FIRST PART –

OBLIGATIONS

Chapter 1 General Provisions

I. Concept - Obligations

a. Definition – under Article 1156 of the Civil Code

Art. 1156- An obligation is a juridical necessity to give, to do or not to do

i. Juridical necessity – Definition

Obligation is a juridical necessity because in case of

non-compliance, the courts of justice may be called upon to
enforce its fulfillment or, in default thereof, the economic value that
it represents. (De Leon)

b. Elements

i. Active Subject (Creditor or Obligee) is the person who is

entitled to demand the fulfillment of the obligation; he who has a
right (De Leon). They have the right to demand performance of
obligation (Soriano)

ii. Passive Subject (Debtor or Obligor) is the person who is

bound to the fulfillment of the obligation; he who has a duty; (De

Leon). The person from whom the performance of the obligation
is demandable (Soriano)

iii. Object or Prestation (Subject Matter of the Obligation) or the

conduct required to be observed by the debtor. It may consist in
giving, doing, or not doing. (see Art. 1232.) Without the
prestation, there is nothing to perform. In bilateral obligations
 (see Art. 1191.), the parties are reciprocally debtors and
creditors (De Leon).

Examples (from Soriano):

A. To give (real obligation), such as to deliver a ring or to give

10,000 PHP.

B. To do (positive personal obligation), such as to repair a car

or to paint a portrait.

C. Not to do (negative personal obligation), such as not to put

up a certain business at a certain locality within five (5)
years or not to soke at public places. The obligation not to
give is deemed included in obligation “not to do”

iv. Efficient Cause or Juridical Tie or Vinculum Juris is that which

binds or connects the parties to the obligation. The tie in an
obligation can easily be determined by knowing the source of
the obligation.

EXAMPLE (De Leon):

Under a building contract, X bound himself to construct a house

for Y for P1,000,000.00. Here, X is the passive subject, Y is the
active subject, the building of the house is the object or prestation,
and the agreement or contract, which is the source of the
obligation, is the juridical tie. Suppose X had already constructed
the house and it was the agreement that Y would pay X after the
construction is finished. X, then, becomes the active subject and Y,
the passive subject

c. Distinction between Natural and Civil Obligations (Article 1423).

From Jurado:
 1. Natural — when the obligation is in accordance with
natural law. Do not grant a right of action to compel their
performance.
2. Civil — when the obligation is in accordance with
positive law. Gives right to compel performance.

II. Sources of Obligation (Article 1157)

1. Law; -- when they are imposed by the law itself, e.g.,

obligation to pay taxes; obligation to support one’s family
(De Leon)

2. Contracts; -- when they arise from the stipulation of the

parties (Art. 1306.), e.g., the obligation to repay a loan
by virtue of an agreement (De Leon)

3. Quasi-contracts; -- when they arise from lawful,

voluntary and unilateral acts and which are enforceable
to the end that no one shall be unjustly enriched or
benefited at the expense of another (Art. 2142.), e.g.,
the obligation to return money paid by mistake or which
is not due. (Art. 2154.) (De Leon)

4. Acts or omissions punished by law; and -- when they

arise from civil liability which is the consequence of a
criminal offense (Art. 1161.), e.g., the obligation of a thief
to return the car stolen by him; the duty of a killer to
indemnify the heirs of his victim. (De Leon)

5. Quasi-delicts. -- when they arise from damage caused

to another through an act or omission, there being fault
or negligence, but no contractual relation exists between
the parties (Art. 2176.), e.g.,the obligation of the head of
a family that lives in a building or a part thereof to
answer for damages caused by things thrown or falling
from the same (Art. 2193.); the obligation of the
possessor of an animal to pay for the damage which it
may have caused. (Art. 2183.) (De Leon)
 As per Soriano, the enumeration stated above is exclusive. No obligation
arises outside of them.

b. Law (Article 1158)

Law is a rule of conduct, just and obligatory, laid down by legitimate authority for
the common observance and benefit (1 Sanchez Roman, 23 via Fidelito
Soriano)

Under Article 1158, special laws refer to all other laws not contained

in the Civil Code. (De Leon)

i. Not presumed and must be expressly stated

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 fore[1]seen, by the

provisions of

this Book.

