Introduction to Law 3.

Moral Law
Law – any rule of action or any system of - Totality of the norms of good and right
uniformity conduct growing out of the collective
- Determines the activities of men as sense of right and wrong of every
rational beings and the movements or community (field of ethics)
motions of all objects or creation - The mores or way of life were then
evolved which where always considered
General Divisions of Law
right and correct, and obedience to
 Law in the strict legal sense
them was demanded by the group
- Promulgated and enforced by the state
- (Sanction) No definite legal sanction.
- State law
Only social reaction is produced. Public
 Law in the non-strict legal sense
displeasure or approval.
- Which is not promulgated and enforced
- (Binding force) It is not absolute.
by the state
Example: women’s fashion before and
- Divine. Natural, moral and physical law
today
Subjects of Law - Influences or shapes state law
1. Divine Law – is the law of religion and faith
4. Physical Law
(field of philosophical theology)
- Uniformities of actions & orders of
- Concerns itself with the concept of sin
sequence (field of physics)
- (Source) Formally promulgated by God
- Addressed to objects which have no
- Revealed or divulged to mankind by
power to disobey
means of direct revelation
- Order or regularity in nature which
- Embodied in the 10 commandments
certain results follow certain causes
- Embodied in the Muslim Quoran
- Is called law only by analogy
- (Sanction) certain rewards and
punishments in the present life or in the 5. State Law
life to come - Positive law, municipal law, civil law or
imperative law
2. Natural Law – divine inspiration in man of
- (Binding force) Enforced by the state
the sense of justice, fairness and
- Does not concern itself with violations
righteousness (field of metaphysics)
of the latter rules of action unless they
- Internal dictates of reason alone
also constitute violations of its
- Ever present and binding on all men
commands.
everywhere and at all times
- A basic understanding of right and
Concepts of State Law
wrong
1. General or abstract sense
- There are acts or conduct which man
- term refers to all the laws taken
knows in his heart and his conscience,
together
not by theorizing but by dictates of his
- the mass of obligatory rules established
moral nature, are simply good or bad or
for the purpose of governing the
evil
relations of persons in society
- Reasonable basis of state law
2. Specific or Material Sense
- The term has been defined as “a rule of
conduct, just, obligatory, promulgated
by legitimate authority, and of common
observance and benefit.”
Characteristics of Law
1. It is a rule of conduct.
2. It is obligatory.
3. It is promulgated by legitimate authority.
4. It is of common observance and benefit.
What does Law do?
1. Secures justice
2. Resolves social conflict
3. Orders society
4. Protects interests
5. Controls social relations
Sources of Law
1. Constitution
- Fundamental law or supreme law or
highest law of the land
- Law to which all other laws enacted by
the legislature must conform
2. Legislation
- Declaration of legal rules by a
competent authority
- Preponderant source of law in the
Philippines
- Enacted Law or Statute Law is the act
passed by the legislature
- Includes ordinances enacted by local
government units
3. Administrative rules and regulations
- Issued by administrative officials under
legislative authority
- Are intended to clarify or explain the
law and carry into effect its general
provisions
4. Judicial decisions
- The decisions of the court, particularly
the supreme court
- Applying or interpreting the laws or the
constitution form part of the legal
system of the Philippines
- Doctrine of Precedent or Stare Decisis
is the decision of a superior court on a
point of law, binding on all subordinate
courts
5. Customs
- Habits and practices which through long
and uninterrupted usage have become
acknowledged and approved by society
as binding rules of conduct
- It has the force of law when recognized
and enforced by the state
- Must be proved as a fact according to
the rules of evidence
- It may be applied by the courts in the
absence of law
6. Others
- Principles of justice and equity, decision
of foreign tribunals, opinion of
textwriters and religion
- Only supplementary
- Resorted to by the courts in the
absence of all the other sources
- Not binding on the courts
Rules in case of doubt in interpretation or
application of laws
 No judge or court shall decline to render
judgment by reason of silence, obscurity or
insufficiency of the laws
 In case of doubt in the interpretation or
applications of laws, it is presumed that the
lawmaking body intended right and justice
to prevail
Other organs of social control
 Churches
 Corporations
 Political parties
 Schools
 Professional organizations
 Families
Law compared with other means of social
control
1. Laws are made and administered by the
only institutions in society authorized to act
in behalf of the entire citizenry. Other
means of social control act only for their
members.
