OBLIGATIONS

I. DEFINITION

Q: What is an obligation?

ANS: An obligation is a judicial necessity to give, to do or not to do (CIVIL

CODE Art. Art. 1156)

II. ELEMENTS OF AN OBLIGATION

Q: What are the elements of an obligation?

ANS. The elements are the following (JAPO)

1. Vinculum juris or Judicial Tie – which binds the parties to the
obligation, and which may arise from either bilateral or unilateral acts
of persons;
2. Archive subject - known as the oblige or creditor, who can demand the
fulfillment of the obligation;
3. Passive subject – known as the obligator or debtor, against whom the
obligation is juridically demandable; and
4. Object – the fact, prestation or service which constitutes the object of
obligation (Jurado, Comments and Jurisprudence on Obligations and
Contracts (2010) p. 2) [hereinafter JURADO, Obligations and
Contracts].

Note: FORM is sometimes added as a fifth requisite but as a general rule however,
it cannot be considered as essential.

III. DIFFERENT KIND OF PRESTATIONS

Q: What are the different kinds of prestations?

ANS: The different kinds of Prestations are the following:

1. From the viewpoint of performance, it may be

a. Positive obligation or the obligation to give or to do, or
b. Negative obligation or the obligation not to do.

2. From the viewpoint of subject matter or prestation, it may be:

a. A personal obligation or the obligation to do or not to do; or
b. A real obligation or the obligation to give:
i. Determine or specific thing – object is particularly designated
or physically segregated from all others of the same class;
ii. Generic p object is designated merely by its class or genus;
iii. Limited generic thing – when the generic objects are
confined to a particular class, e.g. an obligation to deliver
one of my horses (4 Tolentino, p. 91).
3. From the viewpoint of sanctions, it may be:
a. Civil obligations which give a right to compel their performance; or
b. Natural obligations which is not based on positive law but on equity
and natural law ; do not grant a right of action to enforce their
 performance, but after voluntary fulfillment by the obligor, they
authorize retention of what has been delivered or rendered by
reason thereof.

IV. CLASSIFICATION OF OBLIGATIONS

Q: What are the classifications of obligations?

ANS: The classifications of obligations are the following:

1. As to the primary classification under the Civil Code:

a. Pure and conditional (CIVIL CODE, Arts. 1179-1192)
b. With a period (Arts. 1193-1198)
c. Alternative and facultative (Arts. 1199-1206)
d. Joint and solidary (Arts. 1207-1222)
e. Divisible and indivisible (Arts. 1223-1225); and
f. With a penal cause (Arts. 1226-1230)

2. Classification of a secondary character gathered from scattered

provisions of the civil code:
a. Legal, conventional, and penal (Arts. 1158-1162)
b. Real and personal
c. Determinate and generic (Arts. 1163-1166)
d. Positive and negative (Arts. 1167-1168)
e. Unilateral and bilateral (Arts. 1169-1191)
f. Individual and collective (Arts. 1207, 1223); and
g. Accessory and principal (Arts. 1166, 1226).

3. As to juridical quality:
a. Natural – the obligation is in accordance with natural law;
b. Civil – the obligation is in accordance with positive law; and
c. Mixed – the obligation is in accordance with both natural and
positive law

4. As to parties:
a. Unilateral and bilateral – unilateral, where only one party is bound;
and bilateral, where both parties are mutually and reciprocally
bound; and
b. Individual and collective – individual, where there is only one
obligor; and collective, where there are several obligors. The latter
may be (1) joint, when each obligor is liable only for his
proportionate share of the obligation, or (2) solidary, when each
obligor may be held liable for the entire obligation.

