Introduction to

Obligation
Civil C o d e definition of Obligation
Under the New Civil Code,
Article 1156. A n obligation is a juridical necessity to give, to
d o or not to do.
Meaning of Juridical Necessity
Obligation is a juridical necessity because in case of noncompliance,
the courts m a y b e called upon by the aggrieved party to enforce its
fulfillment or, in default thereof, the economic value that it represents. In
a proper case, the debtor m a y also b e m a d e liable for damages, which
represents the sum of money given as a compensation for the injury or
harm suffered by the creditor or obligee (he who has the right to the
performance of the obligation) for the violation of his rights.

In other words, the debtor must comply with his obligation whether he
likes it or not; otherwise, his failure will b e visited with some harmful or
undesirable consequences. If obligations were not m a d e enforceable,
then people c a n disregard them with impunity. If a n obligation cannot
b e enforced, it m a y b e only a n a tural obligation.
Definition of Obligation
“An obligation is a juridical relation whereby a person (called the
creditor) may d e m a n d from another (called the debtor) the
observance of a determinative conduct (the giving, doing, or not
doing), a n d in case of breach, may d e m a n d satisfaction from the
assets of the latter.”
Essential Requisites of a n Obligation
Every obligation has four definite elements, without which no obligation c a n
exist, to wit:
1 ) A passive subject (called debtor or obligor) – the person who is bound to the
fulfillment of the obligation; he who has a duty;
2 ) A n active subject (called creditor or obligee) – the person who is entitled to
d e m a n d the fulfillment of the obligation; he who has the right;
3) Object or prestation (subject matter of the obligation) – the conduct
required to b e observed by the debtor. It m a y consist in giving, doing, or not
doing. Without the prestation, there is nothing to perform. In bilateral
obligations, the parties are reciprocally debtors a n d creditors; a n d
4 ) A juridical or legal tie (also called efficient cause) – that which binds or
connects the parties to the obligation. The tie in a n obligation c a n easily b e
determined by knowing the sources of the obligation.
It is important to identify the prestation in a certain obligation. O n c e
the prestation is identified, you c a n determine who the passive subject
is whom the active subject c a n d e m a nd fulfillment of the obligation
Kinds of prestation
1. To give- consist in the delivery of a movable or 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
2. To do- all kinds of work or services, whether mental or physical.
3. Not to do- consist in abstaining from some act, includes “not to
give.” both being negative obligations
A contract of sale a n d a contract of loan are examples of prestations
to give; A contract of labor or a service contract is a n example of a
prestation to do.
To illustrate
In a n obligation to p a y taxes, the passive subject is the taxpayer,
the active subject is the government through the Bureau of Internal
Revenue, the prestation is ―to give,‖specifically to p a y taxes, the
juridical tie is a source of obligation arising from law.
In a n obligation to give products, the passive subject is the seller,
the active subject is the buyer, the prestation is ―to give,‖
specifically to deliver products, a n d the juridical tie is a source of
obligation arising from contract.
For Example
Under a building contract, A bound himself to build a house for B,
for ₱ 1,000,000.00
In the given example, it can be inferred that:
• A is the passive subject
• B is the active subject
• The building of the house is the object or prestation.
• The agreement or contract, which is the source of the obligation is the
juridical tie.
For Example
Object or prestation
Obligation to d o
Building of the house

A B

Passive subject Contract Active subject

Juridical tie
For Example
Suppose A h a d already constructed the house a n d it was the
agreement that B would p a y after the construction is finished.
Then,
• A becomes the active subject
• B becomes the passive subject.
 Example: Pelayo v. Lauron
12 Phil. 453 (BAR)
Facts: A wife was about to deliver a child. Her parents- in- law
called the doctor.

Issue: Who should p a y the doctor: the husband or the parents?

Held: The husband should pay, even if he was not the one who
called the doctor. It is his duty to support the wife, a n d support,
includes medical attendance. The duty to p a y is a n obligation to
give, a n d is imposed by the law.
 ART. 1159 of the New Civil
Code provides,
Obligations arising from
contracts have the force
of law between the
contracting parties and
should be compiled with in
good faith. (1091a)
 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. (Art. 1305).
Meaning of the Article

The article m e a n s that neither party m a y

unilaterally a n d u p o n his o w n exclusive volition,
e s c a p e his obligations under the contract, unless for
c a u s e s sufficient in law a n d p r o n o u n c e d
a d e q u a t e b y a c o m p e t e n t tribunal.
(1) Binding force- Obligations arising from contracts
have the force of law between the contracting
parties, i.e., they have same binding effect of
obligations imposed by laws. This does not mean,
however, that contract is superior to the law. As a
source of enforceable obligation, contract must
b e valid a n d it cannot b e valid if it is against the
law
(2) Requirement of a valid contract – a contract is
valid (assuming all the essential elements are
present; Art. 1318) if it is not contrary to law,
morals, g o o d customs, public order, a n d public
policy. It is invalid or void if it is contrary to laws,
morals, g o o d customs, public order, or public
policy. (Art. 1306)
Compliance in g o o d faith
Compliance in good faith means compliance or
performance in a c c o r d a n c e with the stipulations or terms of the
contract or agreement. Sincerity a n d honesty must b e observed to
prevent one party from taking unfair advantage over the other.

