Art. 1169.
Those obliged to deliver or to do something If the law or contract does not state the diligence which
incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulftllment of their
obligation However, the demand by the creditor shall not be neces- sary in
order that delay may exist:
(1) When the obligation or the law expressly so de- clares; 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
fulftlls his obligation, delay by the other begins.43
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.44
Art. 1171. Responsibility arising from fraud is demand-
able in all obligations. Any waiver of an action for future fraud is void.45
Art. 1172. Responsibility arising from negligence in the
performance of every kind of obligation is also demandable,
but such liability may be regulated by the courts, according to the
circumstances.46
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 circum-
stances 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.
55
is to be observed in the performance, that which is expected
of a good father of a family shall be required.47
Breach of Obligations. — In general, the breach of an ob- ligation may be either
voluntary or involuntary. It is voluntary if the debtor or obligor in the performance
of his obligation is guilty of
default (mora), or fraud (dolo), or negligence (culpa), or in any man-
ner contravenes the tenor thereof.48 It is involuntary if he is unable
to comply with his obligation because of an event which cannot be
foreseen, or which, though foreseen, was inevitable.49 In the ftrst he is liable for
damages, in the second he is not.
Voluntary Breach Through Default or Mora. — The ftrst kind of voluntary breach of
an obligation regulated by the Civil Code is that which takes place by reason of
default or mora. Default or
mora signiftes the idea of delay in the fulftllment of an obligation
with respect to time.
There are three kinds of default or mora. They are:
(1) Mora solvendi or the delay of the obligor or debtor to perform his obligation.
This delay is called mora solvendi ex re when the obligation is an obligation to give
or mora solvendi ex persona when the obligation is an obligation to do.
(2) Mora accipiendi or the delay of the obligee or creditor to accept the delivery
of the thing which is the object of the obligation.
(3) Compensatio morae or the delay of the parties or obligors in reciprocal
obligations.50
There are three requisites which should be present in order
that the obligor or debtor may be considered in default. They are:
(1) The obligation is demandable and already liquidated;
(2) The obligor or debtor delays performance; and
 (1) The creditor requires the performance judicially or extra-
judicially. (Aerospace Chemical Industries, Inc. vs. CA, 315 SCRA 94.)
In the case of Bricktown Devt. Corp. vs. Amor Tierra Devt. Corp., 239
SCRA 126 (1994), the Court ruled that a grace period is
not an obligation of the debtor but a right. It must not be likened to an
obligation the non-payment of which under Art. 1169 would generally still
require judicial or extrajudicial demand before default can arise. When
unconditionally conferred, it is effective without further need of demand either
for the payment of the obligation or for honoring the right.
Idem; Default in positive obligations. — In obligations
to give or to do (positive obligations), the obligor or debtor incurs
in delay from the time the obligee or creditor demands from him
the fulftllment of the obligation.51 This demand may be judicial or
extrajudicial. It is judicial if the creditor ftles a complaint against the debtor for
the fulftllment of the obligation; it is extrajudicial if the creditor demands from the
debtor the fulftllment of the obligation either orally or in writing. Whether the
demand is judicial or extrajudicial, if the obligor or debtor fails to fulftll or perform
his
obligation, he is in mora solvendi, and therefore, liable for damages. The
signiftcance of this rule may be illustrated by the following problem:
On October 1, 1976, A borrowed P10,000 from B evidenced by a promissory
note whereby he undertook to pay the indebtedness on October 1, 1978. On
October 1, 1980, B brought an action against A for the payment of the
obligation as well as legal interest from the date of maturity by way of damages.
There is no evidence that any demand for payment was ever made prior to the
presentation of the complaint. From what time shall the legal interest be
computed
— shall it be computed from October 1, 1978, when the obligation became due
and demandable, or from October 1, 1980, when the complaint was ftled?
According to the decided cases, the interest shall be computed from October 1,
1980, when the complaint was ftled, because it was only then that the debtor had
incurred in delay.52
56
The result would be different had the creditor made an extrajudicial demand
upon the debtor on October 1, 1978, when the obligation became due and
demandable, or soon thereafter. In such case, the legal interest would have to be
computed from such date.
