LAW - rule of action/system of uniformity
absolute; it varies with the changing
GENERAL DIVISIONS OF LAW
LAW (STRICT LEGAL SENSE) - enforced by the
state; state law
LAW (NON-LEGAL SENSE) – not promulgated
and enforced by the state; divine law, natural
law, moral law, and physical law
SUBJECTS OF LAW
LAW AS A RULE OF ACTION (state law, divine
law, natural law, and moral law) – apply to men
as rational beings only.
LAW OPERATES ON ALL THINGS (physical law) –
including men, without regard to the latter’s
use of their will power and intelligence.
DIVINE LAW – law of religion and faith
 Source – promulgated by God
 Sanction – certain rewards and
punishments
NATURAL LAW – divine inspiration in man
 Binding force – ever present and
binding on all men everywhere and at
all times; basic understanding of right
and wrong.
 Compared to divine law – divine law by
means of direct revelation while natural
law is the core of his higher self.
 Place in state of law – reasonable basis
of state law.
MORAL LAW – totality of the norms of good
and right conduct
 Determination of what is right and
wrong – privilege to determine
what is right and what is wrong.
 Sanction – no definite legal
sanction
 Binding force – moral law is not
times
 Place in state law – moral law
influences or shapes state law.
PHYSICAL LAW – uniformities of actions and
orders of sequence which are the physical
phenomena that we sense and feel.
 Order or regularity in nature – a
law of physical science, being
addressed to objects which have no
power to disobey, is in reality
nothing more than an order or
regularity in nature by which
certain results follow certain
causes.
 Called law only by analogy – order
or regularity is called law only by
analogy.
STATE LAW – particularly concerns us in this
work; promulgated and enforced by the state.
 Other terms used – this law is also
called positive law, municipal law,
civil law, or imperative law.
 Binding force – only state law is
enforced by the state.
 Concern of state law – does not
concern itself with violations of the
latter rules of action unless they
also constitute violations of its
commands.
CONCEPTS OF (STATE) LAW
 General sense – laws taken
together.
 Specific sense – particular statute
or legal rule
CHARACTERISTICS OF LAW
 It is a rule of conduct – what shall
be done and what shall not be
done.
 It is obligatory – positive command
imposing a duty to obey
 It is promulgated by legitimate
authority – in a democratic country,
like the Philippines, the legitimate
or competent authority is the
legislature.
 It is of common observance and
benefit – law is intended by man to
serve man. It regulates the relations
of men to maintain harmony in
society and to make order and co-
existence possible.
NECESSITY AND FUNCTIONS OF LAW
1. What would life be without law?
The need for internal order is as
constant as the need for
external defense.
2. What does law do?
Law secures justice, resolves
social conflict, orders society,
protects interests, controls
social relations.
3. What is our duty as members of
society?
Every citizen should have some
understanding of law and
observe it for the common
good.
SOURCES OF LAW
1. Constitution – written instrument by
which the fundamental powers of the
government are established, limited,
and defined.
(fundamental/supreme/highest law)
2. Legislation – declaration of legal rules
by a competent authority.
(enacted/statute law)
3. Administrative or executive orders,
regulations, and rulings – issued by
administrative officials under legislative
authority.
4. Judicial decisions or jurisprudence –
the decisions of the courts, particularly
the Supreme Court, applying or
interpreting the laws or the
Constitution form part of the legal
system of the Philippines.
5. Custom – habits and practices which
through long and uninterrupted usage
have become acknowledged and
approved by society as binding rules of
conduct.
6. Other Sources – only supplementary;
resorted to by the courts in the absence
of all the other sources.
ORGANIZATION OF COURTS
1. Regular courts
2. Special courts
3. Quasi-judicial agencies
CLASSIFICATIONS OF LAW
1. As to its purpose:
a.) Substantive law – creating, defining,
and regulating rights and duties
b.) Adjective law – prescribing the
manner or procedure by which rights may be
enforced or their violations redressed.
2. As to its subject matter:
a.) Public law – the body of legal rules
which regulates the rights and duties arising
from the relationship of the state to the people.
b.) Private law – the body of rules
which regulates the relations of individuals with
one another for purely private ends.
CHAPTER 1 (GENERAL PROVISIONS)
ARTICLE 1156 – AN OBLIGATION IS A JURIDICAL
NECESSITY TO GIVE, TO DO OR NOT TO DO.
