Art. 1156, CC. An obligation is a juridical necessity to give, to do or not to do.

2. Elements of an obligation

a. Active Subject (Obligee/Creditor): The person (natural or juridical) who has the right or power
to demand the prestation.

b. Passive Subject (Obligor/Debtor): The person bound to perform the prestation.

E.g Under a building contract, X bound himself to construct a house for Y for
P1,000,000.00. Here, X is the passive subject, Y is the active subject, the building of the house is
the object or prestation, and the agreement or contract, which is the source of the obligation, is
the juridical tie. Suppose X had already constructed the house and it was the agreement that Y
would pay X after the construction is finished. X, then, becomes the active subject and Y, the
passive subject.

c. Prestation (Object): The conduct required to be observed by the debtor/obligor (to give, to
do, or not to do).

d. Vinculum Juris (Juridical or Legal Tie; Efficient Cause): That which binds or connects the
parties to the obligation. [de Leon]

3. Sources of Obligations

a. Law Obligations arise when imposed by the law itself and cannot be presumed. [Art. 1158, CC]

b. Contracts Obligations arise from the stipulation of the parties; it has the force of law and
should be complied with in good faith. [Art. 1159, CC]

c. Quasi-Contracts Certain lawful, voluntary and unilateral acts give rise to the juridical relation
of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense
of another. [Art. 2142, CC]

NEGOTIORUM GESTIO (Inofficious Manager )- VOLUNTARY MANAGEMENT OF THE

PORPERTY OR AFFAIRS OF ANOTHER WITHOUT THE KNOWLEDGE OR CONSENT OF THE LATTER.

SOLUTION INDEBITI- SOMETHING IS RECEIVED WHEN THERE IS NO RIGHT TO DEMAND

IT AND IT WAS UNDULY DELIVERES THROUGH MISTAKE

d. Acts or Omissions Punishable by Law (Delicts) Responsibility for fault or negligence under a
quasi-delict [Art. 2176, CC] is entirely separate and distinct from the civil liability arising from
negligence under the penal code. But the plaintiff cannot recover damages twice for the same
act or omission of the defendant. [Art. 2177, CC]

e. arise from damages caused to another through an act or omission, there being fault or
negligence but no contractual relations exist between the parties. [Art. 2176, CC]

ART. 1158. Obligations derived from law are not presumed. Only those expressly
determined in this Code or in special laws are demandable, and shall be regulated by the
 precepts of the law which establishes them; and as to what has not been foreseen, by the
provisions of this Book. (1090)

Article 1158 refers to legal obligations or obligations arising from law. They are not presumed
because they are considered a burden upon the obligor.

An employer has no obligation to furnish free legal assistance to his employees because no law
requires this, and, therefore, an employee may not recover from his employer the amount he
may have paid a lawyer hired by him to recover damages caused to said employee by a stranger
or strangers while in the performance of his duties

ART. 1159. Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.

Binding force of an oral agreement inconsistent with a prior written one.

Facts: X verbally agrees to pay Y the balance of an account in advance, notwithstanding the
different stipulation of a prior written agreement.

Issue: Is X bound to perform said obligation?

Held: Yes. Since he agreed to pay Y the balance of the account independently of the terms of
the written contract, he must perform his obligation to pay according to the tenor of his verbal
agreement which has the force of law between them. (Hijos de I. de la Rama vs. Inventor, 12
Phil. 45 [1908].)

ART. 1160. Obligations derived from quasi-contracts shall be subject to the provisions of
Chapter 1, Title XVII, of this Book. (n)
(1) Negotiorum gestio is the voluntary management of the property or affairs of another
without the knowledge or consent of the latter. (Art. 2144.)

Thus, if through the efforts of X, a neighbor, the house of Y was saved from being
burned, Y has the obligation to reimburse X for the expenses X incurred although Y did
not actually give his consent to the act of X in saving his house on the principle of quasi-
contract.