Illustrative Cases (De Leon):

1. Liability of husband for medical assistance rendered to his wife

but
contracted by his parents.

Facts: X, by virtue of having been sent for by B and C, attended as

physician and rendered professional services to a daughter-in-law

of B

and C during a difficult and laborious childbirth.

Issue: Who is bound to pay the bill: B and C, the parents-in-law of

the

patient, or the husband of the latter?

Held: The rendering of medical assistance in case of illness is

comprised among the mutual obligations to which spouses are

bound by

way of mutual support. If spouses are mutually bound to support

each

other, there can be no question that when either of them by reason

of

illness should be in need of medical assistance, the other is to

render the

unavoidable obligation to furnish the services of a physician and is

liable

for all expenses, including the fees for professional services.

This liability originates from the above-mentioned mutual

obligation
which the law has expressly established between the married
couple. B

and C not having personally bound themselves to pay are not

liable.

(Pelayo vs. Lauron, 12 Phil. 453 [1909].)

2. Title to property purchased by a person for his own benefi t but

paid by

Another

Facts: X, of legal age, bought two vessels from B, the purchase

price

thereof being paid by C, X’s father. Subsequently, differences

arose

between X and C. The latter brought action to recover the vessels,

he

having paid the purchase price.

Issue: Is there any obligation on the part of X to transfer the

ownership

of the vessel to C?

Held: None. If any such obligation was ever created on the part of

X, said obligation must arise from law. But obligations derived from
law are not

presumed. Only those expressly determined in the Civil Code or in

special laws
 are demandable. Whatever right C may have against X either for
the recovery

of the money paid or for damages, it is clear that such payment

gave him no

title, either legal or equitable, to these vessels. (Martinez vs.

Martinez, 1 Phil.

647 [1902].)

Note: If X were a minor, the vessels would belong to C in

ownership

and usufruct under Article 161 of the old Civil Code. (now Art.
324.) Under

Article 1448,the payment may give rise to a gift or an implied trust.

c. Contracts (Article 1159)

ART. 1159. Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith.

i. Force of Law between the parties or Binding force simply states

that obligations arising from contracts are governed primarily by
the agreement of the contracting parties. Once perfected, valid
contracts have the force of law between the parties who are
bound to comply therewith in good faith, and neither one may
without the consent of the other, renege therefrom. (De Leon)

ii. Stipulations between the parties should not be contrary to law,

morals, good customs, public order, and public policy.

According to De Leon, as a source of obligation, a contract must

be valid and enforceable. (see Art. 1403.) A contract is valid
 (assuming all the essential elements are present, Art. 1318.) if it
is not contrary to law, morals, good customs, public order, and
public policy. It is invalid or void if it is contrary to law, morals,
good customs, public order, or public policy. (Art. 1306; see
Phoenix Assurance Co., Ltd. vs. U.S. Lines, 22 SCRA 675
[1968].) In the eyes of the law, a void contract does not exist. (Art.
1409.) Consequently, no obligations will arise.

iii. Difference between Obligations and Contracts

An obligation is the result of a contract (or some other source).
Hence, while a contract, if valid, always results in obligations, not
all obligations come from contracts. A contract always
presupposes a meeting of the minds; this is not necessarily true
for all kinds of obligations. Be it noted, however, from another
viewpoint that a contract may itself be the result of an obligation.
(Paras)

d. Quasi-Contracts (Article 1160)

Art. 1160. Obligations derived from quasi-contracts shall be subject to the

provisions of Chapter 1, Title XVII, of this Book.

A quasi-contract is that juridical relation resulting from a lawful, voluntary,

and unilateral act, and which has for its purpose the payment of indemnity to
the end that no one shall be unjustly enriched or benefited at the expense of
another. (See Art. 2142, Civil Code). (Paras)

i. Negotiorum Gesto – definition (Article 2144)

Art. 2144. Whoever voluntarily takes charge of the agency or
management of the business or property of another, without any
power from the latter, is obliged to continue the same until the
termination of the affair and its incidents, or to require the person
concerned to substitute him, if the owner is in a position to do so.
This juridical relation does not arise in either of these instances:
(1) When the property or business is not neglected or abandoned;

(2) If in fact the manager has been tacitly authorized by the owner.