Idem; id. — When demand is not necessary. — However,
demand by the creditor is not necessary in order that delay may exist in the
following cases:
(1) When the obligation or the law expressly so declares. 53 Attention must
be called to the fact that what the law means is that the obligation or the law
itself must expressly declare that the demand is not necessary in order that
the debtor shall incur in delay. This may be illustrated by the following
examples:
Let us assume that D borrowed P20,000 from C on Dec. 5, 1976. He executed
a promissory note promising to pay the indebtedness on Dec. 5, 1978. Upon the
arrival of the designated date for payment, is it necessary that C shall make a
demand upon D for payment in order that the latter shall incur in delay?
Evidently, such a demand is necessary. In order that the exception stated in No.
1 of
the second paragraph of Art. 1169 shall apply, it is indispensable
that the obligation itself must expressly declare that “demand is not
necessary in order that D shall incur in delay” or that “D shall incur
in delay if he does not pay the obligation upon the arrival of the designated date
for payment.’’54
Let us, however, assume that A and B entered into a contract of
partnership for the purpose of buying and selling textbooks, with the former as
capitalist partner and the latter as industrial partner. It was agreed that A shall
contribute P20,000 to the common fund on January 5, 1980. Upon the arrival of
the designated date for payment, is demand necessary in order that A shall incur
in delay? In this case, such a demand is not necessary in order that A shall incur
in delay. According to Art. 1788 of the Civil Code, where one
of the partners who has undertaken to contribute a sum of money
to the common fund at a specifted date fails to do so, he becomes
a debtor of the partnership not only for the amount which he has
promised to contribute but also for interest and damages from the
time he should have complied with his obligation.
(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.55 The basis of this
exception is the fact that the designation of the time is of such fundamental
importance in the fulftllment of the obligation that it would be logical to assume
that the intention of the parties was to make fulftllment of the obligation upon
the arrival of such designated time an essential part of the contract. In other
words, the time element for the fulftllment of the obligation is of the essence of the
contract. Therefore, it must be established that the designation of the time when
the obligation shall be fulftlled was a controlling motive for the execution of the
contract. This can be inferred from the nature and circumstances of the
obligation.56 Thus, where in the contract of sale entered into between plaintiff
and defendant there is a stipulation that the machinery which is the object of the
sale was already on the way from the United States to Manila, but it is
established that it was actually shipped several days after the execution of the
contract and, as a consequence, plaintiff was unable to deliver it within a
reasonably short time to the defendant, it was held that the plaintiff has already
incurred in delay since, undoubtedly, the representation that such machinery was
already on the way was one of the determining elements of the contract.
Consequently, the subsequent refusal of the defendant to accept the delivery is
justifted.57
(3) When demand would be useless, as when the obligor has
rendered it beyond his power to perform.58 Thus, if A, for instance, has promised
to deliver his automobile to B on the 15th day of November, 1980, but a few days
before such date, the automobile was completely destroyed through his fault,
and the fact of its destruction was known to B, demand by the latter would be
useless.
57
In such case, A will incur in delay without the need of any demand from B.