2. Only the legal institutions within the society
can make rules, regulations and orders in
which the entire citizenry must comply.
Other means of social control govern only
limited members.
3. People associated with other means of
social control can ordinarily terminate their
relationship and thereby free themselves
from the impact of its rules and regulations.
Citizens of a state cannot do this unless
they choose to leave the geographical area
which the state sovereign.
4. The sanction through law are more varied
and complex than the sanctions available to
the other means of social control.
5. Before the law operates against an
individual, various procedural steps are
required. Members of other means of social
control are generally not required to
comply with such procedures.
Organizations of courts
1. Regular Courts
1.1 Court of appeals
1.2 Regional Trial Courts (province & cities)
1.3 Metropolitan Trial Courts (metropolitan
areas)
1.4 Municipal Trial Courts
1.5 Municipal Circuit Trial Courts
The Supreme Court, the Court of Appeals and
the Regional Trial courts are considered courts
of general or superior jurisdiction.
2. Special Courts
2.1 Sandiganbayan – an anti-graft court
2.2 Court of Tax Appeals – tax court
3. Quasi-Judicial Agencies
- Administrative bodies under the
executive branch performing quasi-
judicial functions
3.1 Securities and Exchange Commission
3.2 Land Transportation Franchising and
Regulatory Board
Classifications of Law
1. As to its purpose
1.1 Substantive Law – law creating,
defining and regulating rights and
duties.
1.2 Adjective Law – law prescribing the
manner or procedure by which rights
may be enforced or their violations
redressed.
- Remedial law or procedural law
- Governed by the Rules of Court
promulgated by the Supreme Court and
by special laws
2. As to its subject matter
2.1 Public Law – the body of legal rules
which regulates the rights and duties
arising from the relationship of the
state to the people.
2.1.1 Criminal Law – law which
defines crimes and provides for
their punishment
 2.1.2 International Law – law which
governs the relations among
nations or states
2.1.3 Constitutional Law – law which
governs the relations between
the state and its citizens. It
establishes the fundamental
powers of the government
2.1.4 Administrative Law – governs
the methods by which the
functions of administrative
authorities are to be performed
2.1.5 Criminal Procedure – governs
the methods of trial and
punishment in criminal cases
2.2 Private Law
- the body of rules which regulates the
relations of individuals with one
another for purely private ends
- Law on Obligations and Contracts
comes under this heading because it
deals with the rights and obligations of
the contracting parties only
- The STATE is also involved in Private
Law but simply as an arbiter and not as
a party
- Civil law, commercial or mercantile law
and civil procedure
2.2.1 Civil Procedure – is the branch
of private law which provides
for the means by which private
rights may be enforced
“The law on obligations and contracts is the body
of rules which deals with the nature and sources
of obligations and the rights and duties arising
from agreements and the particular contracts.”
Civil Code of the Philippines (Republic Act No.
386) – Law on Obligations & Contracts can be
found
- Based mainly on Civil Code of Spain
- Civil Law is law found in our Civil Code
Conclusive presumption of knowledge of law
“Ignorance of law excuses no one from
compliance therewith.” “Everyone, therefore, is
conclusively presumed to know the law.”
The following reason for this presumption:
1. If laws will not be binding until they are
actually known, then social life will be
impossible, because most laws cannot be
enforced due to their being unknown to
many.
2. It is impossible to prove the contrary when
a person claims ignorance of the law.
3. It is absurd to absolve those who do not
know the law and increase the obligations
of those who know it.
4. In our conscience, we carry norms of right
and wrong, and sense of duty, so that our
reason indicates many times what we have
to do and in more complicated juridical
relations, there are lawyers who should be
consulted.
5. Evasion of the law would be facilitated and
the administration of Justice would be
defeated if persons could successfully plead
ignorance of the law to escape the legal
consequences of their acts, or to excuse
non-performance of their legal duties. The
rule, therefore, is dictated not only by
expediency but also by necessity.
CHAPTER 1: GENERAL PROVISIONS
ARTICLE 1156. An obligation is a juridical
necessity to give, to do or not to do.
