OBLICON VIDEO 1

Concept of the Law on Obligation and Contracts

– The law on obligations and contracts is the body of rules which deals with the nature and sources of obligations and rights
and duties arising from agreements and contracts.

I. Definition
Article 1156. An obligation is a juridical necessity to give, to do or not to do.
A. 1156 is more on the point of view of the debtor. A more complete definition should also include the point of view of the creditor.
Better definition: It is a juridical relation whereby a person (creditor) may demand from another (debtor) the observance of a
determinative conduct (giving, doing, or not doing), and in case of breach, may demand satisfaction from the assets of the latter.
(Arias Ramos)

II. Elements of an Obligation

a. Passive Subject- (called debtor or obligor) or the person who is bound to the fulfillment of the obligation; he who has
a duty; bound to perform the prestation

b. Active subject-(called creditor or obligee) or the person who is entitled to demand the fulfillment of the obligation; he
who has a right; power to demand the prestation

c. Object or prestation- (subject matter of the obligation) or the conduct required to be observed by the debtor. It may
consist in giving, doing, or not doing. (see Art. 1232.) Without the prestation there is nothing to perform. In bilateral
obligations (see Art. 1191.), the parties are reciprocally debtors and creditors; and; not a thing but a particular conduct of the
debtor, but always a prestation

d. Juridical or legal tie- vinculum juris; It is the efficient cause or juridical tie by virtue of which the debtor has become
bound to perform the prestation. (also called efficient cause) or that which binds or connects the parties to the obligation. The
tie in an obligation can easily be determined by knowing the source of the obligation. (Art. 1157.)

III. Different Kinds of Prestations

a. TO GIVE – consists in the delivery of a movable or an immovable thing in order to create a real right or for the use of the
recipient or for its simple possession or in order to return to its owner;
b. TO DO – all kinds of work or services, whether mental or physical
c. NOT TO DO – consists in abstaining from some act, includes “not to give”, both being negative obligations
Why is the obligation not to give not included in the definition of obligation? This is because the concept of not to give is
really an obligation not to do
NOTE: In obligations it can either be real or personal obligation. An obligation to give is a real obligation while an obligation
to do or an obligation not to do is a personal obligation.
If it is an obligation to do, it is also called a positive personal obligation while an obligation not to do is a negative personal
obligation

IV. Classification of Obligations

Nature of obligations under Civil Code
A. 1156 of the NCC defines civil obligation
Civil Obligations Natural Obligations 1423
Obligations which give to the creditor or obligee a Do not grant a right of action to enforce their
right of action in courts of -justice to enforce their performance although in case of voluntary
performance fulfillment by the debtor, the latter may not
recover what has been delivered or rendered by
reason thereof.

Based on positive law- it is enforceable by court Based on equity and natural law
action (Juridical necessity under 1156)

Examples; 1424 to 1423

Moral Obligation Natural Obligation

It is a duty which one owes and which one he oath
to perform but which is not legally bound to fulfill
V. Sources of Obligations – Arts. 1156-7
1. Law (Article 1158)
2. Contracts (Arts. 1159, 1305)
3. Quasi-contracts (Arts. 1160, 2142)
4. Delicts or Crime (Art. 1161)
5. Quasi-delicts (Art. 1162, 2176)

A. A single act or omission can give rise to different causes of Action

Art. 1157

From Law
ART.1158.Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are
demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen,
by the provisions of this Book.
Law is a rule of conduct passed by common authority for common observance and for common benefit. In order for it to be a source
of obligation. It must be expressly or impliedly set forth and it cannot be presumed.

From Contracts
ARTICLE 1159. Obligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith.
A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to
render some service. It is the formal expression by the parties of their rights and obligations they have agreed upon with respect to
each other.

Obligation ex contractu- it must be complied with good faith. It is the law between the partiesa and neither party may
unilaterally evade its obligation of the contract unless the contract authorizes it or the other party assents.

Note that in contracts, the parties may freely enter into any stipulations provided they are not contrary to law, morals, good
customs, public order or public policy.

From Quasi-Contracts
Are also called obligation quasi ex contractu
 A quasi-contract is that juridical relation resulting from certain lawful, voluntary and unilateral acts by virtue of
which the parties become bound to each other to the end that no one will be unjustly enriched or benefited at the expense of another.
(Art. 2142.)

*Quasi-contract is distinguished from other sources of obligations

KINDS OF QUASI CONTRACT

 The most important of these juridical relations which are recognized and regulated by the Civil Code are negotiorum
gestio and solution indebiti.
1. Negotiorum gestio unauthorized management; arises whenever a person voluntarily takes charge of the agency or management of
another’s abandoned business or property without the latter’s authority.
2. Solutio indebiti, undue payment; Arises when a person unduly delivers a thing through mistake to another who has no right to
demand it (must not be through liberality or some other cause)

From Acts or Omissions punished by Law(Delicts)

Also called Obligation ex malificio or obligation ex delicto
In relation to Article 100 of RPC:
Article 100. Civil liability of a person guilty of felony. - Every person criminally liable for a felony is also civilly
liable.