This juridical relation does not arise in either of these instances:

(a) When the property or business is not neglected or abandoned, in which case the
provisions of the Civil Code regarding unauthorized contracts (Arts. 1317, 1403[1],
1404.) shall govern; or
(b) If, in fact, the manager has been tacitly authorized by the owner, in which case the
rules on agency shall govern. (Art. 2144.)
SOLUTION INDEBITI- SOMETHING IS RECEIVED WHEN THERE IS NO RIGHT TO DEMAND IT AND
IT WAS UNDULY DELIVERES THROUGH MISTAKE.

E.G Recovery of taxes paid under a mistake.

Facts: X, a tax-exempt cooperative store, paid taxes to the City of Manila, believing that it was
liable. Issue: May X recover the payment?

Held: Yes, as it was made under a mistake.

ART. 1161. Civil obligations arising from criminal offenses shall be governed by the penal
laws,14 subject to the provisions of Article 2177,15 and of the pertinent provisions of
Chapter 2, Preliminary Title on Human Relations,16 and of Title XVIII of this Book,
regulating damages.

Scope of civil liability.

The extent of the civil liability arising from crimes is governed by the Revised Penal Code and the
Civil Code.18 This civil liability includes:

(1) Restitution;

(2) Reparation for the damage caused; and

(3) Indemnification for consequential damages. (Art. 104, Revised Penal Code.)

EXAMPLE: X stole the car of Y. If X is convicted, the court will order X: (1) to return the car (or to
pay its value if it was lost or destroyed); (2) to pay for any damage caused to the car; and (3) to
pay such other damages suffered by Y as a consequence of the crime.

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. (1093a)

A quasi-delict is an act or omission by a person (tort feasor) which causes damage to another in
his person, property, or rights giving rise to an obligation to pay for the damage done, there
being fault or negligence but there is no pre-existing contractual relation between the parties.21
(Art. 2176.)

Requisites of quasi-delict. Before a person can be held liable for quasi-delict, the following
requisites must be present:

(1) There must be an act or omission by the defendant;

(2) There must be fault or negligence of the defendant;

(3) There must be damage caused to the plaintiff;

(4) There must be a direct relation or connection of cause and effect between the act or
omission and the damage; and
(5) There is no pre-existing contractual relation between the parties

Crime distinguished from quasi-delict.

DELICT QUASI-DELICT

(1) In crime or delict, there is criminal or
malicious intent or criminal negligence,
(2) Crime affects public interest
(3) In crime, there are generally two
liabilities: criminal and civil
(4) In crime or delict, the purpose is
punishment
(5) Criminal liability can not be compromised
or settled by the parties themselves
(6) In crime, the guilt of the accused must be
proved beyond reasonable doubt
(7) In crime, the liability of the person
responsible for the author of the negligent
act or omission is subsidiary
while in quasi-delict, there is only negligence;
while quasi-delict concerns private interest;
while in quasi-delict, there is only civil
liability;
while in quasi-delict, indemnification of the
offended party;
while the liability for quasi-delict can be
compromised as any other civil liability;
while in quasi-delict, the fault or negligence
of the defendant need only be proved by
preponderance of evidence; and
while in quasi-delict, it is direct and primary.

These two causes of action (ex delicto or ex quasi delicto) may be availed of subject to the
caveat that the offended party cannot recover damages twice for the same act or omission or
under both causes. Since these two (2) civil liabilities are distinct and independent of each other,
the failure to recover in one will not necessarily preclude recovery in the other

NATURE AND EFFECT 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.

A thing is said to be specific or determinate when it is particularly designated or physically

segregated from all others of the same class. (Art. 1459.)

EXAMPLES:

(1) The watch I am wearing.

(2) The car sold by X.

(3) My dog named “Terror.”

(4) The house at the corner of Rizal and Del Pilar Streets.

(5) The Toyota car with Plate No. AAV 344. (

6) This cavan of rice.

(7) The money I gave you.

A thing is generic or indeterminate when it refers only to a class or genus to which it pertains
and cannot be pointed out with particularity.

