1915 – year that the Civil Code of the Philippines was made

– pattern was set by Spaniards

August 30, 1950 – effectivity of Civil Law.

Civil Code of the Philippines

Under Article 1156, OBLIGATION is a juridical necessity to 1) give, 2) to do and 3) not to do.

- derived from Obligatio (Latin word) meaning tying or binding

JURIDICAL NECESSITY – the court may be asked to order the performance of an obligation if the debtor
refuses to perform it.

Essential Requisites of an Obligation:

1. Active Subject – the one who demands, he who has the right.
– also called Creditor/OBLIGEE
2. Passive Subject – the one who is bounded, he who has the duty.
– also called Debtor/OBLIGOR
3. Object/PRESTATION – subject matter of the obligation.
- without prestation, there is nothing to perform.
4. JURIDICAL TIE/Legal Tie – reason why an obligation exists.

Ex.

Piano
Seller -------- Buyer
P50,000
To deliver To Pay
Active Subject – Buyer Active Subject – Seller
Passive Subject – Seller Passive Subject - Buyer
Prestation – Piano Prestation – Money (P50,000)
Juridical Tie – Contract of Sale Juridical Tie – Contract of Sale

Sources of Obligation

1. LAW – Article 1158

2. CONTRACT – Article 1159 & 1305

Article 1159
a. Stipulations of the parties are the law between them
b. Must be complied in good faith
 Article 1305

CONTRACT – meeting of minds between two persons, there is a consent

Consent should have:

 Offer – certain/definite
 Acceptance-absolute/unconditional

Note:
a contract must pertain to the same object for both parties

Ex. X bought an air-conditioning unit. He already paid for the item but when the item was delivered and
as soon as the box was opened, he noticed that the item was damaged. He told the delivery crew that
he wants his money back, but the crew said he can’t because the item is already transferred. Can X get
his money back?

Answer: Yes. Because he didn’t accept the item.

3. QUASI-CONTRACT – Article 1160

- there was no actual contract but it’s as if you entered into one (in a sense these obligations
maybe considered as arising from law)

- no one shall be enriched / benefited at the expense of another.

Quasi – “as if”

Kinds of Quasi-Contract

a. Negotiorum Gestio – without consent, “unauthorized management”

Note: only expenses for preservations are reimbursable, not the ornamental.
b. Solutio Indebiti – “payment by mistake”

Due – pertain to maturity

Demandable – whether it can still be enforced or not

- beyond 10 years not demandable.

Ex. - If the loan was on (2006), it is not demandable now (2017)
- If the debtor pays the loan without knowing that it shouldn’t be paid, the creditor must return the
money. There is solution indebiti.
- If the debtor pays the loan knowing that it shouldn’t be paid, the creditor can keep the money.
There is no solution indebiti.

4. DELICTS (crimes/ acts/ omissions punished by law) Article 1161

 Omissions – negligence (culpa)

3 Kinds of Culpa

a. Contractual Negligence (Culpa Contractual)

-negligence in contracts resulting in their breach
b. Civil Negligence (Culpa Aquiliana)
-negligence without pre-existing contract

c. Criminal Negligence (Culpa Criminal)

- negligence resulting in the commission of a crime.
-punishable in the revised civil code.
Examples:
• A sales lady broke a vase while she was wiping it- Culpa contractual
• A window shopper broke a vase in the mall- Culpa aquiliana
• An angry person decided to vent his frustrations on the vase- not culpa criminal because
it is his intention.
• A truck driver loses control of the vehicle, killing another motorist- Culpa criminal
because it is not his intention

5. QUASI- DELICTS/ Torts Article 1162

- As if there is a crime/acts/omissions
- no contractual relation between the parties

Three (3) kinds of Fruits under Civil Code

a. NATURAL FRUIT – spontaneous products of the soil, young & other products of animals.
b. INDUSTRIAL FRUIT – produced by lands through cultivation or labor.
- there is an intervention of man.
Ex. Poultry farm- chickens/hens lay eggs because of the feeds they eat.
c. CIVIL FRUIT – product of corporeal property

REAL RIGHT – directed against the WHOLE WORLD

Ex. Marriage contract
PERSONAL RIGHT – binding or enforceable ONLY against a SPECIFIC PERSON.
Ex. Your mother can’t be forced to pay the liability under your name.

