Obligations

• Obligation

  A juridical necessity to give, to do or not to do
• Essential Elements or Requisites of an Obligation

  • An active subject, who has the power to demand prestation, also known as the obligee or creditor
  • A passive subject, who is bound to perform the prestation, also known as the obligor or debtor
  • Object or prestation, which is the promise or particular conduct to be performed in the performance of an obligation, and may consist of giving, doing or not doing a thing
• Requisites of an object or prestation of an obligation

  • It must be possible, physically and juridically
  • It must be determinate, or, at least, determinable according to pre-established elements or criteria
  • It must have possible equivalent in money
• Efficient cause

  The tie which binds the parties to the obligation, also known as juridical tie or vinculum
• Examples of juridical tie or vinculum

  • Relation established by law
  • Relation established by contract
  • Relation established by quasi-contract
  • Relation established quasi-delict or culpa aquiliania or tort
  • Relation established by crime or delict
• Types of Obligation based on the definition

  • Positive obligation refers to an obligation which consists of giving or doing something
  • Real obligation refers to an obligation which consists to the delivery or giving of personal or real object
  • Personal obligation refers to an obligation which consists of doing a particular prestation but not delivery of an object
  • Negative obligation refers to an obligation which consists of abstaining from some act
• Distinctions between Civil Obligation and Natural Obligation

  • Civil obligations derive their binding force from positive law or substantive law, while natural obligations derive their binding effect from equity and natural justice
  • Civil obligations can be enforced by court action or the coercive power of public authority, while the fulfilment of natural obligations cannot be compelled by court action but depends exclusively upon the good conscience of the debtor
  • Voluntarily fulfilment of natural obligation by the debtor will preclude him from asking for reimbursement from the creditor of the amount he has voluntarily paid
• Sources of civil obligation demandable in a court of law

  • Law refers to the principles and regulations established in a community by some authority and applicable to its people, whether in the form of legislation or of custom and policies recognized and enforced by judicial decision
  • Contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service
  • Quasi-contract is a juridical relation which arises from certain lawful, voluntary and unilateral acts, to the end that no one may be unjustly enriched or benefited at the expense of another
  • Quasi-delict or culpa aquiliana or torts refers to a source of an obligation wherein a person by act or omission causes damage to another, there being fault or negligence
  • Crime or delict refers to any act or omission which is punishable by law
• Kinds of Thing or Object

  • A generic or indeterminate thing is only indicated by its kind, without being designated and distinguished from others of the same kind
  • A determinate or specific thing is one that is individualized and can be identified or distinguished from others of its kind
• Incidental or accessory obligations in an obligation to deliver a determinate thing

  • Obligation to preserve the determinate thing with due care
  • Obligation to deliver the fruits of the determinate thing if the fruits occur after the obligation to deliver the determinate thing arises
  • Obligation to deliver the accessions and accessories of the determinate thing
• Kinds of fruits under the Civil Code

  • Natural fruits are the spontaneous products of the soil, and the young and other products of animals
  • Industrial fruits are those produced by lands of any kind through cultivation or labor
  • Civil fruits are fruits as a result of civilization or fruit arising out of a juridical relation or contracts such as are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income
• Types of Rights of Creditor over the thing and its fruits (Moment the right is obtained)

  • A real right is the power belonging to a person over a specific thing, without a passive subject individually determined, against whom such right may be personally exercised
  • A personal right is the power belonging to one person to demand of another, as a definite passive subject, the fulfillment of a prestation to give, to do or not to do
• General remedies available to creditor when the debtor fails to comply with his obligation

  • Action for specific performance with damages
  • Action to rescind the obligation with damages
  • Action for damages
• Remedies of the creditor in the case the debtor fails to comply with his obligation to deliver a determinate or specific thing

  • Action for specific performance in addition to damages under Article 1170
  • Action for damages if action for specific performance becomes legally impossible
• Remedies of the creditor in the case the debtor fails to comply with his obligation to deliver an indeterminate or generic thing

  • Action for specific performance with damages
  • He may ask the obligation to be complied with by a third person at the expense of the debtor with damages
• Remedy of the creditor if the debtor fails to do the prestation in obligation to do

  • The creditor or third person may do it in a proper manner at the expense of the debtor
• In an obligation to do whereby only the debtor can do the thing, remedy of the creditor if the debtor fails to do the prestation

  • Action for indemnification for damages
• In an obligation to do, remedy of the creditor in case the debtor did it in contravention of the tenor of the obligation or did it poorly

  • The creditor or third person may do it in a proper manner or it may be decreed that what had been poorly done be undone at the expense of the debtor
• In an obligation consisting in not doing, remedy of the creditor in case the debtor does what has been forbidden him

