LAW OF OBLIGATIONS CIVIL CODE OF THE PHILIPPINES

The Law on Obligations and Contracts

Law -It is a rule of conduct, just, obligatory,
(Book IV) is found in Republic Act No. 382,
promulgated by legitimate authority, and of
otherwise known as the Civil Code of the
common observance and benefit.
Philippines. Civil law refers to the Civil Code.
Divine Law -The law of religion and faith. It Below is Book IV scope of discussion:
varies on the beliefs revealed to mankind thru Title I- Articles 1156-1304: Obligations
messengers or prophets e.g. Ten Title II-Articles 1305-1422: Contracts
Commandments and Quoran. Title III- Articles 1423-1430:Natural
Natural law -This is based on internal dictates Obligations
of [Link] role of the sense of justice,
fairness, and righteousness in a man and not
Article 1156. An obligation is a juridical
by divine revelation. It is the reasonable basis
necessity to give, to do or not to do.
of state law.
An obligation is derived from a Latin
Moral Law -The totality of the norms of good
word Obligatio which means tying or
and right conduct growing out of the collective
binding.
sense of right and wrong of every community.
Physical Law -The uniformities of actions and
orders of sequence which are the physical The three (3) types of obligations under the
phenomena that we sense and feel. Civil Code are:
State Law. It is promulgated and enforced by a. Civil obligations
the state. b. Natural Obligations
Constitution -The fundamental law or c. Moral Obligations
supreme law or the highest law of the land
because it is promulgated by the people
Four (4) Essential Requisites of an
themselves, binding all the citizens and
Obligation:
agencies of the government.
Legislation -This pertains to enactment of
1) Passive Subject (debtor/obligor). The
laws by a competent authority. Acts passed are
party who has the duty-bound to perform the
called enacted law or statute law. The
obligation.
Legislation includes ordinances enacted by
2) Active Subject (creditor/obligee). The
Local Government Units.
party who has the right to demand the
Judicial decisions or jurisprudence -These
performance of the obligation.
are cases decided by the Supreme Court with
3) Object or Prestation (subject-matter). The
finality. Courts interpret the law and
conduct required to be observed by the debtor
constitution.
i.e. the giving, doing, or not doing.
Custom -These are habits and practices which
4) Juridical/Legal Tie (efficient cause). That
through long and uninterrupted usage have
binds or connects the parties to the obligation.
become practiced and approved by society as
Determined by knowing the source of the
binding rules of conduct.
obligation [Art. 1157].
Ignorantia Legis Neminem Excusat -Latin
maxim for “Ignorance of the Law Excuses No
one.”
Meaning of Juridical Necessity. (4) Acts or omissions punished by law; hen
The aggrieved party may seek court reliefs to they arise from civil liability which is the
enforce the fulfillment of the obligation or, in consequence of a criminal offense. (Art. 1161.)
default thereof, the economic value it
(5) Quasi-delicts. when they arise from
represents, in case of noncompliance.
damage caused to another through an act or
omission, there being fault or negligence, but
Kinds of obligations as to Subject-matter: no contractual relation exists between the
parties.(Art. 2176.)
[Link] Obligation (Obligation to Give). The
subject-matter is a thing which the
Articles 1158 to1162 specify the general
obligor/debtor must deliver.
principles regarding the
[Link] Obligation (Obligation to Do or Not
sources of obligations in Art. 1157.
to Do). A subject-matter is an act to be done or
*Obligations are not presumed by law. To be
not to be done:
demandable, they
[Link] Personal Obligation. The
must be set forth in the law.
obligation to do or render a service.
*Principle of Compliance in Good faith.
[Link] Personal Obligation. The
Agreements have the binding force of law, and
obligation not to do or give.
so the parties must comply in good faith.
*Art. 100 of Revised Penal Code. Every
Kinds of Prestation: To Give, To Do, and Not person criminally liable is also civilly liable.
to Do
Requisites for its validity:
Civil liability may be:
i. It must be physically and juridically possible;
a. Restitution [restoration to a former state e.g.
ii. It must be determinate or at least
return];
determinable according
b. Reparation of damage cause; and
to pre-established elements or criteria; and
c. Indemnification of damages as a
iii. It must have a possible equivalent in money
consequence of the crime.
or pecuniary
value.
Article 1160. Obligations derived from quasi-
Article 1157. Obligations arise from: contracts shall be subject to the provisions of
(1) Law; when they are imposed by law itself Chapter 1, Title XVII, of this Book.
Quasi- contract
(2) Contracts; when they are arise from the
Definition [ibid]. It is called as such as it is not
stipulation of the parties.
properly a contract at all. There is no consent
(3) Quasi-contracts; when they arise from as it is supplied by a fiction of law
lawful,voluntary and unilateral acts which are [Presumptive Consent]. The law presumes
enforceable to the end that no one shall be that the parties entered into an agreement
unjustly enriched or benefited at the expense although they have not done so, to prevent
of another. (Art. 2142.) In a sense, these injustice or unjust enrichment of a person at
obligations may be considered as arising from the expense of another.
law.
Kinds of Primary Quasi-contracts: Damages. Signify the monetary compensation
a. Negotiorum Gestio- The voluntary awarded to a party for loss or injury resulting
management of affairs or property of another; from a breach of contract or obligation by the
the management of or interference with the other. The purpose of this is to place the
business or affairs of another without authority. innocent party in the same position if the
b. Solutio Indebiti- a juridical relation created contract has not been breached.
when something is received when there is no
right to demand it AND was unduly delivered
Pure Obligation. One which is not subject to a
through mistake.
suspensive or resolutory condition, and no
specific date is mentioned for its fulfillment,
*Other Quasi-contracts are governed by
thus, immediately demandable.
Article 2164 to 2175. Please refer to these
for further elucidation
Conditional Obligation. An obligation that is
subject to a condition, either a suspensive or
resolutory one.
Operational Definition of Terms

