OBLICON REVIEWER
INTRODUCTION
What is obligation?
- A juridical necessity to give, to do or not to do (Art. 1156)
- A juridical relation whereby a person (active) may demand
from another (passive) the presence of an indeterminate
conduct which in tims of non-observance may seek relief.
ELEMENTS
1. Active – has the power to compel the debtor
2. Passive – debtor
3. Prestation – conduct the debtor must observe/either to
give, to do or not to do
4. Juridical tie – sources of oblgation
SOURCES OF OBLIGATION
1. Law – those expressly provided in the New Civil Code or
special laws, Art. 1158
2. Contracts – those that have force of law between
contracting parties and should be complied with in good
faith, Art. 1159
3. Quasi-contracts – arise from lawful, unilateral and
voluntary acts which are enforceable to the end that no one
should unjustly enrich himself at the expense of another,
Art. 2142
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4. Delicts – arise from the commission of a crime, Art. 1161
5. Quasi-elicts – arise from damage caused to another thru an
act or omission there being fault or negligence, Art. 2176
NATURE AND EFFECTS OF OBLIGATIONS
1. Real Obligations – to give a specific or generic thing
2. Personal Obligations – to do or not to do
OBLIGATION OF A PERSON OBLIGED TO GIVE
SOMETHING
- He is obliged to take good care of it with the diligence of a
good father of a family
Note
1. If the parties have agrreed on the kind of diligence to be
observed, that which is stipulated shall be observed.
2. If there is no agreement, the proper diligence of a good
father of a family shall be observed.
3. If the law require that a specific kind of diligence shall be
observed, this prevails over any kind of agreement.
When does obligation arises?
- In pure obligations
o Art. 1305. From the time of the perfection of
the contract (meeting of the minds)
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 Art. 1315. Contract is perfected by mere

consent
 Art. 1318. Essential Requisites of a Contract:
Consent, Object and Cause of Action (all
must be present)
It is comparable to causal fraud (dolo causante, Art. 1338)
- means a fraud employed in the execution of contract which
vitiates consent and makes the contract voidable

- In conditional/periodical obligations
o Arises upon fulfillment of condition or
arrival of the period
 Art. 1179. Demandability at once (if no
condition/period)
 Art. 1193. Demandability on the date fixed
When is obligation demandable at once?
- When it is pure (1179)
- When it is subject to a resolutory condition (1179, p.2)
- When it is subject to a resolutory period (1193, p.2)
FOUR GROUNDS FOR LIABILITY FOR DAMAGES
1. FRAUD
- Awareness that one’s act/conduct is improper and it
violates the rights of another yet there is persistence.
Art. 1170 – refers to incidental fraud (dolo incidente)
- the other party is induced by word to enter into the contract
(happens at the stage of perfection)
2. NEGLIGENCE
- Failure to observe care
Kinds:
1. Contractual negligence (culpa contractual)
- Negligence in contracts resulting to breach
2. Civil negligence (culpa acquillana)
- Negligence which by itself is the source of the obligation;
also called “tort or delict”
3. Criminal negligence (culpa criminal)
- Resulting from commission of a crime
Culpa contractual Culpa acquillana Culpa criminal

- Committed in the performance of an obligation (at the stage There is a pre- There is a no pre- There is a no pre-
of consummation) existing obligation existing obligation existing obligation
- Ex. When you were shown a pendant and it looked real so
you entered into buying it but the seller gave you a fake
pendant instead.

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3. DELAY
Preponderance of Preponderance of Crime must be
eveidence is eveidence is proven beyond - failure to perform an obligation on time which constitutes breach
required required reasonable doubt of the obligation.
When it is incurred?
Defense of a good Defense of a good Defense of a good
father of a family is father of a family is father of a family is - From the time the oblige demands
applicable applicable not applicable - No demand, no delay/ no period, no delay

Existence of contract Negligence of the Innocence of the

must be proved. If defendant must be accused is presumed
proven, and debtor proven until the contrary is KINDS:
does not comply, he proved 1. Delay by the debtor (more solvendi)
can be declared in - Failure to perform on the date agreed upon
delay
- Demand was made but the debtor failed to comply
- *no delay if the obligation is not yet due
Effects:
FACTORS TO BE CONSIDERED IN NEGLIGENCE
1. Debtor is in breach
1. Nature of obligation 2. Debtor is liable for interest
- Like smoking while carrying carriage with inflammables 3. Debtor is liable for fortuitous event when thing is specific
2. Circumstance of the person
- Like when the guard is sleeping during his duty
2. Delay by the creditor (mora accipendi)
3. Circumstance of time
- Like driving a car without headlights in nighttime - failure to accept performance by the debtor