Accessory Obligation (Obligation to give)

-even if not stated, it is already considered part of the obligation.
1. To take care of the thing with proper diligence of a good father of the family (Article 1163)
 Proper Diligence – ordinary diligence (considering the object of the obligation as if they
belong to you)
Extraordinary diligence – opposite of ordinary diligence. Must give greater care (ex.
Truck drivers, common cargo carriers)
Note: if you ask for a fee, even if you’re not customarily engaged in transporting
goods and passenger, you must exert EXTRAORDINARY diligence

SPECIFIC or DETERMINATE THING -physically segregated, particularly designated (PSPD)

GENERIC or INDERTERMINATE THING – class or genus to which it pertains and cannot be

pointed out with particularity.

- genus never perish

Exceptions: (when not to exercise the proper diligence of the good father of the family)

a. Law so provides
b. Stipulation of the parties
c. Object is a generic thing

2. To deliver the fruits (Article 1164)

Creditor/ Obligee has the right to the fruit when the agreed date has come.
Delivered Fruit = Real right
Undelivered Fruit = Personal right
Note: it is not the payment that transfers ownership, it is the delivery.
The creditor is entitled to the fruits of the thing when the time the obligation to deliver
arises.
3. To accession & accessory (Article 1166)
Accession – improvements/ additions
Accessory – better use, embellishment, & completion
Ex. -Car as the principal item
 Seatcover, fog lights – accessions
 Car keys – accessory

-Diamond Ring

 Diamond – principal
 Ring – accessory

-Oyster ordered in a restaurant

 Oyster – principal
 Pearl – accessory
ARTICLE 1167

An obligation to do, to perform an act or render a service. It contemplates three (3) situations:

1. The debtor fails to perform an obligation to do

2. The debtor performs an obligation to do but contrary to the terms
3. The debtor performs an obligation to do but in a poor manner
(“what has been poorly done be considered as undone”)

Remedies of creditor in positive personal obligation:

- get a third (3rd) person who will command the debtor to do the job, and if there are expenses
incurred, it will be charged against the original debtor.
-if the original debtor still refuse, this time the remedy of the creditor is to go to court for the
collection of that amount.
The court can only command:
a. The debtor to pay
b. To stop the debtor what he has been doing

Note: Do not force the debtor to do something for you, if you force him it is considered as harassment.

Article 1168

An obligation NOT to do, the debtor does what was forbidden for him to do.

Remedies of creditor in negative personal obligation:

- the creditor can go to court, and the court will order the debtor to stop or refrain to such act.
- if there are expenses incurred, it will be charged against the original debtor.

Article 1169
Those obliged to deliver or to do something incur in delay from the time the creditor judicially or
extra-judicially demands from the debtor their fulfilment of their obligation.

However, the demand by the creditor shall NOT be necessary in order that delay may exist:
(pwedeng walang demand, pero delay and debtor if eto ang reasons)
a. Law expressly so declares
b. Stipulation of the parties/obligation so provides
c. When demand would be useless
d. Time is of the essence
e. Reciprocal obligations
DELAY (delay or mora) – delay incurred by debtor when the creditor demands. If the debtor is delayed,
creditor can ask for damages.

1. Ordinary delay – failure to perform an obligation on time (creditor did not demand)
2. Legal delay – failure to perform an obligation on time which failure constitutes a breach of the
obligation. (creditor demanded)

Note: No demand, no delay, no damages. (3Ds)

Kinds of delay:

1. Mora Solvendi – delay on the part of the debtor to fulfil his obligation.
a. Mora Solvendi ex re - real obligations; obligations to give
b. Mora Solvendi ex persona - personal obligations; obligations to do
2. Mora Accipiendi – delay on the part of the creditor to accept the performance of the obligation.
3. Compensatio Morae – delay of the obligors in reciprocal obligation, net result is that there is NO
actionable default on the part of both parties.

Article 1170

Four (4) grounds for liability:

1. Fraud (deceit or dolo)

2. Negligence (fault or culpa)
3. Delay ( mora)
4. Contravention of the terms of the obligation (contravention of tenor)

Two (2) kinds of Fraud (dolo):

a. Dolo Causante (causal fraud) – fraud committed during the time of perfection (nag ooffer and
acceptance palang nanloloko na) (Article 1330)
Note: Contract is Voidable, remedy: annulment
Annulment = contract is voidable (valid until annulled)
Remedy of Void contract= declaration of nullity of contract
b. Dolo Incidente (incidental fraud) – fraud committed during the performance of an obligation,
contract already exists. (Article 1170)
Note: Contract is Valid, remedy: you can ask for damages

