LAW ON OBLIGATIONS AND CONTRACTS

Roman Julio B. Infante

 That which is required by the nature
of the obligation and corresponds
with the circumstances of person,
time, and place (Art. 1173).
 That which is required by law or
contract to exercise a different
standard of care (Art. 1163).
 Art. 1755 – a common carrier is
bound to carry the passengers safely
as far as human care and foresight
can provide, using the utmost
diligence of very cautious persons,
with due regard for all the
circumstances.
 DURING THE JAPANESE
OCCUPATION, A AND B SOUGHT
REFUGE IN THE HOUSE OF A
CERTAIN VILLENA IN BATANGAS,
BATANGAS.
 A AND B HID THEIR VALUABLES IN
VILLENA’S DUGOUT THEN SAID
VALUABLES GOT LOST.
 A CLAIMED THAT HE HAD GIVEN
HIS THINGS TO B AS A DEPOSIT AND
THEREFORE B SHOULD BE LIABLE.
 DECIDE THE QUESTION OF
LIABILITY.
 A fire broke out at a Caltex station.
 It started while gasoline was being
hosed from a tank truck into the
underground storage and the fire
destroyed several houses.
 Caltex and station manager were
sued who gave no explanation at all
regarding the fire.
 Without proof as to the cause of the
fire, does the doctrine of res ipsa
loquitur apply and the defendants
can be presumed negligent?
 Carina is obliged to give Mia on Dec. 23, 2018, a
particular parcel of land.
 Before Dec. 23, what is the right of Mia with regards the
fruits?
 After Dec. 23, what is the entitlement of Mia (as of right)
to the fruits?
 But if the fruits and land are actually or constructively
delivered only on Dec. 25, 2018, when does Mia become
the owner of said land and fruits?
 Between Dec. 23 and 25, what is the right of Mia?
 After Dec. 25, what is the right of Mia?
 On Dec. 25, can Mia sell the fruits of the land?
WHEN DOES
OWNERSHIP OF A
THING
TRANSFERRED:
WHEN AGREED
UPON?
UPON TRADITION?
 ACTUAL DELIVERY
 CONSTRUCTIVE DELIVERY
 TRADITIO LONGA MANU
 TRADITIO BREVI MANU
 TRADITIO CONSITITUTUM
POSSESSORIUM
 TRADITION SIMBOLICA
 TRADITION BY THE EXECUTION
OF LEGAL FORMS
 THE TWO PARTIES
SIMULATED A SALE.
 IS THERE A TRANSFER OF
OWNERSHIP?
 WHAT IF THE SALE WAS A
GENUINE ONE WITHOUT
TRADITIO, DOES IT
TRANSFER OWNERSHIP
IF THERE IS NO
TERM OR
CONDITION?
IF THERE IS A
TERM OR
CONDITION?
  CLASSIFICATION OF
OBLIGATIONS FROM THE
VIEWPOINT OF THE SUBJECT
MATTER
 REAL OBLIGATIONS (TO GIVE)
 TO GIVE A SPECIFIC THING
 TO GIVE A GENERIC OR
INDETERMINATE THING (ONE OF A
CLASS)
 PERSONAL OBLIGATIONS (TO DO
OR NOT TO DO)
 DEMAND SPECIFIC
PERFORMANCE (OR
COMPLIANCE) WITH
DAMAGES
 WHETHER GENERIC OF
SPECIFIC
 DEMAND RESCISSION OR
CANCELLATION WITH
DAMAGES
 A PARTNER FAILS TO
FULFILL HIS
COMMITMENTS TO
THE PARTNERSHIP.
 WHAT ARE THE
RIGHTS OF THE CO-
PARTNERS?
SPECIFIC THING
 OBLIGATION IS
EXTINGUISHED
GENERIC THING
 OBLIGATION IS NOT
EXTINGUISHED
 GENUS NUNQUAM
PERIT
Obligor delays
(default or mora)
Obligor is guilty of
bad faith
 Ordinary delay – non-
performance at the
stipulated time.
 Default – virtual non-
fulfillment of the obligation
if there would be either a
judicial or extrajudicial
demand.
 Cindy obligated herself to sell for a
definite price a certain specified
quantity of sugar of a given quality
(1st class sugar), without designating
a lot.
 In case the sugar is lost by a
fortuitous event, who bears the loss
prior to delivery, the seller or the
buyer?
 Lack of physical segregation from the
rest of the sugar.
 ROMCRIS POGI WANTED TO BUY A PARTICULAR SHIP
FROM MIKE ON CONDITION THAT MIKE WOULD PROVE
BY PAPERS THAT THE LATTER WAS THE REAL OWNER OF
THE SHIP.
 SUBSEQUENTLY THE SHIP WAS LOST BY FORTUITOUS
EVENT ALTHOUGH THE PAPERS HAD NOT YET BEEN
PRODUCED.
 IS ROMCRIS REQUIRED TO PAY?
 Accessories – those joined
to or included with the
principal for the latter’s
better use, perfection, or
enjoyment.
 Accessions – additions to
or improvements upon a
thing and whatever is built,
planted, or sown on a
person’s parcel of land.
 TO DELIVER A PARTICULAR CAR
MEANS TO ALSO GIVE ITS
ACCESSORIES.
 TO DELIVER A PIECE OF LAND
MEANS TO ALSO GIVE ITS
ACCESSIONS.
 IS THIS TRUE EVEN IF THERE IS NO
MENTION OF THEM IN THE
CONTRACT?
 WHAT IF THERE IS STIPULATION
THAT SAID ACCESSIONS AND
ACCESSORIES SHOULD NOT BE
INCLUDED?
FIRST PART DEALS WITH POSITIVE
PERSONAL OBLIGATIONS
 To have the obligation performed (by
himself or another) at debtor’s
expense (only if another can do the
performance)
 Also to obtain damages.
 Can damages alone substitute for
performance?
 No, if creditor can do it.
 What if debtor does not want to
perform?
 What if the obligation is purely
personal or special?
 What if substitution is permitted?
 A PARTY TO AN
AGREEMENT TO
MARRY BACKS OUT OF
SAID MARRIAGE.
 IS THE SAID PARTY
LIABLE FOR THE
CRIME OF SLANDER
BY DEED?
IF MADE
POORLY.
IF THE
OBLIGATION IS
A NEGATIVE
ONE.
REMEDY:
UNDOING OF
THE
PROHIBITED
THING PLUS
DAMAGES.
Judicial or
extrajudicial
demand is
necessary to put
the obligor in
default.
When the
law so
provides.
 When the obligation
expressly so provides.
 Mere fixing of period is not
enough.
 Contrary ruling is on Siulong
and Co. v. Ylagan, 43 Phil. 393
 When time is of the essence
 Selling of land with payment at
specified time, so that the seller could
pay off certain debts that were due on
said date (Abella v. Francisco, 55
Phil. 447)
 Money needed to finance mining
installations if said installments had to
