a police dog

Duties of debtor to give a determinate thing

1. Preserve the thing. The obligor has the incidental duty to take care of the thing due with the diligence of a
good father of a family pending delivery. The debtor must exercise diligence to insure that the thing to be
delivered would subsist in the same condition as it was when the obligation was contracted.

2. Deliver the fruits of the thing

3. Deliver the accessions and accessories
4. Deliver the thing itself
5. Answer for damages in case of non fulfillment or breach

Duties of debtor in obligation to deliver a generic thing

1. To deliver a thing which is of the quality intended by the parties taking into consideration the purpose of
the obligation and other circumstances (Art. 1246).
2. To be liable for damages in case of fraud, negligence, or delay in the performance of his obligation, or
contravention of the tenor thereof (Art. 1170).

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.

Different kinds of fruits

1. Natural fruits – are the spontaneous product of the soil, and the young, and other products of animals. Ex.
Grass, all trees and plants on lands produced without the intervention of human labor.
2. Industrial fruits – those produced by lands of any kind through cultivation or labor. Ex. Sugar cane,
vegetables, rice and all products of land brought about by reason of human labor.
3. Civil fruits – those derived by virtue of a juridical relation. Ex. Rents of buildings, price of leases of lands
and other property and the amount of perpetual or life annuities or other similar income.
When an obligation to deliver fruits arises
1. Generally, the obligation to deliver the thing due and consequently, the fruits thereof, if any, arises from the
time of the “perfection of the contract”. Perfection, in this case, refers to the birth of the contract or to the
meeting of the minds between the parties. (Art. 1305, 1315, 1319).
2. If the obligation is subject to a suspensive condition or period, (Art. 1179, 1189, 1193), it arises upon the
fulfillment of the condition or arrival of the term. However, the parties may make a stipulation to the contrary
as regards the right of the creditor to the fruits of the thing.
3. In a contract of sale, the obligation arises from the perfection of the contract even if the obligation is subject
to a suspensive condition or a suspensive period where the price has been paid.

4. If the obligation to give arising from law, quasi contract, delicts or quasi delicts, the time of performance is
determined by the specific provisions of the law applicable.
Example:
S sold his horse to B for P15,000. No date or condition was stipulated for the delivery of the horse. While still
in the possession of S, the horse gave birth to a colt. Who has a right to the colt?
In a contract of sale, “all the fruits shall pertain to the vendee from the day on which the contract was
perfected.” (Art. 1537 2nd par.) Hence, B is entitled to the colt. This holds true even if the delivery is subject to
a suspensive condition (e.g. upon the demand of B) or a suspensive period (e.g. next month) if B has paid the
price.

But S has a right to the colt if it was born before the obligation to deliver the horse has arisen (Art. 1164) and B
has not yet paid the purchase price. In this case, upon the fulfillment of the condition or the arrival of the
period, S does not have to give the colt and B is not obliged to pay legal interest on the price since the colt and
the interest are deemed to have been mutually compensated.

Meaning of personal right and real right

1. Personal right is the right or power of a person (creditor) to demand from another (debtor), as a definite
positive subject, the fulfillment of the latter’s obligation to give, to do, or not to do.
2. Real right is the right or interest of a person over a specific thing (like ownership, possession, mortgage),
without a definite passive subject against whom the right may be personally enforced.

Personal right and real right distinguished

1. In personal right there is a definite active subject and a definite passive subject, while in real right, there is
only a definite active subject without any definite passive subject.
2. A personal right is, therefore, binding or enforceable only against a particular person, while real right is
directed against the whole world.
Ownership acquired by delivery
Ownership and other real rights over property are acquired and transmitted in consequence of certain contracts
by tradition (Art. 712) or delivery.
The meaning of the phrase “he shall acquire no real right over it until the same has been delivered to him”, is
that the creditor does not become the owner until the specific thing has been delivered for him. Hence, when
there has been no delivery yet, the proper court action of the creditor is not one for recovery of possession and
ownership but one for specific performance or rescission of the obligation (see Art. 1165).
Example:
S is obliged to give B on July 25 a particular horse. Before July 25, B has no right over the horse. B will
acquire a personal right against S to fulfill his obligation only from July 25.

