NATURE AND EFFECT OF

OBLIGATIONS
 ARTICLE 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.
 Art. 1163 is about the
obligation to care for a
DETERMINATE thing
which an obligor (one who
has the obligation to do,
to give or not to do) is
supposed to deliver to
another.
 SPECIFIC OR
DETERMINATE THING
 A thing is determinate when it is
particularly designated or physically
segregated from all others of the same
class. (Art. 1460)
 It is determinate or specific if it is
distinct from all others and can
individually be classified or determined.
 It is one which is specific; a thing
identified by its individuality.
 EXAMPLE
SPECIFIC OR DETERMINATE THING

Cow of Mr. X.
Horse of Mr. Y.
Rolex watch of Mrs. X.
Gucci watch of Mrs. Y.
 EXAMPLE
SPECIFIC OR DETERMINATE THING
X bought from Y, via
internet, a gucci watch
model XYZ.

Y is obliged to deliver to X a
gucci watch model XYZ.
 GENERIC OR
INDETERMINATE THING
A thing cannot be
specifically determined
from things of the same
class. The thing can be
replaced by another thing
that is of the same quality.
 EXAMPLE
GENERIC OR INDETERMINATE THING

Cow
Horse
Rolex Watch
Gucci Watch
 EXAMPLE
GENERIC OR INDETERMINATE THING

X bought from Y, via internet, a

gucci watch.

Y is obliged to deliver to X any

watch as long as it is Gucci.
DUTIES OF DEBTOR/OBLIGOR
DUTIES OF DEBTOR/OBLIGOR
1. Preserve or take care of the things
due.
2. Deliver the fruits of a thing
3. Deliver the accessions/accessories
4. Deliver the thing itself
5. Answer for damages in case of non-
fulfillment or breach
1. Preserve or take care of the
things due.
Standard of Care
Required depends on the
nature of obligation and
corresponds with the
circumstances of person,
time and place.
 ORDINARY DILIGENCE
a. Ordinary Diligence simply means,
"diligence of a good father of a family."
The term "diligence of a good father
of a family" reminds us that in
rendering our obligations to other
persons, we should provide the care
and caution that we would have
otherwise done in the exercise of
handling the affairs of our own family.
 EXAMPLE
ORDINARY DILIGENCE
X binds himself to deliver to Y the
white and black shih tzu on August 15,
2019.

Before August 15, 2019 X should make

sure to take care of the black and
white shih tzu by keeping it in safe
place and provide foods.
EXTRAORDINARY DILIGENCE

b. Extraordinary Diligence means,

"the diligence of a very cautious
person as far as utmost human
care and foresight can provide
with a due regard for all the
circumstances.”
If it is the agreement of the
parties or required by law.
 EXAMPLE
EXTRAORDINARY DILIGENCE REQUIRED
BY LAW
Contract of Carrier
A common carrier is bound to carry
the passengers safely as far as human
care and foresight can provide, using
the utmost diligence of a very cautious
persons, with due regard for all the
circumstances.” Art. 1755 of the Civil
Code.
X rode a bus to Cubao on his way
to Vigan. The bus should do
whatever it take to make sure X
arrive safely in Vigan.

If X did not arrive safely in Vigan,

the bus is liable because they
failed to exercise extraordinary
diligence in transporting X from
Cubao to vigan.
Common carriers, from the
nature of their business and for
reasons of public policy, are
bound to observe extraordinary
diligence in the vigilance over
the goods and for the safety of
the passengers transported by
them, according to all the
circumstances of each case.
2. Deliver the fruits of a thing

Delivery is placing the thing

in the possession or control
of the active subject
(obligee) by the passive
subject (obligor) either
actually or constructively.
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.
 FRUITS
1. NATURAL – spontaneous products of the soil, the
young and other products of animals;
EXAMPLE – puppy, fruits of a tree such as
mango, guyabano and others.

2. INDUSTRIAL – produced by lands of any

cultivation or labor;
EXAMPLE – Rice, vegetable, sugarcane

3. CIVIL – those derived by virtue of juridical

relation.
EXAMPLE - Rents of buildings.
 REAL RIGHT (jus in re) AND
PERSONAL RIGHT (jus ad rem)
REAL RIGHT (jus in re) PERSONAL RIGHT (jus ad rem)

a right a right
enforceable enforceable
against the only against a
whole world definite
person or
group of
persons.
Before the delivery, the creditor, in
obligations to give, has merely a
personal right against the debtor –
a right to ask for delivery of the
thing and the fruits thereof.