DISTINGUISHED

Specific thing Generic thing

(1) A determinate thing is identified by its
individuality. The debtor cannot substitute it
with another although the latter is of the
same kind and quality without the consent of
the creditor. (Art. 1244.)
(2) A generic thing is identified only by its
specie. The debtor can give anything of the
same class as long as it is of the same kind.

EXAMPLES: (1) If D’s obligation is to deliver to C a ROLEX calendar watch, D can deliver any
watch as long as it is ROLEX with calendar. But if D’s obligation is to deliver to C a particular
watch, the one D is wearing, D cannot substitute it with another watch without C’s consent nor
can C require D to deliver another watch without D’s consent although it may be of the same
kind and value. (see Arts. 1244, 1246.)

(2) If D’s obligation is to deliver to C one of his cars, the object refers to a class which in itself is
determinate. Here, the particular thing to be delivered is determinable without the need of a
new contract between the parties (see Art. 1349.); it becomes determinate upon its delivery.

Duties of debtor in obligation to give

A DETERMINATE THING A GENERIC THING

(1) To preserve or take care of the thing due; (1) To deliver a thing which is of the quality
intended by the parties taking into
consideration the purpose of the obligation
and other circumstances (see Art. 1246.);
(2) To deliver the fruits of the thing (see Art. (2) To be liable for damages in case of fraud,
1164.); negligence, or delay, in the performance of
his obligation, or contravention of the tenor
thereof. (see Art. 1170.)
(3) To deliver its accessions and accessories
(see Art. 1166.);
(4) To deliver the thing itself (see Arts. 1163,
1233, 1244; as to kinds of delivery, Arts. 1497
to 1501.); and
(5) To answer for damages in case of non-
fulfillment or breach. (see Art. 1170.)

Obligation to take care of the thing due.

 (1) Diligence of a good father of a family - The phrase has been equated with ordinary care
or that diligence which an average (a reasonably prudent) person exercises over his own
property.
(2) (2) Another standard of care. — However, if the law or the stipulation of the parties
provides for another standard of care (slight or extraordinary diligence), said law or
stipulation must prevail. (Art. 1163.)

common carrier “bound to carry the passengers safely as far as human care and
foresight can provide, using utmost (extraordinary) diligence of very cautious persons,
with a due regard for all the circumstances.” (Art. 1755.)

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. (1095)

Different kinds of fruits.

(1) Natural fruits are the spontaneous products of the soil, and the young and other products of
animals, e.g., grass; all trees and 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, e.g.,
sugar cane; vegetables; rice; and all products of lands brought about by reason of human labor

(3) Civil fruits are those derived by virtue of a juridical relation, e.g., rents of buildings, price of
leases of lands and other property and the amount of perpetual or life annuities or other similar
income. (Art. 442.)

By law, the creditor is entitled to the fruits of the thing to be delivered from the time the
obligation to make delivery of the thing arises

When obligation to deliver 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.

(2) If the obligation is subject to a suspensive condition or period- it arises upon fulfillment of
the condition or arrival of the period.

(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, and quasi-delicts, the time of
performance is determined by the specific provisions of law applicable.

EXAMPLE:
S sold his horse to B for P15,000.00. No date or condition was stipulated for the delivery of the
horse. While still in the possession of S, the horse gave birth to a colt.

Who has the right to the colt?

In a contract of sale “all the fruits shall pertain to the vendee from the day on which the contract
was perfected.” (Art. 1537, 2nd par.) Hence, B is entitled to the colt. This holds true even if the
delivery is subject to a suspensive condition (see Art. 1179; e.g., upon the demand of B) or a
suspensive period (see Art. 1193; e.g., next month) if B has paid the purchase price.

But S has a right to the colt if it was born before the obligation to deliver the horse has arisen
(Art. 1164.) and B has not yet paid the purchase price. In this case, upon the fulfillment of the
condition or the arrival of the period, S does not have to give the colt and B is not obliged to pay
legal interests on the price since the colt and the interests are deemed to have been mutually
compensated. (see Art. 1187.)

