Edlyn M.

Flores
BSA - 2

Article 1156
OBLIGATIONS — derived from the Latin word obligatio means tying or binding.
- Juridical necessity to give, to do, or not to do.
- Juridical necessity signifies that obligations are rooted in the legal system or by
the law. It connotes that in case of noncompliance, there will be a legal sanction.
● ‘’to give’’ involves providing something, such as paying money, delivering
goods, or offering a service as required by a legal agreement.
● “to do’’ entails performing a specific action, like fulfilling a contract,
completing a task, or meeting a legal requirement.
● ’’not to do’ means refraining from doing something that could potentially
be prohibited by law or a contractual arrangement.
Civil Code - it merely stresses the duty under the law of the debtor or obligor when it speaks of
obligation as a juridical necessity.

Nature of obligations under Civil Code - obligations which give to the creditor or obligee a
right under the law to enforce their performance in courts of justice.

Requisites:
1. A Passive Subject (debtor or obligor) - the person who is bound or has a duty to fulfill
the obligation.
2. An Active Subject (creditor or obligee) - the person who has the rights or who is
entitled to demand the fulfillment of the obligation.
3. Object or prestation (object/subject matter) - defines what the obligor is required to
provide or perform. Also includes clarity, possibility, legality, specificity, economic value,
and practicality for the obligee.
4. Juridical or legal tie (efficient cause) - connects the parties to the obligation.

Form of obligations - manner in which an obligation is manifested.

● General rule: the law does not require any form of obligations arising from contracts for
their binding force.
● Obligations arising from other sources do not have any form at all.

Obligation, right, and wrong distinguished

● Obligation is the act which the law will enforce.
● Right - the power which a person has under the law (to demand from another any
prestation)
● Wrong - “injury,” wrongful violation of the legal right of another.

Kinds of obligation according to the subject matter.

1. Real obligation (to give) - an obligor must deliver a thing to the obligee.
2. Personal obligation (to do or not to do)
 ● Positive - to render service
● Negative - not to do or not to give.

Article 1157
Sources of Obligations
1. Law - derived from established laws and regulations. (e.g., obligation to pay taxes;
support one’s family; and abiding by traffic rules)
2. Contracts - voluntary agreement between parties that outline rights and responsibilities.
(e.g., obligation to repay a loan)
3. Quasi-contracts - legal obligation when there are no formal contracts. (e.g., obligation
to return money paid by mistakes)
4. Crimes or acts or omissions punished by law - arise from civil liability which is the
consequence of a criminal offense. (e.g., the obligation of a thief to return the jewelries
stolen by him)
5. Quasi-delicts or torts - one person caused damage to another person through an act or
omission. (e.g., there is a person who drives that becomes negligent by using the phone
while driving, which is why the duty to drive safely is not fulfilled and hits another car.
Both vehicles were damaged, and the person who drives the other car suffered physical
injuries. The consequence of the one who is negligent was to become legally liable for
all the damages caused)

Sources classified
1. Emanating from law
2. Private acts
a. Licit acts
b. Illicit acts

Article 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.

Legal obligations
- Obligation from the law is obviously what we call legal obligations. These must be
followed and obediently abided by as it was stated in the law. The article states that
unless the law plainly states otherwise, the obligation is not demandable,
enforceable, or inferred.
- The laws to be followed are established in the Civil Code and Special Laws.
1. Civil Code
2. Special Laws - are those that are not covered by the Civil code (e.g.,
Corporation Code, Negotiable Instruments Law, Insurance Code,
 National Internal Revenue Code, Revised Penal Code, Labor Code,
etc.)
Article 1159:
Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith.

Contractual Obligation
- An obligation arising from voluntary agreements. It presupposes that the contracts
entered into are valid and enforceable.

Contract - A legal agreement between two or more parties describing the rights and
obligations of each party involved. In a contract, each party agrees to take certain actions or
provide certain goods or services. (e.g., contracts can cover a wide range of transactions,
from business deals and employment agreements to leases and sales of goods.)

1. Binding force - is what gives the contracts their legal significance and ensures that
parties can trust that their agreements will be honored.
2. Requirement of a valid contract - a contract is valid if it is not contrary to law,
morals, good customs, public order, and public policy. It is invalid if it is contrary to all
of them.
3. Breach of contracts - when one of the parties fails to fulfill their obligations as
outlined in the contract. (e.g., not delivering goods, not providing services, not
meeting deadlines, etc.)