4. Circumstances of place Effects:

- Driving facts in a dangerous highway 1. Creditor is in breach
2. He is liable for damages
3. He bears the risk of loss of the thing due
4. Debtor will not be liable for interest (on money)
5. Debtor may be released from the obligation

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FORTUITOUS EVENT (Art. 1174)

3. Delay by both parties (compensation morae) - Event which cannot be foreseen, or which, though foreseen,
is inevitable
- delay of the obligor cancels the delay of the obligee - Requisites:
- no actionable default on the part of both parties o Event must be:
- both are guilty of breach  Independent of human will
 Could not be foreseen
 Event must be of character to render debtor
WHEN IS DEMAND NOT NECESSARY? (Art. 1169) unable to comply
 No concurrent fraud, negligence or delay
1. When the obligation so provides - Although there is a fortuitous event, a person may still be
- If the stipulation states that there is no need for a demand
liable in the following instances:
on a certain date and if debtor fails, he will be in delay
1. When expressly provided by law
2. When the law provides
- Like deadline of paying taxes
- There is fraud, delay or negligence
- Art. 1165, par. 3
3. When time is of the essence “if the obligor delays, or has promise to deliver the same
- Time is the controlling motive thing to two or more persons who do not have the same
- Ex. Delivery of a cake on a wedding day interest he shall be responsible for fortuitous event until he
has effected the delivery”.
4. When demand would be useless
- When that to be delivered is a generic thing
- When the obligation becomes impossible
- Like when the animal to be delivered died
- In cases of fortuitous event (1174)
2. When declared by stipulation
5. When there is performance by a party in reciprocal 3. When the assumption of risk is an element of the
obligation obligation
- There must be simultaneous fulfillment
- No delay if the other party does not comply yet
REMEDIES IN CASE OF BREACH
Remedies in obligation TO GIVE

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1. Art. 1165 1. Art. 1167

- If what to be delivered is a specific thing, creditor may
compel the debtor to make the delivery (SPECIFIC
PERFORMANCE).
- Thing to be delivered cannot be substituted nor be delivered
by a third person.
Example:
Delivery of an Amorsolo painting
Remedies in obligation NOT TO DO
If the painting is delivered in a damaged condition, as long as
the damage is traceable to debtor’s negligence, debtor is liable.
If there is deterioration by reason of negligence, debtor is liable.
- If the debtor fails to perform, the remedy is to ask for a
specific performance or performance by a third person
- Recovery for damages (1170)
- If in contravention of the terms of the obli or when
performance is poorly done
o It may be ordered undone, if possible
1. UNDOING OF THE THING PROHIBITED plus recovery
for damages (1170)

- Art. 1165, par.2 Remedies in RECIPROCAL OBLIGATIONS

If what to be delivered is a generic thing, the creditor may
- Once there is performance of the other party, the delay
ask the obligation be complied with by a third person at the
expense of the debtor (SUBSTITUTED PERFORMANCE). begins on the other
Remedies:
Example:
1. Art. 1191
If you purchase a fuel, ordered it but there is breach, you - FULFILLMENT – the debtor must perform his prestation
can have it delivered by a third party and charge it to the - RECISSION
debtor.

2. Reccision or cancellation of the obligation with payment for SUBSIDIARY REMEDIES IN CASE OF BREACH
damages (Art. 1170 – in cases of fraud, delay, negligence)
- Remedies available to creditors for the satisfaction of their
claims
3. Payment of damages (when there is no other remedy)
Art. 1177
Remedies in obligation TO DO 1. Exact fulfillment with damages

