OBLIGATIONS (Arts.

1156-1304, Civil Code) 3) A passive subject known as the obligor or debtor,

CHAPTER 1: GENERAL PROVISIONS against whom the obligation is juridically
demandable; and
 Art. 1156. An obligation is a juridical necessity to 4) The fact, prestation or service which constitutes
give, to do or not to do. (n) the object of the obligation.

*Adopted from Sanchez Roman’s classic definition of an obligation

as “the juridical necessity to comply with a prestation.” Example:
 Under a building contract, X bound himself to build a
Meaning of Obligation: house for Y for P1, 000, 000.

 Derived from the Latin word,

 Here, X is the passive subject, Y is the active subject,
“obligatio” = tying/binding
the building of the house is the object or prestation,
 Tie or bond recognized by law by virtue of which and the agreement or contract, which is the source of
one is bound in favor of another to render the obligation, is the juridical tie
something (ex. Giving a thing, doing a certain act)
 Suppose X had already constructed the house and it
Civil Code Definition: was the agreement that Y would pay X after the
 The duty under the law of the debtor or obligor construction is finished, X then becomes the active
(he who has the duty of giving, doing or not subject a Y, the passive subject.
doing) when it speaks of obligation as a juridical
necessity. CLASSIFICATION OF OBLIGATIONS
Primary Classification (under the Civil Code):
Obligation is a Juridical Necessity because in case of 1) Pure and conditional (Arts. 1179-1192).
noncompliance, the courts of justice may be called *Pure, no condition; Conditional, the obligation
upon by the aggrieved party to enforce its fulfillment becomes effective only upon the happening of the
specified condition.
or, in default thereof, the economic value that it
2) With a period (Arts. 1193-1198).
represents.
*fulfillment of the obligation is deferred until a
specific period or date, known as the term, is
Civil and Natural reached.
 Civil Obligation - one which has a binding force in 3) Alternative and facultative (Arts. 1199-1206).
law, and which gives to the obligee or creditor *Alternative, one where several prestations are due
but the complete performance of one of them is
the right of enforcing it against the obligor or
sufficient to extinguish the obligation; Facultative, only
debtor in a court of justice. one prestation is due but the debtor may render
 Natural Obligation - one which cannot be another in substitution.
enforced by action, but which is binding on the 4) Joint and solidary (Arts. 1207-1222).
party who makes it in conscience and according *Joint, each obligor is liable only for a proportionate
share of the debt, unless otherwise stipulated;
to the natural law.
Solidary, each obligor is liable for the entire
obligation.
REQUISITES OF OBLIGATIONS 5) Divisible and indivisible (Arts. 1223-1225).
1) Juridical or legal tie which binds the parties to *Divisible, can be fulfilled partially, and each part can
be performed separately; Indivisible, must be fulfilled
the obligation, and which may arise from either
in its entirety—the obligation cannot be performed
bilateral or unilateral acts of persons; partially.
2) Active subject known as the obligee or creditor, 6) With a penal clause (Arts. 1226-1230).
who can demand the fulfillment of the *One where a penalty or punishment is imposed upon
obligation; the debtor in case of breach or non-performance of
the obligation.
There are, however, other classifications of a Secondary allowed to substitute another obligation for one
which is due and demandable.
Character which can be gathered from scattered
provisions of the Civil Code, such as:

1) Legal, conventional and penal; c) Positive and negative – positive, when the
2) Real and personal; obligor is obliged to give or do something;
3) Determinate and generic; negative, when the obligor must refrain from
4) Positive and negative; giving or doing something.
5) Unilateral and bilateral; d) Real and personal – real, when the obligation
6) Individual and collective; consists in giving something; personal, when
7) Accessory and principal. the obligation consists in doing or not doing
something.
Classification according to Sanchez Roman: e) Possible and impossible – possible, when the
obligation is capable of fulfillment in nature as
1. As to juridical quality:
well as in law; impossible, when the obligation
a) Natural – when the obligation is in accordance
is not capable of fulfillment either in nature or
with natural law.
in law.
b) Civil – when the obligation is in accordance
f) Divisible and indivisible – divisible, when the
with positive law.
obligation is susceptible of partial performance;
c) Mixed – when the obligation is in accordance
indivisible, when the obligation is not
with both natural and positive law.
susceptible of partial performance.
g) Principal and accessory – principal, when it is
2. As to parties:
the main undertaking; accessory, when it is
a) Unilateral and bilateral – unilateral, where
merely an undertaking to guarantee the
only one party is bound, and bilateral, where
fulfillment of the principal obligation.
both parties are mutually or reciprocally
bound.
4. As to perfection and extinguishment:
b) Individual and collective – individual, where
a) Pure – when the obligation is not subject to
there is only one obligor, and collective, where
any condition or term and is immediately
there are several obligors—the latter may be
demandable.
joint or solidary.
b) Conditional – when the obligation is subject to
a condition which may be suspensive, in which
3. As to object:
case the happening or fulfillment of the
a) Determinate and generic – determinate, when
condition results in the birth of the obligation,
the object is specific; generic, when the object
or resolutory.
is designated by its class or genus.
c) With a term or period (a plazo) – when the
b) Simple and multiple – simple, when there is
obligation is subject to a term or period which
only one undertaking; multiple, when there are
may be suspensive or from a day certain, in
several undertakings.
which case the obligation is demandable only
*Multiple obligations may be conjunctive, when all upon the expiration of the term.
of the undertakings are demandable at the same
time; or distributive, when only one undertaking out
Art. 1157. Obligations arise from:
of several is demandable.
1. Law;
*Distributive obligations, on the other hand, may be 2. Contracts;
alternative, when the obligor is allowed to choose 3. Quasi-contracts;
one out of several obligations which may be due and 4. Acts or omissions punished by law; and
demandable; or facultative, when the obligor is
5. Quasi-delicts.
 SOURCES OF OBLIGATIONS:  Art. 1159. Obligations arising from contracts have
1. Law – when they are imposed by the law itself. the force of law between the contracting parties
2. Contracts – when they arise from the and should be complied with in good faith.
stipulation (agreement) of the parties. Obligations Arising from Contracts
3. Quasi-contracts – when they arise from the - A contract is a meeting of minds between two
lawful, voluntary, and unilateral acts which are persons whereby one binds himself, with respect
enforceable to the end that no one shall be to the other, to give something or to render some
unjustly enriched or benefited at the expense service.
of another (Art. 2142.) In a sense, these - Contracts are perfected by mere consent—these
obligations may be considered as arising from contracts are commonly called consensual
law. contracts.
4. Crimes or acts or omissions punished by law – - Once the contract is perfected, the valid contract
when they arise from civil liability which is the has the force of law binding the parties to comply
consequence of a criminal offense. (Art. 1161.) therewith in good faith, where neither one may
5. Quasi-delicts or torts – when they arise from renege therefrom without the consent of the
damage caused to another through an act or other.
omission, there being fault or negligence, but - There are certain contracts, however, called real
no contractual relation exists between the contracts, such as deposit, pledge and
parties (Art. 2176.) commodatum, which are not perfected until the
delivery of the object of the obligation.
*Actually, there are only two (2) sources: law and contracts,
because obligations arising from quasi-contracts, delicts, and  Art. 1160. Obligations derived from quasi-
quasi-delicts are really imposed by law. (Leung Ben vs. O’Brien,
contracts shall be subject to the provisions of
38 Phil. 182)
Chapter 1, Title XVII, of this Book.
 Art. 1158. Obligations derived from law are not
Obligations Arising from Quasi-Contracts
presumed. Only those expressly determined in
 Quasi-contracts are those juridical relations arising
this Code or in special laws are demandable,
from lawful, voluntary and unilateral acts, by
and shall be regulated by the precepts of the
virtue of which the parties become bound to each
law which establishes them; and as to what has
other, based on the principle that no one shall be
not been foreseen, by the provisions of this
unjustly enriched or benefited at the expense of
Book.
another.
Obligations Arising from Law
 Unlike other obligations, those derived from law The most important of these juridical relations which
can never be presumed. Consequently, only those are recognized and regulated by the Civil Code are
expressly determined in the Civil Code or in negotiorum gestio and solutio indebiti:
special laws are demandable. These obligations
shall be regulated by the precepts of the law  Negotiorum gestio – is the juridical relation which
which establishes them, and as to what has not arises whenever a person voluntarily takes charge
been foreseen, by the provisions of Book IV of the of the agency or management of the business or
Civil Code. property of another without any power or
authority from the latter.
*According to Manresa, when the law establishes the
obligation and the act or condition upon which it is based is  Solutio indebiti – on the other hand, is the juridical
nothing more than a factor for determining the moment when
relation which arises whenever a person unduly
it becomes demandable, then the law itself is the source of the
obligation. delivers a thing through mistake to another who
 has no right to demand it. In this type of quasi- 3) There must be damage caused;
contract, once the delivery has been made, the 4) There must be a direct relation or connection of
person to whom the delivery is unduly made shall cause and effect between the act or omission
have the obligation to return the property and the damage; and
delivered or the money paid. 5) There is no pre-existing contractual relation
between the parties.
 Other examples of quasi-contracts – They are *Culpa contractual, breach of contract; Culpa extra-contractual
provided in Articles 2164 to 2175 of the Civil Code. (culpa aguiliana), guilty of an act or failure to act, which causes
The cases that have been classified as quasi- damages to somebody else without any type of contractual
contracts are of infinite variety, and when for relationship between the defendant and the victim.

