*Difference: Generic is never extinguished or rendered

Chapter 2: Nature and Effects of Obligations impossible but in specific the loss of the things will extinguish
the obligation as it will render it impossible (kahit anong
Recap: Chapter 1- How to determine obligations arising from cause-does not depends on cause)
different sources
3. Not specific and not generic means limited generic object
Chapter 2: How do we fulfill the prestation of that obligation?
*Why does the debtor need to fulfill in accordance with the
4 Objects of Obligation agreement?

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1. To give -If debtor is able to fulfill the obligation in accordance with law
2. To do or agreement, creditor will now have to honor an obligation on
3. No to give his part (prestation to do/accept and release the debtor from

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4. Not to do the juridical tie)

Real- obligation with the prestation to give -Moral accipiendi

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Personal- obligation with the prestation to do HOW DO YOU FULFILL SPECIFIC OBLIGATION TO BE
RELEASED IN JURIDICAL TIE?

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a. Positive-to do
-Deliver the specific obligation in accordance with law or
agreement
b. Negative-to not do

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*Specific and limited generic have similar manner of fulfillment
Provisions of the law on obligation (CH 2) will either be
applicable to one of among these 2 types or both

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Art.1244 The debtor of the thing cannot compel the creditor to
receive a different one although even if it is for the same value
Real obligations:
or much more (if it was fulfilled then the debtor can compel)
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*Qualifications based on the nature of each object of
How many ways does debtor is allowed to fulfill generic? 1. To
prestation/ things to be delivered/given in fulfillment of
deliver that of the same value/genus
prestation.
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2. Deliver something more valuable

Principal Prestations
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Art. 1246 When obligation consist in the delivery of the

*There are provisions that should be delivered in regards to
indeterminate or genetic object which quality has not been
specific and generic
stated, the creditor cannot demand thing of superior quality nor
debtor can deliver of inferior quality
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[Link]/determinate-segregated from its class/genus and

has become one of a kind/unique i.e car with a certain plate
i.e Debt of 50,000 paid in 100,000 can be allowed but creditor
owned by Dean Ulan which is color blue
cannot compel to pay 100,000 in 50,000 debt.
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*Fulfillment to deliver; cannot deliver another kind

Supplemental Prestations
,F

*If before delivery, thing is lost and results in impossibility of

Art.1163 Every person obliged to give something is also
fulfillment as it cannot be substituted; it is specific.
obliged to take care of it with the diligence of a good father of a
family.
*Cause is not significant/relevant, it becomes impossible
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because I can no longer provide for the real obligation to

WHY LAW MANDATES DEBTOR THIS OBLIGATION (TO
deliver the car as I cannot substitute it with another because
TAKE CARE OF THE THINGS)?
my obligation consists of the very car even if s, not even of the
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same class
-Supposed to take care of the thing that subsequently be
delivered to the creditor to be able to successfully deliver or to
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2. Generic/indeterminate-i.e to deliver only a car with no

fulfill obligation.
other qualifications, take one with millions of available (never
perishes)
*Purpose of 1163 to ensure efficacy of the fulfillment of the
principal obligation
*Can be substituted, no matter how many times to replace the
thing that is supposed to be delivered, there will be no instance
when such genus can be extinguished *If it loss before delivery, it becomes impossible to fulfill

Badillo, Firaza, Gutierrez & Mechure

 Art. 1173 The Fault or negligence of the obliger consist in the
omission of the diligence required in the obligation
SPECIFIC GENERI LIMITED
C -Negligence not the total absence of diligence but it is not
enough as required by the law or in agreement of the parties

PRINCIPAL 1244(TO 12461 12441 *If no stipulation for specific standard of care pending the
GIVE)1 delivery/silent then apply DOAGFOAF not to be compelled with
extraordinary.

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SUPPLEME 1163(TO N/A 1163 THERE IS ALWAYS AN OBLIGATION AMONG MEMBERS OF
COMMUNITY
NTAL DO)

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- if we do not have any relation to other, we have obligation to
be careful and prudent in all our human actions(basis of
1166 -1164 N/A quasi-delict)

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How do we know what diligence should we follow?
N/A 1165 par 1165 in
2 some We cannot really precisely measure diligence, only basis is

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cases DOAGFOAF refers to the quantum of diligence expected from
an ordinary/prudent person.

z,
*Art.1163 is necessary because absence of proper care *Law takes cognizance of the tendency of debtor to lose
will increase the risk of the thing to be lost or damage interest in the care of things that they are to relinquish

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which can be useless to the creditor, if loss it will no possession but also ownership
longer allow the creditor to fulfill his obligation.
*BISHOP OF HARO VS DELA PENA*
*Art 1163 not applicable to generic because you can
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always substitute it with the same class but applicable to Need to check`how it is constituted not immediately generic or
limited because absence of diligence may result in loss of specific,
ut
limited generic.
Facts: Mr. Dela Pena received donations for the establishment
STANDARD OF CARE /QUANTUM OF DILIGENCE of the hospital; he deposited it on his personal account.
,G

-amount or quantity of the care that would be necessary for a Confiscation of money by Americans was done because he
person was alleged as part of revolution.
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3 Standard of Care Issue: What was the obligation of father Dela Pena?

1. DOAGFOAF- standard of care unless it requires another

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-Return money not generic but specific, deposited it in bank

standard separated it from others which transformed it to specific

2. Simple Diligence Issue: Was father Dela Pena diligent?

,F

3. Extraordinary/utmost -Court held that he was not negligent, it was expected that an
ordinary man would have deposited it in the bank instead of
llo

Art.1173 Debtor is considered as negligent keeping it which will increase risk of loss. No liability attaches
of damages will be given to Dela Pena
*In absence of any law or stipulations in regard to a standard of
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care that the debtor should apply to the object before delivery *1163 not applicable in Generic since there is no cause of
then DOAGFOAF should be applied but if it provides for action for damages due to negligence
another then applying DOAGFOAF would not be enough and
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debtor will still be liable *Assess how the tenor constituted the thing not just nature

Art.1733 Common carriers from the nature of their business Art .1166
and for reason of public policy are bound to preserve
extraordinary diligence in the vigilance of the goods and safety
Art. 440 Principle of Accession-ownership of property gives the
of the passengers transported by them according to all
right to accession to everything produced thereby or
circumstance
incorporated or attached there to either naturally or artificially

Badillo, Firaza, Gutierrez & Mechure

1
Accessories upon the perfection of the contract (concurrence of the 2
different parties/meeting of minds).
If the obligation was to give the things, its accessories are
included even if it is not included. Obligation to expressly -Not absolute rule to deliver fruits at the moment of perfection
provide to exclude accessories or before obligation is of contract because some contracts have suspensive
constituted, debtor should detach it. conditions/terms.

Delays, Fraud and Negligence are Contravention of the tenor is fulfilled or arrivalSuspensive condition-suspends
of the obligation but not all may result in delay, fraud or enforcement of whatever obligation was constituted by the
negligence. contract perfected, delivery is only when condition

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Ex. Anticipation of delivery of red Porsche but blue was -1164 At the moment the obligation arises, it doesn’t say in
delivered, there is a breach of contract. Not negligence, deceit moment of perfection of the contract

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or fraud it is COTOTO.
IS 1164 APPLICABLE TO LIMITED GENERIC?
*Spouses Vasquez vs Cathay Pacific*

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-No until the same has been delivered to him (2nd sentence of
Facts: Spouses claimed damages since they were refused art)
seats in a particular flight, they sued even though they were
given a much better value of seats. Damages for breach of WHAT IS DIFFERENCE OF REAL AND PERSONAL?

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contract, fraud-led by Cathay to enter into an agreement as
companion but did not happen. The Moment obligation constituted the creditor would have a
personal right over the thing/object of the prestation to give.

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Issue: If the debtor in the fulfillment of obligation commits fraud Real rights are acquired only after delivery.
or delay

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Personal right- pursue against specific person and that is the
Held: They may have been a breach which is COTOTO, but it debtor
was not correct for the lower court to consider the breach as
having been committed as fraud. They discovered that Real right-no particular person to whom who you will enforce
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business class was now fully booked and the necessity of the right, you can enforce it to the whole world
upgrading the couple, now premeditated intention to force
ut
them to first class although they agreed to business class. It
Ex. Can you get a phone which was stolen and sold to a
cannot be said that they are not aware of this because they are
classmate? Yes. It was illegally taken, right over it is against
frequent fliers. They know that they will be upgraded if this
anyone even if good or bad faith
,G

happens.
HOW DO WE KNOW THERE IS DELIVERY?
Art. 442 Natural Fruits. It refers to the spontaneous products of
the soil and other products of the animals with no intervention
Art. 1497 Delivery is when the thing sold shall be understood
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by man.
as delivered when it is put in place/possession of the creditor.
i.e constructive delivery-- If immovable can be consent or
Industrial fruits-produced due cultivation and culture
agreement.
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1166 relate to 1164

Art. 1165. If the thing is indeterminate/generic he may ask the
obligation be complied with at the expense of the debtor.
,F

-When the obligation to deliver arises? Reckoning point

whether or not fruits should be delivered.
-Before application of Art 1165, it is necessary that the debtor
is no longer able or unwilling to fulfill the principal obligation
If fruits of the principal is produced before the period/time when
llo

(1246-remedial measure).
obligation arises, debtor need not include them but if fruits are
produced at the time when the obligation arises or thereafter,
Ex. You need 10,000 sacks because you will marry and the
debtor will be obliged to deliver the fruits with the principal
di

supplier do now want to deliver anymore. You cannot ask the

supplier to give it but you can find another supplier.
Contracts not governed by provision of the law but rather by
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agreements of the party

How do we know if obligation is now due and demandable?