Obligation – derived from Latin word obligatio
which means tying or binding; tie or bond
recognized by law by virtue of which one is
bound in favor of another to render something.
CIVIL CODE DEFINITION OF ARTICLE 1156
- The duty under the law of the debtor or
obligor (he who has the duty of giving
doing, or not doing) when it speaks of
obligation as a juridical necessity.
Juridical necessity – debtor must comply with
his obligation whether he likes it or not;
otherwise, his failure will be visited with some
harmful or undesirable consequences.
NATURE OF OBLIGATIONS UNDER CIVIL CODE
Civil Obligations – creditor/oblige a
right under the law to enforce their
performance in courts of justice.
Natural Obligations – not being based
on positive law but on equity and natural law,
do not grant a right of action to enforce their
performance.
ESSENTIAL REQUISITES OF AN OBLIGATION
1. Passive subject (called debtor/obligor)
– bound to the fulfillment of the
obligation; he who has duty
2. Active subject (called creditor/obligee)
– entitled to demand the fulfillment of
the obligation; he who has right
3. Object or prestation (subject matter of
the obligation) – conduct required to
be observed by the debtor
4. Juridical or legal tie (called efficient
cause) – binds or connects the parties
to the obligation; can easily be
determined by knowing the source of
the obligation.
FORM OF OBLIGATIONS – manner in which an
obligation is manifested or incurred.
1. As a general rule, the law does not
require any form in obligations arising
from contracts for their validity or
binding force.
2. Obligations arising from other sources;
do not have any form at all
OBLIGATION, RIGHT, AND WRONG
DISTINGUISHED
1. Obligation – act or performance which
the law will enforce.
2. Right – power which a person has
under the law, to demand from another
any prestation
3. Wrong (cause of action) – act or
omission of one party in violation of the
legal right or rights of another; injury is
also used to refer to the wrongful
violation of the legal right of another.
Essential elements of a legal wrong or
injury
a.) Legal right in favor of a person
(creditor/oblige/plaintiff)
b.) Correlative legal obligation
(debtor/obligor/defendant) to
respect or not to violate said right
c.) Act or omission by the latter in
violation of said right with resulting
injury or damage to the former.
KINDS OF OBLIGATION ACCORDING TO THE
SUBJECT MATTER
1. Real obligation (obligation to give) -
obligor must deliver to the obligee.
2. Personal obligation (obligation to do or
not to do) – subject matter is an act to
be done or not to be done.
 2 kinds of Personal Obligation:
a.) Positive personal
obligation – obligation to
do or to render service.
b.) Negative personal
obligation- obligation not
to do
ARTICLE 1157 – OBLIGATIONS ARISE FROM:
1. LAW
2. CONTRACTS
3. QUASI-CONTRACTS
4. ACTS OR OMISSIONS PUNISHED BY
LAW
5. QUASI-DELICTS
SOURCES OF OBLIGATIONS
1. Law – when they are imposed by law
itself.
2. Contracts – when they arise from the
stipulation of the parties.
3. Quasi-contracts – when they arise from
lawful, voluntary and unilateral acts
which are enforceable; considered as
arising from law.
4. Crimes or acts or omissions punished
by law – arise from civil liability which is
the consequence of a criminal offense.
5. Quasi-delicts or torts – when they arise
from damage caused to another
through act/omission, there being fault
or negligence, but no contractual
relation exists between the parties.
SOURCES CLASSIFIED
1. Emanating from law
2. Emanating from private acts which
may be further subdivided into:
a.) Arising from licit acts, in the case of
contracts and quasi-contracts
b.) Arising from illicit acts, which may
be either punishable in the case of
delicts or crimes or not punishable
in the case of quasi-delicts or torts
ARTICLE 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.
Special laws refer to all other laws not
contained in the Civil Code
ARTICLE 1159 – OBLIGATIONS ARISING FROM
CONTRACTS HAVE THE FORCE OF LAW
BETWEEN THE CONTRACTING PARTIES AND
SHOULD BE COMPLIED WITH IN GOOD FAITH
Contract – a meeting of minds between
2 persons whereby one binds himself ,
with respect to the other, to give
something or to render some service.