Non compliance by a party with his legitimate obligations

after receiving the benefits of a contract would constitute unjust
enrichment on his part.
Examples:
(1) If Francis agrees to sell his house to Paul a n d Paul agrees to
buy the house of Francis, voluntarily a n d willingly, then they
are bound by the terms of their contract a n d neither party
m a y upon his own will, a n d without any unjustifiable reason,
withdraw from the contract or e s c a pe from his obligations
there under.

That which is agreed upon in the contract is the law

between Francis a n d Paul a n d must b e complied with in g o o d
faith.

( 2 ) A contract whereby Francis will kill Paul in consideration of

P1,000.00 to b e paid by CJ, is void a n d non-existent because
killing a person is contrary to law. Likewise, a n agreement
whereby Francis will render domestic service gratuitously until his
loan to Paul is paid, is void as being contrary to law a n d morals.
Differences between an Obligation and a
Contract
A n obligation is the result of a contract (or some
other source). Hence, while a contract, if valid, always
results in obligations, not all obligations c o m e from
contracts. A contract always presupposes a meeting of
the minds; this is not necessarily true for all kinds of
obligations.

Be it noted however, from another viewpoint that

a contract m a y itself b e the result of a n obligation. Thus, if
Paul e n g a g e s Allen as the former’s agent, we have the
contract of a g e n c y. As a n agent, Allen has the obligation,
say to look around for clients or buyers, as in the real estate
business. As a result of such obligation, Allen m a y enter into
a contract of sale with Carlo, a customer. The contract of
sale itself results in the obligations to p a y a n d to deliver.
The obligation to deliver m a y result in a contract of
carriage, a n d so on, a d infinitum.
Condrado v. Judge Tan 51 O.G. 2923, Jun. 1955
FACTS: In a validly m a d e contract, some
provisions were later on inserted by a falsifier.

Issue: Is the whole contract void?

HELD: Only the additional provision should be

disregarded, a n d the original terms should b e
considered valid a n d subsisting.
 ART. 1160. Obligations
derived from quasi-contracts
shall be subject to the
provisions of Chapter 1, Title
XVII of this Book. (n) (Art. 1160, N C C )
 A quasi-contract is that juridical relation
resulting from lawful, voluntary, a n d unilateral acts by
virtue of which the parties b e c o m e bound to e a c h
other to the end that no one will b e unjustly enriched
or benefited at the expense of another.
It is not properly a contract at all. In contract,
there is a meeting of the minds or c onsent; the parties
must have deliberately entered into a formal
agreement. In a quasi-contract, there is no consent
but the same is supplied by a fiction of law. In other
words, the law considers the parties as having
entered into a contract, although they have not
actually did do, a n d irrespective of their intention, to
prevent injustice.
Kinds of quasi-contracts
(1)Negotiorum gestio is the voluntary management
of the property or affairs of another without the
knowledge or consent of the latter. (Art. 2144,
NCC.)
(2) Solutio indebiti is the juridical relation which is
created when something is received when there is
no right to d e m a n d it a n d it was unduly delivered
through mistake. (Art. 2154, N C C ) The requisites
are:
(a) There is no right to receive the thing delivered
(b) The thing was delivered through mistake
 UST Cooperative Store v. City of Manila, et al.
L-17133, Dec. 31, 1965

FACTS: The UST Cooperative Store, which is tax-exempt under R A 2023 (The
Philippine Non-Agricultural Cooperative Act) b e c a u s e its assets are not more than
P500,000 p a i d taxes to the City of Manila, not knowing that itw a s tax exempt.

ISSUE: M a y itsuccessfully ask for re f u n d ?

HELD: Yes, b e c a u s e the p a ym e n t is not considered voluntary in character.

Clearly, the p a y m e n t wa s m a d e under mistake.
Query: Is a Quasi-Contract an
Implied Contract?

• No, because in a quasi-

contract (unlike in a n
implied contract) there is
NO meeting of the minds.
Other Examples of
Quasi- Contracts
• When during fire, flood, or other calamity,
property is saved from destruction by
another person without the knowledge of
the owner, the latter is bound to p a y the
former just compensation.

