Vous êtes sur la page 1sur 29


Chapter 1
Art. 1156
Definition of Obligation
-a juridical necessity to give, to do or not to do.
-a juridical relation whereby a person (called the creditor) may demand from another (called the
debtor) the observance of a determinate conduct (the giving, doing, or not doing), and in case of
breach, may demand satisfaction from the assets of the latter. ( Arias Ramos, p. 74)

Judicial necessity because non-compliance can result in judicial or legal sanction.

Elements of Obligation:
1) an active subject (obligee or creditor): the possessor of a right; he in whose favor the obligation is
2) a passive subject (obligor or debtor): he who has the duty of giving, doing or not doing;
3) the object or prestation: the subject matter of the obligation; it may consist of giving a thing, or
doing or not doing a certain act;
4) the efficient cause (vinculum or juridical tie): the reason why the obligation exists and
5) Causa (causa debendi/causa obligationes) - why obligation exists
Requisites of Object:
a. licit - if illicit, it is void
b. possible - if impossible, it is void
c. determinate or determinable - or else, void
d. pecuniary value

Kinds of Obligations
1) From the viewpoint of sanction
a) civil obligation (perfect obligation) : defined in Art. 1156, Civil Code, and sanctioned by
judicial process
b) natural obligation: the duty not to recover what has voluntarily been paid although payment
was no longer required
: it is sanctioned by law, but only because conscience had originally motivated the payment
Example: Knowing that it already prescribed, a debtor still paid his debt to the creditor.
c) moral obligation: sanctioned by conscience or morality, or the laws of the church.
Example: the duty of a catholic to hear mass on Sundays
2) From the viewpoint of subject matter
a) real obligation: the obligation to give
b) personal obligation: to obligation to do or not to do
3) From the affirmativeness and negativeness of the obligation
a) positive or affirmative obligation: the obligation to give or to do
b) negative obligation: the obligation not to give or not to do
4) From the persons obliged
a) unilateral: when only one of the parties is bound
b) bilateral: where both parties are or may be bound
reciprocal: the performance of one is dependent upon the performance of the other
non-reciprocal: the performance of one is not dependent on the performance by the

Article 1157, Articles 1158-62

Art. 1157
Sources of Obligation (LCQAQ)
1) Law, (OBLIGATION EX LEGE ) - Must be expressly or impliedly set forth and cannot be
2) Contracts, (OBLIGATION EX CONTRACTU ) - Must be complied with in good faith because it
is the law between parties; neither party may unilaterally evade his obligation in the contract,
a) contract authorizes it
b) other party assents
Parties may freely enter into any stipulations, provided they are not contrary to law, morals, good
customs, public order or public policy
3) Quasi-contracts (OBLIGATION EX QUASI-CONTRACTU ) - That juridical relation resulting
from a lawful, voluntary and unilateral act, and which has for its purpose, the payment of
indemnity to the end that no one shall be unjustly enriched or benefited at the expense of another
4) Acts or omissions punishable by law/Delicts (OBLIGATION EX MALEFICIO OR EX
5) Quasi delicts/Torts ( OBLIGATION EX QUASI-DELICTO or EX QUASI MALEFICIO ) It is a fault or act of negligence ( or omission of care ) which causes damage to another, there
being no pre-existing contractual relations between the parties
Art. 1158: law
Obligations derived from law are
1) not presumed but must be expressly determined in this Code or other special laws;
2) regulated by the precepts of law which establishes them; and as to what not has been
foreseen, by the provisions of this book.
Art. 1159: contracts
Obligations arising from contracts:
1) have the force of law between the parties; and
meaning that neither party may unilaterally and upon his own exclusive volition, escape his
obligations under the contract, unless the other party assented thereto, or unless for causes sufficient
in law and pronounced adequate by a competent tribunal. (p. 81)
2) should be complied with in good faith.
Compliance in good faith means that we must interpret not by the letter that killeth but by the
spirit that giveth life. (p. 81)
Principle of Privity of Contracts: The terms of the contract cannot be extended to third parties or those
not included in the contract.
Article 1160: quasi-contracts
Obligations derived from quasi-contract shall be subject to the provisions of Chapter 1, Title XVII, of
this Book.
Definition of Quasi-contract: that juridical relation resulting from a lawful, voluntary, and unilateral
act, and which has for its purpose the payment of indemnity to the end that no one shall be unjustly
enriched or benefited at the expense of another. (Art. 2142, Civil Code)
Kinds of Quasi-contract
1) Negotiorium gestio (unauthorized management): takes place when a person voluntarily takes
charge of anothers abandoned business or property without the owners authority;
Reimbursement should be made to the gestor for necessary and useful expenses.
2) Solutio Indebiti (undue payment) : takes place when something is received when there is no
right to demand it, and it was unduly delivered by mistake.

The recipient has the duty to return what was received.

Art. 1161: Ex Delicto or Ex Maleficio

Rules that govern:
1) pertinent provisions of the Revised Penal Code and other penal laws, subject to the provisions of
Art. 2177, Civil Code;
2) Chapter 2, Preliminary Title, on Human Relations of the Civil Code;
3) Title 18 of Book IV of the Civil Code (on damages).
What civil liability arising from a crime includes:
a. restitution
b. reparation of damage caused
c. indemnity for consequential damages
Effect of acquittal in criminal case:
when acquittal is due to reasonable doubt no civil liability
when acquittal is due to exempting circumstances there is civil liability
when there is preponderance of evidence there is civil liability
Art. 1162: Ex Quasi-Delicts or Ex Quasi-Maleficio
Rules that govern:
1) Chapter 2, Title 17, Book IV, Civil Code
2) Special laws.