Compliance in good faith

- fulfilling contractual obligations honestly, fairly, with sincerity and honesty.

Article 1160

Quasi-contractual Obligations - obligations arising from quasi-contracts or contracts

implied in law.

Quasi-contract - juridical relation resulting from certain 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.

Contract and Quasi-contract differences

➢ Contracts have a consent and a formal agreement.
➢ Quasi-contracts have no consent but are also supplied by law.

Kinds of Quasi-contracts
 1. Negotiorium gestio - voluntary management of the property of another without
consent.
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.
- It is based on the principle that no one shall enrich himself unjustly at the expense
of another.

3. Other examples of Quasi-contracts

Article 1161
Civil obligations arising from criminal offenses shall be governed by the penal laws, subject
to the provisions of article 2177, and of the pertinent provisions of Chapter 2, Preliminary
Title, on Human Relations, and of Title XVIII of this Book, regulating damages.

Civil liability arising from crimes or delicts

1. Civil liability in addition to criminal liability - every person criminally liable for an
act or omission is also accountable in civil law for compensating the harmed party's losses.
2. Criminal liability without civil liability - For crimes that do not result in physical harm,
such as contempt, insults towards figures of authority, or gambling, there is no civil liability to
be enforced.
3. Civil liability without criminal liability - a person who’s not criminally responsible might still
have civil liability, such as in cases of failing to repay a contractual debt or causing
unintentional damage to someone else's property without malicious intent or negligence.

Scope of Civil Liability

1. Restitution
2. Reparation for damage caused; and
3. Indemnification for consequential damages.

Article 1162
Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVXX
of this Book, and by special laws.

Requisites of quasi-delict
Before a person can be held liable for quasi-delict, the following requisites must be present:
1. There must be an act or omission by the defendant;
2. There must be fault or negligence of the defendant;
3. There must be damage caused to the plaintiff;
4. There must be a direct relation or connection of cause and effect between the act or
omission and the damage;
5. There is no pre-existing contractual relation between the parties.

Crimes distinguished from quasi-delict

The following are the distinctions:
1. In crime, there is criminal negligence, while in quasi-delict, there is only negligence;
 2. In crime, the purpose is punishment, while in quasi- delict, indemnification of the offended
party;
3. Crime affects public interest, while quasi-delict concerns private interest;
4. In crime, there are generally two liabilities: criminal and civil, while in quasi-delict, there is
only civil liability;
5. Criminal liability can not be compromised or settled by the parties themselves, while the
liability for quasi-delict can be compromised as any other civil liability; and
6. In crime, the guilt of the accused must be proved beyond reasonable doubt, while in
quasi-delict, the fault or negligence of the defendant need only be proved by preponderance
of evidence.

Article 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 of the parties requires another standard of
care.

Specific or determinate thing

- Particularly designated or physically segregated

Generic or intermediate thing

- Class or genus and cannot be pointed out particularly.

Specific thing and generic thing distinguished

1. Determinate thing (individually) cannot substitute it with another although the latter is of the
same kind and quality
2. Generic thing (specie) can give anything of the same class as long as it is of the same kind.

Duties of debtor in obligation to give a determinate thing

1. Preserve or take care of the thing (real obligations) like with the diligence of a good father.
a. Diligence of a good father of a family (ordinary care)
b. Another standard care
c. Factors to be considered
d. Reason for debtor’s obligation
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
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

Article 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.

Kinds of fruits
1. Natural fruits - products of soil, young and other products of animals.
2. Industrial fruits - produced by lands of any kind through cultivation.
3. Civil fruits - derived by virtue of a juridical.

Meaning of personal right and real right

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

Personal right and real right differences

1. There are definite active and Passive subjects on personal rights. While on the real right,
there is only a definite active subject.
2. Personal rights are enforceable only against a particular person. While on the real rights, it is
directed against the whole world.

Article 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.

If the thing is indeterminate or generic, he may ask 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 any fortuitous event until he has affected the
delivery.