—-Micah’s Part—---
-Art. 1537 Bk of Contracts of Sales. The debtor is bound to
Art 1165 (2): Art. 1165.
deliver the thing sold but not necessary contract of share and
its accession and accessory in the condition in which they were

Badillo, Firaza, Gutierrez & Mechure

2
xxx If the thing is indeterminate or generic, he may ask
that the obligation be complied with at the expense of the Illustration: Same situation. Dean U has 3 iphones. 1 is with
debtor. xxx him and 2 is with Dean Delson. Then the limited object can be
fulfilled in application of Art 1165 par. 2. Although, the books
Application of the provision: are silent about this.

An obligation to deliver a generic object and NOT a specific >At this point, set aside Real obligations and focus on Personal
object or a limited generic object. Obligations<<

What do we apply in regard to the manner of fulfilling

This article is Remedial provision.
Personal obligations?

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A remedial provision is a provision that may be alleged or Ans: Art. 1167 and 1168
applied by a creditor in case a debtor is no longer willing to or

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is unable to fulfill the prestation to give a generic object. This is TO DO / NOT TO DO
a remedy / law which a creditor may rely on for the
enforcement of the obligation against the debtor if he is unable Art. 1167. If a person obliged to do something fails to do it,

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to fulfill the principal obligation to deliver a generic object. the same shall be executed at his cost.

There MUST be a proof that a debtor can no longer fulfill the This same rule shall be observed if he does it in
obligation or is unwilling. Kailangan parin idemand kay debtor. contravention of the tenor of the obligation. Furthermore,

M
After demand is made, and D is unwilling, not capable or it may be decreed that what has been poorly done be
unable, then this is where a creditor could offer Article 1165 undone. (1098)
par. 2.

z,
This refers to obligations TO DO: POSITIVE PERSONAL
>>He may ask a 3rd person to fulfill it.<< OBLIGATION.

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Illustration: Creditor ordered from debtor 100 canvas How is D able to fulfill this? Look at Art. 1244. Par 2.
lanzones. There is an obligation to deliver a GENERIC object.
To apply 1165, the debtor must be unable, unwilling, after being Article 1244 par 2. xxx In obligations to do or not to do, an
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due and when demanded, to deliver the 100 lanzones. act or forbearance cannot be substituted by another act or
forbearance against the obligee's will. (1166a) xxx
ut
He can ask another supplier or 3rd party to fulfill it.
General instruction a D must observe in fulfillment of
obligations to do and not to do.
As a consequence, the debtor is liable for any damages
,G

that creditor incurs because of the new agreement needed

If Obligation is to paint your portrait, then fulfill it in accord with
to be entered into.
what was agreed upon. Ikaw dapat ung nasa portrait hindi
ibang tao.
Illustration: Same illustration. Assuming the 100 canvas of
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lanzones costs 100k but the D cannot fulfill. C now looks for a
Not to do: Avoid the forbearance. Bawal mag smoke, edi do
supplier but worth 120k. This will cost C 20k more. This 20k is
exactly what was agreed upon. DO NOT SMOKE.
considered damages that C can compel D to pay him. The
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debtor must pay the addtnl 20k

We go back to Art. 1167 to know the remedy available in case
D has not fulfilled the obligations in Art 1244.
THIS IS NOT APPLICABLE to prestations to fulfill a
,F

specific object because this is only possible to be fulfilled

1167: Tells C that he may ask another person to fulfill it with
by the original debtor.
damages costs by D. BUT only if generic. If Personal obligation
that only he can fulfill, then the 3rd person CAN NOT fulfill this.
A third person cannot fulfill this bc this is not possible.
llo

Remedy: Sue for damages.

Illustration: SPECIFIC OBJECT : Phone ni Dean Ulan to be
delivered to us. Dean Delson’s phone pwede ba? NO. bc it is
Can C sue D and ask courts to compel D to fulfill?
di

not Dean Ulan’s phone specifically agreed upon.

No bc it will constitute Involuntary Servitude (slavery). There is
HOW about to deliver a Limited Generic? Can this be
Ba

no cause of action to compel fulfillment of personal positive

applied with Art 1165 par 2. As to third persons?
obligations. The only remedy is to undo or ask for damages.
>>IT DEPENDS on whose possession the limited object would
Art. 1168. When the obligation consists in not doing, and
be. Sino ang in possession of it. If the limited number of object
the obligor does what has been forbidden him, it shall also
is in D’s possession only, then ART 1165 is not applicable.
be undone at his expense. (1099a)
BUT if the limited number (object) may be 2 or 3, is with
another person (3rd person), then it is applicable.

Badillo, Firaza, Gutierrez & Mechure

3
This provides for remedy for C in case D does not fulfill the M- oral
obligation not to do. E- xemplary
N- ominal
D who is not to do, but did still do it. The remedy is to undo T- emperate
what has been done. BUT this can only be done if what has A- ctual
been done could still possibly be undone without causing L- iquidated
damages to itself or 3rd party.
ALL these for SUM of MONEY
If the thing can no longer be undone, there are 3
instances: Art. 1169 par 1. Those obliged to deliver or to do
something incur in delay from the time the obligee

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(1) If physically impossible to undo what has been done. judicially or extrajudicially demands from them the
(Ex. Do not mix coke and pepsi but u mixed it already fulfillment of their obligation xxx
or do not smoke buyt you did it already. These cannot

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be undone). 3 Types of Delay
(2) May be undone but it would result in prejudice to 3rd
parties or innocent persons. (Ex. A property that must 1. Mora Solvendi- Debtor’s Delay in fulfillment (Art 1169

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be separated by W, and Y but cannot be separated par 1)
because there is a wall. Still, W still put a wall in 2. Mora Accipiendi- Creditor’s Delay if D can fulfill but
violation of what was agreed upon with Y which is to C refuses to accept without cause and release D from
not build a wall. However, if taken down, it will the tie.

M
prejudice X. Such undoing is impossible because it'll 3. Compensatio Morae- Delay on parties in reciprocal
prejudice a 3rd P in good faith. obligations

z,
What is the remedy? Sue for DAMAGES ONLY. Mora Solvendi:

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Provisions on DAMAGES: To incur delay:

TWO WAYS by which a debtor may fail to fulfill 1. Obli is due and demandable
obligations:
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Simple Delay- Delay but no COA yet.
1. Involuntary: D was prevented totally or in a manner as
what was originally contemplated by virtue of tenor of Legal Delay- Liability for Damages may attach here bc there is
ut
the prestation. (Art 1174 Fortuitous event) a judicial order na.
2. Voluntary: Breach in D’s fault. Failure to fulfill to do or
,G

not to do. There are 4 ways D may voluntary fail / Illustration: Promise to pay for P100k matured Feb 14, 2020
breach. di nabayaran ni D. Is D in Delay? YES.

Four ways D may fail / breach obligation: Can he be liable for damages bc of his default? If no demand
za

was made after, he is not liable yet.

1. Negligence
2. Fraud 2. No performance of obligation
3. Delay 3. Obligee demands judicially or extrajudicially
ira

4. COTTOTO (Contravention of the Tenor of the 4. No fulfillment

Obligation
If all has happened in order, D is liable for DAMAGES.
,F

Consequence: DAMAGES - Found in Art 1170

EXCEPTIONS:
Art. 1170 Those who in the performance of their
llo

obligations are guilty of fraud, negligence, or delay, and Art 1169 par 2. However, the demand by the creditor shall
those who in any manner contravene the tenor thereof, are not be necessary in order that delay may exist:
liable for damages. (1101)
(1) When the obligation or the law expressly so declare; or
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What is Damages?
(2) When from the nature and the circumstances of the
Ba

Refers to compensation or recompense for injury or damage obligation it appears that the designation of the time when
done to C for breach by D due to Fraud, Negli, Delay or the thing is to be delivered or the service is to be rendered
Cottoto. was a controlling motive for the establishment of the
contract; or
Damages: Sum of money.
(3) When demand would be useless, as when the obligor
6 Types of Damages: MENTAL has rendered it beyond his power to perform.

Badillo, Firaza, Gutierrez & Mechure

4
Number 1 Example: Law on taxes. April 15 every year. Failure suppliers did not deliver the supplies. Only after Christmas did
of Taxpayer to pay, the ff day, TP has legal delay, there is now it come and the wife was buried after Christmas. It denied her
a fine or interest as penalty. No need for demand because it of her last wish.
was stated by law that demand is not needed.
Marzaga sued the hardware. The hardware submit that there
Moonwalk Devt Corp vs SSS was no demand and so they should not be held liable. Accdg
to them Marzaga did not submit as to when it should be
F: The Corp acquired from SSS a loan to develop a land. delivered.
Developers were supposed to pay in installment and if they are
not able to pay in time each in every installment, it provides for SC: Did not agree. It was made clear to the saleslady and the
automatic penalty BUT did not state that demand is no longer hardware knew of the necessity of the time that it should be

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necessary. It only said that if the Debtor incurred a delay, there delivered. Time was an important motive to the obligation.
will be penalties.
With regard to the allegation that there was no agreement,

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Moonwalk was not able to pay installments, as a consequence, there need not be express stipulation. If circumstances show
SSS canceled the agreement and made them liable for the there is a meeting of minds, there was a date agreed upon
entire balance of principal. SSS demanded (Acceleration …) (before Christmas).