Definition of Quasi-delict: a fault or act of negligence (or omission of care), which causes damages to
another, there being no pre-existing contractual relations between the parties.
Definition of Negligence: the omission of that diligence which is required by the circumstances of
person, place and time (Art. 1173)
Requirements before a Person can be held Liable for a Quasi Delict
1) There must be fault or negligence attributable to the person charged;
2) There must be damage or injury;
3) There must be a direct relation of cause and effect between the fault or negligence on the one
hand and the damage or injury on the other hand (proximate cause).
Proximate cause is that adequate and efficient cause, which in the natural order of events,
necessarily produces the damages or injury complained of. (p. 102)

In Sagrada v. Naccoco, the Supreme Court held that the sources of obligation in Art 1157 is
exclusive. Many commentators believe, however that it should not be. At present, there is one more
possible source of obligations - PUBLIC OFFER (Public Offer is in fact a source of obligation in the
German Civil Code)

Chapter 2
1. Obligation to give - obligation to deliver the thing agreed upon
2. Obligation to do/not to do - obligation to do/not to do the service agreed upon
1. Exercise diligence / Preserve the thing (Art. 1163) EDD
Art. 1163: The obligation of every person to take care of a DETERMINATE/SPECIFIC THING with
proper diligence of a GOOD FATHER OF A FAMILY.
standard of care: that of a good father of a family unless the law or stipulation requires another
standard of care
2. Delivery of fruits (Art. 1164)
Art. 1164: Nature of the rights of the creditor
The creditor has the rights 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.
When does the right begin to exist : from the time to deliver arises
a) when there is no term/condition from the perfection of the contract
b) when there is a term/condition from the moment the term or condition arises
3. Delivery of accessories & accessions ( obligation to deliver determinate thing, even if the stipulation
does not mention delivery of accessories & accessions)
Accessories - those joined to or included with the principal for the latters better use, perfection or
Accessions additions to or improvements upon a thing
When does right to fruits arise? from the time the obligation to deliver arises
a) Conditional from the moment the condition happens
b) With a term/period upon the expiration of the term/period
c) Simple from the perfection of the contract
A. If there is no term or condition, then from the perfection of the contract
B. If there is a term or a condition, then from the moment the term arrives or the condition
PERSONAL RIGHT jus in personam or jus ad rem
Power demandable by one person of another (obligation to give, to do or not to do)
REAL RIGHT jus in rem

A power over a specific thing and it is binding on the whole world.


A. ACTUAL OR TRADITION physically, the property changes hands
B. CONSTRUCTIVE DELIVERY where the physical transfer is implied
Traditio Simbolica (symbolical tradition) as when the keys to the bodega are given
Tradition Longa Manu (delivery by mere consent or the pointing out of the object) like
pointing out to the car, which is the object of a sale.
Tradition Brevi Manu (delivery by short hand) a possessor of a thing not as an owner,
becomes the possessor as owner like when a tenant already in possession buys the house he is renting.
Tradition Constitutum Possessorium opposite of Brevi Manu the delivery whereby a
possessor of a thing as an owner retains possession no longer of a thing as an owner but in some other
Tradition by the Execution of Legal Forms and Solemnities like the execution of a
public instrument selling land.
Art. 1165
DELAY in this article means LEGAL DELAY or DEFAULT
a. ORDINARY DELAY merely the non-performance at the stipulated time
b. LEGAL DELAY or DEFAULT that delay which amounts to a virtual non-fulfillment of the
obligation. AS A RULE, to put a debtor in default, there must be a JUDICIAL or EXTRAJUDICIAL
DEMAND or fulfillment
1. Demand specific performance or compliance
- Specific Performance- performance of the prestation itself
- Substitute Performance - someone else performs or something else is performed at the
expense of debtor
- Equivalent Performance demand for damages
a. If the thing is determinate compel obligor to deliver the thing
b. If the thing is generic demand obligor to comply with his obligation you cannot
compel him to deliver a specific thing.
2. Demand rescission or cancellation
3. Demand Damages
Art. 1166
ACCESSORIES those joined to or included in the principal for the latters better use, perfection or
enjoyment. (Example: keys to a house, jack of a car)
ACCESSIONS additions to improvements upon a thing (Examples: whatever is built, planted or
sown on a parcel of land).
If there is a stipulation to said effect, accessions and accessories do not have to be included.
Art. 1167: The Obligation TO DO
If DEBTOR fails to Do something, CREDITOR can:
Have the obligation performed by himself or another at the debtors expense (only if another can
do the performance)
Obtain Damages only if personal or special, or if others or the creditor cant do it
Specific performance is not a remedy in personal obligations, otherwise, this may amount to
involuntary servitude, which is prohibited under our Constitution
When a Thing May be Ordered Undone:

If poorly made performance by another and damages may be demanded

If the obligation is a negative one provided the undoing is possible

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.
Table of Remedies in case of


Obligation to give
(Real Obligation)

Obligations to do
(Personal Obligation)
To do
Not to do
undo the things already
Can only be demanded if
obligation is not very
Undo the things already


1. Contravention of tenor
2. Delay/ Mora - Non performance with respect to time
a. Mora solvendi default on the part of the debtor;
2 kinds:
(1) Mora Solvendi Ex re default in real obligations
(2) Mora Solvendi Ex persona default in personal obligations
(1) The obligation must be due, enforceable and already liquidated or determinate in
(2) There must be non-performance
(1) There must be a demand, unless demand is not required
a. if determinate thing - debtor bears risk of loss (even when there is fortuitous event)
b. debtor liable for damages/interest
c. resolution (art 1170, in proper cases)
b. Mora accepiendi default on part of creditor; Creditor is guilty of default when he
unjustifiably refuses to accept payment or performance at the time payment/performance can be

responsibility of debtor is reduced to fraud and gross negligence

debtor is exempted from risk of loss of thing / creditor bears risk of loss
expenses by debtor for preservation of thing after delay is chargeable to creditor
if obligation bears interest, debtor does not have to pay from time of delay


creditor liable for damages

debtor may relieve himself of obligation by consigning the thing

c. Compensatio morae both parties are in default (in reciprocal obligations); the effect: is as if
there is no default
Art 1169
Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extra-judicially demands from them the fulfillment of their obligation.
However, the demand from the creditor shall not be necessary in order that delay may exist:
a. When the obligation or the law expressly so declares. ONU
b. 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 to the service is to be rendered was a controlling motive
for the establishment of the contract
c. 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.