Once the thing and the fruits are

delivered, then he acquires a real
right over them.
 EXAMPLE
PERSONAL RIGHT
X agreed to sell to Y his Toyota Innova
car for 500K. They agreed that
payment will be made upon delivery of
the car to Y’s house on July 15, 2019.
Before July 15, 2019, Y has a personal
right to request X to deliver the car to
him. If X did not deliver the car on July
15, 2019 Y can sue him for breach of
contract.
EXAMPLE OF REAL RIGHT
X agreed to sell to Y his Toyota
Innova car for 500K. They agreed
that payment will be made upon
delivery of the car to Y’s house on
July 15, 2019. On July 15, 2019 X
delivered the car and Y paid 500K.
Y being the owner can enforce his
right against anybody and do
whatever he pleases over the car.
SOME RELATED TERMINOLOGY

Dominium – ownership, most

complete real right held in one’s
own property.
EXAMPLE
X bought an Ipad for 20K cash.
Upon purchase and payment of
cash X has dominium over the
Ipad.
SOME RELATED TERMINOLOGY

Ius in re aliena – limited real right

held by non-owner in property
owned by another.
EXAMPLE
X authorize Y as his agent to sell X
land in Tagaytay. Y limited right is
to sell X property located in
Tagaytay.
SOME RELATED TERMINOLOGY
Plena in re potestas – owner has power
to do as she pleases with property
owned.
EXAMPLE
X bought an Ipad for 20K cash. Upon
purchase and payment of cash X has
dominium over the Ipad. As owner X
can do what he pleases with the Ipad.
 Ownership is
transferred by
delivery or tradition.
Delivery could be:
1. actual; or
2. constructive.
 ACTUAL DELIVERY
1. ACTUAL DELIVERY – actual
delivery of a thing from the
hand of the grantor to the hand
of the grantee (personally), or
manifested by certain
possessory acts executed by
the grantee with the consent of
the grantor (realty).
 EXAMPLE
ACTUAL DELIVERY
X obligates himself to deliver 100
sacks of rice to Y on or before
August 30, 2019.
On August 29, 2019, X delivered to
Y 100 sacks of rice at her
warehouse in Quezon city. Upon
delivery, Y becomes the owner of
the 100 sacks of rice.
CONSTRUCTIVE DELIVERY

2) Constructive Delivery:
exists when delivery of
movable and immovable
things is not actual or
material but represented by
other signs or acts
indicative of delivery.
 Article 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.
As a general rule, “no person shall be
responsible for those events which
could not be foreseen, or which,
though foreseen, are inevitable,
except:

1. in cases expressly specified by the

law
2. when it is stipulated by the parties
3. when the nature of the obligation
requires assumption of risk
 DETERMINATE OR
SPECIFIC THING
something which is
susceptible of particular
designation or specification;
obligation is extinguished if
the thing is lost due to
fortuitous events.
 EXAMPLE
DELIVERY OF SPECIFIC OR
DETERMINATE THING
X obligates himself to deliver to Y his
shih tzu puppy named Xander on or
before August 30, 2019.
If before August 30, 2019 Xander
drown due to flood, X obligation to Y
is extinguished because he can no
longer deliver Xander because the
dog had died due to fortuitous event.
 INDETERMINATE OR
GENERIC THING
 something that has reference only
to a class or genus;

 obligation to deliver is not so

extinguished by fortuitous events. An
indeterminate thing cannot be object
of destruction by a fortuitous event
because genus never perishes (genus
nunquam perit)
 EXAMPLE
GENUS NEVER PERISH
X obligates himself to deliver 100
sacks of rice to Y on or before August
30, 2019.

If the rice warehouse of X was flooded,

X cannot inform Y that his obligation
was extinguished due to flood
(fortuitous event) because X can
deliver other rice to Y.
A generic thing such as the
rice is identified only by its
kind or type.

