CHAPTER I

• ARTICLE 1156 of the New Civil Code - An obligation is a juridical necessity to give, to do or not
to do. This article gives definition of OBLIGATION in its Passive Aspect where our law merely
stresses the duty 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.

• OBLIGATION - derived from the Latin word “obligatio” which means a “tying” or “binding.”
- It is a tie of law or a juridical bond by virtue of which one is bound in favor of another
to render something — and this may consist in giving a thing, doing a certain act, or
not doing a certain act.

• OBLIGATION by Manresa - a legal relation established between one party and another,
whereby the latter is bound to the fulfillment of a prestation which the former may demand of
him.”

• OBLIGATION IS A JURIDICAL NECESSITY - because in case of non-compliance, the courts of

justice may be called upon to enforce its fulfillment or, in default thereof, the economic value
that it represents.

Explanation: The debtor must comply with his obligation whether he likes it or not;
otherwise, his failure will be visited with some harmful or undesirable legal consequences.

• OBLIGATION NOT ENFORCED - people can disregard them with impunity or it may be only a
natural obligation.

• NATURE OF OBLIGATIONS (NATURAL vs. CIVIL)

a. CIVIL OBLIGATIONS - Obligations which give to the creditor or obligee a right of action in
courts of justice to enforce their performance.

Basis: Laws, Contracts, Quasi-Contracts

b. NATURAL OBLIGATION – not enforceable by law, because the law do not grant a right of
action to enforce their performance except only in case of voluntary fulfillment by the
debtor without which, the latter may not recover what has been delivered or rendered
by reason thereof.

Basis: They arise from equity and natural law, or fairness, and social duty rather
than from a legal mandate. (based on conscience)
• 4 ELEMENTS OF AN OBLIGATION:

1. PASSIVE SUBJECT - (called debtor or obligor or doer) or the person who is

bound to the fulfillment of the obligation; he who has a duty.

2. ACTIVE SUBJECT - (called creditor or oblige or receiver) or the person who is

entitled to demand the fulfillment of the obligation; he who has a right;

3. OBJECT or PRESENTATION - (subject matter of the obligation) or the

conduct required to be observed by the debtor. It may consist in giving,
doing, or not doing.

• Without the Presentation there is nothing to perform.

• Bilateral Obligations – where the parties are reciprocally debtors
and creditors.

4. JURIDICAL OR LEGAL TIE (Efficient Cause or Vinculum Juris) - which binds

or connects the parties to the obligation.

 How to determine the Tie in an Obligation - can easily be

determined by knowing the source of the obligation.

• GENERAL RULE IN OBLIGATION - the law does not require any form in
obligations arising from contracts for their validity or binding force. (no form in
obligation)

• OBLIGATION ARISED FROM OTHER SOURCES - do not have any form at all.

• DIFFERENCES BETWEEN OBLIGATION, RIGHT, AND WRONG

OBLIGATION RIGHT WRONG (Cause of

Action)
the act or performance the power which a an act or omission of one
which the law will person has under the party in violation of the
enforce law, to demand from legal right or rights of
 another any prestation. another, causing injury to
the latter

• SOURCES OF OBLIGATIONS (where Obligations arise)

1. LAW – obligation arise when they are imposed by the law itself, e.g.,
obligation to pay taxes; obligation to support one’s family.
• OBLIGATION ONLY ARISES IF THE LAW SAYS SO

2. CONTRACTS – obligations arise when they arise from the stipulation of the
parties. The obligation to repay a loan by virtue of an agreement.
• MEETING OF THE MINDS OF THE OBLIGOR AND OBLIGEE WHERE THE
OBLIGOR BINDS ITSELF TO THE OBLIGEE TO RENDER THE OBLIGATION

3. QUASI-CONTRACTS – obligations arise when they arise from lawful,

voluntary and unilateral acts and which are enforceable to the end that no
one shall be unjustly enriched or benefited at the expense of another

• This is the obligation to return money paid by mistake or which is

not due. In a sense, these obligations may be considered as arising
from law.

• Negotiorum Gestio (unauthorized management) - This takes place

when a person voluntarily takes charge of another’s abandoned
business or property without the owner’s authority. Therefore,
reimbursement must be made to the gestor for necessary and useful
expenses, as a rule.

• Solutio Indebiti (payment of what is not due) - This takes place

when something is received when there is no right to demand it, and
it was unduly delivered thru mistake. The recipient has the duty to
return it.
 (Example: If I let a storekeeper change my P50.00 bill and by error he
gives me P50.60, I have the duty to return the extra P0.60).

