TOPICS FOR RESEARCH AND REVIEW:

A. Article 1160 - Obligations derived from quasi-contracts shall be subject to the

provisions of Chapter 1, Title XVII of this book
- Negotiorum gestio
- Solutio Indebiti
Notes:

What is a quasi-contract?
- A 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.
- Easy definition: A contract implied in law, which acts as a remedy for a dispute between
two parties that don’t have a contract.

2 principal kinds of quasi-contracts:

1. Negotiorum gestio - The voluntary management of the property/affairs of another without

the knowledge or consent of the latter. (Art 2144.)

Example: You went to Boracay and left no one to take good care of your house.
While you were on vacation, an accidental fire suddenly broke out near your
house. Through the effort of your neighbor, your house was saved from being
burned. Your neighbor, however, incurred expenses for saving your house.

In this case, you have the obligation to reimburse your neighbor for the said
expenses, although you did not actually give your consent to save your house, on
the principle of quasi-contract.

2. Solutio indebiti - 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. 2154.) It
is based on the principle that no one shall enrich himself unjustly at the expense of
another.

The requisites are:

a. There is no right to receive the thing delivered; and
b. The thing was delivered through mistake

Example: Marc owes Ches P1,000. If Marc paid Lance believing that Lance was
authorized by Ches to receive the money, Lance is obligated to return the money.
If Marc paid Ches P2,000 by mistake, Ches must return the excess of P1,000.

The presumption (Art. 1176.), however, is that “money paid by one to another
was due to the latter,” unless the payor proves otherwise
B. Article 1162-Obligations Arising from Quasi-delicts;
- Requisites of Quasi-delict
- Crime distinguished from Quasi-delict
Notes:

Obligations derived from Quasi-delicts shall be governed by the provisions of CH2.

What is Quasi-delict?
- These are acts that cause damage or harm to another person or to his goods, which
gives rise to an obligation to pay for the damage done.
- There is fault/negligence but there's no pre-existing contractual relation between the 2
parties.

Requisites for Quasi-delict

- There must be an act/omission
- There must be fault/negligence
- Damage caused
- There must be a direct relation/connection of cause and effect between the act or
omission and the damage.
- There is no pre-existing contractual relation between the 2 parties.

C. Read: Articles 1163-1173

- Diligence of a Good Father of a Family
- Specific/Determinate Things distinguished from Generic/Indeterminate Thing
- Kinds of Fruits: Natural, Industrial & Civil
- Personal Right v. Real Right
- Meaning of Delay: Ordinary & Legal Delay/Default
- Kinds of Delay: Mora solvendi, Mora accipiendi, Compensatio morae
Notes:
ART. 1163 (Diligence of a good father of a family)
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 stipulations of parties
requires another standard of care.

Ex.
Imagine you borrow your friends laptop, which is something you’re obliged to take care
of. You use it for a week while yours is being repaired. And according to Article 1163, you
are expected to treat the borrowed laptop with same care and responsibility as if it were
your own. So, if you accidentally spill a drink on it and damages it, you would be
responsibility for repairing or replacing it because you didn’t exercise the proper
diligence of a good borrower.
Specific/Determinate things distinguished from general/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.

Generic
- It is identified by its individuality. The debtor cannot substitute it with another although
the latter is of the same kind and quality without the consent of the credit.

Indeterminate
- It is identified only by its specie. The debtor can achieve anything of the same class as
long as it is of the same kind.

Kinds of Fruits; Natural, industrial & civil

- Natural Fruits, are the spontaneous products 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.

- Industrial Fruits, are those produced by lands of any kind through cultivation of labor.
-
Ex. Sugar cane; vegetables; rice; and all products of lands brought about by reason of human
labor.

- Civil Fruits, are 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.

Personal Right V.S. Real Right

(1) In Personal Right, there is a definite active subject under a definite passive subject,
while in real right, there is only a definite subject without any definite passive subject.

