OBLIGATION

S
Obligation
 An obligation is a juridical necessity to give, to do or not
to do. (Art.1156, Civil Code of the Philippines).
 Juridical necessity means that the court may be asked to
order the performance of an obligation if the debtor
refuses to perform it.
 If an obligation cannot be enforced through courts, it may
be disregarded with impunity.
REQUISITES OF
OBLIGATION
 Active Subject (Creditor/Obligee) - party who has the
right to demand performance of the obligation.
 Passive Subject(Debtor/Obligor) – party who is obliged to
perform the obligation.
 Prestation – the object or subject matter of the
obligation. It may consist of giving, doing, or not doing
something.
 Efficient Cause- The vinculum or the legal or juridical tie
which binds the parties to an obligation. The efficient
cause of an obligation may be any of the five sources.
Example: D is obliged to give C P150,000 with interest at
6% per annum on December 31, 2015 pursuant to a
contract of loan.

 D is the passive subject

 C is the active subject
 The giving of P150,000 with 6% interest is the prestation
and the contract of loan is the efficient cause. The
obligation here is unilateral, only the party (D) is required
to perform a particular conduct.
Civil Obligation vs. Natural Obligation

CIVIL OBLIGATION NATURAL OBLIGATION

1. Based on positive law 1. Based on natural law
2. Enforceable by court 2. Not enforceable by court
action. action, the obligation
however exists in equity
and moral justice such
that if the debtor
voluntarily performs it, he
can no longer recover
what he has given.
SOURCES OF OBLIGATION
1. LAW

 A rule of conduct, just and obligatory, laid down by

legitimate authority for common observance and benefit.
 Obligations derived from law are not presumed.
 Only those expressly determined in Civil Code or in special
laws are demandable and shall be regulated by the
precepts of law which establishes them and as to what has
not been foreseen by the provision on Obligations.
2. Contracts

A contract is a meeting of mind between two or

more persons whereby one bind himself, with
respect to the other to give something or to
render some service. (Article 1305)
3.Quasi Contract

 They refer to certain lawful, voluntary and unilateral acts

giving rise to a juridical relation to the end that no one
shall be unjustly enriched at the expense of another.
 There is unjust enrichment when a person unjustly retains
a benefit to the loss of another, or when a person retains
money or property of another against the fundamental
principle of justice, equity, and good conscience.
Examples of Quasi Contract

 1. Negotiorum Gestio – refers to the voluntary

administration of property, business or affairs of another
without his consent or authority. It creates the obligation
to reimburse the gestor for necessary and useful expense.

 2. Solutio Indebiti – refers to the payment by mistake of

an obligation which was not due when paid. It creates the
obligation to return the payment.
EXAMPLE OF NEGOTIORUM GESTIO
Case: D and C are the owners of adjacent vegetable farms.
One day D was not around to tend to his farm. When C
noticed that D had not been around for almost a week, he
himself cultivated the soil and placed fertilizer on it,
watered the plants, removed the weeds and wilted leaves.
C incurred necessary expenses in the process.
 Question: Should D reimburse C for the expenses he
incurred?
 Answer: Yes, D must reimburse C for such expenses.
Otherwise, he will be unjustly enriching himself at C’s
expense.
EXAMPLE OF SOLUTIO INDEBITI
Case: D, the payee of check for P5000, cashes it with the drawee
bank but the teller gives him P6000.

 Question: Is D liable to return the excess of P1000 to the

bank?

 Answer: Yes, D has the duty to return the excess of P1000

otherwise he will be unjustly enriching himself at the
bank’s expense.
4. Acts or omissions punishable by law

 These are crimes or felonies. The commission of a crime

makes the offender civilly liable. Such criminal liability
includes restitution, reparation of the damage caused and
indemnification of consequential damages.

 Every person criminally liable for a felony is also civilly

liable. (Art. 100, Revised Penal Code)
EXAMPLE OF ACTS AND OMISSIONS PUNISHABLE BY
LAW (Felony)

 Theft, Robbery, Homicide, etc.