Art. 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him
by Art. 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may seek that the obligation be complied with at the expense of the
debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the
same interest, he shall be responsible for fortuitous event until he has effected the delivery.

Remedies of creditor in real obligation

1. In a specific real obligation (obligation to deliver a determinate thing), the creditor may exercise the
following remedies or rights in case the debtor fails to comply with is obligation:
a. Demand specific performance or fulfillment (if it is still possible) of the obligation with a right to indemnify
for damages; or
b. Demand rescission or cancellation (in certain cases) of the obligation also with a right to recover damages
(Art. 1170); or
c. Demand payment of damages only, where it is the only feasible remedy.
Example:
S sells his piano for P10,000. If S refuses to comply with his obligation to deliver the piano, B can bring an
action for fulfillment or rescission of the obligation with the payment of damages in either case (Art. 1191). In
case of rescission, the parties must return to each other what they have received. (Art. 1365).
2. A generic real obligation (obligation to deliver a generic thing), on the other hand, can be performed by a
third person since the object is expressed only according to its family or genus. It is not necessary for the
creditor to compel the debtor to make the delivery, although, he may ask for performance of the obligation. In
any case, the creditor has the right to recover damages under Art. 1170 in case of breach or violation of the
obligation.
Example:
S obliges himself to deliver to B 100 sacks of rice on Dec. 4 for P50,000. If S does not comply with his
obligation, B may buy rice from C, a third person. If B paid C P55,000 he may recover (assuming B has not yet
paid S) P5,000 from S. Furthermore, B can also hold S liable for damages in view of Art. 1170 as in the case of
the delivery of a determinate thing.

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.

Meaning of accessions and accessories

1. Accessions are the fruits of a thing or additions to or improvements upon a thing (the principal). Ex.
Houses or trees on a land, rents of a building, aircon in a car
2. Accessories are things joined to or included with the principal thing for the latter’s embellishment, better
use, or completion. Ex. Key of a house, frame of a picture
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.

Three situations;
1. The debtor fails to perform an obligation
2. The debtor performs an obligation to do but contrary to the terms thereof.
3. The debtor performs an obligation to do but in poor manner.

Remedies of creditor in positive personal obligation

1. If the debtor fails to comply with his obligation to do, the creditor has the right
a. To have the obligation performed by himself or by another, unless personal considerations are involved, at
the debtor’s expense, and
b. To recover damages
2. In case the obligation is done in contravention of the terms of the same or is poorly done, it may be ordered
(by the court) that it be undone if it is still possible to undo what was done.

Performance by a third person

A personal obligation to do, like a real obligation to deliver a generic thing, can be performed by a third person.
While the debtor can be compelled to make the delivery of a specific thing (Art 1165), a specific performance
cannot be ordered in a personal obligation to do because this may amount to involuntary servitude which, as a
rule, is prohibited under our Constitution.

Art. 1168. When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall
also be undone at his expense.

Art. 1169. Those obliged to deliver or to do something incur in delay from the time the oblige 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 declares; 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 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.

Meaning of delay
1. Ordinary delay – failure to perform an obligation on time.
2. Legal delay or default or mora – failure to perform an obligation on time which failure constitutes a breach
of the obligation.

Kinds of delay
1. Mora solvendi – delay on the part of the debtor to fulfill his obligation (to give, or to do)
2. Mora accipiendi – delay on the part of the creditor to accept the performance of the obligation
3. Compensatio morae – delay of the obligors in reciprocal obligation (like in sale). The net result is that
there is no actionable default on the part of both parties.

No delay in negative personal obligation.

Requisite of delay
1. Failure of the debtor to perform his (positive) obligation on the date agreed upon
2. Demand (not mere reminder or notice) made by the creditor upon the debtor to comply with his obligation
which demand may be either judicial or extra judicial (orally or in writing)
3. Failure of the debtor to comply with such demand.
Example:
S oblige himself to deliver to B a specific refrigerator on Dec. 10. If S does not deliver the ref. on Dec. 10, he is
only in ordinary delay. The law presumes that B is giving S an extension of time within which to deliver the ref.
Hence, there is no breach of the obligation and S is not liable for damages.
If a demand is made upon S by B on Dec. 15 and S fails to deliver the ref, S is considered in default only from
the date.