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 at
the expense of the debtor.

If the obligor delays, or has promised to deliver the same thing to two or more persons who
do not have the same interest, he shall be responsible for any fortuitous event until he has
effected the delivery. (1096)

Remedies of creditor in real obligation if debtor fails to comply

PAR. 1 DELIVERY OF A DTEREMINATE THING

(a) specific performance or fulfillment (if it is still possible) of the obligation with a
right to indemnity for damages
(b) Rescission of the contract and payment of damages
(c) demand the payment of damages only (see Art. 1170.) where it is the only feasible
remedy.

In an obligation to deliver a determinate thing, the very thing itself must be delivered. (Art.
1244.) Consequently, only the debtor can comply with the obligation. This is the reason why
the creditor is granted the right to compel the debtor to make the delivery. (Art. 1165, par. 1.)

PAR. 2 DELIVERY OF A GENERIC THING

(a) can be performed by a third person since the object is expressed only according to
its family or genus.
(b) the creditor has a right to recover damages under Article 1170 in case of breach of
the obligation.

PAR 3. DEBTOR DELAYS OR HAS PROMISED DELIVERY TO SEPARATE CREDITORS

 (a) a determinate thing - when a fortuitous event does not exempt the debtor from
responsibility
(b) An indeterminate thing - cannot be the object of destruction by a fortuitous event
because genus nunquam perit (genus never perishes). (see Arts. 1174, 1263.)

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. (1097a

(1) Accessions are the fruits of, or additions to, or improvements upon, a thing (the
principal), e.g., house or trees on a land; rents of a building; air conditioner in a car;
profits or dividends accruing from shares of stocks; etc.
(2) Accessories are things joined to, or included with, the principal thing for the latter’s
embellishment, better use, or completion, e.g., key of a house; frame of a picture;
bracelet of a watch; machinery in a factory; bow 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 may not have been mentioned. This rule is based on the principle of law that the accessory
follows the principal. In order that they will be excluded, there must be a stipulation to that
effect.

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.

Situations contemplated in Article 1167.

Article 1167 refers to an obligation to do, i.e., to perform an act or render a service. It
contemplates three situations:

(1) The debtor fails to perform an obligation to do; or

(2) The debtor performs an obligation to do but contrary to the terms thereof; or
(3) The debtor performs an obligation to do but in a poor manner.

REMEDIES: If the debtor fails to comply with his obligation to do, the creditor has the right:

(a) to have the obligation performed by himself, or by another unless personal

considerations are involved, at the debtor’s expense; and
(b) Damages

Performance by a third person.

Personal Obligation to do (DELIVER)

(a)generic thing, can be performed by a third person.

(b)While the debtor can be compelled to make the delivery of a specific thing
Personal Obligation to do (Performance)

A specific performance cannot be ordered in a personal obligation to do because this

may amount to involuntary servitude which, as a rule, is prohibited under our Constitution.
(Art. III, Sec. 18[2] thereof.)

Case:

Held: Yes. B contravened the tenor of his obligation (see Art. 1170.) because he not only did not
repair the typewriter but returned it “in shambles.”

For such contravention, he is liable under Article 1167 for the cost of executing the obligation in
a proper manner, which in the case should be the cost of the labor or service expended in its
repair, because the obligation or contract was to repair it.

In addition, he is liable under Article 1170 for the cost of the missing parts for in his obligation
to repair the typewriter he was bound, but failed or neglected to return it in the same condition
it was when he received it.

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. (1099a)

Obligation not to do,

The duty of the obligor is to abstain from an act. Here, there is no specific performance. The
very obligation is fulfilled in not doing what is forbidden.

REMEDIES

(a) Undoing of the forbidden thing plus damages. (Art. 1170.)

(b) if it is not possible to undo what was done, his remedy is an action for damages caused
by the debtor’s violation of his obligation.

EXAMPLE: S sold a land to B. It was stipulated that S would not construct a fence on a certain
portion of his land adjoining that sold to B. Should S construct a fence in violation of the
agreement, B can have the fence removed at the expense of S.

