Chapter I – Obligation defined, and the sources of obligations.

1. Define obligations. (Art. 1156)

An obligation is a juridical necessity to give, to do or not to do, as defined by Article 1156. It

becomes a juridical necessity because when there is an agreement between two parties and the
obligor does not perform his obligation, the court can compel the obligor for the fulfillment of
obligation.

2. What are the essential elements of an obligation?

The essential elements are: (a) Active subject, refers to the creditor or obligee, a person who has the
right to demand the fulfillment of the obligation. (b) Passive subject refers to the debtor or obligor, a
person bound to perform the obligation. (c) Prestation refers to the object, the subject matter of the
obligation, this may be a thing, act to do or act not to do. (d) Juridical tie or Vinculum Juris, refers to
which binds the parties to the obligation determined by the source of the obligation.

3. What are the sources of obligations? (Article 1157)

a. Law (Art. 1158)

Law or Obligations ex lege are principles and regulations established in a community by

some authority and applicable to its people, whether in the form of legislation or of custom
and policies recognized and enforced by judicial decision. Also, according to Article 1158,
Obligations derived from law are not presumed. Only those expressly determined in this
Code or in special laws are demandable. Some examples of this can be obligations to pay
taxes (Tax Code), and prohibition of giving alms to beggars (The Anti-Medicancy Law).

b. Contracts (Art. 1159)

Contracts or Obligations ex contractu is the meeting of the minds between two persons
whereby one binds himself, with respect to the other, to give something or to render some
service (Art. 1305). These are obligations that arise from the stipulation of the parties.
Furthermore, obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith (Art. 1159). Some examples are a contract
of lease and a contract of sale.

c. Quasi-contracts (Art. 1160)

Quasi-contracts or obligations ex quasi-contractu refers to the 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
(Art. 2142). It prevents unjust enrichment it is when a person unjustly retains a benefit to the
loss of another. Moreover, there are two kinds of quasi-contracts namely: Negotiorum gestio,
and Solutio indebiti

d. Delicts (Art. 1161)

Delicts or obligations ex maleficio ex delicto refers to an act or omission punishable by law

which may be governed by the Revised Penal Code, other penal laws, or the Title n Human
Relations under the Civil Code. Moreover, every person liable for a felony is also civilly
liable (Art. 100, Revised Penal Code). This civil liability includes restitution, reparation of
the damage caused, and indemnification of consequential damages (Art. 104, Revised Penal
Code).

e. Quasi-delicts (Art. 1162)

 Quasi-delicts or Obligations ex quasi-delicto or ex quasi-maleficio refers obligations 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. 2176).

4. Define quasi-contracts.
a. What is negotiorum gestio? (Art. 2144)

Negotiorum gestio is the voluntary management of the property or affairs of another without
the knowledge or consent of the latter (Art. 2144). Also, there must be abandonment and
voluntary management to identify that it is an obligation arising from quasi-contracts under
the principle negotiorum gestio.

b. When does this principle of negotiorum gestio not apply?

This principle does not apply when there is no abandonment by the owner of the property.
For instance, the owner could have entrusted his house to a friend while on vacation. Also,
when there is a pre-existing contractual obligation between the parties involved. Additionally,
when the person who handled the property or affair did unnecessary actions, negotiorum
gestio does not apply.

5. Define solution indebiti? (Art. 2154)

Solutio indebiti is the juridical relation which created when something is received when there is no
right to demand it and it was unduly delivered through mistake (Art. 2154). The following requisites
must be present: there is no right to receive the thing delivered, and the thing was delivered through
mistake.

6. Define quasi-delict. (Art 1162)

a. What are the requisites for an obligation to arise from quasi-delict?

The following requisites must be present from obligations arising from quasi-delicts:
1. There must be an act or omission;
2. There must be fault or negligence;
3. There must be damaged 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.

Chapter II – Nature and effects of obligations.

Compliance with obligations
1. Distinguish obligations to give from obligations to do.

Obligations to give involve the delivery of a tangible object from one party to another can be a
determinate thing or an indeterminate thing. However, obligations to do involve a person obliged to
do something for the fulfillment of the obligation.

2. Distinguish determinate thing from indeterminate thing.

A determinate thing is particularly designated or physically segregated from others of the same class.
Whereas, substitute performance is not possible. An indeterminate thing is the class or genus to
which it pertains and cannot be pointed out with particularity. Substitute performance is possible
 wherein the creditor can have another person to have such kind of thing delivered at the cost of the
debtor plus damages.

3. In an obligation to give, what are the obligations of the debtor?

a. If the obligation is to give a determinate thing. (Articles 1163, 1164, 1165, 1166, and 1170).

The obligations of the debtor to give a determinate thing are:

1. The obligation of the debtor to preserve or take care of the thing

Art. 1163. Every person obliged to give something is also obliged to take case 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.

2. Deliver the fruits of the thing

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.

3. Deliver the accessions and accessories

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.

4. Deliver the thing itself

5. Answer for damages in case of non-fulfillment or breach

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

Moreover, Art. 1165. When what is to be delivered is a determinate thing, the creditor, in
addition to the right granted him by Article 1170, may compel the debtor to make the
delivery.

The creditor may exercise the following remedies:

a) Demand specific performance or fulfillment (if it is still possible) of the obligation
with a right to indemnity for damages, or
b) Demand recission or cancellation (in certain cases) of the obligation also with a right
to recover damages.
c) Demand payment of damages only, where it is the only feasible remedy.

b. If the obligation is to give/deliver a generic thing. (Articles 1165, 1166, 1170, and 1246).