Effects of Delay
1. Mora Solvendi –
a. The debtor is guilty of breach or violation of the obligation
b. He is liable to the creditor for interest or damages.

c. He is liable even for a fortuitous event when the obligation is to deliver a determinate thing (Arts. 1165,
1170).

In an obligation to deliver a generic thing, the debtor is not relieved from liability for loss due to a fortuitous
event. He can still be compelled to deliver a thing of the same kind or held liable for damages.
2. Mora accipiendi
a. The creditor is guilty of breach of obligation
b. He is liable for damages suffered, if any, by the debtor
c. He bears the risk of loss of the thing due
d. Where the obligation is to pay money, the debtor is not liable for interest from the time of creditor’s delay;
and
e. The debtor may release himself from the obligation by the consignation or deposit in court of the thing or
sum due.
3. Compensatio morae – the delay of the obligor cancels the delay of the obligee and vice versa/ no default or
delay on the part of both parties.

When demand is not necessary to put debtor in delay

As a general rule, delay by the debtor begins from the moment a demand, judicial or extrajudicial, for the
fulfillment of the former’s obligation is made by the creditor. Without such demand, the effect of default will
not rise. The exceptions are:
1. When the obligation so provides
2. When the law so provides
3. When time is of the essence
4. When demand would be useless
5. When there is performance by a party in reciprocal obligation

Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence or delay or those
who in any manner contravene the tenor thereof, are liable for damages.

Grounds for liability which may entitle the injured party to damages
1. Deceit or dolo – deliberate or intentional evasion of the normal fulfillment of an obligation; it implies some
kind of malice or dishonesty and it cannot cover cases of mistake and errors of judgment made in good faith. It
is synonymous to bad faith, it involves a design to mislead or deceive another.
Example: S obliged himself to deliver to B 20 bottles of wine of a particular brand. Subsequently, S delivered
20 bottles knowing that they contain cheaper wine. S is guilty of fraud and is liable for damages to B.
2. Negligence (fault or culpa) – any voluntary act or omission, there being no malice, which prevents the
normal fulfillment of an obligation.
Example: P is a passenger in a taxi. If through recklessness of the driver, an accident occurs, as a result of which
P is injured, there is negligence which would make the owner liable for damages.

3. Delay (mora)
4. Contravention of the terms of the obligation – violation of the terms and conditions stipulated in the
obligation. The contravention must not be due to a fortuitous event or force majeure.
Example: E leased the apartment of R for P8,000 a month to be paid in advance during the first week of every
month. The obligation of E, as lessee, is to pay the stipulated rent. The obligation of R, as lessor, is to maintain
E in peaceful possession of the apartment leased. If E violates his obligation, R is entitled to eject him from the
premises and recover damages. If R does not maintain e in the peaceful possession of the apartment, and E is
ejected, R may be held liable for damages for violation of the terms of his obligation.

Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action
for future fraud is void.

The court is not given the power to mitigate or reduce the damages to be awarded. Fraud is so serious and evil
that its employment to avoid fulfilment of one’s obligation should be discouraged.

A waiver of an action for future fraud is void (no effect, as if there is no waiver) as being against the law and
public policy.

Waiver for past fraud – valid. The waiver can be considered an act of generosity and magnanimity on the part of
the party who is the victim of the fraud.

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.

Reason: negligence is a question which must necessarily depend upon the circumstances of each particular
case. Moreover, negligence is not as serious as fraud because in the case of the former, there is no deliberate
intention to cause injury or damage.

Kinds of negligence according to source of obligation

1. Contractual negligence – culpa contractual – negligence in contracts resulting in their breach. It is not a
source of obligation. It merely makes the debtor liable for damages in view of his negligence in the fulfillment
of a pre-existing obligation.
2. Civil negligence – culpa aquiliana – negligence which by itself if the source of an obligation between the
parties not so related before by any pre-existing contract. It is called tort or quasi delict.
3. Criminal negligence – culpa criminal – negligence resulting in the commission of a crime.

Effect of negligence on the part of eh injured party

Art. 2179. When the plaintiff’s own negligence was the immediate and proximate cause of his injury, he cannot
recover damages. But if his negligence was only contributory, he immediate and proximate cause of the injury
being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded.

In other words, to be entitled to damages, it is not required that the negligence of the defendant should be the
sole cause of the damage.