Suspensive Condition. The happening of

Bonus Pater y Familia. The diligence of a which will give rise to an obligation.
good father of a family.

Resolutory Condition. The happening of

Genus Nunquam Perit. Genus never
which will extinguish an obligation.
perishes.

Potestative Condition. When the fulfillment of

“Accessory follows the principal.” It means
the condition depends upon the sole will of the
that accessions and accessories are included
debtor, the conditional obligation shall be void.
in the obligation to deliver.

Doctrine of Constructive Fulfillment. The

Fault or Negligence. The failure to observe
condition shall be deemed fulfilled when the
the degree of care, precaution, and vigilance
obligor voluntarily prevents its fulfillment. [Art.
which the circumstances justly demand,
1186]
whereby such other person suffers injury [US v.
Barrias, 23 Phil 4334].
Unilateral obligations. Only one party is
obliged to perform.
Fortuitous Event. Any event which cannot be
foreseen, or which, though foreseen, is
Bilateral obligations. Both parties are bound
inevitable. The happening, independent of the
to perform. They are both debtors and creditors
will of the debtor, makes the normal fulfillment
of each other.
impossible. The presence of the requisites
constitutive of a fortuitous event may exempt
Alternative Obligations. There are several
an obligor of liability.
prestations due but the performance or delivery
of one is sufficient.
 A thing is SPECIFIC OR DETERMINATE when
Facultative Obligations. Only one prestation it is individualized and susceptible of
is due but the debtor, by his choice, may specification or designation. It cannot be
render another as substitute. substituted without the consent of the creditor.

Joint Obligation. A kind of obligation where Duties of a debtor in obligation to give a

the entire obligation must be paid Specific or Determinate Thing:
proportionately by the debtors, or be
demanded proportionately by the creditors.
1. Observe the diligence of a Good Father
of a Family(supra)- The ordinary care or
Solidary obligation. A kind of obligation where
diligence of an average (reasonable prudent)
each debtor is bound to pay the entire
person exercised over his own property unless
obligation, or each creditor has the right to
the law provides otherwise; this is also
demand for the entire obligation.
considered as the standard degree of care.
2. Deliver the fruits of the thing [Art. 1164];
Divisible obligation. The object of which is
capable of partial fulfillment.
3. Deliver the accessions and accessories
Indivisible Obligation. The object of which is [Art. 1166];
incapable of partial fulfillment.

4. Deliver the thing itself [Art. 1497

Obligation with a penal clause. It consists of
an accessory obligation to pay a stipulated
indemnity in case of breach in the principal
[Link] for damages in case of non-
obligation.
fulfillment or breach [Art. 1170].
Article 1163. Every person obliged to give
something is also obliged to
take care of it with the proper diligence of a
Duties of a debtor in obligation to give a
good father of a family unless the law or the
Generic or Indeterminate Thing:
stipulation of the parties requires another
1. Deliver the thing in a quality intended by the
standard of care.
parties considering the purpose and other
circumstances [Art. 1246]; and
This provision refers to an obligation to give a
2. Liable for damages in cases of fraud,
specific or determinate
negligence, delay, or contravention of the terms
thing.
in the performance of obligation [Art. 1170].