(2) A Personal Right, Is, therefore, binding or enforceable only against a particular person,
while a real right is directed against the whole world.

Ex. (Personal Right)

You’ve been hiredto work at a company, and you sign an employment contract. In this
scenario, you have a personal right.

you as the employee, are the definite active subject. you hold the right to receive
payment for your work to have your agreed-upon employment conditions met.
 the company or your employer is the definite passive subject. They are obligated to pay
you, provide sa safe working environment, and fulfill the terms and conditions outlined in
the contract.

If the company fails to pay you or violates the terms of the employment contract, you
have the legal right to take action against the company to seek remedies.

Ex. (Real RIght)

Imagine you own a piece of land or a house. In this scenario, you have a real right. Here's how
the elements of real rights apply.

You as the property owner, are the definite subject. you hold the real right to the property, which
means you have ownership and control over it. Unlike personal rights, where the right is
enforceable against specific individuals or entities, real rights are often attached to a specific
property itself. In this case, your real right is tied to the land or house you own.

The concept of real rights is often associated with ownership and control over physical assets or
property, and these rights are typically enforceable against anyone who might challenge your
ownership or attempt to interfere with your use of the property.

Meaning of Delay
- The word Delay, as used in the law, is not to be understood according to its meaning in
common parlance. A distinction, therefore, should be made between ordinary delay and
legal delay (default or mora) in the performance of an obligation.

(1) Ordinary Delay - Merely the failure to perform an obligation on time.

Ex. Imagine you've agreed to meet a friend at a coffee shop at 3:00 PM.
However, due to traffic congestion, you arrive at 3:15 PM. In this case, you've
experienced ordinary delay. You failed to perform the obligation (arriving on time)
within the stipulated time frame, but this delay doesn't necessarily constitute a
breach of any legal obligation or contract.

(2) Legal Delay or default or mora - Is the failure to perform an obligation on time
which failure constitutes a breach of the obligation.

Ex. Now, consider a business contract in which Party A is obligated to deliver

goods to Party B by a specified date. If Party A fails to deliver the goods by the
agreed-upon date without any valid reason, Party A is in legal delay (default or
mora). This delay is not just an ordinary delay; it constitutes a breach of the
contractual obligation between Party A and Party B. The failure to perform on
 time has legal consequences, and Party B might have the right to take legal
action to seek remedies for the breach, such as claiming damages or canceling
the contract.

Kinds of Delay or Default

- They are
(1) Mora solvendi - or the delay on the part of the debtor to fulfill his obligation (to
give or to do);

Ex. You lend money to a friend who promised to re use kopay you by Friday.
Friday comes and goes, but your friend still hasn't paid you back. Your friend,
the debtor, has failed to fulfill their obligation (repaying the loan) on time,
resulting in a delay that could lead to legal consequences

(2) Mora Accipiendi - or the delay on the part of the creditor to accept the
performance of the obligation; and

Ex. A package you ordered online arrives at your door, but you're on vacation
and can't accept the delivery. The courier service has to wait until you return. The
creditor (you) has failed to accept the performance of the obligation
(receiving the product) on time, which might have implications for returns,
refunds, or further actions based on the terms of the purchase.

(3) Compensatio morae - or the delay of the obligors in reciprocal obligations (like
in sale), i.e., the delay of the net result is that there is no actionable default on the
part of both parties.

Ex. You're selling your car to someone, and they're selling their bike to you. Both
are supposed to happen on the same day, but due to unforeseen issues, neither
transaction can be completed as planned. Both parties, as obligors in
reciprocal obligations, have experienced delays that cancel each other out.

ART. 11

D. Article 1179- Meaning of Pure and Conditional Obligation;

1. Define a pure obligation.
Pure obligation is one which is not subject to any condition and no specific date is mentioned for
its fulfillment and is, therefore, immediately demandable. (Art. 1179.)