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Moonwalk paid everything but what was not included was the
penalties that should've been paid by Moonwalk. Number 3 Example: When is demand useless??

SSS later discovered of this na kulang yung singil nila kasi First must know: What is the use / purpose of demand?

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wala ung installment. SSS demanded again. Hence, the case.
It is to ensure that D is not anymore in good faith where it
I: Can SSS demand from Mnwk the penalty of the installment defaults, that he was already at fault.

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defaults agreed upon on the basis of contract?
Under Criminal law, presumption of innocence is that he is not

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SC: No more. (1) The penalty clause is an accessory obligation guilty beyond reasonable doubt.
that its existence depends on the validity of the principal
obligation. Pag wala yung principal, wala din ung accessory. In civil law, presumption of good faith is that D in incurring
Wala na yung principal obligation na extinguish na. It connotes delay/default, he was in good faith and not his fault but due to
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there is an extinguishment of the accessory obligation. fortuitous events.

(2) Assuming an accessory might still be existing, you cannot Illustration: Dean is supposed to pay on March 15. On March
ut
insist this bc there was no demand. The phrase stating a 14, morning, Dean is prepping to pay his obligation. BUT on
demand is important. It MUST be expressed. In the absence of that day duterte declared lockdown. He is unable to pay. There
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that provision making a demand, they were supposed to make is delay BUT there was a circumstance that prohibited him to
the demand to MNWLK. This justifies the penalties. do so. He is in good faith.

Bankruptcy entails impossibility to pay.

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Number 2 Example: Wedding gown. The creator of the gown,

you seal the agreement and make sure of the design, the cost Debtor denies obligation: Dean supposed to pay you, you
and the capability of the creator to deliver your gown on time remind Dean, but Dean does not remember. This will render
for your wedding. demand useless bc he has no intention na. NO NEED
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DEMAND here.
Do you still need to make a demand? NO more. Sue for
damages! 3 Requisites before you demand:
,F

1. Due and Demandable

Marzada vs CA 2. Debtor incurs Delay
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3. Demand
F: An agreement by a widower who bought supplies for
construction of the coffin of his wife where she is to be buried. Dapat ginawa muna to. If demand was made before obligation
Time was an important motive. is D&D, it’s only a reminder not demand.
di

Wife was terminally ill and was expected to die before Compensatio Morae: Art. 1169 par 3.
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Christmas. Her last wish was to be buried before Christmas as

she did not want her family to be grieving on Christmas day. xxx In reciprocal obligations, neither party incurs in delay
She died 2 weeks before Christmas. if the other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. From the
Widower prepared for the funeral with Marzada. Widower moment one of the parties fulfills his obligation, delay by
purchased the materials with the saleslady telling her the need the other begins. (1100a)xxx
for it to be delivered before Christmas day. The hardware
agreed on that. Unfortunately, as workers are waiting, the It involves only if there is reciprocal obligations.

Badillo, Firaza, Gutierrez & Mechure

5
BOTH in delay.
specific
Example: Contract of sale: Buyer does not pay or incurs delay performance
if Seller does not deliver. How could it be possible to delay? could prosper
Pag yung isa nagbayad na. against D for an
obli to do. WHY?
Seller must deliver, no payment made, there is legal delay. Bc it is
Sellers can now ask for damages. Demand is not necessary. tantamount to
slavery or
Solar vs Davao Involuntary
servitude.

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SC: J. Nachura - The provision on Compensation Mora is
applicable in reciprocal obligations AND when the fulfillment of REMEDY: Art
obligation of the parties are DEMANDABLE AND DUE at the 1167.

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same time. In other words, simultaneous.
What is the provision in fulfilling a Positive Personal obligation?
Example: If the obligation is to sell a car, and the obligation to When you read the provision, it is only common sense but then

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buy is to pay, then apply the provision. Hanggat Walang again u have positive law.
nakilos, walang delay. BUT once delivery is made and buyers
do not pay from that point there is delay by buyers and sellers If Debtor does not comply with the manner on how the obli
can ask for damages without demand kasi simultaneous yan.

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should be fulfilled. You have now provision to enforce it to an
action in court of law.
HOWEVER, J. Nachura clarified that even if reciprocal sila, but
fulfillment are not at the same time, you do not apply the What is the provision in fulfilling a Positive Personal

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provision in the last paragraph. You go back tot he 1st par. obligation? It is found in Art 1244 par 2.
Mora Accipiendi

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Art 1244 par 2. xxx In obligations to do or not to do, an act or
Same illustration: Seller to deliver Oct 15, buyer to pay Nov 15. forbearance cannot be substituted by another act or
Not simultanes. forbearance against the obligee's [Link]
Whatever the act required is the only thing the Debtor has to
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Issue now is that on Oct 15, can Buyer now hold Seller liable do. He cannot substitute wt another.
bc seller does not deliver the car? YES but DEMAND MUST
NOW BE MADE. Hindi kasi simultaneous or the same time
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Ex. Paint house not sub wt paint car. Etc.
yung pag fulfill ng mga obligations.
,G

—- END—- Insofar as Negative Personal Oblis, it is the same thing.

Whatever u are not to do, u cannot substitute it with another
—-- Start Personal Obligations—--- forbearance. (Art 1244 par 2)
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REMEMBER: When do we consider an obligation to be Ex. Not to smoke. You cannot insist on not drinking instead.
Personal? If it involves the prestation to do or not to do
and not to give. One way in both types to fulfill which the creditor would now be
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compelled also to accept and release juridical ties.

IF Positive Personal, paint the house and u did, ofc C cannot

insist on something else like a car.
,F

IF Negative Personal, prohibit smoking, C cannot compel u to

not drink instead.
llo

Personal Obligation
Positive Personal Negative What’s important is to determine remedies whenever D is
Personal unable or unwilling to fulfill his obligation to do or is unable to
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prevent himself from doing an act of which he is obliged not to

do.
Principal 1244 par 2 1244 par 2
Prestation: Cannot substitute Cannot substitute
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What is now the remedy? Art 1167 and 1168.

Manner of how to act w/o Creditor’s forbearance w/o
fulfill the obli to do consent Creditor’s consent
Remedy of C incase D does not comply with obli to do or does
and not to do
it not in accord with the tenor or is poorly done which is not
(Pos and Neg)
what is expected of as clear in the tenor of obli. In other words,
ang sama ng pagkaka gawa. May ginawa pero masama.
Remedies of No Compulsion of
Breach Debtor. No

Badillo, Firaza, Gutierrez & Mechure

6
Art 1167 If a person obliged to do something fails to do it,
the same shall be executed at his cost. If obli to do involves personal qualification. Meaning it is only D
that u consider to fulfill obli as on the basis of certain
This same rule shall be observed if he does it in contravention qualifications that are not present in others. There is no way
of the tenor of the obligation. Furthermore, it may be decreed others can fulfill it.
that what has been poorly done be undone. (1098)
If D has an obli to do and does not do it, C cannot enforce it Ex. You ask Dean to paint your portrait because Dean is an
through a demand for specific performance bc it will contrary to artist sought after. Dean agreed and was supposed to start the
constitutional provision preventing slavery and coercion which ff day but he couldn't sleep thinking of drawing your portrait.
is a criminal act. The ff day you ask that Dean start but Dean rejects.

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WHAT IS THE REMEDY? Art. 1167. Is there a possibility that another can do it? NO bc Dean’s skill
in painting portraits is what you are asking for and not the skill
Par. 1 - If a person obliged to do something fails to do it, of another.

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the same shall be executed at his cost.
SOLUTION: ASK FOR DAMAGES. [ART 1170]
This paragraph refers to totally not doing what he was obliged

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to do. Obli to do is personal, you will have to read the bg of each and
every circumstances pertaining to WON there is possibility of
Solution: ASK ANOTHER TO DO IT enforcing that obli against D or it is something that only D could
fuflfil and therefore no longer possible to ask others.

M
Ex. Paint house but D didn't do it. Ask another painter to do the
obligations that D was supposed to fulfill. Also, WON it is something D only could fulfill. BC if ever due to
circumstances beyond his control example he dies. That

z,
When there was a juridical relation in regard to C’s right in extinguishes obli and u cant enforce it to heirs. NO transfer of
compelling D to do, this means C also has the obligation to obli to heirs unlike in obli to give.

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merely ask D to do that and not from others esp when we are
talking of an obli arising from Contracts. D owes 500k but before he is to pay off he dies, C has right
against the estate / heirs.
Ex. C entered into a contract that D will paint the house. Is it
ie
possible to change my mind? After having learned that another BUT if that is obli to do particularly with obli to which D’s
can do it with lesser cause. Can C cancel and go to the person personal qualification was the main consideration for C to have
offering a cheaper price? NO. entered into agreement assuming obli is arising from contract.
ut

The obligation on the part of C to honor that equipment in JAVIER Security and Watchman VS SHELL CRAFT CORP.
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allowing D to fulfill. C is relieved if D does not do.