A thing is GENERIC OR INDETERMINATE

Article 1164. The creditor has a right to the
when indicated by its kind without being
fruits of the thing from the time the obligation to
distinguished from others of the same kind. It
deliver it arises. However, he shall acquire no
becomes determinate or determinable once the
real right over it until the same has been
obligation is performed.
delivered to him.
i. Natural - Spontaneous products of Accessions v. Accessories
soil and offspring of animals
Example: weeds, trees produced
Accessions -fruits of a thing or additions or
without human intervention
improvements on the principal thing.
-Not necessarily together with the principal
ii. Industrial -Produced by lands of
thing
any kind with human intervention
-Usually of significant value
through cultivation or by labor
Accessories -things joined or included for
Example: vegetables, rice, planted
the principal thing’s better use or
with human labor
completion
-Must go together with the principal thing
iii. Civil -Products derived by virtue of
-Lesser value or replaceable
juridical relation
Example: rents, dividends, royalties
and the like Article 1169. Those obliged to deliver or to
do something incur in delay from the time
the obligee judicially or extrajudicially
When the obligation to deliver the fruits
demands from them the fulfillment of their
arises:
obligation.
a. From the perfection of a contract.
Perfection refers to the birth of the contract
or the meeting of the minds of the parties
Kinds of Delay:
[Art. 1305]; and
As to the performance of obligation
b. If the condition is subject to a suspensive
i. Ordinary - Merely the failure to perform
condition or period, upon the fulfillment of
the obligation on time
the condition or arrival of the term except in
ii. Legal -also called a Default/Mora; the
contract of sale.
failure to perform the obligation on time
which constitutes breach of obligation.
Real V. Personal Right
Kinds of Legal Delay/Default/Mora:
A personal right is the right to demand (by a. Mora Solvendi -delay on the part of the
the creditor) from another (debtor-passive debtor
subject) the latter’s obligation to give, to do b. Mora Accipiendi -delay on the part of
or not to do. creditor
c. Compensatio Morae -delay of
OBLIGORS in reciprocal obligation like a
A real right is a right over a specific thing
sale.
without a definite passive subject against
whom the right may be personally enforced.
What are the conditions before mora
solvendi effects may arise:
Article 1166. The obligation to give a
1. Failure of the debtor to perform his
determinate thing includes that of delivering
obligation on the date agreed upon;
all its accessions and accessories, even
2. Demand is made; and
though they may not have been mentioned.
3. Failure of the debtor to comply.
Negligence. Also called a fault. It consists in
Effects of Delay: the omission of diligence required by the
a. The debtor is guilty of a breach; nature of the obligation and corresponds
b. Liable to the creditor for interest in case with the circumstances of the person, of the
of money or damages in others; and time and of the place.
c. Liable even for fortuitous events when its
determinate thing.
Kinds of Diligence Required:
i. That agreed by the parties, orally or in
In Compensation Morae writing;
Delay of the obligor cancels the delay of ii. In the absence of agreement, that
obligee thus no actionable default on both required by law i.e. extraordinary diligence
parties. However, if the delay of one party is for common carriers; and
followed by the other, the liability of the first iii. If both law and parties are silent, the
infractor shall be equitably reduced by the diligence of a good father of the family.
courts. If it cannot be determined as to who
is the first infractor, each shall bear his own
Waiver of future negligence may be
damages.
renounced except when the nature of the
obligation requires extraordinary diligence
Article 1170. Those who in the like common carriers.
performance of their obligations are
guilty of fraud, negligence, or delay, and
Kinds of Negligence [Culpa]:
those who in any manner
i. Contractual Negligence - Culpa
contravene the tenor thereof, are liable V
contractual; presumed negligence in
damages.
violation of the contracts/agreement. It is
not a source of obligation rather makes the
Four (4) grounds of liability for
debtor liable for damages.
Damages:
ii. Civil Negligence -Culpa aquiliana; also
i. Fraud (deceit or dolo)
called as tort; a source of obligation
ii. Negligence (fault or culpa)
iii. Criminal Negligence -Culpa criminal;
iii. Delay (mora)
negligence resulting in the commission of
iv. Contravention of the terms of the
the crime; Based on Art. 100 of Revised
agreement
Penal Code or Art. 2176 of Civil Code.

Fraud. The deliberate or willful evasion of

the normal fulfillment of the obligation. It Delay [Supra. Art. 1169]
implies malice or dishonesty but not
tantamount to mistakes or errors of Contravention of the Terms of
judgment in good faith. agreement. Violation of the terms and
conditions of agreement must not be due to
Waiver of action for future fraud
a fortuitous event.
(incidental) is void.
Article 1174. Except in cases expressly
specified by the law, or when it is otherwise
declared by stipulation, or when the nature
of the obligation requires the assumption of
risk, no person shall be responsible for
those events which could not be foreseen,
or which, though foreseen, were inevitable.

2 Types of Fortuitous Event:

a. Acts of Man
b. Acts of God

2 Kinds of Fortuitous Events under

Contract of Lease:
[Link] -common and reasonably
foreseen,
[Link] -uncommon and could not
be reasonably foreseen

Requisites of a Fortuitous Event:

i. The event is independent of the human
will or at least of debtor’s will;
ii. The event could not be foreseen, or if
foreseen is inevitable;
iii. The event makes it impossible for the
debtor to comply in a normal manner; and
iv. The debtor must be free from any
participation in, or the aggravation of, the
injury to the creditor, that is, there is no
concurrent negligence on his part.