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Oblicon Reviewer If the creditor can not bring an action for

Arts. 1167-1178, from Rabuya & De leon specific performance (determinate thing in
possession of a third party in good faith) he
Art. 1167. If a person obliged to do something can only bring action for recovery of damages.
fails to do it, the same shall be executed at his
cost. Black’s Law Dictionary defined specific
performance as "(t)he remedy of requiring
This same rule shall be observed if he does it exact performance of a contract in the specific
in contravention of the tenor of the obligation. form in which it was made, or according to the
Furthermore, it may be decreed that what has precise terms agreed upon. The actual
been poorly done be undone. (1098) accomplishment of a contract by a party bound
to fulfill it."
The phrase "in any manner contravene the
tenor" of the obligation in Art. 1170, Civil Breach of Generic: Creditor may compel
Code, includes any illicit task which impairs debtor to make the delivery (delivery done by
the strict and faithful fulfillment of the someone else, expenses paid by debtor) or
obligation, or every kind of defective debtor himself delivers, action for specific
performance. (ChanRobles LawLib) performance, recover damages

*The classification of obligations to real and Breach of Positive personal: when it’s not
personal is important to determine the done, performance is poor/contravention of
remedies available in case of breach tenor
*Debtor can NOT be compelled (involuntary
Real: give, as a result of a real right servitude)
Personal: to/not to do, between two or three Remedy: executed by himself or other at the
persons so its exclusively personal expense of the debtor, recovery of damages
If done poorly:
Breach of Determinate obligations: debtor can Remedy: demand for the undoing by
not compel the creditor to receive a different debtor/other @ expense of debtor
one; Creditor can compel debtor to make
delivery Art. 1168. When the obligation consists in not
If source of obligation is contract: creditor can doing, and the obligor does what has been
bring an action for specific performance, forbidden him, it shall also be undone at his
rescission of the contract (Parties may rescind expense. (1099a)
if they are the victims of a vitiating factor,
such as misrepresentation, mistake, duress, or Breach of Negative Personal:
undue influence) Remedy: demand for the undoing @ debtor’s
Else: recover damages (by virtue of liability & expense, right to recovery of damages
non-fulfillment) If: impossible to undo (physically/legally)
recover damages
These rights are CUMULATIVE (may be
pursued in addition to other remedies) not Art. 1169. Those obliged to deliver or to do
ALTERNATIVE (exclusive to one or the something incur in delay from the time the
other) obligee judicially or extrajudicially demands
from them the fulfillment of their obligation.
However, the demand by the creditor shall not debtor, malice (dolo), or negligence
be necessary in order that delay may exist: (culpa)
delay is due to either (a) malicious
(1) When the obligation or the law expressly intent; or (b) negligence
so declare; or - Mora solvendi ex re: to give
- Mora solvendi ex persona: to
(2) When from the nature and the do
circumstances of the obligation it appears that Requisites: (1) obligation is
the designation of the time when the thing is to DEMANDABLE & LIQUIDATED;
be delivered or the service is to be rendered (2) debtor DELAYS performance; (3)
was a controlling motive for the establishment creditor REQUIRES performance
of the contract; or extra/judicially
Violation occurs when creditor
(3) When demand would be useless, as when demands (any form, written/oral)
the obligor has rendered it beyond his power to Exceptions: a. Obligation expressly
perform. declares; b. Law expressly declares; c.
designation of time when thing is to be
In reciprocal obligations, neither party incurs delivered is a controlling motive for
in delay if the other does not comply or is not the establishment of the contract; d.
ready to comply in a proper manner with what Demand is useless bc debtor can not
is incumbent upon him. From the moment one perform; e. Partner who has
of the parties fulfills his obligation, delay by undertaken to contribute sum of
the other begins. (1100a) money fails to do so
DEBTOR IS LIABLE FOR LOSS OF
When is there a breach in obligation? Not THING EVEN IN FORTUITOUS
performed, contravention in tenor EVENT (+assumption of risk, does
If non-fulfillment is bc of fortuitous event, not extinguish liability)
debtor is NOT liable Counting prescriptive period starts
If non-fulfillment is bc of delay, fraud, from the legal possibility of bringing
negligence, contravention, debtor IS liable the action and not the making of an
extra judicial demand
Delay may only occur in POSITIVE 2. Mora accipiendi: to receive, delay on
obligations the part of the creditor in accepting the
performance of the obligation
Delay/Default (Mora): Delay in the fulfillment Requisites: (1) an offer of performance
of obligations; non-fulfillment w/respect to by the debtor who has required
TIME capacity (2) offer must comply
w/prestation as it should be performed
Art. 1170. Those who in the performance of (3) creditor refuses performance
their obligations are guilty of fraud, without just cause
negligence, or delay, and those who in any 3. Compensatio morae: reciprocal, delay
manner contravene the tenor thereof, are liable on both parties (neither has fulfilled
for damages. (1101) their obligations)
Performed simultaneously
Kinds of mora: Mutual delay cancels out the effects of
1. Mora solvendi: to perform, delay in default
the fulfillment by a cause imputable to If: different days, need demand
 Negligent act or Fault or negligence
Art. 1171. Responsibility arising from fraud is commission incident in the
demandable in all obligations. Any waiver of performance
an action for future fraud is void. (1102a)
No prior contractual Prior relation, which
Fraud: deliberate and intentional evasion of the relation increases liability
normal fulfilment of the obligation, gives rise Source of Source is negligence
to action for damages negligence is in contract
tortfeasor
*during the fulfillment of the
obligation/inducing another to enter into the Negligence is Negligence is
substantive & accident to the
contract
independent performance of the
Fulfilment: obli already exists, fraud during obligation
Inducing: ground to seek annulment of
contract Negligence should Proof of the
be clearly existence of the
Prohibition to waiver in advance (before established because contract is prima
it is the basis of facie evidence
commission of fraud) due to public policy
action