The scope of civil liability are the following:

1. Restitution
2. Reparation for damage caused
3. Indeminity for consequential damages

From Quasi delict

Obligation ex quasi delicto, ex quasi malificio
It is an act or omission arising from fault or negligence which causes damage
 to another there being no pre-existing contractual relation between the parties
The elements of quasi-delict or torts are the following:
1. There must be an act or omission
2. There must be fault or negligence attributable to the person charge
3. Damage or injury
4. Direct relation of cause and effect between the act arising from fault or negligence and the damage or injury (proximate cause)
5. There is no preexisting contractual relation between the parties

Negligence is a failure to observe for the protection of interest of another person that the degree of care precaution and
negligence which the circumstances justly demand whereby such other person suffers injury

OBLICON 2
obligations and contracts lecture two.
let's go to the effects of obligations or the duties of the debtor in an obligation to give to do or an
obligation not to do.
With respect to an obligation to give, we have to first determine the object of what is to be given. If it is
a determinate thing or an indeterminate thing.
What is a determinate thing? it is one which is specifically designated and physically separated from
all the members of the same class while a generic thing is one which refers only to a class or
genus and cannot be identified with particularity. A determinate thing is identified only by its
individuality while a generic thing is identified only by its species.
So if it is an obligation to give a specific thing the following are the duties of the debtor:
1. to preserve the thing;
2. to deliver the accessions and accessories
3. to deliver the fruits; and
4. to deliver the thing itself.

with respect to the obligation to preserve the thing, this is the obligation to take care of the thing with the
diligence of a good father of a family. 1163 of the Civil Code provides the standard of diligence
that must be observed in order to preserve the thing to the to be delivered. So, 1163 provides
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. Therefore, in the obligation to preserve or take care of the thing with the due
diligence of a good father of a family the standard of care that must be observed is that one or
first the that which the law requires. If the law does not provide what standard of care to observe
then the standard of care to be observed is that stipulated by the parties in the absence of the two
1163 provides that the standard of care should be the diligence of the good father of a family the
diligence of a good father of a family is ordinary care or that diligence which an average or
reasonable prudent person would exercise over his own property.
The next obligation of the debtor in an obligation to give a specific thing is to deliver the fruits 1164 of
the Civil Code states, the creditor has a right to the fruits of the thing from the time the obligation
to deliver it arises however, he shall require no real right over it until the same has been
delivered to him.
So the creditor has a right to the fruits of the thing from the time the obligation to deliver arises. The
obligation arises from the time it becomes binding in contrast that is from the perfection of the
contract. Hence, the creditor is entitled to the fruits of the thing promised from the time the
debtor became bound and not from the time stipulated for delivery this is in relation to Article
1537 and 1589.
Article 1537 states the vendor is bound to deliver the things sold and its accessions and accessories in
the condition in which they were upon the perfection of the contract. All the fruits shall pertain to
the vendee from the day on which the contract was perfected.
 Article 1589 the vendee shall owe interest for the period between the delivery of the thing and the
payment of the price in the following three cases number two states should the things sold and
delivered produce fruits or income.
The rule does not apply to obligations under a suspensive condition where the fruits remain with the
debtor by special provision of law this is Article 1189.
the next obligation, is to deliver its accessions and accessories even if nothing is mentioned in the
contract. 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.
So those are the obligations to preserve the thing, to deliver the accessions and accessories, to deliver the
fruits and to deliver the thing itself.
If on the other hand, it is a generic thing the obligation of the debtor his principal obligation is that the
debtor must deliver a thing of the qualities specified if none was fixed he cannot deliver a thing
of inferior quality this is pursuant to Article 1246. 1246 states when the obligation consists in the
delivery of an indeterminate or generic thing whose quality and circumstances have not been
stated the creditor cannot demand a thing of superior quality neither can the debtor deliver a
thing of inferior quality the purpose of the obligation and other circumstances shall be taken into
consideration.
If the obligation is on the other hand an obligation to do the debtor must perform the act as promise
and cannot substitute another act or forbearance.
Article 1244 unless the creditor agrees or the right is reserved in case of facultative obligation. So 1244
provides the debtor of the thing cannot compel the creditor to receive a different one although the
latter may be of the same value as or more valuable than that which is due.

in obligation to do or not to do an act or forbearance cannot be substituted by another act or

forbearance against the obliges will.
In an obligation to do to do performance by an agent is permitted unless the obligation is strictly
personal.
In an obligation not to do what is the duty of the debtor or obligor the debtor must himself abstain from
the conduct prohibited he may not substitute another forbearance nor the forbearance of another
unless the creditor consents. Performance here cannot be by a delegate or an agent there is no
legal accessory obligation that arises unlike in obligations to give.
Note: that in obligations to give we should add that, if the debtor fails to comply with this obligation to
take care of the thing to deliver this specific thing or to deliver its accessions and accessories
another obligation of the debtor is to pay damages

C. Breaches of Obligations

An obligation may be breached either voluntarily or involuntarily by the debtor. It is voluntary if the
debtor in the performance of the obligation is guilty of the following: Fraud, Negligence, Delay
or Contravention of the tenor of the obligation. Under any of these instances, the deb0074or is
liable for damages.

The breach of the obligation by the debtor can also be involuntary. The debtor is unable to comply with
his obligation due to a fortuitous event under this instance the debtor is not liable for damages.

Different ways by which the obligation is breached voluntarily by the debtor.

1. FRAUD or DOLO (Art. 1171) - Fraud is defined as the deliberate or intentional evasion of the normal
fulfillment of an obligation. It implies some kind of malice or dishonesty and it cannot cover
cases of mistake and errors of judgment made in good faith. It is synonymous to bad faith.
 Fraud, however in the breach of an obligation, should be distinguished from the two other kinds of fraud
referred to in the civil code.

