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PART I – OBLIGATION – An obligation is a

a) contract authorizes it

juridical necessity to give, to do or not to do b) other party assents ELEMENTS: Parties may freely enter into any stipulations, 1. Active subject ( obligee/creditor ) – the one in whose favor the obligation is

provided they are not contrary to law, morals, good customs, public order or public policy

constituted 2. Passive subject ( obligor/debtor ) – the

3. QUASI-CONTRACT ( OBLIGATION

one who has the duty of giving, doing or

EX QUASI-CONTRACTU ) – That juridical

not doing

relation resulting from a lawful, voluntary

3. Object – prestation; the conduct which has

and unilateral act, and which has for its

to be observed by the debtor/obligor

purpose, the payment of indemnity to the

4. Vinculum Juris – juridical/legal tie

end that no one shall be unjustly enriched

5. Causa (causa debendi/causa obligationes)

or benefited at the expense of another

– why obligation exists

2 kinds:

Requisites of Object:

o

Negotiorum gestio – unauthorized

1. licit – if illicit, it is void

management; This takes place when a

2. possible – if impossible, it is void

person voluntarily takes charge of

3. determinate or determinable – or else,

another’s

abandoned

business

or

property without the owner’s authority

void o

4. pecuniary value

Solutio indebiti – undue payment ; This takes place when something is

SOURCES OF OBLIGATION:

received when there is no right to demand it, and it was unduly delivered

1. LAW ( OBLIGATION EX LEGE ) – Must be expressly

or

impliedly

set

forth

OBLIGATION

EX

and cannot be presumed 2. CONTRACT (

CONTRACTU ) – Must be complied with in

thru mistake 4. DELICTS ( OBLIGATION EX MALEFICIO OR EX DELICTO ) Governing rules:

good faith because it is the “law” between parties; neither party may unilaterally

1. Pertinent provisions of the RPC

evade his obligation in the contract,

and other penal laws subject to

unless:

Art 2177 Civil Code

•

Art 100, RPC – Every person

Elements:

criminally liable for a felony is a)

also civilly liable 2. Chapter 2, Preliminary title, on Human Relations ( Civil Code )

There must be fault or negligence

attributable to the person charged b) There must be damage or injury

3. Title 18 of Book IV of the Civil Code – on damages

c)

What civil liability arising from a crime

There must be a direct relation of cause

and effect between the fault or negligence on the one hand and the damage or injury on the

includes:

other hand ( proximate cause ) 1. restitution Note:

2. reparation of damage caused 3. indemnity

for

consequential

damages

•

The SC in Sagrada v. Naccoco implied that the sources of obligation

Effect of acquittal in criminal case •

•

Art

1157

is

exclusive. Many commentators to

believe, however that it should

reasonable doubt – no civil

not be. At present, there is one

liability

more

when

when

acquittal

acquittal

is

is

due

due

to

exempting circumstances – there is civil liability •

in

when there is preponderance of evidence – there is civil liability

possible

source

of

obligations – PUBLIC OFFER (Public Offer is in fact a source of obligation in the German Civil Code) EFFECTS OF OBLIGATION

5. QUASI-DELICT/TORTS ( OBLIGATION EX QUASI-DELICTO or EX QUASI MALEFICIO )

1. Obligation to give – obligation to

– It is a fault or act of negligence ( or omission

deliver the thing agreed upon

of care ) which causes damage to another,

2. Obligation to do/not to do –

there

being no

pre-existing contractual

relations between the parties

obligation to do/not to do the service agreed upon

ACCESSORY OBLIGATIONS:

b) With a term/period – upon the expiration of the term/period

1. 1. Exercise

•

diligence

/

Preserve the thing

c)

standard of care: that of a good

contract

Simple – from the perfection of the

father of a family – unless the law or stipulation requires another

FAILURE

TO

COMPLY

standard of care

PERFORMANCE/REMEDIES:

WITH

1. 2. Delivery of fruits •

When does the right begin to exist : from the time to deliver arises

a)

3 kinds of Performance:

when there is no term/condition – from

1. 1. SPECIFIC PERFORMANCE – performance of the prestation

the perfection of the contract

itself b) when there is a term/condition – from the moment the term or condition arises 1. Delivery

of

accessories

PERFORMANCE – someone else &

accessions ( obligation to deliver determinate thing, even if the stipulation does not mention delivery

of

accessories

&

accessions) •

2. 2. SUBSTITUTE

Accessories – those joined to or

performs or something else is performed at the expense of debtor 3. 3. EQUIVALENT PERFORMANCE – damages IRREGULARITY

OF

PERFORMANCE/BREACH

included with the principal for the latter’s better use, perfection or enjoyment •