Art. 1172. Responsibility arising from

negligence in the performance of every kind of Negligence as the omission of the diligence
obligation is also demandable, but such required for the nature of the obligation
liability may be regulated by the courts,
according to the circumstances. (1103) Diligence of a good father of a family:
diligence of an ordinary prudent person
Art. 1173. The fault or negligence of the
obligor consists in the omission of that Action for future negligence can be waived
diligence which is required by the nature of the (not contrary to public policy)
obligation and corresponds with the
circumstances of the persons, of the time and Art. 1174. Except in cases expressly specified
of the place. When negligence shows bad by the law, or when it is otherwise declared by
faith, the provisions of Articles 1171 and 2201, stipulation, or when the nature of the
paragraph 2, shall apply. obligation requires the assumption of risk, no
person shall be responsible for those events
If the law or contract does not state the which could not be foreseen, or which, though
diligence which is to be observed in the foreseen, were inevitable. (1105a)
performance, that which is expected of a good
father of a family shall be required. (1104a) Impossibility of performance:
Determinate thing to be delivered is
*refera to culpa contractual lost/destroyed
Prestation to do is legally/physically
Negligence v. Fraud impossible
no deliberate has deliberate
Intent intent Fortuitous event: extraordinary events that can
not be foreseen/avoided

Culpa aquilana Culpa contractual

 7. When the obligation to deliver a
Caso Fortuito Force Majeure
determinate thing proceeds from a
Independent of Independent of criminal offense, unless prior to its
debtor and human debtor will, caused loss the person who should receive it
will (Acts of God) by other pesons refused acceptance without
(natural occurence) justification.