be made on a certain date (Hanlon V.
Hausermann, 40 Phil. 796).
 Is it essential for the contract to
categorically state that time is of the
essence?
 When demand would be useless, as
when the obligor has rendered it
beyond his power to perform.
 Before maturity, the seller has
disposed of it in favor of another or has
destroyed the subject matter or is
hiding.
 When debtor has expressly
acknowledged that he really is in
default.
 Is mere asking of extension of time an
express acknowledgment of default?
 MORA SOLVENDI
 MORA SOLVENDI EX RE
 MORA SOLVENDI EX
PERSONA
 MORA ACCIPIENDI
 COMPENSATIO MORAE
 IS THERE MORA SOLVENDI IN
NEGATIVE OBLIGATIONS?
 IS THERE MORA IN NATURAL
OBLIGATIONS?
 The obligation must be due,
enforceable, and already liquidated
or determinate in amount.
 There must be non-performance.
 There must be a demand unless it is
not necessary.
 Is a mere reminder considered as a
demand?
 The demand must be for the
obligation that is due
 May be liable for interest or
damages.
 Bear the risk of loss provided
that his default is attributable
to his own fault.
 Liable for fortuitous events
(Art. 1165,).
 What if the thing would have still
been lost even if the debtor is not
in default (Art. 2215)?
 In a purchase in
installments, there might
be an acceleration clause.
 When there is default in the
payment in one installment,
does it mean that there is
default in the whole amount?
 Is demand still necessary to
put the debtor in default?
 Creditor is guilty when
he unjustifiably refuses
acceptance of
payment.
 What if the debtor offers
to pay something other
than what was agreed
upon?
If an obligation
arises ex delicto, is
the debtor-criminal
responsible for the
loss even though it is
fortuitous in nature
(Art. 1268)?
 What should the criminal do
if the creditor is in mora
accipiendi?
 Judicial conjugation or
 Keep it himself (debtor not
liable now for fortuitous
event)
 What if the thing was lost
through robbery with violence?
 Should be irresistible or grave.
 Lessor (creditor) improperly
refused to accept the rents
tendered by the lessee (debtor).
 If there are accidental losses on
the premises leased, who would
shoulder the loss?
 The lessee failed to consign the
rejected payments.
 Does the said failure cure the
mora accipiendi?
 After the said delay, is the lessee
still obliged to pay the amounts
he had tendered?
Example: In a
sale the buyer
must pay and
the seller must
deliver.
 Delivery on Dec. 9,
2005; and payment on
Dec. 13, 2005.
 To put seller on default,
demand is necessary.
 Is the buyer in default
upon delivery?
If the performance is
not set on different
dates, either by law,
contract or custom,
when shall
performance take
effect?
Prescription
Condonation
 Fraud (Deceit or dolo)
 Negligence (Fault or
culpa)
 Default (Mora) – imputable
to party at fault
 Violation of the terms of
the obligation (Violatio)
 Increase in the cost of performance
(U.S. v. Varadero de la Quinta, 40 Phil.
48)
 Poverty (Repide v. Alzelius, 39 Phil.
190)
 War between the subject of a neutral
country and the subject of a country
at war where substantial compliance
can still be done (Int. Harvester Co. v.
Hamburg-American Line, 42 Phil.
854)
 A taxi passenger was intentionally
killed by the driver.
 Can an action for damages be
brought against the driver?
 Can an action for damages be
brought against the operator?
 The company should afford full
protection to its passengers with
utmost care.
Is
overcrowdin
g in a bus
considered
a negligent
act?
 M – Moral (for physical and mental
anguish)
 E – Exemplary (corrective or to set
example)
 N – Nominal (to vindicate a right – when no
other kind of damages may be recovered)
 T – Temperate (when the exact amount of
damages cannot be determined)
 A – Actual (actual losses or unrealized
profit)
 L – Liquidated (predetermined beforehand)
Fraud in
obtaining
consent
Fraud in the
performance of
an obligation
 A taxpayer paid a lesser amount of
tax as opposed to the true amount
that he should have incurred.
 This was done through a manner that
the law permits.
 Later on, the tax paid was found to be
insufficient and the BIR elevated the
case to the Court of Tax Appeals.
 Does the taxpayer committed fraud in
this case?
 DOLO
 Deliberate intention to cause damage
or prejudice
 Liability cannot be mitigated by the
courts
 Waiver for future fraud is void
CULPA
 Although voluntary, still there is no
deliberate intention to cause damage
 Liability may be reduced in certain
cases
 Waiver due to future culpa may in
certain sense be allowed
 A shipper in South Carolina sent items worth $4,183.74 through a carrier ship to
Floro Spinning Mills in Manila.
 The value, however, was not declared and so the usual charge of $46.20 was
made for the freightage.
 In the bill of lading was printed a stipulation to the effect that in case of loss or
damage, the carrier’s liability was fixed only at $500, unless a higher value is
declared in the bill of lading and extra freightage is paid, if required.
 The shipment was insured for $5,450 with Phoenix Assurance Company of New
York.
 On arrival, it was discovered that a portion of the shipment have been damaged
(to the extent of $1,512.78).
 The Floro Spinning Mills sued both the carrier and the insurance company.