• Other Quasi-Contracts:
(a) When during a fire, flood, or other calamity, property is saved
from destruction by another person without the knowledge of the
owner, the latter is bound to pay the former just compensation. (Art.
2168, Civil Code).
(b) Any person who is constrained to pay the taxes of another shall be
entitled to reimbursement from the latter. (Art. 2175, Civil Code).

4. CRIMES OR ACTS OR OMISSIONS PUNISHED BY LAW (DELICTS) - when the

obligation arise from civil liability which is the consequence of a criminal
offense.

• The obligation of a thief to return the car stolen by him; the duty of
a killer to indemnify the heirs of his victim.

5. (kweysay) QUASI-DELICTS OR TORTS (Culpa Aquiliana) - when obligation

arise from damage caused to another through an act or omission, there
being fault or negligence, but no contractual relation exists between the
parties

• The obligation of the head of a family that lives in a building or a

part thereof to answer for damages caused by things thrown or
falling from the same. The obligation of the possessor of an animal to
pay for the damage which it may have caused.

• Examples
(a) While driving a car recklessly, I injured a pedestrian.
(b) While cleaning my window sill, my negligence caused a flower pot
to fall on the street, breaking the arms of my neighbor.

• Quasi-delict vs. Crime - A quasi-delict is a private wrong that arises

when a person, through fault or negligence, causes damage to
another without pre-existing contractual relations. A crime is an
offense against the state or society that violates criminal laws.
 Aims: In Quasi-delict, the aim of the obligation is to compensate the
victim for damages suffered due to another’s negligence or fault. In
Crimes, the aim is to punish and rehabilitate the offender and deter
others from committing similar acts.

• Liability for the Fault of Others - is an extension of the principle of

diligence and supervision. Those in positions of responsibility (such as
parents, employers, and guardians) must ensure that their
dependents or subordinates do not cause harm to others. Failure to
exercise proper supervision can lead to vicarious liability, unless due
diligence can be proven.

• Civil Liability Arising from Crime - under the Revised Penal Code
(RPC) of the Philippines, when a person commits a crime, they incur
civil liability to repair the damage caused to the offended party. This
is known as "civil liability ex delicto."

The Civil Liability arising from crime can be done through Restitution,
Reparation, and Indemnification.

• IF NOT ENUMERATED IN SOURCES OF OBLIGATION – there is NO OBLIGATION

because the enumeration in Article 1156 is EXCLUSIVE.

• CLASSIFICATIONS OF OBLIGATIONS IN CIVIL CODE

1. PURE AND CONDITIONAL

• Condition – a future and uncertain event, upon the happening of which, the
effectivity or extinguishment of an obligation (or rights) subject to it depends.

a. Pure Obligation - one which is not subject to any condition and no specific
date is mentioned for its fulfillment and is, therefore, immediately
demandable.
 Ex: I will pay you PHP 50,000 on February 1, 2025

Exception: A distinction must be made between the immediate demandability

of a pure obligation and its fulfillment by the obligor who may be granted by
the court a reasonable period for performance. The period remains pure even
where such period is fixed by the court.

b. Conditional Obligation - one whose consequences are subject in one way

or another to the fulfillment of a condition.

Ex: A company grants an employee a bonus, but only if the company reaches a
specific sales target.

2. WITH A PERIOD OR TERM - one whose consequences are subjected in one

way or another to the expiration of said period or term.

• Period - a future and certain event upon the arrival of which the obligation
(or right) subject to it either arises or is terminated. It is a day certain which
must necessarily come although it may not be known when, like the death of a
person.

PERIOD CONDITION
a certain event which must happen is an uncertain event;
sooner or later at a date known
beforehand, or at a time which cannot
be determined
refers only to the future, refer also to a past event unknown to
the parties;
merely fixes the time for the causes an obligation to arise or to
efficaciousness of the obligation. If cease.
suspensive, it cannot prevent the birth
of the obligation in due time; if
resolutory, it does not annul, even in
fiction, the fact of its existence
depends upon the will of the debtor depends upon the sole will of the
empowers the court to fix the duration debtor invalidates the obligation
thereof
Unless there is an agreement to the the happening of a condition has
OBLIGATION, the arrival of a period retroactive effect.
does not have any retroactive effect.