Idem; Default in negative obligations. — The obligor can
not possibly incur in delay in negative obligations (not to do). Ac- cording to
Manresa, these obligations have a peculiarity of their own which the law does not
show but which is evident from their spe- cial nature. Fulftllment and violation
are possible, but not default or mora. This peculiarity is what differentiates this
class of obligations from positive obligations (to give and to do).59
Idem; Default in reciprocal obligations. — Reciprocal obli-
gations are those which are created or established at the same time,
out of the same cause, and which result in mutual relationships of
creditor and debtor between the parties. These obligations are con- ditional in the
sense that fulftllment of an obligation by one party depends upon the fulftllment of
the obligation by the other. Thus, in a contract of sale of an automobile for
P54,000, the vendor is obliged to deliver the automobile to the vendee, while the
vendee is obliged to pay the price of P54,000 to the vendor. It is clear that the
vendor will not deliver the automobile to the vendee unless the latter will pay the
price, while the vendee will not pay the price to the vendor unless the latter will
deliver the automobile. Hence, in reciprocal ob-
ligations, the general rule is that fulftllment by both parties should
be simultaneous or at the same time. There are, however, cases in which
different dates for performance or fulftllment of the recipro- cal obligations may
be ftxed by the parties, in which case, the rule stated in the ftrst paragraph in
Art. 1169 shall apply.60
The rule then is that in reciprocal obligations, one party incurs
in delay from the moment the other party fulftlls his obligation,
while he himself does not comply or is not ready to comply in a
proper manner with what is incumbent upon him.61 If neither party complies or
is ready to comply with what is incumbent upon him,
the default of one compensates for the default of the other. In such
case, there can be no legal delay. These rules may be illlustrated by the
following example: A sold his automobile to B for P30,000. They agreed that
delivery and payment shall be made on the 15th
 of November, 1980. On that date, A was not ready to deliver the automobile,
neither was B ready to pay. In such case, neither party has incurred in delay. If
A, however, delivered or was ready to deliver the automobile, but B did not pay
or was not ready to pay, then B is said to have incurred in delay.62
Idem; id. — Effect of default. — Once the obligor or debtor has incurred
in delay, he can be held liable by the obligee or creditor for damages. 63 This
liability subsists even if the thing which consti- tutes the object of the obligation
may have been lost or destroyed through a fortuitous event.64
If the obligation consists in the payment of a sum of money, and the debtor
incurs in delay, the indemnity for damages, there being
no stipulation to the contrary, shall be the payment of the interest
agreed upon, and in the absence of stipulation, the legal interest. 65 Interest due
shall earn legal interest from the time it is judicially
demanded, although the obligation may be silent upon this point. 66
In Malayan Insurance Co., Inc. vs. IAC, 146 SCRA 45, the
Supreme Court reiterated the rule that a debtor who is in delay
(default) is liable for damages, in the form of interest.
The Supreme Court ruled in the case of Llorente, Jr. vs. Sandiganbayan, 287
SCRA 382 (1998) that the provisions under
Title XV of the Civil Code on Damages govern in determining the
measure of recoverable damages. It is fundamental in the law on
Damages that one who is injured by a breach of a contract, or by a
wrongful act or omission, shall have a fair and just compensation
commensurate to the loss sustained as a consequence of the
defendant’s act.
Voluntary Breach Through Fraud or Dolo. — The second kind of
voluntary breach of an obligation regulated by the Civil Code is that which takes
place by reason of fraud or dolo. According to Manresa, fraud or dolo consists
in the conscious and intentional
58
proposition to evade the normal fulftllment of an obligation.67 This type of
fraud, which is present during the performance of
an obligation, must not be confused with the causal or incidental
fraud, which is present at the time of the birth of an obligation. Under our legal
system, fraud in general may be classifted into civil
and criminal fraud. Civil fraud, in turn, may be classifted into the following: first,
the fraud or dolo in the performance of an obligation;68 and second, the fraud or dolo
in the constitution or establishment of
an obligation.69 The two may be distinguished from each other as follows:
(1) The ftrst is present only during the performance of a pre- existing
obligation, while the second is present only at the time of the birth of the
obligation.
(2) The ftrst is employed for the purpose of evading the normal fulftllment
of an obligation, while the second is employed for the purpose of securing the
consent of the other party to enter into the contract.
(3) The ftrst results in the nonfulftllment or breach of the
obligation, while the second, if it is the reason for the other party
upon whom it is employed for entering into the contract, results in
the vitiation of his consent.
(4) The ftrst gives rise to a right of the creditor or obligee to
recover damages from the debtor or obligor, while the second gives
rise to a right of the innocent party to ask for the annulment of the
contract if the fraud is causal or to recover damages if it is incidental.