Requisites: (a) the cause of the unforeseen and Art. 1175. Usurious transactions shall be
unexpected occurrence or of the failure of the governed by special laws. (n)
debtor to comply with obligations must be
independent of human will; (b) it must be Usurious transaction has four elements: (1)
impossible to foresee the event that constitutes existence of a loan express or implied; (2) an
the caso fortuito or, if it can be foreseen, it understanding between the parties that money
must be impossible to avoid; (c) the lent shall be returned; (3) that for such a loan a
occurrence must be such as to render it greater rate of interest than is allowed by law
impossible for the debtor to fulfill obligations shall be paid or agreed to be paid; and (4)
in a normal manner; and, (d) the obligor must lender’s corrupt intent to take more than the
be free from any participation in the legal rate for use of money loaned.
aggravation of the injury or loss.
Usury, the practice of charging excessively
When the Law provides for liability: high interest on loans, is regulated under
1. The obligor delays or has promised to Philippine law. Various government agencies,
deliver the same thing to two or more including the Securities and Exchange
persons who do not have the same Commission (SEC) and the Bangko Sentral ng
interest. Pilipinas (BSP), play roles in overseeing and
2. The possessor in bad faith in every enforcing laws related to lending and interest
case. rates.
3. If the common carrier negligently
incurs in delay in transporting the CB Circular No. 905 “did not repeal nor in any
goods, a natural disaster shall not free way amend the Usury Law, but simply
such carrier from responsibility. suspended the latter’s effectivity”
4. The borrower who uses the thing for a
purpose different from that intended, Rendered ineffective
delays its return, receives the thing
under appraisal, lends it to a third CB Circular No. 905 merely upheld the parties
person, or saves his property instead freedom of contract to agree freely on the rate
of the thing borrowed. of interest
5. The depositary who uses the thing
without the depositor's permission, Art. 1176. The receipt of the principal by the
delays its return, or allows others to creditor without reservation with respect to the
use it. interest, shall give rise to the presumption that
6. The negotiorum gestor or officious said interest has been paid.
manager who undertakes risky
transactions, prefers his interest to that The receipt of a later installment of a debt
of the owner, fails to return the without reservation as to prior installments,
property after demand by the owner, shall likewise raise the presumption that such
or assumes management in bad faith. installments have been paid. (1110a)
Based on two presumptions: 1. That interest 5) That the third person who received the
has been paid if payment of the principal is property conveyed, if by onerous title, has
received by the creditor without reservation been an accomplice in the fraud.
with respect to the interest and 2. That prior
installments have been paid if payment of a An accion pauliana thus presupposes the
latter installment is received by the creditor following: 1) A judgment; 2) the issuance by
without reservation as to prior installments the trial court of a writ of execution for the
satisfaction of the judgment; and 3) the failure
Relevant on questions pertaining to the effects of the sheriff to enforce and satisfy the
and nature of obligations in general judgment of the court. It requires that the
creditor has exhausted the property of the
Correlating the two provisions, the rule under debtor. The date of the decision of the trial
Article 1253 that payments shall first be court is immaterial. What is important is that
applied to the interest and not to the principal the credit of the plaintiff antedates that of the
shall govern if two facts exist: (1) the debt fraudulent alienation by the debtor of his
produces interest (e.g., the payment of interest property. After all, the decision of the trial
is expressly stipulated) and (2) the principal court against the debtor will retroact to the
remains unpaid. The exception is a situation time when the debtor became indebted to the
covered under Article 1176, i.e., when the creditor.
creditor waives payment of the interest despite
the presence of (1) and (2) above. In such case, An action for rescission is a subsidiary
the payments shall obviously be credited to the remedy; it cannot be instituted except when
principal. the party suffering damage has no other legal
means to obtain reparation for the same.
Art. 1177. The creditors, after having pursued
the property in possession of the debtor to LAST RESORT
satisfy their claims, may exercise all the rights
and bring all the actions of the latter for the
same purpose, save those which are inherent in
his person; they may also impugn the acts
which the debtor may have done to defraud
them. (1111)

Accion Pauliana: The action to rescind

contracts in fraud of creditors
Requisites: For an accion pauliana to accrue,
the following requisites must concur: 1) That
the plaintiff asking for rescission has a credit
prior to the alienation, although demandable
later; 2) That the debtor has made a subsequent Accion Subrogatoria: remedy for when the
contract conveying a patrimonial benefit to a creditor can not in any way recover the credit
third person; 3) That the creditor has no other because the debtor has no property or has
legal remedy to satisfy his claim,but would property insufficient to satisfy his debt but he
benefit by rescission of the conveyance has credits or rights which he fails to collect.
to the third person; 4) That the act being The creditor may exercise all the rights and
impugned is fraudulent; bring all the actions of a debtor, except the
inherent ones.
Requisites: (1) that the creditor has a right of
credit against the debtor although at the
moment it is not liquidated; (2) the credit must
be due and demandable; (3) failure of the
debtor to collect, that is, inaction of the debtor,
whether the same be willful or negligent; (4)
insufficiency of the assets in the hands of the
debtor although the creditor need not bring a
separate action to show this exhaustion or
insolvency of the debtor but he can prove the
same in the very action to exercise the
subrogatory action; and (5) that the right and
actions are not purely personal or inherent in
the person of the debtor. Inasmuch as the
action is in the name of the debtor, the
defendant, that is, the debtor of the debtor,
may avail himself of all defenses against the
creditor

Art. 1178. Subject to the laws, all rights

acquired in virtue of an obligation are
transmissible, if there has been no stipulation
to the contrary. (1112)