• Any person who is constrained to p a y the

taxes of another shall b e entitled to
reimbursement from the latter.
 ART. 1161 Civil obligations arising
from criminal offenses shall be governed
by the penal laws, subject to the
provisions of article 2177, and of the
pertinent provisions of Chapter 2,
Preliminary Title, on Human Relations,
and of the Title XVII of this Book,
regulating damages. (Art. 1161, N C C )
• Oftentimes, the commission of a
crime causes not only moral evil
but also material damage. From
this principle, the rule has been
established that every person
criminally liable for an act of
omission is also civilly liable for
damages. (Art. 100, Revised Penal C o d e )
S c ope of civil liability
The extent of the civil liability arising from
crimes is governed by the Revised Penal C o d e
a n d the Civil Code. This civil liability includes:
(1) Restitution
(2) Reparation for d a m a g e d caused
(3)Indemnification for consequential
damages. (Art. 104, RPC)
 ART. 1162. Obligations
derived from quasi-delicts
shall be governed by the
provisions of Chapter 2, Title
XVII of this Book, and by
special laws. (Art. 1162, N C C )
 A quasi-delict is a n act of
or omission by a person (tort
feasor) which causes d a m a g e
to another giving rise to a n
obligation to p a y for the
d a m a g e done, there being
fault or negligence but there is
no pre-existing contractual
relation between the parties. (Art.
2176, N C C )
Examples
• While driving a car recklessly, I injured a
pedestrian.

• While cleaning my window sill, my

negligence caused a flower pot to fall on
the street, breaking the arms of my
neighbor.
 Requisites of quasi-delict
• There must b e a n act or omission
• There must b e fault or negligence
• There must b e d a m a g e caused
• There must b e a direct relation of cause a n d effect
between the act or omission a n d the d a m a g e
• There is no pre-existing contractual relation between
parties
Example: While playing softball with his friends, Francis broke
the window glass of Paul, his neighbor. The accident would
not have h a p p e n e d h a d they played a little farther from
the house of Paul.
Test for determination of Negligence
“The test in determining whether a person is negligent
is this: Would a prudent m a n (in his position) foresee harm to
the person injured as a reasonable consequence of the
course about to b e pursued? If so, the law imposes a duty on
the actor to refrain from that course, or to take precaution
against its mischievous results, a n d the failure to d o so
constitutes negligence. Reasonable foresight of harm, followed
by the ignoring of the admonition born of this provision, is the
constitute fact of negligence”
Crime distinguished from quasi- delict
The following are the distinctions:
1. In crime, there is criminal or malicious intent or criminal
negligence, while in quasi-delict, there is only negligence;
2. In crime, the purpose is punishment, while in q u a si-delict,
indemnification of the offended party;
3. Crime affects public interest, while quasi-delict concerns private
interest;
4. In crime, there are generally two liabilities: criminal a n d civil, while
in quasi-delict, there is only civil liability;
5. Criminal liability c a n not b e compromised or settled by the
parties themselves, while the liability for quasi-delict c a n b e
compromised as any other civil liability.
6. In crime, the guilt of the a c c us ed must b e proved beyond
reasonable doubt, while in quasi-delict, the fault or negligence of
the defendant need only b e proved by pre-ponderance
(superior or greater weight) of evidence.
Nature and Effects of Obligations
ART. 1163. Every person obliged to give
something is also obliged to take care of it
with the proper diligence of a good father of
a family, unless the law or the stipulation of
the parties requires another standard of
care. (Art. 1163, N C C )
Duty to Exercise Diligence
This article deals with the first effect of
an obligation to deliver a determinate thing
(as distinguished from a generic thing – or
one of a class) – namely- the duty to exercise
proper diligence. Unless diligence is
exercised, there is a danger that the
property would b e lost or destroyed, thus
rendering illusory the obligation.
Diligence Needed
• That which is required by the nature of the obligation a n d
corresponds with the circumstances of person, time, and place.
This is really diligence of a g o o d father of a family.

• However, if the law or contract provides for a different standard

of care, said law or stipulation must prevail.
 Ronquillo, et al. v. Singson
CA, L-22612-R, Apr. 22, 1959
FACTS: A m a n ordered a ten-year-old boy, Jose Ronquillo, to climb a
high a n d rather slippery santol tree, with a promise to give him part
of the fruits. The boy was killed in the act of climbing.

ISSUE: Is the person who ordered him liable?

HELD: Yes, in view of his negligent act in making the order. He did
not take due care to avoid a reasonably foreseeable injury to the
10y/o boy. The tree was a treacherous one, a veritable trap. His act
was clearly a departure from the standard of conduct required of a
prudent man. He should have desisted from making the order. Since
he failed to appreciate the predictable danger a n d aggravated
such negligence by offering part of the fruits as a reward, it is clear
that he should b e m a d e to respond in d a m a g e s for the actionable
wrong committed by him.
Preserve the thing – In
obligations to give (real
obligations), the obligor has the
incidental duty to take care of
the thing due with the diligence
of a g o o d father of a family
pending delivery.
Factors to be considered. – The
diligence required necessarily depends
upon the nature of the obligation a n d
corresponds with the circumstances of
the person, of the time, a n d of the
place. (Art. 1173, NCC.) It is not
necessarily the standard of care one
always uses in the protection of his
property. As a general rule, the debtor
is not liable if his failure to p reserve the
thing is not due to his fault or negligence
but to fortuitous events or force
majeure.
 A thing is said to b e specific or determinate p a rticularly
designated or physically segregated others of the same class.