Obligation
- Derived from the Latin word obligatio
which means tying or binding
- It is a tie or bond recognized by law by
virtue of which one is bound in favor of
another to render something
Juridical necessity
- The debtor must comply with his
obligation whether he likes it or not,
otherwise, his failure will have
undesirable consequences
NATURE OF OBLIGATIONS UNDER THE CIVIL
CODE
1. Civil Obligations – obligations which give to
the creditor or oblige a right under the law
to enforce their performance in courts of
justice
2. Natural Obligations – not being based on
positive law but on equity and natural law
- Do not grant a right of action to enforce
their performance although in case of
voluntary fulfillment by the debtor, the
latter may not recover what has been
delivered or rendered by reason
thereof.
ESSENTIAL REQUISITES OF AN OBLIGATION
1. Passive subject (debtor or obligor)
- The person who is bound to the fulfillment
of the obligation
- He who has a duty
2. An active subject (creditor or obligee)
- The person who is entitled to demand
the fulfillment of the obligation
- He who has a right
3. Object or prestation (subject matter of the
obligation)
- the conduct required to be observed by
the debtor
- It may consist in giving, doing, or not
doing
4. Juridical or legal tie (efficient cause)
- Binds or connects the parties to the
obligation
- The tie in an obligation can easily be
determined by knowing the source of
the obligation
Form of an obligation
- Refers to the manner in which an
obligation is manifested or incurred
- May be oral, or in writing, or partly oral
and partly in writing
1. The law does not require any form in
obligations arising from contracts for
their validity or binding force.
2. Obligations arising from other sources
do not have any form at all.
Obligation – is the act or performance which
the law will enforce
Right – is the power which a person has under
the law, to demand from another any
prestation
Wrong – is an act or omission of one party in
violation of the legal right or rights
- The term injury is also used to refer to
the wrongful violation of the legal right
of another
- A wrong or cause of action only arises
at the moment a right has been
transgressed or violated
- The essential elements of a legal
wrong or injury:
1. A legal right in favor of a person
2. A correlative legal obligation on
the part of another
3. An act or omission by the latter
in violation of said right with
resulting injury or damage to
the former
KINDS OF OBLIGATION ACCORDING TO THE
SUBJECT MATTER
1. Real Obligation
- Obligation to give
- The subject matter is a thing which the
obligor must deliver to the oblige
2. Personal Obligation
- Obligation to do or not to do
- The subject matter is an act to be done
or not to be done
2.1 Positive Personal Obligation – to do or
to render service
2.2 Negative Personal Obligation – not to
do or not to give
SOURCES OF OBLIGATIONS
1. Law – imposed by law (ex: tax)
2. Contracts – stipulation (ex: repay loan)
3. Quasi-contracts – arise from lawful,
voluntary and unilateral acts
4. Crimes, or Acts or Omission punished by
law – arise from civil liability which is the
consequence of the criminal offense
5. Quasi-delicts or torts – faults or negligence
but no contractual relation exists between
the parties
CLASSIFICATION OF SOURCES OF OBLIGATIONS
1. Emanating from law
2. Emanating from Private Acts
2.1 Licit acts – contracts & quasi contracts
2.2 Illicit acts – crimes & quasi delicts
ART. 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.
ART. 1159. Obligations arising from contracts
have the force of law between the contracting
parties and should be complied with in good
faith.
Contract
- Is a meeting of mind between two
persons whereby one binds himself,
with respect to the other to give
something or to render some service
- As a source of enforceable obligation,
contract must be valid and it cannot be
valid if it’s against the law
- A contract is valid if it is not contrary to
law, morals, goo customs, public order
and public policy
- A void contract does not exist, meaning,
no obligations will arise.
- A breach of contract takes place when
a party fails or refuses to comply
without legal reason, with his obligation
under the contract as promised.
Compliance in good faith
- Performance in accordance with the
stipulations or terms of the contract or
agreement
- Sincerity and honesty must be observed
to prevent one party from taking unfair
advantage over the other
ART. 1160. Obligations derived from quasi-
contracts shall be subject to the provisions of
Chapter 1, Title XVII, of this Book.
Quasi-contract
- Juridical relation resulting from 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.