EXAMPLE: A promises to pay B P1,000. This is a pure obligation. Of course, if the loan has just
been contracted by A, a period must have been intended but the duration thereof will depend
upon the nature of the obligation and the circumstances (Art. 1194.)
2. Define a conditional obligation.

A conditional obligation is one which is subject to a condition.

3. What is a condition? A condition is a future and uncertain (ie., it may or may not happen)
event upon the happening of which the effectivity or ineffectivity of an obligation subject to it
depends.

Two principal kinds of conditions.

They are:
(1) Suspensive- One the fulfillment of which will give rise to the obligation (eg, A binds himself to
give B a car if B complies with his contract); and

(2) Resolutory -One the fulfillment of which will extinguish the obligation (eg. A obliges himself to
give B 50 pesos monthly allowance until B graduates from college).

NOTE: The suspensive condition is deemed fulfilled when the debtor voluntarily prevents its
fulfillment. (Art. 1186.)

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. (1114)

Effect of happening of condition.

This article reiterates the distinction between a suspensive (or antecedent) condition and a
resolutory (or subsequent) condition.
(1) Acquisition of rights. In obligations subject to suspensive condition, the acquisition of rights
by the creditor depends upon the happening of the event which constitutes the condition.

(2) Loss of rights already acquired. In obligations subject to a resolutory condition, the
happening of the event which constitutes the condition produces the extinguishment or loss of
rights already acquired.

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. (1115)

Kinds of Conditions:
Potestative condition- one which depends upon the will of one of the contracting parties. “ I
promise to give you P1,000 if you build a house for me in three months.
Casual condition- depends exclusively upon chance or other factors (upon the will of a third
person), and not upon the will of the contracting parties. “ I will give you my land if a war breaks
out next month.”

Mixed condition- one which depends upon the will of one of the contracting parties and other
circumstances, including the will of a third person. Example: “I will give you a house if you marry
Carolina.”

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. (1116a)

When Article 1183 applies.

Article 1183 refers to suspensive conditions. It applies only to cases where the impossibility
already existed at the time the obligation was constituted. If the impossibility arises after the
creation of the obligation, Article 1266 governs.

Physically Impossible Condition- the condition imposed is not capable of being performed
physically. Example: Grace will give Christine a gold necklace if she swims across the Pacific
Ocean.

Legally impossible Condition- when the condition imposed is contrary to law, good custom or
public policy.
Example: Contrary to law – Pedro agrees to give Ernesto P100,000 if Ernesto will kill Mario.
Contrary to good custom – Santos binds himself to give Maria a gold wrist watch if she will
cohabit with Mr. Reyes without benefit of marriage. Contrary to public policy – Maria agrees to
employ Grace in her company if Grace will not join a labor union.

Effects of Impossible Conditions:

● Conditional obligation void

● Conditional obligation valid
● Only affected obligation is void.
● Only the condition is void.

E. Article 1191 - Kinds of Obligation According to Person Obliged

- Unilateral v. Bilateral
- Reciprocal obligations v. Nonreciprocal obligations
Notes:

Article 1191 categorizes obligations based on the people involved:

- Unilateral and Bilateral: This means if one person has a duty (unilateral) or if both people have
duties (bilateral).
- Reciprocal and Nonreciprocal: This refers to obligations where both sides have duties towards
each other (reciprocal) or when only one side has a duty (nonreciprocal).

1. Unilateral Obligation
- Example: Marc offers a reward for finding his lost dog. If someone finds the dog, they can
claim the reward, but they are not obligated to find the dog.

2. Bilateral Obligation
- Example: Marc agrees to sell his bicycle to Edwy for a certain price. Marc is obligated to sell
the bicycle, and Edwy is obligated to pay the agreed price.

3. Reciprocal Obligation
- Example: Marc and Lance enter into a contract where Marc agrees to deliver a product, and
Lance agrees to pay for it upon delivery. Both Marc and Lance have obligations that depend on
each other.