X can give any rice of the

same class as long as it is of
the same kind.
 REMEDIES OF CREDITOR IN REAL
OBLIGATIONS

1. In obligation to deliver a determinate thing

(specific real obligation) the remedies of the
creditor in case the debtor fails to comply with
his obligation are the following:
a. demand specific performance or fulfillment
(if it is still possible) of the obligation with a right
to indemnity for damages; or
b. demand rescission or cancellation (in
certain cases) of the obligation also with a right to
recover damages (Art. 1170.); or
(c) demand the payment of damages only (see
Art. 1170.) where it is the only feasible remedy.
ADDITIONAL ON OBLIGATIONS
Real obligation – (obligation to give) is that in
which the subject matter is a thing which the
obligor must deliver to the obligee.
Personal obligation – (obligation to do or not to do)
is that in which the subject matter is an act to be
done or not to be done.
Positive personal obligation – obligation to do or to
render service.
Negative personal obligation – is obligation not to
do (which naturally includes obligations “not to
give”)
 EXAMPLE
DEMAND SPECIFIC PERFORMANCE OR
FULFILLMENT
X obligates himself to deliver to Y his
shih tzu puppy named Xander on or
before August 30, 2019.
If after August 30, 2019 X did not
deliver Xander, Y can file before the
court a case for specific performance
and fulfillment (and the court will be
the one to order the delivery of Xander
to Y) with damages.
 EXAMPLE
DEMAND RESCISSION OR
CANCELLATION
X obligates himself to deliver to Y his
shih tzu puppy named Xander on or
before August 30, 2019.
If after August 30, 2019 X did not
deliver Xander because his wife do not
want to loose Xander, Y can Y can file
before the court to rescind and cancel
the obligation
 EXAMPLE
DEMAND PAYMENT FOR DAMAGES

X obligates himself to deliver to Y his

shih tzu puppy named Xander on or
before August 30, 2019.
If after August 30, 2019 X did not
deliver Xander because his wife do not
want to loose Xander, Y knowing that
Xander can no longer be delivered to
him may ask payment for damages.
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.
 ACCESSIONS
ACCESSIONS – refers to fruits
of the thing or additions to or
improvements upon a thing
(principal).
EXAMPLE- vegetable or trees on
a parcel of land sold to a buyer,
rents of a building.
 ACCESSORIES
ACCESSORIES –are things joined to
or included in the principal thing
for the latter's better use,
embellishment, or completion.

EXAMPLE- keys to the car or house,

chain of a necklace.
 GENERAL RULE
Although not specified,
accessions and accessories are
considered included in the
obligation to deliver a determinate
thing because of the principle of
law that the accessory follows the
principal. They will be excluded if
there is a stipulation specifically
excluding them.
 EXAMPLE

Sale of a house does not

include the land because
what is being sold is the
house not the land but a
lease of the house include
the lease of the land on
which it is built.
 WHEN DOES THE RIGHT TO
THE FRUITS ARISE?
The right to fruits arise from the
time the obligation to deliver
arises
a. Conditional – from the moment
the condition happens
b. With a term/period – upon the
expiration of the term/period
c. Simple – from the perfection of
the contract
 EXAMPLE
CONDITIONAL
X promise his son Y that he can
collect for five (5) years the
rent from his building if Y
graduates from college
(condition). As soon as Y
graduated from college he can
collect the rent from the
building for five (5) years.
 EXAMPLE
WITH A TERM/PERIOD
X agreed to have his son Y
harvest for five (5) years the
fruits in his Tagaytay farm
after August 15, 2019.
Beginning August 16, 2019 up
to August 16, 2024 Y can
harvest the fruits from X
Tagaytay farm.
 EXAMPLE
SIMPLE
X sold his building to Y for
10M. As soon as they
signed the contract and
payment had been made,
Y can collect all rents
from the building.
1167. If a person obliged to do
something fails to do it, the same
shall be executed at his cost.

This same rule shall be observed if

he does it in contravention of the
tenor of the obligation.
Furthermore, it may be decreed
that what has been poorly done be
undone.
 THREE (3) SITUATIONS
CONTEMPLATED IN THIS ARTICLE
1. Debtor’s failure to perform an
obligation. (a person obliged to do
something fails to do it)
2. Performance was contrary to the
terms agreed upon. (does it in
contravention of the tenor of the
obligation)
3. Performance in a poor manner.
(poorly done be undone)
 REMEDIES OF CREDITOR
1. Debtor’s failure to perform an
obligation.