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 by the creditor shall not be necessary in order that delay may exist:

(1) When the obligation or the law expressly so declares; or

(2) When from the nature and the circumstances of the obligation it appears that the
designation of the time when the thing is to be delivered or the service is to be rendered
was a controlling motive for the establishment of the contract; or

(3) When demand would be useless, as when the obligor has rendered it beyond his power
 to perform. In reciprocal obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is incumbent upon him.
From the moment one of the parties fulfills his obligation, delay by the other begins

Meaning of delay.

(1) Ordinary delay is merely the failure to perform an obligation on time.

(2) Legal delay or default or mora is the failure to perform an obligation on time which
failure, constitutes a breach of the obligation. (a. Failure of the debtor to perform b.
May demand na not notice or reminder c. failure of the debtor to comply with such
demand.) may be either judicial or extra-judicial

(LEGAL DELAY)
1. obligation is already due or demandable and liquidated. (see Art. 1279[4].) There is
no delay if the obligation is not yet due or demandable.
2. A debt is liquidated when the amount is known or is determinable by inspection of
the terms and conditions of relevant documents.

Kinds of delay (mora).

(1) Mora solvendi or the delay on the part of the debtor to fulfi ll his obligation (to give or
to do)
(2) Mora accipiendi or the delay on the part of the creditor without justifiable reason to
accept the performance of the obligation; and
(3) Compensatio morae or the delay of the obligors in reciprocal obligations (like in sale),
i.e., the delay of the obligor cancels the delay of the obligee, and vice versa.

EXAMPLE:
S obliged himself to deliver to B a specific refrigerator on December 10. If S does not
deliver the refrigerator on December 10, he is only in ordinary delay in the absence of
any demand from B although a period has been fixed for the fulfillment of the
obligation.

The law presumes that B is giving S an extension of time within which to deliver the
refrigerator. Hence, there is no breach of the obligation and S is not liable for damages.
If a demand is made upon S by B on December 15 and S fails to deliver the refrigerator,
S is considered in default only from the date.

If an action for specific performance is fi led by B on December 20, the payment of

damages for the default must commence on December 15 when he made the extra-
judicial demand and not on December 20.

In the absence of evidence as to such extra-judicial demand, the effects of default arise
from the date of the judicial demand, that is, from the fi ling of the complaint. (see
 Compania General de Tabacos vs. Areza, 7 Phil. 455 [1907]; Lopez vs. Tan Tioco, 8 Phil.
693 [1907]; Queblar vs. Garduño and Martinez, 62 Phil. 879 [1936].)
Effects of delay
Mora solvendi. (DEBTOR) — The following are the effects:

(a) The debtor is guilty of breach of the obligation;

(b) He is liable for interest in case of obligations to pay money (Art. 2209.) or damages in other
obligations. (Art. 1170.) In the absence of extrajudicial demand, the interest shall commence
from the fi ling of the complaint; and

(C) He is liable even for a fortuitous event when the obligation is to deliver a determinate thing.
(Arts. 1165, 1170.) However, if the debtor can prove that the loss would have resulted just the
same even if he had not been in default, the court may equitably mitigate the damages. (Art.
2215[4].)

Mora accipiendi. (Creditior) — The effects are as follows:

(a) The creditor is guilty of breach of obligation;

(b) He is liable for damages suffered, if any, by the debtor;

(c) He bears the risk of loss of the thing due (see Art. 1162.);

(d) Where the obligation is to pay money, the debtor is not liable for interest from the time of
the creditor’s delay; and

(e) The debtor may release himself from the obligation by the consignation of the thing or sum
due. (see Art. 1256.)

Compensatio morae. — The delay of the obligor cancels out the effects of the delay of
the obligee and vice versa. The net result is that there is no actionable default on the part of
both parties, such that as if neither one is guilty of delay.

GR: No demand no delay

XPN:

(1) When the obligation so provides.