some reason recovery cannot be had on a true

CHAPTER 2: NATURE AND EFFECTS OF OBLIGATIONS
contract, recovery may be allowed on the basis of a
quasi-contract.  Art. 1163. Every person obliged to give something is
also obliged to take care of it with the proper
 Art. 1161. Civil obligations arising from offenses diligence of a good father of a family, unless the law
shall be governed by the penal laws, subject to the or the stipulation of the parties requires another
provisions of Article 2177, and of the pertinent standard of care.
provisions of Chapter 2, Preliminary Title, on Human
Relations, and of Title XVIII of this Book, regulating  Art. 1164. The creditor has a right to the fruits of
damages. the thing from the time the obligation to deliver it
arises. However, he shall acquire no real right over
Obligations Arising from Criminal Offenses It until the same has been delivered to him. (1095)
- As a rule, every person liable for a felony is also
civilly liable. This principle is based on the fact  Art. 1165. When what is to be delivered is a
that, generally, a crime has a dual aspect — the determinate thing, the creditor, in addition, to the
criminal aspect (to correct) and the civil aspect (to right granted him by Article 1170, may compel the
repair damages.) debtor to make the delivery.
- The basis of the civil liability is the criminal liability
If the thing is indeterminate or generic, he may ask
itself.
that the obligation be complied with at the
expense of the debtor.
 Art. 1162. Obligations derived from quasi-delicts
shall be governed by the provisions of Chapter 2, If the obligor delays, or has promised to deliver the
Title XVII of this Book, and by special laws. same thing to two or more persons who do not
have the same interest he shall be responsible for
Obligations arising from quasi-delicts any fortuitous event until he has effected the
- A quasi-delict is an act or omission by a person delivery.
(tortfeasor) which causes damage to another in
his person, property, or rights giving rise to an  Art. 1166. The obligation to give a determinate
obligation to pay for the damage done, there thing includes that of delivering all its accessions
being fault or negligence but there is no pre- and accessories, even though they may not have
existing contractual relation between the parties. been mentioned.
(Art. 2176.)
Specific things and generic thing distinguished.
Requisites of quasi-delict:  Determinate (specific) – Cannot be substituted
1) There must be an act or omission; with another although the latter is of the same
2) There must be fault or negligence;
 kind and quality without the consent of the 2) To take care of the thing with the proper
creditor. (Art. 1244.) diligence of a good father of a family.
 Generic – is identified only by its specie. The 3) To deliver all accessions and accessories of the
debtor can give anything of the same class as thing, even though they may not have been
long as it is of the same kind. mentioned. (Art. 1166)