- Not properly a contract at all because
there is no consent of both parties
KINDS OF QUASI-CONTRACTS Quasi-delict
1. Negotiorum gestio – is the voluntary - Is an act or omission by a person which
management of the property of another causes damage to another in his
without the knowledge or consent of the person, property, or rights giving rise to
latter obligation to pay for the damage done,
there being fault or negligence but
2. Solutio indebiti – is the juridical relation
there is no pre-existing contractual
which is created when something is
relation between the parties
received when there is no right to demand
it and it was unduly delivered through REQUISITES OF QUASI-DELICT
mistake 1. There must be an act or omission
2. There must be fault or negligence
ART. 1161. Civil obligations arising from
3. There must be damage caused
criminal offenses shall be governed by the
4. There must be a direct relation or
penal laws, subject to the provisions of Article
connection of cause and effect between the
2177, and of the pertinent provisions of Chapter
act or omission and the damage
2, Preliminary Title on Human Relations,16 and
5. There is no pre-existing contractual relation
of Title XVIII of this Book, regulating damages.
between the parties
1. Every person criminally liable for an act or
CRIMES DISTINGUISHED FROM QUASI-DELICT
omission is also civilly liable for damages.
There is criminal or There is only
2. A person not criminally responsible may still
malicious intent or negligence.
be liable civilly. Such as failure to pay criminal negligence.
contractual debt, causing damage to Affects public Concerns
another’s property without criminal intent interest. private interest.
or negligence. Criminal and civil There is only civil
liability. liability.
SCOPE OF CIVIL LIABILITY The purpose is Indemnification of
Civil liability arising from crimes is governed by punishment. the offended party.
the Revised Penal Code and the Civil Code. Criminal liability The liability for quasi-
1. Restitution – return or pay the value cannot be delict can be
compromised or compromised as any
2. Reparation for the damage caused
settled by other civil liability.
3. Indemnification for consequential
the parties
damages – to pay the damages suffered by themselves.
the other party The guilt of the The fault or
(Indemnify – to secure against loss or damage. accused must be negligence of the
Other term: compensate, reparation, restitute) proved beyond defendant
reasonable need only be proved
Doubt. by preponderance of
ART. 1162. Obligations derived from quasi-
evidence.
delicts shall be governed by the provisions of
Chapter 2, Title XVII of this Book, and by special
laws.
CHAP 2: NATURE & EFFECTS OF OBLIGATIONS
ART. 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.
(Refers to an obligation determinate thing)
Specific or Determinate thing
- Particularly designated or physically
segregated others of the same class
- Identified by its individuality
- The debtor cannot substitute it with
another although the latter is of the
same kind and quality without the
consent of the creditor
Generic or Indeterminate thing
- When it refers only to a class or genus
to which it pertains and cannot be
pointed out with particularly
- Identified only by its specie
- The debtor can give anything of the
same class as long as it is of the same
kind
DUTIES OF THE DEBTOR IN OBLIGATION TO
GIVE A SPECIFIC OR DETERMINATE THING
1. Preserve the thing
a. Diligence of a good father – ordinary
care
b. Another standard of care-
extraordinary care (diligence of a very
cautious person) ex. Common carrier
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 THE DEBTOR IN OBLIGATION TO
GIVE 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.
ART. 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.
DIFFERENT KIND OF FRUITS
1. Natural fruits – spontaneous products of
the soil, and the young and other products
of the animals (grass, trees and plants)
2. Industrial fruits – those produced by lands
of any kind through cultivation of labor
(sugar cane, rice)
3. Civil fruits – are those derived by virtue of a
juridical relation (rents of buildings)
RIGHT OF CREDITOR TO THE FRUITS
 The creditor is entitled to the fruits of the
thing to be delivered from the time the
obligation to make delivery arises.
- Generally, the obligation to deliver
the thing and the fruits arises from
the time of the ‘perfection of the
contract’
- If the obligation is subject to a
suspensive condition, the obligation
to deliver the thing and the fruits
arises from the fulfillment of the
condition.
- In a contract of sale, he obligation
to deliver the thing and the fruits
 arises from the perfection of
contract even if the obligation is
subject to a suspensive condition.
Personal Right
- Is the right or power of creditor to
demand from the debtor the fulfillment
of the latter’s obligation to give, to do,
or not to do.
- There is a definite active subject and a
definite passive subject
- Binding or enforceable only against a
particular person
Real Right
- The right or interest of a person over a
specific thing
- There is only a definitive active subject
- Directed against the world
ART. 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
effected the delivery.