Extra-judicial demands may be written or oral-but best if written because it can be presented as
AS A RULE-to put a debtor in default, DEMAND is needed.
Demand is not Needed to Put Debtor in Default When:
a. When the law so provides
b. When the obligation expressly so provides
c. When the fixing of the time was the controlling motive for the establishment of the contract
d. When demand would be useless
e. When the obligor has expressly acknowledged that he really is in default
BUT IN THE PHILIPPINE LAW, THIS IS NO LONGER SO because it is expressly provided that in
reciprocal obligations, neither party incurs default if the other does not comply with what is
incumbent upon him. Even if there were (written) demands from both sides, there is no default when
neither has done his obligation.
It is only when one party fulfills his obligation, delay by the other begins (assuming that there is no
date set in the contract for his performance).
3. Fraud / Dolo Voluntary execution of a wrongful act or willful omission, knowing and intending
the effects which naturally and necessarily arise from such act or omission
a. Causante ( causal ) - makes contract voidable
b. incidente ( incidental ) - fraud in performance of obligation; does not affect validity of
Remedies of Person in fraud under obligations are:
a. insist on specific performance (art 1233)
b. resolve contract (art 1191)
c. claim damages, in either case
4. Negligence /Culpa - absence of due diligence
a) Omission of diligence required
b) Diligence required per nature of obligation, circumstances of persons, time and place

Art 1170
Those who in the performance of their obligation are guilty of fraud, negligence or delay and
those who in any manner contravene the tenor thereof are liable for damages.

Grounds for Liability in the Performance of Obligations

a. Fraud-use of deceit or other machinations to intentionally evade the fulfillment of the obligation
-This type of fraud is applicable in obligations only-it is different from CAUSAL OR
INCIDENTAL fraud (fraud that exists between parties when there is no pre-existing contractual
relations or obligations between them).
b. Negligence-fault-0no intent
c. Default
d. Violation of the terms of Obligation (unless excused in proper cases by fortuitous events)

The Following do not Exempt from the Fulfillment of the Obligation

a. Increase in the cost of the performance
b. Poverty
c. War between the subject of the neutral country and the subject of a country at war, as long as the
substantial compliance can still be done.

Those liable under this Article should pay damages, only if prejudice or damage was caused.
Kinds of Damages
a. Moral-for moral and physical anguish
b. Exemplary-corrective or to set an example
c. Nominal-to vindicate a right-when no other kind of damages may be recovered
d. Temperate-when the exact amount of damages cannot be determined
e. Actual-actual losses as well as unrealized profits
f. Liquidated predetermined beforehand by agreement.

Art 1171
Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for
future fraud is void.
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 1173
The fault or negligence of the obligor consists in that omission of the 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 Articles 1171 and 2201 paragraph 2, shall
Kinds of Diligence Under the Civil Code
a. That agreed upon by the parties
b. In the absence of that agreed upon by the parties, that required by law
c. In the absence of that required by law, that expected of a good father of a family.


There is deliberate intention to cause
Liability cannot be mitigated.
Waiver for future fraud is void.

There is no deliberate intention to cause damage.
Liability may be mitigated.
Waiver for future negligence may be allowed in certain
a) gross can never be excused in advance; against
public policy
b) simple may be excused in certain cases

Art 1174
Concept: Fortuitous Event - event which could not be foreseen, or which though foreseen, were inevitable
Refers to as caso fortuito, act of God, force majeure, unavoidable accident
Eg. Natural calamities
Essential Characteristics of a fortuitous Event (Nakpil & Sons vs. CA)
1. The cause of the breach of the obligation must be independent of the will of the debtor
2. The event must be either unforeseeable or unavoidable
3. The event must be such as to render it impossible for the debtor to fulfill his obligation in a
normal manner
4. The debtor must be free from any participation in, or aggravation of injury to the creditor
Liability for fortuitous events

General Rule for Fortuitous Events- No person shall be liable for fortuitous events; i.e., his
obligation will be extinguished:
Exceptions to the General Rule- when the debtor shall be held liable for a fortuitous event (Art.
a) when expressly declared by law ( bad faith, subject matter is generic, debtor is in delay )
b) when expressly declared by stipulation or contract
c) when the nature of the obligation requires assumption of risk (eg. obligation of an


1. The obligor defaults
2. The obligor is guilty of Bad Faith (for having promised to deliver to two or more persons
who do not have the same interest).
Jaypee is obliged to give Jaboom his car on Dec. 7, 1991. If on that said day, Jaypee does not
deliver, he is in ordinary delay. If on Dec. 8, 1991, an earthquake destroys the car, he is not liable because
the obligation is extinguished.
Art 1175
Usurious transactions shall be governed by special laws.

Usury-contracting for or receiving something in excess of the amount allowed by the law for the loan
or use of money, goods, chattels (estate inheritance, personal property) or credit

Art 1176 Presumptions on receipt of principal or of later installment (these are disputable
presumptions and evidence may be introduced to the contrary by the creditor.)
1. The receipt of the principal by the creditor without reservation as to interest, shall give rise to
the presumption that said interest has been paid.
2. The receipt of a later installment without reservation as to prior installments, shall give rise to
the presumption that such prior installments have been paid.