1. Binding Force – have the
force of law between the
contracting parties
2. Requirement of a valid
contract – a contract is
valid if it is not contrary to
law, morals, good customs,
public order, and public
policy. It is invalid or void if
it is contrary to law, morals,
good customs, public order,
or public policy
3. Breach of contract – a
contract may be breached
or violated by a party in
whole or in part.
COMPLIANCE IN GOOD FAITH – sincerity and
honesty must be observed to prevent one party
from taking unfair advantage over the other.
ARTICLE 1160 – OBLIGATIONS DERIVED FROM
QUASI- CONTRACTS SHALL BE SUBJECT TO THE
PROVISIONS OF CHAPTER 1, TITLE XVII OF THIS
BOOK.
Quasi-contract – juridical relation resulting
from lawful, voluntary and unilateral acts by
virtue of which the parties become bound to
each other to the end that no one will be
unjustly enriched or benefited at the expense of
another.
KINDS OF QUASI-CONTRACTS
1. Negotiorum gestio – voluntary
management of the property or
affairs of another without the
knowledge or consent of the latter
2. Solutio indebiti – created when
something is received when there is
no right to demand it and it was
unduly delivered through mistake.
Requisites are:
a.) There is no right to receive the
thing delivered
b.) The thing was delivered through
mistake
3. Other examples of quasi-contracts
– the cases that have been
classified as quasi-contracts are of
infinite variety
ARTICLE 1161 – CIVIL OBLIGATIONS ARISING
FROM CRIMINAL OFFENSES SHALL BE
GOVERNED BY THE PENAL LAWS, SUBJECT TO
THE PROVISIONS OF ARTICLE 2177, AND OF
THE PERTINENT PROVISIONS OF CHAPTER 2,
PRELIMINARY TITLE, ON HUMAN RELATIONS,
AND OF TITLE XVIII OF THIS BOOK,
REGULATING DAMAGES.
CIVIL LIABILITY ARISING FROM CRIMES OR
DELICTS
1. Every person criminally liable for an act
or omission is also civilly liable for
damages.
2. In crimes, however, which cause no
material damage (like contempt, insults
to persons in authority, gambling,
violations of traffic regulations, etc.)
there is no civil liability to be enforced.
But a person not criminally responsible
may still be liable civilly.
SCOPE OF CIVIL LIABILITY
1. Restitution
2. Reparation for the damage caused
3. Indemnification for consequential
damages
ARTICLE 1162 – OBLIGATIONS DERIVED FROM
QUASI-DELICTS SHALL BE GOVERNED BY THE
PROVISIONS OF CHAPTER 2, TITLE XVII OF THIS
BOOK, AND BY SPECIAL LAWS.
Quasi-delict – act or omission by a person
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.
REQUISITES OF QUASI-DELICT
1. There must be an act or omission
2. There must be fault or negligence
3. There must be damage caused
4. There must be a direct relation or
connection of cause and effect between
the act or omission and the damage
5. There is no pre-existing contractual
relation between the two parties.
CRIME DISTINGUISHED FROM QUASI- DELICT
1. In crime, there is criminal or malicious
intent or criminal negligence, while in
quasi-delict, there is only negligence.
 2. In crime, the purpose is punishment,
while in quasi-delict, indemnification of
the offended party
3. Crime affects public interest, while
quasi-delict concerns private interest
DUTIES OF DEBTOR IN OBLIGATION TO GIVE A
4. In crime, there are generally two
DETERMINATE THING
liabilities: criminal and civil, while in
quasi-delict, there is only civil liability
5. Criminal liability can not be
compromised or settled by the parties
themselves, while the liability for quasi-
delict can be compromised as any other
civil liability
6. In crime, the guilt of the accused must
be proved beyond reasonable doubt,
while in quasi-delict, the fault or
negligence of the defendant need only
be proved by preponderance (superior
or greater weight) of evidence.
CHAPTER 2
(NATURE AND EFFECT OF OBLIGATION)
ARTICLE 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.
Specific/determinate thing – physically
segregated others of the same class.
Generic/indeterminate thing – only to a class
or genus to which it pertains and cannot be
pointed out with particularity.
SPECIFIC THING AND GENERIC THING
DISTINGUISHED
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.
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.