There are three kinds of fraud and their difference:

Fraud in the Casual fraud (Art. Incidental fraud (Art.
performance of 1338) 1344)
the obligation
(Art. 1170)
it is present during the it is present but it is present during
performance of during the the perfection
a pre-existing perfection of a contract
obligation of a contract

the purpose is to evade the purpose is to its purpose is to

the normal secure the secure the
fulfillment of consent of consent of the
the obligation another to other party but
enter into the fraud was
the contract not the
principal
inducement in
making the
contract

the result of the fraud the result is it does not result in

is the breach of individual division of
the obligation invitation of consent
consent is
that the
contract
entered into
is avoidable
contract

it gives rise to a right it gives rise the it gives rise to a right

in favor of the right of an of an innocent
creditor to innocent party to claim
recover party to for damages
damages annul the
contract

NOTE: The fraud under breach of obligation is the fraud referred to under Art. 1170, fraud in the
performance of the obligation.
Future fraud cannot be waived, however the law does not prohibit renunciation of the action for
damages on the ground of fraud already committed.

Remedies of the creditor

The remedies of the aggrieved party where the debtor or obligor fails to comply with this
obligation by reason of fraud:
1. Insist on the performance of the obligation/Specific performance provided for under Article 1233;
2. He can resolve instead the contract under Article 1191;
 3. Claim damages in either case - insisting the performance of the obligation plus damages or resolve the contract
plus damages.

Liability for Malice

Malice or bad faith or fraud is the awareness that once a conduct is improper and violates the rights of
others and persistence in such conduct, then there is fraud.

Under Article 1171, it provides that liability for malice is demandable in all obligations and cannot be
renounced in advance. Any waiver of an action for future fraud is void. Article 2232 of the civil
code likewise provides that malice leads to liability for aggravated damages or exemplary
damages.

2. NEGLIGENCE/Fault/Culpa (Article 1172, 1173) - negligence on the part of the debtor or obligor.
Negligence or fault or culpa negligence is the failure to observe the care or diligence that the law
requires to be observed.

Under 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 of an obligation that which is expected of a good father of a family
shall be required.

The diligence to be observed is first, that provided for by law. In the absence, second, is that stipulated
by the parties and in the absence of the two, then third, the diligence of a good father of a family
or ordinary diligence.

Kinds of negligence
1. Culpa Contractual/ contractual Negligence - is the negligence in the performance of a pre-existing contractual
obligation resulting in breach of the obligation or breach of contract for reasons that the debtor could and should have
foreseen.
2. Culpa Aquiliana/ Extracontractual Negligence - is the failure to observe the care required by law with respect to other
persons who were not connected or bound by contract with the actor.

Distinctions between Culpa contractual and Culpa aquiliana

1. In culpa contractual, damages may be claimed only by heirs and privies. in culpa aquiliana, they may be claimed by a
stranger, relatives, and dependents. (Article 2206)
2. In culpa contractual, the law presumes negligence from the fact that the contract is not performed. In culpa aquiliana,
the plaintiff must prove the existence of the negligence as cause of the damages.
3. Moral damages are not generally recoverable in cases of culpa contractual but they are recoverable in cases of culpa
aquiliana.
4. In culpa contractual, interest is due as damages from breach but in culpa aquiliana, the award of interest is
discretionary in the court. (Article 2211)
5. In culpa aquiliana, the master may evade responsibility upon proof of the exercise of due diligence to prevent the
injury (Article 2177). This defense ,however, is not available in culpa contractual.
6. Under 1172 of the civil code, courts may mitigate liability in culpa contractual but not in culpa aquiliana.
Standard of Diligence
Remember that when it comes to the standard of diligence required in an obligation, the general rule is
that if the law or contract does not state the diligence which is to be observed that which is
expected of the good father of the family is required. (Article 1173)
 “Bonus pater familias” or good father of a family corresponds in concept to the ordinary businessman or
reasonable and prudent man. Occasionally, however, the law requires a higher degree of
diligence as for instance in the case of common carriers of passengers and freight, the diligence
that must be observed is extraordinary diligence. (Article 1733)

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. Article 1755 provides a common carrier is
bound to carry the passengers safely as far as human care and foresight can provide using the utmost
diligence of very cautious persons with a due regard to all the circumstances.

Article 2000, the responsibility referred to in the two preceding articles shall include the loss of or injury to the
personal property of the guests caused by the servants or employees of the keepers of hotels or inns as
well as by strangers but not that which may proceed from any force major. The fact that travelers are
constrained to rely on the vigilance of the keeper of the hotel or in shall be considered in determining the
degree of care required of him.

The standard of diligence can also be specified by the parties okay so the stipulation of the parties may vary the
degree of diligence required except of course where the law provides such stipulations as in the case of
inn keepers.