 The Phoenix Assurance Company paid the equivalent of $1,512.78.

 In turn, the insurance company asked the reimbursement from the carrier.

 The carrier, however, said that it was willing to answer for only $500 as stated in
the bill of lading.
 How much reimbursement must be given?
Culpa
contractual
Culpa
aquiliana
Culpa
criminal
A. That agreed
upon by the
parties
B. In the
absence of (A),
then that is
required by
the law
 An automobile with a fur coat was left
inside a parking lot.
 The parking lot attendant was not
informed nor was he asked to look
after the said fur coat.
 The fur coat was then stolen.
 Should the owner of the parking lot
be held liable?
 General rule:
 No liability for a caso
fortuito.
 It should not be
foreseen
 Even if it can be
foreseen, it is still
inevitable
 Exceptions:
 Expressly declared by
law
 Expressly declared by
stipulation
 When the nature of
obligation requires the
assumption of risk
Rebuttable
assumptions
only.
 A. Exact payment
 B. Exhaust debtor’s properties,
generally by attachment (Art. 2236, civil
code)
 C. Accion subrogatoria (Subrogatory
action)
 Parental authority
 Right to revoke donations on the ground
of ingratitude
 Hold office
 Carry out agency

 Accion pauliana (Impugn or rescind

acts)
 Rawdem lost in a civil case in which
he was a defendant
 Rawdem’s property was attached to
settle his debt.
 Loreto, the winner, could not collect
because Rawdem had no money.
 The attached property was sold to
Rawdem’s daughter, Syrell.
 The property was worth P25,000.
However, Syrell paid only P15,000.
 Syrell probably have no money to
buy such property.
 Family home
 Ordinary tools and implements used
for trade, employment, or livelihood
 Necessary clothing and articles for
ordinary personal use
 Jewelries
 Three horses/cows/carabaos/beasts
of burden used for ordinary
occupation as chosen by the debtor
 Household furniture and utensils
necessary for housekeeping as
chosen by the debtor (should not
exceed P100,000)
 Provisions for the individual or family
use (4 months)
 Professional libraries and equipment
(not to exceed P300,000)
 One fishing boat and accessories
(not to exceed P100,000)
 Four-month worth of salaries, wages,
and earnings BEFORE the levy for
sustenance
 Lettered gravestones
 Life insurance benefits
 Right to government support
 Properties specially exempted by
law
 Property used as collateral for debt
(Mortgages)
 Non-payment of taxes
 Debts incurred BEFORE
the property was recorded
in the Registry of Deeds
 Family home used as
collateral
 Debts to those who
constructed or provided
materials for the building
 General rule: Rights
are transmissible
 Exceptions:
 Law provides otherwise
 Contract provides
otherwise
 Obligation is purely
personal