Article 1171 – you are not liable for a future fraud

Article 1172

- the payment for damages may be reduced if there is negligence because it was unintentional
- the payment for damages may not be reduced if there is fraud because it was intentional and it
involved malice

Article 1173

Exerting proper diligence of a good father of the family depends on the:

1. Nature of object of the obligation (if the nature of object does not require the proper diligence
of a good father of the family you are not liable for damages)

Ex. Sand – does not need the proper diligence of a good father of the family

Fluorescent light – requires the proper diligence of a good father of the family

2. Circumstances of persons

Ex. Security guard sleeping on a night duty – liable of damages

3. Circumstances of place

Ex. CM recto before vs. CM Recto now

4. Circumstances of time

Ex. Car without headlights at night – liable for damages

Article 1174

Fortuitous event – Force Majeure (act of man or act of God)

Ex. Eruption of Volcano

No one is to be held liable in the fortuitous event

` Fortuitous event + Damages = Not Liable
Not Fortuitous event + Damages = Liable

Requisites of a fortuitous event

1. The event must be independent of the debtor’s will

2. The event could not be foreseen, or if foreseen, is inevitable
3. The event must be of such character as to render it impossible for the
debtor to comply with his obligation in a natural manner
4. The debtor must be free from any participation in, or aggravation of, the
creditor’s injury and that there is no concurrent negligence on his part
 Ex.

Bus driver that was stab on the back by a passenger is a fortuitous event
the driver is not liable for any damages

A car exploded because the car’s engineer miscalculated is not a

fortuitous event

There was news about a typhoon and that sailing is forbidden. Still, a
boat sailed and was destroyed by the typhoon is not a fortuitous event

A car was installed with new tires. The car slipped causing an accident is
a fortuitous event

There was a boy walking in a bridge, there was a horse nearby, a car was
behind the horse. The car blew its horn; the horse was startled and
kicked the boy. The event is a fortuitous event because no one foresaw the event coming and it is not
illegal to blow a car’s horn.

Exemptions:

1. Stipulation of the parties

2. Aleatory contract – contracts which in its nature requires an assumption of
risk
Ex. Life Insuarance
3. The object is a proceed of a criminal act
Ex.
A horse was stolen and was struck by lightning. The thief is liable for
damages
When there was estafa, theft and robbery
Estafa – you gave your trust to someone but he/she stole the
thing you entrusted
Theft – there was no damages, someone just stole something
Robbery – there were damages 1.) against a thing or 2.) against
a person

ARTICLE 1175- Usurious transactions s governed by special laws.

Usury Law – law that regulates the amount of interest the creditor should ask from the debtor.

- Usury is now suspended or legally non-existent. Parties are now free to stipulate any
amount of interest.
ARTICLE 1176

A. If there are back-rentals of arrearages, when issuing receipts, indicate where the received
payment is applied. Otherwise, the presumption is all debt is paid.

Example: Monthly rent is P10, 000.00. January-May rent is not paid. Then on June, P10, 000.00
was paid. In the receipt, the note was written “Received the amount of P10, 000.00 as payment
for rentals. Dated June 7, 2017.” The presumption, all debt including those from January up to
the month of May was paid.

If “Received the amount of P10, 000.00 as payment for the month of January 2017. Dated June7,
2017.” was written instead, it is clear that the amount paid was just for one month of rent.

B. Accessory follows the Principal. If the Principal is extinguished, the accessory is extinguished,
too. But if the accessory is extinguished, it doesn’t mean that the principal is extinguished, too.

Example 1: A debt of P100, 000.00 with 10% interest is payable on December 20.

Case 1: The problem stated that the interest of P10, 000.00 was paid on the said date.
Is the debt extinguished? No. Only the interest (accessory) was extinguished, not the principal.

Case 2: The problem stated that the principal of P100, 000.00 was paid.
Is the debt extinguished? Yes. Because the principal obligation was extinguished.

Example 2: A loaned P100, 000.00 from B with a necklace as collateral. The loan is payable on
December 20.

Case 1: On the next day, the necklace was back to A’s possession.
Is the P100, 000.00 debt extinguished? No. The necklace which is a contract of pledge is just an
accessory contract.

Case 2: The P100, 000.00 was paid.

Is the necklace back in A’s possession? Yes, because the principal obligation was extinguished.

ARTICLE 1177

The creditor can go after the debtor of his debtor after exhausting every other means of collecting the
amount.