1. Preserve the thing – the obligor has the
incidental duty to take care of the thing
due with the diligence of a good father
of a family pending delivery.
a.) Diligence of a good father
of a family – ordinary care
or that diligence which an
average (a reasonably
prudent) person exercises
over his own property.
b.) Another standard of care –
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
c.) Factors to be considered –
the diligence required
necessarily depends upon
the nature of the obligation
and corresponds with the
circumstances of the
person, of the time, and of
the place.
d.) Reason for debtor’s
obligation – the debtor
must exercise diligence to
insure that the thing to be
delivered would subsist in
the same condition as it
was when the obligation
was contracted.
2. Deliver the fruits of the thing
3. Deliver the accessions and accessories
4. Deliver the thing itself
 5. Answer for damages in case of non-
fulfillment or breach
DUTIES OF DEBTOR IN OBLIGATION TO
DELIVER A GENERIC THING
1. To deliver a thing which of the quality
intended by the parties taking into
consideration the purpose of the
obligation and other circumstances
2. To be liable for damages in case of
fraud, negligence, or delay, in the
performance of his obligation, or
contravention of the tenor thereof.
ARTICLE 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.
DIFFERENT KINDS OF FRUITS
1. Natural fruits – spontaneous products
of the soil, and the young and other
products of animals.
2. Industrial fruits – produced by lands of
any kind through cultivation or labor
3. Civil fruits – derived by virtue of a
juridical relation
RIGHT OF CREDITOR TO THE FRUITS
The creditor is entitled to the fruits of the thing
to be delivered from the time the obligation to
make delivery arises.
WHEN OBLIGATION TO DELIVER FRUITS ARISES
1. Arises from the time of the “perfection
of the contract”
2. Subject to a suspensive condition or
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
the law applicable.
MEANING OF PERSONAL RIGHT AND REAL
RIGHT
1. Personal right – right or power of a
person (creditor) to demand from
another (debtor)
2. Real right – right or interest of a person
over a specific thing
PERSONAL RIGHT AND REAL RIGHT
DISTINGUISHED
1. Personal right – definite active subject
and a definite passive subject
Real right – only a definite active
subject without any definite passive
subject
2. Personal right – binding or enforceable
only against a particular person
Real right – directed against the whole
world
OWNERSHIP ACQUIRED BY DELIVERY
Ownership and other real rights over property
are acquired and transmitted in consequence of
certain contracts by tradition or delivery.
ARTICLE 1165 – WHEN WHAT IS TO BE
DELIVERED IS A DETERMINATE THING, THE
CREDITOR, IN ADDITION TO THE RIGHT
GRANTED HIM BY ARTICLE 1170, MAY COMPEL
THE DEBTOR TO MAKE THE DELIVERY.
IF THE THING IS INDETERMINATE OR GENERIC,
HE MAY ASK THAT THE OBLIGATION BE
COMPLIED WITH AT THE EXPENSE OF THE
DEBTOR.
IF THE OBLIGOR DELAYS, OR HAS PROMISED
TO DELIVER THE SAME THING TO TWO OR
MORE PERSONS WHO DO NOT HAVE THE
SAME INTEREST, HE SHALL BE RESPONSIBLE
FOR FORTUITOUS EVENT UNTIL HE HAS
EFFECTED THE DELIVERY.
REMEDIES OF CREDITOR IN REAL OBLIGATION
1. Specific real obligation (obligation to
deliver a determinate thing)
a.) Demand specific performance or
fulfillment
b.) Demand rescission or cancellation
c.) Demand payment of damages only
2. Generic real obligation (obligation to
deliver a generic thing) can be
performed by a third person since the
object is expressed only according to its
family or genus; not necessary for the
creditor to compel the debtor to make
the delivery , although he may ask for
performance of the obligation.
WHERE DEBTOR DELAYS OR HAS PROMISED
DELIVERY TO SEPARATE CREDITORS
Paragraph 3 gives 2 instances when fortuitous
event does not exempt the debtor from
responsibility. It likewise refers to determinate
thing. An indeterminate thing cannot be the
object of destruction by a fortuitous event
because genus nunquam perit (genus never
perishes)
ARTICLE 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.
MEANING OF ACCESSIONS AND ACCESSORIES
1. Accessions – fruits of a thing or
additions/improvements upon a thing
(the principal)
2. Accessories – things joined to or
included with the principal thing
RIGHT OF CREDITOR TO ACCESSIONS AND
ACCESSORIES
All accessions and accessories are considered
included in the obligation; In order that they
will be excluded, there must be a stipulation to
that effect.