4. Nonreciprocal Obligation
- Example: Marc lends money to Iza, who agrees to pay back the loan with interest. In this
case, Iza has the obligation to repay the loan, but Marc doesn't have an ongoing duty except for
the initial lending.

These examples illustrate the different types of obligations based on the people involved and
whether the obligations are one-sided or mutual.

F. Article 1192 - When Both Parties are Guilty of Breach

Notes:
- 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.
(https://www.trans-lex.org/602450/_/philippines-republic-act-386-/)

Where both parties are guilty of breach:

1. The first infractor known: when both of them violated the contract, the liability of the
one who breached it first shall be reduced.
2. First infractor cannot be determined: the contract will be extinguished and both parties
shall bear his own damage.
G. Article 1207-1208 - Kinds of Obligations According to Number of Parties
- Joint and Solidary Obligations
- Words used to indicate joint liability
- Words used to indicate solidary liability
Notes:

(1) Joint obligation or one where the whole obligation is to be paid or fulfilled proportionately
by the different debtors and be paid or timileded proportionately by the different creditors. (Art.
1208.)
(2) Solidary obligation or one where each one of the debtors is bound to render, and /or each
one of the creditors has a right to demand from any of the debtors, entire compliance with the
prestation. (Art. 1207.)

Words used to indicate joint liability.

Other words used for joint obligations are; mancomunada; mancomunadamente; pro rata;
proportionately; "we promise to pay' signed by two (2) or more persons. (see Jaucian vs.
Querol, 38 Phil. 707; Parot vs. Gemora, 7 Phil. 94.)

Words used to indicate solidary liability.

It is not necessary that the agreement should employ precisely the word "solidary" in order that
an obligation may be so considered. It is sufficient that the obligation declares, for instance, that
each one of the debtors can be compelled to pay the entire obligation, or can be proceeded
against for the full amount of the obligation, etc. (see 8 Manresa 191; Juan Ysmael & Co. vs.
Salinas, 75 Phil. 601.) Examples of other words used to indicate solidarity are: jointly and/or
severally; solidaria; in solidum; together and/or separately; individually and /or collectively;
juntos o separadamente; "I promise to pay" signed by two (2) or more persons.

H. Article 1231 - Causes of Extinguishment of Obligation

Notes:
- Obligations are extinguished:
5. by payment or performance
6. by loss of the thing due
7. by condonation or remission
8. by confusion or merger of the rights of creditor and debtor
9. by compensation
 10. by novation
Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment
of a resolutory condition, and prescription, are governed elsewhere in this Code
(https://www.trans-lex.org/602450/_/philippines-republic-act-386-/)
- Obligations, nevertheless, are not forever. They can be extinguished. Article 1231
enumerates only six (6) of the many ways by which an obligation may be extinguished:
payment or performance; loss; condonation or remission; confusions; compensation,
and; novation.As mentioned above, there are other ways of extinguishing an obligation
aside from the six (6) enumerated by Article 1231.

They are: annulment; rescission; fulfillment of the resolutory condition; prescription;

death; arrival of the resolutory term; change of civil status; compromises; mutual dissent;
impossibility of fulfillment, and; fortuitous event. Consignation may also be considered as
a mode of extinguishing obligation.