5. QUASI DELICT (a.k.a” TORT” OR
“CULPA AQUILIANA”)
 These are acts or omissions that cause damage to another,
there being fault or negligence but without any pre-
existing contractual relation between the parties.

 Example: If a person, while cleaning his window causes

flower pot to fall through his negligence thereby injuring
someone passing by, the former is liable for damages to
the latter.
Determinate Thing vs. Generic Thing

DETERMINATE THING GENERIC THING/

 A thing is determinate INDETERMINATE THING
when it is particularly  A thing is indeterminate
designated or physically or generic when it is not
segregated from all others particularly designated or
of the same class. physically segregated
 Example: 2017 Toyota from others of the same
Vios with plate number class.
1234, my dog named  Example: A horse, a car, a
Bruno, my only wristwatch sharp refrigerator
Q: Is it important to know whether a
thing is generic or determinate?

 A: Yes, because as a rule the loss of determinate

thing through fortuitous event extinguishes the
obligation.
OBLIGATIONS OF A PERSON 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)

 DILIGENCE OF A GOOD FATHER OF A FAMILY

- means the ordinary care that an average
person exercises in taking care of his property.
OBLIGATIONS OF A PERSON OBLIGED
TO GIVE A DETERMINATE THING:
2. To deliver the thing (Art. 1163)
 - this involves placing the thing in
possession or control of the creditor
either actually or constructively.
OBLIGATIONS OF A PERSON OBLIGED
TO GIVE A DETERMINATE THING:

3. To deliver the fruits of the thing.

(Art. 1164)
OBLIGATIONS OF A PERSON OBLIGED
TO GIVE A DETERMINATE THING:
a. KINDS OF FRUITS:
 1. NATURAL FRUITS- spontaneous product of soil and the young other
products of animals, without human intervention. (Ex: trees that grow
naturally)

 2. INDUSTRIAL FRUITS- refer to those produced by land of any kind through

cultivation of labor, with human intervention. (rice, corn)

 3.CIVIL FRUITS- refer to fruits which the result of juridical relation such as
rent of building, price of lease of land and other property and amount of
perpetual or life annuities.
OBLIGATIONS OF A PERSON OBLIGED
TO GIVE A DETERMINATE THING
b. When creditor has a right to the fruits of a determinate
thing. (Art. 1164)

 The creditor has the right to the fruits of the thing from
the time obligation to deliver arises. However, he shall
acquire no real right over it until the thing has been
delivered to him. (Art. 1164)
OBLIGATIONS OF A PERSON OBLIGED
TO GIVE A DETERMINATE THING:
c. When obligation to deliver the thing arises.
 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.
 If the obligation is subject to suspensive period or suspensive condition,
the obligation to deliver arises upon the fulfillment of the condition.
 Example: If D is obliged to give C a specific car on Christmas Day next
year, the obligation to deliver arises only on the arrival date. Or if the
obligation of D is to give C such car if C passes the CPA Exam, then the
obligation to deliver arises only upon fulfillment of such condition.
d. Rights of the creditor
 PERSONAL RIGHT (Jus in
personam)
- Right that may be enforced
by one person on another,
such the right of the creditor
to demand the delivery of
the thing and its fruits from
the debtor.
 REAL RIGHT (Jus in rem)
 - Right or power over
specific thing, such as
possession or ownership,
which is a right
enforceable against the
whole world.
 - Right acquired by
creditor over thing and its
fruits when they have
been delivered to him.
4. To deliver the accessions and accessories
even if they have not been mentioned. (Art.
1166)
Accessions Accessories
 Include everything that is  Those enjoined to or
produced by a thing or is included with the
incorporated or attached principal thing for the
thereto either naturally or latter’s better use,
artificially such as perfection or enjoyment
alluvium, the soil that
gradually deposited by Example: keys to car
current of river bank or
whatever is built, planted
or sown on a parcel of
land.
REMEDIES OF THE CREDITOR:

1. If the debtor fails to perform his obligation to deliver a

determinate thing.