ARTICLE 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
1. Debtor fails to perform an obligation to
do
2. Debtor performs an obligation to do but
contrary to the terms thereof
3. The debtor performs an obligation to
do but in poor manner
REMEDIES OF CREDITOR IN POSITIVE
PERSONAL OBLIGATION
1. If the debtor fails to comply with his
obligation to do, 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
b.) To recover damages
2. In case the obligation is done in
contravention of the terms of the same
or is poorly done, it may be ordered (by
the court upon complaint) that it be
undone if it is still possible to undo
what was done.
PERFORMANCE BY A THIRD PERSON
Only feasible remedy of the creditor is
indemnification for damages.
ARTICLE 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.
REMEDIES OF CREDITOR IN NEGATIVE
PERSONAL OBLIGATION
In an obligation not to do, the duty of the
obligor is to abstain from an act. The very
obligation is fulfilled in not doing what is
forbidden.
ARTICLE 1169 – THOSE OBLIGED TO DELIVER
OR TO DO SOMETHING INCUR IN DELAY FROM
THE TIME THE OBLIGEE JUDICIALLY OR
EXTRAJUDICIALLY DEMANDS FROM THEM THE
FULFILLMENT OF THEIR OBLIGATION.
HOWEVER, THE DEMAND BY THE CREDITOR
SHALL NOT BE NECESSARY IN ORDER THAT
DELAY MAY EXIST:
1. WHEN THE OBLIGATION OR THE LAW
EXPRESSLY SO DECLARES
2. WHEN FROM THE NATURE AND THE
CIRCUMSTANCES OF THE OBLIGATION
IN 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
3. WHEN THE 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 – the failure to perform
an obligation on time
2. Legal delay or default or mora – failure
to perform an obligation on time which
failure constitutes a breach of the
obligation
KINDS OF DELAY OR DEFAULT
1. Mora solvendi – delay on the part of
the debtor to fulfill his obligation
2. Mora accipiendi – delay on the part of
the creditor to accept the performance
of the obligation
3. Compensatio morae – delay of the
obligors in reciprocal obligations w
REQUISITES OF DELAY OR DEFAULT BY THE
DEBTOR
1. Failure of the debtor to perform his
(positive) obligation on the date agreed
upon
2. Demand (not mere reminder or notice)
made by the creditor upon the debtor
to comply with his obligation which
demand may be either judicial or
extrajudicial
3. Failure of the debtor to comply with
such demand
EFFECTS OF DELAY
1. Mora solvendi
a.) The debtor is guilty of
breach or violation of the
obligation
b.) He is liable to the creditor
for interest or damages. In
absence of extrajudicial
demand, the interest shall
commence from the filing
of the complaint
 c.) He is liable even for the
fortuitous event when the
obligation is to deliver a
determinate thing
2. Mora accipiendi
a.) The creditor is guilty of
breach of obligation
b.) He is liable for damages
suffered
c.) He bears the risk of loss of
the thing due
d.) Where the obligation is to
pay money, the debtor is
not liable for interest from
the time of creditor’s delay
e.) The debtor may release
himself from the obligation
by the consignation or
deposit in court of the thing
or sum due
3. Compensatio morae
There is no default or delay on the part
of both parties.
If the delay of one party is followed by
that of the other, the liability of the first
infractor shall be equitably tempered or
balanced by the courts.
WHEN DEMAND IS NOT NECESSARY TO PUT
DEBTOR IN DELAY
1. When the obligation so provides
2. When the law so provides
3. When time is of the essence
4. When demand would be useless
5. When there is performance by a party
in reciprocal obligations
ARTICLE 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
GROUNDS FOR LIABILITY
1. Fraud (deceit or dolo) – malice or
dishonesty and it cannot cover cases of
mistake and errors of judgment made in
good faith.