RIGHTS AND OBLIGATIONS OF CREDITOR & DEBTOR *The term “accessions’’ signifies all of those things which are
produced by the thing which is the object of the obligation as well
Rights of creditor in determinate obligations: as all of those which are naturally or artificially attached thereto.
1) To compel specific performance. This right is (Ex. House or trees on a land)
expressly recognized by the first paragraph of
Art. 1165 of the Code which states that the *“Accessories,’’ on the other hand, must be understood in its
current and popular sense. It signifi es all of those things which have
creditor may compel the debtor to make the
for their object the embellishment, use or preservation of another
delivery. thing which is more important and to which they are not
2) To recover damages for breach of the incorporated or attached. (Ex. key of a house)
obligation. Besides the right to compel specific c
performance, the creditor has also the right to 4) To be liable for damages in case of breach of the
recover damages from the debtor in case of obligation by reason of delay, fraud, negligence or
breach of the obligation through delay, fraud, contravention of the tenor thereof. This
negligence or contravention of the tenor thereof. obligation is expressly imposed upon the debtor
by the provision of Art. 1170 of the Code.
Rights of creditor in generic obligations.
1) To ask for performance of the obligation. Obligations of debtor in generic obligations:
Whether the object of an obligation to give is 1) To deliver a thing which is neither of superior
determinate or generic, it is undeniable that the nor inferior quality. Consequently, the creditor
creditor has the right to ask for the cannot demand a thing of superior quality.
performance of the obligation. 2) To be liable for damages in case of breach of the
2) To ask that the obligation be complied with at obligation by reason of delay, fraud, negligence or
the expense of the debtor. If the debtor refuses contravention of the tenor thereof.
or is unable to comply with his obligation, the
creditor can even ask that the obligation be  Art. 1168. When the obligation consists in not
complied with at the expense of such debtor. doing, and the obligor does what has been
3) To recover damages for breach of the forbidden him, it shall also be undone at his
obligation. In case of failure of the debtor to expense.
comply with his obligation, or in case of breach
by reason of fraud, negligence, delay or Obligations Not To Do; Effects of Breach
contravention of the tenor of the obligation, the - In obligations not to do (negative personal
creditor can demand for indemnification for obligations), the object of the obligation is fulfilled
damages. or realized so long as that which is forbidden is
not done by the obligor.
Obligations of debtor in determinate obligations: - If the obligor does what has been forbidden him,
1) To perform the obligation specifically. In two remedies are available to the obligee — to
obligations to give a determinate thing, the have it undone at the expense of the obligor in
obligor or debtor binds himself to deliver to the accordance with Art. 1168 and to ask for damages
obligee or creditor a thing or object which is in accordance with Art. 1170.
particularly designated or physically segregated
from all others of the same class.
 Art. 1169. Those obliged to deliver or to do which is expected of a good father of a family shall
something incur in delay from the time the obligee be required.
judicially or extrajudicially demands from them the
fulfillment of their obligation. BREACH OF OBLIGATIONS

However, the demand by the creditor shall not be - In general, the breach of an obligation may be
necessary in order that delay may exist: either voluntary or involuntary.
1) When the obligation or the law expressly so - It is voluntary if the debtor or obligor in the
declares; or performance of his obligation is guilty of default
2) When from the nature and the circumstances of (mora), or fraud (dolo), or negligence (culpa), or in
the obligation it appears that the designation of any manner contravenes the tenor thereof.
the time when the thing is to be delivered or the - It is involuntary if he is unable to comply with his
service is to be rendered was a controlling obligation because of an event which cannot be
motive for the establishment of the contract; or foreseen, or which, though foreseen, was
3) When demand would be useless, as when the inevitable. In the first he is liable for damages, in
obligor has rendered it beyond his power to the second he is not.
perform. In reciprocal obligations, neither party
incurs in delay if the other does not comply or is Three kinds of default or mora:
not ready to comply in a proper manner with 1) Mora solvendi or the delay of the obligor or
what is incumbent upon him. From the moment debtor to perform his obligation. This delay is
one of the parties fulfils his obligation, delay by called mora solvendi ex re when the obligation
the other begins.43 is an obligation to give or mora solvendi ex
persona when the obligation is an obligation to
 Art. 1170. Those who in the performance of their do.
obligations are guilty of fraud, negligence, or delay, 2) Mora accipiendi or the delay of the obligee or
and those who in any manner contravene the tenor creditor to accept the delivery of the thing
thereof, are liable for damages. which is the object of the obligation.
3) Compensatio morae or the delay of the parties
 Art. 1171. Responsibility arising from fraud is or obligors in reciprocal obligations.
demandable in all obligations. Any waiver of an
action for future fraud is void. Three requisites which should be present in order that
the obligor or debtor may be considered in default:
 Art. 1172. Responsibility arising from negligence in 1) The obligation is demandable and already
the performance of every kind of obligation is also liquidated;
demandable, but such liability may be regulated by 2) The obligor or debtor delays performance; and
the courts, according to the circumstances. 3) The creditor requires the performance
judicially or extrajudicially. (Aerospace
 Art. 1173. The fault or negligence of the obligor Chemical Industries, Inc. vs. CA, 315 SCRA94.)
consists in the omission of that diligence which is *In the case of Bricktown Devt. Corp. vs. Amor Tierra Devt. Corp.,
required by the nature of the obligation and 239 SCRA 126 (1994), the Court ruled that a grace period is not an
corresponds with the circumstances of the persons, obligation of the debtor but a right.