Remedies:
a. creditor may do the obligation, or by
another, at the expense of the debtor;
b. recover damages
 EXAMPLE
DEBTOR FAILS TO PERFORM AN OBLIGATION

X entered into agreement and paid Y

for the construction of a Piggery house
for his farm in Batangas on or before
August 15, 2019. Y failed to construct
the piggery house.

In this case X can hire Z to do the

Piggery house and required Y to pay Z
for the work done plus damages.
 REMEDIES OF CREDITOR
2. Performance was contrary to the
terms agreed upon.

Remedy
order of the court (upon a complaint)
to undo the same at the expense of the
debtor if it is possible to undo what
was done.
 EXAMPLE
PERFORMANCE WAS CONTRARY TO THE
TERMS AGREED UPON.
X and Y agreed that no one will build a
fence on the boundary of the land
separating their properties for two (2)
years. If Y build a fence within one
year, X can file a complaint for breach
of the obligation and ask the court to
have the fence remove at the expense
of Y because Y did not follow their
agreement not to build a fence within a
period of two years.
REMEDIES OF CREDITOR
3. Performance in a poor manner.

Remedy
order of the court (upon a
complaint) to undo the same at the
expense of the debtor.
 EXAMPLE
PERFORMANCE IN A POOR MANNER
X agreed to construct a basketball court
inside the lot of Y. They agreed to the
specifications and materials to be used.
X performs his obligation but did not
follow the specifications and materials to
be used.
The materials used was substandard, the
flooring was rough, and the basketball
goal was weak.
Y can have the basketball court redo by
another contractor.
Article 1168. When the
obligation consists in
not doing, and the
obligor does what has
been forbidden him, it
shall also be undone at
his expense.
This article
contemplates an
obligation not to do or
obligation to refrain
from doing what is
being prohibited.
 REMEDIES OF CREDITOR IN
NEGATIVE PERSONAL OBLIGATION

The remedy of the obligee

are the following:

1. Have it undone;
2. Damages.
 EXAMPLE
X and Y entered into an agreement for
the purchase of X fishpond. They
agreed that Y will not remove the pipes
attached to his land so water supply
will not be cut.
If Y later on remove the pipes, X can
bring an action to have the pipes
restored at the expense of Y
Article 1169. Those obliged to deliver or to do
something incur in delay from the time the
obligee 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
declare; or
(2) When from the nature and the
circumstances of the obligation it appears
that the designation of the time when the thing
is to be delivered or the service is to be
rendered was a controlling motive for the
establishment of the contract; or
(3) When demand would be useless,
as when the obligor has rendered it
beyond his power to perform.
In reciprocal obligations, neither
party incurs in delay if the other
does not comply or is not ready to
comply in a proper manner with
what is incumbent upon him. From
the moment one of the parties fulfills
his obligation, delay by the other
begins. (1100a)
WHEN DEMAND IS NOT NECESSARY FOR
DEBTOR TO BE CONSIDERED IN DEFAULT

1. when the obligation so provides;

2. When the law so provides;
3. when time is of the essence;
4. when demand would be useless;
5. when there is performance by
the other party in reciprocal
obligations.
 EXAMPLE
WHEN THE OBLGIATION SO PROVIDES
X bought 20 sacks of rice from Y for
delivery on or before August 30, 2019
without the need for demand.
If Y failed to deliver on August 30, 2019
he is already in default because
demand is not necessary in
accordance with the agreement of the
parties.
 EXAMPLE
WHEN THE LAW SO PROVIDES
A city ordinance required vendors to
pay hawkers fee to continue with their
business. The ordinance provides that
the hawkers fee should be paid on or
before September 1, 2019.
There is no need for the city to demand
payment from vendors as this was
already provided for by law.
 EXAMPLE
WHEN TIME IS OF THE ESSENCE
Catering for baptismal, wedding
and the like.

No need to make demand as time

is of the essence if not delivered
there will be no food for the guest.
 EXAMPLE
DEMAND WOULD BE USELESS
X bought the dog of Y named Picatsu for
delivery on August 30, 2019.

If on September 1, 2019 a typhoon flooded Y’s

house and Picatsu drown from the flood.