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 person, of the
time and of the place. When negligence shows bad faith, the provisions of Art. 1171, 2201 p.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.

Meaning of fault or negligence.

Negligence is the failure to observe for the protection of the interests of another person, that degree of care,
precaution and vigilance which the circumstances justly demand, whereby such person suffers injury (US vs.
Barrias, 23 Phil 434).

Factor to be considered in determining the issue of negligence.

1. Nature of the obligation
2. Circumstances of the person
3. Circumstances of the time
4. Circumstances of the place

Art 2201 p2. In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non performance of the obligation.
Kinds of diligence required
1. That agreed upon by the parties, orally or in writing
2. In the absence of stipulation, that required by law in the particular case (like extra ordinary diligence
required of common carriers)
3. If both the contract and law are silent, then the diligence expected of a good father of a family.

Art 1174. Except in cases expressly specified by 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.

Meaning of fortuitous event

A fortuitous event is any event which cannot be foreseen or which though foreseen is inevitable. It is an event
which is either impossible to foresee or impossible to avoid.

Fortuitous event distinguished from force majeure

1. Acts of man – a fortuitous event is an event independent of the will of the obligor but not of other human
wills. Ex. Ares, fire, robbery, murder etc.
2. Acts of God – force majeure – events which are totally independent of the will of every human being. Ex.
Earthquake, flood, rain, shipwreck, volcanic eruption, etc

Kinds of fortuitous event

1. Ordinary fortuitous event –which are common and which the contracting parties could reasonably foresee
(e.g. rain); and
2. Extra ordinary fortuitous event – which are uncommon and which the contracting parties could not have
reasonably foresee (e.g. earthquake, fire, ware, pestilence, unusual flood).

Requisites of a fortuitous event

1. The event must be independent of the human will or at least of the debtor’s will
2. The event could not be foreseen, or if foreseen, is inevitable.
3. The event must be of such a character as to render it impossible for the debtor to comply with his obligation
in a normal manner; and
4. The debtor must be free from any participation in, or the aggravation of, the injury to the creditor, that is,
there is no concurrent negligence on his part.
Rules as to liability in case of fortuitous event.
A person is not, as a rule, responsible for loss or damage caused to another resulting from fortuitous events. In
other words, his obligation is extinguished. The exceptions are:
1. When expressly specified by law (Art. 1170)
a. When the debtor is guilty of fraud, negligence, or delay or contravention of the tenor of the obligation

b. When the debtor has promised to deliver the same (specific) thing to two or more persons who do not have
the same interest
c. The obligation to deliver a specific thing rises from crime
d. The thing to be delivered is generic (Art. 1263) Genus never perishes (Genus nunquam perit).
2. When declared by stipulation
3. When the nature of the obligation requires the assumption of risk

KINDS OF OBLIGATIONS

PURE AND CONDITIONAL OBLIGATIONS

Art. 1179 Every obligation whose performance does not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is demandable as once.
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the
effects of the happening of the event.

Pure condition
• One which is not subject to any condition and specific date is mentioned for its fulfillment and is,
therefore, immediately demandable.

Conditional obligation
• One whose consequences are subject in one way or another to the fulfilment of a condition
Condition
• Is a future and uncertain event, upon the happening of which, the effectivity or extinguishment of an
obligation (or right) subject to it depends
Characteristics of a condition
1. Future and uncertain –
2. Past but unknown – if the condition refers to a future event, both its occurrence and the time of such
occurrence must be uncertain

2 principal kinds of condition

1. Suspensive condition – condition precedent / condition antecedent, or one the fulfillment of which will give
rise to an obligation (or right). The demandability of the obligation is suspended until the happening of the
uncertain event which constitutes the condition. Ex. I will give you my land if it is adjudicated to me in the
division of my deceased father’s estate.
2. Resolutory condition – condition subsequent – or one the fulfillment of which will extinguish an obligation
(or right) already existing. Ex. D binds himself to give C P1,000 monthly allowance until C graduates from
college.
When obligation is demandable at once
1. When it is pure
2. When it is subject to a resolutory condition
3. When it is subject to a resolutory period

Art. 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall
be deemed to be one with a period, subject to the provisions of Art. 1197.
When duration of period depends upon the will of debtor.
A period is a future and certain event upon the arrival of which the obligation subject to it either arises or is
extinguished.
1. The debtor promises to pay when his means permit him to do so.
2. Other cases. When the debtor binds himself to pay
a. Little by little
b. As soon as possible
c. From time to time
d. As any time I have the money
e. In partial payments
f. When I am in a position to pay
Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the happening of the event which constitutes the condition.