Examples:
1. the watch I am wearing
2. The car sold by X
3 . M y d o g n a m e d “Terror”
4. the house at the corner of Rizal a n d del Pilar
5. the Toyota car with Plate No. A AV 316
6. this c a v a n of rice
7. the money I g a v e you.
Specific thing and generic thing distinguished.
• A determinate thing is identified by its individuality. The
debtor cannot substitute it with another although the
latter is of the same kind a n d quality without the
consent of the creditor.

• A generic thing is identified only b y its specie. The

debtor c a n give anything of the same class as long as it
is of the same kind.
 ART. 1164. The creditor has
a right to the fruits of the thing
from the time the obligation to
deliver it arises. However, he
shall acquire no real right over it
until the same has been
delivered to him. (Art. 1164,
NCC.)
Different Kind of fruits
The fruits mentioned by the law refer to natural, industrial,
a n d civil fruits.

[Link] fruits are the spontaneous products of the soil, a n d the

young a n d other products of animals.

Example: Grass; all trees a n d plants on lands’ produced

without the intervention of human labor.

2. Industrial fruits are those produced by lands of any kind through

cultivation or labor.

Example: Sugar cane, vegetables; rice; a n d all products of

lands brought about by reason of human labor.

3. Civil fruits are those derived by virtue of a juridical relation.

Example: Rents of buildings, price of leases of lands a n d

other property a n d the amount of perpetual or life annuities or other
similar income. (Art. 442, N C C )
Right of creditor to the fruits

The creditor is entitled to the fruitsof the thing to be delivered from

the time the obligation to make delivery arises. The intention of the law isto
protect the interest of the obligee should the obligor commit delay,
purposely or otherwise, in the fulfillment of his obligation.
• When creditor is entitled to the fruits
– Example: Francis is obliged to give Paul on Dec. 3, 2004, a
particular parcel of land. (before Dec. 3, he has no right
whatsoever over the fruits). After Dec. 3, 2004, Paul, the
creditor is entitled (as of right) to the fruits. But if the fruits and
the land are actually or constructively delivered only on Dec.
15, 2004, Paul becomes owner of the said fruits a n d land only
from the said date. Between Dec.3 a n d Dec. 15, Paul h a d
only a personal right (enforceable against Francis); after Dec.
15, he has a real right (over the properties), a right that is
enforceable against the whole world.
 When obligation to deliver fruits
arises
1. Generally, the obligation to deliver the thing due and,
consequently, the fruits thereof, if any, arises from the time of
the “perfection of the contract. Perfection, in this case, refers to
the birth of the contract or to the meeting of the minds
between the parties. (Art. 1305, 1315, 1319, NCC.)
2. If the obligation is subject to a suspensive condition or period
(Art. 1179, 1189, 1193), it arises upon the fulfillment of the
condition or arrival of the term. However, the parties may make
a stipulation to the contrary as regards the right of the creditor
to the fruits of the thing.
3. In a contract of sale, the obligation arises from the perfection of
the contract even if the obligation is subject to a suspensive
condition or a suspensive period where the price has been
paid.
4. In obligations to give arising from law, quasi-contracts, delicts,
a n d q u a si-delicts, the tim e of performan c e is determined by
the specific provisions of the law applicable.
 Meaning of personal right and real
right
[Link] right is the right or power of a person (creditor) to
d e m a n d from another (debtor), as a definite passive subject, the
fulfillment of the latter’s obligiation to give, to do, or not to do.

[Link] right is the right or interest of a person over a specific thing

(like ownership, possesion, mortgage), without a definite passive
subject against whom the right may b e personally enforced.
 Personal right and real right
distinguished
• In personal right there is a definite
active subject a n d a definite passive
subject, while in real right, there is only
a definite subject without any definite
passive subject. (See Art. 1156.)
• A personal right is, therefore, binding
or enforceable only against a
particular person, while a real right is
directed against the whole world.
Example:
Francis is the owner of a parcel of land under
a torrens title registered in his n a m e in the Registry of
Property. His ownership is a real right directed against
everybody. There is no definite passive subject.
If the land is claimed by Paul who takes
possesion, Francis has a personal right to recover from
Paul, as a definite passive subject, the property.
If the same land is mort g a g e d by Francis to
Mae, the mortgage; if duly registered, is binding
against third persons. A purchaser buys the land
subject to mortgage which is a real right.
Ownership acquired by delivery
Ownership a n d other real rights over property
are acquired a n d transmitted in consequence of
certain contracts by tradition or delivery. Mere
agreement does not effect transfer of ownership.
The meaning of the phrase “he shall acquire
no real right over it until the same has been delivered
to him”, is that the creditor does not b e c o m e the
owner until the specific thing has been delivered to
him. Hence, when there has been no delivery yet, the
proper court action of the creditor is not one for
recovery of possession a n d ownership but o n c e for
specific performance or rescission of the obligation.
 ART. 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 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
fortuitous event until he has effected the delivery. (Art.
1165, NCC.)
Remedies of creditor in real
obligation
In a specific real obligation (obligation to deliver
a determinate thing), the creditor m a y exercise the
following remedies or rights in case the debtor fails to
comply with his obligation:

a . D e m a n d specific performance or fulfillment (if it is still

possible) of the obligation with a right to indemnity for
damages; or
b . D e m a n d rescission or cancellation (in a certain cases)
of the obligation also with the right to recover
damages(Art. 1170); or
c . D e m a n d payme nt of d a m a g e s only where it is the only
feasible remedy.
 A generic real obligation
(obligation to deliver a generic thing),
on the other hand, c a n b e performed
by a third person since the object is
expressed only according to its family or
genus. It is, thus, not necessary for the
creditor to compel the debtor to make
the delivery, although he m ay ask for
performance of the obligation. *the
manner of compliance with a n
obligation to deliver a generic thing is
governed by Article 1246.
Responsibility of debtor who delays
or has promised delivery to
separate creditors.
Paragraph 3 gives two instances
when a fortuitous event does not
exempt the debtor from responsibility. It
likewise refers to a determinate thing.
A n indeterminate thing c a n not b e the
object of destruction by a fortuitous
event because genus nunquam perit
(genus never perishes).
 Effects of Fortuitous Events
Another important difference between a generic
a n d a specific obligation is that, a specific obligation, that
is, a n obligation to deliver a specific thing, is, as a rule,
extinguished by a fortuitous event or act of God. Upon the
other hand, generic obligations are never extinguished by
fortuitous events.

Examples:
a. Francis is oblig e d to give Paul this c ar. Before delivery,
a n earthquake destroys completely the car. The
obligation to deliver is extinguished.
b. Francis is oblig e d to give Paul a b o o k. Since this is a
generic thing, even if one particular book is lost, other
book may7 take its place. Hence the obligation is not
extinguished (genus nunquam perit)
‘Ordinary Delay’ Distinguished from
‘Default’

Ordinary delay is different from

legal delay (default). The first is merely
non-performance at the stipulated time;
default is that delay which amounts to a
virtual nonfulfillment of the obligation.
(As a rule, to put a debtor in default,
there must b e a d e m a n d for fulfillment,
the d e m a n d being either judicial or
extrajudicial)
Examples:
a. Ron is obliged to give Harry his Jaguar car on Dec.
7, 2005. If on said day, Ron does not deliver, he is
in ordinary delay (not default). If on Dec. 8, 2005,
a n earthquake destroys the Jaguar c ar, Ron is not
liable because the obligation is extinguished.
b. If, however, on Dec. 8, d e m a n d was m a d e for
delivery, Ron would b e in legal delay (default)
a n d if later, the car is destroyed by a fortuitous
event, he would still b e liable (in that the
obligation to deliver the lot specific thing is
converted into a monetary claim for damages).
However, if the car would have been destroyed
at any rate even if no d e m and h a d been made,
the amount of d a m a g e would reduced.
 ART. 1166. The obligation
to give a determinate thing
includes that of delivering all
its accessions and
accessories, even though
they may not have been
mentioned. (Art. 1166, NCC.)
 Meaning of Accessions and
Accessories
[Link] are the fruits of a thing or additions to
or improvements upon a thing (the principal).
Examples: house or trees on a land; rents of a
building; air-conditioner in a car; profits or dividends
accruing from shares of stocks, etc/

[Link] are things joined to or included with

the principal thing for the latter’s embellishment,
better use, or completion.
Examples: Key of a house; frame of a picture;
bracelet of a watch; machinery in a factory; b o w of a
violin.
 Right of creditor to accessions
and accessories
The general rule is that all accessions and
accessories are considered included in the obligation to
deliver a determinate thing although they m a y not have
been mentioned. This rule is based on the p rinciple of law
that the accessory follows the principal. In order that they
will b e excluded, there must b e a stipulation to that effect.
But, unless otherwise stipulated, a n obligation to
deliver the accessions or accessories of a thing does not
include the latter. Thus, a sale of the improvements (e.g.,
house) upon a land is not sufficient to convey title or any
right to the land. But the lease of a building or house
naturally includes the lease of the lot on which it is
constructed for the possession of the lot is implied in the
lease of the improvement.
 ART. 1167. If a person obliged
to do something fails to do it, the
same shall be executed at his cost.
This same rule shall be
observed if he does it in
contravention of the tenor of the
obligation. Furthermore, it may be
decreed that what has been poorly
done be undone. (Art. 1167, N C C )
 Remedies of Creditor if Debtor Fails
to Do
a. To have the obligation performed (by himself or by another) at
debtor’s expense (only if another c a n d o the performance).