5. As to object:
a. Determinate and generic – determinate, when the object is specific;
and generic, when the object is designated by its class or genus;
b. Simple and multiple – simple, when there is only one undertaking;
and multiple, when there are several undertakings. Multiple
undertakings may be:
 i. Conjunctive – when all the undertakings are demandable at
the same time; or
ii. Distributive – when only one undertaking out of several is
demandable. Distributive obligations may be:
1. Alternative – when the obligor is allowed to choose
one out of several obligations which may be due and
demandable; or
2. Facultative – when the obligor is allowed to substitute
another obligation for one which is due and
demandable.
c. Positive and negative – positive, when the obligor is obliged to give
or do something; and negative, when the obligor must refrain from
giving or doing something;
d. Real and personal – real, when the obligation consists in giving
something; and personal, when the obligation consists in doing or
not doing something;
e. Possible and impossible – possible when the obligation is capable of
fulfillment in nature as well as in law; and impossible, when the
obligation is not capable of fulfillment either in nature or in law;
f. Divisible and indivisible – divisible, when the obligation is
susceptible of partial performance; and indivisible, when the
obligation is not susceptible of partial fulfillment; and
g. Principal and accessory – principal, when it is the main
undertaking; and accessory, when it is merely an undertaking to
guarantee the fulfillment of the principal obligation.

6. As to perfection and extinguishment :

a. Pure – the obligation is not subject to any condition or term and is
immediately demandable;
b. Conditional – the obligation is subject to a condition which may
be:
1. Suspensive – in which case the happening or
fulfillment of the condition results in the birth of the
obligation; or
2. Resolutory – in which case the happening or
fulfillment of the condition results in the
extinguishment of the obligation;
3. With a term or period – the obligation is subject to a
term or period which may be:
a. Suspensive or from a day certain – the
obligation is demandable only upon the
expiration of the term; or
b. Resolutory or to a day certain – the obligation
terminates upon the expiration of the term
(JURADO, Obligations and Contracts, supra at
3-6).
 V. SOURCES OF OBLIGATIONS/RIGHTS

Q: What are the sources of obligations?

ANS: Obligations arise from:

1. Law
2. Contracts
3. Quasi-contracts
4. Acts or omissions punished by law; and
5. Quasi-delicts (CIVIL CODE Art. 1157)

Note: The list of sources is EXCLUSIVE (Sagrada Orden v. NACOCO, G.R. No.
L-3756, June 30, 1952)

A. A SINGLE ACT OMISSION MAY GIVE RISE TO DIFFERENT CAUSES OF

ACTION.

Q: Can a single act or omission give rise to different causes of action?

ANS: Yes. A single negligent act gives rise to at least two separate and
independent liabilities, namely the civil liability arising from a crime and
the liability arising from negligence. These concepts of faults are so
distinct from each other that the exoneration of one does not result to the
exoneration of the other (Cancio Jr. v. Isip, G.R. No. 133978, November
12, 2002).
Note: Sec. 3, Rule 111 and Art. 2177, however, prohibit double recovery.

B. NATURAL OBLIGATIONS

Q: What is a natural obligation?

ANS: A natural obligation is not based on positive law but on equity and
natural law; it does not grant a right of action to enforce its performance,
but after voluntary fulfillment by the obligor, it authorizes retention of
what has been delivered or rendered by reason thereof (CIVIL CODE, Art.
1423).

Q: What are the differences between civil obligations and natural

obligations?

ANS: The differences are the following:

1. As to the governing law, civil obligation is provided under Art. 1156,

while natural obligation is provided under Art. 1423.
2. As to basis, civil obligation is based on positive law, while natural
obligation is based on equity and natural law; and
 3. As to enforceability, civil obligation is enforceable by court action,
while natural obligation is not enforceable by court action (CIVIL
CODE, Arts. 1156, 1423).

Q: What are the kinds of quasi-contract?

ANS: The kinds of quasi-contract are as follows:

1. Solutio Indebiti, which exists when:

a. Something is received;
b. When there is no right to demand it; and
c. It was unduly delivered through mistake.
Note: consequently, the obligation to return it arises (CIVIL CODE, Art.
2154).

2. Negotiorum Gestio, which exists when one:

a. Voluntarily takes charge of the agency or management of the
business or property of another; and
b. Without any power from the latter.
Note: The officious manager 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 position to do so (CIVIL
CODE, Art. 2144).

Q: What is a Quasi-delict?

ANS: it is an act or omission which causes damage to another, there

being fault or negligence, giving rise to the obligation to pay for the
damage done. There must be no pre-existing contractual relation
between the parties (CIVI CODE, Art. 2176).