REMEDIES OF CREDITOR IN REAL OBLIGATION
 In a SEPECIFIC REAL OBLIGATION, the
creditor may exercise the following rights
in case the debtor fails to comply with his
obligation
1. Demand specific performance or
fulfillment (the very thing itself must be
delivered) of the obligation with a right
to indemnity for damages
2. Demand rescission or cancellation of
the obligation also with a right to
recover damages
3. Demand payment for damages only
where it is the only feasible remedy
 In a GENERIC REAL OBLIGATION, the
creditor may exercise the following rights
in case the debtor fails to comply with his
obligation
1. The obligation can be performed by a
third person since the object is
expressed only according to its family or
genus
2. It is not necessary for the creditor to
compel the debtor to make the delivery
3. The creditor has the right to recover
damages
WHEN THE FORTUITOUS EVENT DOES NOT
EXEMPT THE DEBTOR FROM RESPONSIBILITY
1. If the obligor delays
2. If the obligor has promised delivery to
different creditors.
 The debtor shall be responsible for any
fortuitous event until he has effected the
delivery. (refers to determinate thing)
 An indeterminate thing cannot be the
object of destruction by a fortuitous event
because genus never perishes.
ART. 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.
Accessions
- are the fruits of a thing or additions to
or improvements upon a thing
- not necessary to the principal thing
- is also used in the sense of a right
Accessories
- are things joined to or included with the
principal thing for the latter’s
embellishment, better use or
completion
- must go together with the principal
RIGHT OF CREDITOR TO ACCESSIONS AND
ACCESSORIES
 The general rule is that all accessions and
accessories are considered included in an
obligation to deliver a determinate thing.
ART. 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.
(Refers to an obligation to do)
SITUATIONS CONTEMPLATED IN ARTICLE 1167
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 poor manner
REMEDIES OR RIGHTS OF CREDITOR IN
POSITIVE REAL OBLIGATION
1. If the debtor fails to perform an obligation
to do, the creditor has the right to
a. To have the obligation performed by
himself or by another, unless personal
considerations are involved at the
debtor’s expense
b. To recover damages
2. If the debtor performs an obligation to do
but contrary to the terms or if the debtor
performs an obligation to do but in poor
manner
a. It may be ordered that it be undone if it
is still possible to undo what was done
ART. 1168. When the obligation consists in not
doing, and the obligor does what has been
forbidden him, it shall also be undone at his
expense.
 In an obligation not to do, the duty of the
obligor is to abstain from an act
 The very obligation is fulfilled in not doing
what is forbidden
 In this kind of obligation, the debtor cannot
be guilty of delay
 The remedy of the creditor is the undoing
of the forbidden thing plus damages
 If it cannot be undone, the remedy of the
creditor is an action for damages caused by
debtor’s violation of his obligation
ART. 1169. Those obliged to deliver or to do
something incur in delay from the time the
obligee judicially or extra-judicially 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; or
(2) When 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; or
(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.
Ordinary delay
- is merely the fault to perform an
obligation on time
Legal delay or default or mora
- The failure to perform an obligation on
time which failure constitutes a breach
of the obligation
KINDS OF DELAY OR FAULT
1. MORA SOLVENDI – the delay on the part of
the debtor (to give or to do)
2. MORA ACCIPIENDI – the delay on the part
of the creditor to accept the performance
of the obligation
3. COMPENSATIO MORAE – the delay of the
obligors in reciprocal obligations
REQUISITES OF DELAY OR DEFAULT BY THE
DEBTOR
Three conditions must be present before mora
solvendi can exist or its effect may arise:
1. Failure of the debtor to perform his
obligation on the date agreed upon
2. Demand made by the creditor upon the
debtor to comply with his obligation
3. Failure of the debtor to comply with such
demand
EFFECTS OF DELAY - MORA SOLVENDI
1. The debtor is guilty of breach or violation of
the obligation
2. The debtor is liable for interest or damages
3. The debtor is liable even for a fortuitous
event when the obligation is to deliver a
determinate thing
EFFECTS OF DELAY – MORA ACCIPIENDI
1. The creditor is guilty of breach of obligation
2. The creditor is liable for damages suffered
by the debtor
3. The creditor bears the risk of los of the
thing due
4. When the obligation is to pay money, the
debtor is not liable for interest from the
time of creditor’s delay
5. The debtor may release himself from the
obligation by the consignation or deposit in
court of the thing or sum due
EFFECTS OF DELAY – COMPENSATIO MORAE
1. There is no default or delay in the part of
both parties
2. The liability of the first infractor shall be
equitably tempered or balanced by the
court
3. If cannot be determined which of the
parties is guilty of delay, the contract shall
be deemed extinguished and shall bear his
own damages
WHEN DEMAND IS NECESSARY TO PUT
DEBTOR IN DELAY
General rule: Delay by the debtor begins only
from the moment a demand is made by the
creditor.