DOLO v. CULPA
1. Dolo is malice or bad faith while culpa is negligence.
2. In Dolo, the guilty party is actually aware that his conduct will prejudice the other or intends to cause such prejudice.
In Culpa or negligence the guilty party is not but should be aware of prejudice or injury resulting from his conduct.
3. In Dolo, the party answers for all damages or consequences derived from his acts whether foreseeable or not. In culpa
or negligence, the party answers only for damages foreseeable when the obligation arose. (Article 2201)
4. In contracts and quasi contracts, the damages for which the obligor who acted in good faith is liable shall be those that
are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could
have reasonably foreseen at the time the obligation was constituted. In case of fraud, bad faith, malice, or wanton
attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the per non-
performance of the obligation. Article 2202, on the other hand, provides in crimes and quasi-delicts, the defendant
shall be liable for all damages which are the natural and probable consequences of the act or omission complained of
it is not necessary that such damage have been foreseen or could have reasonably been foreseen by the defendant.
5. In Dolo, the liability of the guilty party cannot be waived in advance as provided in Article 1171. In Culpa, it can be
waived unless public policy prohibits the waiver.
6. Dolo is never presumed while culpa is presumed in breach of contract but negligence may be so gross as to show bad
faith or malice. (Article 1173)

OBLICON 4

Another reason why an obligation may be breached is by reason of delay

What is delay or also called mora

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)

Mora or delay is the failure to perform the obligation in due time and the requisites for delay to take
place is:
1. Obligation must be due and demandable and liquidated
2. The debtor fails to perform his positive obligation on the date agreed upon
3. A demand not merely a reminder or notice judicial or extrajudicial is made by the creditor upon the
debtor to pull to fulfill perform or comply with his obligation otherwise he will be considered in default
and
4. The failure of the debtor to comply with such demand

Three kinds of delay are the following:

1. More solvendi - which is default or delay on the part of the debtor
2. Mora accipiende - delay on the part of the creditor
3. Compensatio morae

The first kind of delay mora solvende - default on the part of the debtor

Default on the part of the debtor can either be mora solvende ex re or default in real obligations, the
other one is mora sulvend ex persona or default in personal obligations

In order for there to be mora solvente or default on the part of the debtor the
1. obligation must be due enforceable and already liquidated or determinate in amount
2. There must be none performance on the part of the debtor
3. There must be a demand whether judicial or extrajudicial unless demand is not required

General rule is that 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.

1169 however provides exceptions where there is no need for a demand in order to put the debtor in
default or in mora.

Exceptions:
1. When the obligation or the law expressly so declares
2. When the nature and 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 where time is of the essence
3. When demand would be useless as when the obligor has rendered it beyond his power to perform and
4. In reciprocal obligations where delay begins only from the moment the other party fulfills or tenders
fulfillment of his obligation in a proper manner

What are the effects if debtor or the obligor is in delay?

The debtor is guilty of breach of the obligation. His liability if the obligation is to pay money must be to
pay also interest. If no extra judicial demand was made interest runs from the filing of the
complaint, in other obligations he has to pay damages.
In an obligation to deliver a determinate thing the debtor is liable for a fortuitous event. If the debtor can
prove that loss would have resulted even if he had not been in default the court may equitably
mitigate the damages
 Article 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the
damages under circumstances other than the case referred to in the preceding article, as in the
following instances:
(1) that the plaintiff himself has contravened the terms of the contract;
(2) that the plaintiff has derived some benefit as a result of the contract;
(3) in cases where exemplary damages are to be awarded, that the defendant acted upon the advice of
counsel;
(4) that the loss would have resulted in any event;
(5) that since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or
injury.

Art. 2215 (4) or the creditor can ask for resolution in proper cases.

So this is the delay or default on the part of the debtor.

Take note here that the delay is not merely the non-performance of the obligation on the date stipulated.
To put the debtor or obligor in delay or default and for the consequences for this breach of the
obligation to apply, there must have been a judicial or extrajudicial demand by the creditor upon
the debtor to fulfill the obligation. That is the only time that there is default or delay

The next kind of delay is the mora accipiende

It is default on the part of the creditor and this takes place when the creditor unjustifiably refuses to
accept the performance of the obligation.

The requisites for mora accidenta are the following:

1. There must be offer of performance by the debtor
2. The offer must be to comply with the prestation as it should be performed
3. The creditor refuses the performance without just cause

What are the effects in cases of mora accipiende

1. The responsibility of the debtor is limited only to fraud and gross negligence
2. The debtor is exempted from risk of loss of the thing and the creditor bears the risk of loss
3. Where it is the creditor in delay or mora the expenses by the debtor for the preservation of the thing after
delay is chargeable to the creditor
4. If the obligation bears interest the debtor does not have to pay from the time of delay
5. The creditor is liable for damages suffered by the debtor and
6. The debtor may relieve himself of the obligation by consigning the thing

The third kind of delay is like we said earlier compensation morae where both parties are in default
There is no actionable default on the part of both parties. The rule in reciprocal obligations is that neither
party incurs in delay if the other party 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.

Performance must be simultaneous unless different dates for the performance of the obligation were
fixed by the parties. This is for purposes of compensation morae.

So delay as an instance where there is breach in the performance of the obligation

 Another concept that we must take into consideration in the non-performance of the obligation is the
happening of a fortuitous event. Earlier we discussed that the breach in the performance of an
obligation can either be by reason of a voluntary act on the part of the death or involuntary acts.

Voluntary acts of the debtor that causes the breach of the obligation are in cases of delay, in cases of
dolo, in cases of culpa

Involuntary is where the obligation cannot be performed by reason of a fortuitous event and the
consequence is that the obligation is extinguished your debtor cannot be held liable for damages.

So what is this fortuitous? It is an event which could not breach the obligation.
Under this instance the requirements for a fortuitous event, the happening of a fortuitous event is that
 The cause of the breach of the obligation must be independent of the will of the debtor.
 The event must be either unforeseeable or unavoidable
 The event must be of such as to render it impossible for the debtor to fulfill his obligation in a normal
manner
 The debtor must be free from any participation in or aggravation of injury to the creditor

To be able to raise the defense of fortuitous event in order that the debtor or obligor will not be held
liable for damages for the non-performance of the obligation,
 The event must be independent of the human will or of the will of the debtor.
 The event must be impossible to foresee it is unforeseeable not merely unforeseen or if it can be
foreseen it must be impossible to avoid

Fortuitous event includes caso fortuito both accident and force majeur, force majeur means act of god.

The occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner and
the obligor or debtor must be free of participation in the aggravation of the injury to the creditor,
meaning there must be no concurrent fault on the part of the debtor.

Where the injury is partly due to fortuitous event and partly to dolo or culpa of the debtor, the debtor
remains liable.
The debtor is also liable if he was already in default or was already in mora when the fortuitous event
took place.

So under article 1174 it provides the general rule with respect to fortuitous event

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. (1105a)

So you have here fortuitous event, and the rule is provided under article 1174.
So no one can be held liable for the happening of a fortuitous event. The obligation is extinguished and
the debtor cannot be held liable.

The exceptions however where the debtor answers despite the loss of the thing or the non-performance
of the obligation due to fortuitous events are the following instances:
So what are the instances where the dr remains liable despite the happening of a fortuitous event:
1. Where it is expressly specified by law.
For instance you have article 1942.
 Article 1942.  The bailee is liable for the loss of the thing, even if it should be through a fortuitous event:
(1) if he devotes the thing to any purpose different from that for which it has been loaned;
(2) if he keeps it longer than the period stipulated, or after the accomplishment of the use for which the
commodatum has been constituted;
(3) if the thing loaned has been delivered with appraisal of its value, unless there is a stipulation
exempting the bailee from responsibility in case of a fortuitous event;
(4) if he lends or leases the thing to a third person, who is not a member of his household;
(5) if, being able to save either the thing borrowed or his own thing, he chose to save the latter. (1744a
and 1745)

Another instance where the law expressly provides that the debtor is liable despite the happening of a
fortuitous event is in article 2001.

Article 2001.  The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless
it is done with the use of arms or through an irresistible force. (n)

We have also article 2147.

Article 2147.  The officious manager shall be liable for any fortuitous event:
(1) if he undertakes risky operations which the owner was not accustomed to embark upon;
(2) if he has preferred his own interest to that of the owner;
(3) if he fails to return the property or business after demand by the owner;
(4) if he assumed the management in bad faith. (1891a)

So these are instances where the law specifically or expressly provides that the debtor remains liable
despite the happening of a fortuitous event.

The debtor also answers despite the happening of a fortuitous event

1. Where it is aggrieved upon by the parties or
2. Where there is a stipulation by the parties

When expressly declared by stipulation, meaning there's a waiver of fortune's event as a defense
3. The third instance is where the nature of the stipulation requires the assumption of

An instance or an example where the nature of the obligation requires the assumption of risks is under
article 1717 of the civil code, also article you have also article 1724

Article 1717.  If the contractor bound himself to furnish the material, he shall suffer the loss if the work
should be destroyed before its delivery, save when there has been delay in receiving it. (1589)

Article 1724.  The contractor who undertakes to build a structure or any other work for a stipulated
price, in conformity with plans and specifications agreed upon with the land-owner, can neither
withdraw from the contract nor demand an increase in the price on account of the higher cost of
labor or materials, save when there has been a change in the plans and specifications, provided:
(1) such change has been authorized by the proprietor in writing; and
(2) the additional price to be paid to the contractor has been determined in writing by both parties.
(1593a)

So these are obligations which requires the assumption of risk.

 4. Then the next instance where the happening of a fortuitous event will not exempt the debtor from
liability is where the debtor is in mora or default. Not ordinary delay but already in default by reason
of the demand made by the creditor on the debtor, whether a judicial or extrajudicial demand.

5. When the debtor is guilty also of malice or dolo or fraud as when he promises the same thing to two
different persons this is under article 1165 paragraph 3

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. (1096)

6. When the debtor is guilty of concurrent negligence. So whether it's concurrent negligence on the part
of the debtor or fault in producing the loss of the breach
7. When the liability arises from a criminal act

Article 1268.  When the debt of a thing certain and determinate proceeds from a criminal offense, the
debtor shall not be exempted from the payment of its price, whatever may be the cause for the
loss, unless the thing having been offered by him to the person who should receive it, the latter
refused without justification to accept it. (1185)

The defense or excuse fortuitous event can be waived in advance. The debtor is then said to be an
insurer of the performance of the obligation.

So the general rule when it comes to fortuitous event is that no person can be held liable for the
happening of a fortuitous event, and in an obligation to give a determination if the thing is lost
ready fortuitous event the obligation is extinguished and the debtor is not held liable.

Note however that if it is an obligation to give a generic thing the obligation is not extinguished based
on the rule that genus never perishes.