b. Also– to obtain damages. (D amages alone cannot substitute

for performance if owners c a n d o it; if purely personal or
special – as a painting to b e done by a reputed artist – only
d a m a g e s may b e asked, unless substitution is permitted)
 Performance by a third person
A personal obligation to do, like a real obligation
to deliver a generic thing, c a n b e performed by a third
person. While the debtor c a n b e compelled to make the
delivery of a specific thing, a specific performance cannot
b e ordered in a personal obligation to d o because this
m a y amount to involuntary servitude which, as rule, is
prohibited under our Constitution.
Where, however, the personal qualifications of
the debtor are the determining motive for the obligation
contracted (e.g., to sing in a night club), the performance
of the same by another would b e impossible or would
result to b e so different that the obligation could not b e
considered performed. Hence, the only feasible remedy of
the creditor is indemnification for damages. But where the
obligation c a n still b e performed at the expense of the
debtor notwithstanding his failure or refusal to d o so, the
court is not authorized to merely grant d a m a g e s to the
creditor.
 ART. 1168 When the
obligation consists in not
doing, and the obligor does
what has been forbidden
him, it shall also be undone
at his expense. (Art. 1168,
NCC)
 In a n obligation not to do, the duty of the obligor is to
abstain from a n act. Here, there is no specific performance. The
very obligation is fulfilled in not doing what is forbidden. Hence,
in this kind of obligation the debtor cannot b e guilty of delay.
(Art. 1169, N C C )
As a rule, the remedy of the obligee is the undoing of
the forbidden thing plus damages. However, if it is not possible to
undo what was done, either physically or legally, or because of
the rights acquired by third persons who acted in g o o d faith, or
for some other reason, his remedy is a n action for d a m a ges
caused by the debtor’s violation of his obligation.

Example:
Ron bought a land from Harry. It was stipulated that
Harry would not construct a fence on a certain portion of his
land adjoining that sold to Ron.
Should Harry construct a fence in violation of the
agreement, Ron c a n bring a n action to have the fence
removed at the expense of Harry.
 When Demand is Not Needed to Put
Debtor in Default
[Link] the law so provides (Example: Taxes should b e paid
within a definite period, otherwise penalties are imposed without
need of d e m a n d for payment)
b. When the obligation expressly so provides
[Link] time is of the essence of the contract (or when the
fixing of the time was the controlling motive for the
establishment of the contract)
[Link] d e m a n d would b e useless, as when the obligor has
rendered it beyond his power to perform. (Example: When
before the maturity, the seller has disposed of it in favor of
another, or has destroyed the subject matter, or is hiding)
[Link] the obligor has expressly acknowledged that he really is
in default (But it should b e noted that his mere asking for
extension of time is not a n express acknowledgement of the
existence of default on his part)
 Different Kinds of Mora
a. mora solvendi (default on part of the debtor)
1. mora solvendi ex re (debtor’s default in real obligations)
2. mora solvendi ex persona (debtor’s default in personal
obligations)

b. mora accipiendi (default on part if the creditor)