Any demand is useless as Y made it

impossible to fulfill his obligation because
of the death of Picatsu.
 EXAMPLE
WHEN THERE IS PERFORMANCE BY A PARTY
IN RECIPROCAL OBLIGATIONS
X agreed to sell his dog to Y for 5K no
date was specified so it is understood
that their obligation is simultaneous.
Upon delivery of X, Y need to pay him
5K.
If Y failed to pay when X delivered the
dog, Y is already considered in default
without the need of any demand.
 MEANING OF DELAY
ORDINARY DELAY – mere failure to
perform an obligation at the appointed
time.

LEGAL DELAY (DEFAULT) – tantamount

to non-fulfillment of the obligation and
arises after an extrajudicial or judicial
demand was made upon the debtor.
 EXAMPLE
ORDINARY DELAY
X bought 20 sacks of rice from
Y for delivery on August 30,
2019.

If Y failed to deliver the 20

sacks of rice on or before
August 30, 2019, Y is said to be
in delay.
 EXAMPLE
LEGAL DELAY
X was ordered by the court to pay Y
20,000 as actual damages on or before
August 30, 2019.

If X did not pay Y 20,000 before August

30, 2019, x is considered to be in legal
delay.

Y can ask the court for execution of the

decision to compel X to pay him 20,000
REQUISITES FOR DELAY OR
DEFAULT
1. There was failure on the part of
the debtor to perform his
obligation on the agreed time;
2. There was demand from the
creditor;
3. Failure of the debtor to comply
with the demand.
 EXAMPLE
APPLICATION OF THE REQUISITES.
X bought 20 sacks of rice from Y for
delivery on August 30, 2019.
If Y failed to deliver the 20 sacks of
rice on or before August 30, 2019, Y is
said to be in delay.
If X made the demand to deliver on
September 5, 2019 and still Y failed to
comply, Y is in default only from this
date.
 KINDS OF DEFAULT
a) MORA SOLVENDI
b) MORA ACCIPIENDI
c) COMPENSATIO MORAE – delay
of the obligors in reciprocal
obligation.
 MORA SOLVENDI

MORA SOLVENDI –
delay on the part of
the debtor to fulfill
his obligation.
 MORA SOLVENDI
EFFECTS
1) debtor – liable for
damages and interests
2) debtor – liable for
the loss of a thing due
to a fortuitous event.
 EXAMPLE
LIABLE EVEN FOR FORTUITOUS EVENT
X bought the dog of Y named Picatsu for
delivery on August 30, 2019.
If X made the demand to deliver on
September 5, 2019 and still Y failed to
comply, Y is in default only from this date.
If on September 6, 2019 a typhoon
flooded Y’s house and Picatsu drown
from the flood.
Y cannot escape liability even if the loss
was due to fortuitous event because he is
already in default.
KINDS of MORA SOLVENDI
1) mora solvendi ex re – default
in real obligations (to give)

2) mora solvendi ex persona –

default in personal obligations
(to do)
 MORA ACCIPIENDI

MORA ACCIPIENDI –
delay on the part of
the creditor to accept
the performance of the
obligation.
 MORA ACCIPIENDI
EFFECTS
1. creditor – liable for damages
2. creditor – bears the risk of loss
of the thing
3. debtor – not liable for interest
from the time of creditor’s delay
4. debtor – release himself from
the obligation
 EXAMPLE
DELAY OF CREDITOR
X bought the dog of Y named Picatsu for
delivery on August 30, 2019.
On August 30, 2019 Y delivered Picatsu to
X who refused to received.
Y can ask X to pay him the transportation
cost.
If on September 1, 2019, Picatsu died
due to drowning because of typhoon
Andeng, X suffer the loss of Picatsu and Y
is released of his liability because X is
already in delay on this date.
 COMPENSATIO MORAE

COMPENSATIO
MORAE – delay of
the obligors in
reciprocal
obligation.
 COMPENSATIO MORAE
EFFECTS
If the delay of one follows the delay of
the other, their respective liabilities
shall be offset equitably or balanced by
the court.

If it cannot be determined who first

incurred in delay, the contracts is
extinguished and each party shall bear
his own damages.
Article 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. (1101)
 FRAUD AND NEGLIGENCE
FRAUD (dolo) – deliberate intentional
evasion of the faithful fulfillment of an
obligation.