F: VP of shell craft Inc. has a good friend who is JSW. They
Remedy of C is to ask it to be done from someone else and the became friends because JSW has been contracted by shell
expenses is charged to D plus damages. craft as the person responsible for deploying security guards to
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the company property premises and this was going on for

years. JSW was not incorporated into a juridical entity it was
Par 2 - This same rule shall be observed if he does it in merely some kind of form JSW as it was operated solely by
contravention of the tenor of the obligation. Furthermore, JSW. In the last year of the contract of security service
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it may be decreed that what has been poorly done be between the companies, JSW unfortunately died. Di natapos
undone. (1098) yung 1 yr period. After his death, the VP opted to get another
security agency for securities to be deployed. The contract was
,F

This paragraph refers to what was poorly done. Not in accord terminated before the expiration date. The wife and heirs came
with what the obligation is originally constituted. and insisted on shell craft to continue the contract of security
on the basis of the remaining period but Shellcraft refused
llo

The second par. of Art 1167 merely tells in regard to not having because they insisted they continued only because of Mr javier
been done or what has been poorly done. only and his personal qualification and competence in the last
many years that he was contacted by the company. Meaning,
This also provides for the same remedy. the company was saying it was because of javier's personal
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qualification that the company entered into an agreement. Ergo

I ask u to pay my house blue but u insist to paint it red. OR do the death of javier should likewise terminate the contract from
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double coating but u only did one. Poorly done. the tie allowing to take another agency.

The expenses in asking another to rectify or make good the SC: Agreed with the contention. IT was proven that JSw did
fulfillment by another will now be charged to the debtor and not exist as a separate corporate entity it was owned, operated
damages as well. by JSW only, the name was merely to represent. It was really
just JAvier and it was also proven that javier's performance in
Are these remedies available in all instances when there is a the past in fulfilling the obligation to fill in personnel of which he
breach of D in regard to obli to do? NO NOT ABSOLUTE. really took care of and practiced or applied utmost diligence in

Badillo, Firaza, Gutierrez & Mechure

7
selection of security guards, Shell Corp was fully satisfied wt Pointed out from the definition the Obligations are REAL and
[Link] was due to J’s competence that was sole PERSONAL. The previous provisions gives us instructions on
reason for the continued contract. The heirs should no longer the manner of the fulfillment.
insist on the continuation of the unexpired period.
2 BASIC REASONS why is it important to the
This is an obligation to do of Javier of which his personal debtor/obligor to fulfill his obligations strictly in
qualification was the principal consideration and hence cannot accordance with what the provisions dictate:
be transferred and expected of any other. 1. Possibility of creditor incurring DELAY
-because from the time the debtor fulfills his obligation. The
Negative Personal: NOT TO DO Creditor now acquires the obligation prestation: “to do” which is
to accept such fulfillment and release the debtor from the

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You cannot sub it with another w/o consent of C. WHAT IF D juridical tie.
does what is forbidden?
-If the creditor unjustly refuses to accept the fulfillment by the

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Same Remedy: Art 1168 par. 2. debtor of the obligation strictly in accordance to the provision of
law, that Creditor will be guilty of MORA ACCIPIENDI
Instead of being done at his expense, 1168 says it be

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UNDONE at his expense. 2. Important to the debtor to fulfill his obligations
strictly in accordance with the law because the failure to
Can C compel D to undo? [NO] BC to compel to undo is to ask do so would constitute as a breach and this breach may
him to do! So still forcing him is the same with I.S, slavery or result to an additional obligation and this is the obligation

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coercion. to PAY DAMAGES. (ART 1170)

Ex. Do not paint house red, D painted it red. Can you now ART 1170

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have COA to compel to undo if D does not want? You cant! “Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner

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Ask someone elso to undo it but expenses incurred get from D contravene to the tenor thereof, are liable for damages.”
and damages (1170). Always know basis of COA or claim. Dean’s definition of Art 1170. That if the debtor, in the
fulfillment of his obligation commits delay, fraud, negligence or
contravention on the tenor of the obligation, that debtor aside
ie
Two instances that undoing could not be possible legally from the principal obligation will now possibly legally be liable
and physical: for damages.
ut
Physical undoing impossible: NOT smoking. Nagsmoke, di SCENARIO: If the debtor in the fulfillment of the obligation,
naman pwede higupin ulit. breaches/violates in accordance on how the law dictates. What
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shall now be the right of the Creditor?

Legal undoing is impossible if it will result in prejudice of a 3rd
person in good faith. Answer: The right of the creditor (Art.1165 and Art.1170)
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Ex. House you rent is lessee and has a neighbor and there is a [Link] can insist on fulfillment, if still possible, for the debtor
boundary wall that was constructed by the neighbor. Bawal put to fulfill the principal prestation, in accordance with Art.1165
up ur own wall but u still did and u put it beside the wall of the par.1:
neighbor.
ira

ART.1165 Par.1 “When what to be delivered is a determinate

You breached obli not to do, could it still be undone? Physically thing, the creditor, in addition to the right granted by him by
yes but to force it will damage the wall of the neighbor, thereby Art.1170, may compel the debtor to make the delivery.”
,F

there is prejudice.
Dean’s definition of Art 1165
In cases like this, the remedy is ONLY damages (Art 1170) “on the right to insist on the performance to deliver a
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specific/determinate object ; and performance to deliver

Art. 1170. Those who in the performance of their obligations generic/indeterminate object.”
are guilty of fraud, negligence, or delay, and those who in any
manner contravene the tenor thereof, are liable for damages. [Link] creditor may also insist on damages, in accordance with
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(1101) Art.1170 (basis of cause of action)

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—--- END—--- ARTICLE 1170 “Those who in the performance of their

DAMAGES AND DELAY obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene to the tenor thereof, are liable
Previously on Deanflix: Discussed about the provisions that for damages.”
we need to consider for purposes of knowing exactly how to
fulfill the obligations based on the existing prestations. -In case of breach, committed either by DELAY, FRAUD,
NEGLIGENCE or Contravention of the tenor may be liable for
damages.

Badillo, Firaza, Gutierrez & Mechure

8
 Note: If totally lost: The value of the specific/generic thing that
CONCEPT OF DAMAGES IN LAW was lost is the basis for the amount of damages.

ART.2201 to correlate with ART 2197 CASES ( Related to money matters)

Concept of damages refer to sum of money. DETERMINATION of the amount of damages, should be
paid in INTEREST
What is money? a. NACAR vs GALLERY TRADES

It is for the compensation and recompense for the damage Held: The SC stated the ff RULES on how to compute the
and/or injury sustained by the creditor because of the breach interest as the amount of damages payable by the debtor in

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by the debtor of the obligation committed through “Delay, case of breach ,both in delivery of money or thing/service/not
Fraud, Negligence or Contravention of the tenor” of the to do, in accordance with BSP Monetary Board Circular 799:
obligation.

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[Link] the obligation is payment of sum of money, interest
DAMAGES is about MONEY due is what was stipulated by the parties in writing.
6 types of DAMAGES: (MENTAL)

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i. Moral Dean’s discussion in between:
ii. Exemplary It depends on the agreement of parties, take note of Art 1956,
iii. Nominal it tells us that an agreement for the payment of interest for an
iv. Temperate obligation involving sum of money (loan) and your creditor

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v. Actual wants you to pay for an amount of interest, that must be
vi. Liquidated Damage reduced in writing.

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BASIS OF THE DAMAGES that Creditor may Scenario: If the stipulation stating that the debtor is to pay for
invoked/sustained: the interest over and above the principal, is not in writing, then

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the obligation to pay interest cannot be enforced.
a. Obligations requiring payment of MONEY
Example: *A borrowed from B Php 500,000 and A agree that
In cases of DELAY: he’ll pay an interest of 10% per annum to B, but this agreement
ie
*I owe you Php500,000 and I’m suppose to pay and did not get of A and B were never reduced in writing, they were just oral
to pay you, and I incurred that type of delay that will give rise agreement.
for the liability for damages.
ut
Question: In this aspect what would be the basis of the amount When the obligation becomes due and demandable, A’s
of damages? obligation does not merely to pay B Php500,000 but also the
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10% of interest(50,000)
Answer: When it comes to money matters ART 2209 tells us
that the amount of compensation that the Creditor will be Question: Does B still have a cause of action, in case A no
entitled to, would be in the form of INTEREST. longer fulfills his obligation?
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ART 2209 “ If the obligation consists in the payment of a sum Answer: Yes and No.
of money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall be YES, insofar as the enforcement of the Principal (500k) but
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the payment of the interest agreed upon, and in the presence NO, insofar as the interest is concerned. Even if the creditor
of stipulation, the legal interest, which is six percent per shows proof of their oral agreement for the payment of 10%
annum” interest. (This is among the Formal Contracts)
,F

b. Obligations requiring the delivery of SPECIFIC OR *What if the parties did not stipulate any interest, in cases of
GENERIC THING, FULFILLMENT OF SERVICE, or breach.
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BEING PREVENTED FROM DOING AN ACT

Question: Can the Creditor still claim for an interest as basis
*Question: What if the obligation does not involve for the damages that he would be entitled to?
payment of money? But rather of a delivery of thing either it is Answer: Yes, this time it will be the LEGAL INTEREST which
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specific or generic, rendering of a service and prevented from will be 6% per annum at the moment where there is demand.
doing an act. And these may have been violated, or the debtor
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committed Delay, Fraud, Negligence or Contravention of the 2. If the obligation is not in money and there is a breach,
tenor. the interest will be on the amount of damages determined
already that is payable to the creditor by the debtor.
Answer: The basis for the cause of action for the amount of Dean’s discussion in between:
damages, will be related to the actual determination of the
injury sustained, which will be in the form of either a Example: A car that the debtor is supposed to deliver to the
REPARATION, RESTITUTION or INDEMNIFICATION. creditor, but because of his negligence, was wrecked. The
amount of damages to the car was already determined and

Badillo, Firaza, Gutierrez & Mechure

9
liquidated and amounts to Php100,000. So if the debtor, once
he become liable to such obligation and is now determined and
due, still delays. That is when there is also an an interest. ARTICLE 1169 “Those obliged to deliver or to do something
Interest over the 100k which will also be 6% per annum. incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their
CAUSES FOR RIGHTS TO SUE FOR DAMAGES obligation.
However, the demand by the creditor shall not be necessary in
ART 1170 Tells us that there are 4 GROUNDS by which a order that delay may exist:
debtor, in the breach, may employ and resulting to his liability (1) When the obligation or the law expressly so declare; or
for payment of damages: (2) When from the nature and the circumstances of the
1. DELAY – ART.1169 obligation it appears that the designation of the time when the

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2. FRAUD – ART 1171 thing is to be delivered or the service is to be rendered was a
3. NEGLIGENCE – ART 1172 and Art 1173 controlling motive for the establishment of the contract; or
4. CONTRAVENTION OF THE TENOR OF THE (3) When demand would be useless, as when the obligor has

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OBLIGATION – ART. rendered it beyond his power to perform.”