The condition not to do an impossible thing shall be considered as not having been agreed upon:
a. If condition is to do an impossible of illegal thing=condition and obligation are void
b. If the condition is negative/not to do the impossible=just disregard the condition but the
obligation remain
c. If the obligation is negative/not to do= both condition and obligation are valid

Art. 1177 Remedies of creditor to enforce payment of his claims against debtor
1. Exact performance - specific, substitute, equivalent
2. Attach and execute debtor's property which is not exempt (art 2236)
- pursue the property in the possession of the debtor, except those exempt by law.
3. Accion subrogatoria (Art 1171)- exercise all the rights and bring all the actions of the debtor
except those personal to him.
a. Creditor must have right of return against debtor
b. The debt is due and demandable
c. There is a failure of the debtor to collect his own debt from 3 rd persons either through
malice or negligence
d. Debtor's assets are insufficient
e. The right of account is not purely personal
4. Accion directa (arts 1729 & 1652)
5. Accion pauliana the right to impugn the acts which the debtor may have done to defraud his
creditors. (remedy is rescission)
a. There is a credit in favor of plaintiff
b. The debtor has performed an act subsequent to the contract, giving advantage to other
c. The creditor is prejudiced by the debtor's act which are in favor of 3 rd parties and
rescission will benefit the creditor
d. The creditor has no other legal remedy
e. The debtor's acts are fraudulent
Art. 1178
Rule on transmissibility of rights and exceptions thereto.
All rights acquired by virtue of an obligation are generally transmissible
1. If the law prohibits the transmission of rights;
2. It the parties stipulated;
3. If the right is not transmissible. Eg. personal obligation



Demandability - pure, conditional or with a term

Plurality of object - simple, alternative or facultative
Plurality of subject - simple, joint or solidary
Performance - divisible or indivisible
Sanctions for breach - with or without a penal clause

Primary Classification
1. Pure obligation
2. Conditional Obligation
3. Obligation with a period
4. Alternative Obligation
5. Facultative Obligation
6. Joint Obligation
7. Solidary Obligation
8. Divisible obligation
9. Indivisible Obligation
10. Obligation with a Penal Clause
1. Pure obligation demandable at once, with no term and no condition Eg. I will give you ten pesos.
2. Conditional Obligation- one whose demandability or extinguishment depends upon the happening
of a condition.
A condition is a future and an uncertain event or a past event unknown to the parties eg. I will give
you one million pesos if you pass the Bar.
Definition of Condition: It is an uncertain event which wields influence on a legal relationship
Kinds of Condition
1. Suspensive and Resolutory
2. Potestative, Casual and Mixed
3. Possible and Impossible
4. Positive and Negative
5. Divisible and Indivisible
i. Suspensive happening of condition gives rise to obligation; also called as condition antecedent or
condition precedent.
1. effectivity is retroactive
2. no retroactivity with reference to fruits or interest & prescription
3. creditor may preserve rights
4. debtor recovery of payment by mistake or even w/o mistake
ii. Resolutory happening of condition extinguishes the obligation, referred to as condition
1. no retroactive effect
2. obligation extinguished
3. restore to each other what was received plus interest/fruits
iii. Potestative dependent on sole will of a party; if on part of debtor & suspensive the
obligation is void.

Art. 1182 Even if the condition is fulfilled, obligation is not demandable.; eg. Debtor will give
creditor P10000 if debtor goes to US
If potestative on the part of the creditor, obligations is valid whether condition is suspensive or
resolutory- eg. Debtor is to give Creditor P10000 if creditor goes to US
iv. Casual dependent upon chance or hazard, or upon the will of a third person
eg. Ill give you P1000 if I will win first prize in the lotto which I bet today
v. Mixed dependent partly upon chance and upon the will of one of the parties, or upon the will
of a third person. Eg. I will give you P1million if you marry A.
vi. With term Positive extinguished if time expires or indubitable of condition to
Negative effective from moment of time elapsed or evident it can't


vii. Possible and Impossible

Possible- capable of being fulfilled in its nature and by law.
Impossible- incapable of being fulfilled by its nature and due to operation of law.

To do - both the condition and the obligation are void

Not to do disregard the condition, the obligation is still valid; Condition not to do an
impossible thing, deemed to have been not agreed upon. Art. 1183
Impossible condition physically not feasible
Illegal condition prohibited by law, good custom, public policy and morals
viii. Positive and Negative
Positive the condition that some event happen at a determinate time. Obligation is extinguished
as soon as the time expires or it has become indubitable that the event will not take place or it has become
indubitable that the event will not take place. Eg. Debtor to give creditor P1000 if Creditor will marry A
on or before December 30, 2011. obligation is extinguished if creditor will not marry A on Dec 30, 2011.
Negative Condition that some event will not happen at a determinate time. Oblgiation be
comes effective as soos as the time indicated has elapsed or it become evident tha event will not occur.
Eg. Ill give you 10000 if you have not yet married A as of Dec 30 2011.
ix Divisible and Indivisible
Divisible capable of partial performance, eg. A will give B 1000 if B will finish his law course
and P10,000 if B pass the bar.
Indivisible incapable of partial performance, eg. A will give P1million to B if B finish his law
course and also top the bar.
Rules on loss, impairment, improvement of the subject matter pending the happening of
suspensive condition/ term (Art. 1189)

w/ debtors fault or at
expense of obligor/

Liability in case
of Loss/

Liability in case of Improvement

specific performance, rescission & damages

If it improved at the expense of the debtor, he shall
have no other right than that granted to the
usufructuary. (art 1189)