NEGLIGENCE (culpa or fault) – voluntary

act or omission of diligence, there
being no malice, which prevents the
normal fulfillment of an obligation.
 DELAY AND
CONTRAVENTION OF TERMS
DELAY (mora) – default or tardiness in
the performance of an obligation
after it has been due and
demandable.

CONTRAVENTION OF TERMS OF
OBLIGATION– violation of terms and
conditions stipulated in the
obligation.
 EXAMPLE
X agreed to sell 100 cavans of jasmine rice to Y for
50K on or before July 15, 2019.
Fraud – X delivered 90 Jasmine rice and 10
sinandomeng rice
Negligence- X delivered 100 jamine rice without
cover. The rice got wet from the rain.
Delay- X did not deliver the rice on July 15, 2019.
Contravention of the terms of obligation – X was
unable to deliver on July 15, 2019

In these situations X will be liable to Y which may

include payment of damages.
 1171. Responsibility
arising from fraud is
demandable in all
obligations. Any
waiver of an action
for future fraud is
void.
 WAIVER OF FRAUD
To allow such waiver will necessarily
render the obligatory force of contracts
illusory.
The law does not prohibit waiver of an
action for damages based on fraud
already committed.
Any deliberate deviation from the normal
way of fulfilling the obligation may be a
proper basis for claim for damages
against the guilty party.
 INCIDENTAL FRAUD

INCIDENTAL FRAUD –
committed in the
performance of an
obligation already
existing because of a
contract.
 EXAMPLE
X and Y entered into a lease
agreement for two years.
Lease Contract specified that
Y should not sub-lessee the
property (lease to others). If
Y later on sub-lease the
property, this is incidental
fraud.
CAUSAL FRAUD (dolo causante)

CAUSAL FRAUD (dolo

causante) – employed in the
execution of contract in
order to secure consent;
remedy is annulment
because of defect in
consent.
 EXAMPLE
X managed to convince Y to buy his car
for 500K. X informed Y that the car is in
good condition.
Y believe X because they have been
friends for a long time.
It turns our the car is not in good
condition.
This is causal fraud because the
representation of X that the car is in good
condition convinced Y to buy the car.
1172. 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 circumstances.
Court’s discretion because:

(a) negligence depends upon the

circumstances of a case – good or
bad faith of the obligor may be
considered as well as the conduct
or misconduct of the obligee;

(b) it is not as serious as fraud.

 NEGLIGENCE
AND IMPRUDENCE
Negligence – lack of
foresight or knowledge

Imprudence – lack of
skill or precaution
 TEST OF NEGLIGENCE
Whether the defendant, in
doing the alleged negligent
act, use reasonable care
and caution which an
ordinary prudent man would
have used in the same
situation.
 EXAMPLE
X agreed to buy 100 kilos of bangus
from Y for delivery on September 7,
2019.

If Y delivered the 100 kilos bangus

without ice causing it to rot (nabulok),
Y is guilty of negligence for failure to
make sure the bangus arrive in good
condition.
Article 1173. 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 of the place. When
negligence shows bad faith, the
provisions of articles 1171 and 2201,
paragraph 2, shall apply.
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.
(1104a)
 FRAUD DISTINGUISHED FROM
NEGLIGENCE
FRAUD NEGLIGENCE
1. There is no deliberate
1. There is intention to cause
damage.
deliberate 2. Liability may be mitigated.
intention to 3.Waiver for future
negligence may be
cause damage. allowed in certain cases:
a. gross negligence – can
2. Liability cannot never be excused in
be mitigated. advance; against public
policy
3. Waiver for future b. simple negligence – may
be excused in certain
fraud is void. cases
 DILIGENCE AND NEGLIGENCE

DILIGENCE – the attention and care

required of a person in a given situation
and is opposite of negligence.