• Kinds of Period/Term
a. Suspensive - The obligation begins only from a day certain upon the
arrival of the period

b. Resolutory - The obligation is valid up to a day certain and terminates

upon the arrival of the period.

3. ALTERNATIVE AND FACULTATIVE

a. Alternative Obligation - one wherein various prestation’s are due but the
performance of one of them is sufficiently determined by the choice which,
as a general rule, belongs to the debtor.

Ex: D borrowed from C P10,000. It was agreed that D could comply with his
obligation by giving C P10,000, or a color television set, or by painting the
house of C.

b. Facultative Obligation - one where only one prestation has been agreed
upon but the obligor may render another in substitution.

Ex: I will give you my piano but I may give my television set as a substitute.

ALTERNATIVE FACULTATIVE
several prestations are due but only one prestation is due although
compliance with one is sufficient the debtor is allowed to substitute
another
 the right of choice may be given to the right to make the substitution is
the creditor or third person given only to the debtor
the loss of one or more of the the loss of the thing due
alternatives through a fortuitous extinguishes the obligation;
event does not extinguish the
obligation
the loss of one of the alternatives the loss of the thing due through
through the fault of the debtor his fault makes him liable, and the
does not render him liable, and loss of the substitute before the
where the choice belongs to the substitution through the fault of the
creditor, the loss of one alternative debtor does not render him liable
through the fault of the debtor
gives rise to liability.
the nullity of a prestation does not the nullity of the prestation agreed
invalidate the others, and the upon invalidates the obligation, and
debtor or creditor shall choose the debtor is not bound to choose
from among the remainder, the substitute.

• Alternative Obligations vs. Alternative Remedies

AO AR
a mere choice categorically and the choice of option generally
unequivocally made and then becomes conclusive only upon the
communicated by the person exercise of the remedy.
entitled to exercise the option
concludes the parties. The creditor
may not thereafter exercise any
other option, unless the chosen
alternative proves to be ineffectual
or unavailing due to no fault on his
part.

4. JOINT AND SOLIDARY

a. Joint Obligation - one where the whole obligation is to be paid or
fulfilled proportionately by the different debtors and/or is to be
demanded proportionately by the different creditors.
 •Words used to indicated Joint Liability - mancum, mancomunada;
mancomunadamente; pro rata; proportionately; pro rata, jointly;
conjoint; “we promise to pay” signed by two or more persons.1

b. Solidary Obligation - one where each one of the debtors is bound to

render, and/or each one of the creditors has a right to demand entire
compliance with the prestation.

• Characteristics of Solidary Obligation: unity of object and plurality of

ties.

• There is SO if: the obligation expressly so states; or the law requires

solidarity; or the nature of the obligation requires solidarity.
Solidary liability also exists when it is imposed in a final judgment against
several defendants.

Essence of SO: each and every one of the solidary creditors can demand
and each of the debtors must satisfy the same prestation, with the
resulting duty on the part of the creditor who received payment to pay
to each of his co-creditors what belongs to him, and the resulting right
on the part of the debtor who made payment to claim from his co-
debtors the share which corresponds to each.

Words used in SO: not necessary that the agreement should employ
precisely the word “solidary” in order that an obligation may be so
considered. It is suffi cient that the obligation declares, for instance, that
each one of the debtors can be compelled to pay the entire obligation,
or can be proceeded against for the full amount of the obligation, or that
demand may be made against any one of them, etc.

Other words used: solidaria; in solidum; solidarily; together and/or

separately; individually and/or collectively; juntos o suparada- mente. “I
promise to pay” signed by two or more persons. It has been held that
the words “individually and jointly” create a solidary liability.
 Solidary obligations may be used interchangeably with “joint and
several’’ or “several.’’ Usage of the term “joint and solidary’’ is confusing
and am- biguous.

5. DIVISIBLE AND INDIVISIBLE

a. Divisible Obligation - one the object of which, in its delivery or

performance, is capable of partial fulfillment.
b. Indivisible Obligation - one the object of which, in its delivery or
performance, is not capable of partial fulfillment.

• Test of Distinction (DO or IO) - the controlling circumstance is not the

possibility or impossibility of partial prestation but the purpose of the
obligation or the intention of the parties. Hence, even though the object or
service may be physically divisible, an obligation is indivisible if so provided
by law or intended by the parties

An obligation is presumed indivisible where there is only one creditor and

only one debtor.