Thus, if A engages to tow a launch belonging to B from Iloilo to Manila,
using a steamer for that purpose, and on the way the launch is cast adrift and
lost, Art. 1170, in relation to Art. 1171, is applicable. B can hold A liable for
damages.70 On the other hand, if a certain applicant for an insurance substitutes
another person for himself during the medical examination, it is evident that
there has been causal fraud or dolo causante in securing the consent of the
Arts. 1170-1173 OBLIGATIONS
insurance company which will entitle the latter to ask for annulment of the
contract.71
Idem; Effect of fraud. — If there is a breach or non-fulftll- ment of the
obligation by reason of fraud or dolo on the part of the obligor or debtor, he can be
held liable for damages. As a ground for damages, malice or dishonesty is
implied. It cannot cover cas-
es of mistake and errors of judgment made in good faith. Fraud or
dolo is synonymous to bad faith. (O’leary Macondray & Co., 45 Phil. 812 [1924].)
The liability is expressly recognized by the provisions
of Arts. 1170 and 1171 of the Code. It is also a rule that the liabil-
ity cannot be waived or renounced. It must be noted, however, that what is
prohibited is the waiver or renunciation which is made in advance or in
anticipation of the fraud, and not that which is made after the fraud has already
been committed. In other words, under
Art. 1171, what is prohibited is the renunciation of the action for a
fraud which has not yet been committed.72
Thus, waiver for future fraud is contrary to law and public
policy. As such, said waiver is void. But waiver for a past fraud is
valid since such waiver can be deemed an act of generosity. Further, what is
renounced is the effect of fraud, more particularly the right of the party to
indemnity.
What is the extent of damages which the obligee or creditor can recover from
the obligor or debtor in case of breach or nonfulftllment of the obligation by reason
of fraud or dolo? According to the law on
damages in the Civil Code, it shall comprehend all damages which may be
reasonably attributed to the breach or nonfulftllment of the
obligation, regardless of whether such consequences are natural or
unnatural, probable or improbable, foreseeable or unforeseeable. 73
In addition to such damages, the obligee or creditor can also recover moral and
exemplary damages.74 Moral damages may be recovered
in addition to other damages. (Far East Bank & Trust Co. vs. Court of Appeals,
59 SCAD 253, 241 SCRA 671 [1995].)
Voluntary Breach Through Negligence or Culpa. — The third kind of
voluntary breach of an obligation regulated by the Civil
59
NATURE AND EFFECT OF OBLIGATIONS Arts. 1170-1173
Code is that which takes place by reason of the negligence or culpa
of the debtor or obligor. It 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. 75 From this
deftnition, it is evident that negligence is simply the absence of due care required
by the nature of the obligation.76 It is a relative or comparative, not an absolute
term, and its application depends upon the situation of the parties and the degree
of care and vigilance which the circumstances reasonably require. Where the
danger is great, a high degree of care is necessary, and the failure to observe it is a
want of ordinary care under the circumstances.77 It is in
each case practically a question of fact whether the proper degree of
care has been exercised taking into consideration what a reasonable
and prudent man would have done under the circumstances. 78 Thus, according
to the second paragraph of Art. 1173, if the law
or contract does not state the diligence which is to be observed in
the performance of the obligation, that which is expected of a good
father of a family shall be required. Hence, the law has adopted the standard
supposed to be supplied by the imaginary conduct of the discreet pater familias
of the Roman Law.79
It is, therefore, clear that the degree of care that must be observed by the
obligor in the performance of his obligation shall
depend not only upon the nature of the obligation, but also upon the
circumstances of persons, time and place. In other words, there are
as many degrees of care as there are obligations.
Idem; Kinds of negligence. — Negligence or culpa may be
either civil or criminal. The ftrst is governed by Arts. 1170, 1172,
1173, and other provisions of the New Civil Code, while the second is governed
by Art. 365 of the Revised Penal Code.
Civil negligence, in turn, may be either culpa contractual
or culpa aquiliana (quasi-delicts). Using the general deftnition of negligence
enunciated in Art. 1173 as basis, the ftrst may be deftned as the fault or
negligence of the obligor by virtue of which he is
unable to perform his obligation arising from a pre-existing contract,
Arts. 1170-1173 OBLIGATIONS
(1977 Bar Problem)
because of the omission of the 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. The second, on the other hand, may
be deftned as the fault or negligence of a person,
who, because of the omission of the diligence which is required by
the nature of the obligation and which must correspond with the
circumstances of the persons, of the time and of the place, causes
damage to another.