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2. Pursue the leviable property of the debtor
3. Exercise all rights
Like ACCION SUBROGATORIA – right to collect
from the debtor’s debtor.
 Like when the debtor has no money, what is the remedy
of the creditor?
- If the debtor has no sufficient properties/money but he has
himself debtors, the creditor has the right to collect from
the debtor of his debtor by virtue of accion subrogatoria.
4. Ask the court to rescind or impugn acts which the debtor
may have done to defraud him (Art. 1381, p.3).
Example:
In a collection case, what is the remedy of the creditor?
First, if the debtor has money or property to levy. But, if
before execution, creditor found out there is no more
property, by virtue of Art. 1381, creditor may rescind
contract.
WHEN BOTH PARTIES ARE GUILTY OF BREACH
(Art. 1192)
- If it cannot be determined who breached first, the contract
is deemed extinguished and each shall bear his own
damages
RECIPROCAL OBLIGATIONS
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- Obligation of the seller to deliver depends when the buyer
pays the price. As long as B has not paid, there is no delay,
vice versa.
In case of breach, like:
Suppose B paid the price and S is in delay; if S does not make the
delivery, B can go to Art. 1191 for remedy.
B may choose fulfillment, if he wants performance.
Second option is rescission or cancellation of the transaction.
2 types of rescission:
1. Art. 1191 – the cause of the rescission is breach
2. Art. 1380 – recissible contracts (cause is economic injury)
Example for Art. 1191, p.2:
Parties will have to return what they have received
- They go to court to rescind reciprocal obligation and file a
complaint; the court will determine if rescission is proper.
- Court can deny complaint for rescission
o In case of causal breach
o If there is a just cause authorizing the fixing of a
period
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DIFFERENT KINDS OF OBLIGATION 1. When you have rights as a lawyer but can only practice/use it
as soon as you pass the bar
2. I will give a car to you if you pass the Bar Exam on
1. PURE/CONDITIONAL OBLIGATION September 2003. The condition is suspensive because the
How to determine? giving of the car depends on the results of the examinatio to be
given on September 2003.
Art. 1179, par. 1
PURE – if based on a certain date/time 2. Resolutory
– not subject to a condition/no specific date mentioned for - Obligation is immediately effective but will extinguish upon
its fulfillment happening of the condition
- Immediately demandable - Effect of non-fulfillment of resolutory condition:
o Resolves the contract by force of law without need of
judicial intervention
Art. 1181 EXAMPLE.
CONDITIONAL 1. I will give you mar car today but if you fail the bar exam to
– if the due of obligation is uncertain and based on a future be given on September 2003, I will be the owner of the car
event again. It is resolutory because the happening of the
- Whose consequences are subject in one way or another to conidtion extinguishes the obligation.
the fulfillment of a condition

SUSPENSIVE RESOLUTORY
2 principal kinds:
Before happening, obligation is Obligation is immediately
1. Suspensive not yet demandable demandable
- will give rise to an obligation
- demandability is suspended until the happening of the If the condition happens, it is Once happen, obligation is
condition now demandable extinguished

Even if condition is not yet Not applicable in resolutory

happening, creditor may
EXAMPLES .

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preserve his right pursuant to - obligation is VALID

Art. 1188; like putting
condition into writing 5.ARTICLE 1180 (condition considered period)

For the debtor, he may recover Not applicable in resolutory - if the condition is dependent partly upon sole will of the debtor
what he had paid by mistake and partly by chance or third person
(Art. 1188, p.2)
- obligation is perfectly VALID

2. POTESTATIVE CONDITION
- suspensive in nature
- depends upon the sole will of one of the parties
Validity of obligation upon will of the parties:
1. In suspensive condition upon sole will of the debtor
- Conditional obligation shall be void (Art. 1308) and cannot
be legally demandable
6.IMPOSSIBLE CONDITION (Art. 1183)
- applies to suspensive condition
- applies to existing obligation
- if exists after the constitution of obligation, Art. 1266 applies: “the
debtor to do shall be released when the prestation becomes
physically or legally impossible without fault of the debtor”.

2. In suspensive condition upon sole will of the creditor Kinds:

- Obligation is VALID
1. Physical – cannot exist/ cannot be done
Ex. Flying, lifting a car
3. In resolutory condition upon sole will of debtor
- Like the right to repurchase in case of pacto de retro,
2. Legal – contrary to law, morals, public policy/order,
obligation is VALID
customs
Ex. Killing
3. CASUAL CONDITION (Art. 1182, sentence 2)
- suspensive in nature; depends upon chance or will of a third EFFECT/S:
party; obligation is VALID
1. In conditional obligation
4. MIXED CONDITION (Art. 1182, s3) - Both obligation and condition are void
- If the condition is negative, impossible condition is valid
- suspensive in nature; depends partly by chance and partly by a - If divisible, the part not affected by the condition is valid
third party

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- If obligation is pre-existing, the impossible condition is the RETROACTIVE EFFECTS OF FULFILLMENT OF AN

only void. OBLIGATION

6. POSITIVE/NEGATIVE CONDITIONS
Positive (Art. 1184) 1. Fulfillment of suspensive condition (Art. 1187, p. 1)

- Suspensive; happening of an event at a determinate time o In obligations to give