• Kinds of Indivisibility

Legal Conventional Natural

where a specific where the will of the where the nature of the
provision of law declares parties makes as object or prestation does
as indivisible, obligations indivisible, obligations not admit of division,
which, by their nature, which, by their nature, e.g., to give a particular
are divisible are divisible car, to sing a song, etc.

• One Creditor and One Debtor - the debtor has to perform the obligation in
its totality, whether or not the prestation is divisible. Unless there is an express
stipulation to that effect, the creditor cannot be compelled partially to receive
the prestations in which the obligation consists;
6. WITH PENAL CLAUSE - the penalty shall substitute the indemnity for
damages and the payment of interests in case of noncompliance, if there is
no stipulation to the contrary. Nevertheless, damages shall be paid if the
obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of
the obligation. The penalty may be enforced only when it is demandable in
accordance with the provisions of this Code.

• Obligation with Penal Clause - one which contains an accessory

undertaking to pay a previously stipulated indemnity in case of breach of
the principal prestation intended primarily to induce its fulfillment.
• Penal Clause - an accessory undertaking attached to an obligation to
assume greater liability on the part of the obligor in case of breach of the
obligation, i.e., the obligation is not fulfi lled, or is partly or irregularly
complied with.

• Purpose of Penal Clause –

a. to ensure their performance by creating an effective deterrent against
breach, making the consequences of such breach as onerous as it may
be possible
b. to substitute a penalty for the indemnity for damages and the payment
of interests in case of non-compliance
c. to punish the debtor for the non-fulfillment or violation of his obligation.

• Penal Clause vs. Conditional Obligation

PC CO
an obligation that constitutes to the Obligation do not constitute to the
accessory accessory
may become demandable in default Not demandable
of the unperformed obligation and
sometimes jointly with it

• Penal Clause also a Conditional Obligation – as it is demandable only

when the condition on which it depends, that is, the non-performance of
the obligation takes place.

• Kinds of Penal Clause

Legal Penal Clause when it is provided for by law
Conventional PC when it is provided for by
stipulation of the parties.
Compensatory PC when the penalty takes the place of
damages
Punitive PC when the penalty is imposed
merely as punishment for breach
Subsidiary or Alternative PC when only the penalty can be
enforced
Joint or Cumulative PC when both the principal obligation
and the penal clause can be
enforced.
 CASES

HAMBON VS. CA

Facts:
• George Hambon, the petitioner, instituted a civil case for damages against
Valentino U. Carantes, the respondent, before the Regional Trial Court of Baguio
(Branch 6) on June 6, 1989, due to injuries sustained from a vehicular accident on
December 9, 1985, when a truck driven by the respondent bumped him. A
criminal case, Criminal Case No. 2049 for Serious Physical Injuries through
Reckless Imprudence, was filed on January 8, 1986, but was provisionally
dismissed by the Municipal Trial Court of Tuba, Benguet on March 23, 1987, citing
the petitioner’s lack of interest to prosecute.

• The trial court awarded damages to Hambon, holding that the dismissal of the
criminal case did not bar the civil case. In contrast, the Court of Appeals, upon the
respondent’s appeal, reversed the ruling and dismissed Hambon’s complaint on
grounds that the civil action was impliedly instituted with the criminal case, and
the dismissal of the latter, without any reservation for a separate civil action, also
dismissed the civil case.

• Hambon elevated the matter to the Supreme Court via a petition for review on
certiorari under Rule 45 of the Rules of Court, arguing for his right to pursue a
separate civil action without the need for reservation as upheld in the Abellana v.
Marave case, and contending that the requirement of reservation impairs
substantive rights.

Issues:
• Whether or not a civil case for damages based on an independent civil action
under Articles 32, 33, 34, and 2176 of the New Civil Code can be dismissed for
failure to reserve the right to file separately in a criminal case arising from the
same act.

Ruling:
• The Supreme Court denied the petition and affirmed the decision of the Court of
Appeals in toto.
• The Court upheld the procedural requirement set out in Section 1, Rule 111 of
the 1985 Rules on Criminal Procedure, as amended in 1988, which necessitates
reserving the right to bring separate civil actions for recovery of civil liability.
• The Court emphasized that the requirement is procedural and does not impair,
diminish, or defeat substantive rights. It serves to avoid multiplicity of suits,
prevent delays, and promote efficiency in the justice system.
• Thus, Hambon should have reserved his right to institute the civil action
separately in Criminal Case No. 2049. Failing to do so, the civil case Hambon
subsequently filed was dismissed along with the criminal case upon its provisional
dismissal.