w/o debtors fault or

not at expense of


Creditor to bear damages

Creditor gets it


1. There is a suspensive condition
2. There is an obligation to deliver a determinate thing
3. There is loss, deterioration or improvement before the happening of the condition
OBLIGATION WITH A PERIOD future & certain, past & uncertain, payable when able
When stipulation says payable when able it is with a period,
a) agreement among parties
b) court shall fix period of payment when parties unable to agree
a. Resolutory ( in diem ) takes effect at once but terminate upon arrival of the day certain;
Day certain that which must necessarily come, although it may not be known when
b. Suspensive ( ex die ) takes effect on the day stipulated
a) art 1197
b) art 1197, 2nd paragraph
c) art 1191, 3rd paragraph
d) art 1687, 2nd, 3rd, 4th sentence
e) art 1180
a. insolvency of debtor, unless security provided
b. did not deliver security
c. impaired security- thru fault or fortuitous event
d. violate undertaking in consideration of extension of period
e. attempts to abscond
(4). Facultative only one prestation has been agreed upon but another may be given in substitution
Effect of loss or deterioration thru negligence, delay or fraud of obligor:
a) of thing intended as substitute - no liability

b) of the substitute after substitution is made with liability

(5). Alternative bound by different prestations but only one is due
Right of choice: General rule: right of choice belongs to debtor
a. the choice is with debtor
(1) If only 1 is left either because of fortuitous events or due to debtor's acts, perform what is
left. The effect is that the debtor loses the right of choice
(2) if the choice is limited because of the creditor's acts, the debtor has the right of resolution and
(3) if all are lost due to debtor, the creditor is entitled to damages
(4) if some are lost, the debtor can choose from the remaining
b. the choice is with creditor
(1) if one or some are lost due to fortuitous event, the creditor chooses the remainder
(2) if one or some is lost because of the fault of debtor, the creditor may choose either the
remainder or the value of any which disappeared, and damages in either case
(3) if all is lost due to the debtor's fault, the creditor may choose the value of any if some is lost
due to debtor's fault, the creditor chooses the remainder
(4) if all is lost due to fortuitous event, obligation is extinguished
(5) if all is lost due to creditor's fault, the obligation is extinguished
Requisites for making the choice:
a) Made properly so that creditor or his agent will actually know
b) Made with full knowledge that a selection is indeed being made
c) Made voluntarily and freely
d) Made in due time before or upon maturity
e) Made to all proper persons
f) Made w/o conditions unless agreed by the creditor
g) May be waived, expressly or impliedly

a) Various things are due but the giving
principally of one is sufficient
b) If one of prestations is illegal, others may
be valid but obligation remains
c) If it is impossible to give all except one,
the last one must still be given
d) Right to choose may be given either to
debtor or creditor

a) Only one thing is due but a substitute may be given to
render payment/fulfillment easy
b) If principal obligations is void and there is no
necessity of giving the substitute; nullity of P carries
with it nullity of S
c) If it is impossible to give the principal, the substitute
does not have to be given; if it is impossible to give
the substitute, the principal must still be given
d) The right of choice is given only to the debtor

(6). Joint presumption when 2 or more creditors or 2 or more debtors concur in one and the same
a. Demand on one produces delay only with respect to the debt
b. Interruption in payment by one does not benefit or prejudice the other
c. Vices of one debtor to creditor has no effect on the others
d. Insolvency of one debtor does not affect other debtors
(7). Solidary must be expressed in stipulation or provided by law or by nature of obligation
a. Active on the part of creditor or obligee
1. Death of 1 solidary creditor transmits share to heirs (but collectively)
2. Each creditor represents the other in the act of recovery of payment
3. Credit is divided equally between creditors as among themselves
4. Debtor may pay any of the solidary creditors
b. Passive on the part of debtors or obligors
1. Each debtor may be requested to pay whole obligation with right to recover from co-debtors
2. Interruption of prescription to one creditor affects all
3. Interest from delay on 1 debtor is borne by all
c. Mixed on the part of the obligors and obligees, or the part of the debtors and the creditors
d. Conventional agreed upon by the parties

e. Legal imposed by law

Instances where law imposes solidary obligation:
1. obligations arising from tort
2. obligations arising from quasi-contracts
3. legal provisions regarding obligation of devisees and legatees
4. liability of principals, accomplices, and accessories of a felony
5. bailees in commodatum
a. payment made before debt is due, no interest can be charged, otherwise interest can be charged
b. insolvency of one others are liable for share pro-rata
c. if different terms & conditions collect only what is due, later on collect from any
d. no reimbursement if payment is made after prescription or became illegal
d. remission made after payment is made co-debtor still entitled to reimbursement
e. effect of insolvency or death of co-debtor still liable for whole amount

fault of any debtor every one is responsible price, damage & interest

g. complete/ personal defense total or partial ( up to amount of share only ) if not personal to him
Effect of loss or impossibility of the prestation:
a. if without fault no liability
b. if with fault there is liability (also for damage and interest)
c. loss due to fortuitous event after default there is liability (because of default)
(8). Divisible obligation that is capable of partial performance
a. execution of certain no of days work
b. expressed by metrical units
c. nature of obligation susceptible of partial fulfillment
(9). Indivisible one not capable of partial performance
a. to give definite things
b. not susceptible of partial performance
c. provided by law

d. intention of parties
(10). With penal clause - an accessory undertaking to assume greater liability in case of breach;
1. Subsidiary - As a general rule, only penalty can be demanded, principal cannot be demanded,
except: Penalty is joint or cumulative
2. Exclusive - takes place of damage,
damage can only be demanded in the ff. cases:
a. Stipulation granting right
b. refusal to pay penalty
c. with dolo ( not of creditor )
Causes for reduction of penalty:
a. partial/irregular performance
b. penalty provided is iniquitous/unconscionable
Art 1184
The condition that some event will happen at a determinate time shall extinguish the obligation as
soon as the time expires or if it has become indubitable that the event will not take place.