From the above deftnitions, it is clear that whether the negli-
gence is culpa contractual or culpa aquiliana, the provision of Art.
1173 of the Civil Code applies. The negligence of the defendant in
both cases is characterized by 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. The simi- larity,
however, ends there. They are different with respect to an- tecedents and
consequences. They may be distinguished from each other as follows:
(1) As regards the character of the negligence of the defendant: In culpa
contractual, the negligence of the defendant is merely an
incident in the performance of an obligation; in culpa aquiliana it is
substantive and independent.
(2) As regards the relationship of the parties: In the ftrst there is always a
pre-existing contractual relation; in the second there may or may not be a pre-
existing contractual relation.
(3) As regards the source of the obligation: In the ftrst the
source of the obligation of the defendant to pay damages to the
plaintiff is the breach or nonfulftllment of the contract; in the second
the source is the defendant’s negligent act or omission itself.
(4) As regards the proof required for recovery: In the ftrst proof
of the existence of the contract and of its breach or nonfulftllment
is sufftcient prima facie to warrant a recovery; in the second the
negligence of the defendant must be proved.
(5) As regards the availability of due diligence as a defense:
In the ftrst proof of diligence in the selection and supervision of
employees is not available as a defense; in the second it is.
Problem — Taxi driver D, driving recklessly, killed pedestrian P and his
60
obligation of D and of his employer to P and to Y, and the defense available to the employer.
Answer — There are three overlapping sources of the obligation of D and
of his employer. They are:
(1) Under the Revised Penal Code: The heirs of P and Y may proceed
against D and his employer under the Penal Code. In this case, the source of the
liability of D and of his employer is the crime committed by D (culpa criminal).
The liability of D is
direct and primary (Art. 100, RPC); the liability of his employer
is subsidiary (Art. 103, RPC). The latter cannot relieve himself of liability by
proving due diligence of a good father of a family. This is so because of the very
nature of his obligation.
(2) Under the Civil Code:
(a) Heirs of P: The heirs of pedestrian P may proceed against both D
and his employer, or against the latter only. In this case, the source of the
liability of D and his employer is the quasi-delict (culpa aquiliana) committed
by D (Arts. 2176, 2180, CC). The liability of both is direct and primary. D’s
employer can relieve himself of liability by proving due diligence of a good
father of a family in the selection and supervision of his drivers (Art. 2180,
CC).
(b) Heirs of Y: On the other hand, the heirs of Y may proceed against
D’s employer only. The source of the liability of D’s employer, in this case, is
the breach of his contract of carriage with Y (culpa contractual). His liability is
direct and primary. He cannot relieve himself of liability by proving due
diligence of a good father of a family (Art. 1759, CC). This is so because under
our law on common carriers, we do not adhere to the principle of respondeat
superior; we adhere to the principle that there is always an implied duty of a
common carrier to carry the passenger safely to his place of destination.
However, although not available as a defense, such proof of due diligence may
serve to mitigate the employer’s liability.
Idem; Negligence distinguished from fraud. — Negligence
or culpa, especially in relation to obligations, signiftes an act or
omission which is voluntary in character by virtue of which another
person suffers damage or injury due to a failure to observe the
diligence which is required by the nature of the obligation and which
must correspond with the circumstances of persons, time and place. It should be
distinguished from fraud or dolo which is the conscious
and intentional proposition to evade the normal fulftllment of the
 Arts. 1170-1173 OBLIGATIONS
obligation. The distinguishing element, therefore, is the element of intention. If
there is intent to cause damage or injury, there is
dolo; if there is merely abandonment, inattention, carelessness, or
lack of diligence, there is culpa.80 It must be observed, however, that
when negligence shows bad faith the rules on fraud or dolo shall govern.81 In other
words, when the negligent act or omission of the obligor while performing his
obligation is so gross that it amounts to a wanton attitude on his part, the laws
governing the liability of an obligor in case of fraud shall then apply. In such a
case, the boundary line between negligence and fraud practically disappears.