1. When the obligation so provides
2. When the law so provides
3. When time is of the essence
4. When demand would be useless
5. When there is a performance by a party in
reciprocal obligations (compensation
morae)
ART. 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.
GROUNDS FOR LIABILITY
There is a breach when a person fails or
refuses to perform his obligation without legal
justification.
1. Fraud (Deceit or dolo) contractual
- It is the deliberate or intentional obligation
evasion of the normal fulfillment of an Liability for fraud Liability for
obligation cannot be mitigated negligence may be
- It implies some kind of malice or or reduced by courts reduced according to
dishonesty the circumstances.
- It cannot cover cases of mistake and
errors of judgement made in good faith ART. 1171. Responsibility arising from fraud is
- Synonyms to bad faith because it demandable in all obligations. Any waiver of an
involves a design to mislead or deceive action for future fraud is void. (1102a)
another  This refers to incidental fraud which is
1.1 INCIDENTAL FRAUD (DOLO employed in the fulfillment of an obligation
INCIDENTE)  Responsibility arising from fraud can be
- committed in the performance demanded with respect to all kinds of
of an obligation already existing obligation
because of contract  The court is not given the power to mitigate
1.2 CAUSAL FRAUD (DOLO
or reduce the damages to be awarded
CAUSANTE)
- Fraud employed in the  Fraud may be past or future
execution of a contract which  Waiver for future fraud is void. It is against
vitiates consent the law and public policy.
2. NEGLIGENCE (FAULT OR CULPA)  A past fraud can be the subject of a valid
- Any voluntary act or omission, there waiver.
being no bad faith or malice, which - Considered as an act of generosity and
prevents the normal fulfillment of an magnanimity on the part of the party
obligation who is the victim of the fraud
3. Delay (Mora)
ART. 1172. Responsibility arising from
4. Contravention of the terms of the
negligence in the performance of every kind of
obligations obligation is also demandable, but such liability
- This is the violation of the terms and may be regulated by the courts, according to
conditions stipulated in the obligation the circumstances.
- The contravention must not be due to a  The debtor is liable for damages resulting
fortuitous event or force majeure from his negligence
 The courts are given wide discretion in
FRAUD NEGLIGENCE fixing the measure of damages
There is a deliberate There is no such
 When both parties to a contract are
intention to cause intention negligent in the performance of their
damage or injury respective obligations, the fault of one may
Waiver for future Such waiver may be cancel or neutralize the negligence of the
fraud is void allowed in negligence other.
Fraud must be clearly Negligence is
proved presumed from the
violation of a
VALIDITY OF WAIVER OF ACTION ARISING
FROM NEGLIGENCE
1. An action of future negligence may be
renounced except when the nature of the
obligation requires the exercise of
extraordinary diligence as in the case of
common courier.
2. Where negligence shows bad faith, it is
considered a fraud. Therefore, any future
waiver is void.
KIND OF NEGLIGENCE ACCORDING TO SOURCE
OF OBLIGATION
1. Contractual Negligence (Culpa Contractual)
- Negligence in contracts resulting in
their breach
- Not a source of obligation
- Merely makes the debtor liable for
damages in view of his negligence in the
fulfillment of a pre-existing obligation
2. Civil Negligence (Culpa Aquiliana)
- Negligence which by itself is the source
of obligation between the parties not
related before by any preexisting
contract
- Also called tort or quasi-delict
3. Criminal Negligence
- Negligence resulting in the commission
of a crime
EFFECTS OF NEGLIGENCE ON THE PART OF THE
INJURED PARTY
 When the plaintiff’s own negligence was
the immediate and proximate cause of his
injury, he cannot recover damages
 If the plaintiff’s negligence was only
contributory, the immediate and proximate
cause of the injury being the defendant’s
lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the
damages to be awarded
ART. 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.