- Obligation is extinguished when:
1. As soon as the time expires without the event taking
place; or
2. As soon as it has become indubitable that the event will
not take place although the specified time has not yet
lapsed
Negative (Art. 1185)
- Suspensive; an event will not happen at a determinate time
- Obligation is rendered effective when:
1. From the moment the time elapsed without the
event taking place; or
2. That the event cannot concur although the specified
time has not yet lapsed.
 Once the condition is fulfilled, its effect shall
retroact to the day when the obligation is
constituted
o In obligations to do/not to do
 No fixed rule is provided, but the court may
determine
o In fruits/interests in obligations to give
 No retroactivity since obligation is mutually
compensated

8. CONSTRUCTIVE CONDITION (Art. 1186)

- obligor prevents the fulfillment of the condition
Example: if debtor told creditor that he will pay him if the
professor comes late, then debtor stopped the professor from
coming, it is deemed fulfilled.

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LOSS, DETERIORATION AND IMPROVEMENTS 5. Improvement (enhancement) of thing by

(during pendency of suspensive condition) nature/time
Article 1189.
- Benefits belong to the creditor

1. If loss is without fault of debtor, OBLIGATION IS

EXTINGUISHED 6. Improvement at the expense of the debtor
- Like fortuitous event
- He is not subject to indemnity

2. If loss is with the fault of the debtor, latter pays for

damages

Kinds of loss:
1. Physical loss – when it perishes like burning of a house
2. Legal loss – when it goes out of commerce like it
becomes illegal
3. Civil loss – when it disappears like missing dog

3. If deterioration (reduction of value) is without

debtor’s fault
- The creditor suffers the deterioration

4. If deterioration is with debtor’s fault

- creditor may resort to:
- rescission or specific performance

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OBLIGATION WITH A PERIOD (Art. 1193)
- Those whose consequence are subjected to the expiration of
a period or term (future and certain event)
- Certain event means:
o Must necessarily come like Christmas
o Although not known when like death
KINDS:
1. Suspensive
o Obligation begins from a day certain upon arrival of
period (Art. 1193, p.1)
o Ex. I will pay you in 30 days from today
2. Resolutory
o Obligation is valid up to a certain day and
extinguished upon arrival (Art. 1193, p.2)
o Ex. I will support you from the time your father dies
*LOSS, DETERIORATION AND IMPROVEMENTS
(during pendency of suspensive period)
SEE Article 1189.
 Fixing of period
- Presumed to be for the benefit of both creditor and debtor
(Art. 1196)
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If for Debtor’s benefit
o He cannot be compelled to pay earlier before due,
but he may
If for Creditor’s benefit
o He may demand earlier but debtor cannot require
him to accept payment earlier
When obligation can be demanded before lapse of
period (Art. 1198)
o Debtor shall lose every right to make use of the
period:
 When after obligation, he becomes insolvent,
unless she gives a guaranty or security for
the debt;
 When he does not furnish to the creditor the
guaranties and securities;
 When by his own acts he has impaired said
guaranties and securities after their
establishment;
 When the debtor violates any undertaking, in
consideration of which the creditor agreed to
the period; and,
 When the debtor attempts to abscond.
WHEN DO COURTS FIX PERIOD?
1. Art. 1197
o Like when D contracts with C a contract but C failed
to finish completion at an agreed time, is there
breach?
 None, because no period, no delay
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 However, you can go to court to fix period
and when period is fixed, and C still does not
comply, there will be now a breach
2. Art. 1197, p. 2
- The courts shall also fix the duration of the period when it
depends upon the will of the debtor.
- Relate with Art. 1180:
o When the debtor binds himself to pay when his
means permit him to do so, the obligation shall be
deemed one with a period.
Who has the right to choose prestation
How will courts fix period?
Art. 1197, p.3
- Once period is fixed, it cannot be changed
ALTERNATIVE OBLIGATIONS (Art. 1199)
- One where out of the two or more prestations which will be
given, only one is due and is sufficient for the fulfillment of
the obligation
EXAMPLE.
A borrowed money from B. The agreement states that the loan
can be paid in PH peso or US dollars.
- Art. 1200. The right of choice belongs to the debtor
Exceptions.
1. Art. 1202. The debtor loses the right to choose when
among the prestations, only one is practicable.
2. Art. 1205. The right of choice belongs to the creditor when
expressly provided.
3. Art. 1203. If the debtor cannot make a choice, the
obligation is rescinded.