NEGLIGENCE – consists in the omission

of that diligence which is required by the
nature of the particular obligation and
corresponds with the circumstances of
the persons, of the time, and of the place.
FACTORS TO CONSIDERED TO DETERMINE
THE ISSUE OF NEGLIGENCE

1. Nature of the Obligation;

2. Circumstances of the
person;
3. Circumstances of time;
4. Circumstances of the
place.
 EXAMPLE
NATURE OF THE OBLIGATION
X a smoker is employed at
a firecracker company.
X should not smoke while
working. if he smoke and
it cause explosion or fire
he is guilty of negligence.
 EXAMPLE
CIRCUMSTANCES OF THE PERSON

A young policeman
failed to respond to a
robbery call because
he is sleeping while on
duty is guilty of
negligence.
 EXAMPLE
CIRCUMSTANCES OF TIME
If X drove his car with a
defective head light resulting
to collision because the
headlight is not working, X is
guilty of negligence.
Headlight is not necessary in
the morning but at night it is
important.
 EXAMPLE
CIRCUMSTANCES OF THE PLACE
X running fast on a crowded mall
resulting to disturbance and injury
to customers is guilty of
negligence.
If X run fast in the track oval he will
not be guilty of negligence
because the place is designed for
running.
 DILIGENCE REQUIRED

1. Agreement of the parties;

2. Required by law;
3. In the absence of
agreement and law is silent,
diligence of a good father of
a family.
 Article 1174. Except in cases
expressly specified by the law, or
when it is otherwise declared by
stipulation, or when the nature of
the obligation requires the
assumption of risk, no person
shall be responsible for those
events which could not be
foreseen, or which, though
foreseen, were inevitable.
 FORTUITOUS EVENT

Fortuitous event – is
any event which
cannot be foreseen, or
which, though
foreseen, is inevitable.
 REQUISITES OF FORTUITOUS
EVENT
1. Independent of the human will (or at
least of the obligor’s)
2. Unforeseen or unavoidable
3. Of such character as to render it
impossible for the obligor to comply with
his obligation in a normal manner
4. Obligor – free from any
participation/aggravation of the injury to
the obligee (no negligence or
imprudence)
 EXCEPTION
1.When it is expressly stipulated that he shall be
liable even if non-performance of the obligation is
due to fortuitous events;
2.When the nature of the obligation requires the
assumption of risk;
3.When the obligor is in delay;
4.When the obligor has promised the same thing to
two or more persons who do not have the same
interest;
5.When the possessor is in bad faith and the thing
lost or deteriorated due to fortuitous event;
6.When the obligor contributed to the loss of the
thing.
 EXAMPLE
EXPRESSLY STIPULATED
X and Y entered into a contract for the
delivery of rice for delivery on
September 16, 2019 only. The contract
specified that in case of fortuitous
event Y will be liable if the rice perish.
The parties can validly stipulate
liability even due to fortuitous event as
they are free to agree on the terms of
the agreement.
 EXAMPLE
REQUIRES ASSUMPTION OF RISK
Insurance coverage for
earthquake, fire and flood.
Even if the cost of the loss
is a fortuitous event
(earthquake, fire and flood)
the insured can recover the
amount of the policy.
 EXAMPLE
OBLIGOR IS IN DELAY
X obliged himself to deliver to Y his dog
named Xander on September 10, 2019.
On September 11, 2019 Y demanded X
to deliver Xander but X failed to do so.
On Sept. 12, 2019 Xander drowned
because of the flood.
X is liable even of Xander died due to
because he is already in delay.
 EXAMPLE
PROMISE TO DELIVER THE SAME THING TO
TWO OR MORE PERSONS

X is liable even for fortuitous

event if he sold and promise to
deliver the same horse to Y and
Z.
This is because it is impossible
for him to comply with his
obligation to Y and Z.
Article 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 installments
have been paid. (1110a)
 PRESUMPTION
This article is about presumption on
interest and installments.

Presumption is the inference of a fact not

actually known arising from its usual
connection with another which is known
or proved.

A fact assumed to be true under the law

is called a presumption
 EXAMPLE

1. A suspect is presumed
to be innocent until his
guilt is proven beyond
reasonable doubt.
2. Presumption of death.
 EXAMPLE
X and Y common law partners who
recently transferred to QC. Their
neighbor presumed that the child they
have are the couples child.
The fact not actually known is - who is
the parent of the child. The fact known
is the couple have a child.
The presumption is that they are the
parent of the child.
TWO KINDS OF PRESUMPTION

1. A rebuttable presumption or
disputable presumption is
assumed true until a person
proves otherwise.
It can be contradicted or
rebutted by presentation of
proof.
TWO KINDS OF PRESUMPTION

2. A conclusive (or
irrebuttable) presumption
cannot be contradicted or
refuted in any case (such
as defense of minors).
 EXAMPLE
DISPUTABLE OR REBUTTABLE PRESUMPTION

X owed Y 50k payable in five (5) monthly

installment from September to January.