Fault or Negligence
- Is the failure to observe for the
protection of the interests of another
person, that degree of care, precaution
and vigilance with the circumstance
justly demand, whereby such other
person suffers injury
- Question of fact
FACTORS TO BE CONSIDERED
1. Nature of obligation
2. Circumstances of the person
3. Circumstances of time
4. Circumstances of the place
Damages
- Signify the money compensation
awarded to a party for loss or injury
resulting from breach of contract or
obligation by the other
- The purpose of awarding damages is to
place the innocent party in the same
position he would have occupied if the
contract or obligation had been
performed according to its terms
KINDS OF DILLIGENCE REQUIRED
1. That agreed upon by parties, orally or in
writing
2. In the absence of stipulation, that required
by law in particular case (like extraordinary
diligence required for common carriers)
3. If both the contract and law are silent, then
the diligence expected of a good father of a
family (ordinary care)
ART. 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.
Fortuitous event
- It is an event either impossible to
foresee or impossible to avoid
- A happening independent of the will of
the debtor and which happening makes
the normal fulfillment of the obligation
impossible
ACTS OF MAN
- Fortuitous event that is independent on
the will of the obligor but not of other
human wills
- War, robbery, murder
ACTS OF GOD or FORCE MAJEURE
- Events which are totally independent
will of every human being
- Earthquake, flood, rain, lightning
KINDS OF FORTUITOUS EVENTS
1. Ordinary fortuitous events
- Those events which are common and
which the contracting parties could
reasonably foresee (ex. Rain)
2. Extra-ordinary fortuitous events
- Those events which are uncommon and
which the contracting parties could not
have reasonably foreseen (ex.
Earthquake, fire)
REQUISITES OF A FORTUITOUS EVENT
1. The event must be independent of the
human will or at least of the debtor’s will
2. The event could not be foreseen, or if
foreseen, is inevitable
3. The event must be of such a character as to
render it impossible for the debtor to
comply with his obligation in a normal
manner
4. 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
RULES AS TO LIABILITY IN CASE OF
FORTUITOUS EVENT
A person is not responsible for loss or damage
resulting from the non-performance of his
obligation due to fortuitous event. The
exceptions:
1. When expressly specified by law
1.1 Debtor is guilty of fraud, negligence or
delay
1.2 Debtor has promised to deliver the
same specific thing to two or more
persons
1.3 The obligation to deliver a specific thing
arises from crime
1.4 The thing to be delivered is generic
2. When declared by stipulation
3. When the nature of obligation requires the
assumption of risk
ART. 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 load or use of money, goods,
chattels or credits.
REQUISITES FOR RECOVERY OF INTEREST
1. The payment of interest must be expressly
stipulated
2. The agreement must be in writing
3. The interest must be lawful
 The rate interest and other charges on a
loan or any kind shall not be subject to any
ceiling prescribed under Usury Law
 Usury is now legally non-existent
 Parties are now free to stipulate any
amount of interest
 However, it does not give absolute right to
the creditor to charge the debtor interest
that is ‘iniquitous or unconscionable’
(unconscionable = excessive)
ART. 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.
Presumption
- Is meant the interference of a fact not
actually known arising from its usual
connection with another which is
known or proved
TWO KINDS OF PRESUMPTION
1. Conclusive Presumption
- One which cannot be contradicted
2. Disputable Presumption
- One which can be contradicted or
rebutted by presenting proof to the
contrary
WHEN PRESUMPTIONS IN ARTICLE 1176 DO
NOT APPLY
1. With reservation as the interest
2. Receipt without indication of particular
installment paid
3. Receipt for a part of the principal
4. Payment of taxes
5. Non-payment proven
ART. 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.
REMEDIES AVAILABLE TO CREDITORS FOR TH
SATISFACTION OF THEIR CLAIMS
1. Exact fulfillment with the right to damages
2. Pursue the leviable property of the debtor
3. After having pursued the property in the
possession of the debtor, exercise all the
rights and bring all the actions of the debtor
4. Ask the court to rescind or impugn acts or
contracts which the debtor may have done
to defraud him when we cannot in any
other manner recover his claim
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.
The exceptions to this rule
1. Prohibited by the law
1.1 By the contract of partnership
1.2 By the contract of agency
1.3 By the contract of commodatum
2. Prohibited by stipulation of parties