Q: Does the term “fault or negligence” include criminal act?

ANS: Yes. “Fault or negligence” in Art. 2176 covers not only acts “not
punishable by law” but also acts criminal in character, whether
intentional and voluntary or negligent. Consequently, a separate civil
action lies against the offender in a criminal act whether or not he is
found guilty or acquitted, provided the offended party is not allowed, if
the offender is actually charged also criminally to recover damages on
both scores, and would be entitled in such eventuality only to the
bigger award of the two, assuming the awards made in the two case
vary (Elcano v Hill, G.R. No. L-24803, May 26, 1977)

VI. NATURE AND EFFECT OF OBLIGATIONS

A. OBLIGATION TO GIVE

A Determinate or Specific Thing

Q: What are the obligations of a person obliged to give a determinate or specific

thing?

ANS: The obligations are the following:

1. To perform the obligation specifically (JURADO, Obligations and Contracts,
supra at 47);
2. To take care of the thing with the proper diligence of a good father of a
family unless another standard of care is required by law or stipulated by
the parties (CIVIL CODE, art. 1163);
 3. To deliver all accessions and accessories of the thing although not
mentioned (CIVIL CODE, art. 1166); and
4. To be liable for damages in case of delay, fraud, negligence or
contravention of tenor thereof (CICIL CODE, Art. 1170).

Note: Accessions signifies all of those things which are produced by the thing
which is the object of the obligation as well as all of those which are
incorporated or attached thereto, either naturally or artificially (CICIL CODE,
Art. 440). Accessories signifies all of those things which have for their object
the embellishment, use or preservation of another thing which is more
important and to which they are not incorporated or attached (Jurado,
Obligations and Contracts, supra at 48).

Q: What are the rights of the obligee or creditor in an obligation to give a

determinate or specific thing?

ANS: The rights are the following:

1. To compel specific performance with right to be indemnified for damages
(CIVIL CODE, Art. 1165);
2. To the fruits of the thing from the time the obligation to deliver it arises
(CIVIL CODE, Art. 1164);
3. If the obligor delays, or has promised to deliver the same thing to two or
more persons who do not have the same interest, the creditor has the
right to hold the obligor responsible for any fortuitous event until the
latter has effected delivery (CIVIL CODE, Art. 1165, Par.3);
4. To demand rescission of the obligation with right to recover damages,
should the obligation be reciprocal (CIVIL CODE, Art. 1191); and
5. To demand payment of damages if the other party is guilty of fraud,
negligence, or delay in the performance of their obligation, and those
rules in any manner contravene the tenor thereof (CIVIL CODE, Art.
1170).

An Indeterminate or Generic Thing

Q: What are the duties of a debtor in an obligation to give an indeterminate

or generic thing?

ANS: The duties are the following:

1. To deliver a thing which is neither of superior nor inferior quality,
taking into consideration the purpose and circumstances of the
obligation (CIVIL CODE, Art. 1246); and
2. To be liable for damages in case of delay, fraud, negligence or
contravention of the tenor thereof (CIVIL CODE, Art. 1170).

Q: What are the rights of the creditor in an obligation to give an

indeterminate or generic thing?

ANS: The rights are the following:

1. To ask for performance of the obligation (JURADO, Obligations and
Contracts, supra at 46);
2. To ask that the obligation be complied with at the expense of the
debtor (CIVIL CODE, Art. 1165, Par.2); and
3. To recover damages in case of fraud, negligence, delay, or
contravention of the tenor of the obligation (CIVIL CODE, Art.
1170).

B. OBLIGATION TO DO OR NOT TO DO
 Q: If the person obliged to do something fails to perform the obligation, or
does it in contravention of the tenor of the obligation, what are the rights of
the oblige?

ANS: The obligee or creditor has the right:

1. To have the same executed at the cost of the obligor (CIVIL CODE,
Art. 1167);
2. He may ask that it may be decreed that what has been poorly done
be undone (CIVIL CODE, Art. 1167); and
3. To recover damages because of breach of obligation (CIVIL CODE,
Art. 1170).