Art. 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall
take effect in conformity with the provisions of this Code.

Potestative condition
• A condition suspensive in nature and which depends upon the sole will of the contracting parties is
known as potestative condidion.

Where suspensive condition depends upon will of debtor

1. Conditional obligation void
- because its validity and compliance is left to the will of the debtor and it cannot, therefore, be easily
demandable. In order not to be liable, the debtor will not just fulfill the condition.
Ex. I will pay you if I want.
I will pay you after I receive a loan from a bank
I will pay you after I recover what X owes
I will pay you after I have harvested fish.
I will pay you upon the sale of the house in which I live.
I will pay you the price of the forest concessions you sold me upon my operation of the same
2. Only the condition void.
- If the obligation is a pre-existing one and, therefore, does not depend for its existence upon the fulfillment by
the debtor of the potestative condition, only the condition is void leaving unaffected the obligation itself.

Where the suspensive condition depends upon will of creditor

• The obligation is valid

Where resolutory condition depends upon will of debtor

• The obligation is valid. The fulfillment of the condition merely causes the extinguishment or loss of
rights already acquired.
Casual condition
• If the suspensive condition depends upon chance or upon the will of a third person, the obligation
subject to it is valid.
Ex. Where S binds himself to sell his land to B if he wins a case which is pending before the Supreme Court.

Mixed condition
• The obligation is valid if the suspensive condition depends partly upon chance and partly upon the will
of a third person.
Ex. Where X, building contractor, obliges himself in favor of Y, owner, to repair at X’s expense, any damage
to the building taking place after an earthquake if found by a panel or arbitrators that construction defects
contributed in any way to the damage. Both conditions must take place in order that X’s obligation will arise.

Art. 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited
by law shall annul the obligation which depends upon them. If the obligation is divisible, that part
thereof which is not affected by the impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not having been agreed upon.

2 kinds of impossible conditions

1. Physically impossible conditions – when they, in nature of things, cannot exist or cannot be done. Ex. I will
pay you P10,000 if it will not rain for one year in the Philippines.
2. Legally impossible conditions – when they are contrary to law, morals, public order or public policy. Ex. X
will give you P1,000 if Y will kill Z; if Y publicly advocate the overthrow of the government

Effect of impossible conditions

1. Conditional obligation void – both the obligation and the condition are void. The obligor knows his
obligation cannot be fulfilled. He has no intention to comply with his obligation.
2. Conditional obligation valid – if the condition is negative, that is, not to do an impossible thing, it is
disregarded and the obligation is rendered pure and valid.
3. Only the affected obligation is void – if the obligation is divisible, the part thereof not affected by the
impossible condition shall be valid.
4. Only the condition void.- if the obligation is a preexisting obligation, and therefore, does not depend upon the
fulfillment of the condition which is impossible, for its existence, only the condition is void.

Art. 1184. The condition that some event happen at a determinate time shall extinguish the obligation as
soon as the time expires or it if has become indubitable that the event will not take place.

Positive condition
- Positive suspensive condition – the happening of an event at a determinate time. The obligation is
extinghished:
1. As soon as the time expires without the event taking place
2. As soon as it has become indubitable that the event will not take place although the time specified has not
expired.
Ex. X obliges himself to give B P10,000 if B will marry C before B reaches the age of 23.
- X is liable if B marries C before he reaches the age of 23
- X is not liable if B marries C at the age of 23 or after he reaches the age of 23

Art. 1185. The condition that some event will not happen at a determinate time shall render the
obligation effective from the moment the time indicated has elapsed, or if it has become evident that the
event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been
contemplated, bearing in mind the nature of the obligation.
Negative condition
The obligation shall become effective and binding:
1. From the moment the time indicated has elapsed without the event taking place, or
2. From the moment it has become evident that the event cannot occur, although the time indicated has not yet
elapsed.

Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.