In the first case, the provisions of Articles 1317, 1403, No. 1, and
1404
regarding unauthorized contracts shall govern.

In the second case, the rules on agency in Title X of this Book

shall be
applicable. (1888a)

ii. Solutio Indebiti – definition (Article 2154)

Art. 2154. If something is received when there is no right to

demand it, and it was unduly delivered through mistake, the
obligation to return it arises. (1895)

iii. Other Examples (Articles 2164 to 2175 of the Civil Code)

Art. 2164. When, without the knowledge of the person obliged to

give support, it is given by a stranger, the latter shall have a right
to claim the same from the former, unless it appears that he gave
it out of piety and without intention of being repaid. (1894a)

Art. 2165. When funeral expenses are borne by a third person,

without the knowledge of those relatives who were obliged to give
support to the deceased, said relatives shall reimburse the third
person, should the latter claim reimbursement. (1894a)

Art. 2166. When the person obliged to support an orphan, or an

insane or other indigent person unjustly refuses to give support to
the latter, any third person may furnish support to the needy
individual, with right of reimbursement from the person obliged to
give support. The provisions of this article apply when the father or
mother of a child under eighteen years of age unjustly refuses to
support him.

Art. 2167. When through an accident or other cause a person is

injured or becomes seriously ill, and he is treated or helped while
he is not in a condition to give consent to a contract, he shall be
liable to pay for the services of the physician or other person
aiding him, unless the service has been rendered out of pure
generosity.

Art. 2168. When during a fire, flood, storm, or other calamity,

property is saved from destruction by another person without the
knowledge of the owner, the latter is bound to pay the former just
compensation.

Art. 2169. When the government, upon the failure of any person to
comply with health or safety regulations concerning property,
undertakes to do the necessary work, even over his objection, he
shall be liable to pay the expenses.

Art. 2170. When by accident or other fortuitous event, movables

separately pertaining to two or more persons are commingled or
confused, the rules on co-ownership shall be applicable.

Art. 2171. The rights and obligations of the finder of lost personal
property shall be governed by Articles 719 and 720.

Art. 2172. The right of every possessor in good faith to

reimbursement for necessary and useful expenses is governed by
Article 546.

Art. 2173. When a third person, without the knowledge of the

debtor, pays the debt, the rights of the former are governed by
Articles 1236 and 1237.

Art. 2174. When in a small community a nationality of the

inhabitants of age decide upon a measure for protection against
 lawlessness, fire, flood, storm or other calamity, any one who
objects to the plan and refuses to contribute to the expenses but is
benefited by the project as executed shall be liable to pay his
share of said expenses.

Art. 2175. Any person who is constrained to pay the taxes of

another shall be entitled to reimbursement from the latter.

e. Acts or Omissions Punished by Law or Delicts (Article 1160)

Art. 1161. Civil obligations arising from criminal offenses shall be governed by
the penal laws, subject to the provisions of Article 2177, and of the pertinent
provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XVIII
of this Book, regulating damages.

i. Based on Article 100 of the Revised Penal Code

Article 100. Civil liability of a person guilty of felony. - Every person

criminally liable for a felony is also civilly liable. (RPC)

As per De Leon, however, there are offenses and special crimes

without civil liability. Examples are crimes of treason, rebellion,
illegal possession of fi rearm and gambling. But a person who is
not criminally liable may still be civilly liable

ii. Scope of Civil Liability in Delicts

1. Restitution

2. Reparation of the Damage Caused

3. Indemnification for Consequential Damages

f. Quasi-Delicts (Article 1162)

ART. 1162. Obligations derived from quasi-delicts shall be governed by the

provisions of Chapter 2, Title XVII of this Book, and by special laws. (1093a)

i. Definition (see Article 2176)

Art. 2176. Whoever by act or omission causes damage to another,

there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter. (1902a)

ii. Elements

As per De Leon, the following are the requisites:

1. There must be an act or omission by the defendant;

2. There must be fault or negligence of the defendant;

3. There must be damage caused to the plaintiff;

4. There must be a direct relation or connection of cause

and effect between the act or omission and the damage;
and

5. There is no pre-existing contractual relation between the

parties.