Remedies of creditor in real obligation

1. Specific real obligation - obligation to deliver a determinate thing.
2. Generic real obligation - obligation to deliver a generic thing.

Article 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.

1. Accessions - fruits of a thing (the principal) (e.g., house or trees on land, rent of a building,
air conditioner in a car, etc.)
2. Accessories - things joined to the principal thing for the latter’s embellishment. (e.g., key of
a house, frame of a picture, bracelet of a watch, etc.)

Article 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.

Remedies of creditor in positive personal obligation

1. If the debtor fails to comply with his obligation.
a. To have the obligation performed by the debtor, or by another unless personal
considerations are involved, at the debtor’s expense
b. To recover damages
2. The debtor performs an obligation to do but contrary to the terms.
3. Perform an obligation to do but in a poor manner.

Performance by a third person

1. Compelling performance by debtor prohibited
2. Indemnification of creditor for damages

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

Remedies Of Creditor In Negative Personal Obligation

1. Debtor undoes what was done.
2. If not possible, action for damages.

Article 1169
Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially 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

2. 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 is to be rendered was a controlling
motive for the establishment of the contract.
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.

Delay
1. Ordinary delay - the failure to perform an obligation on time
2. Legal delay or default or mora - the failure to perform an obligation on time which
constitutes a breach of the obligation.
Kinds of delay or default
1. Mora solvendi - delay on the part of the debtor to fulfill his obligation.
2. Mora accipiendi - delay on the part of the creditor to accept the performance of the
obligation.
3. Compensatio morae - delay of the obligor in reciprocal obligations.

Requisites if delay or default by the debtor

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

Article 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.

- explains the four legal bases for liability, which might allow the victim of an injury to seek
compensation for all types of responsibilities, independent of the source.

Grounds for liability

1. Fraud (deceit or dolo)- intentional evasion of the normal fulfillment.
2. Negligence (fault or culpa) - any voluntary act or omission
3. Delay (mora)
4. Contravention of the terms of the obligation

Article 1171
Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for
future fraud is void
Responsibility arising from fraud is demandable.
This article refers to incidental fraud which is employed in the fulfillment of an obligation.
Waiver of action for future fraud void.
A waiver of an action for future fraud is void as being against the law and public policy.

Waiver of action for past fraud valid.

A past fraud can be the subject of a valid waiver because the waiver can be considered as an act of
generosity and magnanimity on the part of the party who is the victim of the fraud. Here, what is
renounced is the effects of the fraud, that is, the right to indemnity of the party entitled thereto.

Article 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.

Responsibility arising from negligence demandable.

1. Discretion of court to fix amount of damages.
2. Damages where both parties were mutually negligent.
Kinds of negligence according to the source of obligation.
1. Contractual negligence (culpa contractual) or negligence in con-tracts resulting in their
breach Article 1172 refers to “culpa contractual.”
2. Civil negligence (culpa aquiliana) or negligence which by itself is the source of an obligation
between the parties not formally bound before by any pre-existing contract. It is also called
“tort” or “quasi-delict.” (Art. 2176.10);
3. Criminal negligence (culpa criminal) or negligence resulting in the commission of a crime.

Article 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 persons, of the time and
of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph
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

1. Fault or negligence is defined by the above provision.
2. According to our Supreme Court, “negligence is conduct that creates undue risk or harm to
another. It 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 another person suffers injury.”

Test for determining whether a person is negligent

1. Reasonable care and caution expected of an ordinary prudent person.
2. No hard and fast rule for measuring degree of care.

Factors to be considered
1. Nature of the obligation.
2. Circumstances of the person.
3. Circumstances of time.
4. Circumstances of the place.

ILLUSTRATIVE CASES:
1. Negligence in the care of goods.
2. Negligence in not giving previous warning against a dangerous machine.

Measure of liability for damages.

1. Civil Code provisions
2. Contractual breach committed in good faith/bad faith.
3. With respect to moral damages.
4. Code of Commerce provisions.

Kinds of diligence required.

Diligence is “the attention and care required of a person in a given situation and is the opposite of
negligence.’’
Article 1174
Except in cases expressly specifi ed by the law, or when it is otherwise declared by stipulation, or
when the na-ture of the obligation requires the assumption of risk, no person shall be responsible for
those events which could not be fore-seen, or which, though foreseen, were inevitable.