[Link] morae (when in a reciprocal obligation both

parties are in default; here it is a s if neither is in dafault)
 Requisites for mora solvendi
1. The obligation must b e due, enforceable, a n d
already liquidated or determinate in amount.
2. There must b e non-performance
3. There must b e a demand, unless the d e m a n d is
not required (as already discussed). (When
d e m a n d is needed, proof of it must b e shown by
the creditor)
4. The d e m a n d must b e for the obligation that is due
(and not for another obligation, nor one with a
bigger amount, except in certain instances,
considering all the circumstances)
 Mora Accipiendi
a. The creditor is guilty of default when he unjustifiably refuses to
accept payment or performance at the time said payment or
performance c a n b e done. Some justifiable reasons for refusal
to accept may b e that the payor has no legal capacity or that
there is a n offer to p a y a n obligation other than what has been
agreed upon.
b. If a n obligation arises ex delicto (as a result of a crime), the
debtor-criminal is responsible for loss, even though this b e
through a fortuitous event, unless the creditor is in mora
accipiendi.
 Reciprocal Obligations
a. Reciprocal obligations d e p e n d upon e a c h other for
performance (Example: In a sale, the buyer must PAY, a n d
the seller must DELIVER)
b. Here performance m a y b e set on different dates. (Example:
delivery date on Dec. 9, 2005; a n d payment on Dec. 13, 2005.
To put the seller in default, d e m a n d as a rule must b e made.
Delivery upon the other hand, does not put the buyer in
default, till after demand, unless d e m a n d is not required. This
is because, in the example given, different periods for
performance were given)
c. If the performance is not set on different dates, either by the
law, contract, or customs, it is understo o d that performa n c e
must b e simultaneous. Hence, one party cannot d e m a n d
performance by the other, if the former himself cannot
perform. A n d when neither has performed , there is
compensatio morae (default on part of both; so it is as if no
one is in default). If one party performs a n d the other does
not, the latter would b e in default.
 ART. 1170. Those who in
the performance of their
obligations are guilty of
fraud, negligence, or delay
and those who in any
manner contravene the tenor
thereof, are liable for
damages. (Art. 1170, N C C )
Grounds for Liability
1. Fraud (deceit or dolo)– as used
in Article 1170, it is the deliberate or
intentional evasion of the normal
fulfillment of the obligation. As a
ground for damages, it implies
some kind of malice or dishonesty
a n d it cannot cover cases of
mistake a n d errors of judgment
m a d e in g o o d faith. It is
synonymous to b a d faith.
 Article 1170 refers to
incidental fraud (dolo incidente)
committed in the performance of
a n obligation already existing
because of contract. It is to be
differentiated from casual fraud
(dolo causante) or fraud employed
in the execution of a contract
under Article 1338, which vitiates
consent.
 2. Negligence (fault or
culpa) – it is any voluntary
act or omission, there being
no malice, which prevents
the normal fulfillment of a n
obligation. (see Arts. 1173,
1174, N C C )
3. Delay (mora) – this has already
been discussed under article
1169.
4. Contravention of the terms of
the obligation – This is the
violation of the terms a n d
conditions stipulated in the
obligation. The contravention
must not b e due to s fortuitous
event or force majeure. (Art.
1174, N C C )
 Fraud and Negligence
distinguished
1. In fraud, there is deliberate intention to cause d a m a g e or
injury, while in negligence, there is no such intention.
2. Waiver of the liability for future fraud is void (Art. 1171), while
such waiver may, in a certain sense, b e allowed in
negligence. (Art1172)
3. Fraud must b e clearly proved, while negligence is presumed
from the violation of a contractual obligation.
4. Lastly, liability for fraud cannot b e mitigated or reduced by
the courts, while liability for negligence m a y b e reduced
according to the circumstances. (Art. 1173)
They are similar in that both are voluntary, that is, they are
committed with volition. Where, however, the negligence shows b a d
faith; or in so gross that it amounts to malice or wanton attitude on part
of the defendant, the rules on fraud shall apply. In such ca se no more
distinction exists between the two, at least as to effects.
 ART. 1171. Responsibility arising
from fraud id demandable in all
obligations. Any waiver of action for
future fraud is void. (Art. 1171, N C C )
 Waiver of Action for future fraud
void
According to the time of commission, fraud m a y
b e past or future.

A waiver of a n action for future fraud is void (no

effect, as if there is no waiver) as being against the law
a n d public policy. A contrary rule would encourage the
perpetration of fraud because the obligor knows that
even if he should commit fraud, he would not b e liable
for it, thus making the obligation illusory.
 Waiver of Action for Past Fraud
Valid
What the law prohibits is waiver anterior to the fraud a n d
to the knowledge thereof by the aggrieved party.
A past fraud c a n b e the subject of a valid waiver because
the waiver c a n b e considered as a n act of generosity a n d
magnanimity on the part of the party who is the victim of the
fraud. Here, what is renounced is the effect of the fraud, that is, the
right to indemnity of the party entitled thereto.
 Example:
Sally promised to deliver 120 cavans of rice of a particular
brand a n d quality to Bessie at the rate of 10 cavans a month.
Sally cannot make a n agreement with Bessie, whereby
Bessie will not file a n action in court against Sally, should Sally
commit fraud in the performance of her obligation. This waiver of
a n action for future fraud is void. Hence, Bessie c a n still bring a n
action against Sally for d a m a g e s arising from the fraud.
But o n c e fraud is committed, Bessie, with full knowledge
thereof, c a n waive her right to indemnity as a n act of forgiveness
on her part.
 ART. 1172. Responsibility
arising from negligence in the
performance of every kind of
obligation is also demandable, but
such liability may be regulated by
the courts, according to the
circumstances. (Art. 1172, NCC.)
 Validity of waiver of action arising
from negligence
1 . A n action for future negligence (not fraud) m a y b e
renounced except where the nature of the obligation
requires the exercise of extraordinary diligence as in the c ase
of c o m m o n carriers. Thus, in the preceding example, the law
allows a n agreement between Sally a n d Bessie, whereby Sally
will not b e liable for d a m a g e s arising from negligence in the
perform a nc e of his o b ligation. But if Sally is a c o m m on carrier
(e.g., bus, shipping or airline company) such waiver is void.