Example: A owns the apartment in which B is renting. B decides to lease it to bed spacers. If B can’t pay
rent, A can collect the amount from B’s bed spacers.
ARTICLE 1178

All rights acquired in virtue of an obligation are generally transmissible.

10 Special Kinds of Obligation (POCAF JS DIO)

Pure Obligations Joint Obligations

Obligations with a period Solidary Obligations

Conditional Obligations Divisible Obligations

Alternative Obligations Indivisible Obligations

Facultative Obligations Obligations with a penal clause

 I. PURE OBLIGATION
 No period
 No condition
 Immediately demandable

II. OBLIGATION W/ A PERIOD – Future & CERTAIN event

Examples :

• Everybody will die

• I’ll give you P10k if Mr. X will die
• I’ll give you P10k if the sun shines tomorrow
• I’ll give you P10k if Mr. X’s 60 year old father dies.
• “on Christmas Day” “This Year”
• “little by little” “as soon as possible” “from time to time” “at any time I have the money”
“In partial payments” “when I am in a position to pay”

III. CONDITIONAL OBLIGATION – Future & UNCERTAIN event; Past & Unknown to the parties.

Two Principal Kinds of Condition (as to EFFECTS):

1. Suspensive Condition (Condition Precedent/ Condition Antecedent) – the fulfilment of

the condition will give rise to the obligation.
Example: I’ll give you P10k if you pass this subject this semester.
2. Resolutory Condition (Condition Subsequent) – the fulfilment of the condition will
extinguish an obligation.
Example: You can use my car until you pass this subject.

As to FORM:

1. Express – condition is clearly stated.

2. Implied – condition is merely inferred.

As to POSSIBILITY:

1. Possible – the condition is capable of fulfilment, legally and physically.

2. Impossible – it shall ANNUL the OBLIGATION.
a. Legally – susceptible of happening but contrary to law, morals, good customs,
public order,/public policy.
Example: I will give you P20k if you kill your seatmate.
NOTE: It is as if we did not have any agreement, because the condition is illegal
therefore there will be no obligation to be made.
b. Physically – in nature of things, cannot exist or cannot be undone.
 Example: Punta ka nga sa 5th floor, talon ka sandal, dapat una paa pagbagsak
mo.

As to ORIGIN:

1. Potestative – depends upon the will of the creditor/ debtor.

Examples:
a. I will give you this watch if I step out of this room right now.
NOTE: if the fulfilment of the condition is based solely upon the will of the
debtor, the CONDITIONAL OBLIGATION shall be VOID.
b. I will give you this watch if you step out of this room right now.
NOTE: if the fulfilment of the condition is based upon the will of the creditor,
then the CONDITIONAL OBLIGATION is VALID.
2. Casual – depends upon the 3rd person/ chance.
Examples:
a. I will give you this watch if the couple outside went kissing.
NOTE: the fulfilment of the condition is based upon the will of the 3rd person,
therefore the CONDITIONAL OBLIGATION is VALID.
b. I will give you P10k if I will win the lottery tomorrow.
NOTE: the fulfilment of the condition if based upon the chance, therefore the
CONDITIONAL OBLIGATION is VALID.
3. Mixed – partly potestative & partly casual.

Example: I will buy that car if I will be hired at San Miguel Corporation.

NOTE: the fulfilment of the condition depends upon the debtor whether he will
buy the car or not, and it also depends upon the will of the 3rd person (San
Miguel whether they will accept the debtor or not)

As to MODE:

1. Positive – the condition consists in the performance of an act.

2. Negative - the condition consists in the omission of an act.

As to NUMBERS: (further discussion in the next pages)

1. Conjunctive – there are several conditions & ALL must be fulfilled

2. Disjunctive – there are several conditions & ONLY ONE or SOME of them must be
fulfilled.

As to DIVISILBILITY: (further discussion in the next pages)

1. Divisible – the condition is susceptible of partial performance.

2. Indivisible - the condition is NOT susceptible of partial performance.
 KINDS of PERIOD

1. Suspensive Period (ex die) – the obligation BEGINS only upon the arrival of the period.
Example: I promise to give you P10k if Mr. X dies.
2. Resolutory Period (in diem) – the obligation is valid upto a day certain and TERMINATES upon
the arrival of the period.
Example: You can use my car until the end of this year.

Three (3) Kinds of Obligation that are IMMEDIATELY DEMANDABLE

• PURE OBLIGATION
• RESOLUTORY CONDITION
• RESOLUTORY PERIOD (In Diem)