of the time and of the place. When negligence

shows bad faith, the provisions of Articles 1171 and Voluntary Breach through Fraud or Dolo
2201, paragraph 2, shall apply. - The second kind of voluntary breach of an
obligation regulated by the Civil Code is that which
If the law or contract does not state the diligence takes place by reason of fraud or dolo. According
which is to be observed in the performance, that to Manresa, fraud or dolo consists in the conscious
 and intentional proposition to evade the normal civil liability arising from a crime under Article
fulfillment of an obligation. This type of fraud, 100 of the Revised Penal Code (supra.), or create
which is present during the performance of an an action for quasi- delict under Article 2176, et
obligation, must not be confused with the causal seq., of the Civil Code.
or incidental fraud, which is present at the time of
the birth of an obligation. Diligence – is the attention and care required of a
person in a given situation. Whether or not the
 Dolo causante – determines or is the essential negligence of the obligor is excusable will depend on
cause of the consent, while the degree of diligence required of them.
 Dolo incidente – refers only to some particular or
accident of the obligation. Kinds of diligence are required:
1) That agreed upon by the parties, orally or in
*The effects of dolo causante are the nullity of the contract and the
indemnification of damages, and dolo incidente also obliges the writing;
person employing it to pay damages. 2) In the absence of stipulation, that required by
*This type of fraud, which is present during the performance of an law in the particular case (like the extraordinary
obligation, must not be confused with the causal or incidental diligence required of common carriers); and
fraud, which is present at the time of the birth of an obligation. 3) If both the contract and law are silent, then the
diligence expected of a good father of a family.
Voluntary Breach through Negligence or Culpa (par. 2; see Art. 1163.)
- The third kind of voluntary breach of an
obligation regulated by the Civil Code is that which  Art. 1174. Except in cases expressly specified by the
takes place by reason of the negligence or culpa of law, or when it is otherwise declared by stipulation,
the debtor or obligor. or when the nature of the obligation requires the
- It consists in the omission of that diligence which assumption of risk, no person shall be responsible
is required by the nature of the obligation and for those events which could not be foreseen, or
corresponds with the circumstances of the which though foreseen, were inevitable. (1105a)
persons, of the time and of the place.
FORTUITOUS EVENT
Kinds of negligence according to source of obligation:
- A fortuitous event is any event which cannot be
1) Contractual negligence (culpa contractual) or
foreseen, or which, though foreseen, is inevitable.
negligence in contracts resulting in their breach.
Stated otherwise, it is an event which is either
Article 1172 refers to culpa contractual. This kind
impossible to foresee or impossible to avoid.
of negligence is not a source of obligation. (Art.
- The essence of a fortuitous event consists of
1157.) It merely makes the debtor liable for
being a happen-ing independent of the will of the
damages in view of his negligence in the
debtor and which happening, makes the normal
fulfillment of a pre-existing obligation (Arts. 1170,
fulfillment of the obligation impossible
1172.);
2) Civil negligence (culpa aquiliana) or negligence
Requisites of a fortuitous event:
which by itself is the source of an obligation
1) The event must be independent of the human
between the parties not so related before by any
will or at least of the debtor's will;
pre-existing contract. It is also called tort or quasi-
2) The event could not be foreseen, or if foreseen,
delict (Art.1162; see Art. 2176.); and
is inevitable;
3) Criminal negligence (culpa criminal) or
3) The event must be of such a character as to
negligence resulting in the commission of a
render it impossible for the debtor to comply
crime. (Arts. 3, 365, Revised Penal Code.) The
with his obligation in a normal manner;
same negligent act causing damages may produce
 4) The debtor must be free from any participation by the debtor designed to defraud the
in, or the aggravation of, the injury to the former.
creditor, that is, there is no concurrent
negligence on his part.  Art. 1178. Subject to the laws, all rights acquired in
virtue of an obligation are transmissible, if there
*The absence of any of the above requisites (all of which must be has been no stipulation to the contrary. (1112)
proved) would prevent the obligor from being exempt from liability.

*Mere pecuniary inability or poverty is not an excuse for the non-

Rights that do not fall under the exceptions are
fulfillment of an obligation. Neither is mere difficulty to foresee the considered assignable or alienable, but as a general
happening of an event; it is different from the impossibility to rule, rights are transmissible except for the following:
foresee the same. As stated earlier, the event must be
unforeseeable, or even if it could be foreseen, must be impossible a) those not transmissible by their nature like
to avoid. purely personal rights;
b) those not transmissible by provision of law
 Art. 1175. Usurious transactions shall be governed
by special laws.

Usury, as defined in Black’s Law Dictionary, is the

charging of exorbitant and unconscionable rate of
interest, higher than the interest allowed by law. In
layman’s term, it means loan sharking.

 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 install-
ments have been paid. (1110a)

 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. (1111)

1) Accion subrogatoria is an action where the

creditor hose claims had not been fully
satisfied, may go after the debtors (third
persons) of the defendant-debtor.
2) Accion pauliana is an action where the
creditor files an action in court for the
rescission of acts or contracts entered into