D promised to pay C the sum of P20,000.00 on or before November 30 without
the need of any demand. Therefore, if D fails to pay on November 30, he is
automatically in default. In this case, the parties stipulate to dispense with the
demand.

The obligation must expressly so declare that demand is not necessary or must use words to
that effect, as for instance, “the debtor will be in default” or “I will be liable for damages.”

(2) When the law so provides. —

 EXAMPLES: (a) Under the law, taxes should be paid on or before a specifi c date;
otherwise, penalties and surcharges are imposed without the need of demand for
payment by the government. (b) The partner is liable for the fruits of the thing he may
have promised to contribute to the partnership from the time they should have been
delivered without the need of any demand. (Art. 1786; see also Art. 1788

(3) When time is of the essence. —

EXAMPLES: The delivery of balloons on a particular date when a children’s party will be
held; the making of a wedding dress where the wedding is scheduled at a certain time;
payment of money at a particular time so that the creditor could pay off certain debts due
on the same date; the delivery of a car to be used in a trip at a particular time; etc.

It is not necessary, that the contract should expressly so declare. Words of this import need
not be used. It is sufficient that the intention to this effect should appear, and there are
certain situations wherein it is held, from the nature of the agreement itself, that time is of
the essence of the contract.

(4) (4) When demand would be useless. —

EXAMPLE:

S obliged himself to deliver a specific horse to B on December 5. Through S’s negligence or

deliberate act, or by reason of a fortuitous vent for which S has expressly bound himself
responsible (see Art. 1174.), the horse died on December 2.

Under this situation, any demand for the delivery of the horse on December 5 would be useless
as S has made it impossible for him to perform his obligation. Demand is also unnecessary
where it is apparent that it would be unavailing, as where there has been a prior absolute
refusal by S (see 13 C.J. 661.) or S has manifested an intention not to comply with his obligation.

(5) When there is performance by a party in reciprocal obligations. In case of reciprocal

obligations (see Art. 1191.), the performance of one is conditioned upon the
simultaneous fulfillment on the part of the other.

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.
(1101)

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 an obligation.

Article 1170 refers to incidental fraud (dolo incidente) committed in the performance of
an obligation already existing because of contract.
 It is to be differentiated from causal fraud (dolo causante) or fraud employed in the
execution of a contract under Article 1338, which vitiates consent and makes the
contract voidable and to incidental fraud under Article 1344 also employed for the
purpose of securing the consent of the other party to enter into the contract but such
fraud was not the principal inducement to the making of the contract.

EXAMPLE: S obliged himself to deliver to B 20 bottles of wine, of a particular brand. S

delivered 20 bottles knowing that they contain cheaper wine. S is guilty of fraud and is
liable for damages to B.

If B bought the 20 bottles of wine on the false representation of S that the wine is that
as represented by the labels, the fraud committed by S is causal fraud. Without the
fraud, B would not have given his consent to the contract. He has the right to have the
contract annulled or set aside on the ground of the fraud. (Arts. 1390, 1391.)

In the first situation, the remedy of B is not annulment of the contract of sale which is
not affected by the incidental fraud but to claim damages. If the fraud employed by S to
get B’s consent was not the principal inducement that led B to enter into the contract,
the fraud is also incidental under Article 1344 and it will likewise give rise only to an
action for damages. (see Art. 1344, par. 2.)

(2) Negligence (fault or culpa). — It is any voluntary act or omission, there being no malice,
which prevents the normal fulfillment of an obligation.7 (see Arts. 1173, 1174.

(3) Delay (mora). — This has already been discussed under Article 1169 which determines
the commencement of delay. It has been ruled that the delay in the performance of the
obligation under Article 1170 must be either malicious or negligent.
(4) Contravention of the terms of the obligation. — This is the violation of the terms and
conditions stipulated in the obligation. The contravention must not be due to a
fortuitous event or force majeure. (Art. 1174.)

When negligence equivalent to fraud. Where the negligence shows bad faith or is so gross that it
amounts to malice or wanton attitude on the part of the defendant, the rules on fraud shall
apply. (see Art. 1173.) In such case, no more distinction exists between the two at least as to
effects.