[Link] OF THE TENOR OF THE OBLIGATION ( CONCEPT OF THE DEFAULT

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COTTOTO) DEFAULT (MORA)

Issue: If the debtor commits delay (Art.1169), Fraud, -refers to the delay of the obligor to perform wth respect to
Negligence would that all be considered as COTTOTO’s? YES, time.

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they are COTTOTO’s but not all COTTOTO’s would be limited
to delay, fraud and negligence. -failure to perform the prestation in time
There are other several ways of committing COTTOTO’s

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*****why MORA? Check example below to know:
CASE:

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Example: If A owed Matthew, and promised Matthew to pay
CATHAY PACIFIC vs SPS. VASQUEZ him today. Matthew waited for A, but A did not arrived. (‘Di ba
kung ikaw si Matthew mapapa-MORA ka? )
Facts: This is a suit filed by the passengers of the airline ,
ie
generally, passengers sue airline for 2 reason. First, they were 3 TYPES OF MORA
bumped off (with confirmed reservation but refused to board 1. MORA SOLVENDI (Delay on the part of the
the aircraft without any valid reason) and second, there is a DEBTOR)
ut
downgrade (purchase a ticket for a higher grade, but refuse to 2. MORA ACCIPIENDI (Delay on the part of the
be seated on your reserved seat and instead put the CREDITOR -Art 1256 to Art 1261 TOPAC-Tender of
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passenger in a lower grade seat) – Carascoso v Airfrance. payment and consignation)

But here in this case, they were not bumped off or 3. COMPENSATIO MORAE (Delay in RECIPROCAL
downgraded, in the contrary, they were upgraded, from OBLIGATION- creates 2 separate prestations)
Business class they were forced to occupy First Class seats.
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They were so angry and filed a case against Cathay pacific for MORA SOLVENDI
the breach of contract through FRAUD. Failure of the debtor to fulfill the obligation in regard to time.
In Cathay Pacific’s defense, the business class were already
full and that the Spouses were among the few qualified Discussion by Dean:
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members of the Marco Polo Frequent Flyer Club who is The question is, at the moment the debtor is unable to fulfill the
entitled for an upgrade to first class. obligation on time, does he now incur that liability to pay
But Spouses insist of seating in business class, since all of damages on the basis of Art.1170?
,F

their friends were seated there next to each other.

Example: *A 1 Million peso loan was supposed to be paid
Issue: Was there a breach of the contract of carriage and if the yesterday, but the debtor did not pay.
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breach was committed how was it committed?

Question: Does the creditor have a right to demand for the
Held: SC stated that there was a breach because the contract 1million pesos but also an interest corresponding to a
was for them to occupy the Business Class, not the first class damage?
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which the Cathay pacific forced them to occupy. The breach Issue: Would that delay or failure to perform in time would be
was NOT FRAUD. enough for the debtor to be liable for the damages?
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Breached was committed in another manner which is Answer: YES

CONTRAVENTION OF THE TENOR OF THE OBLIGATION
(COTTOTO) Discussion in between:

Dean’s discussion: Not all COTTOTO would result an action for 3 Requisites (must be in this order):
damages on the basis of Delay, Fraud and/or Negligence(DFN)
because although DFN are COTTOTO’s but not all [Link] must be Due/Demandable/Liquidated
COTTOTO’s would be tantamount to DFN.

Badillo, Firaza, Gutierrez & Mechure

10
-that the creditor at the moment has the right to enforce the merchandise, that the cardholder now is applying for a loan. In
obligation on the debtor this case, the cardholder now becomes the debtor and the card
-Due (enforceable) Demandable(may be enforced) Liquidated issuer (AMEX) is now the creditor. If there was a delay, it was
(amount of damages is determined already) Mora Accipiendi.
note: Natural obligation (no longer demandable)
In proving Mora Accipiendi, it must also be shown that their
[Link] fails to fulfill the obligation (Simple delay) delay was without just cause. AMEX says, that there was just
cause in their delay, they needed to dig into a further credit
c. Demand-demand should be made either Judicial or Extra investigation in the capability of the spouses to repay the loan
Judicial because the amount was unusually larger than the ordinary
loans that spouses applied for when they utilized the card for

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-Judicial( Use the court) Extra Judicial (lawyer or you yourself previously.
make demand)
Issue: What was the obligation of AMEX where they committed

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Question: Should the demand be always in writing? NO, any the alleged delay or simply they did not fulfill it on time.
form of demand should be sufficient, provided that all the
requirements made by the creditor for the debtor to fulfill the Held: SC states that they are not talking about the contract of

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obligation is present. loan. But rather an obligation on the part of the AMEX to
process with dispatch applications for a loan by cardholders
-demand is not just a procedural requirement but is a who utilize the same for the purchase of merchandise. This is
jurisdictional requirement, which means that you must prove it matter provided for in the agreement of the Cardholder and the

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if you’re going to sue the debtor for the fulfillment of obligation Card Issuer. By their agreement everytime you use it, AMEX
and claim for damages. (for practical purposes, do it in writing) promise that we will process your application with dispatch. SC
states that AMEX is the debtor in this case and Pantaleons as

z,
Example: A owes B 500k, and it is due for tomorrow. A and B the creditor. Ergo the delay committed was not Mora Accipiendi
met today, B demands to A that he should pay the 500k but MORA SOLVENDI.

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tomorrow even if it is not yet due and demandable. YES, there is a breach on the part of AMEX in the processing
of application of loans with dispatch. Which resulted damaged
Question: If A do not fulfill it tomorrow, is A already liable for to the Pantaleons.
damages and/or B is entitled for damages?
ie
Before D will incur liability for damages bc of default, as
Answer: NOT YET. Because the demand you made was distinguished from simple delay or legal delay.
effected prior to the it becoming due and demandable.
ut
Simple Delay: Failure to fulfil on time
Legal Delay: There is already simple delay, a demand made,
,G

CASE: PANTALEON vs AMERICAN EXPRESS which now creates an obli to sue for damages.
In all instances, is it necessary for demand be made in order
Facts: Atty. Pantaleon together with his family took a flight to for D to incur delay?
Europe for a tour. When they came to Amsterdam, they were
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brought to the Diamond maker shop, where he and his family General rule: YES. Before D is liable for damages, C must
purchase some diamonds amounting to $13,000 which was have made a demand and that must be made after the obli is
unusual as to the prior expenses of Atty. Pantaleon using his due and demandable. If no demand, what D incurs is only
AMEX card, it took sometime for the approval from the AMEX simple delay and not yet enough for C to sue for damages.
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of his purchase. It was so long, that they were the only ones
that is not yet inside the bus. The AMEX took more than an Exception: Instances when demand is no longer (dko
hour to approve the purchase, upon alighting the bus, Atty. maintndhan). From the moment D fails to fulfill on time,
,F

Pantaleon and his family was met by a group of angry tourists, that’s it, that’s delay/ default that will now give the right to
because the scheduled group tour was delayed and some site give C to sue for damages.
visits had to be cancelled because of them.
llo

1. LAW stipulates otherwise: when obli arises from law.

When they came back in the Philippines, they sued AMEX for Law provides for a time when it is fulfilled or
breach of contract committed by AMEX through DELAY. And performed. Further, when law states there need not
claiming for damages. Delay in the processing of the demand to be made and/ or D incurs delay
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application for a loan, because such application should be automatically for failure to fulfill on time. The law itself
process in dispatch or in a manner of seconds or minutes, and now says no need to make a demand.
Ba

not beyond 1 hour.