The exceptions where despite the happening of a fortuitous event the debtor remains liable:
1. When expressed expressly declared by law
2. When expressly declared by stipulation or contract
3. When the nature of the obligation requires the assumption of risks
4. When the obligor is in default or has promised to deliver the same thing to two or more persons who do
not have the same interests

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. (1096)

5. When the debtor is guilty of concurrent negligence and

6. When the liability arises from a criminal act pursuant to article 1268

These are the circumstances that causes the breach of an obligation. We will continue from there the
next lecture will involve the remedies available to the creditor for the satisfaction of their claims

OBLICON 5

Okay so the last lecture where we discussed the remedies or we discussed the what you call this the
reasons for the breach of the obligations, the non-performance of the obligation such as dolo,
culpa, in cases of delay there is the non-performance by the debtor of the obligation so if there is
the non-performance of the obligation or let us say how can the creditor now ensure the
fulfillment of the obligation or the remedies that are available to the creditor in order to ensure
the satisfaction of their claims in order to enforce the obligation of the debtor the obligation of
the debtor either being an obligation to give to do or not to do so that is either a personal
obligation:
a) personal obligation is an obligation to do or not to do; or
b) a real obligation which is an obligation to give in an obligation
So, let's go first to the first obligation now. In an obligation to give what can the creditor do in order to
ensure the fulfillment of the obligation?
First, we have to determine what is to be given. Is the thing that is going to be given a specific or
determinate thing or is it a generic thing because the remedy now here is different if the
obligation is to give a specific thing.
In an obligation to give and what is to be given is a determinate thing, what now is the option of the
creditor?
He can ask or he can file an action to compel specific performance. So in an obligation to give a
determinate thing a specific thing the creditor can file an action to compel specific performance
or an action for damages because an action for damages is equivalent to performance.
What is the basis for this you have article 1165 as well as article 1117.
So, article 1165 provides when what is to be delivered is a determinate thing, the creditor in addition to
the right granted him by article 1170 and what is that right granted to him under article 1170, it is
the right to ask for damages, he may compel the debtor to make delivery so an action for specific
performance in an obligation to give a determinate thing or an action for damages.
If the obligation on the other hand is to give a generic thing, if what is to be delivered now is a generic
thing, under 1165 paragraph 2, an action for substituted performance is given the creditor. So this
is 1165 paragraph 2 which says if the thing is indeterminate or generic, the creditor may ask that
the obligation be complied with at the expense of the debtor, so substituted performance.
Another remedy of the creditor to ensure satisfaction of his claim is to ask for damages. So an obligation
to give generic thing your creditor can ask for substituted performance pursuant to article 1165
paragraph 2 or an action for damages which is equivalent to performance.
If let's say it is an obligation to do okay an obligation to do, Article 1167 provides now the legal basis of
the remedy of the creditor. If a person obliged to do something fails to do it, the same shall be
executed at his cost. The same rules 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. So,
in an obligation to do if a person obliged to do something fails to do it, the same shall be
executed at his cost. Another remedy of the creditor if he does not want to avail of this first
remedy is an action for damages. In addition, pursuant to article 1167 paragraph 2, if what was
supposed to be done was improperly executed meaning, if it is done in contravention of the tenor
of the obligation the creditor may ask the court that what was poorly done be undone at the
debtor's cost or at the expense of the debtor.
Why is it that in an obligation to do, the remedy of specific performance is not available to the creditor
unlike in an obligation to give, you notice that in an obligation to give the creditor can file an
action for specific performance to compel the debtor to deliver this specific thing but in
 obligations to do the creditor does not have the remedy of specific performance. In personal
obligation the remedy of specific performance is not available because that would be tantamount
to involuntary servitude in an obligation to do. So what then is his remedy, if he fails to do it or if
he refuses to do it, the same can be done at the expense of the debtor meaning someone else can
be made to do it provided of course that the personal qualities of the debtor were not the moving
factor in entering into this obligation.
For instance, let's say it is your wedding and you're planning for your wedding and because you want it
to be special you and your future husband or wife enter into a contract with Martin Nievera so
that he will sing during the wedding ceremony. Suddenly let's say this famous singer that you
contracted to does not want to fulfill his obligation to sing at your wedding, can you instead get
April boy to sing? It might not satisfy your obligation because the personal qualities of this
famous singer was taken into consideration, if the qualities of the debtor are not the moving
factor in entering into this obligation to do then someone else can be made to do it but who is
going to pay for that? It will be paid by the debtor who refused to perform this obligation to do.
For instance, let us say it is to construct your house and any other architect or engineer can be the one to
do it now, the engineer you contracted to or the contractor you contracted to refuses to do it, you
can ask another contractor to do it at the expense of this debtor contractor.
If the creditor does not want to avail of this remedy, he has another action, he can file an action for
damages because an action for damages is always equivalent performance, it is considered as an
equivalent performance. In addition if improperly executed we said it can be undone at the
expense of the debtor.
The next kind of obligation is an obligation not to do, what is the remedy of the creditor to ensure
satisfaction of his claim? There can be no specific or substituted performance, if it is an
obligation not to do, it is only the debtor who must comply with this obligation. It cannot be
complied with by someone else so there can be no substituted performance in an obligation not
to do. The creditor pursuant to article 1168 of the civil code also gives the creditor the remedy of
damages and if the obligor does what is forbidden of him it shall be undone at the expense of that
debtor. So, article 1168 is another remedy of the creditor in an obligation not to do.
So those are the remedies of the creditor however the law also provides other remedies of the creditor in
certain obligations. Let's say it is an obligation to give, an obligation to give whereby the debtor
promised to pay the creditor 1.5 million pesos. So here you have now the debtor who owes 1.5
million pesos to the creditor, the remedy of the creditor is to compel specific performance
because this is an obligation to give and it is an obligation to give a generic thing now, so he asks
now the debtor to pay the 1.5 million pesos. If the debtor does not have the cash of 1.5 million
pesos, what is the remedy of your creditor? Pursuant to the law article 2236, under article 2236
of the civil code, it provides that the debtor is liable with all his property present and future for
the fulfillment of his obligation subject to the exemptions provided for by law. So if it is an
obligation to pay an amount of money and the debtor does not have the money to pay but he has
other assets now he has other properties, can the creditor go after these properties? Yes pursuant
to article 2236, the debtor is liable with all his property and not only present property, the law
even goes further and says future property for the fulfillment of his obligation subject of course
to the exemptions provided for by law because there are properties of a person of a debtor that
are exempt from execution, exempt from sale. So if they're not among these exemptions your
creditor can avail or can go after this properties.
What is another remedy that is available to the creditor? Let us say he tried he filed a case for specific
performance but the debtor does not have the money to pay that 1.5 million pesos so he tries to
go after the properties or other properties of the debtor but the debtor does not have any other
properties, he has no land, he has no car, so the creditor cannot attach any of these properties.
Does that mean that the creditor is left with an empty bag? No because the law now here
provides what we call subsidiary remedies of the creditor.
So subsidiary remedies of your creditor and what is this first subsidiary remedy provided. The first one
is the action in subrogation or action subragatoria. What is an action sobragatoria? An action
 subragatoria is that instance where under article 1188, creditors after exhausting the property in
possession of the debt or to satisfy their claims may exercise all the rights and bring all the
actions of the debtor for the same purpose, meaning to obtain satisfaction except those which are
inherent in the person of the debtor. This means that if the debtor has no property, has no money,
but he has a credit, your creditor can be the one to file an action to enforce the satisfaction of that
credit.
For instance you have the creditor here who is entitled to be paid 1.5 million pesos. So you have the
debtor indebted in the amount of 1.5 million pesos, your debtor has no money, your debtor also
has no properties to pay the 1.5 million pesos but your debtor here is the creditor of x to the
amount of 1.5 million pesos. The obligation of x to the debtor here is already due and
demandable but he does not file any action or does not do anything to collect his credit of 1.5
million pesos from his debtor x. So, what can C do in this case? The law allows an action
subragatoria, but in order for C to avail of this remedy it must be that he first exhausted all the
properties in possession of the debtor, it is only when the debtor has no property to answer for
his obligation to his creditor that the creditor now can avail of this action subragatoria. The
creditor should file an action against x in order to collect the 1.5 million pesos credit. However
since this is only a subrogatory action, C cannot file it directly against x, C must file it in
representation of the debtor, it is merely a subrogatory action so he must file it in representation
of x here. What is the basis that C is given the right to file an action against the debtor of his
debtor in order to collect that credit? The basis here is the debtor of my debtor is also my debtor.
The basis or the reason why a creditor is given this subbrigatory action or action subbrigatoria to
file a case in representation of the debtor against the debtor of the debtor is because the debtor of
my debtor is also my debtor.
Take note however that the following requisites must be available in order that the creditor may be able
to exercise this action subragatoria. So, what are those requisites in order to avail of action
sobragatoria?
1. the debtor to whom the right of action properly pertains must be indebted to the creditor, okay so there must be
the interest of the creditor the debtor or something to the creditor.
2. the inaction of the debtor whether it is willful or not meaning his failure whether willfully or unwilfully he
refuses, he does not do anything to collect his credit from his debtor
3. there must be the existence of the credit even if it is not liquidated and the credit must be due and demandable
meaning the credit of the debtor to his debtor now it must be due and demandable but the debtor does not do
anything to collect that credit and therefore your creditor here who has exhausted all the available properties of
his debtor but there are no available properties can now file this subrogatory action.