1. Payment of performance
- A promised that he would paint a portrait of B in exchange for Php
100,000. A did and delivered the portrait on time. A's obligation here was
extinguished by performance.
- B, in turn, has the obligation to pay the Php 100,000 fee. He issued a
check in favor of A. A encashed the same. B's obligation here was
extinguished by payment
2. Loss of the Thing Due
- A promised to make and deliver a particular sculpture for B. Without his
fault and after actually finishing the art, a burglar entered A's house at
night and stole the sculpture. A here now does not have any obligation to
deliver the sculpture anymore; his obligation has been extinguished by
the thing's loss.
However, this rule does not apply when it comes to the obligation to
deliver an indeterminate thing. Remember, genus never perishes. So, if A
promised to deliver one-kilo of high-grade sugar and what he prepared
was lost by his fault or through a fortuitous event, he is still obliged to
deliver one-kilo of said sugar.
3. Condonation or Remission
- A owed B $5000. B decided to let go of the $5000 debt since A has been
a very good friend to him through the years. A here now does not have
any obligation to pay the money anymore because it was condoned by B.
4. Confusion or Merger
- A borrowed money from B so, in order to pay, the former issued a check
in favor of the latter. B, then, who was in turn indebted to C, handed it to
C. Unknown to B, C also owed the same amount of money from A. C
returned the check to A. There is now a merger of the rights of the debtor
and the creditor.
5. Compensation
 - A and B are debtors and creditors of each other both in the amount of
Php 100,000. By operation of law, A and B are no more debtors and
creditors of each other.
6. Novation
- Article 1291 provides that Obligations may be modified by: (1) Changing
their object or principal conditions; (2) Substituting the person of the
debtor; (3) Subrogating a third person in the rights of the creditor.
Therefore, if A had the obligation to deliver a certain car to B and if they
both agreed that the thing to be delivered would be a certain unit of
personal computer instead, the obligation to deliver the car cannot be
enforced anymore. Assigning C in place of A or D in place of B would also
extinguish the obligation to deliver the car between A and B.

OTHER CAUSES OF EXTINGUISHMENT OF OBLIGATION

7. Annulment
- A, 16 years of age, entered into a contract with B, 21. A's parents knew and went
to court. They argued that the contract is voidable and sought the annulment of
the same.
8. Rescission
- Pending litigation over a parcel of land, B, the defendant in the case, sold
the same parcel of land to C, who knew very well of the nature of the
parcel of land and of the pending hearing over the same. A, the plaintiff,
filed an action for the rescission of the contract of sale between B and C.
9. Fulfillment of the Resolutory Condition
- A lold B, "This car is yours until you pass the BAR" B passed the BAR A's
obligation to give the ear, or more accurately put, to let B enjoy
possession and use of the car, is extinguished by the happening of the
resolutory condition.
10. Prescription
- Under Law XXX, a student may demand the school a rebate of 10% of all
his total tuition payments within one (1) month after his graduation. A
graduated on January 1. He demanded on February 27. Here, the
school's obligation to grant the rebate had already prescribed.
11. Death
- A met with B to have the former's house and lot sold to the latter. The
contract was perfected. However, A died the following day. Is B still bound
to pay the house and lot? Not anymore.
12. Arrival of the Resolutory Term
- A told B, "This car is yours until the first day of 2016." The first day of
2016 came. A is no more bound to let B maintain possession over the car,
13. Change of Civil Status
- [xxx]
14. Compromises
 - A bound himself to give B a parcel of land. They, however, agreed and
entered into a compromise that A would instead give half of the promised
land. A's obligation to completely deliver the parcel of land had already
been extinguished.
15. Mutual Dissent
- A and B perfected a contract to sell. They, however, later on, both agreed
to cancel the contract.
16. Impossibility of Fulfillment
- A bound himself to deliver 2 sacks of brown rice to B. The following day,
all kinds of brown rice were declared illegal by a statute. Here, there
occurred what is called legal impossibility.
17. Fortuitous Event
- A and B agreed that the former would deliver a certain dog to the latter.
The dog, however, without the fault of A, died when a meteor hit it while it
was sleeping one night.
18. Consignation
- A had the obligation to pay B $500,000. On the day the payment was
agreed to be made, B, apparently without any just cause or reason,
refused to receive the payment. A went to court, presented proof of tender
of payment, deposited the amount to court and served notice to B. The
consignation by A extinguished the obligation.
(https://www.projectjurisprudence.com/2017/06/article-1231-extinguishing-obligations.ht
ml?m=1)