Chapter 2 Nature and Effects of Obligations

I. Kinds of Prestation

a. Obligation to Give
i. Duties of the Obligor when the Obligation is to give a Specific
or Determinate Thing:

1. To deliver the thing itself (Article 1244)

Art. 1244. The debtor of a thing cannot compel the creditor

to receive a different one, although the latter may be of the
same value as, or more valuable than that which is due.

2. To preserve the thing (Article 1163)

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.

a. Diligence of a good father of a family – Meaning

or Definition

- Means the diligence which an ordinary

prudent man would exercise with regard to his
own property (Soriano)

b. Exceptions

- “…unless the law or the stipulation of the

parties requires another standard of care.”1.
To deliver the accessions and accessories
(Article 1166)

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.

a. Accessories – Definition
Things joined to, or included with, the principal thing
for the latter’s embellishment, better use, or
completion, e.g., key of a house; frame of a picture;
 bracelet of a watch; machinery in a factory; bow of a
violin.

Note that while accessions are not necessary to the

principal thing, the accessory and the principal thing
must go together but both accessions and
accessories can exist only in relation to the principal.

b. Accessions – Definition

The fruits of, or additions to, or improvements upon,

a thing (the principal), e.g., house or trees on a land;
rents of a building; air conditioner in a car; profits or
dividends accruing from shares of stocks; etc.

The concept includes accession in its three forms of

building, planting, and sowing (see Art. 445.), and
accession natural, such as alluvion (see Art. 457.),
avulsion (see Art. 459.), change of course of rivers
(see Arts. 461-462.), and formation of islands. (see
Arts. 464-465.) “Fruits of the thing” are specifically
provided for in Article 1164.

c. Exceptions

2. To deliver the fruits (Article 1164)

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.

3. Answer for Damages in Case of Non-Fulfillment or

Breach (Article 1170)
 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.

ii. Duties of the Obligor when the Obligation is to give a Generic

or Indeterminate Thing.
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.

b. Obligations to Do (Article 1244, par. 2)

In obligations to do or not to do, an act or forbearance cannot be substituted by another

act or forbearance against the obligee's will.

i. Exception

c. Obligations Not to Do (Article 1244, par. 2)

II. In obligations to do or not to do, an act or forbearance cannot be substituted by

another act or forbearance against the obligee's will.
 i. Exception

III. Breach of Obligation

a. Distinction between substantial and casual/slight breach

b. Modes of Breach (Article 1170)

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

i. FRAUD (DECEIT OR DOLO) – Article 1171

Art. 1171. Responsibility arising from fraud is demandable in all

obligations. Any waiver of an action for future fraud is void.

1. Two Kinds of Dolo

a. Dolo Causante (Casual Fraud)

Causal fraud or dolo causante is the fraud employed

by one
 party prior to or simultaneous with the creation of the
contract

to secure the consent of the other. It is the fraud

used by a party

to induce the other to enter into a contract without

which the

latter would not have agreed to, taking into account

the

circumstances of the case. (De Leon)

b. Dolo Incidente (Incidental Fraud)

Article 1170 refers to incidental fraud (dolo incidente)

committed in the performance of an obligation
already existing because of contract. (De Leon)

2. Waiver of FUTURE fraud is void; Reason therefor

A waiver of an action for future fraud is void (no effect, as if

there is no waiver) as being against the law and public
policy. (Art. 1409[1].) A contrary rule would encourage the
perpetration of fraud because the obligor knows that even if
he should commit fraud he would not be liable for it thus
making the obligation illusory (De Leon)

3. Waiver of PAST FRAUD is allowed; Reason therefor

A past fraud can be the subject of a valid waiver because

the waiver can be considered as an act of generosity and
magnanimity on the part of the party who is the victim of the
fraud. Here, what is renounced is the effects of the fraud,
that is, the right to indemnity of the party entitled thereto.
(De Leon)