Meaning of a fortuitous event

A fortuitous event is any extraordinary event which cannot be foreseen, or which, though foreseen,
is inevitable. In other words, it is an event which is either impossible to foresee or impossible to
avoid.

Fortuitous event distinguished from force majeure.

1. Acts of man
2. Acts of God

In our law, fortuitous events and force majeure are identical in so far as they exempt an obligor from
liability. Both are independent of the will of the obligor.
Kinds of fortuitous events.

In speaking of the contract of lease, our Civil Code distinguishes between two kinds of fortuitous
events, namely:

1. Ordinary fortuitous events or those events which are common and which the contracting
parties could reasonably foresee (e.g., rain); and
2. Extraordinary fortuitous events or those events which are uncommon and which the
contracting parties could not have reasonably foreseen (e.g., earthquake, fi re, war,19
pestilence, unusual flood).

Requisites of a fortuitous event.

Whether an act of man or an act of God, to constitute a fortuitous event, it is essential that:
1. The event must be independent of the human will or at least of the obligor’s will;
2. The event could not be foreseen (unforeseeable), or if it could be foreseen, must have been
impossible to avoid (unavoidable); (3) The event must be of such a character as to render it
impossible for the obligor to comply with his obligation in a normal manner; and (4) The
obligor must be free from any participation in, or the aggravation of the injury to the obligee.

Rules as to liability in case of a fortuitous event.

A person is not, as a rule, responsible for loss or damage resulting from fortuitous events. In other
words, his obligation is extinguished. The exceptions are enumerated below.

1. When expressly specified by law.

2. When declared by stipulation.
3. When the nature of the obligation requires the assumption of risk.
Effect of obligor’s negligence upon his liability
1. Negligence contributed to the loss or damage.
2. Negligence not contributory to the loss or damage.

Article 1175
Usurious transactions shall be governed by special laws.

Simple loan or mutuum is a contract whereby one of the parties delivers to another money or other
consumable thing, upon the condition that the same amount of the same kind and quality shall be
paid. Usury is contracting for or receiving interest in excess of the amount allowed by law for the
loan or use of money, goods, chattels, or credits. Kinds of Interest

1. Simple interest
2. Compound interest
3. Legal interest
4. Lawful interest
5. Unlawful interest

Article 1176
The receipt of the principal by the creditor, without reservation with respect to the interest, shall give
rise to the presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior installments, shall likewise
raise the presumption that such installments have been paid.
By presumption is meant the inference of a fact not actually known arising from its usual connection
with another which is known or proved.

Example
D borrowed P1,000.00 from C. Later, D shows a receipt signed by C. The fact not actually known is
the payment by D. The fact known is the possession by D of a receipt signed by C. The presumption
is that the obligation has been paid unless proved otherwise by Cas, for example, that D forced C to
sign the receipt.

Two kinds of presumption

1. Conclusive presumption-one which cannot be contradicted like the presumption that everyone is
conclusively presumed to know the law
2. Disputable (or rebuttable) presumption-one which can be contradicted or rebutted by presenting
proof to the contrary like the presumption established in Article 1176.

Article 1177
The creditors, after having pursued the property in possession of the debtor to 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.
In case the debtor does not comply with his obligation, the creditor may avail himself of the following
remedies to satisfy his claim:

1. Exact fulfillment (specific performance) with the right to damages;

2. Pursue the leviable property of the debtor
3. "after having pursued the property in possession of the debtor," exercise all the rights (like the
right to redeem) and bring all the actions of the debtor (like the right to collect from the debtor
4. ask the court to rescind or impugn acts or contracts which the debtor may have done to defraud of
his debtor) him when he cannot in any other manner recover his claim.

Article 1178.
Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has been
no stipulation to the contrary.

All rights acquired in virtue of an obligation are generally transmissible. The exceptions to this rule
are the following:

1. Prohibited by law-when prohibited by law, like the rights in partnership, agency, and commodatum
which are purely personal in character By the contract of partnership.

2. Prohibited by stipulation of parties- when prohibited by stipulation of the parties, like the stipulation
that upon the death of the creditor, the obligation shall be extinguished or that the creditor cannot
assign his credit to another.