In filing the subrogatory action, what are the effects? First the debtor's credit if collected will now be
applied to the payment of the creditor, the creditor who exercised this subrogatory action. So if c
here was able to collect the 1.5 million pesos in representation of d against this debtor who is x
here, that 1.5 now will be applied to the obligation of d to c. The creditor here must remember
that he must sue in the name of the debtor in representation of the debtor. Take note however that
when c here files an action in representation of d against x, x can set up all defenses available
against the debtor, against d here. So let us say, C here filed in representation of d against x for
collection of 1.5 million pesos, however x here has a note whereby d had already condoned the
1.5 million pesos, therefore x here now can avail of this defense in the action filed by x against
him, so the action is subject to all defenses available against the debtor himself. If the creditor
obtain a judgment for an amount let's say greater than his own credit so instead of 1.5 million
pesos only he was able to get 2 million pesos, in this case now he is only entitled to the 1.5 and
must return the excess to the debtor. So those are the effects in cases of a subrogatory action, he
is merely subrogated in the shoes of the debtor.
By way of an exception to the subrogatory action we have what we call a direct action or action directa.
An action directa, this is where the debtor unable to pay and after the creditor has tried to exhaust
all the available properties of the debtor and there are none, the creditor is aware that x here owes
 d an amount of money. So, he files now a direct action meaning he does not file it in
representation but he files a direct action, c versus x, not c in representation of x.
Now what are these instances where the law allows this direct action or this action directa. You have in
cases of article 1652, what is article 1652, this refers to a lessor against a sub lessee. So, let's say
you have your lessor and you have the lessee, it is the obligation of the lessee to pay the monthly
rent to the lessor. Now the lessee now here subleases it in favor of w, so in this sublease w has an
obligation to pay his rent to the lessee. If the lessee does not pay the lessor the rental now if it is
monthly or yearly rental but he has sublease it to w, the law allows now the lessor here who is
the creditor to file a direct action against the sub lessee to collect the rent in that sublease. So, he
does not file it here in representation of the lessee, he files a case directly against the sublessee,
so lessor versus sublessee, now here that is a direct action.
Another direct action is provided under article 1729. What happens now in article 1729, in here, under
article 1729, it refers to the laborers of the independent contractor against the owner. So here let's
say you have the owner, you have the contractor, and you have the laborers. The owner now
contracted with C to build a house in order for C to build the house, he has his laborers but C
here must pay the salaries of the laborers, C does not pay the salary of the laborers but C is
getting paid or will be paid by the owner for the obligation to build that house now. Who is the
creditor here? L or the laborers are the creditors in this case, the law now allows them to file a
direct action, the laborers now will file a direct action against the owner of the building which C
was contracted to build now here, in order to satisfy their claim against their debtor C in this
case, so it is a direct action.
So occasionally the law confers now on the creditor a direct and not a subrogatory action against the
debtors of his debtor. You have article 1652 lesser against the sublessee and you have article
1729 the laborers of the independent contractor against the owner.
Another remedy given to the creditor now here in order to satisfy his claim against his debtor is what we
call an action pauliana, okay this is a recissory action. Action pauliana is that provided for under
article 1177. Artcile 1177 provides the creditors having pursued the property and 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 persons, that is your action
sobragatoria. The action pauliana is the next sentence, okay, they may also impugn the acts
which the debtor may have done to defraud them. Okay so that last sentence is your action
pauliana, the creditor having pursued the property in the possession of the debtor may also
impugn the acts which the debtor may have done to defraud them. The requisites in order for the
creditor to be able to exercise this rescissory action or action pauliana are the following:
1. there must be the prior existence of the credit, it must be anterior to the fraudulent act
2. the credit must be due and demandable
3. there must have been the exhaustion or insufficiency of the assets in the hands of the debtor (so he tried to go after
all the properties of the debtor but the debtor has no properties)
4. there is that fraudulent intention of the debtor when he enters into a contract with a third person.