Example: NIR provides for the last day to pay for income taxes
In AMEX’s defense, there can be no delay, because there can April 15. Pag di nabayaran, April 16 na, the governor need not
be no obligation on their part. They said that the Pantaleon’s make a demand, taxpayer is liable for damages (interest)
were insisting on Mora Solvendi (delay on the part of the
Obligor) when in truth in the fact, their delay was MORA Ex. Provision in Art 1788: where the partner in a partnership
ACCIPIENDI (Delay on the part of the Creditor) because as promises to contribute financially assets and commits to make
pre stated, when the cardholder utilizes the card to purchase a delivery to make it on this day, once he is unable to deliver it

Badillo, Firaza, Gutierrez & Mechure

11
on time the ff day, partner is in legal delay and partnership has would still require Mbank to make a demand. Kasi nga in the
right to impose penalty as damages no need demand. provision there was nothing there that states Tarona being
considered in default at the moment there is failure to pay on
2. Stipulation by the parties’: Common in CONTRACTS. time or a statement that will oblige Mbank as C mortgage the
They stipulate. authority to foreclose the mortgage without the need of a
demand from the moment Tarona fails to pay.
Example: Credit card agreements,
SSS case: SSS extended a large amount of loan for a long
What must be stipulated by the parties: period of 10 years to moonwalk development corp. for the
subdivision. Moonwalk will pay SSS in installment basis a
•No need for a demand in order to hold D in default so as to portion of a principal plus interest (NOTE: The justification of

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hold him liable for damages. Or D is in default at the moment D interest is not always for damages as distinguished from
fails to fulfill the obli and is liable for interest or penalty for interest as compensation and interest as compensation for the
damages. Unequivocal. right of the D to use the money. When u are extended a loan,

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by C, he voluntarily prevents him from enjoining the amount of
Ex: In a contract of loan you are to pay on April 7, we agreed money bc he allows u to first use it. So bayad mo kay C ung
that if you delay, Creditor need not make demand for him to privilege na yan.).

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have a right to impose penalty
SSS agreed for MNWLK to pay in installments plus interest. It
Ex. You are to pay on Dec 31, failure on your part to pay on the is also stipulated that upon failure of MNWLK to pay the partial
exact date, you will be in default to which you will now be amount of the principal and interest on time every month will

M
obligated also to pay a penalty in the amount of 5% per day now also hold him liable to pay an additional penalty. It is also
until fulfilled. stipulated that if after failure to pay the installments, SSS as C
will have a right to make the whole outstanding obligation and

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Cases to be compared: interest due and demandable this is an acceleration clause.
RIVERA VS SPS CHUA compare to MAYBANK PHILS. VS This is common in so far as loans available in installments.

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TARRERA and SSS vs MNWLK DEVT CORP>
(Example: Pag di mo binayaran yung amount sa credit card mo
Rivera Case: Nangutang si Rivera sa Sps. 30k, the contracts on time, for several times the credit card will now use the
states that it be paid on Dec 31, “that if unable to pay, upon acceleration clause and consider the entire obligation to be
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default, I, Rivera, will be liable to pay the amount of 5% per due and demandable.) MNWLK was not able to pay several
month until fully paid.” installments and when SSS realized this, they use the
acceleration clause; it therefore required MNWLK to pay the
ut
Rivera wasn’t able to pay on date, SPS tried to collect principal outstanding obligation and interest wala pa yung penalty.
amount and interest: total amount accumulated. MNWLK paid and the obligation was extinguished the balance
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and the corresponding obligation, tapos na. After a few months

ISSUE: Is Rivera liable for interest even w/o demand by the SSS realized that MNWLK should also be liable for the penalty
sps? kasi nasa contract na if you’re not able to pay on time for
several months, you also have to pay for penalty.
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SC: The provision in the contract was sufficient. SPS chua did
not need to demand. SSS hinabol si MNWLK for the amount of penalty that they
Maybank Case: Contract of loan but this time, it was secured incurred for not being able to pay on time their installments and
by real estate mortgage. The provision stated gave Maybank interests every month. MNWLK refused.
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the right to foreclose the mortgage for failure on part of D to

pay the loan on time: Issue: Is MNWLK liable to pay for the interest (as penalty)
automatically from the moment it failed to pay the installment
,F

Exact provi: “In event of that failure of mortgagor/Debtor, the and interest (not penalty). Automatic ba?
mortgagee or C shall have the right to foreclose the mortgage.”
It was proven but SSS in every moment the MNWLK failed to
llo

Issue: Did the bank have that right to automatically foreclose pay on time did not make any demand. Walang demand
the real estate mortgage from the moment Tarrera failed to pay SC held MNWLK cannot be held liable to pay.
on time, did MBank still need to make a demand? The liability cannot be considered to be automatically attached
upon failure of payment every month of the installment and
di

SC: No. Mbank did not have a right to automatically foreclose interest in order for that penalty to attach SSS should have
the real estate mortgage atm Tarrera failed to pay on time made a demand.
Ba

because there was nothing in the contract of loan stating that

Tarona from the moment he is in default, or that maybank need WHY? because there is nothing in the agreement that declares
not make a demand in order for it to foreclose the real estate moonwalk liale to pay for failure every month to pay the
mortgage. installment and interest that the penalty would automatically to
attach without deman by SSS.
The SC said that the reason why Mbank or C right to foreclose
is merely a consequence of Tarona. Meaning, it is only a In order for this to apply to the exception what needs to be
consequence of Tarona’s being in default but being in default stipulated in a contract or to waive the demand the contract

Badillo, Firaza, Gutierrez & Mechure

12
must express either (1) demand need not be necessary, or (2) time it was clear insofar as the defendant was concerned that
that default or legal delay shall commence upon mere failure to the materials needed on or before that particular date.
pay on time.
WHY? Bc marzaga was able to relay the sad story to a
3. Time is motive or Principal Consideration on the representative ofc which marzaga has a good reason to rely
part of the parties who have entered into a that the defendant understood. Second, the demand was not
contract necessary bc the time for the delivery was a controlling motive
for marzaga to push through to the agreement of the purchase.
The designation is the controlling motive for the establishment
of the contract it is the time. 4. Demand is useless

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Example: If you are to get married you will be entering into Before you are able to understand that demand is useless u
several types of contract the important of them is the creation have to know what is the purpose of the demand what is its
of your wedding gown: use? It is bc of the presumption of good faith found in relation

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article 1174.
3 important things to consider
• Style of the gown kung kaya bang gawin Good faith means the law presumes my failure to pay u on

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• Price kaya mo bang bayaran time may have been due to some event that was unforeseen
• Time of its delivery by me or that I foresaw but was unable to avoid, not my fault
but bc of circumstances beyond my control.
Obviously you will not agree to the coturier if he cannot deliver

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it before ur wedding. If hindi kaya you will not proceed to the Example: D was about to pay today and when he was about to
making of the gown but if he agrees that he is able to fulfill it leave but unfortunately an earthquake occurred. D failed to
before the day of your wedding and he does not it will affect ur pay, could it still be justified to hold the liable for damages bc of

z,
wedding. his failure to pay? No bc D’s failure to pay was brought about
by fortuitous events or forces beyond control.

rre
Yan ang basehan for damages. After the wedding do u still
need to make a demand in order to hold the ctorier liable for Upon failure and a demand is made notwithstanding the D still
damages? Ofcourse not. fails, this time that presumption no longer will apply. It is for D
to show proof to establish the fact that his continued failure is
ie
Marsaga vs CA due to such events. Wala na yung presumption of good faith.
F: Marzagas wife was terminally ill and the wife has a last will When the law says that when demand will be useless as to
asking marzaga her husband that if she dies before Christmas when the D make it impossible to fulfill the obligation the word
ut
shell be buried before Christmas day para naman daw masaya “as when” the law only gives as an example when demand is
sila bago mag Christmas for the family will not be mourning on useless but it really refers to circumstances that will clearly
,G

Christmas day. prove that presuming good faith on the part of D in regard on
his failure to pay on time no longer will be applicable
The wife died but there were still a few days for marzaga to
prepare for the funeral, to construct the coffin and to buy Anticipatory breach: A breach committed even before the
za

supplies and materials. He went to this hardware store and obligation falls due. Obligation was denied.
expressed to the sales person the representative na eto yung
kailangan ko na materials at this state and this time kasi my Example: A definite and unconditional repudiation of the
wife has a dying wish that she be buried before Christmas. contract before it falls due. Meaning, Dean's obligation to pay
ira

and you remind him BUT instead of confirming, Dean resisted

Marzaga was able to relay to a representative of the hardware and rejected. He expressed his not willingness to pay. After
the need for the materials to be delivered to this day and time that statement, there is no presumption of good faith anymore.
,F

because the coffin need to be finished by the workers who are

to use this materials so that the wife will be buried before Constructive breach: The obligation was not denied but D
christmas. does things that will prevent him from fulfilling the obligation on
llo

The hardware was not able to deliver the materials hence the time.
burial happened after Christmas. The last will of the wife was
not fulfilled because of this marzaga sued for damages against Example: Dean to deliver a car tomorrow, and Dean went to
the hardware for delay of the delivery of the materials. Mindanao so Dean will not be able to fulfill it.
di

There are two contentions: According to the hardware there In these circumstances, NO DEMAND IS NECESSARY!
Ba

was no express agreement as for the delivery of the materials,

the invoice did not provide for the time and date for the delivery Blosson company and Company VS Manila GAS (dko
it was completely silent which means that the defendant will be marinig ng maayos)
allowed to deliver within the reasonable period, also the
hardware said there was no demand on the part of marzaga. Anticipatory breach example

SC: Did not agree and held the hardware liable. As for the first F: BC entered into a contract with MG to supply them gas for 4
issue even without any express agreement as to the date and years for a stipulated amount. Meron na presyo ung gas na

Badillo, Firaza, Gutierrez & Mechure

13
binibili. After 2 yrs, there was a sudden increase of the price of Two types of Fraud
the gas that BC was purchasing. 2 yrs pa lang may 4 yrs pa
pero tumaas na presyo ng gas. 1. Fraud in the performance of an obligation