RULES IN CASE OF LOSS BEFORE THE CREDITOR HAS

MADE CHOICE
1. When a thing is lost through a fortuitous event
- Creditor may choose among the remaining prestations

2. When the thing is lost through debtor’s fault

- Creditor may choose among the remaining prestations with
a right to claim damages

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3. When all the things are lost through debtor’s fault ALTERNATIVE FACULTATIVE
- Creditor can demand the payment of the price of any of the
prestations with right to damages Several prestations are due but Only one prestation is due
compliance with one is although substitution is
4. When all the things are lost through fortuitous sufficient allowed
event
- Obligation is extinguished The right of choice may be Right to make substitution is
given to the debtor or third given to the debtor only
party
When does the choice take effect?
Loss of one or more of the Loss of the thing due thru
- Art. 1201. From the time the choice has been communicated alternatives thru fortuitous fortuitous event extinguishes
event does not extinguish obligation
obligation
FACULTATIVE OBLIGATION, Art. 1206
In nullity of prestation, nullity Nullity of prestation
- One where only one prestation has been agreed upon but of one does not invalidate the invalidates obligation
the obligor may render another in SUBSTITUTION. others
EXAMPLE.
1. I will give you my money but I can give you my television
instead

Effect of loss.
1. Before substitution – if the principal thing is lost thru a
fortuitous event, the obligation is extinguished; otherwise,
the debtor is liable for damages.

2. After substitution – if the principal thing is lost, the

debtor is not liable whatever may be the cause of loss since
it is no longer due.

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SOLIDARY OBLIGATION (Art. 1207) Solidary Creditors

Solidary Debtors - 2 or more creditors, 1 debtor
Example: Example:
One creditor, three debtors If 1st Creditor (C1) demands, can Debtor pay to 2nd Creditor (C2)?
According to: - No, payment must be made to the one who demands (Art.
1214)
 1216. Creditor may demand to any of the debtors
 1217, par.1. Payment by one of the debtors will REMISSION:
extinguish obligation; but if two or more debtors try to
What if C1 condoned Debtor from paying?
pay, creditor may choose what payment to accept
 1217, par.2. If payment is made by one of the debtors, he - Obligation is extinguished
who paid may claim from his co-debtors only the share
But what is the remedy of C2?
corresponds to each, including interest as a general rule
(but if payment is made before due date, no interest). - Art. 1212. Each one of the solidary creditors may do
whatever may be useful to the others, but not anything
General Rule: what one debtor pays is reimbursable
which may be prejudicial to the latter. Relate with:
Exceptions:
1. Art. 1218. If payment after obligation has prescribed or
- Art. 1215. Novation, compensation, confusion or remission
becomes illegal
of the debt, made by any of the solidary creditors or with
2. Art. 1219. In partial remission, if one of the debtors paid in
any of the solidary debtors, shall extinguish the obligation,
full, he may reimburse
without prejudice to the provisions of:
3. Art. 1220. Total remission – when creditor condones the
- Art. 1219.The remission made by the creditor of the share
debt
which affects one of the solidary debtors does not release
the latter from his responsibility towards the co-debtors, in
 1217, par.3. In case one debtor becomes insolvent, his
case the debt had been totally paid by anyone of them
share will be borne by the co-debtors proportionately.
before the remission has effected.

- Art.1213. solidary creditor cannot assign his rights without

the consent of the others

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JOINT OBLIGATIONS, Art. 1207

- Plurality of parties
- There is more than one creditor and/or debtor
- An obligor answers only for a part of the entire liability.
EXAMPLE.
1. C lends Php1,000.00 to D1 and D2.
- In here, D1 is liable only to his share which is 500.00.
Art. 1210. Indivisibility of an obligation does not
necessarily give rise to solidarity.
Example.
The object is a car which is to be delivered whole. A and B, as joint
debtors, are not presumed to be solidary, the obligation is still
joint.

Art. 1208. The credit or debt shall be divided into as many equal
shares as there are debtors and creditors.

Art. 1209. Joint indivisible obligation

- Where the object is physically indivisible but the debtors
are jointly liable as t their liabilities or the creditors as to
their rights. In relation to –

Art. 1224. A joint indivisible obligation gives rise to

indemnity for damages from the time anyone of the debtors
does ot comply with their undertaking.

EXAMPLE.
A,B and C are partners in a buy and sell business. D buys
car. However, C later on disagreed realizing that the car has
a sentimental value. What is the remedy of D?

1224. The debtors who may have been ready to fulfill shall
not contribute to the indemnity beyond the corresponding
portion of the price of the thing or value of the service
consist in the obligation.

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