  • It shall be undone at the expense of debtor with indemnification for damages
• Delay

  Default (Mora) refers to the non-fulfilment of the obligation with respect to time
• Requisites in order that the debtor may be in default or for debtor's delay or mora to exist

  • The obligation must be demandable and already liquidated
  • The debtor delays performance of the obligation
  • The creditor demands the performance either judicially or extrajudicially
• Exceptional instances when demand by the creditor shall not be necessary in order that delay may exist

  • When the obligation expressly so declares that demand is excused or waived
  • When the law expressly so declares that demand is excused or waived
  • 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
  • When demand would be useless, as when the obligor has rendered it beyond his power to perform
• Moment of delay in reciprocal obligation

  From the moment one of the parties fulfills his obligation
• Types of Delay or Default (Mora)

  • Mora solvendi - Debtor's delay
  • Mora accipiendi - Creditor's delay
• Effects of delay on the part of the debtor

  • The debtor becomes liable for damages for the delay
  • When it has for its object a determinate thing, the delay places the risk of the thing on the debtor
• Effects of the delay on the part of the creditor

  • The creditor becomes liable for damages
  • The debtor may relieve himself of the obligation by the consignation of the thing
  • The creditor bears the risk of the loss of the thing
  • The responsibility of the debtor for the thing is reduced and limited to fraud and gross negligence
  • All expenses for the preservation of the thing after the mora shall be chargeable to the creditor
• Compensatio morae

  Delay of both parties
• Effect of compensatio morae

  The delays of both parties are compensated or offset
• Grounds for damages in the performance of obligation under Article 1170 or Grounds for breach of contract

  • Fraud - Dolo refers to the deliberate and intentional evasion of the normal fulfilment of obligations
  • Negligence - Fault - Culpa 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 person suffers injury
  • Delay - Default - Mora refers to the non-fulfilment of the obligation with respect to time
  • Contravention of the tenor of obligation refers to illicit act which impairs the strict and faithful fulfilment of the obligation or every kind of defective performance
• Types of civil damages that may be awarded by Court

  • Liquidated damages are damages agreed upon by the parties to a contract, to be paid in case of breach thereof
  • Actual damages or compensatory damages are those pecuniary losses suffered and duly proved by the plaintiff
  • Temperate damages or moderate damages are more than nominal but less than compensatory damages
  • Nominal damages are damages adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him
• Additional damages to any of the mutually exclusive damages

  • Moral damages are damages awarded by reason of physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury
  • Exemplary damages or corrective damages are damages imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages
• Waiver of fraud

  • Future Fraud (Waiver of an action for future fraud is void)
  • Past fraud (Waiver of an action for past fraud may be considered valid)
• Degree of Diligence to be observed by Contracting Parties in the Performance of obligation

  • Diligence Required by Law
  • Contract of common carrier - Extraordinary diligence
  • Contract of bank deposits - Extraordinary diligence
  • Diligence Stipulated by the Contracting parties
  • The stipulation must be valid. Waiver of future fraud or future gross negligence is null and void
  • Ordinary diligence or diligence of a good father of a family or diligence of a reasonably prudent person
• Indemnifying the plaintiff

  The purpose is for any loss suffered by him
• Moral damages

  Damages awarded by reason of physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury
• Exemplary damages or corrective damages


  Damages imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages
• Waiver of fraud

  Past fraud (Waiver of an action for past fraud may be considered valid)<|>Future Fraud (Waiver of an action for future fraud is void)
• Degree of Diligence to be observed by Contracting Parties in the Performance of obligation

  • Diligence Required by Law
  • Contract of common carrier - Extraordinary diligence
  • Contract of bank deposits - Extraordinary diligence
  • Diligence Stipulated by the Contracting parties
  • Ordinary diligence or diligence of a good father of a family or diligence of a reasonably prudent person
• Principle on issuance of receipt

  The receipt of the principal by the creditor, without reservation with respect to the interest, shall give rise to rebuttable presumption that said interest has been paid<|>The receipt of a later installment of a debt without reservation as to prior installments, shall raise rebuttable presumption that such prior installments have been paid
• Rights of unpaid creditor to satisfy claims against the debtor

  • To levy by attachment and execution upon all the property of the debtor including garnishment of bank deposits, EXCEPT such as exempt by law from execution
  • To exercise all rights and actions of the debtor, EXCEPT such as are inherently personal to him (Accion subrogatoria)
  • To ask for the rescission of the contracts made by the debtor in fraud of his rights (Accion pauliana)
  • To file an action for damages against the third person who acquired the property of debtor in bad faith