Idem; Test of negligence. — The test by which we can determine the
existence of negligence in a particular case may be stated as follows: Did the
defendant in doing the alleged negligent
act use the reasonable care and caution which an ordinarily prudent
person would have used in the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the standard supposed to be supplied by
the imaginary conduct of the discreet pater familias of the Roman Law.82
Cangco vs. Manila Railroad Co.
38 Phil. 763
The records show that plaintiff, who was a passenger in a train
belonging to the defendant company, alighted from the said train while it was
still moving before coming to a complete stop. In so alighting, he stepped upon
a sack of watermelons and as a result he fell violently on the platform.
Because of the violence of his fall, he rolled from the platform and was drawn
under the moving car, as a result of which his right arm was badly crashed
and lacerated. In this action for damages commenced by the plaintiff against
the defendant company, the former contends that the proximate cause of the
accident was the negligence of the latter in allowing the sack of watermelons
to be placed in its platform where passengers may alight, while the latter
contends that the proximate cause was the negligence of the former in
alighting while the train was still moving. Granting that the defendant
company was negligent in allowing the sack of watermelons to be placed in
its platform, was the
61
NATURE AND EFFECT OF OBLIGATIONS Arts. 1170-1173
plaintiff also negligent in alighting from the train while it was still moving?
Held: “The test by which to determine whether the passenger has been guilty
of negligence in attempting to alight from a moving railway train, is that of
ordinary or reasonable care. It is to be considered whether an ordinarily prudent
person, of the age, sex and condition of the passenger, would have acted as the
passenger acted under the circumstances disclosed by the evidence. This care
has been deftned to be not the care which may or should be used by the prudent
man generally, but the care which a man of ordinary prudence would use, under
similar circumstances, to avoid injury. (Thompson, Commentaries on Negligence,
Vol. 3, Sec. 2010.) Or, if we prefer the mode of exposition used by this court in
Picart vs. Smith (37 Phil. Rep. 809), we may say that the test is this: Was there
anything in the circumstances surrounding the plaintiff at the time he alighted
from the train which would have admonished a person of average prudence that
to get off the train under the conditions then existing was dangerous? If so, the
plaintiff should have desisted from alighting; and his failure to so desist was
contributory negligence.
“As the case now before us presents itself, the only fact from which a
conclusion can be drawn to the effect that the plaintiff was guilty of contributory
negligence is that he stepped off the car without being able to discern clearly the
condition of the platform and while the train was yet slowly moving. In
considering the situation thus presented, it should not be overlooked that plaintiff
was ignorant of the fact of the obstruction which was caused by the sacks of
watermelons piled on the platform. The place was dark, or dimly lighted.
Furthermore, the plaintiff was possessed of the vigor and agility of young manhood,
and it was by no means so risky for him to get off while the train was yet moving as
the same act would have been in an aged or feeble person. In determining the
question of contributory negligence in performing such act — that is to say,
whether the passenger acted prudently or recklessly — the age, sex and physical
condition of the passenger are circumstances necessarily affecting the safety of
the passenger, and should be considered. Women, it has been observed, as a
general rule, are less capable than men of alighting with safety under such
conditions, as the nature of their wearing apparel obstructs the free movement of
the limbs. Again, it may be noted that the place was perfectly familiar to the
plaintiff as it was his daily custom to get on and off the train at this station. There
could, therefore, be no uncertainty in his mind with regard
Arts. 1170-1173 OBLIGATIONS
liability of the carrier to an agreed valuation unless the shipper
declares a higher value and pays a higher rate of freight.
either to the length of the step which he was required to take or the character
of the platform where he was alighting. Our conclusion is that the conduct of
the plaintiff in undertaking to alight while the train was yet slightly under
way was not characterized by imprudence and that, therefore, he was not
guilty of contributory negligence.”