MG nagsabe na they will no longer supply unless BC agrees to 2. Art.1338 Fraud of inducement
pay the increased price ng gas.
-others get induced to enter into a contract which without the
Issue: Did BC need to make a demand as soon as MG fail to
party would not agree upon, leading someone to agree to a
deliver?
contract.
MG incurred anticipatory breach bc they made the admission

re
that they will not deliver gas unless BC agrees to pay the *Distinction between the two is that Art.1388 no pre-existing
increased price. obligation, fraud itself creates the obligation while in Art 1171
there is a pre-existing obligation

hu
5. Reciprocal obligations: Refers to an obli where
gives rise to use restrictions. When does one of *If it fraud in 1171 creditor may have been injured and would
them incur delay? have a course of action both for specific and damages for fraud

ec
but for Art 1338 limited only for damages not performance of
Example: Contract of sale, seller and buyer. Buyer pay 500k an obligation because there is no obligation that existed
and seller is to deliver car. This is done simultaneously.
TWO TYPES OF FRAUD

M
SOLAR harvest case:
Dolo Incidente/Incidental fraud -committed by debtor but to
NACHURA: if obli is reciprocal, one of them will be held liable which was not really enticed that creditor to enter the

z,
only upon fulfillment by the other. Once the buyer pays the agreement, even if without fraud creditor will enter into an
seller 500k, it is expected that the seller delivers the car agreement. Right to damages only here

rre
already. Hence, if the buyer pays 500k and seller did not
deliver, Seller is in default which means that buyer now has a Dolo Causente- entices creditor to enter into a contract,
cause of action to demand specific performance and to creditor will not enter without fraud.
damages.
ie
Art 1165 and 1171
—-NEGLIGENCE and FE—
ut
Is demand necessary? NO NEED! Accdg to Nachura, if the
[Link] in ART. 1172 AND ART. 1173
obligation is fulfilled simultaneously, there is no need for
,G

demand.
Art.1172 “Responsibility arising from negligence in the
performance of every kind of obligation is also demandable,
If not simultaneous, this is not applicable; it is Mora Solvendi
but such liability may be regulated by the courts, according to
only. APPLY 1st paragraph, 1169. DEMAND.
the circumstances”.
za

Example: Seller delivers car on April 7, Wed, while buyer is to

Art. 1173 “The fault or negligence of the obligor consists in the
pay only on April 30, here the fulfillments are not dua and
omission of that diligence which is required by the nature of the
demandable at the same time or simultaneously.
ira

obligation and corresponds with the circumstances of the

persons, of the time and of the place. When negligence shows
How can Seller be in delay if ganito? DEMAND must be done.
bad faith, the provisions of Articles 1171 and 2201, par.2, shall
If S fails to deliver, B hasn’t paid yet can B demand? YES in
,F

apply.
order to be liable for damages.
If the law or contract does not state the diligence which is to be
Case: Contract of Loan, reciprocal obli. Bank agreed with
observed in the performance, that which is expected of a good
llo

debtor with regard to release in loan after complying to reqs

father of a family shall be required’’.
and fails, that will hold him liable.
You will now just have to relate it to ART 1163:
—START OF FRAUD—
di

Art. 1163 Every person obliged to give something is also

FRAUD
obliged to take care of it with the proper diligence of a good
Ba

father of a family, unless the law or the stipulation of the parties

Art.1171 Responsibility arising from fraud is demandable from requires another standard of care.
all obligation, any waiver for future fraud is void
Dean’s definition of Art.1163. Obligation to care to the thing
Fraud/Dolo is a conscious or intention proposition to evade the with the diligence of a good father of the family.
normal fulfillment of an obligation. It implies a kind of malice or
dishonesty and should not cover cases of errors made in good
faith.

Badillo, Firaza, Gutierrez & Mechure

14
SCENARIO: If the Debtor is not able to fulfill that obligation to
care for the thing, with the diligence required of them. If you go
to ART 1173 it will tell you that it is tantamount to negligence. ART.1176 ART.2176

And if because of that negligence it is the direct cause or CULPA CULPA

proximate cause of the injury done or loss on the part of the CONTRACTUAL AQUILIANA
creditor then there is a cause of action for damages.

NOTE: Negligence must have cost the creditor loss, injury or

damage. SIMILARITIES Both refers to Both refers to
NEGLIGENCE NEGLIGENCE

re
2 Distinct Requirements:
a. Negligence
b. That results to: Loss, Damage or Injury

hu
IMPORTANCE There is a There is no
PRE-EXISTING pre-existing
SCENARIO: So, if the question provides for facts where it
CONTRACTUAL contractual
merely states negligence committed on the part of the debtor,
RELATION relation, but

ec
but did not make mention of the “Damage, Injury or Loss” do
not make the conclusion that, that debtor will now be liable for there is an
damages. No, there has to be the consequence of that OBLIGATION
negligent act on the part of the creditor. “Losing, Damaging or

M
being injured”.

-obligations is -no pre-existing

z,
Note for this scenario: Pag binitin kayo ng tanong at hindi
sinabi that the negligent act causes Damage, Injury or Loss to arising from CONTRACTUAL
existing OBLIGATION

rre
the creditor. You make the qualification, it depends kamo,
considering the statement of facts of the case did not contractual
specifically identify the Damage, Injury or Loss on the part of relation
the creditor, then we will have to make a presumption or
ie
assumption, pag may damages then, liability for damages. Pag But there is a
wala naming nangyari, then wala kang basis for an “action for
damages”. pre-existing
ut
obligation which
EXAMPLE FROM DEAN : is the GENERAL
,G

Pag may nag-banggaan, sasabihin mo “ Oh liable!” OBLIGATION of

each one of us,
No. you have first to determine whether the accident was expected of
brought about by the negligence of one of them.
each one of us
za

Because if the accident was brought about by an event that is to be prudent, to

unforeseen or may have been foreseen but was inevitable, Art be careful in all
1174 applies -that relieves any of them from the liability to pay of our human
ira

for the Injury, Damage, or Loss. (THERE MUST BE actuations or

NEGLIGENCE and DAMAGE, INJURY or LOSS) activities- as
this will be the
,F

II. DISTINCTIONS between Quasi Delicts (Art 2176) and

basis of our
Negligence (Art 1171)
negligence.
(Jurado)
llo

ART 1171. Culpa Contractual

“Responsibility arising from fraud is demandable in all
obligations. Any waiver of an action for future fraud is void.” -imposed on all,
di

by virtue of
ART 2176. Culpa Aquiliana
community
“Whoever by act or omission causes damage to another, there
ONENESS.
Ba

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.”

DISTINCTIONS as discussed by Dean:

Badillo, Firaza, Gutierrez & Mechure

15
 the obligation that we need
to be prudent and careful in
all of our human actuations
CONSEQUENCE The negligence The negligence or activities)
S of the is committed in is committed in
DISTINCTIONS the fulfillment of the fulfillment of
between the the pre-existing the general
TWO obligation obligation that
arising from the we owe each

re
contract. other.
****There is a third type of culpa, CULPA CRIMINAL, but
Dean won’t discuss it. Hindi nya bet, charot.***

hu
SCENARIOS:
DISTINCTIONS provided in the case of Oriental Freight

ec
a. If the negligence is in the fulfillment of existing
International v. Keihein Everett (pp. 89-92 of Dean’s book )
contractual relation--- the cause of action is CULPA
CONTRACTUAL.

M
ART.1176 CULPA ART.2176 CULPA b. If the negligence is committed not in the performance
of pre-existing contractual obligation but rather is due to the
CONTRACTUAL AQUILIANA
absence of prudence and the care that is expected from all in

z,
our dealings with others---the cause of action is CULPA
AQUILIANA.

rre
1. There is a pre-existing [Link] pre-existing contractual
contractual obligation. relation *EXAMPLE FROM DEAN: “May banggaan (again).”

Question: On the basis of the civil code what will be the cause
ie
of action of the innocent driver against the guilty driver who
2. Negligence need not be [Link] must be was negligent as a result?
ut
proven by the plaintiff or proven by the complainant
Answer of dean: CULPA AQUILIANA
creditor because upon (in relation to how to
,G

breach by the debtor of any proceed with the cause of

*EXAMPLE FROM DEAN: “There is a pedestrian walking,
of the provisions of the action for damages) nabundol mo”
contract, there is a
presumption of negligence. Cause of Action- must be Question: What is the cause of action that the heirs of the
za

proven by the complainant. pedestrian could initiate since namatay na si pedestrian?

ira

Answer of dean: CULPA AQUILIANA, why? It cannot be

Culpa contractual because there is no pre-existing contractual
(BURDEN-- it is on the relation that existed between you (ikaw na nakabangga) and
the pedestrian (namatay).
,F

(BURDEN-- Debtor must Creditor to prove that there

show that there was no was negligence) SCENARIOS:
negligence)
llo

[Link] it possible that CULPA AQUILIANA may still be the basis

of action of a negligence clearly committed in the fulfillment of
3. Negligence is the direct a pre-existing contractual relation? Yes. (Carascoso vs Air
di

3. Negligence is mere and substantive and France)

incidental to the performance independent
[Link] do some complainants want that the cause of action
Ba

of the contractual
was Culpa Aquiliana rather than Culpa Contractual?
obligations.
Answer: Because even if the complainant (Creditor) would
NOTE: it is the negligence have the burden of showing proof of negligence, it will be paid
itself that creates the off by a larger sum that will be granted by the court for the
obligation to pay for reason that there is bad faith usually in Culpa Aquiliana. In
damages (but we still bear Culpa contractual, negligence may not be necessarily be
committed in bad faith (lesser sum will be granted by the court)