SALUDAGA VS. FEU

Facts:
• Joseph Saludaga, a sophomore law student of Far Eastern University (FEU), was
shot by the school’s security guard, Alejandro Rosete, while on FEU’s premises on
August 18, 1996.

• Rosete, employed by Galaxy Development and Management Corporation

(Galaxy), which provided security services to FEU, claimed that the shooting was
accidental. After the incident, Rosete was taken into custody but released due to
the absence of a formal complaint.

• Saludaga initiated a Complaint for damages against FEU and its President,
Edilberto C. De Jesus, alleging breach of their obligation to ensure a safe
educational environment. FEU and De Jesus filed a Third-Party Complaint against
Galaxy and Imperial, its President, seeking indemnity. Galaxy and Imperial then
filed a Fourth-Party Complaint against AFP General Insurance.

• The Regional Trial Court of Manila sided with Saludaga, ordering FEU and De
Jesus to pay damages. FEU and De Jesus appealed to the Court of Appeals, which
reversed the trial court’s decision and dismissed Saludaga’s complaint. Saludaga
sought reconsideration, which was denied, prompting the filing of the Petition for
Review on Certiorari with the Supreme Court.

Issue:
• Whether or not the said respondents of the case are liable for damages for the
injury inflicted by their security guard.

Ruling:
• The petition was granted reversing the Court of Appeals decision and reinstating
the trial court’s ruling with modifications

• FEU was held liable for the damages as FEU breached its contractual obligation
to provide a safe learning environment, when Saludaga was injured by a school
security guard and they also failed to prove the exercise of due diligence in
ensuring a safe educational environment; specifically, there was no evidence of
examining Rosete’s qualifications as per the Security Service Agreement.

• Galaxy, as the employer of Rosete, is liable for its negligence in selecting and
supervising its employees. Imperial, as Galaxy’s president, is solidarily liable for
gross negligence in managing the agency.

• Galaxy Development and Management Corporation (Galaxy) and its president,

Mariano D. Imperial are ORDERED to jointly and severally pay respondent FEU
damages as they are the one who supplied FEU with an unqualified security
guard, which resulted to the latter's breach of obligation to petitioner.

• On the other hand, De Jesus, the President of FEU was held not liable along with
the other respondents because there was no clear evidence of personal
negligence or fault on his part, and the legal principles surrounding vicarious
liability did not apply to his position in this case.
 ISAAC VS. AMMEN TRANSPORTATION

Facts:
• May 31, 1951: Cesar Isaac boarded Bus No. 31 from Ligao, Albay bound for Pili,
Camarines Sur and seated himself on the left side resting his left arm on the
window sill but with his left elbow outside the window.

• Before reaching his destination, a pick-up car at full speed and was running
outside of its proper lane came from the opposite direction. The driver of the bus
swerved the bus to the very extreme right of the road until its front and rear
wheels have gone over the pile of stones or gravel situated on the rampart of the
road.

• As a result of the collision, the Isaac’s left arm was completely severed, and he
sustained significant injuries. The plaintiff was hospitalized multiple times and
incurred medical expenses amounting to P623.40, excluding fees paid by the
defendant.

• Isaac filed a claim for damages against the defendant, asserting gross negligence
by the bus driver and a breach of the contractual obligation to transport him
safely.

• However, the defendant attributed the collision to the negligence of the driver
of the pick-up car and contributory negligence on Isaac’s part. They claimed the
accident was unforeseen and inevitable.

• The trial court found the collision was caused by the negligence of the pick-up
car’s driver and dismissed Isaac’s complaint with costs against him.
• As a result, Isaac appealed the trial court’s decision to the Supreme Court of the
Philippines.

Issue:
Whether or not the Ammen Transportation Co., Inc. breached its contractual
obligation to transport the plaintiff safely, thereby making them liable for
damages.
Ruling:

• The Supreme Court affirmed the trial court’s dismissal of Isaac’s complaint,
holding that the defendant was not liable for the Isaac’s injuries.
• The SC clarify that the liability for breach of contract (culpa contractual) arises
only if the carrier fails to exercise extraordinary diligence.
• But since the defendant proved that it exercised extraordinary diligence, it was
not liable for breach of contract.
• The Court found that the bus driver had exercised extraordinary diligence by
swerving the bus to the extreme right of the road and attempting to avoid the
collision. The collision was caused by the pick-up car driver's negligence, which
was beyond the control of the bus driver.
• SECONDARY CLASSIFICATION