Idem; Effects of negligence. — If the debtor or obligor
is unable to comply with his obligation because of his fault or
negligence, the creditor or obligee can hold him liable for damages.83
This liability subsists even if he has been acquitted in a criminal
action charging him with a criminal offense based on his negligent
act or omission.84
It must be observed, however, that Art. 1172 which enunciates the principle
of the demandability of the responsibility of the obligor in case of negligence is
different from Art. 1171 which also enunciates the same principle in case of fraud
in the sense that in the former, nothing is said with regard to the renunciation
or waiver of the action, while in the latter, it is stated that any waiver of an
action for future fraud is void. Consequently, may an action for negligence be
waived? There is no question that if the action is based on a negligent act or
omission which has already happened, the action may be waived since it can also
be done in the case of fraud and negligence is certainly not as serious as fraud.
The question is with respect to an action for future negligence. Can it be waived?
Authorities agree that it can be waived, unless the nature of the obligation and
public policy should require extraordinary diligence as in the case of common
carriers.85 Thus, the Supreme Court in the case of Heacock vs. Macondray & Co.,86
stated:
“Three kinds of stipulation have often been made in a bill of lading. The
ftrst is one exempting the carrier from any and
all liability for loss or damage occasioned by its own negligence. The second is
one providing for an unqualifted limitation of such
liability to an agreed valuation, and the third is one limiting the
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NATURE AND EFFECT OF OBLIGATIONS Arts. 1170-1173
According to an almost uniform weight of authority the ftrst and
second kinds of stipulations are is valid as being contrary to public policy, but
the third is valid and enforceable.”
In the case of Southeastern College, Inc., vs. Court of Appeals, Juanita de
Jesus Vda. De Dimaano, et al., (July 10, 1998, 292 SCRA 422), the Supreme
Court observed that at the outset, it bears emphasizing that a person claiming
damages for the negligence of another has the burden of proving the
existence of fault or
negligence causative of his injury or loss. The facts constitutive of negligence
must be afftrmatively established by competent evidence,
not merely by presumptions and conclusions without basis in fact. Private
respondents, in establishing the culpability of petitioner, merely relied on the
aforementioned report submitted by a team which made an ocular inspection of
petitioner’s school building after the typhoon. As the term imparts, an ocular
inspection is one that is conducted by means of actual sight or viewing. What is
visual to the eye though, is not always reflective of the real cause behind. For
instance, one who hears a gunshot and then sees a wounded person, cannot
always deftnitely conclude that a third person shot the victim. It could have been
self-inflicted or caused accidentally by a stray bullet. The relationship of cause
and effect must be clearly shown.
Idem; id. — Regulatory power of the courts. — Under Art.
1172, liability arising from negligence in the performance of every
kind of obligation may be regulated by the courts. Consequently, the court may
increase or decrease the liability of the party at fault depending upon the
circumstances of each case. Thus, the court may take into consideration the good
or bad faith of the obligor (defendant) or the conduct of the obligee (plaintiff) when
the damage was incurred.
Idem; id.; id. — Effect of good faith. — If the debtor or obligor has acted
in good faith, he shall be liable only for natural
and probable consequences of the breach of the obligation and which
the parties have foreseen or could have reasonably foreseen at the
time the obligation was constituted.87
 Arts. 1170-1173 OBLIGATIONS
Idem; id.; id. — Effect of bad faith. — If the negligence of the obligor
shows bad faith, then, by express provision of Art. 1173,
the provisions of Arts. 1171 and 2201, par. 2, shall apply. It is in this case that the
boundary line, at least with regard to effects, between negligence and fraud
disappears altogether. Hence, the obligor
can be held responsible for all damages which may be reasonably
attributed to the nonperformance of the obligation. 88 Furthermore, any waiver or
renunciation which is made in anticipation of such liability is null and void.89
Idem; id.; id. — Effect of contributory negligence. — If there was
contributory negligence of the obligee or creditor, the effect is to reduce or
mitigate the damages which he can recover from the obligor or debtor as a result
of the breach of the obligation. This doctrine has always been consistently upheld
by the Supreme Court.90 Attention, however, must be called to the fact that if
the
negligent act or omission of the obligee concurred with the negligent
act or omission of the obligor in causing the injury complained of,
in other words, if the negligent act or omission of the obligee was
a proximate cause of the event which led to the damage or injury
complained of, he cannot recover. It is, therefore, of the utmost importance to
determine whether the negligence of the obligee or creditor was a proximate
cause of the accident or event which led to the injury or merely contributory to his
own injury. The test is given in the following case:
Rakes vs. Atlantic Gulf and Paciftc Co.