Note: When the obligor has an obligation to do, not to give, he may not be
compelled to carry out the obligation. The law recognizes the individual’s
freedom or liberty to do an act he has promised to do, or not to do, as he
pleases. It falls within what Spanish commentators call a very personal act
(acto personalismo), of which courts may not compel compliance, as it
considered an act of violence to do so (Woodhouse v. Halili, G.R. No. L-4811,
July 31, 1953).

Q: When the obligation consists in not doing and the obligor does what has
been forbidden, what is the remedy of the obligee?

ANS: The obligee has the right:

1. To have the same undone at the expense of the obligor (CIVIL
CODE, Art. 1168); and
2. To ask for damages because of breach of obligation (CIVIL CODE,
Art. 1170)

C. BREACH OF OBLIGATIONS

Q: What are the kinds of default or mora?

ANS: The kinds of default are the following:

1. Mora Solvendi – delay of the debtor to perform his obligation. It
may be:
a. Ex re – in obligations to give; or
b. Ex persona – in obligations to do.
2. Mora Accipiendi – delay of the creditor in accepting delivery of the
thing which is the object of the obligations. The requisites are:
a. Offer or performance by the debtor who has the required
capacity;
b. Offer is to comply with the prestation as it should be performed;
and
c. Creditor refuses the performance without just cause.
3. Compensation Morae – Delay of the parties or obligors in reciprocal
obligations (JURADO, Obligations and Contracts, supra at 57).

Q: When does a person obliged to deliver or to do something incur in delay?

ANS: Those obliged to deliver or to do something incur in delay from the time
the oblige judicially or extrajudicially 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;

2. When from the nature and the circumstances of the obligation it
appears that the designation of time when the thing is to be
 delivered or the service is to be rendered was a controlling motive
for the establishment of the contact; and
3. When demand would be useless, as when the obligor has rendered
it beyond his power to perform.

Note: in reciprocal obligations, neither party incurs in delay of the other does
not comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment of the parties fulfills his obligations,
delay by the other begins (CIVIL CODE, Art. 1169).

Fraud in the Performance of Obligation

Q: What is Fraud or dolo?

ANS: Civil fraud may be classified into:

1. Fraud or dolo in the performance of an obligation (dolo incidente);

and
2. Fraud or dolo in the constitution or establishment of an obligation
(dolo causante).

The two may be distinguished from each other as follows:

Fraud in performance Fraud in constitution

Commitment of existence
Present only during the performance Present only at the time of the birth
of a pre-existing obligation of the obligation
Purpose of employment
Employed for the purpose of evading Employed for the purpose of
the normal fulfillment of an securing the consent of the other
obligation party to enter into the contract
Result
Result in the non-fulfillment of the Results in the violation of consent, it
obligation is the reason for the other party
upon whom it is employed for
entering the contract
(JURADO, Obligations and Contracts, supra at 63)

Q: Is the responsibility arising from fraud in the performance of an obligation

demandable?

ANS: Yes. Responsibility arising from fraud is demandable in all obligations. Any
waiver of an action for future fraud is void. (CIVIL CODE, Art. 11t1).

Negligence (culpa) in the Performance of Obligation

Q: What is fault or negligence?

ANS: 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 place, 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 (CIVIL CODE,
Art. 1173).

Q: Is the responsibility arising from negligence in the performance of the

obligation demandable?

ANS: Responsibility arising from negligence in the performance of every kind of

obligation is also demandable but such liability may be regulated by the courts,
according to the circumstances (CIVIL CODE, Art. 1472).

Q: What are the kinds of negligence?

ANS: The kinds are the following:

1. Civil Negligence, which may be:

a. Culpa contractual – fault or negligence of obligor by virtue of which
he is unable to perform his obligation arising from a pre-existing
contract; or
b. Culpa aquiliana/quasi-delict – fault or negligence of a person,
whose failure to observe the required diligence to the obligation
causes damage to another.
2. Culpa Criminal – fault or negligence which results in the commission of a
crime (JURADO, Obligations and Contracts, supra at 65-66).