•

1. A. CAUSES ATTRIBUTABLE TO DEBTOR

Accessions – additions to or

1. 1. Contravention of tenor

improvements upon a thing

2. 2. Delay/

When does right to fruits arise? –

Mora –

Non

performance with respect to time

from the time the obligation to deliver arises

Mora solvendi – default on the part of the debtor; 2 kinds:

a)

Conditional – from the moment the

condition happens

(1) Mora Solvendi Ex re – default in real

willful omission, knowing and

obligations

intending

the

effects

which

naturally and necessarily arise (2) Mora Solvendi Ex persona – default in

from such act or omission

personal obligations

1. Causante ( causal ) – makes contract voidable

Elements:

2. incidente – ( incidental ) – (1) The obligation must be due, enforceable

fraud in performance of

and already liquidated or determinate in

obligation; does not affect validity of obligations

amount (2) There must be non-performance

Remedies of Person in fraud under obligations are:

(3) There must be a demand, unless demand 1. insist on specific performance

is not required

(art 1233) When demand is not necessary:

2. resolve contract (art 1191) 3. claim damages, in either case

(1) When law declares

1. 4. Negligence /Culpa – absence of due diligence

(2) When obligation expressly declares (3) When designation of time of delivery or rendering the service was a controlling motive (4) When demand would be useless as when debtor has rendered it beyond his powers to perform

Elements: a) Omission of diligence required b)

Diligence required – per nature of

obligation, circumstances of persons, time and place

Effects:

FRAUD

1. if determinate thing – debtor bears risk of

DISTINGUISHED

FROM

NEGLIGENCE

loss (even when there is fortuitous event) 2. debtor liable for damages/interest 3. resolution (art 1170, in proper cases) 1. Fraud

/

Dolo –

Voluntary

execution of a wrongful act or

Fraud – There is a deliberate intention to cause damage. Liability cannot be mitigated. Waiver for future fraud is void.

Negligence – There is no deliberate intention

2. Fortuitous Events – event which

to cause damage. Liability can be mitigated.

could not be foreseen, or which

Waiver for future negligence may be allowed

though foreseen, were inevitable

gross – can never be

in certain cases:a)

REQUIREMENTS (Nakpil & Sons vs. CA):

excused in advance; against public policy 1. The cause of the breach of the b)

simple – may be excused in certain cases

obligation must be independent of the will of the debtor

Mora accepiendi – default on part of creditor;

2. The

Creditor is guilty of default when he

at

the

must

be

either

unforeseeable or unavoidable

unjustifiably refuses to accept payment or performance

event

3. The event must be such as to

time

render it impossible for the

payment/performance can be done

debtor to fulfill his obligation in a normal manner

Effects:

4. The debtor must be free from any (1) responsibility of debtor is reduced to

participation in, or aggravation of

fraud and gross negligence

injury to the creditor

(2) debtor is exempted from risk of loss of

Rule on Fortuitous Event:

thing / creditor bears risk of loss 1. General Rule – no liability for (3) expenses by debtor for preservation of

fortuitous event

thing after delay is chargeable to creditor

2. Exemption –

(4) if obligation bears interest, debtor does

a)

not have to pay from time of delay

faith, subject matter is generic, debtor is in

(5) creditor liable for damages (6) debtor may relieve himself of obligation

when expressly declared by law ( bad

delay ) b) when expressly declared by stipulation or contract

by consigning the thing c) Compensatio morae – both parties are in default (in reciprocal obligations); the effect: is as if there is no default

when nature of obligation requires

assumption of risk

REMEDIES

OF

transmissible

CREDITORS –

(except:

law,

3rd parties and rescission will

generally

benefit the creditor

stipulation,

4. The creditor has no other legal

personal obligation):

remedy 1. Exact performance – specific,

5. The debtor’s acts are fraudulent

substitute, equivalent 2. Attach

and

execute

debtor’s

DIFFERENT KINDS OF OBLIGATIONS

property which is not exempt (art CATEGORIES:

2236) 3. Accion subrogatoria (art 1171)

1. Demandability – pure, conditional or with a term

Requisites:

2. Plurality of object – simple, 1. Creditor must have right of return

alternative or facultative

against debtor

3. Plurality of subject – simple, joint

2. The debt is due and demandable

or solidary 4. Performance

3. There is a failure of the debtor to collect

his

own

debt

from

–

divisible

or

indivisible

3rd persons either through malice

5. Sanctions for breach – with or

or negligence

without a penal clause

4. Debtor’s assets are insufficient 5. The right of account is not purely personal

(1) Pure – demandable at once, no term, no condition

6. Accion directa (arts 1729 & 1652)

(2) Conditional – A condition is a future and

7. Accion pauliana

an uncertain event or a past event unknown to the parties

Requisites: 1. There is a credit in favor of plaintiff 2. The debtor has performed an act

Kinds: i. Suspensive – happening of condition gives rise to obligation

subsequent to the contract, giving advantage to other persons

Effects:

3. The creditor is prejudiced by the debtor’s act which are in favor of

1. effectivity is retroactive

2. no retroactivity with reference to fruits or interest & prescription

ii. Resolutory – happening of condition extinguishes obligation

3. creditor may preserve rights 4. debtor – recovery of payment by mistake or even w/o mistake

Effects: 1. no retroactive effect 2. obligation extinguished

Rules on loss, impairment, improvement of the subject matter pending the happening

3. restore to each other what was received plus interest/fruits

of suspensive condition/ term iii. Potestative – dependent on sole will of 1 Loss and Impairment (w/ fault or at expense of obligor) – Indemnity and damages Loss and Impairment (w/o fault or at

party; if on part of debtor & suspensive – void iv. Casual – dependent on chance or hazard v. Mixed – chance, or any of parties

expense of obligor) – Extinguished. Improvement (w/ fault or at expense of obligor) -

specific

performance

rescission & damages. If it improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary. (art 1189)

vi. With term – a) Positive – extinguished if time expires or indubitable of condition to happen b) Negative – effective from moment of time elapsed or evident it can’t happen

Improvement (w/o fault or at expense of obligor) – Creditor to bear damages. Creditor

vii. Impossible and illegal –

gets it. (1) To do – both the condition and the REQUISITES FOR THE AFOREMENTIONED

obligation are void

RULE: (2) Not to do –disregard the condition, the 1. There is a suspensive condition

obligation is still valid

2. There is an obligation to deliver a Impossible condition – physically not feasible

determinate thing 3. There

is

loss,

deterioration

or

improvement before the happening of the condition 4. The condition happens

Illegal condition – prohibited by law, good custom, public policy and morals

(3) With a period – future & certain, past &

3. impaired security- thru fault or fortuitous event

uncertain, payable when able

4. violate undertaking in consideration of When stipulation says “payable when able “ – it is with a period, remedy: a) agreement among parties b)

court shall fix period of payment when

parties unable to agree Kinds:

extension of period 5. attempts to abscond (4). Facultative – only one prestation has been agreed upon but another may be given in substitution Effect

of

loss

or

deterioration

thru

negligence, delay or fraud of obligor: a. Resolutory ( in diem ) – takes effect at of thing intended as substitute – no

once but terminate upon arrival of the day

a)

certain; Day certain – that which must

liability

necessarily come, although it may not be known when b. Suspensive ( ex die ) – takes effect on the day stipulated

b) of the substitute after substitution is made – with liability (5).

Alternative –

bound

by

different

WHEN COURTS MAY FIX PERIOD:

prestations but only one is due

a) art 1197

Right of choice: General rule: right of choice belongs to debtor

b) art 1197, 2nd paragraph 1. the choice is with debtor c) art 1191, 3rd paragraph (1) If only 1 is left either because of fortuitous d) art 1687, 2nd, 3rd, 4th sentence

events or due to debtor’s acts, perform what is left. The effect is that the debtor loses the right

e) art 1180 WHEN DEBTOR LOSES RIGHT TO PERIOD: 1. insolvency of debtor, unless security provided 2. did not deliver security

of choice (2) if the choice is limited because of the creditor’s acts, the debtor has the right of resolution and damages

(3) if all are lost due to debtor, the creditor is

d)

entitled to damages

maturity

(4) if some are lost, the debtor can choose

e) Made to all proper persons

Made in due time – before or upon

from the remaining f) 2. the choice is with creditor (1) if one or some are lost due to fortuitous

Made w/o conditions unless agreed by the

creditor g) May be waived, expressly or impliedly

event, the creditor chooses the remainder (6) Joint – presumption when 2 or more (2) if one or some is lost because of the fault

creditors or 2 or more debtors concur in one

of debtor, the creditor may choose either the

and the same obligation

remainder or the value of any which disappeared, and damages in either case (3) if all is lost due to the debtor’s fault, the creditor may choose the value of any if some is lost due to debtor’s fault, the creditor chooses the remainder

Effects: 1. Demand on one produces delay only with respect to the debt 2. Interruption in payment by one does not benefit or prejudice the other 3. Vices of one debtor to creditor has no

(4) if all is lost due to fortuitous event, obligation is extinguished

effect on the others 4. Insolvency of one debtor does not affect other debtors

(5) if all is lost due to creditor’s fault, the obligation is extinguished

(7) Solidary –

must

be

expressed

in

stipulation or provided by law or by nature of Requisites for making the choice:

obligation

a) Made properly so that creditor or his agent

Active – on the part of creditor or

will actually know

obligee

b) Made with full knowledge that a selection

Effects:

is indeed being made 1. Death of 1 solidary creditor c) Made voluntarily and freely

transmits share to heirs (but collectively)

2. Each creditor represents the

4. liability

of

principals,

other in the act of recovery of

accomplic...