If the period is not fixed in the contract, the court, considering the parties intentions, should
determine what period was really intended.

Art 1185
The condition that some event will not happen at a determinate time shall ender the obligation
effective from the moment the time indicated has elapsed, or if it has become evident that the event
cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may have been
contemplated, bearing in mind the nature of the obligation.

This article refers to negative conditions.

Art 1186
The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment
(Doctrine of Constructive Fulfillment)
This Article deals with Constructive or Presumes Fulfillment.
Reason for the article: One must not profit by his own fault.
a. Voluntarily made-intent to prevent must be present
b. Actually prevents-intention without prevention or prevention without intention is not sufficient

Art 1187
The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact
to the day of the constitution of the obligation. Nevertheless, when the obligation imposes reciprocal
prestations upon the parties, the fruits and interests during the pendency of the condition shall be deemed
to have been mutually compensated. If the obligation is unilateral, the debtor shall appropriate the fruits
and interests received, unless from the nature and circumstances of the obligation it should be inferred
that the intention of the person constituting the same was different.
Art 1188
The creditor may, before the fulfillment of the condition, bring the appropriate actions fro the
preservation of his rights.
The debtor may recover what during the same time he has paid by mistake in case of suspensive
Art 1189
When the conditions have been imposed with the intention of suspending the efficacy of an
obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration
of the thing during the pendency of the condition:
a. If the thing is lost without the fault of the debtor, the obligation shall be extinguished
b. If the thing is lost through the fault of the debtor, he shall be obliged to pay damages, it is
understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such
a way that its existence is unknown or cannot be recovered.
c. When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the
d. If it deteriorates through the fault of the debtor, the creditor may choose from the rescission of the
obligation and its fulfillment, with indemnity for damages in either case
e. If the thing is improved by its nature or by time, the improvement shall inure to the benefit of the
f. If it is improved at the expense of the debtor, he shall have no other right than that granted to the
Effects of Partial Loss-It may be partial loss:
a. That would amount to a loss important enough to be considered a complete loss (this will be
determined by the courts)
b. That would merely be considered a deterioration of the thing, in which case the rules on
deterioration should apply
Art 1190
When the condition have for their purpose the extinguishments of an obligation to give, the
parties, upon fulfillment of said conditions, shall return to each other what they have received.
Effects When Resolutory Condition is Fulfilled:
a. The obligation is extinguished
b. Because the obligation has been extinguished and considered to have had no effect, the parties
should restore to each other want they have received
c. Aside from the actual things received, the fruits of the interests thereon should also be returned
after deducting of course the expenses made for their production, gathering and preservation

d. The rule on Art 1189 will apply to whoever has the duty to return in case of the loss, deterioration
or improvement of the thing
e. The courts are given power to determine the retroactivity of the fulfillment of resolutory
Art 1191
The power to rescind obligations is implied in reciprocal ones in case one of the obligors should
not comply with what is incumbent upon him.
The injured party may choose between the fulfillment if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a
This is understood to be without prejudice to the rights of third persons who have acquired the
thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.
To rescind=to cancel/revoke
Rescission may be judicial or extra-judicial (but best to be judicial)
Effect of Rescission-mutual restitution
This article speaks of reciprocal obligations
Characteristics of the Right to Rescind of Resolve
a. It only exists in reciprocal obligations
b. It can be demandable only if the plaintiff is ready, will and able to comply with his own
obligation, and the other is not
The Right to Rescind is not Absolute
a. trivial causes for slight breaches will not case rescission
b. If there be a just cause for fixing the period within which the debtor can comply, the court will not
decree rescission
c. If e property is now in the hands of an innocent 3rd party who has lawful possession of the same

Judicial approval for rescission is needed when there has already been delivery of the object (unless
there is a voluntary returning)
Judicial approval is not needed when there has been no delivery yet
Choice by the Injured Party
a. Fulfillment or specific performance with damages or
b. Rescission plus damages

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

Breach of the second infractor provides mitigating effect to the liability of the first infractor because
of this, the courts shall temper/regulate/lessen the liability of the first infractor.

Section 2 Obligations with a Period

Art 1193
Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when
that day comes.
Obligations with resolutory period take the effect at once, but terminate upon arrival of the day
A day certain is understood to be that which must necessarily some, although it may not be
known when.
If the uncertainty consists in whether the day will come or not, the obligation is conditional and it
shall be regulated by the rules of the preceding Section.

Period ids a certain length of time which determines the effectively or the extinguishment of the
obligation (it must surely come)

Different Kinds of Periods or Terms

a. Definite-exact date or time is known or given
b. Indefinite-something will surely happen but the date is unknown
c. Legal-period granted under the provision of the law
d. Conventional or Voluntary-period agreed upon or stipulated by the parties
e. Judicial-period is fixed by the courts for the performance of an obligation or for its termination
f. Ex Die- a period with suspensive effect- the obligation begins upon the arrival of the period
g. In Diem-a period with a resolutory effect- the obligation terminates upon the arrival of the period
Requisites for a Valid Period or Term
a. It must refer to the future
b. It must be certain, but can be extended
c. It must be physically or legally impossible, otherwise the obligation is void.
Art 1194
In case of loss, deterioration or improvement of the thing before the arrival of the day certain, the
rules in Art 1189 shall be observed.
Art 1195
Anything paid or delivered before the arrival of the period, the obligor being unaware of the
period or believing that the obligation has become due and demandable, may be recovered, with fruits and
Art 1196
Whenever in an obligation a period is designated, it is presumed to have been established for the
benefit of both the creditor and the debtor, unless from the tenor of the same or other circumstances it
should appear that the period has been established in favor of one or of the other.

General Rule: Term is for the benefit of the debtor or creditor. Meaning, the debtor cannot
prematurely pay and the creditor cannot demand prematurely.
This Article applies only to a contract with a period they fixed themselves.