a. Compel the debtor to make the delivery (Art. 1165)

b. Demand damages from debtor (Art. 1170)
Example: D is obliged to give C a specific car. On due date, C
demands delivery but does not deliver. In this case, C can compel D
to deliver the car because there is no other person in possession of it.
C can also demand payment of damages from him.
REMEDIES OF THE CREDITOR
 2. If the debtor fails to perform his obligation to deliver a
generic thing.
a. To ask the obligation be complied with at the expense of
the debtor. (Art. 1165)
b. Demand damages from debtor (Art. 1170)
Example: D is obliged to deliver 10 sacks of rice to C. If D
does not perform his obligation on due date upon C’s
demand, C can obtain 10 sacks of rice from other sources at
the expense of D.
C can do so because the thing is generic and thus can be
replaced with the same kind. C can also ask for damages
from D.
REMEDIES OF THE CREDITOR

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.
2. He may also demand damages from the debtor
REMEDIES OF THE CREDITOR
Example: D is obliged to construct a hallow block fence for
C. By agreement, the fence will be 2 meters high and 10
meters long, fine finished and painted. If D does not
perform his obligation upon C’s demand, C can ask another
person to, or himself may, construct the fence at the
expense of D. C can also ask damages from D. C cannot
compel D to perform the obligation because compulsion will
violate D’s right against involuntary servitude.

If D constructs the fence but did not follow the

measurements agreed upon (i.e. there was contravention of
the tenor of the obligation) C will have the same rights.
REMEDIES OF THE CREDITOR

b. If the debtor performs the obligation but does it poorly.

1. Creditor may have the same be undone at debtor’s expense.
(Art. 1167)
2. Creditor may also demand damages from the debtor.
(Art. 1170)
Example: If in the same illustration in the previous slide, D
constructs the fence following the measurements but it was not
properly aligned, the finishing was rough, and materials used
were substandard, C can have the fence be demolished by
another person or even by himself at D’s expense. C can also
demand damages from D.
REMEDIES OF THE CREDITOR
4. If the debtor does what has been forbidden him
a. The creditor may demand that what has been done be undone.
b. He may also demand damages from the debtor.
Example: B brought a farm lot from S. However, the only access
from the road to B’s lot is the lot of D. So B entered into a
contract with D for a right of way over a period of 10 years and
paid a sum therefor. It was agreed that for the duration of the
contract D would not construct any fence between B’s lot and his.
Sometime thereafter, however, D constructed a fence in violation
of the agreement. B may demand that D remove the fence at D’s
expense and pay damages.
GROUNDS FOR LIABILITY TO PAY
DAMAGES:
 FRAUD
 NEGLIGENCE
 DELAY
 CONTRAVENTION OF THE TENOR OF THE
OBLIGATION (Art. 1170)
 DAMAGES vs. INJURY

DAMAGES INJURY
 Damages refer to the  Refers to the wrongful,
harm done and the sum of unlawful or tortuous act
money that may be which causes loss or harm
recovered in reparation to another. It is legal
for the harm done. wrong to be redressed.
 KINDS OF DAMAGES
(MENTAL)
 MORAL DAMAGES
 EXEMPLARY DAMAGES
 NOMINAL DAMAGES
 TEMPERATE OR MODERATE DAMAGES
 ACTUAL OR COMPENSATORY DAMAGES
 LIQUIDATED DAMAGES
ACTUAL OR COMPENSATORY DAMAGES

 Referto the pecuniary loss such as loss in

business or profession that may be
recovered. It includes the value of loss
suffered and profits not realized.
 MORAL DAMAGES

Include physical suffering, mental

anguish, fright, serious anxiety,
besmirched reputation, wounded
feelings, moral shock, humiliation
and similar injury.
NOMINAL DAMAGES

 Refer to damages to vindicate a right.

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.
LIQUIDATED DAMAGES

 Those agreed upon by parties to a contract, to be

paid in case of breach.
EXEMPLARY OR CORRECTIVE DAMAGES

 These are imposed by way of example or correction for

public good, in addition to the moral, temperate,
liquidated or compensatory damages
PROOF OF PECUNIARY LOSS

 ACTUAL DAMAGES- PROOF IS REQUIRED unless provided

by law or stipulation.

 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.
God bless!