Badillo, Firaza, Gutierrez & Mechure

16
Case: Cathay Pacific vs Vasquez CARASCOSO v AIRFRANCE

There was a breach of pre-existing contractual obligation (not Facts: It was in the 60’s Mr. Carascoso a Filipino, bought
due to negligence) and it was not proven that there was bad first-class ticket on Air France, when he’s on the flight he was
faith even if there’s breach, the breach did not justify a much refused to be seated in first-class and his seat was given to
larger amount of damage. some Europeans (Discrimination was prevalent that time). Mr.
Carascoso then filed a suit against Air France.
NOTE: It is more of trying to make the debtor more liable for
damages, why? Because sometimes it would be better for you Issue: Was there a pre-existing contractual relation between
to prove that the cause of action you are filing is Culpa Mr. Carascoso and Air France?
Aquiliana although their negligence being pointed out is

re
negligence committed on the performance of a pre-existing Held: Yes, “Contract of Carriage”. But SC make Air France
obligation. liable not of Culpa Contractual but Culpa Aquiliana because

hu
the negligent act or the fault that Air France committed
III. ILLUSTRATIONS from the CASES : although was breached of contractual relations constituted also
a Culpa Aquiliana in the form of Discrimination even without
any existing contractual relation between Air France and Mr.

ec
SALUGADA vs FEU
Carascoso the fact that there was Discrimination committed in
Facts: Negligent act of the Security Guard discharged bad faith it could have given rise to a liability, and that liability is
accidentally a service firearm hitting a law student, injuring him tort.

M
inside the FEU Campus. In the allegations there was an effort
to show proof that the basis of the liability was Culpa Aquiliana EXAMPLE FROM DEAN:
because the defense of diligence of a good father of family is

z,
sufficient. (not sufficient in Culpa Contractual- there must be a a.A third party enters San Beda Campus and this stranger
clear showing of utmost diligence before you may be exempted meets an accident inside the campus, the cause of action of
from the liability) that stranger is Culpa Aquiliana (nahulog sa manhole-

rre
negligence ‘to kasi may naiwan na open manhole).
Held: SC states that the negligence of the security guard was
considered to be negligence of the FEU but it was Culpa [Link] it was a student, where there is pre-existing contractual
ie
Contractual not Culpa Aquiliana because outside of the relation, at nahulog sa manhole. Can San Beda be liable? Yes.
contractual relationship between the student and the school, Liable for Culpa Aquiliana, because that duty of San Beda to
the school has no obligation to the care of the safety of the cover the manhole to protect others from falling, would not be
ut
student. limited to those to whom there is a contractual relation but
even to third party.
,G

The negligence found that is imputable to FEU was negligence

committed in the performance of a pre-existing obligation MERALCO VS RAMOY
arising from the contractual relationship between the student
and the school (FEU). F: The cutting of electricity. THere was this property ng
za

squatters, informal settlers. Lupa ng NAPOCOR and the

Change of Scenarios in between discussion: squatters are being evicted. They refuse to leave so
NAPOCOR asked MERALCO to cut off the electricity of the
ira

a. If the Salugado was not a student of FEU and was squatters area. NAPOCOR is the supplier and Meralco is the
injured outside the campus. FEU will not bother. distributor. Pinakiusapan ng NAPOCOR na putulan para
umalis na pero MERALCO did not review well the extent of the
property where electricity should be withdrawn. They shut
,F

[Link] there is a third party who entered FEU and that

down the electricity extending to where Ramoy lives. Pati
accident happened , it will be Culpa Aquiliana and not
bahay ni Ramoy kahit di sya kasama, naputulan ng kuryente.
culpa contractual.
Was there negligence? YES. The contract between Ramoy
llo

and Meralco. Culpa Contractual ito. Outside their contract,

SC states that if the contracting parties act that breaches the there could be no negligence.
contract would have given rise to any extra-contractual liability
(quasi-delict liability that arises outside the contract) had there FORTUITOUS EVENTS
di

be no contract, the contract would be deemed breached by a

tort and the party may be held liable under ART.2176. Art. 1174. Except in cases expressly specified by the law, or
Ba

when it is otherwise declared by stipulation, or when the nature

What Dean was trying to point out here in this case: of the obligation requires the assumption of risk, no person
shall be responsible for those events which could not be
Even without the pre-existing contractual relation, if a negligent foreseen, or which, though foreseen, were inevitable. (1105a)
act could still be the basis of the damage done then it is Culpa
Aquiliana. (best illustration is the case of Carascoso vs Air When C is to initiate any claim for damages on basis of 1170
France) (Breach through delay, fraud negli), the usual defense of D is
FE (1174).

Badillo, Firaza, Gutierrez & Mechure

17
 the original plan was for the bldg to withstand the e-quake eh
FE tells u that a person is prevented from fulfilling due to an pero NAKPIL did not follow the plan.
event that was unforeseen or may have been foreseen but was
inevitable will not hold him liable for damages or injury. No Baka nagtipid ung NAKPIL kaya nagdeviate. BUT they already
liability that would attach. It will extinguish principal obli, foresaw it kasi. It was negligence on their part.
renders obli impossible to fulfill and will also prevent a claim for
damages. That’s why this is always a defense of D who is REPUBLIC VS LUZON Stevedoring
sued for liability for damages.
F: Luzon involved in transport of merchandise, they were
FE = Force Majeure contracted to transport a machine from manila to somewhere
inside metro manila. The only way is to go through the pasig

re
There are authors who say these have different meanings. river and they had barges used to transfer the big equipment.
Accdg to them, FE means Acts of God and FM is Acts of Man.
Another grp of authors define these in vice versa A day before the scheduled activity, there was a heavy rain in

hu
MM resulting in swelling of the Pasig river and there was a
BUT the truth is, SC does not make any distinction between strong current in the Pasig river.
the two. Dean advises to use whichever nalang mas madali

ec
ang spelling hehe. Luzon continued the ff day, what they did was they applied
their best, they used their best equipment ask ppl to oversee,
If it is asked, what are the kinds of FE, students will always say they did everything to push through even though there was still
Acts of God Acts of Man. This is WRONG! swelling. Sa lakas ng current, nabali yung cable that was

M
attached to the barge and bc of that nabangga sa Nagtahan
Rather in Art 1174, the two types are: bridge.

z,
1. Unforeseen event
2. Foreseen but was inevitable Republic sued Luzon for damages. Their defense was FE acts

rre
of God again because there was a heavy rain that resulted in
Ito ang two types. swelling of the river of which now was having current. Dahil
daw doon yun. They did everything daw as they never foresaw
Not all AOG or AOM are considered FE. BC to be FE, it what had happened.
ie
must be either unforseen or foreseen but was inevitable.
This means, if it is shown by the facts proven that an AOG SC: Defense was unmeritorious. The very fact that LUZON did
was something foreseen and could have been avoided, it their best is proof that they foresaw the possibility of the
ut
is NOT FE that will relieve D from any liability for damages. accident.
,G

GR: FE would not give rise for liability for damages. IT will The very evidence presented to prove FE was exactly the
relieve D from any obligation either performing the proof SC applied to show there was actually NO FE.
principal prestation if rendered impossible and damages
wala. TANNGILIN VS CA
za

Requisites: F: C contracted with TANGGILIN with the construction of

windmills. Kaso nung lumakas hangin, bumagsak yung
1. Event must be independent of the will of the Debtor windmills. Sabe AOG daw dahil strong wind eh which the
ira

2. Must be unforeseen or foreseen but inevitable windmills are unable to withstand.

3. Must have been rendered impossible to fulfill. Must be
proximate cause why D couldn't fulfill obligation. BUT kaya nga windmill they are supposed to withstand winds.
,F

4. Obligor or C is free from any participation in the NOT FE this is something foreseen na.
aggravation of injury resulting.
Based on the facts, there you will know if they have foreseen it
llo

Earthquake: AOG? na or hnde

NAKPIL and Sons vs CA and PBA ACTS OF MAN Examples:

di

F: After the earthquake, PBA’s bldg got damaged. Now, PBA is

suing Nakpil bc they are the contractors for damages due to AUSTRIA VS CA: Robbery kasi nag window shopping sya tas
Ba

negligence. BUT NAKPIL’s defense that it was an FE bc nakuha ung jewelry. SC agreed that it was FE. This happened
earthquake was unforeseen. in 1963, when criminality was not as rampant as the present
1970.
SC: After thorough review, there were many deviations by
NAKPIL from the original plan that was precisely for purposes If this happened 1970 then this is not FE pero dahil 1963, FE
of withstanding earthquakes. SC did not exempt NAKPIL from sya kasi mababa criminal rate.
liability kasi it was not unforeseen. NAKPIL foresaw it kaya nga
Cannot be applied in the present kasi rampant na ang crime.

Badillo, Firaza, Gutierrez & Mechure

18
OPCO vs BRDWAYMOTORS: Carnap

SIKAM PAWNSHOP: Holdap jewelry daw AOM. but since a

pawnshop is a business prone to robbery, they must've
foreseen that possibility. Isa lang security, di naka lock door,
vault was open too. This was proven negligence.

***Assumption of Risk***

****END****

re
hu
ec
M
z,
rre
ie
ut
,G
za
ira
,F
llo
di
Ba

Badillo, Firaza, Gutierrez & Mechure

19