Q: What instances does the law require a particular degree of diligence to be

observed?

ANS: The general rule is that the required diligence of a good father of a
family (CIVI CODE, Art. 1173, Part 2). The following are the exceptions:

1. In cases of common carrier, which from the nature of their business and
for reasons of public policy, is bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the passengers
transported by them, according to the circumstances of each case (CIVIL
CODE, Art. 1733); and
Note: As a rule, if the goods are lost, destroyed or deteriorated or in case
of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that
they observed extraordinary diligence (CIVIL CODE, Arts. 1735 and
1756).

2. In case of banks, wherein the degree of diligence required of banks, is

more than that of a good father of a family where the fiduciary nature of
their depositors is concerned. In other words, banks are duty bound to
treat the deposit accounts of their depositors with the highest degree of
care (Reyes v. CA G.R. No. 118942m august 15, 2001).

Q: What is the diligence of a good father of a family?

ANS: the reasonable diligence which an ordinary prudent person would have
done under the same circumstances (Cusi v. Philippine National Railways,
G.R. No. L-29889, May 31, 1979).

Contravention of the Tenor of Obligation

Q: What acts are included in the phrase “in any manner contravene the
tenor” of the obligation:
 ANS: It includes not only any illicit act which impairs the strict and faithful
fulfillment of the obligation but every kind of defective performance (Ameta v
National Rice and Corn Corp. G.R. No. L-15645, January 31, 1964).

Legal Excuse for Breach of Obligation – Fortuitous Event Requisites

Q: Is the obligor responsible for those acts which, could not be foreseen, or
which though foreseen, were inevitable?

ANS: Generally, no person shall be responsible for those acts which, could
not be foreseen, or which though foreseen are inevitable. The exceptions
are:
1. When expressly specified by law;
2. When otherwise declared by stipulation;
3. When the nature of the obligation requires the assumption of risk
(CIVIL CODE, Art. 1174); or
4. When the obligation is generic.

Q: What are the requisites of a fortuitous event?

ANS: The requisites are the following:

1. The event must be independent of the human will or at least of the
obligor’s will;
2. The event could not be foreseen, or if it could be foreseen, it must
have been impossible to avoid;
3. The event must be of such a character as to render it impossible for
the obligor to fulfill his obligation in a normal manner; and
4. The obligor must be free from any participation in the aggravation
of the injury resulting to the obligee (Lasam v. Smith, G.R. No. L-
19495, February 2, 1924).

D. REMEDIES AVAILABLE TO CREDITOR IN CASES OF BREACH

Remedies Available to Creditor

Q. What are the remedies of the creditor should the obligor fail to perform
his obligation?

ANS: It must be qualified. The following are the remedies:

1. In case of an obligation to deliver a determinate or specific thing, to
compel performance of the obligation (CIVIL CODE, Art. 1165,
Par.1);
2. In case of an obligation to deliver an indeterminate or generic
thing, to substitute performance by a third person,(CIVIL CODE,
Art. 1165, Par. 2) and in an obligation to do except in the latter
case when the obligation to do is a purely personal act.

Note: If the prestation consists of an act where the personal and special
qualification of the obligor is the principal motive for the establishment of the
obligation, the remedy of the obligee is to proceed against the obligor for
damages under Article 1170 (JURADO, Obligations and Contracts, supra at
52-53).

Q. Can the injured party choose rescission after he has chosen fulfillment of
the obligation?

ANS: Generally, the injured party must choose between fulfillment and
rescission of the obligation, with payment of damages in either case.
 However, he may also seek rescission even after he has chosen fulfillment if
the latter should become impossible. (CIVIL CODE, Art. 1191, Par.2).

Q: X and Y entered into a contract whereby Y bound himself to deliver to X

300,000 gallons of molasses within a certain period, payment to be made
upon presentation of accounts at the end of each month. It appears that a
request for payment of accounts for molasses delivered was sent to X in
January, 1923. Plaintiff defaulted and paid only on February 20, 1923. May Y
rescind the contract for breach of obligation?