Art. 1187. The effects of a conditional obligation to give, once the condition has been fulfilled, shall
retroact to the day of the constitution of eh obligation. Nevertheless, when the obligation imposes
reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition shall
be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shall
appropriate the fruits and interests received, unless, from the nature and circumstances of the obligation
it should be inferred that the intention of the person constituting the same was different.
In obligation to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition
that has been complied with.

Art. 1188. The creditor may, before the fulfillment of the condition, bring the appropriate actions for the
preservation of his right.
The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition.
Art. 1189. When the conditions have been imposed with the intention of suspending the efficacy of an
obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration
of the thing during the pendency of the condition:
1. If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
2. If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the
thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is
unknown or it cannot be recovered;
3. When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor;
4. If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the
obligation and its fulfillment, with indemnity for damages in either case;
5. If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor;
6. If it is improved at the expense of the debtor, he shall have no other right than that granted to the
usufructurary.

Requisites for application of Art. 1189:

1. The obligation is a real obligation.
2. The object is a specific or determinate thing
3. The obligation is subject to a suspensive condition
4. The condition is fulfilled.
5. There is loss, deterioration, or improvement of the thing during the pendency of the condition.

Art. 1190. When the conditions have for their purpose the extinguishment of an obligation to give, the
parties, upon the fulfillment of said conditions, shall return to each other what they have received.
In case of loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are
laid down in the preceding article shall be applied to the party who is bound to return.
As for obligations to do and not to do, the provisions of the second paragraph of Art. 1187 shall be observed as
regards the effect of the extinguishment of the obligation.

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with Art. 1385 and 1388 of the Mortgage Law.
Reciprocal obligations
- Those which arise from the same cause and in which each party is a debtor and creditor of the other, such that
the performance of one is designed to be the equivalent and the condition for the performance of the other.
- Each party may treat the fulfillment of what is incumbent upon the other as a suspensive condition to his
obligation.

Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first
infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first
violated the contract, the same shall be deemed extinguished, and each shall bear his own damages.

OBLIGATIONS WITH A PERIOD

Art. 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when
that day comes.
Obligations with a resolutory period takes effect at once, but terminates upon arrival of the day certain.
A day certain is understood to be that which must necessarily come, although it may not be known when.
If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be
regulated by the rules of the preceding section.

Meaning of obligation with a period

• An obligation with a period is one whose consequences are subject in one way or another to the
expiration of said period or term.

Meaning of period or term

• A period is a future and uncertain event upon the arrival of which the obligation (or right) subject to it
either arises of is terminated. It is a day certain which necessarily come (like the year 2030; next
Christmas) although it may not be known when like the death of a person.
Kinds of period or term
1. According to effect:
a. Suspensive period (ex die) – obligation begin only from a day certain upon the arrival of period. Ex. I will
pay you 30 days from today / at the end of this month.
b. Resolutory period (in diem) – the obligation is valid up to a day certain and terminates upon arrival of the
period. Ex. I will support you until you die.
2. As to source:
a. Legal period – when it is provided by law
b. Conventional or voluntary period – when it is agreed to by the parties
c. Judicial period – when it is fixed by the court
3. According to definiteness
a. Definite period – when it is fixed or known when it will come
b. Indefinite period – when it is not fixed or it is not known when it will come.

Art. 1194. In case of loss, deterioration or improvement of the thing before the arrival of the day certain,
the rules in Art. 1189 shall be observed.

Art. 1195. Anything paid or delivered before the arrival of the period, the obligor being unaware of the
period or believing that the obligation has become due and demandable, may be recovered, with the
fruits, and interests.

Art. 1196. Whenever in an obligation a period is designated, it is presumed to have been established for
the benefit of both the creditor and the debtor, unless from the tenor of the same or other circumstances,
it should appear that the period has been established in favor of one or of the other.

Art. 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be
inferred that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may under the circumstances have been probably
contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.

Art. 1198. The debtor shall lose every right to make use of the period:
1. When after the obligation has been contracted, he becomes insolvent, unless he gives a quaranty or security
for the debt;
2. When he does not furnish to the creditor the guaranties or securities which he has promised;
3. When by his own acts he has impaired said guaranties or securities after their establishment, and when
through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;
4. When the debtor violates any undertaking, in consideration of which the creditor agreed to the period.
5. When the debtor attempts to abscond