The obligations of the debtor to give a generic thing are:

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; and

Art. 1246. When the obligation consists in the delivery of an indeterminate or generic
thing, whose quality and circumstances have not been stated, the creditor cannot
demand a thing of superior quality. Neither can the debtor deliver a thing of inferior
quality. The purpose of the obligation and other circumstances shall be taken into
consideration.
 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)

Moreover, Art. 1165. If the thing is indeterminate or generic, he may ask that the obligation
be complied with at the expense of the debtor.

The specific performance may be performed by a third person since the object is expressed
only according to its family or genus. Also, an indeterminate thing cannot be the object of
destruction by a fortuitous event because genus nunquam perit (genus never perishes)

c. What are the remedies of the creditor when the debtor fails to comply with his obligations?

The remedies of the creditor are the following:

1. The injured party may opt to ask for the exact fulfillment or specific performance of
obligation with damages or;
2. The injured party may exceptionally ask for the rescission of the obligation, if the exact
fulfillment or specific performance is impossible.

4. In an obligation to do, what are the obligations of the debtor?

a. Art. 1167
If a person obliged to do something fails to do it, the same shall be executed at his cost. This
s\
ame 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.

b. Art. 1168 if the obligation is not to do.

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

c. Art. 1170 if the debtor fails to comply with his obligation.

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

Breach of obligations and grounds for liability

5. Define fraud (deceit or dolo).

Fraud is the deliberate or intentional evasion of the normal fulfillment of an obligation. It implies
some kinf of malice or dishonesty and it cannot cover cases of mere mistake and error of judgement
made in good faith.

a. Distinguish incidental fraud (dolo incidente) from causal fraud (dolo causante).

Incidental fraud (dolo incidente) is a form of fraud that a person deliberately and
interntionally evaded the normal fulfillment of his obligation. However, does not affect the
validity of the contract and makes the party guilty of fraud liable for damages. On the other
hand, Causal fraud (dolo causante) is a form of fraud from obtaining consent, hence, affecting
the validity of the contract, making it voidable.

6. Define negligence (culpa).

Negligene (culpa) is any voluntary act or omission, there being no bad faith or malice, which
prevents the normal fulfillment of an obligation. This is the failure to exercise that degree of care
required by the circumstances. Moreover, if the negligence is due to the creditor or injured party, he
 can still recover damages if his negligence is contributory, however, if it was immediate and
proximate cause of the injury, there will be no recovery for damages.

7. Define delay (mora).

Delay (mora) is the failure to perform an obligation n time which failure constitutes a breach of the
obligation.

a. When is there delay on the part of the debtor?

There is a delay on the part of the debtor when he is in legal delay. As stated from the
definition of obligation above it is a juridical necessity however a demand from the creditor
must be made by juridical or extrajudicial means to activate the delay for a court to be called
upon to compel the debtor for the fulfillment of the obligation. Otherwise, the debtor is only
in ordinary delay, a mere failure to perform an obligation on time.

b. When is demand necessary and when is it not necessary? (Art. 1169)

Demand is necessary for every obligation unless when the obligations so provides, when the
law so provides, when time is of the essence, when demand would be useless, and when there
is performance by a party in reciprocal obligation.

c. What are the kinds of mora? Define each.

1. Mora Solvendi – the delay on the part of the debtor to fulfill his obligation
2. Mora Accipiendi – the delay on the part of the creditor
3. Compensatio morae – delay on the part of both parties

d. What are the requisites of Mora Solvendi?

The following requisites must be present:

1. failure of the debtor to perform his obligation on the date agreed upon;
2. demand made by the creditor upon the debtor to comply with his obligation which demand
may be either judicial or extrajudicial; and
3. failure of the debtor to comply with such demand.

i. What are the effects if the debtor is in Mora Solvendi?

1. The debtor becomes liable for damages for the delay or default or mora.
2. When it has for its object a determinate thing, the delay or default or mora
places the risk of loss of the determinate thing on the debtor.

Remedies for Breach

8. What are the remedies for the creditor in case of breach of obligation?
a. Principal Remedies
i. Specific Performance (1165-1170)

Under Article 1165, for obligations to give determinate thing the creditor or
injured party may demand specific performance or fulfillment of the obligation
with a right to indemnity for damages, or demand rescission or cancellation of the
obligation also with a right to recover damages, or demand payment of damages
only, where it is the only feasible remedy. However, for generic thing the creditor
or injured party may compel the debtor to make the delivery, and the creditor has
 the right to recover damages under Article 1170 in case of breach or violation of
the obligation.

Under Article 1167, for obligations to do, the creditor or injured party have the
right to have the obligation performed by himself, or by another, unless personal
considerations are involved, at the debtor’s expense, and to recover damages (Art.
1170).

Under Article 1168, for obligations not to do, the creditor or injured party have the
right to require obligor the undoing of the forbidden thing plus damages (Art.
1170).

ii. Rescission (Resolution, Art. 1191)

Under Article 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.

b. Subsidiary Remedies
i. Accion subrogatoria (Art. 1177)

Under Article 1177, the creditor or injured party have the opt to the following
remedies:
1. the exact fulfillment with the right to damages
2. pursue the leviable property of the debtor
3. exercise all the rights and bring all the actions of the debtor except those
inherent or personal to the person of the latter

ii. Accion pauliana

The creditor may ask the court to rescind or impugn acts or contracts which
the debtor may have done to defraud him when he cannot in any other
manner recover his claim.

c. Ancillary Remedies.

To file an action for damages against the third person who acquired the property of debtor in
bad faith.