Example here when is there fraud, an example of fraud is article 1387, it says fraud is presumed in
certain cases. When can you show that there is fraud here, it is presumed in certain cases, where
a judgment has been rendered or an attachment has been issued against the debtor who caused
the alienation of his property. So what is an example of this, you have again the creditor and you
have the debtor who owes the creditor 5 million pesos, the debtor cannot pay the 5 million pesos,
your creditor filed an action now but he cannot pay 5 million pesos, there are no properties of the
debtor to satisfy that 5 million pesos. However after the debtor borrowed 5 million pesos from
the creditor, prior to the obligation becoming due and demandable, the debtor now here donates
his only property worth five million pesos in favor of x. So it is after entering into that obligation
that he donates his only property left in favor of x. C now here can file an action to declare null
and void, to set aside this because it is done in fraud of creditors, there is that fraudulent act on
the part of the debtor in donating the property so that the creditor has nothing to get any more
 from debtor. So an actual pauliana and another remedy of the creditor here is an action to declare
the nullity of absolutely simulated transfers by the debtor. This should be differentiated from a
rescissory action, which is an action to rescind a contract entered into by the debtor, that is
different from an action to declare null and void a transaction entered into by the debtor because
here if it is an action to declare null and void, that means the transaction or contract entered into
by the debtor with someone else is fictitious. If it is fictitious it is null and void, in rescissory
actions the contract entered into by the debtor is not a fictitious contract however there is
pecuniary injury to the creditor. We will discuss that later the difference between a rescissory
action and an action for the resolution of a contract.
So that is another action that is available to the debtor. An action to declare the nullity of absolutely
simulated transactions. Aside from the subsidiary remedies of the creditor, we have also what we
call ancillary remedies of the creditor. What are these ancillary remedies of the creditor? These
are remedies to ensure collection of judgment, your creditor may file an action - an action
paulianna, an action for collection of sums of money, specific performance now - but even if he
wins it may happen that he gets nothing, so this is an ancillary remedy given to the creditor.
Example of an ancillary remedy, an attachment together with the principal action the creditor
attaches the properties of the debtor. Another is replevin, attachment is real property while
replevin is personal properties. In order to ensure that if your creditor, properties of the debtor
can be sold to satisfy the obligation or a receivership now.
Okay so ancillary remedies of the creditor attachment, replevin and receivership. Are those the only
actions that are available or remedies available to the creditors in order to ensure the fulfillment
of the obligation? We have the last one, it is a special remedy of the creditor and what is that
special remedy? A judicial declaration of the debtor’s insolvency, so together with the other
creditors, the creditors now can file a petition in court to declare the debtor as insolvent, that is a
special remedy, this is to ensure the equitable distribution of the debtor's assets among his
creditors even if they cannot all be paid in full but at least there is the equitable distribution of
whatever assets the debtor may have left.
So those are the remedies of the creditor depending on the obligation, what are his remedy, either to file
a specific performance or substituted performance with or to decide instead to file damages.
Then you have now the subsidiary remedies of the creditor after exhausting all the properties and
it is not sufficient, they can either file an action subrogatoria, an exception to action subrogatoria
is what an action directa. They can also file an action pauliana, another remedy is to declare the
nullity of absolutely simulated transactions entered by the debtor and in order to ensure
satisfaction, there is the ancillary remedy of attachment, replevin or receivership. And finally, the
special remedy of the judicial declaration of the debtor's insolvency.
Okay so those are the remedies of the creditor, the next discussion will involve the different kinds of
obligations okay depending on demandability, plurality of object, plurality of the subject matter,
or the performance and that will be discussed during the week.