Art 1197
If the obligation does not fix a period, but from its nature and the circumstances it can be inferred
that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may under the circumstances have been
probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.
Art 1198


The debtor shall lose every right to make use of the period:
When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty
or security for the debt
When he does not furnish to the creditor the guarantees or securities which he has promised
When by his own acts he has impaired said guaranties and securities after their establishment,
and when through a fortuitous event they disappear, unless he immediately gives new ones
equally satisfactory
When the debtor violates any undertaking, in consideration of which the creditor agreed to the
When the debtor attempts to abscond.

The debtor shall lose every right to make use of the period-it means that the term is extinguished and
the creditor can demand fulfillment at once.

Art 1199
A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
Art 1200
The right of choice belongs to the debtor, unless if as been expressly granted to the creditor.
The debtor shall have no right to choose from those prestations which are impossible, unlawful,
or which could not have been the object of the obligation.

General Rule-In the absence of any stipulations, the right if choice belongs to the debtor.

Limitation on the Debtors Choice- the debtor shall have no right to choose prestations which are:
a. Impossible
b. Unlawful
c. Which could not have been the object of the obligation

Art 1201
The choice shall produce no effect except from the time it has been communicated.

The choice may be communicated orally or in writing, expressly or impliedly.

Once notice has been made that a choice has been done, the obligation becomes a simple obligation to
do or to deliver the object selected.
An election once made is binding on the person who makes it, and he will not therefore be permitted
to renounce his choice and take an alternative which was first open to him.

Requisites for Making the Choice:

a. Made properly so that the creditor or his agent will actually know
b. Made with full knowledge that a selection is indeed being made
c. Made voluntarily and freely
d. Made in due time-that is before or upon maturity
e. Made to all the proper persons
f. Made without conditions unless agreed to by the creditor
g. May be waived expressly or impliedly
Art 1202
The debtor shall lose the right of choice when among the prestations whereby he is alternatively
bound, only one is practicable.
Art 1203
If through the creditors acts the debtor cannot make a choice according to the terms of the
obligation, the latter may rescind the contract with damages.
The debtor may:
a. Rescind the obligation plus collect damages
b. Perform other prestation(s)

Observe that the contract is not automatically rescinded.

Art 1204
The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all
the things which are alternatively the object of the obligation have been lost, or the compliance of the
obligation has become impossible.
The indemnity shall be fixed taking as a basis the vale of the last thing which disappeared, or that
of the services which last become impossible.
Art 1205
When the choice has been expressly given to the creditor, the obligation shall cease to be
alternative from the day the selection has been communicated to the debtor.

Until then the responsibility of the debtor shall be governed by the following rules:
a. If one of the things is lost through a fortuitous event, he shall perform the obligation by delivering
that which the creditor should choose from among the remainder, or that which remains if only
one subsists

b. If the lose of one of the things occurs through the fault of the debtor, the creditor may claim any
of those subsisting, or the price of that which, through the fault of the former has disappeared,
with a right to damages
c. If all the things are lost through the fault of the debtor, the choice by the creditor shall fall upon
the price of any of them, also with indemnity for damages.
Art 1206
When only one prestation has been agreed upon the obligor may render another in substitution,
the obligation is called facultative.
Facultative Obligation- one where only one prestation has been agreed upon but the obligor may
render another in substitution.

Section 4 Joint and Solidary Obligation

Art 1207
Joint Obligations- each obligor answers only for a part of the whole liability and to each obligee belongs
only a part of the correlative (equivalent) rights
Solidary / Joint and Several Obligations- the relationship between the active and the passive subjects is so
close that each of the former or of the latter may demand the fulfillment of or must comply to the whole
General Rule: When there are two or more debtors or two or more creditors the obligation is joint.
a. When there is a stipulation to the contract that the obligation is solidary
b. When the object of the obligation requires liability to be solidary
c. When the law declares the obligation to be solidary
Art 1208
Liability of Partners:
a. If it arises out of contracts the liability is joint or pro-rata
b. If it arises out of a crime or quasi-delict, the liability is solidary together with the partnership
Art 1209
If the division is impossible, the rights of the creditors may be prejudiced only by their collective
acts, and the debt can be enforced only by proceeding against all the debtors.

a. The obligation is joint but since the object is indivisible, the creditor may proceed against all the
joint debtors for compliance is possible only if all the joint debtors would act together
b. Demand must therefore be made on all the joint debtors if anyone of the debtors does not comply
with his monetary obligation for damages
c. If any of the debtors shall be insolvent, the others shall not be liable for his share
d. If there be joint creditors, delivery must be made to all, and not merely to one, unless that one be
specifically authorized by others
e. Each joint creditor is allowed to renounce his proportionate credit
Art 1210
The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity
of itself imply indivisibility.
Indivisibility- refers to the subject matter
Solidarity- refers to the tie between the parties
Art 1211
Different Ways by Which Two Debtors may be Bound:
a. Uniform-when the debtors are bound by the same stipulations and clauses
b. Otherwise-where the obligor, though liable for the same prestation are nevertheless not subject to
the same secondary stipulations and clauses
Art 1213 A solidary creditor cannot assign his rights without the consent of the others.
Art 1214 The debtor may pay any one of the creditors: but if any demand has been made by any one of
them, payment must be made to him.
Art 1215
The creditor who may have expected any of these acts, as well as he who has collects the debt,
shall be liable to the others for the share in the obligation corresponding to them.
Novation- the modification of an Obligation by changing its object or principal conditions, or by
substituting the person of the debtor or by subrogating a third person in the rights of the creditor
Compensation- that which takes place when 2 persons in their own right are creditors and debtors of each
other. Compensation may be Total or Partial depending upon the amount involved
Confusion or Merger- That which takes place when the characters of the creditor and debtor are merged in
the same person
Remission or Waiver- that act of liberality whereby the creditor condones the obligation of the debtor,
that where the creditor tells the debtor to forget the whole thing
Payment- one of the ways by which the obligation is extinguished and consists in the delivery of the thing
or the rendition of the service which is the object of the obligation.
Art 1218 Payment by a solidary debtor shall not entitle him to reimbursement from his co-debtors if
such payment is made after the obligation has prescribed or become illegal.