2. Negligence (fault or culpa) – any
voluntary act or omission, there being
no bad faith or malice, which prevents
the normal fulfillment of an obligation
3. Delay (mora)
4. Contravention of the terms of the
obligation – violation of the terms and
conditions stipulated in the obligation;
must not be due to a fortuitous event
or force majeure
FRAUD AND NEGLIGENCE DISTINGUISHED
1. Fraud – deliberate intention to cause
damage or injury
Negligence – no such intention
2. Fraud – waiver of the liability for future
is void
Negligence – such waiver in a certain
sense, be allowed
3. Fraud must be clearly proved, while
negligence is presumed from the
violation of a contractual obligation
4. Liability for fraud cannot be mitigated
or reduced by the courts, while liability
for negligence may be reduced
according to the circumstances.
ARTICLE 1171 – RESPONSIBILITY ARISING
FROM FRAUD IS DEMANDABLE IN ALL
OBLIGATIONS. ANY WAIVER IF AN ACTION FOR
FUTURE FRAUD IS VOID.
RESPONSIBILITY ARISING FROM FRAUD
DEMANDABLE
This provision refers to incidental fraud which is
employed in the fulfillment of an obligation
WAIVER OF ACTION FOR FUTURE FRAUD VOID
A waiver of an action for future fraud is void as
being against the law and public policy.

WAIVER OF ACTION FOR PAST FRAUD VOID
A past fraud can be the subject of a valid waiver
because the waiver can be considered as an act
of generosity and magnanimity on the part of
the party who is the victim of the fraud.
ARTICLE 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.
RESPONSIBILITY ARISING FROM NEGLIGENCE
DEMANDABLE
The debtor is also liable for damages resulting
from his negligence
VALIDITY OF WAIVER OF ACTION ARISING
FROM NEGLIGENCE
1. An action for future negligence (not
fraud) may be renounced except where
the nature of the obligation requires
the exercise of extraordinary diligence
as in the case of common carriers.
2. Where negligence shows bad faith, it is
considered equivalent to fraud.
KINDS OF NEGLIGENCE ACCORDING TO
SOURCE OF OBLIGATION
1. Contractual negligence (culpa
contractual) – makes the debtor liable
for damages in view of his negligence in
the fulfillment of a pre-existing
obligation
2. Civil negligence (culpa aquiliana) –
obligation between the parties not so
related before by any preexisting
contract.
3. Criminal negligence (culpa criminal) –
resulting in the commission of a crime
ARTICLE 1173 – THE FAULT OR NEGLIGENCE OF
THE OBLIGOR CONSISTS IN THE OMISSION OF
THAT DILIGENCE WHICH IS REQUIRED BY THE
NATURE OF THE OBLIGATION AND
CORRESPONDS WITH THE CIRCUMSTANCES OF
THE PERSON, OF THE TIME AND OF THE PLACE.
WHEN NEGLIGENCE SHOWS BAD FAITH, THE
PROVISIONS OF 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.
MEANING OF FAULT OR NEGLIGENCE
Negligence is the failure to observe for the
protection of the interests of another person,
that degree of care, precaution, and vigilance
which the circumstances justly demand,
whereby such other person suffers injury.
FACTORS TO BE CONSIDERED
1. Nature of the obligation
2. Circumstances of the person
3. Circumstances of time
4. Circumstances of the place
MEASURE OF LIABILITY FOR DAMAGES
Damages signify the money compensation
awarded to a party for loss or injury resulting
from breach of contract or obligation by the
other.
KINDS OF DILIGENCE REQUIRED
1. That agreed upon by the parties, orally
or in writing
2. In the absence of stipulation, that
required by law in the particular case
3. If both the contract and law are silent,
then the diligence expected of a good
father of a family
ARTICLE 1174 – EXCEPT IN CASES EXPRESSLY
SPECIFIED BY THE LAW, OR WHEN IT IS
OTHERWISE DECLARED BY STIPULATION, OR
WHEN THE NATURE OF THE OBLIGATION
REQUIRES THE ASSUMPTION OF RISK, NO
PERSON SHALL BE RESPONSIBLE FOR THOSE
EVENTS WHICH COULD NOT BE FORESEEN, OR
WHICH THOUGH FORESEEN, WERE
INEVITABLE.
MEANING OF FORTUITOUS EVENT
Any event which cannot be foreseen, or which,
though foreseen, is inevitable.