If X paid Y 10K on November and Y issued a

receipt dated November, the presumption is
that X had already paid the installment for the
month of September and October.
This presumption can be set aside upon
presentation of proof that there was no
payment for the month of September and
October.
Article 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.
This article is about
the remedies
available to
creditors for the
satisfaction of their
claims.
REMEDIES AVAILABLE TO CREDITORS FOR
THE SATISFACTION OF THEIR CLAIMS

1. Exact fulfillment with damages-

performance by the debtor of the
prestation itself
2. Pursue the leviable property of the
debtor- to attach the properties
of the debtor, except those exempt by law
from execution
3. Exercise all rights like
a. Accion subrogatoria;
b. Accion pauliana
REMEDIES AVAILABLE TO CREDITORS FOR
THE SATISFACTION OF THEIR CLAIMS

1. Accion Subrogatoria
It is an action where the
creditor whose claims had not
been fully satisfied, may go
after the debtors (third
persons) of the defendant-
debtor.
In ACCION SUBROGATORIA,
once the creditor has
exhausted the property of
debtor, he can step into the
shoes of the debtor and sue
the debtor’s debtor. The
requirement is that, there must
be a prior exhaustion of
property.
 REQUISITES
ACCION SUBROGATORIA
a. Debtor to whom the right of action
properly pertains must be indebted to the
creditor;
b. The debt is due and demandable;
c. The creditor must be prejudiced by the
failure of the debtor to collect his own
debt from 3rd persons either through
malice or negligence;
d. The debtor’s assets are insufficient
(debtor is insolvent);
e. The right of action is not purely
personal to the debtor.
REMEDIES AVAILABLE TO CREDITORS FOR
THE SATISFACTION OF THEIR CLAIMS

2. Accion Pauliana
It pertains to an action filed by
the creditor in court for the
rescission of acts or contracts
entered into by the debtor
designed to defraud the
former.
This will allow the
creditor to attack
contracts
contracted by the
debtor towards
another:
 REQUISITE
ACCION PAULIANA
a. There is a credit
in favor of plaintiff prior to alienation
b. The debtor has performed a
subsequent contract conveying a
patrimonial benefit to third persons
c. The creditor has no other legal remedy
to satisfy his claim
d. The debtor’s acts are fraudulent to the
prejudice of the creditor;
e. The third person who received the
property is an accomplice in the fraud.
 EXAMPLE

X owed Y 2M. X has a

property at Tagaytay worth
2M and a car worth 500K. W
is indebted to X for 500K. X
know that he cannot pay Y
so before the due date he
sold the land to Z for 1.5M.
The remedies of Y are the following:
1. He may file a case for collection of 2M.
2. If X is unable to pay the amount
awarded by court, Y can attached the car
so Y can get the amount from sale of the
car at public auction.
3. Y can request the court to order W not
to pay X.
4. Y may ask the court to set aside the
sale of the property to Z because it was
made to defraud the creditor. This is in
case Y could not collect in full his credit.
 DIFFERENCE BETWEEN
ACCION SUBROGATORIA AND ACCION PAULIANA

ACCION SUBROGATORIA ACCION PAULIANA

-Not necessary that the -Credit must exist before
creditors claim is prior the fraudulent act
to the acquisition of the
right by the debtor
-Fraudulent intent is
required if the contract
-No need for fraudulent rescinded is onerous.
intent.
-Prescribed in four years
-No period for from the discovery of
prescription. fraud.
 Article 1178. Subject
to the laws, all rights
acquired in virtue of
an obligation are
transmissible, if there
has been no stipulation
to the contrary.
This article tackles
transmissibility of rights. All
rights arising from obligation
are generally transmissible
except:
1. Those prohibited by law;
2. Those prohibited by
stipulation of the parties;
 REFERENCE
R. A. 386 Civil Code of the Philippines
https://www.coursehero.com
Law on Obligations and Contracts
(Hector S. De Leon and Hector M. De Leon) 2014
revised edition
https://www.slideshare.net
https://www.studocu.com
https://www.scribd.com
https://en.wikipedia.org
Caliwan, E. J.D., UP_OBLICON reviewer
https://lspuoblicon2015.wordpress.com