Art 1220 The remission of the whole obligation, obtained by one of the solidary debtors, does not
entitle him from reimbursement from his co-debtors.
Art 1221
If the thing has been lost or the prestation has become impossible without the fault of the solidary
debtors, the obligation shall be extinguished.
If there was fault on the part of any one of them, all shall be responsible to the creditor, for the
price and the payment of damages and interest, without prejudice to their action against the guilty or
negligent debtor.
A solidary obligation implies mutual agency and mutual confidence.

Art 1222
A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of those which are personal to him, or pertain to his own
share. With respect to those which personally belong to the others, he may avail himself thereof only as
regards that part of the debt for which the latter are responsible.
Kinds of Defense
a. Those derived from the nature of the obligation
- Lack of consideration or cause
- Absolute simulation-as when the contract is totally fictitious
- Illegal consideration
- Extinguishment of the obligation-as when the whole debt has been paid, remitted, etc.
- Non-fulfillment of the suspensive condition
- Statute of frauds
- When all the debtors were incapacitated to give consent-such as unemancipated minors, insane, etc.
- When there are Vices of Consent/Vitiated Consent on the part of all the debtors
b. Those personal to the debtor sued
c. Those personal to the other

Section 5 Divisible and Indivisible Obligations

Art 1223
The divisibility of the indivisibility of the things that are the object of obligations in which there
is only one debtor and only one creditor does not alter or modify the provisions of Chapter 2 of this Title.
Divisible Obligations-one capable of partial performance
Indivisible Obligations- one not capable of partial performance
Classes of Kinds of Indivisibility
a. Conventional- by common agreement
b. Natural or Absolute- because of the nature of the undertaking

c. Legal- if so provided by law

Kinds of Division
a. Quantitative- depends on quantity
b. Qualitative- depends on quality, irrespective of quantity
c. Intellectual or Moral- one that exists only in the mind, and nor in physical reality
Art 1224
A joint indivisible obligation give rise to indemnity for damages from the time anyone of the
debtors does not comply with his undertaking. The debtors who may have been ready to fulfill their
promises shall nor contribute to the indemnity beyond the corresponding portion of the price of the thing
or of the value of the service in which the obligation consists.
Effect of Non Compliance- the obligation is converted to a monetary one for indemnity.
Art 1225
For the purpose of the preceding articles, obligations to give definite and those which are not
susceptible of partial performance shall be deemed to be indivisible.
In obligations not to do, divisibility or indivisibility shall be determined by the character of the
prestation in each particular case.
Obligations that are Deemed Indivisible:
a. Obligations to give definite things
b. Those which are not susceptible of partial performance
c. Even if the thing is physically divisible, it may be indivisible if so provided by law
d. Even if the thing is physically divisible, it may be indivisible if such was the intention of the
parties concerned
Obligations that are Deemed Divisible
a. When the object of the obligation is the execution of a certain number of days of work
b. When the object of the obligation is the accomplishment of work by metric units
c. When the purpose of the obligation is to pay a certain amount in installment
d. When the object of the obligation is the accomplishment of work susceptible of partial

The character of the prestation or obligation will determine the divisibility or indivisibility of
obligation not to do.
Section 6 Obligations with a Penal Clause

Art 1226
In obligation with a penal clause, the penalty shall substitute the indemnity fro damages and the
payment of interest in case of non-compliance, if there is no stipulation to the contrary. Nevertheless,
damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the
Principal Purpose of the Penal Clause- to insure the performance of the obligation and also to substitute
for damages and the payment of interest in case of non-compliance.

Exceptions to the General Rule:

a. When there is express stipulation to the effect that damages or interest may still be recovered,
despite the presence of the penalty clause
b. When the debtor refuses to pay the penalty imposed in the obligation
c. When the debtor is guilty of fraud in the fulfillment of the obligation
Art 1227
The debtor cannot exempt himself from the performance of the obligation by paying the penalty,
save in the case where this right has been expressly reserved for him. Neither can the creditor demand the
fulfillment of the obligation and the satisfaction of the penalty at the same time, unless this right has been
clearly granted to him. However, if after the creditor has decided to require the fulfillment of the
obligation, the performance thereof should become impossible without his fault, the penalty may be

IF the debtor can just pay the penalty, the fulfillment of the obligation will be considered an
alternative one.

Art 1228 Proof of actual damages suffered by the creditor is not necessary in order that the penalty may
be demanded.
Art 1229
The judge shall equitably reduce the penalty when the principal obligation has been partly or
irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be
reduced by the courts if it is iniquitous or unconscionable.
When Penalty may be Reduced by Court;
a. When the obligation has been partly complied with by the debtor
b. When the obligation has been irregularly complied with by the debtor
c. When the penalty is iniquitous or unconscionable, even if there has been no performance at all
It is thus clear that the penal clause cannot be enforced if
a. The breach is the fault of the creditor
b. A fortuitous event intervened, unless the debtor expressly agreed on his liability in case of
fortuitous events
c. The debtor is not yet in default
Art 1230 The nullity of the penal clause does not carry with it that of the principal obligation.
The nullity of the principal obligation carries with it that of the penal clause.

Modes of Extinguishment of Obligation:

Payment or performance
Loss of the thing due
Condonation or remission of debt
Confusion or merger of rights
Fulfillment of resolutory condition