2. Where negligence shows b a d faith (i.e., deliberately

committed), it s considered equivalent to fraud. Any waiver
of a n action for future negligence of this kind is, therefore,
void.
 Kinds of negligence according to
source of obligation
1. Contractual negligence (culpa contractual) or negligence in
contracts resulting in their breach. Article 1172 refers to culpa
contractual. This kind of negligence is not a source of
obligation. (Art. 1157) It merely makes the debtor liable for
d a m a g e s in view of his negligence in the fulfillment of a pre-
existing obligation. (Arts. 1170, 1172)
2. Civil negligence (culpa aquiliana) or negligence which itself is
the source of a n obligation between the parties not so
related before by any pre-existing contract. It is also called
tort or quasi-delict. (Art. 2176)
3. Criminal negligence (culpa criminal) or negligence resulting
in the commission of a crime. The same negligent act causing
d a m a g e s m a y produce civil liability arising from a crime
under Article 100 of the Revised Penal Code, or create a n
action for quasi-delict under Article 2176 of the Civil Code.
 Examples:
1. If Sandy entered into a contract with Bandy to deliver a
specific horse on a certain d a y a n d the horse died through
the negligence of Sandy before delivery, Sandy is liable for
d a m a g e to Bandy for having failed to fulfill a pre-existing
obligation because of his negligence. This is culpa
contractual.
2. Assume now, that the horse belongs to a n d is in the
possession of Bandy. The negligence of Sandy which
results in the death of the horse is culpa aquiliana. In this
case, there is no pre-existing contractual relation between
Sandy a n d Bandy. The negligence itself is the source of
liability
3 . A crime c a n b e committed by negligence. If Bandy wants,
she c a n bring a n action for culpa criminal ( d a m a g e to
property through simple or reckless imprudence). Here, the
crime is the source of the obligation of Sandy to p a y
damages.
 ART. 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 person, of the time and
of the place. When negligence shows bad
faith, the provisions of the articles 1171 and
2201, paragraph 2, shall apply.
Ifthe law or contract does not state the
diligence which is to be observed in the
performance, that which is expected of a
good father of a family shall be required. (Art.
1173)
 Negligence is a question of fact, its existenc e being depe ndent
upon the particular circumstances of e a c h case. In determining the issue of
negligence, the following factors must b e considered:
1. Nature of Obligation
Example: Smoking while carrying materials known to b e
inflammable constitutes negligence.
2. Circumstances of the person
Example: A guard, a m a n in the prime of life, robust a n d healthy,
sleepin g while on duty is guilty of negligence.
3. Circumstances of time
Example: Driving a car without headlights at night is gross
negligence but it does not by itself constitute negligence when driving
during the day.
4. Circumstances of the place
Example: Driving at 80kph on the superhighw a y is permissible but
driving at the same rate of speed in Rizal Avenue, Manila is gross
recklessness.
 ART. 1174. Except in cases
expressly specified by 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. (Art. 1174, N C C )
 A fortuitous event is any event
which cannot b e foreseen, or
which, though foreseen, is
inevitable.
The essence of a fortuitous
event consists of being a
happening independent of the will
of the debtor a n d which
happening, makes the normal
fulfillment of the obligation
 Fortuitous event distinguished
from force majeure
[Link] of man – strictly speaking, fortuitous event is a n
event independent of the will of the obligor but not of
other human wills.
Examples: War, fire, robbery, insurrection

[Link] of God – They refer to what is called majeure

or those events which are totally independent will of
every human being.
Examples: Earthquake, flood, rain, shipwreck,
lightning, eruption of volcano, etc.
 Kinds of Fortuitous Events
1. Ordinary fortuitous events or those events which a re common
a n d which the contracting parties could reasonably foresee
(e.g., rain)

2. Extra-ordinary fortuitous events or those events which are

uncommon a n d which the contracting parties could not have
reasonably foreseen. (e.g., earthquake, fire, war, pestilence,
unusual flood). (see Art. 1680, par. 2.)
 Rule as to liability in case of fortuitous
event
A person is not, as a rule, responsible for loss or d a m a g e
caused to another resulting from fortuitous events. In other words, his
obligation is extinguished. The exceptions are enumerated below.

1. When expressly specified by law – In exception (a), (b), a n d (c)

below, the special strictness of the law is justified.
(a) The debtor is guilty of fraud, negligence, or delay, or
contravention of the tenor of the obligation. (Arts. 1170, 1165,
par 3.)
(b) The debtor has promised to deliver the same (specific) thing to
two or more persons who d o not have the same interest
(c) The obligation to deliver s specific thing arises from a crime. (Art.
1268, N C C )
(d) The thing to b e delivered is g e n e ric. (Art. 1263)
 Rule as to liability in case of fortuitous
event
[Link] declare by stipulation- the basis for the
exception rests upon the freedom of contract, (see Art.
1306, NCC). Such stipulation is usually intended to better
protect the interest of the creditor a n d procure greater
diligence on the part of the debtor in the fulfillment of his
obligation. But the intention to make the debtor liable
even in the case of a fortuitous event should b e clearly
expressed.
[Link] the nature of the obligation requires the
assumption of risk- here, risk of loss or d a m a g e is an
essential element in the obligation.