7 Phil. 359
This is an action to recover damages. The plaintiff, one of a gang of
eight Negro laborers in the employment of the defendant, was at work
transporting rails from a barge in the harbor to the company’s yard near the
Malecon in Manila. The rails lay upon two crosspieces secured to the cars, but
without sidepieces or guards to prevent them from slipping off. At a certain
spot at or near the water’s edge the track sagged, the tie
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NATURE AND EFFECT OF OBLIGATIONS Arts. 1170-1173
broke, the car canted, the rails slid off and caught the plaintiff, breaking his leg,
which was afterwards amputated at about the knee. The cause of the sagging of
the track is admitted to be the dislodging of the crosspiece under the stringer by
the water of the bay raised by a recent typhoon. The superintendent of the
company attributed it to the giving way of the block laid in the sand. No effort
was made to repair the injury at the time of the occurrence. According to the
plaintiff’s witnesses, a depression of the track was apparent to the eye, and a
fellow workman of the plaintiff swears that the day before the accident he called the
attention of the foreman to it and asked him to have it repaired. It is also admitted
that there was a prohibition imposed by the defendant company against walking
by the side of the car and that the plaintiff was walking by the side of the car
when the rails slid off. The question now is — what effect is to be given to such act
of contributory negligence?
Held: “Difftculty seems to be apprehended in deciding which acts of the
injured party shall be considered immediate causes of the accident. The test is
simple. Distinction must be
made between the accident and the injury, between the event
itself, without which there could have been no accident, and
those acts of the victim not entering into it, but contributing
to his own proper hurt. For instance, the cause of the accident under review was
the displacement of the crosspiece or the failure to replace it. This produced the
event giving occasion for damages that is the sinking of the track and the sliding of
the iron rails. To this event, the act of the plaintiff in walking by
the side of the car did not contribute although it was an element of the damage
which came to himself. Had the crosspiece been out of place wholly or partly
through his act or omission of duty, that would have been one of the determining
causes of the event or accident, for which he would have been responsible. Where
he contributes to the principal occurrence, as one of its determining factors, he
cannot recover. Where, in conjunction with the occurrence, he contributes only to
his own injury, he may recover the amount that the defendant responsible for the
event should pay for such injury, less a sum deemed a suitable equivalent for his
own imprudence.
“Accepting, though with some hesitation, the judgment of the trial court,
ftxing the damage incurred by the plaintiff at 5,000 pesos, the equivalent of
2,500 dollars, United States money, we deduct therefrom 2,500 pesos, the amount
fairly attributed to his negligence, and direct judgment to be entered in favor of
the plaintiff for the resulting sum of 2,500 pesos, with
 Art. 1174 OBLIGATIONS

costs to both instances and ten days thereafter let the case be remanded to the
court below for proper action.”

Idem; id.; id. — Other circumstances. — Besides the

circumstances referred to in the preceding sections, the courts may
also equitably mitigate the damages in the following instances:
(1) Where the plaintiff himself has contravened the terms of
the contract;
(2) Where the plaintiff has derived some beneftt as a result of the contract;
(4) and
(3) In cases where exemplary damages are to be awarded,
where the Where
defendant
the acted upon have
loss would the advice of counsel;
resulted in any event;
(5) Where upon the ftling of the action, the defendant has
done his best to lessen the plaintiff’s loss or injury. 91
Voluntary Breach Through Contravention of Tenor of
Obligation. — Under Art. 1170 of the Civil Code, not only debtors guilty of
fraud, negligence or default in the performance of obligations are decreed
liable; in general, every debtor who fails
in the performance of his obligations is bound to indemnify the
creditor for the damages caused thereby. The phrase “in any manner contravene
the tenor” of the obligation includes not only any illicit act which impairs the
strict and faithful fulftllment of the obligation, but also every kind of defective
performance.92

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