ART. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of
an action for future fraud is void. (1102a

Art. 1172, CC. 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

Kinds of negligence according to source of obligation. Culpa or negligence may be understood in

three different senses. They are:

(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 damages in view of his negligence in
the fulfi llment of a pre-existing obligation resulting in its breach or non-fulfi llment. (Arts. 1170-
1174, 2201.) It is a kind of civil negligence if it does not amount to a crime;

(2) Civil negligence (culpa aquiliana) or negligence which by itself is the source of an obligation
between the parties not formally bound before by any pre-existing contract. It is also called
“tort” or “quasidelict.” (Art. 2176.10);

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 persons, of the time and of the place. When negligence shows bad faith, the provisions
of Articles 1171 and 2201, paragraph 2, shall apply. If the law or contract does not state the
diligence which is to be observed in the performance, that which is expected of a good
father of a family shall be required. (1104a)

ART. 1174. Except in cases expressly specified by the law, or when it is otherwise declared
by stipulation, or when the nature of the obligation requires the assumption of risk, no
person shall be responsible for those events which could not be foreseen, or which, though
foreseen, were inevitable. (1105a)

A fortuitous event is any extraordinary event which cannot be foreseen, or which, though
foreseen, is inevitable. In other words, it is an event which is either impossible to foresee or
impossible to avoid.

Requisites of a fortuitous event.

Whether an act of man or an act of God, to constitute a fortuitous event, it is essential that:

(1) The event must be independent of the human will or at least of the obligor’s will;
 (2) The event could not be foreseen (unforeseeable), or if it could be foreseen, must have been
impossible to avoid (unavoidable);

(3) The event must be of such a character as to render it impossible for the obligor to comply
with his obligation in a normal manner; and

(4) The obligor must be free from any participation in, or the aggravation of the injury to the
obligee.

ART. 1175. Usurious transactions shall be governed by special laws. (n)

Suspended

ART. 1176. The receipt of the principal by the creditor, without reservation with respect to
the interest, shall give rise to the presumption that said interest has been paid. The receipt of
a later installment of a debt without reservation as to prior installments, shall likewise raise
the presumption that such installments have been paid. (1110a)

Meaning of presumption.

By presumption is meant the inference of a fact not actually known arising from its usual
connection with another which is known or proved.

EXAMPLE: D borrowed P1,000.00 from C. Later, D shows a receipt signed by C. the fact not
actually known is the payment by D. The fact known is the possession by D of a receipt signed by
C. The presumption is that the obligation has been paid unless proved otherwise by C as, for
example, that D forced C to sign the receipt.

Receipt of the principal amount by the creditor without reservation with respect to interest, it
shall give rise to the presumption that the said interest has been paid.

ART. 1177. The creditors, after having pursued the property in possession of the debtor to
satisfy their claims, may exercise all the rights and bring all the actions of the latter for the
same purpose, save those which are inherent in his person; they may also impugn the acts
which the debtor may have done to defraud them.

Requisites: ACCION SUBROGATORIA

1. The person to whom the right of action pertains must be indebted to the creditor

2. The debt is due and demandable

3. The creditor must be prejudiced by the failure of the debtor to collect his debts due him from
third persons, either through malice or negligence

4. The debtors assets are insufficient (debtor is insolvent)

5. The right of action is not purely personal to the debtor.

Previous approval of the court is not necessary to exercise the accion subrogatoria.

ACCION PAULIANA Creditors may also impugn the acts which the debtor may have done to
defraud them

. [Art. 1177, CC] Par. 3, Art. 1381. The following contracts are rescissible: (3) Those undertaken
in fraud of creditors when the latter cannot in any other manner collect the claims due them.

An accion pauliana thus presupposes the following:

1. A judgment;

2. the issuance by the trial court of a writ of execution for the satisfaction of the judgment, and;
3. the failure of the sheriff to enforce and satisfy the judgment of the court.