ANS: No. The general rule is that rescission will not be permitted for a slight
or casual breach of the contract, but only for such breaches as are
substantial and fundamental as to defeat the object of the parties in making
the agreement. A delay in payment for a small quantity of molasses for some
twenty days is not such a violation of an essential condition of the contract as
to warrant rescission for nonperformance (Song Fo & Company v. Hawaiian
Philippine Co., G.R. No. 23769, Sepetember 16, 1925).

Damages

Q: What are the instances when the obligor is liable for damages?

ANS: Those who in the performance of their obligation are guilty of:
1. Fraud;
2. Negligence;
3. Delay; and
4. Those who in any manner contravene the tenor of the obligation
(CIVIL CODE; Art. 1170).

Q: How shall damages be paid in case both parties have committed a breach
of the obligation?

ANS: In case both parties have committed a breach of the obligation, the
liability of the first infractor shall be equitably tempered by the courts. If it
cannot be determined which of the parties first violated the contract, the
same shall be deemed extinguished, and each shall bear his own damages
(CIVIL CODE, Art. 1192).

Subsidiary Remedies of Creditors

Q: What are the subsidiary remedies granted to creditors?

ANS: The subsidiary remedies are the following:

1. Accion Subrogatoria, or to be subrogated to all the rights and actions of

the debtor except purely personal rights in the sense that they are
inherent in the person of the debtor, such as rights arising from purely
personal or family relations or which are public or honorary in character
(8 Manresa 5th ed. Bk. 1 in p. 267). The following are the requisites:
a. Debtor to whom the right of action properly pertains must be
indebted to the creditor;
b. Creditor must be prejudiced by the inaction or failure of the debtor
to proceed against the third person; and
c. Creditor must have first pursued or exhausted all the properties of
the debtor which are not exempted from execution.
2. Accion Pauliana or to impugn all the acts which the debtor may have done
to defraud the creditor by means of rescissory action at the instance of
the creditor who is prejudiced. The following are the requisites:
a. There must be a creditor prior to alienation;
 b. Debtor has made a subsequent contract conveying a patrimonial
benefit to third person;
c. The creditor has no such other legal remedy to satisfy his claim;
d. The act being impugned is fraudulent; and
e. The third person who received the property is an accomplice in the
fraud.
Note: 2nd and 3rd remedies are subsidiary to the 1 st. It can only be
availed of in the absence of any other legal remedy to obtain
reparation for the injury (JURADO, Civil Law Reviewer, supra at 717).

3. Accion Directa: Specific cases include the following:

a. In case of SUBLEASE, the sublessee is subsidiarily liable to the
lessor for any rent due from the lessee. However, the sublessee
shall not be responsible beyond the amount of rent due from him,
in accordance with the terms of the sublease, at the time of the
extrajudicial demand by the lessor;
Note: Payments of rent in advance by the sublessee shall be
deemed NOT to have been made, so far as the lessor’s claim is
concerned, unless said payment were effected in virtue of the
custom of the place. (CIVIL CODE, Art. 1652);

b. In case of CONVENTIONAL REDEMPTION, the vendor may bring his

action against every possessor whose right is derived from the
vendee, even if in the second contract no mention should have
been made of the right to repurchase, without prejudice to the
provisions of the Mortgage Law and the Land Registration Law with
respect to third persons (CIVIL CODE, Art. 1608);

c. In case of a CONTRACT FOR A PIECE OF WORK, subject to the

provisions of special laws, those who put their labor upon or furnish
materials for a piece of work undertaken by the contractor have an
action against the owner up to the amount owing from the latter to
the contractor at the time the claim is made. However, the
following shall not prejudice the laborers, employees and furnishers
of materials:

i. Payments made by the owner to the contractor before they

are due;
ii. Renunciation by the contractor of any amount due him from
the owner (CIVIL CODE, Art. 1729); and

d. In case of SUB-AGENCY under Art. 1892, the principal may bring an

action against the substitute with respect to the obligations which
the latter has contracted under the substitution (CIVIL CODE, Art.
1893).

Note: In the aforementioned cases, a right of action is granted even in the

absence of privity of contract between the parties.