FORTUITOUS EVENT DISTINGUISHED FROM
FORCE MAJEURE
1. Acts of man – event independent of the
will of the obligor but not of other
human wills
2. Acts of God – called majeure or those
events which are totally independent
will of every human being
Fortuitous events and force majeure are
identical as they exempt an obligor from liability
KINDS OF FURTUITOUS EVENTS
1. Ordinary fortuitous events – common;
contracting parties could reasonably
foresee
2. Extra-ordinary fortuitous events –
uncommon; could not have reasonably
foreseen
REQUISITES OF A FORTUITOUS EVENT
1. The event must be independent of the
human will or at least of the debtor’s
will
2. The event could not be foreseen, or if
foreseen, is inevitable
3. The event must be of such a character
as to render it impossible for the debtor
to comply with his obligation in a
normal manner
4. The debtor must be free from any
participation in, or the aggravation of,
the injury to the creditor, that is, there
is no concurrent negligence on his part
The absence of any of the above requisites
would prevent the obligor from being
exempt from liability
Mere pecuniary inability or poverty is not
an excuse for the non-fulfillment of an
obligation.
RULES AS TO LIABILITY IN CASE OF
FORTUITOUS EVENT
A person is not, as a rule, responsible for loss or
damage caused to another resulting from the
non-performance of his obligation due to a
fortuitous event. In other words, his obligation
is extinguished.
1. When expressly specified by law
a.) The debtor is guilty of
fraud, negligence, or delay,
or contravention of the
tenor of the obligation
b.) The debtor has promised to
deliver the same (specific)
thing to 2 or more persons
who do not have the same
interest
c.) The obligation to deliver a
specific thing arises from a
crime
2. When declared by stipulation
3. When the nature of the obligation
requires the assumption of risk
ARTICLE 1175 – USURIOUS TRANSACTIONS
SHALL BE GOVERNED BY SPECIAL LAWS
MEANING OF SIMPLE LOAN OR MUTUUM
A contract whereby one of the parties
delivers to another, money or other
consumable thing, upon the condition that
 the same amount of the same kind and
quality shall be paid.
MEANING USURY
Contracting for or receiving interest in
excess of the amount allowed by the law for
the loan or use of money, goods, chattels or
credits.
REQUISITES FOR RECOVERY INTEREST
1. The payment of interest must be
expressly stipulated
2. The agreement must be in writing
3. The interest must be lawful
A stipulation for the payment of usurious
interest is void, as if there is no stipulation as to
interest.
ARTICLE 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.
MEANING OF PRESUMPTION
The inference of a fact not actually known
arising from its usual connection with another
which is known or proved.
TWO KINDS OF PRESUMPTION
1. Conclusive presumption – cannot be
contradicted; conclusively presumed to
know the law
2. Disputable (or rebuttable)
presumption – can be contradicted or
rebutted by presenting proof of
contrary
WHEN PRESUMPTIONS IN ARTICLE 1176 DO
NOT APPLY
1. With reservation as the interest
Article 1176 do not arise where there is
a reservation that no payment has been
made as to interest or prior
installments, as the case may be
2. Receipt without indication of particular
installment paid
Receipt does not recite that it was
issued for a particular installment due
as when the receipt is only dated
3. Receipt for a part of the principal –
such a receipt, without mentioning the
interest, implies that the creditor
waives his right to apply the payment
first to the interest.
4. Payment of taxes – article 1176 does
not apply to payment of taxes.
5. Non-payment proven – article 1176 is
not applicable where the non-payment
of prior obligations has been proven.
ARTICLE 1177 – THE CREDITORS, AFTER HAVINF
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.
REMEDIES AVAILABLE TO CREDITORS FOR THE
SATISFACTION OF THEIR CLAIMS
1. Exact fulfillment
2. Pursue the leviable
3. “after having pursued the property in
possession of the debtor”, exercise all
the rights and bring all the actions of
the debtor
4. Ask the court to rescind or impugn acts
or contracts which the debtor may have
 done to defraud him when he cannot in
any other manner recover his claim

ARTICLE 1178 – SUBJECT TO THE LAWS, ALL

RIGHTS ACQUIRED IN VIRTUE OF AN
OBLIGATION ARE TRANSMISSIBLE, IF THERE
HAS BEEN NO STIPULATION TO THE
CONTRARY.

TRANSMISSIBILITY OF RIGHTS

1. Prohibited by law
a.) By the contract of partnership
b.) By the contract of agency
c.) By the contract of commodatum
2. Prohibited by stipulation of the parties